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.
Friday, 29th July, 2016
Eaton Corporation (NYSE:ETN) Puts
**OPTION TRADE: Buy the ETN AUG 19 2016 62.500 put at approximately $1.40. Sell price is left to your own judgment.
Eaton Corporation (NYSE: ETN), a diversified power management company, will release second-quarter 2016 financial results before the market opens on Aug 2. Last quarter, this power management company reported a positive earnings surprise of 3.53%, but is not expected to do so this time round.
Eaton expects earnings per share for the second quarter to be in the range of $1 to $1.10 per share. Eaton expects its organic revenue to improve in excess of 5% sequentially, as the first quarter is historically its weakest in terms of revenue generation.
However, the weakness in the some of the company's end markets could have an adverse impact on its results on a year-over-year basis. Negative currency translation might also have some impact on second-quarter revenues. Eaton expects organic revenues to decline between 2% and 4%, reflecting continuing sluggish markets around the world.
Eaton Co., PLC has a 52-week low of $46.19 and a 52-week high of $64.71. The firm has a market cap of $29.08 billion and a price-to-earnings ratio of 15.40. The stock has a 50 day moving average of $61.29 and a 200 day moving average of $58.73.
Friday, 29th July, 2016
Expeditors International of Washington (NASDAQ:EXPD) Calls
**OPTION TRADE: Buy the EXPD AUG 19 2016 50.000 call at approximately $1.15. Sell price is left to your own judgment.
Expeditors International of Washington (NASDAQ: EXPD), a logistics company that purchases cargo space from carriers, including airlines and ocean shipping lines on a volume basis and resells that space to its customers, is scheduled to report earnings on the 2nd August, and is expected to report better-than-expected earnings in the second quarter of 2016.
In the first quarter of 2016, the transportation company had reported lackluster results with earnings and revenues missing estimates. All three primary segments - Airfreight Services, Ocean Freight and Ocean Services and Customs Brokerage and Other Services - performed disappointingly in the quarter.
Despite the miss in the first quarter of 2016, Expeditors has an impressive earnings history having outshined the Consensus Estimate in three of the last four quarters, at an average of 4.55%. The company's emphasis on cost reduction to drive the bottom line is quite impressive. Also, there is a positive note about the company's efforts to reward shareholders through dividend payments.
In May 2016, the board of directors at Expeditors approved a hike in its dividend payout. The board declared a semi-annual cash dividend of 40 cents per share (annual payout of 80 cents per share, up 11.1%).
As well, Expeditors International of Washington Inc has no debt. The Integrated Shipping & Logistics sector debt to equity ratio average stands at 103.4%. The company has a current ratio of 2.44.
The company has a market cap of $9.09 billion and a P/E ratio of 20.96. Expeditors International of Washington Inc. has a 52-week low of $40.41 and a 52-week high of $51.80. The firm has a 50-day moving average price of $49.20 and a 200 day moving average price of $47.68.
Thursday, 28th July, 2016
United Parcel Service, Inc. (NYSE:UPS) Calls
**OPTION TRADE: Buy the UPS AUG 19 2016 110.000 call at approximately $1.00. Sell price is left to your own judgment.
United Parcel Service, Inc. (NYSE: UPS), a package delivery company, will be announcing its earnings results on Friday, July 29th, before the bell. United Parcel Service has set its FY16 guidance at $5.70-5.90 EPS.
Wall Street is expecting earnings of $1.43 per share on revenue of $14.65 billion. Last year, the company reported earnings of $1.35 per share on revenue of $14.1 billion.
UPS is expected to beat Wall Street's earnings estimates as a result of continued U.S. domestic package growth. The company has reported surprise earnings beats for the last four quarters, with a 6.1% average beat.
In the first quarter of 2016, United Parcel Service reported a positive earnings surprise of 4.10%.
The company reported $1.27 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.22 by $0.05. The firm had revenue of $14.40 billion for the quarter, compared to analyst estimates of $14.57 billion. During the same quarter in the previous year, the company earned $1.12 earnings per share. The company’s quarterly revenue was up 3.2% on a year-over-year basis.
