by Ian Harvey
August 05, 2018
OUT WHILST THE GOING IS GOOD!
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
United Technologies Corporation (NYSE:UTX)
Here is an update of United Technologies's options call trade. This options trade was recommended to “Armchair Trader” Members on Monday, July 16, 2018, based on United Technologies's discounted stock price, no cash flow issues, increasing EPS growth, and also some significant upside from a possible breakup of the company, along with positive analyst activity.
NOW…..it is time to consider a new call options trade.
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
…….was……** OPTION TRADE: Buy the UTX AUG 17 2018 130.000 CALL at approximately $2.70 TO $2.80. Place a pre-determined sell at $5.40.
Also include a protective stop loss of $1.10.
The New Suggested Trade…..
** OPTION TRADE: Buy UTX SEPT 21 2018 140.000 CALL at approximately $0.75 to $0.80. Sell price is left to your own judgment.
The Previous Details……..
Defense contractor, United Technologies Corporation (NYSE:UTX) has had quite a few ups and downs over the years; but it seems that leading hedge fund managers Dan Loeb and Bill Ackman don’t have a worry in regard to this fact.
United Technologies stock offers compelling value due to several reasons…..
When compared to UTX’s industrial conglomerate peers, it's clear the stock trades at discount on an EV-to-EBITDA -- enterprise value (market cap plus net debt) to earnings before interest, tax, depreciation and amortization -- basis. (EV-to-EBITDA is a very commonly used measure that helps compare companies with different debt loads.)
One benefit here is that United Technologies isn't facing cash flow issues or structural decline in its core segment.
United Technologies is positioning itself for long-term growth, but three of its four segments are suffering near-term headwinds as a consequence. Otis has been more price-competitive in order to win market share in the elevator equipment..……continue reading…..
Why A New Options Trade?..…
Shares of United Technologies have gained +11.9% in the last year. The company's second-quarter 2018 adjusted earnings outpaced expectations and came in higher than the year-ago tally of.
Going forward, stronger Otis, Climate Control and Security, Pratt & Whitney and Aerospace Systems sales, as well as new innovation investments will likely continue to drive United Technologies' revenues. On the other hand, higher revenues and cost-cutting measures are expected to boost profitability in the quarters ahead.
Also, the company is seeing favorable trends on the moving average crossover front. Recently, the 50 Day Moving Average for UTX broke out above the 200 Day Simple Moving Average, suggesting a short-term bullish trend.
As well, earnings estimate revisions have been favorable, with one estimate going lower whilst 4 went higher, and the consensus estimate has also moved higher too; suggesting more bullishness may especially be the case.
United Technologies raised EPS guidance from $6.95 - $7.15 to $7.10 - $7.25. Sales expectations went from $63.0 - $64.5 billion to $63.5 - $64.5 billion. This represents a change in EPS growth expectations of 6% to 7.8%, assuming midpoint results. Those are some pretty good expectations.
So given this move in estimates, and the positive technical factors, investors may want to watch this breakout candidate closely for more gains in the near future.
Over the last quarter organic sales increased another 6%. Unsurprisingly, organic sales growth was led by aerospace, with commercial aerospace sales growing 11% and military aerospace sales grow 8%. Even with tax cuts and an accelerating economy, the “aerospace super-cycle” remains the best thing going for United Technologies.
Already Existing Profits
So, for “Armchair Trader” members who managed to execute this trade recommended by Stock Options Made Easy; profits of 100% would have been already taken; and a chance now for further profit making is available.
Entering the option trade at a cost of $2.70 or less; and going as high as $7.10, but the sell point that was recommended was $5.40; one options contract would provide a profit of $270.00; or 100% Profit.ACTION TO TAKE…….
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, as seen in this scenario as part of the “Armchair Trader Series”, but during earnings season this strategy 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……
"When To Exit A Trade Based On Earnings?".....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.
Our proven track record says it all!!
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