by Ian Harvey
January 25, 2019
NXP Semiconductors NV (NASDAQ: NXPI)
NXP Semiconductors stock saw bullish interest from several analysts; had an established record of topping earnings estimates; trading at a current market cap of $23 billion, with $25 billion of enterprise value and is incredibly cheap; delivering revenue growth during turbulent days; through IoT, it connects devices ranging from cars to health monitors to drones; and, strong end-market positioning, especially for electric vehicles and self-driving vehicles.
Yesterday, saw the stock price soar as high as $85.19, and close the session at $84.25, up +$5.35, or +6.78%.
And, “Cut-to-the-Chase Members” made a potential
profit of 129% with a call option – within one week!
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
The Details Presented Previously……..
Chipmaker NXP Semiconductors NV (NASDAQ: NXPI) has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of -9.55%.
Nomura Instinet upgraded NXP Semiconductors to "buy" from "neutral," and maintained its $95 price target -- a 21.3% premium the close at $78.34. The analyst in coverage said valuation is appealing after the chip stock's recent sell-off, and traders are "underappreciating an attractive end-market mix."
Likewise, CrispIdea Research reiterated its "buy" rating and $88.90 NXPI price target.
** OPTION TRADE: Buy NXPI FEB 15 2019 85.000 CALL at approximately $1.50
The Result So Far………
Despite NXP Semiconductors proposed merger with larger chip-making peer Qualcomm (NASDAQ: QCOM) falling apart, and car sales in China having been slow for a few months, and the stock suffering from a major drawback; a re-bound has been underway and “Cut-to-the-Chase Members” have managed to benefit from this drive up in stock price.
NXP stock is down around 30% since China failed to approve Qualcomm's overture to buy it. But the company has a multiyear plan in place for supplying chips to the automotive market which is already reaping benefits.
Fortunately, management led the company's foray in the fast-growing auto market while waiting for the QCOM-NXPI approval. Its investments over the years will result in strong end-market positioning, especially for electric vehicles and self-driving vehicles.
In the third quarter, NXP reported strong numbers in automotive. The unit brought in $990 million in revenue, up 4% from last year, offset by slower growth in Secured Connected Devices and Secure Identification Solutions.
Last month, NXPI priced $2 billion worth of unsecured notes, half of which it will use to pay down debt. A share buyback would further lower share count and help EPS.
At the present time, 14 analysts have, on average, a $98.31 price target on NXP Semiconductors.
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 129% was to be made.
Entering the option trade at a cost of $1.70 or less; and the price of the option reaching $3.89 within a week; a profit of 129% was made. Therefore, one options contract would provide a profit of $219.00.
A NICE FINISH TO THE WEEK!
AS ALWAYS THE DECISION IS YOURS!
NXP Semiconductor takes its place among Internet of Things stocks on many levels. The firm’s work in chips for automotive, consumer, and industrial applications means IoT plays a critical role in the company’s products. Through IoT, it connects devices ranging from cars to health monitors to drones.
As a result, NXPI stock appears more immune to the chip glut that has hurt profit growth for many semiconductor companies.
And analysts are predicting a 19.7% profit growth for NXP. They think NXPI will see double-digit profit increases in 2020 as well. As well, as 5G networks launch in earnest in 2020, and self-driving cars take to the roads, IoT should take off exponentially. This should propel NXPI stock to more gains.
With a market cap of just over $23 billion, its story has only just begun. And, once the market notices the continued profit growth of NXPI, the stock price will surely take-off!
Therefore, NEW Trade to consider……..
** OPTION TRADE: Buy NXPI APR 18 2019 90.000 CALL at approximately $3.00. 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!!
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