Top Trades for Thu, 13 Feb 2020 11:28 – SPWR and Futures Shorts

SPWR/Batman – The reaction is a little harsh, I think.  

SunPower (NASDAQ:SPWR): Q4 Non-GAAP EPS of $0.23 in-line; GAAP EPS of $0.03 beats by $0.15.

Revenue of $607M (+15.5% Y/Y) misses by $7.98M.

Press Release

SunPower (NASDAQ:SPWR-5.8% after-hours after slightly missing expectations for both Q4 earnings and revenues and issuing in-line guidance for FY 2020 revenues.

Q4 residential revenue rose to a record with 27% MW growth vs. the year-ago quarter, and global shipment volumes gained more than 80% Y/Y to a record.

SunPower sees full-year revenues of $2.1B-$2.3B vs. $2.28B analyst consensus estimate; for Q1, the company forecasts revenues of $435M-$470M vs. $409M consensus, as well as gross margin of 9%-12%, adjusted EBITDA flat to negative 15M and MW deployed of 520-570 MW.

As a result of the restructuring of its commercial direct business, SunPower forecasts FY 2020 adjusted EBITDA of $125M-$175M.

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Top Trades for Wed, 12 Feb 2020 10:55 – SKT and SPY Hedge

SPY/Winston – Well, if you have $1M in SPY you want a $100,000 hedge against a $200,000 drop (20%).  Your SDS Sept $23/30 spread at $1.10 is at the money and SDS is a 2x hedge so a 20% drop in SPY would be a 40% gain in SDS to $32 – so good logic there.  To get $100,000 ($200,000 would be way over-hedged) you need 150ish of the spreads for $16,500 and that would pay $105,000 back and likely around $50,000 on a 10% drop.  I guess you could go for 200 at $22,000 but the question is – do you feel your SPY will gain 10% and that the chance of gaining 10% on SPY is as good or better than losing 10% or else – why be in the trade at all?

SSD is the ultra-long SPY and it's at $85 and you can buy the Sept $80 ($10)/85 ($7) bull call spread for $3 so $300,000 pays back $500,000 ($200,000 profit) if the S&P simply stays flat and you can pull the plug with a $150,000 loss and buy 100 of the SDS hedges for $11,000 and they would pay $70,000 if the S&P does drop on you and now you've only tied up $311,000 and you have $689,000 to play with with essentially the same upside.  

Since you are not likely to lose more than $80,000 on a 20% drop in SPY, you'd still have $920,000 left to invest when stocks are 20% cheaper than they are now and you can start by selling some puts in things you REALLY want to buy if the market does drop like BA 2022 $250 puts, which are still $16 so, if you are willing to commit to $125,000 of BA, then you can collect $8,000 for 5 short puts.

AAPL is a bit high but, like BA, you can sell the 2022 $250 puts for $16.65.  

Do that with 10 stocks and there's another $80,000 in your pocket and you'll be up $280,000 if SPY goes higher with far, far less risk than keeping all that money in SPY.  

SKT is $13.35 and you can sell the 2022 $13 calls for $1.80 and the 2022 $13 puts for $3.10 so that's net $8.45/10.725 if assigned so either you own 2x the shares at $10.725 (and

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Top Trades for Fri, 31 Jan 2020 12:23 – DFS

DFS/Vkat – I posted earlier, insiders are buying at $75 and they are very interesting down here.  

Discover Financial execs buy the dip

  • Between Jan. 23 and 27th, Discover Financial Services (NYSE:DFS) shares sank 16% after two analysts downgraded the stock after the company's outlook for expenses in 2020 was worse than expected.
  • Four Discover executives took advantage of that lower share price and purchased 24,777 shares on Jan. 27.
  • CEO and President Roger Hochschild picked up 15,000 shares at $74.12 per share.
  • John Greene, executive vice president and CFO, bought 3,377 shares at $73.84 per share.
  • Wanji Walcott, executive vice president, chief legal officer and general counsel, acquired 3,400 shares at $73.95 per share.
  • Carlos Minetti, executive vice president, consumer banking, bought 3,000 shares at ~$73.74 per share.

