-- 2018 TO BE THE BEST YEAR YET! --
by Ian Harvey
January 15, 2018
Successful Recommended Options Trades So Far For 2018
Successful Recommended Options Trades So Far For 2018
|09 January 2018||DAL FEB 16 2018 57.500 CALL||P.P: 494%|
|09 January 2018||CMCSA FEB 16 2018 42.500 CALL||P.P: 133%|
|08 January 2018||VUZI FEB 16 2018 7.500 CALL||P.P: 161%|
|05 January 2018||VIPS FEB 16 2018 12.000 CALL||P.P: 264%|
|05 January 2018||JD MAR 16 2018 45.000 CALL||100%|
|03 January 2018||CALM JAN 19 2018 40.000 PUT||P.P: 257%|
|02 January 2018||JPM MAR 16 2018 110.000 CALL||100%|
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Options Trades to Consider Based on Expected Earnings Reports:
Wednesday, January 17
Goldman Sachs Group Inc. (NYSE:GS) – will release its fourth-quarter earnings report before opening bell. The consensus earnings estimate is $4.90 per share on revenue of $7.61 billion and the Earnings Whisper ® number is $4.98 per share. Investor sentiment going into the company's earnings release has 69% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 3.54% with revenue decreasing by 6.85%. Deutsche Bank gives a consensus of $5 per share along with its own estimate of $4.97 per share, and estimates in other places vary.
Deutsche Bank analyst Matt O-Connor said in a recent note that he believes fixed income, currency and commodities revenue was “sluggish” during the fourth quarter.
Continued momentum in investment banking business is anticipated to support bottom-line figures. Strong advisory and underwriting fees on the back of higher debt origination and equity issuances are likely to provide a boost to the top line. As the interest-rate hike is expected to continue, many U.S. companies have been raising fresh debt capital over the recent quarters to avoid higher interest rates later. Therefore, debt origination fees will lead to solid gains.
Option trade to consider: Buy the GS FEB 16 2018 260.000 CALL at approximately $5.80.
Alcoa Corp (NYSE:AA) -- is expected to post revenues of $3.31 billion in 4Q17 with an EPS of $1.23.
Alcoa's most recent quarterly report included a 27% sales spike, which
translated into $135 million of adjusted net earnings -- compared to a $95
million loss in the prior-year period.
That strong result led CEO Roy Harvey and his executive team to raise
their full-year profit target to $2.4 billion, up from $2.2 billion. Global aluminium
demand is now expected to rise by a healthy 5.5% in 2017.
aluminium prices allowed Alcoa to post strong earnings during each of the first
three quarters of 2017 and exit last September with a cash position of $1.1
billion, which management considers being the "minimum" balance
necessary to weather the next cyclical downturn. If current market conditions
keep up for another year, then Alcoa's business could get even stronger and its
rainy day fund even larger.
to flirt with new 52-week highs in the beginning of 2018. The stock's strong
start to the year was made possible by a nearly 30% gain in December and 91%
gain from the beginning to the end of last year.
producer is firing on all cylinders and continues to take advantage of a strong
market to shore up its financial and operational flexibility.
Option trade to consider: Buy the AA FEB 16 2018 60.000 CALL at approximately $1.20.Thursday, December 14
International Business Machines Corp. (NYSE:IBM) -- reports Q4 results after the market closes. The consensus earnings estimate is $5.17 per share on revenue of $21.94 billion and the Earnings Whisper number is $5.22 per share. Consensus estimates are for year-over-year earnings growth of 3.19% with revenue increasing by 0.78%.
There is an expectation that it will do something not seen in at least 18 quarters, which is to show an increase in revenue, year over year. IBM has been undergoing a multiyear reorganization, which has included shedding old business lines and starting new ones.
The stock is currently in a weak upward trend, and if sales do show year over year growth, the stock will likely trade higher. IBM has a low P/E of 13.7. Analysts have an average price target of $166.71 on the stock.
Option trade to consider: Buy the IBM FEB 16 2018 165.000 CALL at approximately $3.40.
Friday, January 19
Schlumberger Limited. (NYSE:SLB) -- Analysts expect the oilfield service provider to report a 63% EPS jump to 44 cents and a 14% increase in revenue to $8.12 billion.
As the North American market continues to strengthen and the international market finally recovers Schlumberger stock should be lifted.
North America land drilling has been excellent. In Q3 2017 Schlumberger received 33% of its revenue from the segment growing 18% Y/Y in Q3, while total revenue was up 8%.
Schlumberger has decided to significantly expand its foothold in North America by acquiring Weatherford International (WFT)’s pressure pumping business for $430 million in cash after scrapping its previous plan to team up with its rival by forming a joint venture called OneStim.
At the same time, the exploration and production activity will also likely improve in the international markets. Schlumberger, unlike most of its rivals, is heavily levered to international markets which have been historically responsible for a majority of the company’s revenues and earnings.
Also, the company will likely show strong results for Q4 2017 and Q1 2018 with oil prices hovering near $70.
Option trade to consider: Buy the SLB FEB 16 2018 80.000 CALL at approximately $1.45.
Kansas City Southern (NYSE:KSU) -- should see EPS climb 21% to $1.35 as revenue grows 10% to $657 million.
Kansas City Southern seems to benefit from an improvement in carload volumes. This is evident from the company’s third-quarter 2017 results, which were aided by a 3% rise in overall carload volumes.
As well, Kansas City Southern’s operating ratio (operating expenses as a percentage of revenues) came in at 64.4% in the third quarter compared with 66.9% reported a year ago. Improvement in this key metric is a positive for the company. The lesser the value of operating ratio the better as it implies that more cash is available to the company to reward shareholders through dividends/buybacks.
Option trade to consider: Buy the KSU FEB 16 2018 115.000 CALL at approximately $1.95.
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.
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