Under Armour Plunges!
But Put Options Save The Day!

540% Potential Profit!

by Ian Harvey

November 01, 2017

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Under Armour Inc. (NYSE:UAA)

Here is an overview of Under Armour Inc. (NYSE:UAA) winning options put trade after reporting earnings. This options trade was recommended to “Cut-To-The-Chase” Members of Stock Options Made Easy, on Friday, October 27, 2017 in the article ““Cut-to-the-Chase” Recommendations - Week Beginning Monday, October 23, 2017”; producing great profits within a few of days of executing the trade!

The Recommendation……

…….from ““Cut-to-the-Chase” Recommendations - Week Beginning Monday, October 23, 2017”.

The Details……..

Baltimore-based athletic apparel and accessories maker Under Armour Inc. (NYSE:UAA) is scheduled to report third-quarter 2017 results on Oct 31, before the opening bell.

The Consensus Estimate for the quarter is pegged at 19 cents down from 29 cents reported in the year-ago period. Notably, the estimates have witnessed downward revisions in the last 30 days. Analysts expect revenues of $1,490 million for the said quarter, up about 1.2% from the year-ago quarter.

Under Armour has been under pressure for the last two years. Its stock peaked in 2015 and then continued to project big sales increases that never seem to materialize.

Under Armour Inc. fell 3% on Monday following news that the firm is considering an exit from its tennis and outdoor business; while longtime executive Kip Fulks will take a sabbatical from the company.

Trading down another 2.3% on Tuesday morning at $16.46, UAA stock reflects a whopping 43.4% decline year-to-date (YTD) versus the SP 500’s 14.7% gain over the same period. In response to the news, one team of analysts on the Street suggests that the athleisure player’s real problem is its many distributors, rather than too many product offerings.

Earlier this year, Under Armour reported its first loss as a public company, as shares fell to a five-year low after reporting second-quarter earnings in August. As the firm tries to revive its business in an increasingly competitive sportswear space against Nike Inc. and revived German rival Adidas AG, sources tell The Wall Street Journal that the company is considering trimming down and getting rid of its smaller businesses.

The Trade……..

** OPTION TRADE: Buy the UAA NOV 17 2017 15.000 PUT at approximately $0.40.

The Report………

Under Armour announced disappointing third-quarter results and revised its outlook for the rest of the year downward, sending the stock plunging 24%.

There were several causes:-

  • Besides the company's first-ever quarterly revenue decline, with sales dipping 4.5% to $1.41 billion; earnings per share were $0.12, or $0.22 excluding one-time items relating to the company's restructuring efforts, compared with $0.29 in the same period last year. Guidance for full year revenue was cut to a low-single-digit percentage increase, compared with last year's 22% gain, and guidance given three months ago for growth in the 9% to 11% range.,
  • Bank of America's investment banking unit downgraded Under Armour stock to "underperform," with a cut in the price target to $12; analysts cited concerns such as tougher competition and a more difficult environment in North America right now, and
  • Under Armour slashed its full-year guidance, from expectations of 9% to 11% sales growth after the second quarter, to a "low single-digit percentage rate" after its third-quarter results were in.

End Result……..

At the time of the recommendation, Friday morning, UAA stock price was sitting at $16.25.

By the end of trading Tuesday the stock price had settled at $12.52; down 3.89 or -23.71%.

The Profit……..

So, for members of Stock Options Made Easy’s “Cut-To-The-Chase” Series; a great potential profit of 540% within a few of days.

ACTION TO TAKE…….

As you would have by now realized, many of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, but during earnings season this strategy has been very profitable.

Our approach is 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. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.

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.

What To Do Now…….

If you interested in being part of this profitable action just click here……


Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


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