by Ian Harvey
January 26, 2019
Etsy Inc. (NASDAQ:ETSY)
Etsy was up 164% in 2018, and, the leading online marketplace for arts and crafts keeps gaining traction with revenue surging 41% in its latest blowout quarter, and its adjusted profit more than doubled what Wall Street pros were expecting.
“Cut-to-the-Chase Members” made a potential profit of 117% with a call option; entering when Etsy was at the $50.00 mark; and then hitting $56.49 before retreating slightly!
Etsy is now picking up steam again for a further leg-up; therefore another options trade is included for trader’s consideration!
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
…….from…… ““Cut-to-the-Chase” Recommendations
Brooklyn, NY-based Etsy Inc. (NASDAQ:ETSY), a commerce platform to make, sell, and buy goods online and offline, primarily in the United States, was up 164% in 2018. And, the leading online marketplace for arts and crafts keeps gaining traction. Revenue surged 41% in its latest blowout quarter, and its adjusted profit more than doubled what Wall Street pros were expecting. Making analysts look like lightweights is just what Etsy has done over the past year when it comes to barreling through bottom-line targets.
The big catalyst for its recent surge was a decision to boost its selling fees in June, something that could've scared away sellers but, thankfully for investors, that wasn't the case. Etsy's seller base has risen by 8% over the past year with gross merchandise sales climbing 20% in that span of time. It's a win-win-win. Sellers are making more sales. Buyers are finding a broader selection of crafty merchant wares on the site.
Etsy has done a fantastic job turning around its business. The crafts e-commerce portal looked close to busted three years ago. But after a 2017 management shake-up, a new CEO and team has made all the difference. Investors have noticed, driving the ETSY stock price from under $10 at the beginning of 2016 to nearly $50.
CEO Josh Silverman had undertaken extensive measures to drive Etsy’s performance. He had outlined four strategies to drive growth, which included accelerating marketing investments, providing newer tools and services to both buyers and sellers, and enhancing trust and reliability on the platform.
Under these outlined strategies, the company has been investing in TV campaigns. Etsy is also bettering its shipping policies. The company is mulling over expanding free shipping to more products. Free shipping attracts shoppers and boosts conversion rates.
Etsy is deploying machine learning and AI technology along with human curation to make the search process simpler. It’s adding buyer locations to its algorithm, which helps categorize and rank search results. Adding buyer locations should make the search process much clearer, as tastes and preferences differ considerably from region to region.
The company is also expanding internationally. It had inked a referral agreement with Germany-based online retailer DaWanda. On the third-quarter conference call, Etsy stated that Germany had become its second-biggest overseas market by domestic activity due to referral traffic from DaWanda.
** OPTION TRADE: Buy ETSY FEB 15 2019 55.000 CALL at approximately $2.00
The Result So Far………
Etsy closed at $55 in the latest trading session, marking a +1.21% move from the prior day. Prior to yesterday’s trading, shares of the online crafts marketplace had gained 14.76% over the past month. This has outpaced the Computer and Technology sector's gain of 11.25% and the S&P 500's gain of 12.44% in that time.
Etsy is not a cheap stock. With just $81 million in trailing earnings but a market capitalization well in excess of $6.3 billion, Etsy shares sell for the at 78.5 times trailing earnings. On the other hand, though, Etsy has grown its share price more than 160% over the past year, making this a reasonable price to pay.
So, for “Cut-to-the-Chase Members” members, who managed to execute this trade recommended by Stock Options Made Easy, and then exit yesterday; a potential profit of 117% was to be made.
Entering the option trade at a cost of $1.80 or less; and the price of the option reaching $3.90 within a couple of weeks; a tidy profit of 117% was made. Therefore, one options contract would provide a profit of $210.00.
A NICE FINISH TO THE WEEK!
AS ALWAYS THE DECISION IS YOURS!
Etsy is not a stock that is in the category“buy low, sell high" as it actually priced relatively high at this stage; but it appears to be on its path to climbing even higher. This is one stock that's "doubled and still has room to grow."
ETSY will be looking to display strength as it nears its next earnings release, which is expected to be February 26, 2019. ETSY is projected to report earnings of $0.33 per share, which would represent year-over-year growth of 120%. Meanwhile, the latest consensus estimate is calling for revenue of $194.36 million, up 42.63% from the prior-year quarter.
Over the last 12 months, Etsy has only made about $540 million in total sales; but as Etsy's market expands, and in particular as the company connects more of the "rest of the world's" creators (currently just 28% of Etsy's total revenues) with the rich consumer markets of the United States, the United Kingdom, and Germany (the other 72%), expect Etsy's revenue stream to grow larger.
And analysts are on a positive track with Etsy, projecting it to earn $0.50 per share this year, then more than double that by 2020, then double it again by 2022.
This leaves plenty of scope for continued growth!
Therefore, NEW Trade to consider……..
** OPTION TRADE: Buy ETSY JUN 21 2019 60.000 CALL at approximately $5.60. 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 apply in this case; and 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!!
Members of Stock Options Made Easy are provided with an extensive reason as to which direction a stock will move after earnings, followed up by a recommended options trade.
If you not a member and interested in being part of this profitable action just CLICK HERE.
Other Membership Options…….
If you interested in "Earnings Predictions" just click here……
or "Mentorship Program".....click here....