Top Trades for Mon, 08 Jul 2019 16:09 – IMAX

IMAX still too cheap at $20:

  • IMAX (IMAX -1.8%) CEO Richard Gelfond pushes back against the idea that sequel fatigue is holding back box office sales this year.
  • Gelfond points to the strong opening run for Spider-Man: Far From Home and success of Avengers:Endgame. He thinks studios will continue to lean on the sequel formula due to structural changes with the movie industry.
  • As for him company, he notes IMAX's box office revenue is up 5% YTD, including a 25% rise in China.
  • Shares of IMAX are still up 7% YTD, despite a two-month long stumble.

They look at total box office but the blockbuster movies are, of course, on IMAX screens and those things are packing them in.  Several times we've wanted to see something in IMAX and that was sold out and we had to go see it on a regular screen.  

Spider Man was worth paying the IMAX fee for.  

Look at IMAX's nice, steady revenue growth and yes, they spent a lot of money the last few years and it's supposed to start dropping to the bottom line this year and Q1 was $12.5M in profits so on track for $50M even if Q1 wasn't a low Q in the movie Biz.  The company is valued at $1.2Bn at $20 so p/e pushing below 20x and the growth is still there and likely to…
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Top Trades for Mon, 01 Jul 2019 10:12 – AAPL

CMG/JMD – Keep in mind we got really burned on short calls on them at one point – a bit dangerous.  CMG isn't cheap now so I wouldn't take any position – the key to our success is PATIENCE – we initiate these positions when a stock is low in the channel – not at the top.  We are up over $100,000 on CMG from entries that began in Jan 2018, when CMG was $300 and we're still in the position because we took wins off the table and now we're rolling our short-call losses and covering with the new $700/800 spread but it's not an entry position – it's a buffer against the 15 short Jan $740 calls burning us and then we're selling the puts to offset the calls but again, if we didn't owe the short callers $106,000 that we were trying to avoid paying (and maybe making some money), we would not be messing around with this from scratch.

Now AAPL, on the other hand, is still very undervalued at $203 and, unlike CMG, I'm NOT worried about AAPL falling 25% to $150 so, with AAPL, I would confidently take the following:

  • Sell 10 AAPL June 2021 $165 puts for $12 ($12,000) 
  • Buy 20 AAPL June 2021 $180 calls for $41 ($41,000) 
  • Sell 20 AAPL June 2021 $225 calls for $20 ($20,000) 
  • Sell 5 AAPL Sept $205 calls for $9 ($4,500) 

Here we're spending net $4,500 on the $90,000 spread that's $40,000 in the money so no big deal if you lose a bit to the short callers and, if AAPL behaves and rises slowly, you have 718 days to sell and the Sep short calls used 81 so 7 more sales like that can drop another $31,500 in your pockets while you wait to see if you make $85,500 (1,900%).  Margin on the short puts is only $16,500ish (ordinary) so it's great if you have PM.  

I don't see the point in messing around with risky trades when trades like that are just sitting around!

FCX/Batman – They lowered outlook for Q2 as they expected $2.94 avg selling prices and got $2.77 so revenues are down $75M and now they will lose 0.05 vs +0.09 expected but I think…
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Top Trades for Thu, 27 Jun 2019 11:27 – WBA

WBA came through for us but a long way to go:

That guidance is around $5.99/ $55 share this year and $6 next year.  $55 is $50Bn market cap and, SO FAR this year (this is Q3 for them), they made about $4Bn so well on track for $5.3Bn.

As a new trade on them (we already have them in the OOP and LTP), I'd do the following:

  • Sell 5 WBA 2021 $55 puts for $8 ($4,000)
  • Buy 10 WBA 2021 $50 calls for $9.40 ($9,400)
  • Sell 10 WBA 2021 $65 calls for $3.40 ($3,400) 

That nets you into the $15,000 spread that's $5,000 in the money for $2,000 so the upside potential is $13,000 (650%) at $65.  TOS says the ordinary margin required $5,476 – so it's a pretty efficient way to make $13,000! 





