Earnings Predictions 
for the
Week Beginning February 04, 2019

"Earnings Prediction Members" Keep Winning!

by Ian Harvey

February 04, 2019

A Quick Review of Last Week’s Market…..

The major indexes posted sharp monthly gains for the month of January. Last month's gains were the biggest for the Dow and S&P 500 since October 2015. The S&P 500 ended January up more than 7 percent.

The Fed removed a big concern from the markets in the past week, when its post-meeting statement and Fed Chairman Jerome Powell's briefing tilted dovish, assuring markets the Fed would pause in its interest rate hiking.

Advanced Micro Devices, Inc. (NASDAQ:AMD) shares tumbles over 8% on Monday due to NVidia’s lowered guidance; but shot-up more than 20% after reporting fourth-quarter financial results on Tuesday. And “Mentorship Members” gained potential profits of 106%. Also, Earnings Predictions Members” made 215% potential profit.

The Chinese e-commerce goliath Alibaba Group Holding Ltd (NYSE:BABA)reported quarterly profit far above market expectations and played down worries of Chinese economic slowdown and U.S. tariff effects, sending its shares up 6 percent. And “Armchair Trader Members” made an easy 100% profit. The potential profit now sits at 137%. As well, “Earnings Predictions Members” made 139% potential profit

Facebook Inc. (NASDAQ:FB) stock also skyrocketed after earnings, matching options traders' volatility expectations. And “Earnings Predictions Members” are up 530% potential profit.

Shares of Dow component Boeing Co (NYSE:BA) soared higher in the wake of the aerospace giant's fourth-quarter financial report. Boeing said that 2018 full-year sales climbed above the $100 billion mark, with a nearly 50% gain in core operating earnings pointing to the success that the aircraft manufacturer has had in meeting demand from both commercial and defense customers. And again, “Earnings Predictions Members” are up 306% potential profit.

And, Honeywell International Inc. (NYSE:HON) reported better-than-expected fourth-quarter 2018 results. Adjusted earnings for the quarter were $1.91 per share, outpacing the Consensus Estimate of $1.88. The bottom line also improved 3.2% year over year. This upside primarily stemmed from the company's stellar operational performance during the quarter. And once again, Earnings Predictions Members” were able to make 315% potential profit.

Merck, meanwhile, posted a better-than-expected profit and revenue, sending its shares up by 2.7 percent. For “Armchair Trader Members” this will bring their options trade back into the green!

For the week, the Dow Jones Industrial Average (DJI) finished up 1.3% at 25,063.89.

The S&P 500 Index (SPX) was up 1.6% at 2,706.53 for the week.

And the Nasdaq Composite (IXIC) was up 1.4% for the week at 7,263.87.

Moving Ahead…..

This earnings season has become reassuring as there has been a turnaround in investor’s reactions and companies are being rewarded for posting better-than-expected results.

Up until Friday, more than 45 percent of S&P 500 had reported earnings with 68.1 percent having topped analyst expectations.

Google parent Alphabet (GOOGL) will report earnings this week, with social media stocks Twitter (TWTR) and Snap (SNAP) also set to report.

February could go well for the stock market, if January was any indication of future expectations.

Wall Street will also keep an eye on trade talks between China and the United States. Both negotiating teams have said they made "important progress." President Donald Trump also said he would soon meet with Chinese President Xi Jinping to try to reach a comprehensive trade deal.

Investors will also be watching the outcome of Treasury auctions for $84 billion in Treasury notes and bonds Tuesday through Thursday, after the Fed's dovish tone helped calm the markets.

Earnings to Watch…..

Monday

Alphabet, Clorox, Gilead Sciences, Ryanair, Sysco, Legg Mason, Leggett and Platt, Seagate Technology, Beazer Homes, Hartford Financial, ON Semiconductor

Tuesday

BP, Disney, Archer Daniels Midland, Viacom, Becton Dickenson, Genworth Financial, Owens-Illinois, Vertex, Plains All American, Skyworks Solutions, Chubb, Suncor, Unum, Oaktree Capital, Pitney Bowes, Tableau Software, Torchmark, Snap, Allstate, The Container Store, Estee Lauder, Ralph Lauren

Wednesday

General Motors, Eli Lilly, Chipotle Mexican Grill, Fireeye, Zynga, Sonos, Valvoline, Humana, Cognizant Tech, Cummins, First Data, Regeneron, Spotify, Take Two Interactive, Carlyle Group, Netgear, Boston Scientific, BNP Paribas, GlaxoSmithkline, Daimler, Toyota, O'Reilly Automotive, Metlife, Snap

Thursday

Twitter, News Corp, Kellogg, Marathon, Expedia, Mohawk, Western Union, Intercontinental Exchange, Sanofi, Total, Yum Brands, Expedia, IAC/Interactive, Mattel, WR Grace, Dunkin Brands, Fiserv, Tapestry, Tyson Foods, Andeavor Logistics, Virtu Financial, Hain Celestial, Sealed Air, Triumph Group, Cardinal Health, S&P Global, Penske Auto Group, Sealed Air, Fiat Chrysler

Friday

Arconic, Hasbro, Cleveland-Cliffs, Ventas, Philips 66, Buckeye Partners, Exelon

Economic Data to Watch…..

