Top Trades for Tue, 15 May 2018 10:17 – AMGN

AMGN should be good for $14/share so $173.70 is a good deal (p/e 12).  They appear to earn less because they repatriated last year and took a big tax hit but the cash is in the bank ($40Bn).

Year End 31st Dec 2012 2013 2014 2015 2016 2017 TTM 2018E 2019E CAGR / Avg
Revenue $m 17,265 18,676 20,063 21,662 22,991 22,849 22,939 22,696 22,609 +5.8%
Operating Profit $m 5,577 5,867 6,191 8,470 9,794 9,973 10,108     +12.3%
Net Profit $m 4,345 5,081 5,158 6,939 7,722 1,979 2,219 9,384 9,413 -14.6%
EPS Reported $ 5.61 6.64 6.70 9.06 10.2 11.0 11.6     +14.4%
EPS Normalised $ 5.87 7.02 7.15 9.13 10.2 11.4 11.6 13.7 14.1 +14.2%
EPS Growth % +19.8 +19.5 +1.9 +27.7 +12.1 +11.5 +9.9 +19.8 +3.47  
PE Ratio x           15.4 15.2 12.9 12.4  
PEG x           0.78 0.77 3.71 3.06
Profitability

So those $9Bn estimates are realistic expectations for this $115Bn company and that's a real bargain in Biotech land.  We'll see how earnings go but let's set up a small position for the LTP – just in case it pops and we miss it:

  • Sell 5 AMGN 2020 $160 puts for $15.50 ($7,750) 
  • Buy 15 AMGN 2020 $175 calls for $20 ($30,000) 
  • Sell 15 AMGN 2020 $200 calls for $11 ($16,500) 

That's net $5,750 on the $37,500 spread so $31,750 profit potential at $200 and we're aggressively high as they might miss and then we'll spend about $7,500 more to roll the calls down $10 and widen the spread by $15,000.  Either way, we'll be able to sell 5 short calls and, at the moment, the July $180s are $3 so $1,500 for 66 out of 612 days means we can collect about $12,000 in premiums while we wait.  Not selling short calls yet as I think they are priced too low into earnings.  





Philstockworld May Top Trade Review

Image result for top trade ideasYes, this is Monday morning's Report.

I don't have much to say about the markets, they are back near the highs and we'll see if they hold tomorrow, not today, as it's Monday and Monday's don't matter.  What we do need to do is bargain-hunt in case it is a real rally and the best way to do that is to look back on past trade ideas and see if we can find some that haven't gone up yet.  

We did our last Top Trade Review in Aprilso it's a good time to do one of those and, as our Members well know, the vast majority of those trades turn positive so, when they're not, it's usually just a matter of time.  As of the April review, we had looked at Top Trades that were initiated through July and, out of 36 trade ideas in 34 weeks, we had 29 winners and 7 losers but 3 of the losers turned around and that left is with 30 wins and 4 losses for a very solid 88.23% winning percentatge.

Our Top Trades are what we think are our best trade ideas of the week with the highest chances of winning and we send out Alerts to our Members via Text and Email but we don't have a specific portfolio for them as they ofen ended up in one of our 5 various Member Portfolios already.  

There's a bit of randomness to the reviews in that we check in on trades after roughly 6 months so they are usually in progress and may be randomly up or down at the moment but that's why these reviews are so great for identifying bargains that simply haven't made a move
continue reading





Top Trades for Fri, 27 Apr 2018 14:51 – DIS

We don't have DIS in the LTP, which is now up another $10,000 today at $594,588.  Let's sell 10 2020 $95 puts for $8 ($8,000) and buy 15 2020 $90 ($17.80)/115 ($6) bull call spreads for $11.80 ($17,700) and that puts us in for net $9,700 on the $37,500 spread and we'll be selling 5 short calls for maybe $2 ($1,000 - the June $100s are $3) each Q to recoup much of that net $9,700.  

