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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Top Trades for Wed, 15 May 2019 09:49 – TZA Hedge and M Puts

Good morning!  

More bad news:

  • April Industrial Production: -0.5% to 109.2 +0.0% consensus, +0.2% prior (revised).
  • Capacity Utilization 77.9% vs. 78.7% consensus, 78.5% prior (revised).

That was very unexpected. 

Volume on sell-off was pretty low.  While that's not a great sign (could be a lot more people who want to sell but can't find buyers), it means we can pop right back up on a little good news.  The trick is finding the good news – mostly it's earnings.  Companies are making money (see M) and, if F'ing Trump would just leave things alone – things would probably be great (again).  

New Hedge/Robert – Well I'd go with the July TZA spread above and offset with short puts on something you don't mind buying if the market drops 20% like this:

  • Buy 50 TZA July $9 calls for $1.30 ($6,500) 
  • Sell 50 TZA July $11 calls for 0.65 ($3,250) 
  • Sell 10 M 2021 $20 puts for $4 ($4,000) 

So that's a net $750 credit on the $10,000 spread so the upside potential is $10,750 if the Russell falls and the worst case scenario is you get $22,000 worth of M stock (currently) for net $19,250.

If you want a bigger hedge, I'd suggest selling more than just one put so you're less likely to get burned by one company going lower than we thought.  Anything still in the LTP is a good candidate as we've already purged the things we aren't happy to ride out a downturn with.

M/DC – What a gift that you still get to buy it cheap after those earnings!  


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Top Trades for Fri, 10 May 2019 11:17 – INTC

/SI/Tommy – But it's on a weak Dollar so we have to wait for the Dollar to bounce and see where /SI bottoms out.  Could get worse.

Gold is holding up well though as Central Banks are hoarding it again.

INTC/Mike – You would think $45.50 is cheap enough as that's just over $200Bn and they dropped $21Bn to the bottom line last year and this year is guided lower but only about 5% lower though now we're back to the 2018 avg price so maybe it's the mover to $59 that was silly, not the move back to $45.

Year End 29th Dec 2013 2014 2015 2016 2017 2018 TTM 2019E


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Top Trades for Fri, 03 May 2019 11:58 – T

Another penny on /RB – Good for $500 so far – don't be greedy on a Friday – $100 trailing stops.  

/CL at $62.50 – nice gains now.  

EA/Kgab – I think the business is in flux and not really growth so not one I'd play but there is that interesting ESports thing going on and 2.5M people watched their Madden Bowl Game recently, which is pretty good engagement and up from like 400,000 last year.  There's a lot of TV shows that don't get 2.5M views.  So consider that a bonus to their $1.3Bn in earnings and $27Bn ($92.50) doesn't seem that crazy but "doesn't seem that crazy" isn't why I buy something.

Assignment/Yodi – On the other hand, if I get assigned, then it's just time to roll and I didn't have to pay a a spread or fee to get out of my short put – so I usually just wait unless there's somewhere else I clearly want to be on the put side.

T/Yodi – I like T better than VZ and T just bought TWX so content is a nice add to the steady telco biz and VZ is pumped up from sticking FTR with CA, FL and TX but that's 3 big states they won't get earnings from down the road so T remains irresistible to me at $30.63 with their $2.04 (6.5%) dividend so, as a new play on T:

For the OOP:

  • Sell 10 T 2021 $30 puts for $3.75 ($3,750) 
  • Buy 20 T 2021 $28 calls for $4 ($8,000) 
  • Sell 20 T 2021 $35 calls for $1.15 ($2,300) 

That's net $1,950 on the $7,000 spread so $5,050 (258%) upside potential in 20 months and only $5,500 in ordinary margin makes this a pretty efficient way to make $5,050.  

