Jim Cramer, on the set of his Mad Money television program this week, mentioned Life Time Fitness (LTM) as his “No. 1, best-of-breed, health club pick.” He added he is a “huge fan” of the stock.
An article appearing on thestreet.com website stated, “The health fitness business is a big industry that’s getting bigger… And as the weight-loss play is about people trying and failing time and time again to lose weight, it is everlasting.”
Audio Podcast:
An audio podcast of this article is available at: poweropt.com/podcasts/2007_02_02_LTM.mp3
In other news, Life Time Fitness Inc announced last Friday a $105 million long-term mortgage financing agreement with Goldman Sachs Commercial Mortgage LP. The agreement is for a 10-year loan and was arranged by RBC Capital Advisors.
“We intend to use the proceeds of the financing to partially pay down the Company’s revolving line of credit, making available additional capital for the construction and development of new centers,” Chief Financial Officer Michael Robinson said in released statement.
Lifetime Fitness has recently opened new facilities in Sugarloaf, Georgia, Scottsdale, Arizona and Alpharetta, Georgia in the last 6 months and has plans for continued expansion.
Lifetime Fitness differs slightly from traditional health clubs offering additional amenities in most of its centers. Those amenities include indoor swimming pools with water slides, basketball and racquet courts, interactive and entertaining child centers, full-service spas, dining services, climbing walls and outdoor swimming pools. As of March 1, 2006, the Company operated 48 centers across nine states.
Competitors:
Competitors for LTM include: Bally Total Fitness Holding Corp. (BFT), 24 Hour Fitness Worldwide, Inc. (private), and Gold’s Gym International, Inc. (private).
Potential Trades:
All of the following option trades have 43 days until expiration. Life Time Fitness is currently trading at $54.24. These trades were discovered using the powerful suite of option search tools found at PowerOptions .
| Covered Call – Life Time Fitness Inc. (LTM) $ 54.24 (43) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| OPTION | Strike Info |
Opt Bid |
% Dnsd. Prot. |
% If Unch. |
% If Asgnd |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTMCJ | 07 MAR 55.00 | $2.00 | 3.70% | 3.80% | 4.90% | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bull-Call Debit Spread — Life Time Fitness Inc. (LTM) $ 54.24 (43) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sell Opt |
Strike Info |
Bid Price |
Buy Option |
Strike Info |
Ask Price |
% Return |
Break Even |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LTMCK | 07 MAR $55.00 | $2.00 | LTMCI | 07 MAR $45.00 | $10.40 | 19.00% | $53.40 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The covered call trade, an out of the money covered call, offers 3.7% downside protection and a potential profit of 3.8% if the stock remains unchanged. If the stock rises, the potential profit becomes 4.9%. The net cost of this trade, per 100 options, is $5,230.00.
The second trade is a bull call debit spread. This trade offers 19.00% potential profit if the stock advances above $55.00. If the stock decreases below the break-even price of $53.40, the investment begins to lose money. If the stock price goes below the lower strike price of $45.00, the entire investment is lost. The net cost of this trade, per 100 options, is $850.00.
For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions’ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.
PowerOptions provides a free 14-day trial of its service. So join PowerOptions today, and you too can start reaping the benefits of the covered call investment strategy.
PowerOptions’ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.
[tags]Jim Cramer, Mad Money, thestreet.com, Goldman Sachs, RBC Capital Advisors, Michael Robinson, Sugarloaf, Georgia, Scottsdale, Arizona, Alpharetta, 24 Hour Fitness Worldwide, Inc., Gold’s Gym International, Inc., BFT, Bally Total Fitness Holding Corp., LTM, Life Time Fitness Inc., covered call investment strategy, investment strategy, iron condor, poweroptions, stock option trading, stock options[/tags]