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.
Wednesday, 4th May, 2016
Option Trade – Whole Foods Market, Inc. (NASDAQ:WFM) Calls
**OPTION TRADE: Buy the WFM Jun 17 2016 31.000 call at approximately $0.65. Sell price is left to your own judgment.
Whole Foods Market, Inc. (NASDAQ: WFM), a retailer of natural and organic foods and groceries, is scheduled to announce its fiscal second-quarter earnings today, Wednesday 4th, after the market closes.
Analysts expect earnings of 41 cents per share, down from 44 cents per share for the same period last year. Whole Foods’ EPS estimates have increased 11% in the last three months.
Also, analysts expect sales for the quarter totaling $3.7 billion. That’s up from $3.6 billion for the same period last year.
In February, WFM announced Q1 earnings that beat estimates and issued an upbeat outlook for fiscal 2016 with Co-CEO Walter Robb commenting:
“We delivered record sales of $4.8 billion this quarter and are pleased with the progress we have made on our nine-point plan outlined in November. We improved our cost structure, stepped up our value efforts, and are excited to announce today the national launch of digital coupons within our mobile app. We believe we will deliver strong returns to shareholders over the long term as we improve our price perception, better communicate our higher quality standards and differentiation, and continue to fundamentally evolve our business.”
Whole Foods shares are down 13.8% for the year so far, and down 40% for the past 12 months. The S&P 500 is down 2.2% for the year to date.
But, Whole Foods is revamping its pricing strategy and concentrating on value offerings. Moreover, it is launching a new store concept to target millennials and stave off competition.
The healthy grocer will open the first outpost of its lower-cost chain, 365 by Whole Foods Market, on May 25. The new 365 stores are a part of the continuing effort to rid Whole Foods of its high-price reputation.
Whole Foods had a tough 2015, prompting the company to introduce a nine-point turnaround plan in November 2015, and the plan is starting to take off.
Oppenheimer says digital coupons and other promotions are working for the grocer. The bank rates Whole Foods shares outperform with a $38 price target.
Whole Foods Market, Inc. stock is currently trading at about $29.76 and lots of rating firms seem to have a target price set on the stock. The median 12-month price target of 22 analysts covering the company is $31, which suggests the stock could still gain more than 4 percent. The highest analyst price target is $38, which implies a gain of 28 percent. And roundups of analyst notes show that 3 are rating the stock a buy while 1 rate WFM a strong buy.
Tuesday, 3rd May, 2016
Option Trade – Centurylink Inc (NYSE:CTL) Puts
**OPTION TRADE: Buy the CTL May 2016 30.000 put at approximately $0.65. Sell price is left to your own judgment.
Centurylink Inc (NYSE: CTL), a provider of various communications services to residential, business, wholesale, and governmental customers in the United States, is expected to announce first quarter financial results after market closes tomorrow, May 4th, 2016. In front of Q1 earnings release, Wall Street is expecting earnings per share of $0.68. The analysts’ current consensus range is $0.65-$0.7 for EPS. The market consensus range for revenue is $4.40B-$4.44B, with an average of $4.43B.
In CenturyLink,’s most recent quarter, EPS grew 33.33 percent to $0.8 from $0.6 a year earlier and revenues decreased to $4.48B from $4.55B. Analysts had expected CenturyLink, Inc. to report earnings of about $0.65 per share on $4.42B in revenue. Looking forward, analysts on average predict that earnings for the current quarter would come in between $0.65 and $0.7. That is compared with the $0.67 in earnings per share it reported during the same period last year.
In the last reported results it was an earnings surprise of 23.1 percent. In the matter of earnings surprises, the term Cockroach Effect is often implied. Cockroach Effect is a market theory that suggests that when a company reveals bad news to the public, there may be many more related negative events that have yet to be revealed. In the case of earnings surprises, if a company is suggesting a negative earnings surprise it means there are more to come.
Wall Street analysts have a much less favorable assessment of CenturyLink, Inc., with a mean rating of 2.8. The stock is rated as buy by 3 analysts, with 2 outperform and 9 hold rating. The rating score is on a scale of 1 to 5 where 1 stands for strong buy and 5 stands for strong sell.
For the full year, 17 Wall Street analysts forecast this company would deliver earnings of $2.6 per share, with a high estimate of $2.68 and a low estimate of $2.43. It had reported earnings per share of $2.6 in the corresponding quarter of the previous year. Revenue for the period is expected to total nearly $17.67B versus 17.90B in the preceding year.
The analysts project the company to maintain annual growth of around -1.2 percent over the next five years as compared to an average growth rate of 1.48 percent expected for its competitors in the same industry.
Among 14 analysts the 12-month average price target for CTL is $30.14 but some analysts are projecting the price to go as low as $22 price targets on shares of CenturyLink, Inc.
According to a research note published on 17/03/2016, analysts at Jefferies have lowered their rating on the company stock from Hold to Underperform. Deutsche Bank analysts issued their verdict on CenturyLink, Inc. recently. The rating firm gave a Hold rating to this stock in a research note on 24/02/2016.