“Cut-to-the-Chase” Recommendations
- Week Beginning August 01, 2016 -

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, 3rd August, 2016
Activision Blizzard, Inc. (NASDAQ:ATVI) Calls

**OPTION TRADE: Buy the ATVI SEPT 16 2016 40.000 call at approximately $1.80. Sell price is left to your own judgment.

Activision Blizzard, Inc. (NASDAQ: ATVI), a publisher of online, personal computer, console, handheld, mobile and tablet games, is set to report second-quarter 2016 results on Aug 4, after market close. Last quarter, the company delivered a positive earnings surprise of 90.00%. The company has delivered positive earnings surprises with an average beat of 61.51% in the last four quarters.

Analysts project Activision Blizzard will post earnings of 42 cents per share on revenue of $1.46 billion.

In 2015, Activision Blizzard reported earnings of 13 cents per share on revenue of $759 million.

The company recently raised its full-year revenue guidance to $6.275 billion, while analysts estimate $6.38 billion. It expects 2016 adjusted earnings to be approximately $1.78 cents per share, compared to Wall Street's projected $1.88 cents per share.

Increasing digital revenues and continued strength of the Call of Duty title should cushion earnings in the second quarter. Also, the company announced that its newest franchise, Overwatch (released on May 24, 2016) has crossed 10 million users as of Jun 14, 2016. The company is contemplating creating a league for this franchise, which could serve as a new revenue stream.

More importantly, the acquisition of King Digital seems to have paid off as reflected in the solid results of the last quarter. The buyout was a ploy to enter the lucrative mobile games market where so far Activision has had a limited presence. Moreover, it adds a sizeable female user base to its hardcore male dominated gamer base. With 544 million users, Activision Blizzard has surpassed Twitter and Instagram.

Activision launched its first movie Warcraft (Jun 10, 2016) based on its super hit video franchise World of Warcraft. However, the movie, despite terrible reviews and a bad show at the domestic box office, has managed to mint good money in the overseas territories especially China.

Activision has been benefiting from its deep focus on broadening its franchise portfolio, innovation and initiatives to expand to new geographies. Activision's offerings like StarCraft, World of Warcraft, Heroes of the Storm and Call of Duty have been widely popular and should continue to contribute to bottom-line growth.

Also, analysts observe that the company has been trying to improve its engagement levels by adopting a year-round model instead of a launch-based model in which earnings and profits are derived only in a week. This should help to drive long-term performance.

Of late, Activision has been making giant strides in its attempts to become a broad-based media company. Apart from launching a movie studio, the company is also strengthening its presence in the lucrative e-sports market.

Activision Blizzard is releasing its World of Warcraft "Legion" expansion on August 30 following the release of Legendary Pictures' "Warcraft" film.

Activision Blizzard Inc. has been given a $43.00 target price by investment analysts at Wedbush in a note issued to investors on Monday. The firm presently has a “buy” rating on the stock. Wedbush’s target price suggests a potential upside of 7.07% from the company’s current price.

Four equities research analysts have rated the stock with a hold rating and eighteen have assigned a buy rating to the company’s stock. The stock has a consensus rating of “Buy” and an average target price of $43.53.

The stock has a market cap of $23.02 billion and a PE ratio of 21.81. Electronic Arts has a 1-year low of $53.01 and a 1-year high of $79.99. The company’s 50 day moving average is $75.95 and its 200-day moving average is $68.74.



Tuesday, 2nd August, 2016
Option Trade – Electronic Arts Inc. (NASDAQ:EA) Calls

**OPTION TRADE: Buy the EA SEPT 16 2016 80.000 call at approximately $1.75. Sell price is left to your own judgment.

Electronic Arts Inc. (NASDAQ: EA), a game software content and services provider, is set to report first-quarter fiscal 2017 results today, August 2, after the market closes. In the previous quarter, the company reported a positive earnings surprise of 26.67%. On an average, EA has delivered a positive earnings surprise of 49.28% in the last four quarters.

EA's strong games portfolio, strength in new consoles and continuing growth in the mobile market are key growth catalysts. Moreover, strong growth in digital sales coupled with cost optimization initiatives will be beneficial going forward.

Last quarter, the company recorded growth in digital revenues and witnessed continued strength in Star Wars Battlefront sales. The company sold 14 million units of Battlefront in fiscal 2016. In the to-be-reported quarter, the new titles that are likely to drive sales include Mirror's Edge Catalyst and the Secret Life of Pets.