Monday

  • 10:00 a.m. Factory orders
  • 2:00 p.m. Senior loan officer survey 7:30 p.m. Cleveland Fed President Loretta Mester

Tuesday

  • 8:30 a.m. International trade
  • 9:45 a.m. Services PMI 10:00 a.m. ISM nonmanufacturing
  • 1:00 p.m. $38 billion 3-year note auction

Wednesday

  • 8:30 a.m. Productivity and costs
  • 1:00 p.m. $27 billion 10-year note auction
  • 7:00 p.m. Fed Chairman Jerome Powell at town hall with educators

Thursday

  • 8:30 a.m. Initial unemployment claims
  • 1:00 p.m. $19 billion 30-year bond auction
  • 3:00 p.m. Consumer credit
  • 7:30 p.m. St. Louis Fed President James Bullard

Friday

  • 10:0 a.m. Wholesale trade

 

 CONTROL OF EMOTIONS AND LESS PANIC WILL HELP YOUR PROFIT MARGIN!

GETTING OUT WHILST THE GOING IS GOOD!

GREED CAN BE THE UNDOING OF A GOOD PROFIT!

YOU NEED TO BE IN IT TO PROFIT!

Options Trades to Consider Based on Expected Earnings Reports:

Tuesday, February 05, 2019

The British oil giant BP plc (NYSE: BP) will report earnings before the market opens. The consensus earnings estimate is $0.77 per share on revenue of $60.72 billion. Consensus estimates are for year-over-year earnings growth of 20.31% with revenue decreasing by 13.28%.

In the preceding three-month period earnings predictions for BP were well ahead. The bottom line recorded a massive year-over-year improvement on the back of higher price realizations and project ramp ups. Coming to earnings surprise history, the company missed earnings estimates in just one of the trailing four quarters, with average positive earnings surprise of 11.8%.

The upstream (exploration and production) segment of the company is expected to benefit from year-over-year higher commodity price realizations; it expects production levels in the to-be-reported quarter to rise sequentially from 2,460 thousand barrels of oil equivalent per day. The rise will be supported by the acquisition of BHP assets in the U.S. lower 48.

In the downstream (refining and marketing) segment, the company expects high level of turnaround activities at its Whiting refinery in the United States.

BP’s debt position has been improving in the past few quarters.

In its most recently reported quarter, Q3 2018, BP's net earnings soared 93.2% higher over the prior year, thanks mostly to strong crude prices. But during the aforementioned oil price slump, BP was still able to circle the wagons, cut expenses, and hold its dividend payout steady, even as smaller companies were cutting their dividends.

BP’s current dividend yield stands at 6.1%, higher than the peer average of 5.0%. BP is buying back shares to offset scrip dilution. In the first nine months of 2018, BP’s total share buybacks stood at $0.3 billion.

Overall, after its recent recovery, BP stock seems well placed, with a higher dividend yield, a higher growth estimate, and a lower valuation than its peers.

Also, note that only one research analyst has rated the stock with a sell rating, four have assigned a hold rating, but ten have assigned a buy rating and two have given a strong buy rating to the stock. The stock presently has an average rating of “Buy” and an average target price of $51.79.

Option trade to consider: Buy the BP MAR 15 2019 43.000 CALL at approximately $0.31.



Snap Inc. (NYSE:SNAP), formerly Snapchat, Inc., a camera company, will report earnings after the market closes. The consensus estimate is for a loss of $0.08 per share on revenue of $376.64 million; but the Whisper number is higher at ($0.04) per share. The company's guidance was for revenue of $355.00 million to $380.00 million. Consensus estimates are for year-over-year earnings growth of 27.27% with revenue increasing by 31.83%.

The company beat the Consensus Estimate in three of the trailing four quarters, delivering average positive surprise of 11.3%.

In the last reported quarter, the company's loss of 12 cents per share was narrower than both the Consensus Estimate and year-ago quarter's loss of 14 cents. Revenues surged 43.2% from the year-ago quarter to $297.7 million, better than the consensus mark of $283 million.

Short interest has decreased by 1.8% and overall earnings estimates have been revised higher since the company's last earnings release.

Snap is leaving no stone unturned to turn around its fortunes. Snap Originals, partner curated Our Stories and partnerships with the likes of Comcast and Viacom are steps toward that direction.

Commercials, 6-second, non-skippable ads that appear only within premium content, including 12 new Snap Original Shows, is expected to boost ad revenues.

