Selling a Banker, Buying a Warrant

Just a quick note to confirm that yes, I did sell my remaining shares of Sprott Resource Lending once my trading restriction ended — and early today I bought some of the PNC Warrants that I had mentioned in our last “Idea of the Month” piece.

PNC Shares are at post-crisis highs now, fairly close to all-time highs, but the stock is valued much more cheaply than it was before the financial crisis and they seem to me to have solid earnings power and a good asset base for the long term — the warrants are essentially a bet that the stock will rise more than 15% from here over the next five years, which seems like a very decent bet to me. You can see my piece on those warrants here if you’re interested — the strike price is around $67 and the shares are at about $70 now, so the warrants have an “in the money” value of $3 and a “time value” of about $10 at recent prices near $13, buying at this price effectively means I need PNC to reach $80 before November, 2018 to break even. My initial purchase order has not filled entirely (these warrants are all quite illiquid), so I do still have a small limit buy order sitting out there which may trigger at some point over the next few days.

Sign Up for a Premium Membership

To view the rest of this article (and to have full access to the rest of our articles), sign up.
Already a member, log in.

Become a member

We use cookies on this site to enhance your user experience. By clicking any link on this page you are giving your consent for us to set cookies.

More Info