For the LTP:

  • Buy 2,000 shares of T for $30.63 ($61,260) 
  • Sell 20 2021 $30 puts for $3.75 ($7,500) 
  • Sell 20 2021 $30 calls for $2.85 ($5,700) 

That's net $48,060 and we get called away at $60,000 (but we'll probably roll to stay in) for an $11,940 (25%) profit plus we get 6 dividend payments for about $3 ($6,000) for another 12.5%


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Phil's Favorites

Colorado Hits $1 Billion In Marijuana State Revenue

Courtesy of ZeroHedge

Colorado has passed another major marijuana milestone, surpassing $1 billion in state revenue since it legalized the drug in 2014.

Source: Colorado.gov

Up to May of this year, Statista's Niall McCarthy notes that the state has seen more than $6 billion in total marijuana sales since ...



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Zero Hedge

Colorado Hits $1 Billion In Marijuana State Revenue

Courtesy of ZeroHedge

Colorado has passed another major marijuana milestone, surpassing $1 billion in state revenue since it legalized the drug in 2014.

Source: Colorado.gov

Up to May of this year, Statista's Niall McCarthy notes that the state has seen more than $6 billion in total marijuana sales since ...



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Biotech

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

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

 

Consumer genetic testing customers stretch their DNA data further with third-party interpretation websites

If you’ve got the raw data, why not mine it for more info? Sergey Nivens/Shutterstock.com

Courtesy of Sarah Catherine Nelson, University of Washington

Back in 2016, Helen (a pseudonym) took three different direct-to-consumer (DTC) genetic tests: AncestryDNA, 23andMe and FamilyTreeDNA. She saw genetic testing as a way...



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Kimble Charting Solutions

Gold Bugs Index Attempting 8-Year Breakout, Says Joe Friday

Courtesy of Chris Kimble.

Are Gold Bugs fans about to receive positive news they haven’t had in years? Possible!

This chart looks at the Gold Bugs Index (HUI) on a weekly basis over a couple of decades. The index has spent the majority of the past 20-year inside of rising channel (1).

The index hit the top of the channel in 2011, where it peaked and started creating a series of lower highs for the past 8-years, which has formed line (2).

The index is now kissing the underside of falling resistance and the underside the 2016/2017 lows at (3).

Joe Friday Just The Fa...



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Insider Scoop

Wedbush: Apple's Stock Could Gain $20-$25 From US-China Trade Deal

Courtesy of Benzinga.

The Sino-American trade dispute and near-term developments could prove to be a "major swing factor" for Apple Inc. (NASDAQ: AAPL), according to Wedbush.

The Analyst

Daniel Ives maintained an Outperform rating on Apple with an unchanged $235 pric...



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Chart School

Silver Review

Courtesy of Read the Ticker.

The folks in the federal reserve will debase the US dollar currency to an extreme degree silver will finally lift off the floor.. 

Note: Readers should re watch the silver back screen news video, here.

The following video looks at price action and Wyckoff logic.

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Chart in video

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If gold moves, silver wi...

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Digital Currencies

Cryptos Are Crashing As Asia Opens, Bitcoin Back Below $8k

Courtesy of ZeroHedge. View original post here.

Having survived the day's bloodbath in US tech stocks, cryptos are crashing in the early Asian session, apparently playing catch-down to the day's de-risking.

While no catalyst is immediately evident, there are some reports noting 13 large global banks are preparing to launch digital versions of major global currencies next year, though we suspect this drop was more algorithmic that fundamental-driven.

...



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ValueWalk

More Examples Of "Typical Tesla "wise-guy scamminess"

By Jacob Wolinsky. Originally published at ValueWalk.

Stanphyl Capital’s letter to investors for the month of March 2019.

rawpixel / Pixabay

Friends and Fellow Investors:

For March 2019 the fund was up approximately 5.5% net of all fees and expenses. By way of comparison, the S&P 500 was up approximately 1.9% while the Russell 2000 was down approximately 2.1%. Year-to-date 2019 the fund is up approximately 12.8% while the S&P 500 is up approximately 13.6% and the ...



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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.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

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.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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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