Further, Snap launched a local version of Discover in India, which follows expansions into the United States, France, Germany, Norway and the Middle East. In the last reported quarter, 21 unique shows in Discover reached a monthly audience of more than 10 million.

Snap is also improving shopping experience of its users through the Snapchat camera by partnering with Amazon. As well, the company added features to the Ad Manager solution, including video views, consideration objectives (website visits and app installs) and conversion objectives (in-app purchases).

Snap is weighing an option to make messages permanent or longer lasting, as well as to reveal the identities of those who post public messages. If it does, it could be a move to break out of Snap's walled garden that locks the content inside of the app; making the content last longer could also be a play for more advertising revenue.

 Option trade to consider: Buy the SNAP MAR 15 2019 7.000 CALL at approximately $0.65.


Wednesday, February 06, 2019

Take-Two Interactive Software, Inc. (NASDAQ:TTWO), an interactive gaming company that develops, markets and publishes entertainment solutions worldwide, will report earnings before the market opens. The consensus earnings estimate is $2.72 per share on revenue of $1.46 billion; but the Whisper number is higher at $2.82 per share. The company's guidance was for earnings of $0.31 to $0.41 per share. Consensus estimates are for year-over-year earnings growth of 106.06% with revenue increasing by 203.64%.

In the last reported quarter, Take Two's earnings of 22 cents per share increased. The company had reported loss of 3 cents in the year-ago quarter. The company's net revenues increased 11.1% from the year-ago quarter to $492.7 million.

Take Two's innovative product portfolio is expected to drive its top line in the near term.

The company released the highly-anticipated Red Dead Redemption 2 in October and recorded sales of $725 million within the first three days of its release.

Take Two expects net bookings in a band of $1.40 and $1.45 billion, primarily due to Red Dead Redemption 2 and higher recurrent spending on NBA 2K.

Rockstar Games, the division behind Red Dead Redemption, recently provided an update and a few free in-game giveaways as the company works to complete the beta testing of Red Dead Redemption Online.

Take Two partnered with HB Studios to publish The Golf Club 2019 in the to-be reported quarter, which features PGA TOUR. The deal gave Take-Two a competitive edge over Electronic Arts, which was earlier the sole provider of PGA TOUR.

Take Two also released Borderlands 2 VR on Dec 14. The popularity of the Borderlands franchise is evident from the fact that the company has sold 16 million units of the game worldwide to date.

NBA 2K, one of Take Two's popular franchises, continues to remain an important growth driver.

NBA 2K19 has gained significant traction with an increase of 10% in bookings compared to NBA 2K18’s release a year ago.

Take-Two said that it had signed a $1 billion deal with the National Basketball Association to expand the existing partnership that made the NBA 2K video game "the top-rated and top-selling NBA video game simulation series for the past 17 years," and has sold 86 million units to date. The seven-year deal comes during the 20th anniversary of the franchise and on the heels of last year's NBA 2K18 selling a series-best 10 million copies.

Overall earnings estimates have been revised higher since the company's last earnings release.

 Option trade to consider: Buy the TTWO MAR 15 2019 110.000 CALL at approximately $4.40.



Thursday, February 07, 2019

The interactive media sector, of large tech companies, of which Twitter Inc. (NYSE:TWTR), a global platform for public self-expression and conversation in real time, will report earnings before the market opens. The consensus earnings estimate is $0.25 per share on revenue of $871.59 million; but the Whisper number is higher at $0.29 per share. Consensus estimates are for year-over-year earnings growth of 38.89% with revenue increasing by 19.14%.

Wall Street still expects massive sales growth to continue in fourth-quarter results this year, with revenue expected to increase 46.4%.

Twitter shares have outperformed the Computer Software industry in the past year, gaining +46.2% vs. +5.8%. Twitter continues to add new features and ramp up its security measures to lure users to its platform and boost engagement levels.

Some analysts think that the company’s investment in series of live streaming deals is a positive. Twitter is also benefiting from strong growth in international markets and video advertisements. Growing adoption of video ad products like Video Website Cards & Video App Cards is driving top line for Twitter.

Also, the company has a positive record of earnings surprises in recent quarters.

Data licensing is the pillar of Twitter’s non-advertising business. Brands and organizations come to Twitter for data they can use to launch new products or inform their marketing campaigns. In October 2018, Twitter said that it sees more opportunities ahead in its data business. It expects to gain more data clients and forge deeper ties with existing ones. Twitter’s data licensing business has been growing at a double-digit rate.

Short interest has decreased by 54.7% and overall earnings estimates have been revised higher since the company's last earnings release.

Overall, Twitter stock is positioned to have a strong 2019 due to…..

