Silgan Holdings (SLGN) has announced that it will acquire Graham Packaging Company (GRM). The acquisition is accretive. Silgan may have to assume quite a bit of debt in this deal . This makes Silgan a very risky stock to hold. As of this writing the stock is at $43.5. The market seems to be pleased with the strategy of diversification.
What stock market considers positive changes like the weather. Today, the fashion is that assuming large debt is a good thing. Sooner or later, we will enter a cycle when the stock market’s wisdom will be that large debt is not good.
We will short 5% of the full position size starting right here. We will add to the position on any bounces at the exhaustion of up spikes. Our target is $36.00. Smaller accounts may consider using 20% of the full position size as increments.
At present five of the six screens of the ZYX Change Method are satisfied.
As full disclosure, those reading ZYX SHORT SELL CHANGE ALERTS has an advantage over the reader of this blog, because they had the same information quite some time ago.
