by Ian Harvey
August 02, 2018
OUT WHILST THE GOING IS GOOD!
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
Xilinx, Inc. (NASDAQ: XLNX)
Here is an update of Xilinx's options call trade. This options trade was recommended to “Cut-to-the-Chase” Members on Tuesday, July 24, 2018, based on Xilinx’s continued momentum, unique positioning and the likely ability to produce a sound earnings report.
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 XLNX AUG 17 2018 70.000 CALL at approximately $1.45. Sell price is left to your own judgment.
The New Suggested Trade…..
** OPTION TRADE: Buy XLNX SEPT 21 2018 72.500 CALL at approximately $1.80. Sell price is left to your own judgment.
The Previous Details……..
Xilinx, Inc. (NASDAQ: XLNX), a designer and developer of programmable devices and associated technologies worldwide, had its start back in the 1980’s; by inventing a new class of programmable chipsets called FPGAs (field-programmable gate arrays), which could be reprogrammed after being shipped.
Today, Xilinx is the world's top maker of FPGAs, which are used across a wide range of industries. Its only meaningful competitor is Intel, which acquired Xilinx's top competitor Altera in 2015..……continue reading…..
Why This Trade Was Successful!………
Besides those factors mentioned in the first recommended options trade, Xilinx Inc. reported better-than-expected fiscal first-quarter 2019 results on July 25, where both the top and the bottom lines surpassed the Consensus Estimate and recorded year-over-year improvement.
The company reported earnings of 74 cents per share, which beat the Consensus Estimate by a penny and were much higher than the prior-year quarter's figure of 59 cents.
Revenues increased 14% year over year to $684.4 million and outpaced the Consensus Estimate of $672.2 million as well.
Why A New Options Trade?..…
Xilinx projects revenues in the range of $700-$720 million for second-quarter fiscal 2019.
Management expects Data Center and TME to grow significantly. Communications is expected to increase, with strong wireless revenue growth to more than offset a slight decline in wired revenues. Early 5G deployment activity in Korea and the withdrawal of the denial order on ZTE will be tailwinds.
Gross margin is expected to be around 69.5%. Operating expenses are projected to be $279 million. Tax rate is estimated between 10% and 14%.
For fiscal 2019, Xilinx projects revenues in the range of $2.8-$2.9 billion (mid-point $710 million).
Gross margin is expected to be between 68.5% and 70.5%. Operating expenses are projected to be in the range of $1.12-$1.14 billion.
On top-of-this, Xilinx had crossed above the average analyst 12-month target price of $73.00, changing hands for $74.49/share – but has declined a bit this week. When a stock reaches the target an analyst has set, the analyst logically has two ways to react: downgrade on valuation, or, re-adjust their target price to a higher level. Analyst reaction may also depend on the fundamental business developments that may be responsible for driving the stock price higher - if things are looking up for the company, perhaps it is time for that target price to be raised – which seems to be situation here.
Having noted this, Bank of America upgraded shares of Xilinx from an underperform rating to a buy rating in a report published last Thursday morning. Bank of America currently has an $85.00 price objective on the programmable devices maker’s stock. And more analysts will follow!
Already Existing Profits
So, for “Cut-to-the-Chase” members who managed to execute this trade recommended by Stock Options Made Easy; and wish to take potential profits now, 331%, at last look, was available.
Entering the option trade at a cost of $1.45 or less; and going as high as $6.25; one options contract would provide a profit of $480.00; or 331% Potential 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 “Cut-to-the-Chase 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.....
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