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.
Thursday, 16th June, 2016
Oracle Corporation (NYSE:ORCL) Calls
**OPTION TRADE: Buy the ORCL July 15 2016 40.000 call at approximately $0.45 Sell price is left to your own judgment.
Oracle Corporation (NYSE: ORCL), will report its fiscal fourth-quarter results today, June 16, after market close. The company is forecast to earn $0.82 per share, up from $0.78 during the same period last year. The stock is up 6.2% on the year.
Oracle has put together a streak of three straight earnings beats, and a fourth beat could be the catalyst the stock needs to regain its footing and erase some of its recent losses. The company’s biggest competitors, Microsoft (MSFT) and IBM (IBM) have already both reported, with MSFT posting a negative earnings surprise while IBM posted better than expected results. The street has a slightly higher whisper number target for ORCL, forecasting $0.83, which could suggest that the company will indeed post another earnings beat.
At the same time, sentiment on the name remains solid. Shares go for about 14 times forward earnings on a growth forecast of 7%.
The stock has P/E of 19, so there is limited downside risk on an earnings miss.
Four investment analysts have rated the stock with a sell rating, fourteen have given a hold rating and twenty-five have issued a buy rating to the stock. The stock presently has a consensus rating of “Hold” and a consensus price target of $44.13.
Oracle has a market cap of $161.22 billion and a PE ratio of 19.10. The firm’s 50-day moving average price is $39.60 and its 200-day moving average price is $38.28. Oracle has a one year low of $33.13 and a one year high of $45.24.
Wednesday, 15th June, 2016
Kroger Co (NYSE:KR) Calls
**OPTION TRADE: Buy the KR July 15 2016 37.500 call at approximately $0.55. Sell price is left to your own judgment.
Kroger Co (NYSE: KR), a grocery store chain, is scheduled to report its first-quarter results tomorrow, June 16. The company will post its quarterly results before the market open, with the consensus calling for earnings of $0.69 per share, up from $0.62 during the same period last year. The stock is currently down 12.4% on the year.
Kroger stock has trailed the market by double digits so far in 2016. In March, the supermarket chain posted its 10th straight year of market share gains against rivals like Wal-Mart and Whole Foods.
Recent strength from both Costco (COST) and Wal-Mart (WMT) suggest that Kroger could likely top analyst’s estimates. The consensus calls for earnings of $0.69 per share, but the street has a slightly higher whisper number of $0.71. The bullish whisper number is a good indicator that Kroger is likely to top the forecast. KR shares are trading with a P/E of 17.8, which should limit any downside risk in the event of a possible earnings miss. Analysts expect the company to grow earnings by 9.2% this year, which combined with the low valuation should help shares recover their recent losses.
The main driver behind Kroger's awesome 49-quarter growth streak has been its success at appealing to shoppers on both extremes of the value spectrum. Its corporate brands, which have spiked to almost one-third of sales volume, allow it to poach share from the lower end of the market through aggressive pricing and improved selection.
At the same time, Kroger's premium offerings around craft beer and brands like Simple Truth attract higher income shoppers and ultimately contribute to the pressure that's behind Whole Foods' new lower-priced store concept. Executives believe they can keep this solid momentum going even if the broader market doesn't grow quickly.
Kroger Co‘s stock had its “sector perform” rating reissued by equities research analysts at RBC Capital in a note issued to investors on Monday. They currently have a $39.00 price target on the stock.
There are fifteen investment analysts that have rated the stock a buy and one has assigned a strong buy rating to the company’s stock. Kroger presently has an average rating of “Buy” and an average price target of $41.63.
Kroger has a 12 month low of $27.32 and a 12 month high of $42.75. The stock has a market capitalization of $35.43 billion and a price-to-earnings ratio of 17.87. The stock’s 50 day moving average is $35.56 and its 200-day moving average is $38.10.