We have 5 short May $105 calls in the Butterfly Portfolio that we sold for $3.20.  Let's buy them back for 0.63 as it's doubtful we gain more than 0.30 on earnings  (5/8) if they go lower but, if DIS flies higher – we could lose a lot more. 





Top Trades for Thu, 26 Apr 2018 11:22 – GILD

GILD/Jabob – I still like them but as a long-term value play – I don't see anything exciting in the near-term.  At $95Bn ($73) they should steady out at $8.5Bn in earnings so they'll look more attractive once they prove their downsizing is over (was $13.5Bn in 2016 and just $5Bn last year).  The assumption is revenues stay around $21Bn and margins stay around 40%.  Operating margin was 54% last year, they just took a lot of charges which are, hopefully, behind them.

We do not have GILD in the LTP so let's sell 5 2020 $70 puts for $8.50 ($4,250) to collect our monthly rent and remind us to keep an eye on them for a possible bull call spread. 

At the moment, the 2020 $60 ($17)/$75 ($9.20) bull call spread is just $7.80 so 10 long spreads ($7,800)  and 5 short puts would give you a net $3,550 entry on the $15,000 spread that's almost all in the money and then you could sell 3 July $80s for $1.10 ($330) using 85 out of 631 days and even if you just do that once a quarter – it's another $2,000+ towards the trade.  

 





Top Trades for Tue, 17 Apr 2018 14:15 – GIS

List/Options – Well I like all of them but not sure at what price.  PG is having margin issues and is not cheap at $78.25 since it's about 20 times their $4 earnings with little growth.  I know that seems "cheap" compared to other idiotic prices but I prefer to play assuming reality sets in before Global Warming kills us all.  TXN requires a lot of study as chip cos go in and out of fashion and VLO is not even a tiny bit cheap and I'd short them if I didn't like them so much – play OIH to catch up.

GIS also nice and boring and well-priced at $45, those should go in the LTP in the very least selling puts.  Let's make this play official for the LTP:

  • Sell 10 GIS 2020 $45 puts for $5.15 ($5,150)
  • Buy 20 GIS 2020 $40 calls for $7.50 ($15,000)
  • Sell 20 GIS 2020 $52.50 calls for $2.20 ($4,400) 

That's net $5,850 on the $25,000 spread that's $10,000 in the money to start.  Profit potential is $19,150 (327%) and, of course, once we're at $50 we can sell some calls like 5 short July $50s for $1+ and, if we collect just $500 every quarter, that's another $3,500 we can bank on the trade.  

 





Top Trades for Mon, 16 Apr 2018 10:18 – LB

There was a Top Trade Review this morning on the Main Page @ https://www.philstockworld.com/2018/04/16/philstockworld-april-top-trade-review/

Also note that you can see older reviews in the Portfolio Section on the main page as well.

LB/Yodi – Such a deal down here:

You can sell 5 2020 $30 puts for $5 and that is simply a free $2,500.  If you want to be more aggressive, the 2020 $30 ($9)/$40 ($5) bull call spread for $4 still leaves you with a $500 credit on 5 full spreads and pays $5,500 at $40 – not a rough target.  





Top Trades for Wed, 28 Mar 2018 15:12 – SQQQ Hedge

As an additional hedge, at the moment, I like for the STP:

  • Sell 4 WHR 2020 $125 puts for $12.50 ($5,000)
  • Buy 50 SQQQ May $16 calls for $3.90 ($19,500) 
  • Sell 50 SQQQ May $20 calls for $2.20 ($11,000) 

That's net $3,500 on the $20,000 spread that's almost all in the money to start and the only way to lose is if the Nas goes up quite a bit from here which, with all these headwinds, doesn't seem too likely.

This hedge also gives us a buffer to take profits on some of the Sept $15 calls if they spike higher and, if they don't, then the Sept $15/20 spread (80, half covered) can cover the 50 short May $20s and we take $19,500 off the table for a $16,000 instant gain (on cash) while the rest plays out.  





