$VSI Some Thoughts On Vitamin Shoppe

unusual options trades and unusual options volume

I recently entered calls in $VSI to capitalize on a possible turnaround that I think is in the very early innings.  I'llhave more on $VSI in the weeks ahead.  Their upcoming earnings report in early August will shed some light on just how well the turnaround is  progressing.  While I think there is a good chance the stock could pull a sharp rally on a positive report, I'll probably wait to  add to my position.

$VSI was heavily shorted on its way down.   Currently there is  over 5 million shares still short.  $VSI has a very modest 24 million share outstanding, so 5 million is quite a chunk of the outstanding shares.  Factor in some recent large stakes taken in the company and it almost seems like there aren't enough shares to go around.  And so I decided to dig a little deeper....

Simply taking the most recent ownership data  I found there literally aren't enough shares to go around.  Go figure....  Not counting the many smaller stakes,insiders, and retail, I went over the o/s by 25k.  Interesting....

Of course some of these stakes could have already been reduced and not reported yet.  Shares sold and not accounted for should show up on the Nasdaq daily threshold report.  I looked, and VSI is no where to be found.  Perhaps many of these previously reported positions have been reduced?.....

On the other hand, who is to say new stakes haven't been taken in the company, or current stakes increased?  Recently Millennium took a brand new 5%+ stake in $VSI.

The recent buyers of $RCII for a 50% premium have taken a keen interest in $VSI amassing a 14%+ stake since late last year.   Shah Capital also bought a large 17% stake in the company since late last year.  I'd argue positions in $VSI are rising and new ownership documents are more likely to show NEW stakes and larger holdings rather than new stakes.  Pure speculation of course, until the numbers are revealed.

While $VSI needs to show progress in turning the ship around, seeing money coming into the stock and not out of it is a good sign.  The chart has taken a bullish turn.

The recent price action has been quite choppy, but clearly consolidating.  I think the next move will be higher, with the $10.00 level coming into focus.  And I'll leave it at that for now....

Known to most as Uranium Pinto Beans, Jason has more than 15 years under his belt of trading stocks, options and currencies. His expertise primarily lies in chart analysis, and he has a strong eye for undervalued stock. Because he’s got the ability to identify great risk/reward trades he usually enjoys taking the path less traveled and reaping the benefits from the adventure.

He is a co-founder of Option Millionaires, and he is best known for his weekly webinars with Scott, as well as his high level training webinars and charts found in the forums.

More Posts by UPB: View All | Private Twitter Feed: Access Now! (For Diamond Members)

Leave a Reply