by Ian Harvey
July 19, 2017
Here is an overview of the above stocks after reporting earnings. Both trades were placed on Monday, July 17, 2017 with Netflix reporting that afternoon and Harley-Davidson next morning; producing major profits within 24 hours of executing the trades.
** OPTION TRADE: Buy the NFLX AUG 18 2017 170.000 CALL at approximately $4.50. Place a pre-determined sell at $9.00.
No protective stop losses added -- but if you wish to do so make it $1.80.
Netflix Inc. released a profit
for its second quarter that rose from last year.
The company said its bottom line came in
at $65.60 million, or $0.15 per share. This was higher than $40.76 million, or
$0.09 per share, in last year's second quarter.
Analysts had expected the company to
earn $0.16 per share, according figures compiled by Thomson Reuters. Analysts'
estimates typically exclude special items.
The company said revenue for the quarter
rose 32.2% to $2.79 billion. This was up from $2.11 billion last year.
Netflix closed Monday at $161.70, but
opened Tuesday morning at $176.12, and climbed to $ 185.00 during the day.
Within 24 hours this trade produced a
Inc (NYSE:HOG) Puts
The Options Trade for “Cut-to-the-Chase
a password is required to access the trade information until the trade expires…..I
will add the recommended trade information for your benefit.
OPTION TRADE: Buy the HOG AUG 18 2017 50.000 PUT at approximately $1.40. Sell
price is left to your own judgment.
Harley-Davidson Inc (NYSE:HOG) will release its Q2
2017 results tomorrow, July 18, 2017, before the market opens. The company is
facing a continuous decline in its sales as it does not find favor with the
highest spending generation in the U.S. - the millennials. According to Alliance Bernstein, this younger
generation is "adopting motorcycling at a far lower rate than prior
generations," leading to the decline in sales of Harley-Davidson. Consequently, consensus revenue and EPS
(earnings per share) estimates for the company for Q2 2017 are lower than those
for the same period last year.
Brokerages expect Harley-Davidson, Inc. to announce
earnings per share of $1.37 for the current fiscal quarter. Eight analysts have
provided estimates for Harley-Davidson’s earnings, with the highest EPS
estimate coming in at $1.43 and the lowest estimate coming in at $1.29.
Harley-Davidson reported earnings per share of $1.55 in the same quarter last
year, which suggests a negative year-over-year growth rate of 11.6%.
Harley-Davidson, Inc is the parent company for the
groups of companies doing business as Harley-Davidson Motor Company (HDMC) and
Harley-Davidson Financial Services (HDFS). The Company operates in two
segments: the Motorcycles & Related Products (Motorcycles) and the
Financial Services. The Motorcycles segment consists of HDMC, which designs,
manufactures and sells at wholesale on-road Harley-Davidson motorcycles, as
well as motorcycle parts, accessories, general merchandise and related
Harley-Davidson continues to expect stiff competition,
which may hurt its retail sales as competitors rely on discounts and product
introductions to boost the same. The weak demand in Asia Pacific is expected to
continue through the second half of 2017. Also, retail inventory in the U.S. is
expected to lie low in the second quarter.
Based on end of quarter dealer checks Longbow Research
estimates that there could be a 1-3% decline in the company's U.S. sales for
this quarter; this is disappointing since the comparative number - Q2 2016 was
soft when the sales had declined by more than 5%. The overall outlook for this
quarter indicates a declining revenue and earnings trend.
Harley-Davidson anticipates motorcycle shipments in
2017 to be either at the same level or slightly lower than 2016. In
second-quarter 2017, the company hopes to ship 80,000 to 85,000 motorcycles,
compared with 88,160 motorcycles shipped in the year-ago period.
The company's Financial Services segment is also
expected to show a downtrend in operating income mainly due to higher borrowing
costs and credit losses. In the previous quarter, the segment's operating
income declined 6.6% year over year.
Harley-Davidson will be paying $15 million as
settlement charges to the Environmental Protection Agency (EPA) due to its
"super tuners" releasing harmful emissions despite bolstering power.
Of the total amount, $3 million will be spent to replace conventional woodstoves
with cleaner-burning in the faulty models to mitigate air pollution. Per the
deal, it will buy back all the devices and discontinue future sales of the
product. These actions will add to its expenses.
Analysts and Hedge Funds Opinions
Shares of Harley-Davidson, Inc. have been given a
consensus recommendation of “Hold” by the twenty-seven ratings firms that are
covering the firm. One equities research analyst has rated the stock with a
sell recommendation, twenty have given a hold recommendation and six have given
a buy recommendation to the company. The average 12-month price objective among
brokerages that have issued ratings on the stock in the last year is $55.75.
Harley-Davidson, Inc.‘s stock had its “hold” rating
reiterated by equities researchers at Jefferies Group LLC in a research report
issued on Tuesday, July 4th. They currently have a $49.00 target price on the
stock. Jefferies Group LLC’s price objective points to a potential downside of
5.06% from the company’s current price.
Also, Harley-Davidson, Inc. was downgraded by analysts
at Sanford C. Bernstein from an "outperform" rating to a "market
perform" rating. The Bernstein analyst covering the name cited a so-called
secular erosion on demand for motorcycles, and noted sales of new model bikes
have been disappointing. They lowered their price target from $62 to $55.
And, Goldman Sachs came in with a neutral rating and
an even lower $51 price target. They cited that its channel checks for Q2 sales
show at best a flat performance, although I am expecting declines.
As well, Caxton Associates LP lowered its stake in
Harley-Davidson, Inc. by 89.1% during the first quarter, according to its most
recent Form 13F filing with the SEC. The fund owned 35,000 shares of the
company’s stock after selling 285,000 shares during the period. Caxton
Associates LP’s holdings in Harley-Davidson were worth $2,118,000 at the end of
the most recent reporting period.
Harley-Davidson has a 52 week low of $45.34 and a 52
week high of $63.40. The firm has a 50 day moving average price of $53.81 and a
200-day moving average price of $57.40. The stock has a market capitalization
of $9.08 billion, a price-to-earnings ratio of 14.72 and a beta of 0.86.
…….end of recommendation
Harley-Davidson shipped 81,388
motorcycles during the second quarter, a 6.7% decline from last year’s second
quarter. Worldwide retail motorcycle sales fell 6.7% year over year. U.S.
motorcycle sales fell 9.3%. The company’s U.S. market share stood at 48.5% in
the 602cc-plus segment during the second quarter. International retail sales declined
Harley-Davidson also slashed its outlook
for motorcycle shipments this year to a decline of 6% to 8%. The company’s
previous outlook had been “flat to down modestly.” The company expects
motorcycle shipments during the third quarter to be down by 10% to 20%, which
would be a range of 39,000 to 44,000.
After the Harley-Davidson Q2:F17
earnings report, the company’s stock opened lower by as much as 10% Tuesday
This trade was purchased at $1.40 on
Monday; and during the day Tuesday, climbed as high as $8.95 – giving a potential
profit of 539%.
ACTION TO TAKE
If you interested in being part of this profitable action just click here……