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Zihan1004/FNSPID | Noteworthy Thursday Option Activity: RETA, CRM, TWTR
Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Reata Pharmaceuticals Inc (Symbol: RETA), where a total volume of 1,585 contracts has been traded thus far today, a contract volume which is representative of approximately 158,500 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 49.2% of RETA's average daily trading volume over the past month, of 321,970 shares. Especially high volume was seen for the $240 strike call option expiring January 17, 2020, with 1,216 contracts trading so far today, representing approximately 121,600 underlying shares of RETA. Below is a chart showing RETA's trailing twelve month trading history, with the $240 strike highlighted in orange:
Salesforce.com Inc (Symbol: CRM) options are showing a volume of 25,634 contracts thus far today. That number of contracts represents approximately 2.6 million underlying shares, working out to a sizeable 49.1% of CRM's average daily trading volume over the past month, of 5.2 million shares. Particularly high volume was seen for the $170 strike call option expiring January 17, 2020, with 2,747 contracts trading so far today, representing approximately 274,700 underlying shares of CRM. Below is a chart showing CRM's trailing twelve month trading history, with the $170 strike highlighted in orange:
And Twitter Inc (Symbol: TWTR) saw options trading volume of 63,037 contracts, representing approximately 6.3 million underlying shares or approximately 48.4% of TWTR's average daily trading volume over the past month, of 13.0 million shares. Particularly high volume was seen for the $30 strike call option expiring March 20, 2020, with 5,856 contracts trading so far today, representing approximately 585,600 underlying shares of TWTR. Below is a chart showing TWTR's trailing twelve month trading history, with the $30 strike highlighted in orange:
For the various different available expirations for RETA options, CRM options, or TWTR options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 579 |
Zihan1004/FNSPID | February 14th Options Now Available For EOG Resources (EOG)
Investors in EOG Resources, Inc. (Symbol: EOG) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the EOG options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $83.50 strike price has a current bid of $3.25. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $83.50, but will also collect the premium, putting the cost basis of the shares at $80.25 (before broker commissions). To an investor already interested in purchasing shares of EOG, that could represent an attractive alternative to paying $83.95/share today.
Because the $83.50 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 3.89% return on the cash commitment, or 33.04% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for EOG Resources, Inc., and highlighting in green where the $83.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $84.50 strike price has a current bid of $3.05. If an investor was to purchase shares of EOG stock at the current price level of $83.95/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $84.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 4.29% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if EOG shares really soar, which is why looking at the trailing twelve month trading history for EOG Resources, Inc., as well as studying the business fundamentals becomes important. Below is a chart showing EOG's trailing twelve month trading history, with the $84.50 strike highlighted in red:
Considering the fact that the $84.50 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.63% boost of extra return to the investor, or 30.84% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $83.95) to be 34%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of Stocks Analysts Like »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 892 |
Zihan1004/FNSPID | HL February 14th Options Begin Trading
Investors in Hecla Mining Co (Symbol: HL) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the HL options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $3.00 strike price has a current bid of 2 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $3.00, but will also collect the premium, putting the cost basis of the shares at $2.98 (before broker commissions). To an investor already interested in purchasing shares of HL, that could represent an attractive alternative to paying $3.42/share today.
Because the $3.00 strike represents an approximate 12% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.67% return on the cash commitment, or 5.66% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Hecla Mining Co, and highlighting in green where the $3.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $3.50 strike price has a current bid of 16 cents. If an investor was to purchase shares of HL stock at the current price level of $3.42/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $3.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 7.02% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if HL shares really soar, which is why looking at the trailing twelve month trading history for Hecla Mining Co, as well as studying the business fundamentals becomes important. Below is a chart showing HL's trailing twelve month trading history, with the $3.50 strike highlighted in red:
Considering the fact that the $3.50 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 4.68% boost of extra return to the investor, or 39.71% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $3.42) to be 65%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 864 |
Zihan1004/FNSPID | Insiders Bullish on Certain Holdings of FXZ
A look at the weighted underlying holdings of the First Trust Materials AlphaDEX Fund (FXZ) shows an impressive 17.4% of holdings on a weighted basis have experienced insider buying within the past six months.
