by Ian Harvey
June 16, 2018
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
Etsy Inc. (NASDAQ:ETSY)
Here is a great example of how “Patience
Pays Off” when trading options. This call
options trade on Etsy was recommended to “Cut-to-the-Chase”
Members on Monday, May 07, 2018; however, little movement occurred, and the trade
started to decline. But, on Thursday, June 14, due to positive news, Etsy skyrocketed
providing potential profits of 1257%.
Etsy Inc. (NASDAQ:ETSY), operating a marketplace where people around the world connect, both online and offline, to make, sell and buy goods, is expected to report earnings tomorrow, Tuesday May 08, after the market closes. Based on 8 analysts' forecasts, the consensus EPS forecast for the quarter is $0.05. The reported EPS for the same quarter last year was $0. The lowest EPS estimate is $0.01 and the highest is $0.09.
Equities research analysts expect that Etsy will announce sales of $119.18 million for the current fiscal quarter. Five analysts have provided estimates for Etsy’s earnings, with the lowest sales estimate coming in at $115.14 million and the highest estimate coming in at $121.78 million. Etsy posted sales of $96.89 million in the same quarter last year, which suggests a positive year-over-year growth rate of 23%.
On average, analysts expect that Etsy will report full-year earnings of $0.36 per share for the current fiscal year, with EPS estimates ranging from $0.27 to $0.42. For the next financial year, analysts anticipate that the company will report earnings of $0.50 per share, with EPS estimates ranging from $0.36 to $0.61.
Etsy has been on a tear lately: The stock is up 40% so far this year. In fact, share prices have nearly tripled over the past 12 months as the company, under new CEO Josh Silverman, seems to finally be unleashing the power of its unique platform and marketplace model. Silverman, who was ushered in by activist investors last May, has laid off employees, shut down underperforming or tangential business units, and focused on driving gross merchandise sales, or the total sales of its merchants……continue reading…..
Option trade to consider: Buy the ETSY JUNE 15 2018 35.000
CALL at approximately $0.70 TO $0.90.
On May 08 Etsy reported earnings and doubled up expectations on its bottom line, posting 10 cents per share versus the consensus of 5 cents. Revenues of $120.9 million edged past estimates, up almost 25% year over year. The company also ratcheted up guidance for its Gross Merchandise Sales category.
However, this was not sufficient to move the options trade into worthwhile positive territory, providing a return of 57% in a short window of execution, and for those traders that failed to exit the trade, and retained the trade; a further chance to exit came this week – Thursday, June 14, 2018.
Shares of online craft marketplace Etsy soared 26.3% on Thursday after the company announced it was increasing seller fees and using the additional revenue to fund investments in marketing, product support, and product innovation. The company also announced new add-on seller services and raised its revenue guidance for the year.
Starting July 16, Etsy will raise its transaction
fees for sellers from 3.5% to 5%, and the fee will apply to both the selling
price and the shipping cost, rather than to the price alone, as it does today. The
company also announced Etsy Plus, which will be available next month and will
provide an expanded set of selling tools for $10 a month, increasing to $20 in
January 2019. Etsy Premium, an advanced set of tools for larger businesses with
employees, will be available next year for a yet-to-be-determined price.
Etsy is optimistic about
how these changes will impact its business in 2018. The company is now guiding
for full-year gross merchandise sales (GMS) to increase 16%-19% and revenue to
rise 32%-34% year over year, respectively. This is up from a previous forecast
for GMS and revenue growth of 16%-18% and 22%-24%, respectively. As well,
revenue growth this steep would mean Etsy's year-over-year revenue growth rates
continue to accelerate.
So, for “Cut-to-the-Chase” members who have managed to hold the option trade, and then exit last Thursday near the peak; a potential profit of more than 1,257% was experienced.
Entering the option trade at a cost of $0.70 or less; reaching as high as $9.50; one options contract would provide a profit of $880.00; or 1,257% Potential Profit.
So, in this case, it has been very beneficial to hold the trade – but remember, not all trades have saving graces!
PATIENCE HAS PAID OFF!
As you would have by now realized, some of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, but this scenario, as part of the “Cut-to-the-Chase Series”, formed part of this strategy; and during earnings season this strategy has been very profitable.
Sometimes it is our approach to predict whether a company will beat or miss estimates, whether the stock will appreciate or depreciate as a result and what strategies investors and traders can use – such as found with the “Earnings Predictions Program”. This type of prediction is based on thorough investigation and fundamentally based research, and the results have been very exceptional.
Our proven track record says it all!!
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