Results were buoyed by a rise in ecommerce packages in the company's U.S. Domestic Package unit. The company has an impressive track record with respect to earnings, having posted higher-than-expected earnings in each of the past four quarters, with an average beat of 6.01%.
The stock has a 50 day moving average price of $107.56 and a 200-day moving average price of $102.16. The firm has a market cap of $96.03 billion and a PE ratio of 19.77. United Parcel Service Inc. has a 52-week low of $87.30 and a 52-week high of $111.83.
Thursday, 28th July, 2016
Alphabet Inc (NASDAQ:GOOGL) Calls
**OPTION TRADE: Buy the GOOGL Jul 29 2016 800.000 call at approximately $4.80. Sell price is left to your own judgment.
Alphabet Inc (NASDAQ: GOOGL), a collection of Companies, is set to release second-quarter 2016 results today, July 28, 2016 after the market close, This will mark the Google parent's third time breaking out its performance on a segment basis, so now is great opportunity for this options trade.
For perspective, last quarter didn't sit particularly well with the market; Alphabet shares plunged around 5% the day after its Q1 report when it technically fell short of Wall Street's fickle near-term expectations, despite Alphabet CFO Ruth Porat calling it a "tremendous start to the year."
"We're thoughtfully pursuing big bets and building exciting new technologies, in Google and our Other Bets, that position us well for long-term growth," added Porat.
To that end, keep in mind Alphabet doesn't typically offer specific quarterly financial guidance. But as a point of reference, analysts' consensus estimates this time call for second-quarter revenue to increase roughly 17.1% year over year, to $20.76 billion, and result in a 14.9% increase in earnings per share, to $8.03.
Google parent Alphabet Inc. excels at many things. One at which it doesn't: playing Wall Street's expectations game.
Underneath those rosy figures is a solid core business. Google's lucrative search-advertising business is humming along and it is capitalizing on the shift from desktop to mobile use.
Furthermore, to the delight of some shareholders, Alphabet is actually showing some spending restraint, at least by its own standards. Paid clicks, which measure the number of clicks Google gets on its ads, are forecast to have increased by 25% in the second quarter from a year ago.
Google will likely get more than half of its advertising revenue from mobile this year for the first time, according to data provider eMarketer. And overall, it has cornered about one-third of the global mobile-ad market, nearly double that of the second-biggest player, Facebook Inc., eMarketer estimates.
This all comes as spending appears to be in check. Total operating expenses were about 36% of net revenue in the first quarter, in line with its average over the past few years. More significantly, capital expenditure is expected at 15% of net revenue this year, down from about 20% in 2014.
After so much talk of science projects such as driverless cars and robots, that restraint may soon get investors' attention. After a sharp rally in 2015, Alphabet has struggled this year relative to rivals. Fetching just 20 times projected earnings over the next 12 months, its multiple is identical to the Nasdaq Composite and cheaper than Facebook's.
Four equities research analysts have rated the stock with a hold rating and forty-six have given a buy rating to the company’s stock. Alphabet presently has a consensus rating of “Buy” and an average target price of $904.84.
Cantor analyst Youssef Squali is bullish on Google’s parent company Alphabet Inc. As such, Squali reiterates a Buy with a price target of $940, a 24% increase from where the stock is currently trading.
Also, Alphabet Inc. has been assigned a $810.00 price target by investment analysts at Goldman Sachs Group Inc. in a report released on Wednesday. The brokerage presently has a a “buy” rating on the stock. Goldman Sachs Group Inc.’s price target points to a potential upside of 9.91% from the company’s current price.
Alphabet Inc. has a 12 month low of $593.09 and a 12 month high of $810.35. The stock’s 50 day moving average price is $724.99 and its 200 day moving average price is $734.60. The company has a market cap of $521.12 billion and a P/E ratio of 30.89.
Wednesday, 27th July, 2016
Facebook Inc (NASDAQ:FB) Calls
**OPTION TRADE: Buy the FB Aug 19 2016 125.000 call at approximately $2.50. Sell price is left to your own judgment.
Facebook Inc (NASDAQ: FB), which is engaged in building products to create utility for users, developers, and advertisers, is set to release its second quarter report today after the closing bell. Expectations are running high, but many analysts still believe the social network can beat them.