Fastenal Co. (Symbol: FAST), which makes up 0.70% of the First Trust Materials AlphaDEX Fund (FXZ), has seen 2 directors and officers purchase shares in the past six months, according to the recent Form 4 data. The ETF holds a total of $1,081,120 worth of FAST, making it the #42 largest holding. The table below details the recent insider buying activity observed at FAST:
FAST — last trade: $36.95 — Recent Insider Buys:
PURCHASED INSIDER TITLE SHARES PRICE/SHARE VALUE
07/18/2019 Michael J. Ancius Director 1,104 $30.13 $33,264
08/01/2019 Daniel L. Johnson Director 2,500 $30.49 $76,218
08/05/2019 Michael J. Ancius Director 1,000 $28.99 $28,990
10 ETFs With Stocks That Insiders Are Buying »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 326 |
Zihan1004/FNSPID | February 14th Options Now Available For Deutsche Bank (DB)
Investors in Deutsche Bank AG (Symbol: DB) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the DB options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $8.00 strike price has a current bid of 14 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $8.00, but will also collect the premium, putting the cost basis of the shares at $7.86 (before broker commissions). To an investor already interested in purchasing shares of DB, that could represent an attractive alternative to paying $8.11/share today.
Because the $8.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 1.75% return on the cash commitment, or 14.85% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Deutsche Bank AG, and highlighting in green where the $8.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $8.50 strike price has a current bid of 7 cents. If an investor was to purchase shares of DB stock at the current price level of $8.11/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $8.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 5.67% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if DB shares really soar, which is why looking at the trailing twelve month trading history for Deutsche Bank AG, as well as studying the business fundamentals becomes important. Below is a chart showing DB's trailing twelve month trading history, with the $8.50 strike highlighted in red:
Considering the fact that the $8.50 strike represents an approximate 5% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 63%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 0.86% boost of extra return to the investor, or 7.33% annualized, which we refer to as the YieldBoost.
The implied volatility in the call contract example above is 44%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $8.11) to be 37%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 879 |
Zihan1004/FNSPID | Provident Financial Services Named Top Dividend Stock With Insider Buying and 3.73% Yield (PFS)
In this series, we look through the most recent Dividend Channel ''DividendRank'' report, and then we cherry pick only those companies that have experienced insider buying within the past six months. The officers and directors of a company tend to have a unique insider's view of the business, and presumably the only reason an insider would choose to take their hard-earned cash and use it to buy stock in the open market, is that they expect to make money — maybe they find the stock very undervalued, or maybe they see exciting progress within the company, or maybe both. So when stocks turn up that see insider buying, and are also top ranked, investors are wise to take notice. One such company is Provident Financial Services Inc (Symbol: PFS), which saw buying by Director James P. Dunigan.
Back on December 4, Dunigan invested $23,880.00 into 1,000 shares of PFS, for a cost per share of $23.88. In trading on Thursday, shares were changing hands as low as $24.45 per share, which is 2.4% above Dunigan's purchase price. Provident Financial Services Inc shares are currently trading -0.61% on the day. The chart below shows the one year performance of PFS shares, versus its 200 day moving average:
Looking at the chart above, PFS's low point in its 52 week range is $23.08 per share, with $27.94 as the 52 week high point — that compares with a last trade of $24.49. By comparison, below is a table showing the prices at which insider buying was recorded over the last six months:
PURCHASED INSIDER TITLE SHARES PRICE/SHARE VALUE
07/30/2019 Ursuline F. Foley Director 4,000 $23.80 $95,213.85
09/03/2019 James P. Dunigan Director 1,000 $23.59 $23,593.10
12/04/2019 James P. Dunigan Director 1,000 $23.88 $23,880.00
12/03/2019 Matthew K. Harding Director 1,000 $23.82 $23,820.00
The DividendRank report noted that among the coverage universe, PFS shares displayed both attractive valuation metrics and strong profitability metrics. The report also cited the strong quarterly dividend history at Provident Financial Services Inc, and favorable long-term multi-year growth rates in key fundamental data points.
The report stated, ''Dividend investors approaching investing from a value standpoint are generally most interested in researching the strongest most profitable companies, that also happen to be trading at an attractive valuation. That's what we aim to find using our proprietary DividendRank formula, which ranks the coverage universe based upon our various criteria for both profitability and valuation, to generate a list of the top most 'interesting' stocks, meant for investors as a source of ideas that merit further research.''
The annualized dividend paid by Provident Financial Services Inc is $0.92/share, currently paid in quarterly installments, and its most recent dividend ex-date was on 11/14/2019. Below is a long-term dividend history chart for PFS, which the report stressed as being of key importance. Indeed, studying a company's past dividend history can be of good help in judging whether the most recent dividend is likely to continue.