Top Trades for Tue, 27 Mar 2018 14:30 – WBA, SONC & CBI

I do like CBI as they should benefit from an infrastructure bill – if they ever actually pass one.  

As a new trade, I'd sell 10 of the CBI 2020 $12.50 puts for $1.90 ($1,900) and consider that free money and put it into 10 of the 2020 $15 ($3.25)/20 ($1.60) bull call spreads at $1.65 ($1,650) and you still have a small credit on the $5,000 spread and worst case is you own them for less than $12.50.

Also folks, don't forget about the LTP trade and earnings trade from the morning post (I'm putting it here so Top Trade People will get it too):

I may change my mind after earnings.  McCormick (MKC), the spices company, knocked it out of the park this morning with an 18.5% beat and IHS Markit (INFO) beat by 10% while FactSet (FDS) beat by 14% so things are good in the world of spices and data so far.  Lululemon (LULU) reports this evening along with Shoe Carnival (SCVL), Restoration Hardware (RH) and Sonic (SONC) and SONC is cheap at $24.79 but the others are not cheap at all and I'll be interested to see if they can justify their high valuations.  

As you can see from Earning's Whispers' chart, options on SONC imply a higher move than it usually makes and we can turn that to our advantage by selling premium into earnings.  In this case, the Sept $22.50 puts are $1.25 and that would net us into the stock at $21.25, which is a $3.50 (14%) discount to the current price so that's a no-brainer to sell if you don't mind owning SONC for $21.25 as the worst case.  We can leverage that further by betting $25 will hold up and add a spread as follows:

continue reading





Top Trades for Thu, 15 Mar 2018 11:56 – HBI

HBI/Stock – Hmm, I guess we'll have to pull the trigger on them since that may be a sign something is up.  

HBI was our 2nd choice for Stock of the Year because our first choice, LB, had already snapped higher by Thanksgiving, when we officially make our pick.  Both are out of favor at the moment and we already picked up LB but now we can add some HBI to our Portfolios as well:

Note our old LTP play from 2/3/17 had a rough ride:

Submitted on 2017/02/03 at 7:46 am

HBI/Rexx – If they go down 30% I will dump other stocks so I can load up the truck.  Goes back to what I try to teach you guys about the absolute value of a company.  This isn't some dot.com with a blown business model or a retailer with too many stores and too few customers, this is a brand clothing company in an age where it take hundreds of millions to build each brand and you get Maidenform, Bali, PlaytexHanes, JMS/Just My Size, Lilyette, WonderbraDonna KaranDKNYChampionPolo Ralph LaurenL'eggs, Hanes Beefy-T, Gear for Sports, Duofold, DIM, Nur Die/Nur Der, Lovable, Shock Absorber, Abanderado, Zorba, Rinbros, Kendall, Sol y Oro, Fila, Bellinda, Edoo, and Track N Field AND $5Bn in sales AND $400M in profits for $8Bn.  If you don't understand the value in that – stick to TA!  

Submitted on 2017/02/03 at 12:54 pm

HBI/Pstas – $25 seems about right.  As to 44% of sales, so the 3 largest retailers sell 44% of something that pretty much every retailer (including AMZN) sells?  That's nothing to worry about.  If you don't get your Leggs from WMT it's because you're getting them at WBA or AMZN or whatever but you are still getting Leggs and HBI doesn't care WHERE you buy their stuff.


continue reading





Top Trades for Mon, 12 Mar 2018 10:21 – UCTT

Also, check out this morning's Top Trade Review.

Older reviews can be found under our Portfolio Tab.

