by Ian Harvey
IMPORTANT NOTE: There is no stop-loss or pre-determined sell price recommended – this is left to the discretion of the individual trader.
Gogo Inc (NASDAQ:GOGO) Calls
Friday, January 20, 2017
**OPTION TRADE: Buy the GOGO FEB 17 2017 10.000 call at approximately $0.30. Sell price is left to your own judgment.
Gogo Inc (NASDAQ:GOGO), a provider of in-flight connectivity and wireless entertainment solutions for the aviation industry across the world, has been steadily declining over the years. However, this may all change in the very near future. The company stock has definitely been oversold and it appears that a bottom has been reached.
It seems that many of the technical indicators, the Williams Percent Range or Williams %R, the Commodity Channel Index (CCI), the Average Directional Index or ADX and the RSI, or Relative Strength Index, all point to GOGO being oversold and is ready for an upswing.
Also, many of the analysts that cover GOGO are moving to a more positive stance….
Gogo Inc. was upgraded by Zacks Investment Research from a “sell” rating to a “hold” rating in a research note issued on Wednesday.
According to Zacks, “Gogo is the leading provider of in-flight connectivity and wireless entertainment solutions for the global aviation industry. They currently provide services on approximately 9,600 aircraft, which represents more than 20% of the worlds total commercial and business jet aircraft. Gogo has partnerships with 14 commercial airlines and is installed on more than 2,500 commercial aircraft. Nearly 7,000 business aircraft are also flying with its solutions, including the world’s largest fractional ownership fleets. Gogo also is a factory option at every major business aircraft manufacturer. Gogo is headquartered in Chicago, IL, with additional facilities in Broomfield, CO, and various locations overseas. “
Separately, William Blair reaffirmed an “outperform” rating on shares of Gogo in a report on Friday, September 30th.
One investment analyst has rated the stock with a sell rating, two have assigned a hold rating and four have given a buy rating to the company’s stock. Gogo has an average rating of “Hold” and an average target price of $13.60.
As well, according to the latest SEC filings, insiders at Gogo Inc. have increased their position in the stock by 147.29% over the past 6 months. Insiders now own 0.60% of total outstanding shares.
And hedge funds have recently made positive changes to their positions in the stock. US Bancorp DE boosted its stake in shares of GOGO by 5.8% in the third quarter. US Bancorp DE now owns 9,810 shares of the company’s stock valued at $108,000 after buying an additional 539 shares during the last quarter. Merriman Wealth Management LLC bought a new stake in shares of GOGO during the third quarter valued at about $110,000.
As for earnings, the Street is expecting that the firm will post earnings of $-0.46 per share for the current quarter. This is compared to the actual earnings of $-0.42 which the company most recently reported for the period ending on 2016-09-30. All eyes will be on the firm when they next report actual results on or around 2017-02-23.
Shares of Gogo traded down 1.18% on Thursday, closing at $9.24. The company’s stock had a trading volume of 908,874 shares. The stock’s 50-day moving average is $9.50 and its 200-day moving average is $10.19. The company’s market capitalization is $806.34 million. Gogo has a one year low of $7.80 and a one year high of $15.10.
Option Trade – T-Mobile US Inc (NASDAQ:TMUS) Calls
Thursday, January 19, 2017
**OPTION TRADE: Buy the TMUS FEB 17 2017 60.000 call at approximately $1.50. Sell price is left to your own judgment.
T-Mobile US Inc (NASDAQ:TMUS), a provider of mobile communications services in the United States, Puerto Rico, and the U.S. Virgin Islands, has been a takeover target for the better part of a year, with the stock riding the rumors higher along the way. Although TMUS is up 44% since May, it’s spent the past month moving sideways and looks to be gearing up for another run higher.
T-Mobile US Inc. traded on unusually high volume on Jan. 18, as the stock gained 2.82% to close at $58.66. On the day, T-Mobile US Inc. saw 5.32 million shares traded hands on 39,592 trades. Considering that the stock averages only a daily volume of 3.33 million shares a day over the last month, this represents a pretty significant bump in volume over the norm.
Generally speaking, when a stock experiences a sudden spike in trading volume, it may be seen as a bullish signal, which helps lead to this options play. An increase in volume means more market awareness for the company, potentially setting up a more meaningful move in stock price. The added volume also provides a level of support and stability for price advances.
T-Mobile management expects 2017 to be another year of solid revenue growth for the third-place carrier. "We're looking at another year of very significant value creation," CFO Braxton Carter said at a recent investor’s conference hosted by Citi.
