“Cut-to-the-Chase” Recommendations
- Week Beginning -
Monday, January 14, 2019

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.


You may also wish to read Stock Options Made Easy Trading Philosophy

ALSO "Trading Capital Management"



Option Trade – NXP Semiconductors NV (NASDAQ: NXPI) Calls

Friday, January 18, 2019

** OPTION TRADE: Buy NXPI FEB 15 2019 85.000 CALL at approximately $1.50. Sell price is left to your own judgment.

 (or alternatively as requested by some members : Place a pre-determined sell at $3.00.

Also include a protective stop loss of $0.70.)

Chipmaker NXP Semiconductors NV (NASDAQ: NXPI) has an established record of topping earnings estimates, especially when looking at the previous two reports. The company boasts an average surprise for the past two quarters of -9.55%.

Nomura Instinet upgraded NXP Semiconductors to "buy" from "neutral," and maintained its $95 price target -- a 21.3% premium the close at $78.34. The analyst in coverage said valuation is appealing after the chip stock's recent sell-off, and traders are "underappreciating an attractive end-market mix."

Likewise, CrispIdea Research reiterated its "buy" rating and $88.90 NXPI price target.

About NXP Semiconductors……

NXP Semiconductors N.V., a semiconductor company, provides high performance mixed signal solutions for radio frequency (RF), analog, power management, interface, security, and digital processing products worldwide. The company offers products for audio and visual head-end unit applications, such as single-chip radio solutions, multi-standard radios, audio amplifiers and power analog products, and i.MX applications processors; in-vehicle networking products; two-way secure entry products; various sensors and microcontrollers; power management solutions; and solutions for radar, vision, vehicle-to-vehicle, and vehicle-to-infrastructure systems.

Influencing Factors…..

NXP Semiconductors has a trailing twelve months PE ratio of 10.9.

This level actually compares pretty favorably with the market at large, as the PE for the S&P 500 compares in at about 16.6. If we focus on the stock's long-term PE trend, the current level puts NXP Semiconductors' current PE ratio somewhat below its midpoint (which is 19.1) over the past five years.

Further, the stock's PE also compares favorably with the industry's trailing twelve months PE ratio, which stands at 13.9. At the very least, this indicates that the stock is relatively undervalued right now, compared to its peers.

NXP Semiconductors has a Price/Sales ratio of about 2.6. This is slightly lower than the S&P 500 average, which comes in at 2.9 right now. This approach compares a given stock's price to its total sales, where a lower reading is generally considered better.

The PEG ratio for NXP Semiconductors is just 0.7, a level that is slightly lower than the industry average of 0.9. The PEG ratio is a modified PE ratio that takes into account the stock's earnings growth rate. Additionally, its P/CF ratio (another great indicator of value) comes in at 5.6, which is slightly better than the industry average of 9.9. Clearly, NXPI is a solid choice from multiple angles.

Past Earnings.….

For the last reported quarter, NXP came out with earnings of $2.01 per share versus the Consensus Estimate of $1.92 per share, representing a surprise of 4.69%. For the previous quarter, the company was expected to post earnings of $1.64 per share and it actually produced earnings of $1.25 per share, delivering a surprise of 23.78%.

Future Earnings…..

NXP has an Earnings ESP of +0.14% at the moment, suggesting that analysts have grown bullish on its near-term earnings potential.

Brokerages expect NXP Semiconductors to announce $2.09 earnings per share for the current fiscal quarter. NXP Semiconductors posted earnings of $3.21 per share in the same quarter last year, which would suggest a negative year over year growth rate of 34.9%.

Also, equities analysts expect that NXP Semiconductors will report sales of $2.39 billion for the current fiscal quarter. NXP Semiconductors posted sales of $2.46 billion during the same quarter last year, which suggests a negative year over year growth rate of 2.8%.

The firm is scheduled to announce its next earnings results on Wednesday, February 6th.

Analysts….

  • Piper Jaffray Companies assumed coverage on NXP Semiconductors in a report on Thursday, December 20th. They issued an “overweight” rating and a $100.00 target price on the stock.
  • Citigroup reduced their target price on NXP Semiconductors from $94.00 to $88.00 and set a “hold” rating on the stock in a report on Friday, November 2nd.
  •  Zacks Investment Research raised NXP Semiconductors from a “hold” rating to a “buy” rating and set an $81.00 target price on the stock in a report on Wednesday.
  • Stifel Nicolaus reaffirmed a “sell” rating on shares of NXP Semiconductors in a report on Thursday, November 1st.
  • Finally, BMO Capital Markets raised their target price on NXP Semiconductors from $70.00 to $75.00 and gave the company a “market perform” rating in a report on Friday, November 2nd.