Three equities research analysts have rated the stock with a hold rating and eighteen have given a buy rating to the company. The company currently has an average rating of “Buy” and a consensus target price of $85.27.

Electronic Arts Inc. was upgraded by research analysts at Vetr from a “hold” rating to a “buy” rating in a note issued to investors on Monday. The firm currently has a $79.72 price target on the game software company’s stock. Vetr‘s price target would suggest a potential upside of 4.45% from the company’s current price.

Also, Electronic Arts Inc‘s stock had its “buy” rating reaffirmed by Jefferies Group in a report issued on Monday.

As well, TheStreet Ratings has this to say about the recommendation:

We rate Electronic Arts 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, attractive valuation levels and expanding profit margins. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results.

The stock has a market cap of $23.02 billion and a PE ratio of 21.81. Electronic Arts has a 1-year low of $53.01 and a 1-year high of $79.99. The company’s 50 day moving average is $75.95 and its 200-day moving average is $68.74.

Electronic Arts has taken the necessary steps to lead and innovate in the gaming genre. Its titles are top-notch and management has taken the necessary steps to drive growth and innovate, resulting in an outstanding earnings numbers. The future for EA stock is bright.



Monday, 1st August, 2016
Pfizer Inc. (NYSE:PFE) Calls

**OPTION TRADE: Buy the PFE AUG 19 2016 36.000 call at approximately $1.00. Sell price is left to your own judgment.

Pfizer Inc. (NYSE: PFE), a leading global drug company, will be releasing its earnings data before the market opens on Tuesday, August 2nd. Analysts expect Pfizer to post earnings of $0.62 per share for the quarter, 11% higher than what it reported a year earlier, on the back of nearly a 10% increase in quarterly revenue. Pfizer has set its FY16 guidance at $2.38-2.48 EPS.

Pfizer last posted its earnings results on Tuesday, May 3rd. The biopharmaceutical company reported $0.67 EPS for the quarter, topping the Thomson Reuters’ consensus estimate of $0.55 by $0.12. The company had revenue of $13 billion for the quarter, compared to the consensus estimate of $12 billion. During the same quarter last year, the business earned $0.51 EPS. Pfizer’s quarterly revenue was up 19.3% compared to the same quarter last year. On average, analysts expect Pfizer to post $2.46 EPS for the current fiscal year and $2.65 EPS for the next fiscal year.

Pfizer was in the news recently, finally settling a decade-long case relating to the cardiovascular risks associated with its blockbuster arthritis drugs Celebrex and Bextra. Terms were not disclosed but an earlier related settlement involving Bextra cost the company $2.3 Billion.

With the lawsuit settlement behind Pfizer, and the potential for strong quarterly results, now is the time to evaluate shares and take advantage of a likely positive movement.

Analysts are forecasting that Pfizer will see its revenues grow by 7% a year over the next half-decade - a considerable improvement from the flat growth it registered in the preceding 5 years. Treatments such as Pfizer's breast cancer treatment Ibrance and (possibly) Inflectra are expected to lead this growth. It also has a number of potential blockbusters in its drug pipeline such as its lung cancer treatment Avelumab.

Pfizer Inc. was been given a $54.00 price target by research analysts at Piper Jaffray Cos. in a research note issued last Monday. The brokerage presently has a a “buy” rating on the biopharmaceutical company’s stock. Piper Jaffray Cos.’s price objective would suggest a potential upside of 46.98% from the company’s previous close.

Ten analysts have rated the stock with a hold rating, fourteen have issued a buy rating and one has issued a strong buy rating to the company’s stock. Pfizer has an average rating of “Buy” and a consensus target price of $38.19.

The stock has a market capitalization of $222.40 billion and a PE ratio of 30.06. The stock has a 50 day moving average price of $35.41 and a 200 day moving average price of $32.39. Pfizer has a 52-week low of $28.25 and a 52-week high of $37.19.



Monday, 1st August, 2016
Etsy Inc (NASDAQ:ETSY) Calls

**OPTION TRADE: Buy the ETSY SEPT 16 2016 10.000 call at approximately $1.10. Sell price is left to your own judgment.

Etsy Inc (NASDAQ: ETSY), that operates a marketplace where people connect both online and offline to make sell and buy goods, is expected to announce second quarter financial results after market close tomorrow, August 02, 2016. The company added about 16.9 percent in value since last earnings when it was at $8.40.