For the LTP, we can simply play them not to go lower with this spread:

  • Sell 10 DFS 2022 $70 puts for $8 ($8,000) 
  • Buy 20 DFS 2022 $60 calls for $18.50 ($37,000) 
  • Sell 20 DFS 2022 $75 calls for $11 ($22,000) 

That's net $7,000 on the $30,000 spread that's in the money to start.  All DFS has to do is hold $75 and we make $23,000 (328%) and,  if they recover back to the $80s, we can even sell some short calls for income while we wait. 

Top Trades for Thu, 23 Jan 2020 13:36 – VIAC

DIS/Yodi – My brain doesn't work that way.  I would want to see something really good, like $110-120 and, otherwise, why do I need DIS when there are other stocks that ARE on sale?  As much as I like DIS overall, $141 is $260Bn and they are not "only" dropping $10Bn to the bottom line for 2020 and MAYBE $11Bn in 2021.  It's not the kind of stock that will get to $13Bn in less than 5 years so buying it for $260Bn now says that, for the next 5 years, I can't imagine a market event that re-values stocks to 20x earnings.  Nope, no thanks…

Year End 28th Sep 2014 2015 2016 2017 2018 2019 2020E 2021E CAGR / Avg
Total Revenue

48,813 52,465 55,632 55,137 59,434 69,570 81,350 86,571 7.34%
Operating Profit

11,435 13,171 14,202 13,853 14,845 14,459     4.80%
Net Profit

7,501 8,382 9,391 8,980 12,598 11,054 9,912 11,239 8.06%
EPS Reported

4.26 4.90 5.73 5.69 7.23 6.25     7.93%
EPS Normalised

4.29 4.92 5.79 5.70 6.94 5.01 5.43 6.13 3.17%
EPS Growth

+19.5 +14.8 +17.6 -1.61 +21.8 -27.8 +8.41 +12.8  
PE Ratio

          28.7 26.5 23.5  

          3.41 2.07 1.75  

How about VIAC?  $37.22 is $23Bn and they should make around $3.3Bn this year and more next year. In fact, that's a good one for the LTP:

  • Sell 10 VIAC 2022 $32.50 puts for $4 ($4,000) 
  • Buy 30 VIAC 2022 $35 calls for $7 ($21,000)
  • Sell 30 VIAC 2022 $42.50 calls for $4 ($12,000) 

That's net $5,000 on the $22,500 spread so the upside potential is $17,500 at $42.50 and the risk is owning 1,000 shares of VIAC for net $37.50 (about where it is now).  This is a first round, of course, we hope it gets cheaper and we can sell more puts and add more longs or widen the spread but, if it doesn't – we'll take the $22,500 as we should end up with at least 20 positions in the LTP (plus 20 naked short puts) – even in a "normal market" (we had more like 40 long positions in the last LTP.  

Picard starts tonight on CBS All Access – I bet that will get it off the floor as people begin to notice their streaming service.  

Top Trades for Fri, 17 Jan 2020 10:59 – MIDD

OK, I think this news item is actionable as I really like MIDD anyway, they make my beloved Viking ranges but only $2.7Bn in sales and $320M in profit so this deal can really move the needle on the $6.3Bn valuation at $112:

Middleby said to be on McDonald's radar

  • Shares of Middleby (MIDD +1.3%) are on watch after Buckingham Research suggests the company could land oven business from McDonald's in front of the fast-food chain's launch of a crispy chicken sandwich.
  • Middleby trades on the low end of its 52-week range of $105.77 to $142.98.