Three equities research analysts have rated the stock with a sell rating, seven have issued a hold rating and fourteen have issued a buy rating to the company’s stock. The company presently has a consensus rating of “Hold” and an average price target of $100.58.

Summary                                     

NXPI has a market cap of $25.18 billion, a PE ratio of 10.16, a P/E/G ratio of 0.81 and a beta of 0.98. NXP Semiconductors has a fifty-two week low of $67.62 and a fifty-two week high of $125.93. The company has a debt-to-equity ratio of 0.50, a quick ratio of 0.87 and a current ratio of 1.22.


Option Trade – Array Biopharma Inc (NASDAQ: ARRY) Calls

Wednesday, January 16, 2019

** OPTION TRADE: Buy ARRY MAR 15 2019 18.000 CALL at approximately $1.30. Sell price is left to your own judgment.

 (or alternatively as requested by some members : Place a pre-determined sell at $2.60.

Also include a protective stop loss of $0.50.)

Array Biopharma Inc (NASDAQ: ARRY), a biopharmaceutical company, focusing on the discovery, development, and commercialization of small molecule drugs to treat patients with cancer and other diseases in North America, Europe, and the Asia Pacific, loss has lessened since it announced a -US$147.3m bottom-line in the full financial year, compared to the latest trailing-twelve-month loss of -US$134.2m, as it approaches breakeven.

ARRY is bordering on breakeven, according to the 9 Biotechs analysts. They anticipate the company to incur a final loss in 2020, before generating positive profits of US$169m in 2021. ARRY is therefore projected to breakeven around 3 years from now. In order to meet this breakeven date, the rate at which ARRY must grow year-on-year to meet this date, is on an average annual growth rate of 73%, which signals high confidence from analysts.

And to show the analyst confidence Cantor Fitzgerald yesterday initiated coverage on Array Biopharma with an "overweight" rating and $30 price target -- representing a premium of 76% to Monday's close at $17.07. The brokerage firm said Array's "lead asset, Mektovi+Braftovi, still appears underappreciated by investors," and the combination "has a best-in-class profile and is well-positioned commercially."

Array Biopharma shares gapped higher on January 7, as analysts waxed optimistic on the impact of the Eli Lilly (LLY) acquisition of Loxo Oncology (LOXO). Since then, ARRY has been consolidating its gains atop the $17 level, and was last seen 0.3% higher at $17.12. And the security has rallied 36% since its October 11’s low of $12.56.

About Array Biopharma……

Array BioPharma Inc, a biopharmaceutical company, focuses on the discovery, development, and commercialization of small molecule drugs to treat patients with cancer and other diseases in North America, Europe, and the Asia Pacific. It provides BRAFTOVITM (encorafenib) capsules in combination with MEKTOVI (binimetinib) tablets for the treatment of patients with unresectable or metastatic melanoma with a BRAF mutation.

Influencing Factors…..

Array BioPharma has reported encouraging updated results from the safety lead-in of its BEACON CRC trial.

BEACON CRC trial is evaluating the triplet combination of BRAFTOVI, MEKTOVI, and ERBITUX in patients with BRAFV600E-mutant metastatic colorectal cancer.

The results showed that mature median overall survival was 15.3 months for patients treated with the triplet. The updated confirmed overall response rate remains 48% and updated median progression-free survival remains 8.0 months, added the Company.

Commenting on the study results, Victor Sandor, Chief Medical Officer, Array BioPharma, said, "We are delighted with the updated results from the BEACON CRC safety lead-in. Following consultations with the FDA and European Medicines Agency, we initiated an amendment to the BEACON CRC protocol to allow for an interim analysis based primarily on confirmed ORR and durability of response endpoints, which we believe could support an accelerated approval with positive results. We anticipate top-line results from this interim analysis in the first half of this year".

As mentioned earlier, traders appear to believe that this sizable financial move by Lilly could convince other big pharma companies to go on a shopping spree. If that happens, it could be great news for investors in Array BioPharma, since the business is developing precision-medicine oncology products of their own.

Array BioPharma has already reached the market with two cancer drugs, Braftovi and Mektovi. Sales for these drugs recently came in at 14 million last quarter, which is pretty good when considering that they only became available for sale in July 2018.

Past Earnings.….

Array Biopharma last released its quarterly earnings results on Tuesday, October 30th. The biopharmaceutical company reported ($0.12) EPS for the quarter, topping the Zacks’ consensus estimate of ($0.22) by $0.10. The business had revenue of $56.91 million for the quarter, compared to analyst estimates of $34.47 million. Array Biopharma had a negative return on equity of 74.02% and a negative net margin of 66.77%. Array Biopharma’s revenue for the quarter was up 91.3% on a year-over-year basis. During the same period in the prior year, the company earned ($0.22) EPS.

