The Second Roach Comes Out of the Cupboard
Sunday, April 24, 2011 at 4:57PMToday we thought we’d provide an update to our $SCSS (Select Comfort Corporation) – $TPX (Tempur Pedic) trade from April 7th and April 8th. On both dates we bought 5 $SCSS and sold 1 $TPX on the back of a rally in $TPX after the firm said it expected strong first quarter results. In the prior two reporting periods $SCSS’s results mimicked $TPX’s results and we were betting the same would happen this time. Sure enough $SCSS significantly beat expectations when it reported earnings yesterday. The stock is up 28% today. We unwound the spread yesterday after the report for an approximate +13% return.
Also this week we traded in and out of 4*$GLD (SPDR Gold Trust) – 9*$GDX (Gold Miners ETF) for about a +2% return, selling the spread on April 18th and buying it back on April 20th. We’ve been more active in this one since the recent rebound in shares of the mining stocks.
Written by Norm Winer. Follow me on Twitter and StockTwits.
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