by Ian Harvey
September 19, 2018
OUT WHILST THE GOING IS GOOD!
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
Momo Inc (ADR) (NASDAQ:MOMO)
Momo Inc is on the up and up. An option call trade was recommended to “Cut-To-The-Chase” Members on Monday, August 20, 2018, based on an expected bullish earnings report; with expectations of impressive growth.
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
Momo Inc (ADR) (NASDAQ:MOMO), China's fast-growing social entertainment platform, will report earnings on Wednesday, August 22, 2018, before the market opens. The report will be for the fiscal Quarter ending Jun 2018. Based on analysts' forecasts, the consensus EPS forecast for the quarter is $0.59. The reported EPS for the same quarter last year was $0.29.
Wall Street is expecting impressive growth — a 74% increase on the bottom line and a 54% pop on the top. That would come on the back of revenue growth in excess of 100% in fiscal 2017.
Momo share pricehas lost more than 30% of its value since closing at an all-time high in mid-June due to negative rumors spread by short sellers and is currently offered at a bargain ahead of Q2 earnings.
MOMO is in the midst of testing its 200-day moving average. It appears to have held that level, and it could head back toward its 50-day average and beyond in the relative near term.
Momo is likely to be a very volatile investment for the years to come. But it offers a great margin of safety at current price.
** OPTION TRADE: Buy MOMO SEPT 21 2018 40.000 CALL at approximately $2.20.
MOMO has monetized short videos of users as the key feature of what's essentially a dating app. Members pay a fee, though the company also gleans a little revenue in more conventional ways (like advertising).
And, users love it. Momo now boasts more than 100 million monthly users who generated nearly $500 million worth of revenue last quarter.
Last quarter's per-share profit of 66 cents doubled the year-ago bottom
line of 33 cents, and sales were up 58% year-over-year.
The Result So Far………
Shares of Momo were moving higher again last month as the Chinese social media company posted a strong second-quarter earnings report, blowing past analyst estimates.
The stock finished the month up 13%.
The stock surged 9% on August 22 after delivering an impressive earnings report. Revenue jumped 58% in the quarter to $494.3 million and adjusted earnings per American Depositary Share nearly doubled from $0.35 to $0.66. Both figures beat analyst estimates of $480 million in revenue and $0.61 per ADS. Monthly active users on Momo were up from 91.3 million to 108 million, an increase of 18%. In addition to the added users, Momo is driving revenue growth through live video and value-added services like premium subscriptions.
CEO Yan Tang explained, "Our live streaming business continued to grow robustly. In addition, value-added service revenues for the Momo app more than doubled from a year ago, demonstrating Momo's monetization potential as a social platform."
So, for “Cut-To-The-Chase” members, who managed to execute this trade recommended by Stock Options Made Easy; and had an exit price already established, potential profits of 291% are available at this stage; but more may be expected before expiry this week.
Entering the option trade at a cost of $2.20 or less; and the sell price on the option, at the moment is $8.60; a potential profit of 291% is applicable. Therefore, one options contract would provide a profit of $640.00; or 291% Potential Profit.
A NICE FINISH TO THE WEEK!
Momo shares haven't always consistently reflected the company's results and growth prospects. Although they've nearly doubled in value this year, the current price of $47.37 is well off from its June peak of $54.25. This year's action also got started with the added advantage of more than a 50% pullback during the latter half of last year.
Those pullbacks serve as the underpinnings of opportunity for newcomers though, and there's room to run for multiple reasons.
The chart, the fundamentals and analysts are working together to propel the stock upwards. At a price of $56, the forward P/E is on the order of 17.4 - a perfectly palatable valuation, given the company's growth pace.
For the current quarter, the company sees revenue increasing 51%-55% to $525 million-$540 million.
Momo is finding a ripe market in online dating. That could set up a buying opportunity for investors looking to capitalize on this undervalued growth story.
And on the analyst front, there is plenty of positive reaction…..
Overall, two analysts have rated the stock with a hold rating and thirteen have given a buy rating to the company’s stock.
ACTION TO TAKE NOW…….
** A New Options Trade To Consider: Buy the MOMO OCT 19 2018 50.000 CALL at approximately $2.00.
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 it is obvious that it applies in this case; and during earnings season this strategy of predicting earnings 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.
Strategies to Consider……
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?” .....READ MORE.....
"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……
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.
If you not a member and interested in being part of this profitable action just CLICK HERE.
Other Membership Options…….
If you interested in "Earnings Predictions" just click here……
or "Mentorship Program".....click here....