Earnings Predictions
for the
Week Beginning November 12, 2018

4 Out Of 5 Successful Trades -
Despite Market Turbulence Last Week!

Up 544% Potential Profit!

by Ian Harvey

November 11, 2018

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

The past week saw the blue chips showing strength, particularly with the big-cap energy name Chevron CVX) getting the bullish ball rolling on Monday. Also, Wall Street's positive reaction to midterm election results in the U.S. created bigger tailwinds for the stock market.

Even though Thursday's Fed announcement and Friday's inflation data – as well as oil prices falling into bear-market territory -- the Dow, S&P 500 Index (SPX), and Nasdaq Composite (IXIC) had their second straight week of gains.

For the week, the Dow Jones Industrial Average (DJI) finished up 2.8% at 25,989.30.

The S&P 500 Index (SPX) was up 2.1% at 2,781.01 for the week; and the Nasdaq Composite (IXIC) up 0.7% for the week at 7,406.90.

Moving Ahead…..

Looking ahead, Wall Street will be again busy, with several Fed speakers presenting. As well, earnings from Walmart (WMT), Nvidia (NVDA), and a number of cannabis companies are due.

The decline in oil may be another opportunity for consumers and for business, as you will pay less at the pump and industry's paying less as well. The last time that this occurred - mid-1984, according to Refinitiv data – it was proven that cheaper fuel is actually good for 90 percent of the S&P 500 as long as it's caused by excess supply; which is the case now.

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

Reviewing the Earnings Predictions from Last Week…..


“EARNINGS for LAST WEEK”!

DATE TRADE GAIN
November 06, 2018 CVS DEC 21 2018 75.000 CALL P.P: 197%
November 06, 2018 TWLO DEC 21 2018 75.000 CALL P.P: 283%
November 07, 2018 WYNN DEC 21 2018 110.000 PUT P.P: 93%
November 08, 2018 ATVI DEC 21 2018 70.000 CALL P.L. -99%
November 06, 2018 DIS DEC 21 2018 115.000 CALL P.P: 70%

TOTAL potential profit for these 5 trades= P.P: 544%.

Don’t miss out – check out further options trades recommended for the week ahead by becoming a member of Stock Options Made Easy “Earnings Predictions”.

Options Trades to Consider Based on Expected Earnings Reports:

Tuesday, November 13

The Home Depot, Inc. (NYSE:HD), the leader in the home-improvement retail space, is expected to report earnings before the market opens. The consensus earnings estimate is for $2.27 per share on revenue of $26.25 billion; but the Whisper number is for $2.31 per share. Consensus estimates are for year-over-year earnings growth of 23.37% with revenue increasing by 4.89%.

The Federal Reserve has now raised rates eight times since December 2015, which has caused investors to be concerned about the housing market, and all housing related sectors such as home improvement. HD was doing OK through the summer, but the stock began turning lower in September, and while it has managed to rally a bit with the overall market after the October sell off the stock remains well below its all-time high set in the first part of September.

Home Depot has a solid earnings track record and has posted better than expected quarterly earnings each of the last eight quarters; and the street is looking for another earnings beat.

Home Depot stock has climbed over 50% in the last three years, with much of that expansion coming in the last 24 months. However, the last year has not been as kind to the home improvement retail powerhouse.

Shares of HD are up roughly 14% in the last 12 months, but have slipped around 1% since the start of 2018. Plus, Home Depot stock is down nearly 6% during the past three months. Home Depot stock is down about 13% from its 52-week high of $215.43 per share, which sets up for what could prove to be a solid buying opportunity.

Home Depot's last official outlook called for sales to rise by 5.3%, or a bit more than the 5% that it had initially predicted. "We continue to expect strong economic growth," CFO Carol Tome told investors in a conference call in August, "with the backdrop of a healthy home improvement environment." Management pointed to several economic metrics that were supporting the industry, including home prices, wages, unemployment, and consumer confidence.

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

Of the 25 analysts who cover the stock 18 rate it Strong Buy, 3 rates it Buy and 4 rates it Hold.

Option trade to consider: Buy the HD DEC 21 2018 190.000 CALL at approximately $3.80.


Cronos Group Inc (NASDAQ: CRON), a Toronto-based weed company, will report earnings before the market opens. The consensus estimate is for a loss of $0.02 per share on revenue of $2.71 million; but the Whisper number is for ($0.01) per share.

On October 17, Canada officially lifted the gate on recreational marijuana sales to adults. Once legal, sales soared, with the industry expected to pull in up to $5 billion in added annual sales when fully ramped up. The expectation of billions of dollars in added revenue into marijuana stocks is expected. Marijuana stocks have produced amazing gains, and now that they're squarely on the radar of mainstream investors.

Cronos has done a good job over the past year of ramping up its revenue. The fastest growth came in the first quarter of 2018, when sales soared more than 80% compared to the fourth quarter of 2017.

Not only has Cronos built up sales but it's also focused on the best niches of the cannabis market, including sales of cannabis oils that tend to get much higher profit-margin levels than dried cannabis. The company also took steps to prepare for its future, including raising cash, announcing plans to build a new production facility in the Canadian province of Ontario, and forging relationships overseas that could greatly expand Cronos' international business.

