by Ian Harvey
May 24, 2018
OUT WHILST THE GOING IS GOOD!
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
Lowe's Companies, Inc. (NYSE:LOW)
Here is an update of LOW’s winning options call trade after reporting earnings. This options trade was recommended as a consideration to members of Stock Options Made Easy “Earnings Predictions” on May 21, 2018; which produced excellent potential profits of 290% -- within a couple of days of executing the trade!
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
Lowe's Companies, Inc.
(NYSE:LOW), a home improvement retailer, is
scheduled to announce its earnings before the market opens. The consensus
earnings estimate is $1.22 per share on revenue of $17.58 billion; however, the
earnings whisper number is for $1.28 per share. Consensus estimates are for
year-over-year earnings growth of 18.45% with revenue increasing by 4.27%.
After registering an earnings decline of
14% in the final quarter of fiscal 2017, Lowe's Companies is expected to record
year-over-year growth of more than 18% in the first quarter of fiscal 2018.
An improving job scenario, housing
market recovery and merchandising initiatives along with efforts to enhance
omni-channel capabilities bode well for Lowe's. Moreover, the company's focus
on strengthening its relationship with Pro customers is encouraging.
The buyout of Maintenance Supply
Headquarters is enhancing the company's relationship with Pro customers.
Further, Lowe's has refurbished its pro-service business website,
LowesForPros.com, in order to cater to the needs of its Pro customers. The
company's Canadian and Mexican businesses has been doing pretty well.
Meanwhile, the buyout of RONA has been fortifying the company's position in the
Lowe's Canada entered into a strategic
partnership with Solar Brokers Canada to provide solar energy installation
services to homeowners under Lowe's Solar banner. Of late, the company has been
focusing on maintenance, repair and operations products, evident from its
acquisition of Maintenance Supply Headquarters and also the earlier buyout of
In fact, the reflection of these
endeavors is quite evident from a 4.1% rise in fourth-quarter comparable sales
(comps), following an increase of 5.7%, 4.5% and 1.9% recorded in the third,
second and first quarter, respectively.
There seems to be optimism about Lowe's
performance in the soon-to-be-reported quarter.……..continue reading.
Option trade to consider: Buy the LOW JUNE 15 2018
87.500 CALL at approximately $2.00.
Shares of Lowe's Companies jumped on Wednesday despite a first-quarter report that missed analyst expectations across the board. News that Lowe's had poached J.C. Penney CEO Marvin Ellison for the top job at the company could be contributing to the gains. Another factor could be news that Bill Ackman's Pershing Square had acquired a $1 billion stake in the retailer.
Lowe's gapped sharply higher Wednesday morning. Stock price at Tuesday’s close was $85.75, but opened Wednesday at 90.70; hitting a high of $95.14 (over 10%), and finally closing at $94.69.
Lowe's reported first-quarter revenue of $17.4 billion; up 3% year over year but about $290 million below the average analyst estimate. Comparable sales increased by just 0.5%, impacted by weak sales in outdoor categories caused by unfavorable weather. The company said that sales in May have been strong.
Earnings per share came (EPS) in at $1.19, up from $0.70 in the prior-year period but $0.08 lower than analysts were expecting. EPS rose 15.5% from the adjusted EPS Lowe's reported during the first quarter of 2017.
For the full year, Lowe's expects sales to rise by about 5%, driven by a 3.5% increase in comparable sales. The company expects earnings per share between $5.40 and $5.50.
While Lowe's missed analyst estimates, the company's success luring Marvin Ellison away from J.C. Penney may be giving investors hope that Lowe's can accelerate its growth.
So, for members of Stock Options Made Easy “Earnings Predictions”, who managed to execute this trade; a nice tidy profit already of more than 290% made within 48 hours.
Entering the option trade at a cost of $2.00 or less; and reaching as high as $7.80; one options contract would provide a profit of $580.00.ACTION TO TAKE…….
"YOU NEED TO BE IN IT TO WIN IT!"
Now is the time to decide if it is worth continuing to hold this trade or exit on excellent profits. It is nearly always prudent to exit a trade before an unknown incident occurs that could rattle a sound profit, and this is a fine example of such a situation.
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!!
There are usually five (5) trades recommended for consideration each week; providing great profits – look at the chart in the article “Earnings Predictions” for this week.
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What To Do Now…….
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