Wall Street expects the social network to post $6 billion in revenue and 81 cents per share in adjusted earnings for the second quarter.
In the year-earlier period, Facebook reported earnings of 50 cents and revenue of $4.04 billion, beating Wall Street estimates.
Facebook has monetized its mobile audience well and has potential future catalysts through Instagram, Oculus VR and its mobile-messaging platforms.
Facebook has continued its storied growth in Q2, with its messenger app notably hitting the 1 billion monthly user milestone on July 20th. Up until this point, messenger was not a source of revenue for Facebook, as CEO Mark Zuckerberg had previously stated that he would wait until this milestone to explore profitability options with the service.
Facebook also recently announced its first successful test of Aquila, the company’s high altitude solar-powered aircraft. Aquila is part of Facebook’s plan to beam internet to people in remote locations through use of laser communication and millimeter wave systems.
A still-growing core user base along with Instagram’s new ad program, a 1 billion user strong messenger, well-performing WhatsApp and continued innovation paints a picture of a Facebook that still has plenty of growth ahead. These factors, coupled with a lack of earnings estimate revisions in the last 60 days reflect analyst confidence in Facebook’s Q2 earnings report, as well as moving forward.
Most analysts have a positive view towards Facebook. There is only one equities research analyst which has rated the stock with a sell rating, six have given a hold rating, but forty-six have assigned a buy rating and two have issued a strong buy rating to the company’s stock. The company currently has a consensus rating of “Buy” and a consensus target price of $145.00.Facebook Inc stock has been on a short-term tear over the last month or so, rising more than 8% in this time, and it’s up by about 25% over the last 12 months.
Facebook has a 1-year low of $72.00 and a 1-year high of $122.20. The stock has a market cap of $346.10 billion and a price-to-earnings ratio of 74.01. The stock’s 50-day moving average is $116.19 and its 200-day moving average is $111.35.
Wednesday, 27th July, 2016
Ford Motor Company (NYSE:F) Calls
**OPTION TRADE: Buy the F Aug 19 2016 14.000 call at approximately $0.27. Sell price is left to your own judgment.
Ford Motor Company (NYSE: F), a global automotive and mobility company, will deliver its second-quarter earnings report before the market opens Thursday.
The No. 2 U.S. car maker is expected to post earnings of 60 cents a share, according to analysts, compared with 47 cents during the same time period a year ago. Revenue is expected to rise 3% to $36.3 billion compared with $35.1 billion a year ago.
Ford has stepped up production of its highly-profitable trucks and sport-utility vehicles, a move that is expected to power North American earnings in the second-quarter. Rising sales in Europe and China are also helping to offset red ink in South America.
Ford is witnessing strong sales volumes in all major markets. This will boost the automaker’s revenues. The company expects 2016 pre-tax profit, earnings per share, Automotive revenue and Automotive operating margin to be equal to or higher than 2015 levels.
Also, North America, Europe, Middle East & Africa, and the Asia Pacific segments are expected to be profitable this year. Results from Europe and the Asia Pacific are anticipated to witness a year-over-year improvement in 2016, while that from Middle East & Africa will likely be equal to or higher than 2015 levels. Better annual guidance raises expectations of improvement in the quarterly performance as well.
Ford stock is currently trending higher, and with a P/E of just 6.5, there is a lot of upside for the automaker if its quarterly numbers impress. The company has a mixed earnings record, but it has managed to post two consecutive better than expected reports, and a third will drive shares even higher.
The company’s main competitor, General Motors (GM), has already posted its quarterly numbers, easily topping estimates for both the top and bottom lines, and shares made a strong move higher on the results. With GM enjoying solid numbers, Ford is likely to also post decent results.
Wall Street appears to agree that Ford will post solid results, with the Street setting a whisper number for the quarter of $0.62, which is two pennies higher than the consensus. If Ford is able to hit the estimate, shares should make a charge higher.
F shares are trending higher, but remain down 2.6% on the year.
Ford hit the gas on truck and SUV production this year in the U.S., boosting second-quarter output 14% from the same time period a year earlier.
