by Ian Harvey
August 22, 2018
OUT WHILST THE GOING IS GOOD!
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
Baozun Inc (ADR) (NASDAQ:BZUN)
Baozun continues bouncing upwards, escalating 5.86% and closing out Tuesday’s trading session at $54.71; then today the share price climbed another 1.28% to finish the day at $55.41. An option call trade was recommended to “Mentorship Program” Members on Monday, August 20, 2018, based on the strength of Baozun positions in digital and e-commerce services, primarily in China, which keeps the stock price scaling higher.
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
Classed as the Chinese of Shopify, Baozun Inc. (ADR) (NASDAQ:BZUN), offering digital and e-commerce services primarily in China, is down about 25% from its June all-time closing high and currently testing its 200-day moving average; now providing us with a great opportunity to profit from this options trade.
The company's most recent earnings report, on August 14, saw revenue increase 31% year-over-year. Non-GAAP net income also saw impressive growth, up 34% to $0.15 per American Depositary Share (ADS).
And Baozun has a great ability to make money from the growth of online retail in China.
The company is scaling down the warehousing and distribution side of its business, a move that's resulting in slower sales growth but stands to make the business substantially more profitable.
The company trades at roughly 50 times this year's expected earnings, but it still has big growth potential as per-store sales volume on its platform expands and it continues to add new brand partners..……continue reading…..
** OPTION TRADE: Buy BZUN SEPT 21 2018 55.000 CALL at approximately $1.60.
Place a pre-determined sell at $3.20.
Also include a protective stop loss of $0.65.
The Result So Far………
Baozun continues bouncing upwards, ) escalating 5.86% and closing out Tuesday’s trading session at $54.71; then today the share price climbed another 1.28% to finish the day at $55.41. An option call trade was recommended to “Mentorship Program” Members on Monday, August 20, 2018, based on the strength of Baozun positions in digital and e-
Monday trading for Baozun was flat, but Tuesday saw the stock price increase by 5.86%, closing the day at $54.71; then today saw the stock price continue increasing by 1.28% to finish at $55.41.
After hours saw the stock price continue its upward momentum – up another 0.79% to $55.85.
China is the world's largest e-commerce market, and with the world's largest population and the economy still expanding around 7% annually, there should be plenty of room for growth ahead.
Not surprisingly, Baozun is riding that wave. The company just reported in its second quarter, that services revenue jumped 51.6% to $88 million, about half the total. Baozun has been pivoting to higher-margin services and away from product sales, and as a result, its operating margins have been widening. In the second quarter, non-GAAP operating profit increased 56.5% to $12 million, and non-GAAP operating margin improved from 5.7% to 6.8%. Non-GAAP earnings per share jumped 32% to $0.15.
Considering that services revenue still only makes up half of the total revenue, profits should improve significantly as the company converts more of its business to services.
Due in part to concerns about a rising trade war with China, the stock
has fallen about 25% from its peak in June. That looks like a mistake,
considering that shares are now trading at a P/E of less than 30, based on
2019's expected earnings. Right now looks like a great time to buy.
Analysts are speculating a 22.46% move, based on the high target price ($67) for the shares that is set to reach in the next 12 months. The analysts, on average, are forecasting a $60.21 price target, but the stock is already up 112.55% from its recent lows.
However, the stock is trading at -18.84% versus recent highs ($67.41). Overall, the share price is up 73.35% so far this year.
Out of 9 Wall Street analysts, 7 rated the stock as a Buy, 2 brokerage firms rated the stock as a Hold; there are no sell ratings.
So, for “Mentorship Program” members, who managed to execute this trade recommended by Stock Options Made Easy; and had an exit price already established, profits of 100% were made. If the trader did not have a pre-determined sell price on the stock they are would have higher potential profit; and more is likely in the future based on the positive progression of the stock price.
Entering the option trade at a cost of $1.60 or less; and the sell price on the option was set at $3.20; a profit of 100% was made within 48 hours. Therefore, one options contract would provide a profit of $160.00; or 100% Profit.
If the member has continuing holding the options trade – now at $3.90 during today’s trading; meaning potential profits of 144% or $230.00.
A NICE START TO THE WEEK!
ACTION TO TAKE…….
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, as has been witnessed in this trade; but during earnings season this strategy 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 very exceptional.
Strategies to Consider……
It is also worth considering, when options trading earnings reports – “Do we exit on already existing profits or leave the companies to report their earnings and hope for bigger profit?” .....READ MORE.....
"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....