Carter expects T-Mobile's service revenue -- the money customers pay for their plans -- to grow in the double digits, yet again, in 2017, which will ultimately translate into a sustainable ramp up in cash flow. Meanwhile, T-Mobile's competitors have seen service revenue decline. AT&T’s (NYSE: T) service revenue declined 0.9% in the third quarter, Verizon’s (NYSE: VZ) fell 5.2%, and Sprint’s (NYSE: S) fell 6.8%. Comparatively, T-Mobile increased service revenue 13.2% in the third quarter.
T-Mobile US, Inc. will report its next earnings on Feb 15 – Feb 20 (Est.). The company reported the earnings of $0.42/Share in the last quarter where the estimated EPS by analysts was $0.22/share. The difference between the expected and actual EPS was $0.2/share, which represents an Earnings surprise of 90.9%.
Factors to Consider
1. Subscriber base keeps growing -- over the past few years; no wireless carrier has done a better job than T-Mobile. In 2016, T-Mobile added 8.2 million total customers, 3.3 million of which are the extremely high-value postpaid phone subscribers. In fact, T-Mobile boasts that it captured over 100% of the postpaid phone net additions across the industry in both 2016 and 2015.
There's no indication that the trend is slowing in 2017.
2. All In will set the stage -- T-Mobile's most recent Un-Carrier move, announced at CES earlier this month, is to include taxes and fees in its pricing. It's also doing away with its Simple Choice plans with data buckets, and only offering its unlimited data T-Mobile One plan. Carter believes the latest move, dubbed All In, "will set the stage for very nice front-end growth" in 2017.
3. Increasing revenue per user -- the other benefit of getting rid of Simple Choice plans is that customers will be forced to choose T-Mobile's more expensive plan. During the third quarter, when T-Mobile introduced its T-Mobile One plan, it saw a 2.2% sequential increase in average revenue per postpaid phone subscriber. And Carter points out the new service plan was only available for one month that quarter.
4. Geographical expansion -- T-Mobile dramatically improved its network coverage in 2016, but its retail footprint hasn't quite caught up with its network. Carter says the company plans to open 1,000 new T-Mobile stores by mid-2017.
5. Getting into business -- When it comes to grabbing share of the enterprise market, Verizon and AT&T are dominant forces. Carter says, "We still index very low on B2B [business to business]." T-Mobile has taken less than 5% of the marketplace.
While business customers are harder to convert than retail customers due to the need to convert so many people at once, T-Mobile is much better positioned to win these valuable contracts than just two years ago. It may be a slow process, but investors should look for enterprise customers to add meaningfully to service revenue in 2017 and beyond.
Many analysts are providing their Estimated Earnings analysis for T-Mobile US, Inc. and for the current quarter 20 analysts have projected that the stock could give an Average Earnings estimate of $0.29/share. These analysts have also projected a Low Estimate of $0.21/share and a High Estimate of $0.38/share.
In case of Revenue Estimates, 18 analysts have provided their consensus Average Revenue Estimates for T-Mobile US, Inc. as 9.83 Billion. According to these analysts, the Low Revenue Estimate for T-Mobile US, Inc. is 9.52 Billion and the High Revenue Estimate is 10.28 Billion. The company had Year Ago Sales of 8.25 Billion.
T-Mobile US, Inc. had its price objective boosted by FBR & Co from $54.00 to $55.00 in a research note released on Wednesday. FBR & Co currently has an outperform rating on the stock.
Also, BTIG Research restated their buy rating on shares of T-Mobile US, Inc. in a research note released on Thursday. BTIG Research currently has a $65.00 price target on the stock, up from their previous price target of $56.00.
As well, Wells Fargo & Company restated an outperform rating on shares of T-Mobile US in a research report on Sunday, January 8th.
There are 8 analysts who have rated the stock as Strong buy, 13 analysts have given a Buy signal, 5 said it’s a HOLD, 1 reported it as Underperform and 0 analysts rated the stock as Sell.
Overall, T-Mobile is poised for another strong year of service-revenue growth as its competitors struggle to tread water.
T-Mobile has a 52-week low of $33.23 and a 52-week high of $59.46. The firm’s 50-day moving average price is $57.09 and its 200 day moving average price is $49.76. The stock has a market cap of $47.01 billion, a P/E ratio of 36.13 and a beta of 0.68.
Option Trade – ManpowerGroup Inc. (NYSE:MAN) Calls
Wednesday, January 18, 2017
**OPTION TRADE: Buy the MAN MAR 17 2017 100.000 call at approximately $1.50. Sell price is left to your own judgment.
ManpowerGroup Inc. (NYSE:MAN), a provider of workforce solutions and services, had its stock hit a new 52-week high and has been given a $100.50 price target or 8.00% above yesterday’s $93.06 share price.
The 8 months bullish chart indicates low risk for the $6.34 billion company. If the $100.50 price target is reached, the company will be worth $507.20 million more.
