Has This 'Debt-Laden' Speedboat Maker Rallied Too Far?
Brunswick has rallied 15 percent in three days, causing one big investor to bet that the debt-laden speedboat maker may have run too far.
OptionMonster's tracking systems detected the purchase of 7,600 January 2.50 puts for $0.45 and $0.50 against open interest of 1,544 contracts. The trade generated more than 90 percent of the options volume in the name and will turn a profit if the stock falls to $2 by expiration.
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Brunswick rose 8.96 percent yesterday to $4.38 but has lost 87 percent of its value in the last two years.
The company has been taking charges and racking up losses as the recession eviscerates demand for big-ticket discretionary items. Sales are expected to total $3.58 billion this year, compared with $5.67 billion in 2007. More than two-thirds of its book value evaporated in the last three quarters.
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David Russell is a reporter and writer for OptionMonster.