Top Trades for Fri, 14 Jun 2019 10:07 – CLF

Industrial Production BTE as well:

  • May Industrial Production: +0.4% to 109.6 +0.2% consensus, -0.4% prior (revised).
  • Capacity Utilization 78.1% vs. 78.0% consensus, 77.9% prior (revised).

CLF is still pretty cheap at $9.66:

  • Dalian iron ore futures ripped to a new record and wrapped up their biggest weekly gain since February, raised by expectations of sustained tightness in supply and strong demand amid China's renewed drive to support its slowing economy.
  • The most-actively traded Dalian September iron ore contract jumped as much as 4% to 797.5 yuan/mt ($115.20), the highest since Dalian iron ore futures began trading in 2013, before ending +2.2% at 783.5 yuan, posting a weekly gain of 11.4%.
  • BHP, Rio Tinto (NYSE:RIO) and Fortescue Metals (OTCQX:FSUMF) all 


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Top Trades for Thu, 13 Jun 2019 12:49 – CPRI

Year End 30th Mar 2014 2015 2016 2017 2018 2019 2020E 2021E CAGR / Avg
Revenue $m 3,311 4,371 4,712 4,494 4,719 5,238 6,008 6,267 +9.6%
Operating Profit $m 1,008 1,257 1,175 689.9 749.1 735     -6.1%
Net Profit $m 661.5 881 839.1 552.5 591.9 543 761.4 828.8 -3.9%
EPS Reported $ 3.22 4.28 4.44 3.29 3.95 3.58     +2.2%
EPS Normalised $ 3.22 4.28 4.48 4.24 4.67 4.42 4.93 5.40 +6.5%
EPS Growth % +63.1 +32.9 +4.6 -5.5 +10.3 -5.5 +11.6 +9.62  
PE Ratio x           7.50 6.72 6.13  
PEG x           0.65 0.70 0.58
Profitability

Fashion companies go in and out of fashion but the nuts and bolts of this company seem OK with $600M in profit on $6Bn in sales and the whole company is $5Bn at $33.75 so a reasonable enough play to play it the way we played RH for the LTP:

  • Sell 10 CPRI 2021 $35 puts for $7.35 ($7,350) 
  • Buy 20 CPRI 2021 $30 calls for $9.50 ($19,000) 
  • Sell 20 CPRI 2021 $45 calls for $4 ($8,000) 

That's net $2,650 on the $30,000 spread that's almost $8,000 in the money with a very conservative goal.  If CPRI pops to $50, we can even sell a few quarterly calls for some income.  The Oct $37.50s are $2 so if we sold just 5 that would put $1,000 in our pocket and 6 sales like that puts us deep into a credit on the spread – so we have that to look forward to.  As it stands, the upside potential is $27,350 (1,032%) if they get back to $45.  It is SO much more fun trading with a high VIX, right?  

 





Top Trades for Mon, 10 Jun 2019 15:41 – LMT

Very nice for LMT over 3 years as their current sales are only $54Bn so + 20% in sales AND of course, they still have to maintain and repair the fleet and that's going to be no less than 10% of the $34Bn a year, probably more like 20%…

  • The U.S. Department of Defense says it has a "handshake" agreement with Lockheed Martin (LMT -0.7%) for the first multi-year purchase of F-35A fighter jets that would cut the price by 8.8% and bring the price of each aircraft below $80M/year earlier than expected.
  • The agreement is preliminary and a final deal is expected to be sealed in August for the 12th batch of jets worth $34B, Reuters reports.
  • The first-ever multiyear agreement for the jets represents a shift in sales practices from annual purchases to more economic multi-year deals that lower the cost of each jet to $81.35M from $89.2M.

Also, their R&D expenses for the F35 will be dropping too.  Unfortunately, LMT is high in the channel but I do like them long-term as a fusion play as well.  


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Top Trades for Wed, 05 Jun 2019 13:42 – RH

RH/JMD – We have played them on and off over the years and I find them to be a good, solid company.  They are still fairly small, with just  83 stores and Whole Foods has 500 so I'd have to say there's a bit of room to grow as that's essentially the customer base (people willing to pay more for quality).  I like their attention to the bottom line while growing and $90.50 is only $1.85Bn so, if they are really going to make $200M next year – that's quite a good deal.

