by Ian Harvey
October 24, 2017
General Electric Company (NYSE:GE)
Here is an overview of General Electric Company (NYSE:GE) winning options put trade after reporting earnings. This options trade was recommended to Stock Options Members on Tuesday, October 17, 2017 in “Cut-to-the-Chase” Recommendations - Week Beginning Monday, October 16, 2017”, with the company reporting poor earnings on Friday, October 20, 2017; producing potential profits within a couple of days of executing the trade!
The Recommendation……from "“Cut-to-the-Chase” Recommendations - Week Beginning Monday, October 16, 2017”
The industrial conglomerate General Electric Company (NYSE:GE) is confirmed to report earnings on Friday, October 20, 2017, before the market opens. The consensus earnings estimate is expected to see EPS grow 56% to 50 cents as revenue climbs 9% to $31.92 billion. GE has announced a slew of executive and boardroom changes since John Flannery took over as CEO in August, besides cutting operational costs. But a top Wall Street analyst recently warned GE is fundamentally challenged and its prized dividend is at risk, sending GE stock to the lowest level in more than two years.
General Electric announced Friday afternoon that it would cut its dividend by 68 percent for the second half of the year. GE said it would reduce its quarterly dividend to 10 cents a share from 31 cents. It said the dividend cut would save the company $9bn a year," The New York Times wrote on 27 February 2009, only a couple of weeks before this almost nine-year-old bull market began.
The stock has drifted lower by 9.5% from its open following the earnings release to be 17.5% below its 200 day moving average of $27.86. Overall earnings estimates have been revised lower since the company's last earnings release.
GE has beat the consensus EPS estimates in 7 of the last 8 quarters; however, Q3 2017 will likely be the first earnings miss in the last 2 years. Many pundits are already calling for the company to report a kitchen-sink type of quarter.
GE's stock has fallen 26 percent this year and has made management and board changes.
** OPTION TRADE: Buy the GE NOV 17 2017 23.000 PUT at approximately $0.50. Sell price is left to your own judgment.
GE's earnings fell short of Wall
Street's expectations on Friday as profits were weighed down by restructuring
costs and weak performance at its power and oil and gas businesses.
Shares of GE sank as much as 8 percent
in premarket trading before recovering ground ahead of the opening bell. Within
16 minutes of trading, the stock's volume had outpaced its daily average for
the past 30 sessions.
GE shares turned positive at 1:39 p.m.
ET and closed 1 percent higher. Trading volume was on pace for its highest
volume day since November 2015.
Then, shares of General Electric dropped
as much as 6.7% in trading Monday as Wall Street analysts rushed to downgrade
the stock and cast a shadow over its dividend. Shares were at their daily low
at 2:40 p.m. EDT and are trading at a level not seen in four-and-a-half years.
Analysts at Morgan Stanley, UBS, and
Deutsche Bank all downgraded GE's stock rating or earnings expectations today
as they became uncertain about the company's dividend. New CEO John Flannery
has said that he may reduce GE's dividend to retain cash for organic growth and
reduce pressure on the balance sheet.
At the time of the recommendation, Tuesday morning, GE stock price was sitting at $23.20.
By the time the market opened Friday, the stock had dropped to a low of $22.10.
So, for those traders who managed to execute this trade recommended by Stock Options Made Easy; a nice tidy potential profit of 200% within a couple of days.
ACTION TO TAKE…….
As you would have by now realized, many of our trades are based on earnings predictions. This is not to say all trades recommended to members follow this pattern, but during earnings season this strategy has been very profitable.
Our approach is 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. 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!!
Members of Stock Options Made Easy are provided with an extensive reason as to which direction a stock will move after earnings, followed up by a recommended options trade.
What To Do Now…….
If you interested in being part of this profitable action just click here……