Ford's sales in China are up 6% in the first half of the year but the second-quarter was rocky. Sales fell in April and May before rebounding in June. The performance contrasts with rising demand in the broader Chinese market amid new tax incentives aimed at stimulating demand for more fuel-efficient cars. Ford has placed big bets on China, recently spending $5 billion to build new plants and expand its lineup in the world's largest auto market.
Ford teased investors earlier this year with a pledge to expand into new transportation services, promising to roll out a more concrete plan this year. Chief Executive Mark Fields has also hyped the sector, which includes buses, cabs and passenger rail, as generating $5.4 trillion in revenue a year and describing it as a big opportunity for Ford.
Four research analysts have rated the stock with a sell rating, five have given a hold rating, eleven have given a buy rating and one has issued a strong buy rating to the stock. Ford Motor currently has a consensus rating of Hold and a consensus price target of $15.42.
Wall Street analysts were happily surprised when Ford trounced earnings estimates in the first quarter, more than doubling its year-earlier profit. Worries that a rise in low-profit rental-fleet sales would squeeze Ford's margins turned out to be unfounded: Strong sales of high-profit trucks and SUVs helped the company to an impressive overall 9.8% operating profit margin.
We should see Ford post a big improvement this time around on it’s year-ago 7.2% operating profit margin. With average transaction prices still strong, incentives at reasonable levels, and no new overseas drama cropping up, it's quite possible that Ford's margin will jump -- and that its result will come in a bit ahead of Wall Street's optimistic estimate.
The firm has a 50-day moving average of $13.13 and a 200-day moving average of $12.93. The stock has a market cap of $54.98 billion and a PE ratio of 6.41. Ford Motor has a 1-year low of $10.44 and a 1-year high of $15.84.
Tuesday, 26th July, 2016
Netflix, Inc. (NASDAQ:NFLX) Calls
**OPTION TRADE: Buy the NFLX Sept 16 2016 100.000 call at approximately $0.80. Sell price is left to your own judgment.
Netflix, Inc. (NASDAQ: NFLX), a provider of Internet television network, a former market darling -- the stock that was the top performer among the S&P 500 companies in two of the past three years -- continues to prove mortal in 2016. Shares of Netflix shed 13% of their value last week, fueled by weaker than expected subscriber counts and a weak near-term prognosis.
The same stock that soared 298% in 2013 and jumped 134% in 2015 now finds itself trading 25% lower year-to-date. At least 11 analysts lowered their price targets on Netflix stock last week following its troublesome report.
This leaves plenty of opportunity to buy on the dip!!
And, Netflix executives remain confident about the company's growth trajectory. There are plenty of positive points to pursue:-
• Everyone is using internet video and internet television more and more -- Netflix CEO Reed Hastings is sticking to his forecast that the company will eventually have 60 million-90 million domestic subscribers.
Hastings continues to believe that all TV viewing will eventually move to the internet. As a first mover in the internet TV market, Netflix is well positioned to attract a large share of TV viewing in the future. Considering that there are about 120 million households in the U.S., Netflix still has huge domestic growth opportunities ahead.
• The slowdown in growth also affected Netflix's international markets. Even though Netflix launched in 130 additional countries back in January, international subscriber growth was down 36% year over year in Q2.
Nevertheless, Netflix doesn't plan to change its strategy by offering a "cheap" option in emerging markets. Instead it wants to set itself apart as a premium service and improve its content to the point that many people will pay about $10/month to subscribe to Netflix.
This may seem like a tough sell in low-income countries. However, Hastings pointed to the broad global success of the iPhone as evidence that premium products can be successful in emerging markets if they are good enough.
• Original content is a critical lever that Netflix plans to use to drive subscriber growth both in the U.S. and abroad. Not only does original content help elevate Netflix's brand, it also generates more member viewing per dollar (on average). As a result, Netflix may one day allocate 50% or more of its content budget to originals, according to Chief Content Officer Ted Sarandos.
Netflix CFO David Wells pointed out that Netflix has a potential advantage over competitors due to its global scale.
• While Netflix is increasingly emphasizing original content, it still has a huge library of licensed content.
