by Ian Harvey
November 16, 2017
YY Inc. (ADR) (NASDAQ:YY)
Here is an overview of YY Inc. (ADR) (NASDAQ:YY) winning options call trade after reporting earnings. This options trade was recommended, as a consideration, on Monday, November 13, 2017 -- in the article “Earnings Predictions for the Week Beginning November 13, 2017”-- producing great profits of 143% within a couple of days of executing the trade!
YY Inc. (ADR) (NASDAQ:YY) – China’s leading social live-streaming platform reports after the market closed Tuesday, November 14, 2017. The consensus earnings estimate is $1.54 per share on revenue of $423.29 million, but the Earnings Whisper number is $1.59 per share. Consensus estimates are for year-over-year earnings growth of 49.51% with revenue increasing by 35.07%.
Even though the share price has doubled year-to-date, YY remains inexpensive at 13 times this year’s estimated earnings and just 11 times next year’s. Market cap net of cash on the books is about $4.5 billion.
YY’s principal source of revenue is the virtual currency it sells to viewers who then use it to reward their favorite performers or to secure an edge in YY’s online games.
The 10-million amateur channels on its platform attract 117 million monthly average users, with more than half now tuning in via their smartphones. Paying live-streaming users were up 46% year-over-year to a still relatively modest 5.7 million.
With Chinese disposable incomes on a tear once again and consumer confidence the highest in more than 20 years, YY’s near-term prospects is looking good.
Investor sentiment going into the company's earnings release has 85% expecting an earnings beat. Short interest has decreased by 65.5% since the company's last earnings release while the stock has drifted higher by 11.1% from its open following the earnings release to be 41.0% above its 200 day moving average of $63.06.
Overall earnings estimates have been revised higher since the company's last earnings release.
Option trade to consider: Buy the DEC 15 2017 90.000
CALL at approximately $4.80.
YY Inc. reported for its third quarter of 2017, YY's revenue climbed 48% year over year to $464.8 million, which translated to 46.7% growth in adjusted net income to $96.1 million. Adjusted net income per American depositary share (ADS) climbed 41.2% to $1.59. By comparison, analysts' consensus estimates predicted significantly lower adjusted earnings of $1.45 per ADS on revenue of $422.8 million.
Shares of this Chinese social communication platform, which allows users to communicate via voice, text, and video, had already skyrocketed 126% in 2017. With Tuesday's jump, YY Inc. shares hit a new all-time intraday trading high of $111.52 per share.
YY's underlying business drivers were equally impressive. Mobile live-streaming monthly active users climbed 36.6% to 73 million, and total live-streaming paying users rose 46.5% to 6.3 million. The company also introduced a series of unique enhancements in its latest version of YY Live 7.0, including Accompany Me, Happy Basketball, and Clip Doll Online.
"Our solid performance is a testament to our highly effective strategies in introducing more initiatives to attract younger generation users and to enhance existing users' engagement and consumption on our live streaming social media platform," stated YY chairman and CEO David Xeuling Li.
For the fourth quarter YY anticipates revenue of between RMB 3.4 billion (~$513 million) and RMB 3.5 billion (~$528 million), good for year-over-year growth of 36.5% to 40.6%. Here again, Wall Street was modeling lower fourth-quarter revenue of $484.2 million, or 29.5% growth from the same year-ago period.
Investors seem to be more confident than ever, helping YY shares soar nearly 24.83% Wednesday. YY Inc. also crushed revenue projections and posted massive year-over-year sales growth.
At the time of the recommendation, Monday morning, YY stock price was sitting at $88.90.
Wednesday saw the stock price hit end the
day at $110.39, up $ $22.16 or 24.83%.
So, for those traders who managed to execute this trade recommended by Stock Options Made Easy; a nice tidy potential profit of 143% within a couple 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……