Lakeland Industries (LAKE) –  Short position Established

LAKE (16.98; marked down to $15.00 pre market)–  Recall, on 10/10/2014 we mentioned we sold our entire position in LAKE.

“We first coded LAKE as a GeoSpecial on 2/6/2012 at $10.16 as a possible buyout target because a large competitor (Ansell) established a 9.6% stake in the company. Due to some of the challenges the company had faced during its tenure as a GeoSpecial, the shares had faced downward pressure. However, in the last few weeks we sent our premium members several email alerts stating we have become more bullish on LAKE due to increase EBITDA performance over the past several quarters and the possibility that investors will gravitate toward the company speculating, that it will see increase orders for its commercial protective apparel line. While it’s certainly possible the company could receive increased order flow for its products, over $21 per share today, the stock has easily surpassed our top end near term price target of 1.5 times TBV, equating to around $12.”

We consider ourselves lucky that we were able to lock in over 100% gains on the trade. Friday after the close, Ansell filed a 13D/A showing they have sold the majority of their position in LAKE.   We think the removal of this very positive catalyst could result in LAKE making its way back to  $12.00, or lower.  In general, it looks like the ebola trade for protective equipment makers ( LAKE, APT, VSR) is nearing an end as the World Health Organization (WHO) is declaring that Ebola is being contained.  Please note that shorting these stocks does not come without risk: Headline risk;  Receipt of orders.