Year End 02nd Feb 2014 2015 2016 2017 2018 2019 2020E 2021E CAGR / Avg


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Top Trades for Wed, 29 May 2019 16:00 – SEE & TLT

They are trying hard to keep it together into the close but it does seem a lot more like we're consolidating for a move down.

/KC hitting 100 for the first time in ages – congrats to all on that one.

Soybeans too:

Unless they are back at 820, I wouldn't go back in.  China begins slaughtering hogs soon and that cuts down on the global need for feed.

TLT right at our shorting line ($130):

SEE seems to be the new provider of packing material for AMZN and I like them anyway so let's sell 10 of the Jan $40 puts for $2.60 in the OOP ($2,600) and buy 20 of the Jan $38 ($5.10)/$43 ($2.25) bull call spreads for $2.85 ($5,700) for net $3,100 on the $10,000 spread.

Sealed Air Corporation SEE, -0.05% a leading manufacturer of protective packaging solutions, announces its participation in the Amazon Packaging Support and Supplier Network (APASS). Amazon created the APASS Network to provide vendors, sellers and manufacturers with a list of companies and labs that meet Amazon’s packaging certifications. As a participant of the APASS Network, Sealed Air is approved to test, design and supply packaging without additional testing or documentation from Amazon.

Also for the OOP, let's buy 10 TLT Jan $132 ($6)/$127 ($3) bear put spreads for net $3 and we'll sell some short-term puts for $1 once it comes down a bit.





Top Trades for Tue, 21 May 2019 13:53 – MJ

FNMA/Albo – Trump is talking about "doing something" with them and it's assumed that means getting out from Government control, which will re-direct profits to the private investors.  

Oh yeah, so I got sidetracked.  I was going to say I'm watching CGC et al, not just to get excited about the fund but because the MJ ETF has been holding these things for ages and their Revenues (not earnings) have been rocketing higher so I expect some good returns off MJ BUT I'm worried that there are a lot of growers and growing, especially in Canada, is likely to have an over-supply problem this summer.  

This is one of those cases where "it's not a bug – it's a feature" and you can make really good money on the ETF since the premiums are so huge.  I lean towards being long-term long and I'm going to make MJ the first play in our new Hemp Boca (another PSWI project) Radio Portfolio.  The base play will be:

  • Sell 5 MJ 2021 $30 puts for $6.25 ($3,125) 
  • Buy 10 MJ 2021 $25 calls for $10.50 ($10,500)
  • Sell 10 MJ 2021 $35 calls for $6 ($6,000) 

That's net $1,375 on the $10,000 spread that's 90% ($9,000)) in the money so the upside potential is $8,625 (627%) if MJ managed to gain a buck over the next 18 months!  How's that for a first trade? Surprisingly, the net ordinary margin requirement on this is just $1,510.70 according to TOS, so it's super-efficient but likely to change if MJ has violent swings again (I think this one flew under the radar in compliance!).  

For our Butterfly Portfolio, however, we're going to be more aggressive:

  • Sell 10 MJ 2021 $30 puts for $6.25 ($6,250) 
  • Buy 30 MJ 2021 $35 calls for $6 ($18,000) 
  • Sell 15 MJ 2021 $50 calls for $2.30 ($3,450) 
  • Sell 15 MJ July $35 calls for $1.30 ($1.950) 
  • Sell 15 MJ July $33 puts for $2.10 ($3,150) 

That's net $3,200 on our out of the money spread, which is mainly there to make sure the short calls don't get away from us.  Otherwise, if we can sell $5,000 every quarter, we have 5 quarters


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Top Trades for Mon, 20 May 2019 10:32 – CBS

CBS/Palotay – Thanks for reminding me (though the above news item did too!).  That offer is one of the reasons they began to drop off and I knew this was coming as their CBS subscription service is not getting the traction they'd hoped with just Star Trek and a couple of other unique things (though Star Trek Discovery is great).  Now they are trying to buy LGF, who own Starz so they can get their film library but are you going to cancel Comcast and go with CBS because you can't get Starz anymore?  I hate the way this whole industry is going…

LGF has $4Bn in revenues and makes about $150M a year yet CBS is willing to pay $5Bn (33x) even though they are valued at $18Bn on $2Bn in earnings (9x) so they want to spend $5Bn – effectively diluting you by 25% in order to add 7.5% to earnings?  That seems silly, right?  They are doing this to cover up the mistake they made with CBS All-Access, not because it's a good decision.