Well, the relationships remain very strong, and we continue to do business with every studio, every network in every territory. They're in the business of selling their content to the highest bidder.
-- Ted Sarandos
• Earlier this month, Comcast -- the world's largest media conglomerate -- announced plans to incorporate Netflix into its highly regarded X1 set-top box. Apparently, after years of sparring with Netflix, Comcast now thinks it is smarter to work with the streaming video leader than to work against it.
Comcast will probably get some kind of referral fee when customers sign up for Netflix through the X1 box.
Five investment analysts have rated the stock with a sell rating, fifteen have assigned a hold rating, twenty-seven have issued a buy rating and one has assigned a strong buy rating to the stock. Netflix currently has a consensus rating of “Buy” and an average price target of $113.19.
The company has a market capitalization of $36.99 billion and a P/E ratio of 269.634. The stock’s 50-day moving average is $94.18 and its 200-day moving average is $96.83. Netflix has a 52 week low of $79.95 and a 52 week high of $133.27.
Monday, 25th July, 2016
Under Armour Inc (NYSE:UA) Puts
**OPTION TRADE: Buy the UA Aug 19 2016 40.000 put at approximately $1.00. Sell price is left to your own judgment.
Sports apparel maker, Under Armour Inc (NYSE: UA) is scheduled to release its second quarter earnings report on Tuesday, but will do so before the market opens.
Analysts expect the company to announce earnings of $0.02 per share and revenue of $995.14 million for the quarter.
Shares are down so far this year despite UA's having just managed its 24th consecutive quarter of 20% or better growth.
Like rival Nike , Under Armour's profitability has been hurt by an inventory buildup in the U.S. market. Gross profit margin fell by a percentage point to 46% of sales in Q1.
Also, Under Armour trimmed its 2016 outlook after one of its major customers, The Sports Authority, faced bankruptcy as it has been burdened with more than $1 billion of debt. For the second quarter, Under Armour expects impairment charge of nearly $23 million related to The Sports Authority. Previously, the company had estimated sales of $163 million from the sports retailer for 2016. However, now that it has filed for bankruptcy, Under Armour is likely to recognize only $43 million of the sales.
The company now expects net revenues for 2016 to be nearly $4.925 billion, as against the previous estimate of about $5 billion.
As well, despite strong numbers posted in Q1, there is some concern around UA’s domestic apparel growth - especially in the women’s segment. Since the second half of 2015, numbers from that segment have been showing negative growth.
The company has seen a great deal of negative analysts estimate revision activity in the last 60 days, with 18 analysts lowering their EPS estimates in that time frame.
Morgan Stanley downgraded the stock to underweight from equal weight in January this year, and downgraded it further to sell, slashing the price target to $32 from $34 in April - right before their Q1 earnings call.
Under Armour stock has been under pressure for some time now and the stock has pretty much been moving sideways since January this year, thanks to the Morgan Stanley downgrades. As well as UA losing momentum in the women's segment, there have been some high profile exits which have caused concern as well.
The real issue at hand here is that the stock is still trading at nearly 78 times earnings, and any small disappointment from the earnings call could easily send a shock wave, exerting enormous downward pressure on the stock.
Under Armour Inc. has a 1-year low of $31.61 and a 1-year high of $52.94. The company has a market capitalization of $37.45 billion and a P/E ratio of 80.24. The firm has a 50-day moving average of $39.28 and a 200 day moving average of $39.87.
Monday, 25th July, 2016
Twitter Inc (NYSE:TWTR) Puts
**OPTION TRADE: Buy the TWTR Aug 19 2016 18.000 put at approximately $1.00. Sell price is left to your own judgment.
Twitter Inc (NYSE: TWTR), a global platform for public self-expression and conversation in real time, will be issuing its Q216 quarterly earnings data tomorrow, Tuesday, July 26th. Analysts expect the company to announce earnings of $0.10 per share and revenue of $606.37 million for the quarter.
Twitter has lost a lot of shine in social media circles, especially from an investor's point of view. There was a time when Twitter and Facebook (FB) used to be in the same sentence when investors discussed social media. Then Facebook started moving at breakneck speed, increasing its product portfolio, revenues, user base - and most importantly, its bottom line profitability.