For the Long-Term Portfolio (LTP), let's:

  • Sell 10 MIDD Dec $110 puts for $10.70 ($10,700) 
  • Buy 10 MIDD Dec $100 calls for $19 ($19,000)
  • Sell 10 MIDD Dec $120 calls for $9 ($9,000) 

That's a net $700 credit on the $20,000 spread that's $10,000 in the money at the moment.  Upside potential is $20,700 (2,957%) in less than a year and our worst case is owning 1,000 shares of MILL at $110, but then we can sell the next year's $100 calls for $20 and drop our net to $90 so not much downside there

Year End 29th Dec 2013 2014 2015 2016 2017 2018 TTM 2019E 2020E CAGR / Avg
Total Revenue

1,429 1,637 1,827 2,268 2,336 2,723 2,896 2,938 3,038 13.8%
Operating Profit

244 300 303 419 379 446 483     12.8%
Net Profit

154 193 192 284 298 317 325 354 401 15.6%
EPS Reported

2.74 3.40 3.36 4.98 5.26 5.70 5.84     15.8%
EPS Normalised

2.74 3.64 4.07 5.10 6.16 5.96 6.13 6.66 7.33 16.9%
EPS Growth

+26.4 +33.2 +11.8 +25.3 +20.7 -3.17 +2.86 +11.7 +10.1  
PE Ratio

          18.4 17.9 16.5 15.0  

          1.58 1.53 1.63 2.44  

Top Trades for Wed, 15 Jan 2020 15:03 – IMAX


In the Webinar, we wanted to add IMAX to the STP, which is going to be the LTP so really, this is for the LTP:

  • Buy 50 IMAX June $17 calls for $4 ($20,000) 
  • Sell 50 IMAX June $20 calls for $1.90 ($9,500) 
  • Sell 50 IMAX June $20 puts for $1.30 ($6,500) 

That's net $4,000 on the $15,000 spread so $11,000 (275%) upside potential if IMAX is over $20 on June 19th.  The risk is being assigned 5,000 IMAX at $20 ($100,000) but, realistically, maybe they are down 20% to $16 and the loss (if not rolled or stopped) is $4 x 5,000 or $20,000 – that's the true risk.  ToS says $8,494 in ordinary margin is required – pretty efficient.  


Top Trades for Mon, 06 Jan 2020 14:53 – HRB

HRB/Fel – I like HRB as it seems like a pattern that people tend to forget about them and lose interest each year but then, during tax season, everyone remembers HRB is a pretty good business and gets back into the stock and, of course, Q1 and Q2 are their big quarters and Q3 and Q4 (which ends 10/30) generally have losses.  It's like a high-speed cyclical:

I guess it would be a good Butterfly candidate but it stays down too long so we generally just play it bullish into April.  March earnings are not likely to be exciting but, for the Earnings Portfolio, let's play HRB like this:

  • Sell 5 HRB 2022 $22 puts for $3.50 ($1,750) 
  • Buy 15 HRB July $20 calls for $4.10 ($6,150) 
  • Sell 15 HRB July $24 calls for $1.60 ($2,400) 

That's net $2,000 on the $6,000 spread so $4,000 of upside potential at just $24 is a nice, conservative way to make 200% – though you have to wait a while on the put side.  

Top Trades for Mon, 16 Dec 2019 13:45 – TOL

Mean reversion/Winston – That's the crux of the strategy.  Pick long-term value stocks, wait for them to go on sale and then ride out the storm.  Worst case is we end up "stuck with them" at low prices for the long term.  Just be careful with big-ticket stocks as it's harder to "worst case draw an income" if they fall too far below the target range.

If AMGN ($244) falls 40% to $150ish, I don't really want to sell $150 calls or even $150 puts as it's hard to DD at those prices – especially as you move to a 4x position.  

HBI, on the other hand, is $14.65 and if they dropped 40% to $9ish, even if I only got $1.30 (the price of the 2022 $20s) for the $15 calls, that's still 15% back on my stock while I wait and 10% back on my original investment on just the call side – I can afford to be patient with that.  

That's why I tend to favor lower-priced stocks – unless the high-priced stock is rock-solid like AAPL.  Even 400 shares of a $350 stock run you up to $140,000 very fast and, realistically, we have no fun at all starting with 1 contract on anything – so I try not to tie the portfolios up with too many of those.

Homebuilders/1020 – Well I was pounding the table on HOV all year but now they've blasted off and I'm not really sure who's cheap.  Not too many people I really like in the sector.  I suppose TOL would be my 2nd choice as $39.81 is still just $5.6Bn and they are good for at least $500M to the bottom line 

Financial Summary

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Top Trades for Thu, 12 Dec 2019 10:01 – TD

Speaking of TD – This deal is dropping 13.4% of SCHW in their laps at about $7Bn and that's way up from what they valued their remaining stake in AMTD.  TD is a good value anyway at $55.60, which is $100Bn with a $2.24 (4%) Dividend and they might spit out a special dividend down the road.  

