Option Trade 
Expeditors International of Washington (NASDAQ:EXPD) Calls 
Friday, 29th July, 2016

** OPTION TRADE: Buy the EXPD NOV 18 2016 50.000 call at approximately $2.35. Place a pre-determined sell at $4.70.

Note: No protective stop losses added -- but if you wish to do so make it $0.95.

by Ian Harvey

July 29, 2016

Expeditors International of Washington (NASDAQ: EXPD), a logistics company that purchases cargo space from carriers, including airlines and ocean shipping lines on a volume basis and resells that space to its customers, is scheduled to report earnings on the 2nd August, and is expected to report better-than-expected earnings in the second quarter of 2016.

In the first quarter of 2016, the transportation company had reported lackluster results with earnings and revenues missing estimates. All three primary segments - Airfreight Services, Ocean Freight and Ocean Services and Customs Brokerage and Other Services - performed disappointingly in the quarter.

Despite the miss in the first quarter of 2016, Expeditors has an impressive earnings history having outshined the Consensus Estimate in three of the last four quarters, at an average of 4.55%. The company's emphasis on cost reduction to drive the bottom line is quite impressive. Also, there is a positive note about the company's efforts to reward shareholders through dividend payments.

In May 2016, the board of directors at Expeditors approved a hike in its dividend payout. The board declared a semi-annual cash dividend of 40 cents per share (annual payout of 80 cents per share, up 11.1%).

As well, Expeditors International of Washington Inc has no debt. The Integrated Shipping & Logistics sector debt to equity ratio average stands at 103.4%. The company has a current ratio of 2.44.

The company has a market cap of $9.09 billion and a P/E ratio of 20.96. Expeditors International of Washington Inc. has a 52-week low of $40.41 and a 52-week high of $51.80. The firm has a 50-day moving average price of $49.20 and a 200 day moving average price of $47.68.

In recent trading, shares of Expeditors International of Washington, Inc. have crossed above the average analyst 12-month target price of $50.05, changing hands for $50.08/share. When a stock reaches the target an analyst has set, the analyst logically has two ways to react: downgrade on valuation, or, re-adjust their target price to a higher level – and the latter is more likely at this stage.

Analysts and Hedge Fund Opinions are Positive

Legal & General Group Plc increased its position in Expeditors International of Washington Inc. by 1.7% during the first quarter, according to its most recent disclosure with the SEC. The firm owned 828,661 shares of the company’s stock after buying an additional 14,232 shares during the period. Legal & General Group Plc’s holdings in Expeditors International of Washington were worth $40,446,000 at the end of the most recent reporting period.

Lyons Wealth Management LLC. raised its stake in shares of Expeditors International of Washington Inc. by 7.1% during the first quarter. The firm owned 19,002 shares of the company’s stock after buying an additional 1,255 shares during the period. Expeditors International of Washington comprises 1.3% of Lyons Wealth Management LLC.’s portfolio, making the stock its 14th largest position. Lyons Wealth Management LLC.’s holdings in Expeditors International of Washington were worth $930,000 at the end of the most recent quarter.

Also, several equities research analysts have recently commented on the company.

• Robert W. Baird increased their price target on shares of Expeditors International of Washington from $48.00 to $49.00 in a research report on Monday, April 4th.

• Zacks Investment Research upgraded shares of Expeditors International of Washington from a “sell” rating to a “hold” rating in a report on Tuesday, April 5th.

• Finally,Barclays PLC upgraded shares of Expeditors International of Washington from an “equal weight” rating to an “overweight” rating and raised their target price for the stock from $51.00 to $58.00 in a report on Thursday, April 14th.

Harvey’s Options Volatility Indicator

Conclusion

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

** OPTION TRADE: Buy the EXPD NOV 18 2016 50.000 call at approximately $2.35. Place a pre-determined sell at $4.70.

Note: No protective stop losses added -- but if you wish to do so make it $0.95.

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



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