PSA/Yodi – You like those storage trades, don't you?  I like them in general but only making $7.50/share so I'd rather wait for a better pullback.  UCTT is a nice, boring company that's a great value.  I like that for the LTP:

  • Sell 10 UCTT 2020 $20 puts for $5.75 ($5,750) 
  • Buy 20 UCTT 2020 $15 calls for $9.50 ($19,000)
  • Sell 20 UCTT 2020 $22.50 calls for $6.50 ($13,000) 

That's a grand total of $250 out of pocket on the $15,000 spread that's almost entirely in the money.  Good for a $14,750 (5,900%) gain on cash if it manages to go up $1.42 in 2 years and TOS says the margin is just $1,898 – so a very efficient way to make $15K in two years!  

Good call Yodi.





 
 
 

Zero Hedge

Thousands In Sweden Have Implanted Microchips Under Their Skin

Courtesy of ZeroHedge. View original post here.

More than 3,000 people in Sweden have implanted tiny microchips beneath their skin to replace their credit card information, identification, keys, train tickets, among other everyday items, Agence France-Press announced Sunday.

The implant, which is about the size of a grain of rice, utilizes Near Field Communication (NFC) technol...



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Phil's Favorites

Truth is Stranger than Fiction

 

Truth is Stranger than Fiction

Courtesy of 

Imagine Jamie Dimon made a killing shorting J.P. Morgan stock during the Great Financial Recession? And imagine he didn’t get in any trouble for it?

This actually happened 90 years ago at Chase Manhattan Bank, while Albert Wiggin was at the helm. This story was marvelously told in Once in Golconda, by John Brooks.

...

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Insider Scoop

PayPal's $2.2-Billion iZettle Acquisition Reassures A Sell-Side Bull

Courtesy of Benzinga.

Related PYPL Cantor's CoinDesk Consensus Conference Takeaways The Key To A Successful Fintech Partnership ...

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Chart School

Bulls Step In - Easing Bearish Concerns as Small Caps Breakout

Courtesy of Declan

Monday offered the bearish doji / swing high set up which had looked like it was going to create the 3-day bearish evening star set up across markets; this pattern did present itself Tuesday with the gap downs but today (Wednesday) saw rallies which were enough to close these gaps but not enough to negate the 'bearish evening star' setups. However, the bearish 'evening star' is typically a reliable setup and the lack of follow through lower suggests more upside is to come

The S&P had its breakout last week with supporting technicals all bullish, with the exception of relative performance. Despite this, look for a continuation of this rally.
 

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Biotech

Studying poop samples, scientists find clues on health and disease

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

 

Studying poop samples, scientists find clues on health and disease

Though examining poop samples scientists working on the American Gut Project are getting a new perspective on the microbes in our guts. By Christos Georghiou/Shutterstock.com

Courtesy of Daniel McDonald, University of California San Diego

Have you ever wondered what’s going on in your poop? Perhaps not. But thi...



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Digital Currencies

HSBC Completes First Trade-Finance Deal Using Blockchain, Opening $9 Trillion Market For Mass Adoption

Courtesy of ZeroHedge. View original post here.

Just a few hours after German online bank Bitbond announced it now allows users to transfer loans anywhere in the world using bitcoin and other cryptos, a move which we said would result in a rapid adoption of blockchain technologies within the bank-disintermediation space, the FT reported that in a somewhat parallel ...



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Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...



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Kimble Charting Solutions

The Stock Bull Market Stops Here!

 

The Stock Bull Market Stops Here!

Courtesy of Kimble Charting

 

The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...



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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)

 

"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...



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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

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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

NewsWare: Watch Today's Webinar!

 

We have a great guest at today's webinar!

Bill Olsen from NewsWare will be giving us a fun and lively demonstration of the advantages that real-time news provides. NewsWare is a market intelligence tool for news. In today's data driven markets, it is truly beneficial to have a tool that delivers access to the professional sources where you can obtain the facts in real time.

Join our webinar, free, it's open to all. 

Just click here at 1 pm est and join in!

[For more information on NewsWare, click here. For a list of prices: NewsWar...



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All About Trends

Mid-Day Update

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

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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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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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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