CEO Mike Gorenstein laid out Cronos Group's strategy in very simple terms. Cronos is focused on four strategic priorities…..

  • ….building capacity in a capital-efficient manner,
  • …..creating a smart distribution infrastructure,
  • …..establishing valuable intellectual property to differentiate itself from commodity players in the cannabis industry, and
  • …..promoting brands that will resonate with customers and produce loyalty in the long run.

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

Option trade to consider: Buy the CRON DEC 21 2018 9.000 CALL at approximately $1.10.


Wednesday, November 14

Canopy Growth Corporation (NYSE:CGC), the largest marijuana stock of all will report earnings before the market opens. The consensus estimate is for a loss of $0.12 per share on revenue of $25.60 million; but the Whisper number is for ($0.09) per share.

Marijuana stocks are very volatile, and Canopy Growth Corporation is no exception - dropping over 40% in just a few sessions last month — and has now bounced back another 30% since.

CGC stock is second to none in terms of potential cannabis investments. The company has a massive investment from major alcoholic beverage company Constellation Brands (NYSE:STZ). Canopy also spends a fair amount on R&D, and has a venture arm that is further diversifying investor exposure to the cannabis market.

The company is the unrivaled sales leader in this space and has the biggest cannabis production capacity of any publicly traded pot stock as well as the widest portfolio of brands for both recreational and medicinal purposes.

After recreational marijuana officially became legal in Canada, pot stocks across the board saw a significant “sell the news” event. But now, positive results in U.S. elections have boosted optimism toward the sector in the last few days.

Short interest has decreased by 9.8% since the company's last earnings release while the stock has drifted higher by 20.0% from its open following the earnings release.

Options traders are pricing in a big move for Canopy Growth shares.

The long-term fundamentals on CGC stock are quite attractive with the market cap hovering below $10 billion. Meanwhile, near-term fundamentals and sentiment are improving, the stock is rallying and it’s still 25% off recent highs. As such, it looks like the current rally has more runway to the upside.               

Option trade to consider: Buy the CGC DEC 21 2018 40.000 CALL at approximately $4.00.


Specialty retailer Canada Goose Holdings Inc. (TSX: GOOS)(NYSE:GOOS), a company that is known specifically for its $900-and-up parkas with fur-trimmed hoods, will report earnings before the market opens. The consensus earnings estimate is for $0.19 per share on revenue of $149.59 million; but the Whisper number is much higher at $0.25 per share. Consensus estimates are for earnings to decline year-over-year by 17.39% with revenue increasing by 8.80%.

Consumer confidence neared an 18-year high last month. Now it looks like the 2018 holiday shopping season is shaping up to be a big one. And Canada Goose is one company that will definitely benefit from this.

Canada Goose, which sells high-priced down jackets, is coming off a strong start to the year in its "smallest fiscal quarter," with total revenues up 58.5% last period. The firm's direct-to-consumer business shined as did in-store sales.

Real growth looks like it will come during its fiscal third-quarter, which includes the holiday shopping period, with revenues projected to jump over 25% to $262.15 million. 

At the bottom end of the income statement, Canada Goose's adjusted Q3 earnings are expected to soar 41.3% to reach $0.65 per share. Meanwhile, its full-year EPS figure is projected to jump 30%.

Overall earnings estimates have been revised higher since the company's last earnings release with nothing but positive earnings revisions for both its current year and the following fiscal year over the last 60 days.

Option trade to consider: Buy the GOOS DEC 21 2018 60.000 CALL at approximately $5.60.


Thursday, November 15

The maker of graphics and high-performance computing chips NVIDIA Corporation (NASDAQ:NVDA) will report earnings after the market closes. The consensus earnings estimate is for $1.73 per share on revenue of $3.24 billion; but the Whisper number is for $1.80 per share. Consensus estimates are for year-over-year earnings growth of 30.08% with revenue increasing by 22.91%.

After a very strong bull run that started in the summer of 2015, NVDA has finally started to cool off. The stock was at an all-time high as recently as the start of October, but as volatility hit the overall market in October NVDA really took a hit and the stock in now the lower end of 52-week range.

The recent drop in the stock has lowered NVDA’s valuation, but the forward P/E is still at 26 which is still too high; and as its comparables increase growth will slow.

Also, there is a concern over the impact a trade war between the U.S. and China will have on chip demand and prices, and any signs of weakness could result in a big drop in the stock.

Both recent volatility in growth stocks and concerns that Nvidia would struggle to maintain its own remarkable expansion has caused a slow-down in stock price; since the New Year, NVDA shares are up just 3.3%.

Short interest has increased by 17.7% since the company's last earnings release while the stock has drifted lower by 18.7% from its open following the earnings release to be 16.1% below its 200 day moving average of $245.09.

Option trade to consider: Buy the NVDA DEC 21 2018 190.000 PUT at approximately $9.60.


Don’t miss out – check out further options trades recommended for the week ahead by becoming a member of Stock Options Made Easy “Earnings Predictions”.

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.

GETTING OUT WHILST THE GOING IS GOOD!

GREED CAN BE THE UNDOING OF A GOOD PROFIT!

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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