by Ian Harvey
August 11, 2017
Macy's Inc. (NYSE:M)
Here is an overview of Macy's Inc. (NYSE:M) after reporting earnings. This options trade was recommended on Wednesday, August 09, 2017, with the company reporting on Thursday, August 10; producing major potential profits within a very short period of executing the trade.
Macy’s provided an earnings report yesterday that was much better than the Wall Street analysts had predicted…….
Earnings of 48 cents per share beat estimates by a penny despite a 5.4% drop on revenue from the year-ago period. Same-store sales fell 2.8% vs. the 3.3% drop expected, or 2.5% on an owned plus licensed basis. Strength in shoes, fine jewelry and men’s clothing was noted. And sales growth on the mobile front was said to be in the double digits.
Members of Stock Options Made Easy were advised the day before, Wednesday, August 09, to purchase a put options trade based on Macy’s likely earnings.
** OPTION TRADE: Buy the M AUG 18 2017 23.000 PUT at approximately $0.90. Sell price is left to your own judgment.
To see the recommended trade and why…… CLICK HERE.
The Morning of the Report……
Thursday, before the market had opened, and the results of the report were out, saw the price of Macy’s stock whip-saw from positive to negative and back-again, several times as investors initially responded positively to the report.………which caused a panic among several members as to whether or not to hold their trade, or exit at best possible price, since the report was more positive than expected.
sell at a small loss today, or
wait, put a stop-loss, maybe 50% of your
entry price if you are happy with that, or
continue to hold, as I will -- hopefully
the market will stall on the sales issue!
And the slide in Macy's stock began in earnest once the market opened – which seemed to owe more to the general malaise in the sector than to the report, as several other department store stocks were down sharply. A comment on the earnings call that management had no new real estate updates also pushed the stock lower. Also noted was the compression of profit margins proved worrisome for Macy’s as it reflects increasing reliance on discounts and promotions to whip up customer traffic.
Analysts remain skeptical about M stock, as they believe Macy’s, as an organization, is a “bigger ship to turn” relative to peers.
Management will have a critical task performing well in the upcoming back-to-school shopping season.
The price of Macy’s stock on Wednesday close was $23.02; opened Thursday at $$22.85, and continued downwards from there; closing the day of trade at $20.67, down 10.25%.
So, for members of Stock Options Made Easy; a nice tidy profit of 225% within two days.ACTION TO TAKE
This is not a one-off situation.
The results say it all!