Life Time Fitness (LTM) -- Any More Pounds to Shed?
by Houghton and Atkeson 11/17/08
If I could only lose 20 pounds as fast as Life Time Fitness (LTM) has lost 20 points -- now that would be magic.
In fact, since October 2007, LTM has lost 80% of its value. With $16 in long-term debt per share, LTM is in the debt camp that has been crushed in the deleveraging world we are living.
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Today, the options in LTM have traded 18 times usual volume. Market particpants look to be selling more than 11,000 LTM Dec 10 Puts (LTMXB) for roughly 85 cents. Nearly 14,000 puts in total have traded, which is greater than 50% of all put open interest.
With the stock at $12, are these investors saying that they would be back at the gym if LMT hits $9.15?
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Looking into June, the market should begin refocusing on upcoming earnings reports for evidence the economy is gaining momentum.
Watching the Treasury's Actions
In the short-term, the government's bond auction is likely to be a key driver of stocks.
Treasury Auction Boosts Market
The Treasury's auction of two-year notes brought an upside surprise which should alleviate fears of a lack of demand for U.S. paper.
Credit Markets Point to Upturn
The credit market, a reliable indicator of equity direction, suggests we will break out of the SPX's trading range to the upside.
The market seems to be saying that a 30% move up from the lows is ahead of the real economy and the market needs to allow the economy to catch up.
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