The 52-week high event is an important milestone as it shows very positive momentum and now is the time to execute this options trade.
According to Zacks Investment Research, “Manpower Inc. is a leading non-governmental employment services organization. The company’s largest operations, based on revenues, are located in the United States, France and the United Kingdom. The company provides a variety of staffing and workforce management services and solutions, including temporary staffing services, contract services and training and testing of temporary and permanent workers. The company provides employment services to a wide variety of customers.”
ManpowerGroup Inc. has risen 21.78% since June 10, 2016 and is up-trending. It has outperformed the S&P500 by 13.26%.
One of the reasons why Manpower is such an outperformer for job stocks is its diversity of businesses. Unlike some competitors, MAN isn't just a job placement firm. It also offers talent management services, as well as professional development curriculums. These divisions provide another layer of revenue from organizations that aren't looking to add headcount, but to make the most of what they already have.
Also,with 2,900 offices across 80 countries and territories, ManpowerGroup Inc . is one of the most recognized names among job stocks.
ManpowerGroup Inc. is to report earnings on February, 1. Analysts expect $1.71 earnings per share, up 3.01% or $0.05 from last year’s $1.66 per share. MAN’s profit will be $116.50M for 13.61 P/E if the $1.71 EPS becomes a reality.
Based on the latest quarterly filings, institutions continue to be large stakeholders in ManpowerGroup Inc. The big banks are holding 95.60% of the shares while company insiders are clinging to 0.30%. Shares of ManpowerGroup Inc. are currently valued at $92.99 with a future target price of $92.48 according to research brokerages.
Zacks Investment Research raised ManpowerGroup from a “hold” rating to a “buy” rating and set a $103.00 price objective for the company in a research note last Friday. BMO Capital Markets reaffirmed a “buy” rating and set a $97.00 price target on shares of ManpowerGroup in a research note on Monday, January 9th.
ManpowerGroup has a market cap of $6.26 billion, a PE ratio of 15.31 and a beta of 1.59. The firm has a 50-day moving average price of $89.79 and a 200-day moving average price of $76.35.
Option Trade – United Continental Holdings Inc (NYSE:UAL) Calls
Tuesday, January 17, 2017
**OPTION TRADE: Buy the UAL FEB 17 2017 77.500 call at approximately $1.80. Sell price is left to your own judgment.
U.S. airliner United Continental Holdings Inc. (NYSE:UAL) is expected to post its fourth-quarter results today, January 17. The company will report its numbers after the market closes, with the consensus calling for earnings of $1.51 per share, down from $2.54 during the same period last year.
Transportation stocks participated in the post-election rally, and UAL was no exception. The stock has a low valuation, with a P/E of just 9.5.
The company has topped estimates the last three quarters, and another earnings beat will be enough to help push the stock higher.
UAL has appreciated 30.3% over the last twelve months.
Factors to Consider
United Continental Holdings is seeing favorable earnings estimate revision activity as of late, which is generally a precursor to an earnings beat. After all, analysts raising estimates right before earnings—with the most up-to-date information possible—is a pretty good indicator of some favorable trends underneath the surface for UAL in this report.
In fact, the Most Accurate Estimate for the current quarter is currently at $1.76 per share for UAL, compared to a broader Consensus Estimate of $1.51 per share. This suggests that analysts have very recently bumped up their estimates for UAL.
Also, the airline industry unit revenue is finally improving. Nearly every major airline has raised its Q4 revenue guidance during the past three months. Just this week, American Airlines (NASDAQ: AAL), United Continental (NYSE: UAL), and Southwest Airlines (NYSE: LUV) all raised their fourth-quarter unit revenue forecasts, confirming that the revenue environment has finally stabilized.
Three months ago, United expected its passenger revenue per available seat mile (PRASM) to slump 4% to 6% in Q4. In December, it raised its outlook, calling for a 3% to 4% PRASM decline.
Even that estimate was far too conservative. On Tuesday, United Continental revealed that it is likely to report a modest PRASM decrease of just 1.25% to 1.75% for Q4. Measuring from the midpoint of this guidance range, United's unit revenue forecast has improved by 3.5 percentage points over the past three months.
United Continental Holdings had its target price raised by equities researchers at Imperial Capital from $76.00 to $82.00 in a research report issued to clients and investors last Thursday. The firm presently has an “in-line” rating on the stock. Imperial Capital’s price target indicates a potential upside of 10.81% from the company’s previous close.
United Continental Holdings has a 12 month
low of $37.41 and a 12 month high of $76.80. The stock has a market cap of
$23.48 billion, a P/E ratio of 9.45 and a beta of 0.71. The company’s 50-day
moving average price is $72.57 and its 200 day moving average price is $56.36.