“Cut-to-the-Chase” Recommendations 
- Week Beginning -
Monday, February 27, 2017

by Ian Harvey

IMPORTANT NOTE: There is no stop-loss or pre-determined sell price recommended – this is left to the discretion of the individual trader.


Option Trade – Autodesk, Inc. (NASDAQ:ADSK) Puts

Tuesday, February 28, 2017

** OPTION TRADE: Buy the ADSK MARCH 17 2017 80.000 put at approximately $1.00. Sell price is left to your own judgment.

Computer-aided design software firm Autodesk, Inc. (NASDAQ:ADSK) is expected to report its worst quarterly results since it began its transition to cloud-based services from licensed software when it posts Q4 numbers Thursday, March 2. Analysts expect the San Rafael, Calif.-based company to lose 34 cents a share excluding items, compared with a year-earlier profit of 21 cents a share. Sales are projected to fall 27% to $474 million. Wall Street doesn't expect Autodesk to return to profitability for another four quarters, in fiscal Q4 this year.

Influencing Factors to Consider               

The company’s financials may be affected by increasing investments in cloud-based infrastructure and marketing initiatives.

Foreign exchange fluctuations and competition in the cloud-computing domain from the likes of Amazon.com Inc. AMZN, Microsoft Corp. MSFT and Adobe Systems also remain headwinds.

During last six month period, the net percent change held by insiders has seen a change of -19.88%. Company has reported several Insider transactions to the SEC, on Jan 12, 2017, Carl Bass (Chief Executive Officer) sold 100,000 shares at 79.84 per share price. On Jan 6, 2017, Jan Becker (SVP, CHRO and Corp Real Estate) sold 2,973 shares at 77.08 per share price. On Dec 28, 2016, Amarpreet Hanspal (SVP, Autodesk Product Group) sold 39,736 shares at 76.24 per share price.

Analysts and Hedge Funds Opinions

HighVista Strategies LLC lowered its stake in shares of Autodesk, Inc. (NASDAQ:ADSK) by 17.3% during the third quarter, according to its most recent 13F filing with the SEC. The fund owned 61,970 shares of the software company’s stock after selling 13,000 shares during the period.

Citigroup Inc. cut their price target on shares of Autodesk from $58.00 to $50.00 in a research note on Thursday, February 18th.

Barclays PLC reiterated a “buy” rating on shares of Autodesk in a research note on Saturday, November 21st.

Zacks Investment Research raised Autodesk from a “sell” rating to a “hold” rating in a research report on Tuesday, December 20th.

Three research analysts have rated the stock with a sell rating, eight have given a hold rating and eleven have given a buy rating to the stock. The stock has an average rating of “Hold” and a consensus price target of $73.15.

Summary

Autodesk has a 12 month low of $41.60 and a 12 month high of $83.08. The stock’s 50-day moving average price is $75.85 and its 200 day moving average price is $67.09. The firm’s market capitalization is $16.47 billion.


Option Trade – Dollar Tree, Inc. (NASDAQ:DLTR) Calls

Monday, February 27, 2017

** OPTION TRADE: Buy the DLTR MARCH 17 2017 85.000 call at approximately $1.30. Sell price is left to your own judgment.

Dollar Tree, Inc. (NASDAQ:DLTR), an operator of discount variety stores offering merchandise at the fixed price of $ 1.00, will post its quarterly numbers March 1. The company will announce the results of its most-recent quarter before the market opens, with the consensus calling for earnings of $1.33 per share, on revenue of $5.64 billion. During the same period last year the company had a profit of $1.01 per share on sales of $5.37 billion.

Dollar Tree stock has been under pressure in recent months, with the company disappointing Wall Street the last two quarters. Last quarter the company’s sales lagged estimates, and in the previous quarter profit was below the consensus.

However, overall, Wall Street expects big growth from the company moving forward, with earnings forecast to rise 31.6% this year, and an additional 18.7% next year. Given the strong growth estimates, the stock’s P/E of 23.5 is attractive.

The bad news for the last two quarters has already been priced into the stock, and with the stock trading near its 52-week low, it is not expected to sell off.

Influencing Factors to Consider               

A look at Dollar Tree’s earnings estimates revisions shows that the Consensus Estimate for the fourth quarter and fiscal 2016 has remained stable for over 30 days. A comparison with the year-ago period reported earnings reveals that the Consensus Estimate of $1.33 per share for the fourth quarter reflects growth of 31.6% from the prior-year quarter. Analysts expect revenues of $5.64 billion for the fourth quarter, reflecting a 5.1% growth from the year-ago quarter.

Dollar Tree is progressing well with its growth initiatives, which include store expansion strategies, enhancing store productivity, tapping new markets and incorporating innovative sales channels. Further, the company remains on track with the integration of Family Dollar, which is expected to generate annual run rate synergies of at least $300 million by the end of the third year of the acquisition.

Additionally, Dollar Tree is concentrating on expanding store base, alongside incorporating technological advancements. The company leverages an extensive network of stores to effectively penetrate targeted markets, which in turn enables it to generate healthy sales and gain market share.

Dollar Tree has displayed remarkable comparable-store sales (comps) performance as it recorded its 35th straight quarter of comps growth in third-quarter fiscal 2016. Comps remained robust mainly due to competitive pricing and strategic store expansion plans, including remodeling and relocations. Going forward, management anticipates comps to increase in a low-single digit range in fiscal 2016.

Analysts and Hedge Funds Opinions

Analysts at Sanford C. Bernstein initiated coverage on shares of Dollar Tree, Inc.  and set an “underperform” rating on the stock.

Deutsche Bank AG reissued a “buy” rating and set a $96.00 price objective on shares of Dollar Tree in a research report last Wednesday.

Also, Goldman Sachs Group, Inc. (The) reissued a “buy” rating and issued a $97.00 target price on shares of Dollar Tree in a research note on Thursday, January 19th.

Four analysts have rated the stock with a sell rating, eleven have issued a hold rating and eleven have assigned a buy rating to the stock. Dollar Tree has an average rating of “Hold” and a consensus price target of $90.86.

Summary

Dollar Tree, Inc.’s 50-day moving average price is $77.37 and its 200 day moving average price is $81.23. Dollar Tree, Inc. has a 1-year low of $72.55 and a 1-year high of $99.93. The firm has a market capitalization of $18.75 billion, a PE ratio of 23.35 and a beta of 0.62.




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