Twitter's revenue grew as well, from $28 million in 2010 to $2.2 billion in 2015, but its losses widened, too, from $67 million to $521 million during the same period. Facebook on the other hand reported $17.92 billion in revenues in 2015 with nearly $3.7 billion in profits.
It's obvious that there is now a gulf separating Twitter and Facebook, and we cannot put them in the same bracket any longer. There are several factors holding Twitter back:-
• If you are a social media network and your user base is not growing, then at some point you will start losing them. Other apps will start to steal away your users and it will be only a matter of time before the no-growth turns into negative growth.
Twitter does have a growing user base, but the pace of that growth leaves a lot to be desired.
Between 2012 and 2016, Twitter more than doubled its monthly active user base, from 138 million in Q1 2012 to 310 million in Q1 2016. During the same period, Facebook went from 901 million monthly active users to 1.6 billion in Q1 2016. To put it another way, Facebook added 753 million monthly active users to its base of 901 million, while Twitter added 172 million to its base of 138 million users.
Canaccord analyst Michael Graham notes that slow user growth may be a downside to the company.
• To exacerbate the problem, Twitter is still losing money. Though total sales have steadily gone up over the years, the operational losses do limit the ability of the company to reinvest in itself to keep the growth story moving, and this limits the options at Twitter's disposal.
• The other big problem Twitter faces is the average revenue per user. Twitter's ARPU is nearly half of what Facebook is able to earn.
Considering the rate at which user base is growing between these two platforms, any big advertiser will naturally gravitate towards Facebook because of sheer scale. Unless Twitter offers a better reason to choose them over their rival, advertisers will entrench themselves more and more into Facebook's platform, which now includes the 400 million users on Instagram as well.
Raymond James Financial Inc. cut shares of Twitter from an “outperform” rating to a “mkt perform” rating in a research note on Saturday. Also, Zacks Investment Research cut shares of Twitter from a “hold” rating to a “sell” rating in a research note on Wednesday, July 20th.
Six research analysts have rated the stock with a sell rating, twenty-seven have issued a hold rating, ten have given a buy rating and two have given a strong buy rating to the company. The company has a consensus rating of “Hold” and a consensus price target of $21.11.
The company has a 50 day moving average of $16.69 and a 200-day moving average of $16.65. The firm’s market cap is $12.79 billion. Twitter Inc. has a one year low of $13.73 and a one year high of $36.67.
Monday, 25th July, 2016
Apple Inc. (NASDAQ:AAPL) Calls
**OPTION TRADE: Buy the AAPL Aug 19 2016 100.000 call at approximately $1.60. Sell price is left to your own judgment.
Apple Inc. (NASDAQ: AAPL), the tech giant, will report its fiscal third-quarter numbers after the market closes tomorrow on July 26. The company is expected to post quarterly earnings of $1.39 per share, down from $1.85 during the same period last year. The stock is starting to recover, but remains down 6.0% on the year, so there is plenty of room for improvement.
Apple shares have been under pressure for the last year, with Wall Street showing concern over iPhone sales, as well as its exposure in China. The company’s earnings have been declining, but even with the lower earnings, Apple still enjoy big profits, and with new iPhone models on the horizon, the stock should remain stable and if earnings are better than expected then expect a spurt in the stock price.
Wall Street has already priced the earnings decline into the stock, and with a current P/E of just 11, there is not a lot of downside risk. While the company will almost certainly post results weaker than shareholders are used to, there is already so much negativity priced into the stock that the downside appears to be limited, and there is plenty of upside potential if there is even a hint of strength in the iPhone segment.
The iPhone slump appears priced in. And while the next iPhone, expected later this year, likely won't be a significant upgrade, there is optimism that sales growth will soon bounce back. Analysts forecast iPhone unit sales will rise 5% for fiscal 2017, which ends next September.
Apple is the sort of stock that investors love these days. It plans to spend $250 billion on dividends and buybacks by March 2018, which would boost earnings per share and yield. Already, Apple's 2.3% dividend yield is well above the 10-year Treasury yield.