Year End 31st Dec 2013 2014 2015 2016 2017 2018


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Phil's Favorites

Five countries in the eastern Mediterranean are shaking up Europe's energy map

 

Five countries in the eastern Mediterranean are shaking up Europe's energy map

A rig off the coast of Cyprus explores the region’s gas potential. Shutterstock

Courtesy of Khaled Kesseba, Sheffield Hallam University and Konstantinos Lagos, Sheffield Hallam University

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Zero Hedge

UMich Inflation Expectations Spike To 3-Year Highs

Courtesy of ZeroHedge. View original post here.

Following June's dip in 'hope', UMich Sentiment was expected to improve in preliminary July data but it disappointed in most aspects.

  • Headline Sentiment rose from 98.2 to 98.4 (but missed 98.8 exp)

  • Current Conditions dipped from 111.9 to 111.1 (missing 112.8 exp)

  • Expectations inched higher from 89.3 to 90.1

Still close to the best level in more than a decade

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Kimble Charting Solutions

Doc Copper Is Pushing Higher Off 18-Year Rising Support, Says Joe Friday

Courtesy of Chris Kimble.

Gold & Silver have been hot of late! Is Doc Copper about to do the same? Possible says Joe Friday.

This chart looks at Copper Futures over the past 27-years. Copper has spent the majority of that time inside of rising channel (1).

The decline over the past year has Doc Copper testing 18-year rising support and lows of the past 8-months at (2).

Joe Friday Just The Facts Ma’am- Copper is attempting to rally off of long-term support at (3). As Copper is testing the bottom of this support channel, smart money hedgers are making a bi...



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Insider Scoop

Benzinga's Top Upgrades, Downgrades For July 19, 2019

Courtesy of Benzinga.

Upgrades
  • For American International Group Inc (NYSE: AIG), William Blair upgraded the previous rating of Market Perform to the current rating Outperform. American International Gr earned $1.58 in the first quarter, compared to $1.04 in the year-ago quarter. American International Gr's market-cap stands at $48,358,299,270. At the moment, the stock has a 52-week-high of $56.49 and a 52-week-low of $36.16. American International Gr c...


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Chart School

RTT Plus Chart Book (Sneak Peak)

Courtesy of Read the Ticker.

The magic of support and resistance channel lines and how they direct price. Here are some chart disclosed to members via the RTT Plus service. All charts are a few weeks old. 


XAU bound by parallel channel lines.


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Newmont Mining support from Gann Angles.



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US Dollar index (DXY) dominate cycle ...

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Digital Currencies

Cryptos Suddenly Panic-Bid, Bitcoin Back Above $10k

Courtesy of ZeroHedge. View original post here.

Following further selling pressure overnight, someone (or more than one) has decided to buy-the-dip in cryptos this morning, sending Bitcoin (and most of the altcoins) soaring...

A sea of green...

Source: Coin360

Bitcoin surged back above $10,000...

Ethereum bounced off suppo...



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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

Reminder: We're is available to chat with Members, comments are found below each post.

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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ValueWalk

Professor Shubha Ghosh On The Current State Of Gene Editing

 

Professor Shubha Ghosh On The Current State Of Gene Editing

Courtesy of Jacob Wolinsky, ValueWalk

ValueWalk’s Q&A session with Professor Shubha Ghosh, a professor of law and the director of the Syracuse Intellectual Property Law Institute. In this interview, Professor Ghosh discusses his background, the Human Genome Project, the current state of gene editing, 3D printing for organ operations, and gene editing regulation.

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

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It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

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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