by Ian Harvey
January 31, 2019
Advanced Micro Devices, Inc. (NASDAQ:AMD)
Advanced Micro Devices shares tumbles over 8% on Monday due to NVidia’s lowered guidance; but shot-up more than 20% after reporting fourth-quarter financial results on Tuesday. And “Mentorship Members” gained potential profits of 106%.
Shares of chip company Advanced Micro Devices soared on Wednesday following a mixed fourth-quarter report. AMD produced less revenue than expected, and its earnings were in line with analyst estimates. The company's guidance for the first quarter called for a steep revenue decline, but its solid full-year guidance gave investors reason to cheer.
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
…….from……““Mentorship Program” Recommendations
The Details Presented Previously……..
Advanced Micro Devices, Inc. (NASDAQ:AMD), a global semiconductor company, will report earnings January 29, so the stock movement and the price of the option trade need to be continually observed; as the trade may need to be exited before the earnings report if there is sufficient profit to be made.
The report will be for the fiscal Quarter ending Dec 2018. Based on 8 analysts' forecasts, the consensus EPS forecast for the quarter is $0.06. The reported EPS for the same quarter last year was $0.06.
The same tailwinds which pushed AMD stock higher in 2018 remain intact today. The valuation is reasonable under realistic growth assumptions, the growth trajectory remains promising, and the company’s size relative to its addressable market implies further upside. There are also M&A rumors on the table.
Overall, there are reasons to believe that AMD stock is set have another big year, so long as certain tailwinds remain in play, AMD stock should have another strong showing in 2019.
** OPTION TRADE: Buy AMD FEB 15 2019 20.000 CALL at approximately $1.60
The Result So Far………
Advanced Micro Devices saw its stock price rise 20% after the company reported its fourth-quarter financial results. The chipmaker's 6% growth in sales was a bit less than most investors had expected to see, but AMD's bottom line looked healthier, with margin improvement helping to push earnings upward.
"In 2018 we delivered our second straight year of significant revenue growth, market share gains, expanded gross margin and improved profitability based on our high-performance products," CEO Lisa Su said in a press release. "Importantly, we more than doubled our EPYC processor shipments sequentially and delivered record GPU datacenter revenue in the quarter."
AMD reported fourth-quarter revenue of $1.42 billion, up 6% year over year but about $20 million below the average analyst estimate. Computing and graphics revenue rose 8.6% year over year on the strength of the company's Ryzen PC processors. The enterprise, embedded, and semi-custom segment posted flat revenue, with growth in EPYC server CPU sales offsetting lower semi-custom revenue.
Non-GAAP earnings per share came in at $0.08, up from $0.01 in the prior-year period and in line with analyst expectations. Non-GAAP gross margin was 41%, up 7 percentage points from the prior-year period, with the improvement driven by Ryzen and EPYC.
So, for “Mentorship Members”, who managed to execute this trade recommended by Stock Options Made Easy, and then exit yesterday; a potential profit of 106% was to be made.
Entering the option trade at a cost of $1.75 or less; and the price of the option reaching $3.30 within a short period of time; a tidy profit of 106% was made. Therefore, one options contract would provide a profit of $155.00.
ANOTHER WIN FOR THE WEEK!
AS ALWAYS THE DECISION IS YOURS!
AMD is in much better shape than it was just three years ago where it found itself cash-strapped and lacking any competitive products.
Now AMD is seeing a surge in consumer demand for its Ryzen products that compete with Intel’s Pentium and Core lineups.
AMD will launch a new generation of Ryzen CPUs, built on a 7nm manufacturing process, sometime in mid-2019. The second generation of its EPYC server processors is also coming soon, and AMD is aiming to win a double-digit share of the lucrative data center market.
Growth from the CPU business will need to offset a slumping GPU business. AMD is going to start off 2019 with a steep revenue decline, but it's betting that a strong second half will more than offset its GPU troubles.
However, although the company has encountered some of the same headwinds that caused rival NVIDIA’s stock to plunge recently, AMD thinks that it won't have a longer-term impact on full-year 2019 revenue growth. That reassured investors greatly, and if it holds up, it would signal a potential new competitive advantage for AMD over its peers.
AMD now has $1.16 billion in cash and is doing well on its plan to pay down debt. Another encouraging note is the all-important gross corporate profit margins. Two years ago profit margins were in the mid-30; last quarter the firm booked its sales with 41 percent margins, and that’s very important improvement here. AMD is finally proving that it can increase the average selling price of its products while showing long term and consistent revenue gains. The spike in AMD’s stock price was buoyed further by AMD’s outlook that they would “grow their business by high single digit percentage” in 2019 versus Wall Street expectations of 6 percent for the year.
Therefore, NEW Trade to consider……..
** OPTION TRADE: Buy AMD APR 21 2019 25.000 CALL at approximately $1.65. Sell price is left to your own judgment.
As you would have by now realized, some of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, but it is obvious that it does not apply in this case; but during earnings season this strategy of predicting earnings has been very profitable.
Sometimes it is our approach to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use – such as found with the “Earnings Predictions Program”. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been exceptional.
An Important Note: That any 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.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!
Strategies to Consider……
When To Exit A Trade Based On Earnings?.....Read Article
"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.……continue reading this article……
Our proven track record says it all!!
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