Apple remains wildly profitable, too. Its $10.52 billion profit in the March quarter easily surpassed combined profits of Alphabet Inc., Amazon.com Inc. and FaceBook Inc.
And its valuation is compelling. Shares fetch 11 times projected earnings, a 34% discount to the S&P 500. By that measure, the stock is the cheapest it has been in at least the past 15 years.
Four equities research analysts have rated the stock with a sell rating, seven have assigned a hold rating and forty-six have given a buy rating to the stock. The stock currently has a consensus rating of “Buy” and a consensus price target of $126.20.
And Apple Inc. was upgraded by stock analysts at Vetr from a “hold” rating to a “buy” rating in a report issued on Monday. The firm presently has a $102.99 price objective on the iPhone maker’s stock. Vetr‘s price target points to a potential upside of 4.39% from the stock’s previous close.
Apple has a 52 week low of $89.47 and a 52 week high of $123.91. The company has a market capitalization of $540.40 billion and a price-to-earnings ratio of 10.98. The company has a 50 day moving average of $97.00 and a 200 day moving average of $99.29.
Monday, 25th July, 2016
Verizon Communications Inc. (NYSE:VZ) Calls
**OPTION TRADE: Buy the VZ Aug 19 2016 56.000 call at approximately $0.95. Sell price is left to your own judgment.
Verizon Communications Inc. (NYSE: VZ), a provider of communications, information and entertainment products and services to consumers, businesses and governmental agencies, will announce its second-quarter results before the market open on July 26. Analysts forecast earnings of $0.94 per share, down from $1.04 during the same period last year. The stock has been a top-performer in 2016, with shares appreciating 21.1% year to date.
Verizon’s biggest competitor, AT&T (T) already reported its quarterly number, posting earnings that were in-line with the consensus, and revenues slightly weaker than forecast. Despite the slightly weaker revenue number, Wall Street drove T shares higher, which in turn pushed VZ shares slightly higher.
The big thing to watch for in Verizon’s report is how many customers the company was able to add during the quarter. The wireless market in the U.S. is fairly saturated, and competition is fierce between the major carriers to attract as well as retain customers.
While the company’s quarterly report will drive the stock’s direction, the biggest news surrounding Verizon is the fact it has agreed to purchase Yahoo's core internet business and some land holdings for $4.8 billion, according to several media reports that cited people familiar with the matter. The deal, which is to be announced this morning, which will also end the four-year reign of Yahoo CEO Marissa Mayer, who is unlikely to join Verizon.
The deal follows last year’s AOL purchase, and if Verizon is able to combine the content and advertising technology of both companies, it will be able to somewhat compete with heavyweights Alphabet (GOOGL) and Facebook (FB) in the online advertising arena. Yahoo captures a very small 3.6% of all online advertising, but it remains the fifth-most visited site in the U.S., so the potential is there if execution improves.
"The deal speaks to a clear strategy shift at Verizon," Craig Moffett, an analyst with the equity research firm MoffettNathanson, told Bloomberg. “They are trying to monetize wireless in an entirely new way. Instead of charging customers for traffic, they are turning to charging advertisers for eyeballs."
Of the 24 analysts who cover the stock, seven rate it a “strong buy”, three rate it a “buy”, 13 rate it a “hold”, and one rates it a “strong sell”.
TheStreet Ratings had this to say about Verizon:-
We rate VERIZON COMMUNICATIONS INC as a Buy with a ratings score of A. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, expanding profit margins, growth in earnings per share and increase in net income. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Also, AMF Pensionsforsakring AB raised its stake in shares of Verizon Communications Inc. by 6.2% during the first quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The firm owned 3,877,936 shares of the cell phone carrier’s stock after buying an additional 224,753 shares during the period. Verizon Communications comprises about 2.8% of AMF Pensionsforsakring AB’s portfolio, making the stock its 2nd largest position.
The stock has a market cap of $228.68 billion and a P/E ratio of 12.72. The firm has a 50-day moving average of $54.42 and a 200-day moving average of $51.53. Verizon Communications Inc. has a 12 month low of $38.06 and a 12 month high of $56.95.