Future Earnings…..

Wall Street brokerages expect Array Biopharma to announce ($0.16) earnings per share for the current quarter. Array Biopharma posted earnings of ($0.17) per share during the same quarter last year, which suggests a positive year over year growth rate of 5.9%.

Also, Wall Street brokerages expect Array Biopharma to report sales of $48.43 million for the current quarter. Array Biopharma posted sales of $42.22 million in the same quarter last year, which would indicate a positive year-over-year growth rate of 14.7%.

The firm is scheduled to announce its next quarterly earnings report on Tuesday, February 5th.

Analysts….

  • Piper Jaffray Companies reiterated a “positive” rating and issued a $28.00 target price on shares of Array Biopharma in a research note on Tuesday.
  • Also, BidaskClub upgraded shares of Array Biopharma from a hold rating to a buy rating in a research note published last Wednesday.
  • Several other analysts have recently commented on the company…..
  • Guggenheim initiated coverage on Array Biopharma in a research report on Monday, September 17th. They set a “buy” rating on the stock.
  • Cowen set a $22.00 price target on Array Biopharma and gave the stock a “buy” rating in a research report on Sunday, October 7th.
  • Zacks Investment Research raised shares of Array Biopharma from a “sell” rating to a “hold” rating in a research report on Wednesday, October 31st.
  • Goldman Sachs Group began coverage on shares of Array Biopharma in a research report on Thursday, December 13th. They issued a “neutral” rating and a $20.00 price target for the company.
  • Finally, Stifel Nicolaus upped their price objective on Array Biopharma from $24.00 to $26.00 and gave the stock a “buy” rating in a report on Wednesday, December 12th.

Array Biopharma has been assigned a consensus rating of “Buy” from the twelve ratings firms that are currently covering the stock. One equities research analyst has rated the stock with a sell rating, two have assigned a hold rating, eight have assigned a buy rating and one has given a strong buy rating to the company. The average 1-year price target among brokers that have covered the stock in the last year is $24.63.

Summary                                     

ARRY has a market cap of $3.77 billion, a PE ratio of -23.71 and a beta of 1.17. Array Biopharma has a one year low of $12.56 and a one year high of $20.21. The company has a debt-to-equity ratio of 0.60, a current ratio of 5.62 and a quick ratio of 5.62.


Option Trade – EQT Corporation (NYSE: EQT) Calls

Tuesday, January 15, 2019

** OPTION TRADE: Buy EQT MAR 15 2019 22.000 CALL at approximately $1.15. Sell price is left to your own judgment.

 (or alternatively as requested by some members : Place a pre-determined sell at $2.30.

Also include a protective stop loss of $0.45.)

Very cold weather across the Northwest and Eastern US, as well as moderate demand globally, should prompt a renewed rally in Natural Gas through at least March or April of 2019. A move to, or above, $3.30~$3.40 would indicate there is little chance of a Washout-Low price formation and that a new rally is in place.

Shares of natural gas producers tumbled in November. That slump came even though the price of natural gas was red-hot the month before. Instead, a sell-off in the oil market, as well as other issues, weighed on these gas stocks.

Over the past week, natural gas had remained bearish, but Friday’s strong close and Sunday night’s price of natural gas futures showing a 7% pop signals a potential trend change happening.

In short, natural gas was oversold; it’s been testing the $3.00 whole number which acted as support for the price. Also, analysis does point to higher prices from here.

Natural Gas provides an excellent opportunity for a move back to near $4.20~$4.40 as the extended cold weather and global demand continue to put renewed pricing pressure on this commodity.  The next upside move could be very fast regarding upside price recovery.

Therefore, EQT Corporation (NYSE: EQT)is an excellent choice to take advantage of this situation.

EQT Corporation is the nation’s largest producer of natural gas; and by definition would seem to be the largest beneficiary of higher natural gas prices. EQT stock hasn’t really rallied much, either. It’s down 3% since the beginning of the month and sits 36% below its 52-week high. A consensus price target around $64 suggests a 37% bounce from current levels.

EQT acquired Rice Energy for $6.7 billion last year and is spinning off its midstream business.

The complexity of the business should ease after the spinoff and after the Rice acquisition is lapped. Meanwhile, production costs are going down, and cash flow is going up. EQT, like most producers, does have near-term production hedged, but longer-term strength in natural gas prices should help margins.

