Dollar way down (97.22) so that's helping to boost things a bit – might not last.
Dow has been all over the place this morning.
Oil calming already.
Cell prices/StJ – It's amazing all the ways they find to rip off consumers under "Capitalism" while "Cocialism" tends to keep costs under control. It's the exact opposite of what they tell you – over and over and over again…
GE/Albo – Stop, you'll make me want to play them again!
FTR catching some bids ahead of earnings:
What Our Model Says
Our proven model shows that Frontier Communications is likely to beat earnings this quarter as it has the two key components. A stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is exactly the case here as you will see below:
Earnings ESP: Frontier Communications’ Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is +55.80% as the former is pegged at a loss of 20 cents and the latter at a loss of 45 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Frontier Communications Corporation Price and EPS Surprise
Frontier Communications Corporation Price and EPS Surprise
Zacks Rank: Frontier Communications currently has a Zacks Rank #3. This increases the predictive power of ESP.
Note that we caution against stocks with a Zacks Rank #4 or 5 (Sell-rated) going into the earnings announcement, especially when the company is seeing a negative estimate revisions momentum.
Factors at Play
In January 2019, Frontier Communications completed the sale of 100 wireless communication towers primarily in Connecticut, New York, and California for approximately $80 million. The assets were sold to Everest Infrastructure Partners — a Pittsburgh, PA-based investment firm specializing in infrastructure investments. The divesture is part of the company’s long-term strategy to strengthen its balance sheet.
It launched Frontier Connect – Cloud that leverages the breadth of its Ethernet network to provide customers a secure and private cloud connection. This improved cloud application performance while reducing latency by enabling more consistent throughput to cloud services.
The solution further enables application innovation and data center transformation, supporting cloud and multi-cloud strategies, bringing visibility and control to any network. The move is likely to have aided Frontier Communications’ top line in the to-be-reported quarter.
The company has progressed in its Consumer business, which is expected to result in an improved revenue trend in the quarter, backed by better execution of operational strategies and initial benefits from its transformation program.
IN the LTP, we have 20,000 shares of FTR at $4 for a massive loss of $27,000 and we sold 50 2021 $5 puts and 100 2021 $4 puts for about $2 and we sold 100 $3 calls for $1.65 so our net entry on 20,000 shares is $29,750 so under $1.50 per share is our cost but we're obligated to buy another 15,000 shares at about $3 ($45,000) which would bump us up to $2.15ish, if assigned and FTR is at $2.78 so this trade is WAY better off than it looks on paper at the moment!
FTR
Frontier Comms. Corp.
20000
1/2/2018
479
$80,000
$4.00
$-1.39
$4.03
$2.61
$0.08
$-27,800
-34.8%
$52,200
FTR Short Put
2021 15-JAN 5.00 PUT [FTR @ $2.61 $0.08]
-50
11/20/2018
(630)
$-12,250
$2.45
$0.78
$3.23
–
$-3,875
-31.6%
$-16,125
FTR Short Put
2021 15-JAN 4.00 PUT [FTR @ $2.61 $0.08]
-100
2/28/2019
(630)
$-21,500
$2.15
$0.15
$2.30
–
$-1,500
-7.0%
$-23,000
FTR Short Call
2021 15-JAN 3.00 CALL [FTR @ $2.61 $0.08]
-100
3/1/2019
(630)
$-16,500
$1.65
$-0.48
$1.18
$-0.13
$4,750
28.8%
$-11,750
As a new trade on FTR, I would go with:
Buy 10,000 FTR at $2.80 ($28,000)
Sell 100 FTR 2021 $3 calls for $1.35 ($13,500)
Sell 100 FTR 2021 $3 puts for $1.60 ($16,000)
That's a net CREDIT of $1,500 with a call-away at $30,000 and your worst case is having to own 10,000 shares of FTR for $2.85 (the current price) while your best case is making $31,500 if FTR is 0.20 higher in 20 months!
