by Ian Harvey
March 19, 2018
Options Trades to Consider Based on Expected Earnings Reports:
Wednesday, March 21
Five Below Inc. (NASDAQ:FIVE), a specialty retailer offering a range of merchandise for teen and pre-teen customers, reports Q4 earnings after the market closes. The consensus earnings estimate is $1.16 per share, a 29% increase, on revenue of $501.46 million, also rising by 29%. The Earnings Whisper number is for a $1.17 per share. Shares are sitting in a buy zone at the present.
Short interest has decreased by 26.1% since the company's last earnings release; and overall earnings estimates have been revised higher.
Recently a press release stated that in early January FIVE revealed healthy revenue growth during the period. "Multiple merchandise categories outperformed," CEO Joel Anderson said in that report, "once again demonstrating the broad-based strength of our business."
The success means comparable-store sales likely rose by a robust 6% in the fourth quarter and by 6.5% for the full year.
Assuming the business didn't take a turn lower in February, FIVE executives should issue an aggressive 2018 forecast that predicts significant sales growth as the retailer takes another step toward the 2,000 locations it aims to operate across the country, up from just 600 today.
Fundamentals are solid at
Five Below and another strong quarter of growth is expected.
Option trade to consider: Buy the FIVE APRIL 20 2018 70.000 CALL at approximately $3.30.
Thursday, March 22
Accenture Plc. (NYSE:ACN), a professional services company serving clients in various industries and in geographic regions, including North America, Europe and Growth Markets, is set to report fiscal Q2 earnings before the market opens. Analysts expect EPS to grow 12% to $1.49 with revenue rising 6% to $9.29 billion.
Accenture's result for the fiscal second quarter is likely to benefit from the expansion of its clientele base and acquisitions.
ACN closed 37 buyout deals
worth approximately $1.7 billion in fiscal 2017. Also, over the last three
fiscals, Accenture invested approximately $3.4 billion in purchasing nearly 70
companies including start-ups.
So far in fiscal 2018, the company has completed several acquisitions including Mackevision, Rothco and Altima.
Accenture signed agreements
with clients from a variety of industries during the quarter. The new names
include a pharmaceutical company, Shionogi, a communications service provider,
M1, plus an energy company called Statoil and Bouygues Construction among
The new partnerships along with the existing ones will help solidify the company's position across multiple industries. With a focus on increasing its operational efficiency, Accenture is expected to maintain its impressive performance momentum.
The stock has rallied 29.3% in the past year, outperforming the 25.3% increase of the industry it belongs to.
Option trade to consider: Buy the ACN APRIL 20 2018 165.000 CALL at approximately $3.00.
Idaho-based Micron Technology, Inc. (NASDAQ: MU), a memory chip manufacturer, is scheduled to report fiscal Q2 results after the market closes. The consensus earnings estimate is $2.69 per share on revenue of $7.27 billion. The Earnings Whisper number is $2.81 per share. The company's guidance was for earnings of $2.51 to $2.65 per share. Consensus estimates are for year-over-year earnings growth of 220.24% with revenue increasing by 56.41%.
MU has risen sharply over the last year, and the stock is up a hefty 36.9% since the start of the year.
MU has been one of the top performing stocks over the last year, buoyed by strong demand and pricing trends for DRAM and Nand memory chips, and also with so much market bullishness in the semiconductor sector at this time, shares continue to trade higher. Even with the strong gains investors have enjoyed, the stock remains very attractively priced, with a forward P/E of just 6.9, and earnings are expected to rise 27.1% per annum over the next five years, so there is still plenty of room for the stock to rise.
Option trade to consider: Buy the MU APRIL 20 2018 65.000 CALL at approximately $2.65.
Nike Inc. (NYSE: NKE), a seller of athletic footwear and athletic apparel worldwide, is expected to report earnings after the market closes. The consensus earnings estimate is $0.52 per share on revenue of $8.83 billion. The Earnings Whisper number is $0.58 per share.
One major concern is that the company announced that two of its top executives have stepped down -- Nike Brand President Trevor Edwards and VP Jayme Martin both resigned last week amid a code of conduct-related scandal.
And Nike's earnings are projected to plummet 23.5% from the year-ago period to $0.52 per share. Nike's 4.7% top line growth projection is also relatively minimal based on the company's history.
Option trade to consider: Buy the NKE APRIL 20 2018 65.000 PUT at approximately $1.40.
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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