All told, there’s a nice combination of catalysts here, and a reasonably cheap price. The combination makes EQT one of the better, if not the best, natural gas stocks to buy at the moment.

About EQT ……

EQT Corporation, together with its subsidiaries, operates in natural gas industry in the United States. Its EQT Production segment produces natural gas, natural gas liquids (NGLs), and crude oil. As of December 31, 2017, this segment operated 21.4 trillion cubic feet of proved natural gas, NGLs, and crude oil reserves across approximately 4.0 million gross acres comprising approximately 1.1 million gross acres.

Past Earnings.….

EQT last issued its quarterly earnings results on Thursday, October 25th. The oil and gas producer reported $0.35 earnings per share for the quarter, topping the consensus estimate of $0.33 by $0.02. EQT had a positive return on equity of 3.77% and a negative net margin of 6.86%.

The business had revenue of $1.16 billion for the quarter, compared to analyst estimates of $1.11 billion. During the same quarter in the previous year, the firm earned $0.12 earnings per share. As a group, equities analysts forecast that EQT Co. will post 2.52 earnings per share for the current year.

Future Earnings…..

Wall Street analysts expect that EQT Co. will report $0.74 earnings per share for the current fiscal quarter. EQT reported earnings of $0.76 per share during the same quarter last year, which indicates a negative year-over-year growth rate of 2.6%.

Also, analysts forecast that EQT will announce sales of $1.24 billion for the current fiscal quarter. EQT posted sales of $1.13 billion during the same quarter last year, which would indicate a positive year-over-year growth rate of 9.7%.

The business is scheduled to report its next quarterly earnings results on Thursday, February 21st.

Analysts….

EQT received a $79.00 price target from investment analysts at Stifel Nicolaus in a research report issued on Thursday, December 20th. The firm currently has a “buy” rating on the oil and gas producer’s stock. Stifel Nicolaus’ target price would suggest a potential upside of 287.83% from the company’s previous close.

Several other analysts have recently commented on the company…..

  • Credit Suisse Group set a $48.00 price objective on EQT and gave the company a “buy” rating in a report on Friday, October 26th.
  • Royal Bank of Canada set a $53.00 price objective on EQT and gave the company a “buy” rating in a report on Saturday, October 27th.
  • Zacks Investment Research reiterated a “buy” rating and issued a $35.00 target price on shares of EQT in a research note on Tuesday, November 13th.
  • Citigroup dropped their price target on EQT from $43.00 to $24.00 and set a “buy” rating on the stock in a research note on Thursday, November 29th.
  • Credit Suisse Group dropped their price target on EQT from $48.00 to $25.00 and set a “buy” rating on the stock in a research note on Thursday, November 15th.
  • Finally, JPMorgan Chase & Co. set a $24.00 price target on EQT and gave the stock a “buy” rating in a research note on Friday, December 7th.

Two investment analysts have rated the stock with a sell rating, five have given a hold rating and nine have assigned a buy rating to the company’s stock. The company currently has a consensus rating of “Buy” and a consensus price target of $39.86.

Insider News….

Director Philip G. Behrman bought 20,000 shares of the firm’s stock in a transaction that occurred on Friday, November 16th. The stock was purchased at an average price of $16.51 per share, with a total value of $330,200.00. Following the completion of the acquisition, the director now directly owns 20,000 shares of the company’s stock, valued at approximately $330,200.

As well, EQT Director Philip G. Behrman acquired 5,331 shares of the firm’s stock in a transaction dated Wednesday, December 26th. The shares were purchased at an average price of $19.37 per share, with a total value of $103,261.47.

Also, Director A. Bray Jr. Cary bought 1,390 shares of the firm’s stock in a transaction that occurred on Wednesday, January 2nd. The shares were purchased at an average cost of $18.89 per share, with a total value of $26,257.10. Following the acquisition, the director now directly owns 28,000 shares of the company’s stock, valued at $528,920.

And, insider Robert Joseph Mcnally purchased 15,800 shares of the stock in a transaction dated Wednesday, October 31st. The shares were bought at an average price of $34.16 per share, with a total value of $539,728.00.

Summary                                     

Shares of EQT stock traded up $0.42 during trading hours on Monday, reaching $20.79. 4,568,761 shares of the company’s stock were exchanged, compared to its average volume of 6,366,507. EQT Co. has a 1 year low of $16.29 and a 1 year high of $59.63. The firm has a market capitalization of $5.08 billion, a price-to-earnings ratio of 14.14, a PEG ratio of 0.78 and a beta of 0.72. The company has a debt-to-equity ratio of 0.48, a quick ratio of 0.47 and a current ratio of 0.47.