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, December 17, 2015
Lennar Corporation (NYSE:LEN) Calls
**OPTION TRADE: Buy the LEN Jan 2016 55.000 call (LEN160115C00055000) at approximately $0.30. Sell price is left to your own judgment.
Wednesday, December 16, 2015
Carnival Corp (NYSE:CCL) Calls
**OPTION TRADE: Buy the CCL Jan 2016 55.000 call (CCL160115C00055000) at approximately $0.80. Sell price is left to your own judgment.
Carnival Corp (NYSE: CCL), a cruise company, will report fiscal fourth-quarter numbers before the market open on December 18, with analysts calling for earnings of $0.41 per share on revenue of $3.71 billion. CCL is up 12.4% year to date.
Carnival has been trending higher, buoyed by a string of better than expected quarterly reports that spans back to the second quarter of 2013. Not only has the company been outpacing estimates, it has been growing earnings nicely. Last quarter the company posted year over year earnings growth of 10.7%, and looking ahead, analysts forecast earnings growth of 27% in 2016 versus 2015.
Carnival will open at $52.16 today, Wednesday. The firm has a 50-day moving average price of $51.72 and a 200 day moving average price of $50.65. Carnival Corp has a 52-week low of $42.51 and a 52-week high of $54.59. The company has a market capitalization of $40.58 billion and a P/E ratio of 28.95.
Several research firms have issued reports on CCL……
• HSBC began coverage on shares of Carnival Corp in a research note on Wednesday, November 25th. They set a “buy” rating and a $60.00 price objective for the company.
• Zacks Investment Research upgraded shares of Carnival Corp from a “hold” rating to a “buy” rating and set a $56.00 price objective for the company in a research note on Wednesday, November 25th.
• Buckingham Research decreased their price objective on shares of Carnival Corp from $65.00 to $60.00 and set a “buy” rating for the company in a research note on Wednesday, November 4th.
• Wolfe Research began coverage on shares of Carnival Corp in a research note on Wednesday, November 18th. They set a “peer perform” rating for the company.
• Finally, William Blair reiterated a “market perform” rating on shares of Carnival Corp in a research note on Monday, September 21st.
Eleven research analysts have rated the stock with a hold rating and twelve have assigned a buy rating to the stock. The company currently has an average rating of “Buy” and a consensus price target of $56.31.
Over the last few years, the company has made a strong marketing push that has kept its ships full, while at the same time lowering its fuel consumption to boost the bottom line. Expect another solid quarter for the company and the stock to trend higher into the New Year.
Tuesday, December 15, 2015
Lumber Liquidators Holdings Inc (NYSE:LL) Calls
**OPTION TRADE: Buy the LL Dec 2015 18.000 call (LL151218C00018000) at approximately $0.25. Sell price is left to your own judgment.
Lumber Liquidators Holdings Inc (NYSE: LL), operating as a multi-channel specialty retailer of hardwood flooring, and hardwood flooring enhancements and accessories, saw its shares surge by 21.6% in extended after-hours trading yesterday after hedge-fund manager Whitney Tilson said he had covered his short position -- and there is likely to be plenty of further growth in days to come.
"In the past week, I've received information that leads me to believe that senior management of Lumber Liquidators (NYSE:LL) wasn't aware that the company was selling Chinese-made laminate that had high levels of formaldehyde...If there are no 'smoking gun' documents/emails, then the doomsday scenario for the company (and the stock) is less likely."
Tilson has been among Lumber Liquidators most vocal critics. He alerted the news program "60 Minutes" about concerns and the program produced a report on the company that alleged its products from factories in China contained potentially hazardous levels of formaldehyde.
The company's chief executive, Robert Lynch, stepped down in May as the scandal over the product swelled.
Tilson publicly announced that he was shorting the stock, betting that its price would drop and that he would repay his loan for the stock for less later. At one point he said the stock price could plunge as low as $9 a share.
On Monday, he wrote that if his new information about the company is correct, then management was "sloppy and naive, but not evil."
In other words, after a year crusading against the company, the evidence simply didn’t stack up, and Tilson – in this case, the judge and jury of the affair – ruled that the opportunity to destroy the equity of LL was no longer worth pursuing.
Points of interest:--
• LL is a much-maligned company pulling huge sales (>$1B), down 80% over the past year, and just cleared the standards of one of the most famous short-sellers on the planet, as far as the merits of its principal investment thesis.
• LL has a small trading float of just 26.10M, which suggests the stock could launch higher on any additional influx of interest.
• LL will open today above its 20-day, 50-day, and 200-day moving averages, with all trend indicators pointing to the upside for the first time in at least 7 months
When a major bet caves, and in this case the bear bet has just been debunked, and with LL greatly undervalued, the stock is exploding back to the upside.