Option Trade
Baozun Inc (ADR) (NASDAQ:BZUN) Calls
Monday, August 21, 2017

** OPTION TRADE: Buy the BZUN SEPT 15 2017 35.000 CALL at approximately $3.00. Place a pre-determined sell at $6.00.

Note: No protective stop losses added -- but if you wish to do so make it $1.20.

Also Note: This is a recommendation and individual members can use their own discretion as to when to enter or exit!

You may also wish to read Stock Options Made Easy Trading Philosophy

by Ian Harvey   

This year’s spectacular run of gains for the markets have been powered largely by tech stocks. Recently, major tech names suffered grievous losses, primarily due to concerns about exorbitant valuations. However, a spate of strong earnings numbers have put paid to most of these doubts.

But such gains pale in comparison to those notched up by their counterparts in China. Not only have such gains been considerably higher, in some cases they have been nearly twice as much.

Baozun Inc. (ADR) (NASDAQ:BZUN), offering digital and e-commerce services primarily in China, is certainly one of these high performing tech investments.

And Baozun Inc. is confirmed to report earnings today, Monday, August 21, 2017, after the market closes; and analysts are expecting an earnings beat.

The company reported the earnings of $0.08/Share in the last quarter where the estimated EPS by analysts was $0.07/share. The difference between the expected and actual EPS was $0.01/share, which represents an Earnings surprise of 14.3%.

Many analysts are providing their Estimated Earnings analysis for Baozun Inc. and for the current quarter 4 analysts have projected that the stock could give an Average Earnings estimate of $0.1/share. These analysts have also projected a Low Estimate of $0.1/share and a High Estimate of $0.11/share.

In case of Revenue Estimates, 5 analysts have provided their consensus Average Revenue Estimates for Baozun Inc. as 131.2 Million. According to these analysts, the Low Revenue Estimate for Baozun Inc. is 129.87 Million and the High Revenue Estimate is 132.1 Million. The company had Year Ago Sales of 105.33 Million.

It is pretty encouraging that estimates for BZUN have moved higher in the past few weeks, meaning that analyst sentiment is moving in the right way. Plus, the stock actually has a Buy rating, so the recent move higher for this spotlighted company may definitely continue.

Prices of the e-commerce company have made considerable gains from its two bases -- a first base from around $6 from the middle of 2015 to the middle of 2016, and a second-level base around the $16 level from September/October 2016 to this May.

Prices are up nearly six-fold from the first base and have doubled from the second base.                     

The Market Capitalization of the company stands at 1.65 Billion. The Company has 52-week high of $34.98 and 52-week low of $9.20. The firm has a 50 day moving average of $30.53 and a 200-day moving average of $20.53.

Baozun Inc. has risen 289.41% since August 16, 2016 and is uptrending. It has outperformed the S&P500 by 272.71%.

Analysts and Hedge Funds Opinions

BidaskClub upgraded the stock from a buy rating to a strong-buy rating last week.

Several other analysts have also recently commented on the company…..

  • Zacks Investment Research raised shares of Baozun from a “hold” rating to a “buy” rating and set a $38.00 price objective on the stock in a research note on Tuesday, July 25th.
  • Bank of America Corporation raised their price objective on shares of Baozun from $26.00 to $36.00 and gave the company a “buy” rating in a research note on Friday, July 21st.

The stock of Baozun Inc. reached all-time high last week and still has $38.47 target or about 10.00% above the current share price. This indicates more upside for the $1.89B company. If the $38.47 PT is reached, the company will be worth $151.20M more.

Several institutional investors have recently made changes to their positions in the stock…..

  • Northern Trust Corp boosted its stake in Baozun Inc. by 9.6% during the second quarter. The institutional investor owned 23,651 shares of the technology company’s stock after buying an additional 2,066 shares during the period. Northern Trust Corp’s holdings in Baozun were worth $524,000.
  • Matthews International Capital Management LLC boosted its position in shares of Baozun by 12.9% in the first quarter. Matthews International Capital Management LLC now owns 1,882,441 shares of the technology company’s stock worth $28,124,000 after buying an additional 215,600 shares during the last quarter.
  • Green Court Capital Management Ltd acquired a new position in shares of Baozun during the second quarter worth about $32,278,000.
  • Harvest Fund Management Co. Ltd boosted its position in shares of Baozun by 78.2% in the second quarter. Harvest Fund Management Co. Ltd now owns 790,142 shares of the technology company’s stock worth $17,517,000 after buying an additional 346,861 shares during the last quarter.
  • Franklin Resources Inc. acquired a new position in shares of Baozun during the second quarter worth about $16,599,000.

Harvey’s Options Volatility Indicator

Summary

Volume has expanded with the uptrend, which is bullish.

Therefore, based on the facts above, and Harvey’s Options Volatility Indicator, the following option trade is recommended…..

 

** OPTION TRADE: Buy the BZUN SEPT 15 2017 35.000 CALL at approximately $3.00. Place a pre-determined sell at $6.00.

Note: No protective stop losses added -- but if you wish to do so make it $1.20.

 

”Success is simple. Do what's right, the right way, at the right time.”

Option Tip for your Success!

Options traders are not successful because they win.

Options traders win because they are successful.



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