Even if these are Canadian Dollars, TD is way undervalued:

Year End 31st Oct 2014 2015 2016 2017 2018 2019 2020E 2021E CAGR / Avg
Revenue C$m 29,961 31,426 34,315 36,202 38,892 41,065 40,947 43,418 +6.5%
Operating Profit C$m 9,075 9,170 10,646 12,321 13,773 13,229     +7.8%
Net Profit C$m 7,776 7,912 8,821 10,396 11,262 11,668 12,437 13,123 +8.5%
EPS Reported C$ 4.14 4.21 4.67 5.50 6.01 6.25     +8.6%
EPS Normalised C$ 4.15 4.52 4.74 5.50 6.04 6.33 6.88 7.33 +8.8%
EPS Growth % +18.3 +9.0 +4.7 +16.1 +9.8 +4.8 +8.81 +6.51  
PE Ratio x           11.5 10.6 9.93  
PEG x           1.31 1.62 0.70

So, as an eventual LTP play, we can put TD in the STP but let's also do a Dividend play:

For the Dividend Portfolio:

  • Sell 5 TD July $57.50 puts for $4.10 ($2,050) 

We're kind of full but I'd sell something else to buy TD for net $53.40.

For the STP:

  • Sell 10 TD July $55 puts for $2.65 ($2,650) 
  • Buy 15 TD July $52.50 calls for $4 ($6,000) 
  • Sell 15 TD July $57.50 calls for $1.20 ($1,800) 

That's net $1,550 on the $7,500 spread so $5,950 (383%) upside potential in just 218 days if all goes well and, if it doesn't, we're very happy to establish a bigger TD position in the LTP.  Ordinary Margin is $10,500 – not terribly efficient but very manageable.  

Top Trades for Mon, 09 Dec 2019 14:35 – M Again

M came right back off that downgrade – $15 looking very solid as a floor!

Talk about a no-brainer investment.  Would have been my stock of the year except for the stunningly negative sentiment possibly causing eventual credit issues.  

We have them in the Dividend Portfolio (pays $1.51/share!  Next payment is 12/12 – my Dad's Bday…):

M Macys Inc. 2000 10/30/2019 40 $30,000 $15.00 $0.47 $15.00     $15.47 $0.32 $930 3.1% $30,930
M Short Call 2022 21-JAN 15.00 CALL [M @ $15.47 $0.32] -20 10/30/2019 (774) $-6,500 $3.25 $0.03     $3.28 - $-50 -0.8% $-6,550
M Short Put 2022 21-JAN 13.00 PUT [M @ $15.47 $0.32] -20 11/1/2019 (774) $-7,600 $3.80 $-0.58     $3.22 $-0.23 $1,160 15.3% $-6,440

We also have them in the Hemp Boca Portfolio (still playable if you like getting up to $10,500 back on a net $1,037 entry that's currently $3,750 in the money):

M Long Call 2022 21-JAN 13.00 CALL [M @ $15.47 $0.32] 15 11/20/2019 (774) $6,225 $4.15 $-0.05 $3.72     $4.10 $0.09 $-75 -1.2% $6,150
M Short Call 2022 21-JAN 20.00 CALL [M @ $15.47 $0.32] -15 11/21/2019 (774) $-3,075 $2.05 $-0.13     $1.93 $0.13 $188 6.1% $-2,888
M Short Put 2022 21-JAN 15.00 PUT [M @ $15.47 $0.32] -5 11/20/2019 (774) $-2,425 $4.85 $-0.40     $4.45 - $200 8.2% $-2,225

I would add it to Money Talk if I could but we can add it to the STP (now up 61.6%) so let's:

  • Sell 20 M 2022 $15 puts for $4.50 ($9,000)

Why?  Because who doesn't like $9,000 for doing nothing but promising to buy M for $10.50?  Ordinary margin is $5,253, which is high but still – not bad for $9,000.


