$ASO is a powder keg & will blow soon
$ASO is Academy sports and outdoors. They are a sports equipment store and a hunting store that sells guns & ammo. I would describe them similar to Dick’s but more focused on their core selling points, they aren’t spending money making their stores look like a extravegent mall. I have been too ASO many times and overall enjoy their store & from my personal experience they have been consistently busy this past year and the days ammo arrives there is always a line around the building at 7 am of people trying to get some before they sell out.
ASO IPO’d in October of 2020. ASO is a fundamentally undervalued stock. Last week they absolutely smashed earnings by doubling EPS. Estimated was .46 and actual was 1.09 Their revenue increased as well. Their net sales increased 18% over last year. They have a market cap of 2.63 B and trade at a P/E of 7.66 as compared to Dick’s which trades at a P/E of 13.85. As you can see this stock is criminally undervalued as compareded to its peers. IPO lockup period ended on 3/31 which caused a negative dip on open that day but the stock finished postive on the day as there was not a mass sell off as shorters of the stock had hoped for.
The stock has been shorted from the start because I believe it was just lumped into the typical brick & mortar category and will just assumed would bleed out due to online shopping. This was a grave miscalculation as ASO provides a niche varitey of products that the online space is not fulfiilling adequetly & their top compeitor Dicks has been backing out of like guns and ammo. They have a current short interest of 39% with a public float of 31 M. The stock currently is at a all time high of $29, that means every single instution that shorted this stock is negative now and they have 9 days to cover their positions. With some more volume and upward pressure in this stock and we could see a squeeze similair to the one that happened with RKT. I don’t see this stock tripling or anything of the scale that GME had but I do see a substaintial price increase soon if the right factors materialize.
Open interest for 4/16 30 strike calls are huge and if the volume comes in and pushes the stock up we could be looking at quite the squeeze for this bad boy.
TLDR: ASO is a fundamentally undervalued stock that is currently trading at a ATH with high short interest which makes it prime for a squeeze.
Positions: (9) 4/16 30 strike & (2) 4/16 25 strike calls
This is not financial advice spend your money however you choose.
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April 4, 2021 at 03:19PM