by Ian Harvey
January 22, 2018
Successful Recommended Options Trades For Last Week
Earnings Results for the Week Beginning January 15, 2018
|January 17, 2018||MS APRIL 20 2018 55.000 CALL||P.P: 72%|
|January 18, 2018||GE MARCH 2018 17.000 PUT||P.P: 147%|
|January 18, 2018||IBM FEB 16 2018 165.000 CALL||P.P: 149%|
|January 18, 2018||KSU FEB 16 2018 115.000 CALL||P.P: 41%|
NOTE: P.P: – Potential Profit
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Options Trades to Consider Based on Expected Earnings Reports:
Monday, January 22
Netflix, Inc. (NASDAQ:NFLX) – A streaming video
provider, will report after the market closes. The consensus earnings
estimate is $0.41 per share on revenue of $3.28 billion and the Earnings
Whisper number is $0.43 per share. Consensus estimates are for
year-over-year earnings growth of 173.33% with revenue increasing by 32.39%.
International growth has been fantastic, and the company has
consistently shown faster than expected growth overseas. The strong subscriber
numbers in recent quarters has helped drive shares to record highs, and Wall
Street remains very bullish on the stock moving forward.
The stock outperformed in 2017, and has risen 9.3% since the start of the year.
Short interest has decreased by 17.6% since the company's last earnings release. Overall earnings estimates have been revised higher since the company's last earnings release.
The holiday quarter is usually a strong period for Netflix as TV-watching time spikes and millions of new internet-connected devices come online. That tailwind joins a few other positive trends, including rising demand in international markets, as already mentioned, and an improving content catalog, to paint a bright picture for sales and profit gains.
Option trade to consider: Buy the NFLX FEB 16 2018 230.000 CALL at approximately $6.20.
Tuesday, January 23
Verizon Communications Inc. (NYSE:VZ)—A telecom giant, reports before the market opens. The consensus earnings estimate is $0.88 per share on revenue of $33.21 billion and the Earnings Whisper number is $0.88 per share.
Short interest has decreased by 14.0% since the company's last earnings release. Overall earnings estimates have been revised higher since the company's last earnings release.
Verizon continues to crank out strong cash flows, which came to $17.2 billion during the first nine months of 2017. And this should continue for some time.
Verizon has built a huge network since 2000; with the result of 98% coverage in the U.S. mobile market, and the company leads in the all-important 4G LTE category.
The elimination of the net-neutrality system is likely to provide a nice benefit to the network. Verizon should be able to offer more services and data plans with higher margins.
As well, the rollout of 5G should help provide more revenue opportunities.
Verizon will be one of the largest beneficiaries of the recent corporate tax overhaul. Not only will it drastically lower their realized tax rate, but it will be able to immediately expense a large portion of its capital spending over the next five years and lower its tax burden even further.
Option trade to consider: Buy the VZ FEB 16 2018 52.500 CALL at approximately $0.90.
Wednesday, January 24
Lam Research Corporation (NASDAQ:LRCX) – a leading supplier of wafer fabrication equipment, will report after the market closes. The consensus earnings estimate is $3.67 per share on revenue of $2.56 billion and the Earnings Whisper number is $3.73 per share. The company's guidance was for earnings of $3.53 to $3.77 per share. Consensus estimates are for year-over-year earnings growth of 63.84% with revenue increasing by 36.00%.
Overall earnings estimates have been revised higher since the company's last earnings release.
the top-performing stocks in the technology sector and an increase in share
price and strong fundamentals signal its bullish run. Lam has gained 70.5%
compared with the industry’s rally of 56.5%.
an impressive earnings surprise history -- delivering an average positive
earnings surprise in the last four quarters of 5.3%.
Research is doing well and continues to succeed in areas such as device
architecture, process flow and advanced packaging technology inflections.
company has been improving on its WFE market share significantly since 2013 and
expects to make robust gains in 2018.
said that strong demand for bit growth in server DRAM and NAND will continue,
driven by cloud computing and IoT.
Research continues to witness increased adoption rates of 3D NAND technology,
FinFETs and multi-patterning. The company has undertaken cost-reduction
activities and density scaling for 3D NAND and new memory technologies.
the company anticipates continued strong demand for leading-edge silicon in the
enterprise market courtesy of the long-term move to cloud, storage and
Option trade to consider: Buy the LRCX FEB 16 2018 210.000 CALL at approximately $6.50.
Thursday, January 25
Celgene Corporation (NASDAQ:CELG) – a global biopharmaceutical company, will report before the market opens. The consensus earnings estimate is $1.92 per share on revenue of $3.51 billion and the Earnings Whisper number is $2.02 per share. Consensus estimates are for year-over-year earnings growth of 22.29% with revenue increasing by 17.77%.
Overall earnings estimates have been revised lower since the company's last earnings release.
The company expects to grow revenue by a compounded annual growth rate of 14.5% through 2020. Adjusted earnings per share should grow by 19.5% annually over the next few years.
Those projections are based on continued sales growth for several drugs, particularly Revlimid. The blood cancer drug ranked as the No. 2 top-selling drug in the world last year and could reach annual sales of $14 billion by 2022. Celgene should also see solid growth for multiple myeloma drug Pomalyst and autoimmune disease drug Otezla. The biotech's pipeline looks strong, too, with potential blockbusters including ozanimod and luspatercept waiting in the wings.
The biotech will generate the largest amount of revenue in its history.
Celgene's top moneymaker Revlimid ranked as the second top best-selling drug in the world last year with close to $8.2 billion in sales. The company projects that the blood cancer drug will rake in roughly $9.4 billion in 2018, a year-over-year increase of nearly 15%.
Even stronger growth is anticipated for Celgene's other current blockbusters. Pomalyst made $1.6 billion last year. Celgene thinks sales for the multiple myeloma drug will jump 18% in 2018 to around $1.9 billion. Otezla generated revenue of nearly $1.3 billion, and should make $1.5 billion or so this year, a solid 17% year-over-year increase. The biotech expects sales for cancer drug Abraxane to grow slightly, with 2018 revenue of around $1 billion.
Celgene also has a handful of other products. It also hopes to launch ozanimod, which could be one of the top new drugs of 2018.
The company will have a much lower U.S. tax rate in 2018, thanks to tax reform legislation signed into law in December 2017.
Option trade to consider: Buy the CELG FEB 16 2018 105.000 CALL at approximately $2.60.
Friday, January 26
AbbVie Inc (NYSE:ABBV) -- a research-based biopharmaceutical company, will release earnings early. Abbvie is expected to report an EPS of $1.43, up 19%, on revenue of $7.56 billion, up 11.5%.
The stock was up 54.4% in 2017, comparing favorably with a gain of 16.3% recorded by the industry; and the bullish run of the stock should continue in 2018.
Abbvie has had a strong performance supported by a series of positive news including promising data from several pivotal studies, regulatory approvals in the U.S., Europe, and Japan for its competitive HCV medicine Mavyret and FDA approval for the sixth indication for Imbrivica and settlement of its Humira patent disputes with Amgen.
AbbVie's key drug Humira has been performing well based on strong demand trends for the drug, despite new competition. Moreover, Imbruvica has multibillion dollar potential and AbbVie is exploring the possibility of label expansion into solid tumors and autoimmune diseases. Also, several pivotal data readouts and regulatory milestones are expected in 2018.
Option trade to consider: Buy the ABBV FEB 16 2018 105.000 CALL at approximately $2.70.
An Important Note: That these suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
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