Zero Hedge

Philly Fed Unexpectedly Soars To Second Highest Since Financial Crisis

Courtesy of ZeroHedge View original post here.

Anyone expecting the coronavirus pandemic to hit regional Fed surveys following the recent plunge in the Chicago PMI was in for a disappointment this week, when first the NY Fed's Empire State mfg survey unexpectedly printed at the highest since mid-2018, and then moments ago the Philly Fed blew it out of the ballpark with a massive surge in its business outlook survey, where the current general activity rose nearly 20 points this month to 36.7, smashing expectations of a drop from 17.0 to 11.0, and the highest index reading since February 2017. More importantly, this was the se...

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The Technical Traders

Is The Technology Sector Setting Up For A Crash? Part IV

Courtesy of Technical Traders

As we continue to get more and more information related to the Coronavirus spreading across Asia and Europe, the one thing we really must consider is the longer-term possibility that major global economies may contract in some manner as the Chinese economy is currently doing.  The news suggests over 700+ million people in China are quarantined.  This is a staggering number of people – nearly double the total population of the entire United States.

If the numbers presented by the Chinese are accurate, the Coronavirus has a very high infection rate, yet a moderately small mortality rate (2~3%).  Still, if this virus continues to spread throughout the world and infects m...

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Phil's Favorites

Why Trump's post-impeachment actions are about vengeance, not retribution


Why Trump's post-impeachment actions are about vengeance, not retribution

President Trump fired Army Lt. Col. Alexander Vindman for testifying in his impeachment trial. AP Photo/Susan Walsh, File

Courtesy of Austin Sarat, Amherst College

Since the end of his Senate impeachment trial, President Donald Trump has carried out a concerted campaign against ...

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Biotech & Health

Deep learning AI discovers surprising new antibiotics


Deep learning AI discovers surprising new antibiotics

A colored electron microscope image of MRSA. NIH - NIAID/flickr, CC BY

Courtesy of Sriram Chandrasekaran, University of Michigan

Imagine you’re a fossil hunter. You spend months in the heat of Arizona digging up bones only to find that what you’ve uncovered is from a previously discovered dinosaur.

That’s how the search for antibiotics has panned out recently. The relatively few antibiotic hunters out there ...

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Kimble Charting Solutions

King Dollar Going To Lose Strength Here? Gold & Silver Hope So!!!

Courtesy of Chris Kimble

Is King$ and the Euro facing important breakout/breakdown tests at the same time? It looks like it in this chart!

The US$ trend remains up, as it has created a series of higher lows since the start of 2018. The opposite can be said for the Euro, as it has created a series of lower highs since early 2018.

The US$ is currently testing the top of its 18-month rising channel, as the Euro is testing the bottom of its falling channel.

What King$ and...

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Insider Scoop

The Daily Biotech Pulse: Heron Pain Drug Review Extended, Disappointment For Teva In Tourette Syndrome Study

Courtesy of Benzinga

Here's a roundup of top developments in the biotech space over the last 24 hours.

Scaling The Peaks

(Biotech Stocks Hitting 52-week highs on Feb. 19)

  • Adverum Biotechnologies Inc (NASDAQ: ADVM)
  • Akebia Therapeutics Inc (NASDAQ: AKBA)
  • Ana... more from Insider

Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year


Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...

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What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...

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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.

Date Found: Tuesday, 01 October 2019, 02:18:22 AM

Click for popup. Clear your browser cache if image is not showing.

Comment: Wall of worry, or cliff of despair!

Date Found: Tuesday, 01 October 2019, 06:54:30 AM

Click for popup. Clear your browser cache if image is not showing.

Comment: Interesting.. Hitler good for the German DAX when he was winning! They believed .. until th...

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Members' Corner

How to Stop Bill Barr


How to Stop Bill Barr

We must remove this cancer on our democracy.

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia


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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires


Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:


The ‘experts’ I hear from keep saying that once 300B more in reserves have ...

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:


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Free eBook - "My Top Strategies for 2017"



Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:


·       How 2017 Will Affect Oil, the US Dollar and the European Union


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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.