Wall Street is expecting earnings per share of $-0.01. The analysts’ current consensus range is $-0.04-$0.02 for EPS. The market consensus range for revenue is $77.7M-$83.36M, with an average of $80.55M.

Etsy Inc stock has literally been a dog since it went public on April 16, 2015.

Share prices hit a high of $35.74 on that fateful day and have traded downward ever since. ETSY stock lost 83% of its value—from peak to trough.

There is reason to believe that there is an opportunity to profit from this option call. Examining the stock’s price charts, it is a belief that Etsy’s shares have put in a significant bottom.

The first piece of good news is that share prices finally broke out of that downtrend. The pattern of lower highs and lower lows has ceased. This gives reason to be optimistic.

Apart from the optimism created from the broken downtrend, there are a few other key factors that are confirming a trend reversal.

The current setup we are witnessing in ETSY stock is a head-and-shoulders bottom, otherwise known as an inverted head-and-shoulders pattern. The significance of this trading pattern is that it foresees a reversal of the current trend. In a trader’s toolbox, this pattern serves as a major trend reversal indicator.

Not only does this pattern foresee a trend reversal, but it also outlines a possible target upon the stock’s successful break above the neckline. The depth from the head to the neckline is used to project a target price. In this case, the target price is $12.00. This is a projected price—not an absolute target.

On July 14, ETSY stock generated a golden cross. A golden cross is a bullish signal that is produced when a faster moving average (the 50-day moving average) crosses above a slower moving average (the 200-day moving average). Traders use this signal to confirm a bull market is ahead. We can use this signal to further confirm the head-and-shoulders bottom.

Also many Wall Street Analysts have been positive towards Etsy Inc. Maxim Group Initiated Etsy Inc on May 26, 2016 to “Buy”, Price Target of the shares are set at $12.Company shares were Reiterated by RBC Capital Mkts on May 4, 2016 to “Sector Perform”, Firm has raised the Price Target to $ 11 from a previous price target of $10 .Company shares were Reiterated by Wedbush on May 4, 2016 to “Neutral”, Firm has raised the Price Target to $ 10 from a previous price target of $9.

The stock’s 50 day moving average is $9.70 and its 200-day moving average is $8.67. Etsy Inc. has a one year low of $6.04 and a one year high of $21.48. The company’s market cap is $1.12 billion.



Monday, 1st August, 2016
Williams Companies Inc (NYSE:WMB) Calls

**OPTION TRADE: Buy the WMB SEPT 16 2016 25.000 call at approximately $0.90. Sell price is left to your own judgment.

Williams Companies Inc (NYSE: WMB), an energy infrastructure company focused on connecting North America’s hydrocarbon resource plays to markets for natural gas natural gas liquids (NGLs) and olefins, is set to release second-quarter 2016 financial results after the closing bell today, August 01. Analysts expect Williams Cos. to post earnings of $0.22 per share for the quarter.

Williams Cos. last posted its earnings results on Wednesday, May 4th. The company reported $0.03 EPS for the quarter, missing the consensus estimate of $0.22 by $0.19. During the same quarter in the prior year, the business earned $0.16 earnings per share. On average, analysts expect Williams Cos. to post $0.81 EPS for the current fiscal year and $1.12 EPS for the next fiscal year.

While the market has been trading in its tightest pattern of the last half century, oil prices have been quietly getting crushed. Texas tea is down more than 11% in just the last two weeks. This weakness has carried into energy equities as well, but Friday may have signaled the start of a major turnaround.

Oil prices traded an “outside day,” wherein Thursday’s lows were taken out in a reversal to close over the day’s high. This appears to be the spot to pick up some heavy oil exposure, and this is possible by buying WMB option calls.

Williams is a premier energy infrastructure provider in North America. The company boasts a widespread pipeline system and is one of the largest domestic natural gas transporters by volume. Hence, the company's size and diversity are likely to drive earnings in the to-be-reported quarter.

The company's midstream assets, which are less sensitive to commodity price fluctuations, help it maintain a steady stream of revenues and cash flows in spite of low natural gas prices .

Seven equities research analysts have rated the stock with a hold rating, eight have assigned a buy rating and one has given a strong buy rating to the stock. The stock has a consensus rating of “Buy” and an average target price of $30.10.

The company’s market capitalization is $18.23 billion. The company’s 50-day moving average price is $22.20 and its 200 day moving average price is $19.04. Williams Cos. has a 52 week low of $10.22 and a 52 week high of $55.42.




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