  • ….. staying power as a go-to digital entertainment and news source for young professionals. As such, engagement should only go up over the next several quarters as the platform rolls out new features and expands usability.
  • ….. benefiting from favorable financial trends in 2019, as well as favorable usage and engagement trends because of revenue growth accelerating higher throughout 2018, while margins expanded.
  • ….. large revenue growth and big margin expansion, Twitter's profits are finally growing. As such, the valuation is finally sensible. Twitter stock today trades at just 26-times EBITDA, versus ~15-times EBITDA at Facebook and Google.

As well, analysts have started to be more positive towards Twitter….

  • Zacks Investment Research upgraded shares of Twitter from a “hold” rating to a “buy” rating and set a $35.00 target price for the company in a research note on Thursday, January 10th.
  • JPMorgan Chase & Co. reiterated a “buy” rating and issued a $44.00 target price on shares of Twitter in a research note on Thursday, January 10th.
  • Bank of America upgraded shares of Twitter from an “underperform” rating to a “buy” rating and set a $39.00 target price for the company in a research note on Thursday, January 10th.

  Option trade to consider: Buy the TWTR MAR 15 2019 35.000 CALL at approximately $1.85.

 

Friday, February 08, 2019

Iron ore mining company Cleveland-Cliffs Inc (NYSE: CLF) will report earnings before the market opens. The consensus earnings estimate is $0.57 per share on revenue of $713.61 million; but the Whisper number is higher at $0.63 per share. Consensus estimates are for year-over-year earnings growth of 119.23% with revenue increasing by 18.76%.

There has been a tremendous improvement in Cleveland-Cliffs’ fundamentals since its new management took over in 2014. The company’s non-core assets sold off and its debt problem is improving, so the company is marching on a growth path. The construction on its hot-briquetted plant is in full swing. This plant will be a margin-accretive opportunity for Cliffs and is expected to start operations in 2020.

Its existing US iron ore business is looking good with a favorable macro backdrop of firm steel prices and lower imports. The recent sell-off in the stock and deceleration in multiples mainly have to do with global growth concerns including China, but the multiple should catch up to its fundamentals.

At the current multiple, the stock is looking cheap relative to the past, and the upside seems to be far from over.

Many analysts turned positive on Cleveland-Cliffs stock in 2018. While at the beginning of March 2018, only 30% of the analysts covering it rated it as a “buy,” currently 64% of the analysts have a “buy” rating on the stock.

  • …..B. Riley set a $14.00 price target on Cleveland-Cliffs and gave the stock a “buy” rating in a research note on Thursday, December 13th.
  • …..Cowen initiated coverage on Cleveland-Cliffs in a research note on Tuesday, January 8th. They set a “market perform” rating and an $8.50 price target on the stock.
  • .....Zacks Investment Research lowered Cleveland-Cliffs from a “buy” rating to a “hold” rating in a research note on Monday, December 10th.
  • …..ValuEngine raised Cleveland-Cliffs from a “strong sell” rating to a “sell” rating in a research note on Wednesday, January 2nd.

Analysts like Cliffs’ HBI (hot-briquetted iron) plant, which is expected to improve CLF’s margins. Moreover, improvements such as re-initiation of dividends, paying down debt, and focus on the accretive US steel markets are other positives for the stock.

Today, shares trade at 2.7 times earnings and management's forecast for 2019 gives a positive outlook for the price of high-quality iron ore pellets.

And, one last note, shares of iron ore producers, particularly those with higher-grade supplies such as at  Cleveland-Cliffs, are having one of their best days in years after Brazilian iron ore giant Vale SA (NYSE: VALE) announced it would close 10 tailing dams and shutter operations at several mines after last week's dam collapse.

 Option trade to consider: Buy the CLF MAR 15 2019 11.000 CALL at approximately $0.55.


An Important Note: That these suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.

It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented.

If you wish to receive more options trading recommendations similar to this, which will help boost your portfolio strategy, check out the other  memberships available at Stock Options Made Easy.

When To Exit A Trade Based On Earnings?.....

It is also worth considering, when options trading earnings reports – “Do we exit on already existing profits or leave the companies to report their earnings and hope for bigger profit?” 

As most traders realize, there is a 50/50 chance that the company stock price could go either way after reporting earnings – even if the report is good, the stock price could reverse – and if you hold a call option, means depletion of an already good profit if it exists. A similar situation can be found if you hold a put option, and a report is not that sound (and you expect a profit from this) but the stock price can, at times move upwards due to traders bias or other external conditions......READ MORE.....

The Decision Is Yours!

Before You Trade Consider This Strategy……

"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.

……continue reading this article……


”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!

Options traders are not successful because they win.

Options traders win because they are successful.


Best of Trading,
Ian Harvey
Director of Stock Options Made Easy


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”Success is simple. Do what's right, the right way, at the right time.”


Option Tip for your Success!
Options traders are not successful because they win.
Options traders win because they are successful.



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