The Top DividendRank'ed Stocks With Insider Buying »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 843 |
Zihan1004/FNSPID | WERN Ex-Dividend Reminder - 1/3/20
Looking at the universe of stocks we cover at Dividend Channel, on 1/3/20, Werner Enterprises, Inc. (Symbol: WERN) will trade ex-dividend, for its quarterly dividend of $0.09, payable on 1/21/20. As a percentage of WERN's recent stock price of $36.58, this dividend works out to approximately 0.25%.
In general, dividends are not always predictable; but looking at the history above can help in judging whether the most recent dividend from WERN is likely to continue, and whether the current estimated yield of 0.98% on annualized basis is a reasonable expectation of annual yield going forward. The chart below shows the one year performance of WERN shares, versus its 200 day moving average:
Looking at the chart above, WERN's low point in its 52 week range is $27.27 per share, with $39.21 as the 52 week high point — that compares with a last trade of $36.60.
In Thursday trading, Werner Enterprises, Inc. shares are currently up about 0.5% on the day.
Click here to learn which 25 S.A.F.E. dividend stocks should be on your radar screen »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 320 |
Zihan1004/FNSPID | SDS February 14th Options Begin Trading
Investors in ProShares Trust - UltraShort S&P 500 2017 (Symbol: SDS) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the SDS options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $24.00 strike price has a current bid of 7 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $24.00, but will also collect the premium, putting the cost basis of the shares at $23.93 (before broker commissions). To an investor already interested in purchasing shares of SDS, that could represent an attractive alternative to paying $24.72/share today.
Because the $24.00 strike represents an approximate 3% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.29% return on the cash commitment, or 2.48% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for ProShares Trust - UltraShort S&P 500 2017, and highlighting in green where the $24.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $25.00 strike price has a current bid of 38 cents. If an investor was to purchase shares of SDS stock at the current price level of $24.72/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $25.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 2.67% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if SDS shares really soar, which is why looking at the trailing twelve month trading history for ProShares Trust - UltraShort S&P 500 2017, as well as studying the business fundamentals becomes important. Below is a chart showing SDS's trailing twelve month trading history, with the $25.00 strike highlighted in red:
Considering the fact that the $25.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 1.54% boost of extra return to the investor, or 13.05% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $24.72) to be 24%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 915 |
Zihan1004/FNSPID | Did F5 Networks Overpay To Acquire Shape Security?
F5 Networks (NYSE: FFIV) recently announced that it has entered into an agreement to acquire Shape Security – a security company that protects the websites and mobile apps of some of the world’s largest enterprises from various types of fraud and cybercrime. Notably, F5 will shell out $1 billion to acquire Shape Security – a figure that represents a Price-to-Sales (P/S) multiple of 14.3x for the target company, which is nearly 4 times F5’s estimated FY’20 P/S multiple of 3.6x. The deal is expected to close in March 2020, and F5 is expected to fund the transaction through cash on its balance sheet and a $400 million unsecured term loan.
This is the most expensive acquisition in F5’s history and we believe the acquisition will weigh on the company’s earnings in the near term but is likely to boost F5’s growth in the long term. Trefis quantifies the impact of the Shape acquisition on F5’s operating metrics in the scenario-based dashboard How Much Could F5 Networks Be Worth Post It’s Shape Security Acquisition? Besides detailing the rationale behind the acquisition, we arrive at the potential upside to F5’s stock as a direct result of the acquisition.
#1. F5’s Acquisition of Shape Could Add Additional $140 Million To F5’s Application Revenues By FY’21
Shape is a leader in fraud and abuse prevention and is likely to add a new dimension to F5’s portfolio of application services which is helpful in protecting customers’ digital experiences.
The acquisition will accelerate F5’s growth momentum and is likely to double F5’s addressable market in the security business.
Post its completion in March 2020, Shape Security will be integrated with F5’s software’s business under the Application Delivery Network segment.
Notably, Software revenues are approximately 25% ($250 million) of the company’s Application delivery revenues.
We assume that the acquisition will boost the company’s software revenues by 35% and 60% in 2020 and 2021, respectively. As a result, Shape is expected to add around $140 million to F5’s software business over 2020-2021, helping F5’s application revenues to cross $1.16 billion in FY’21.
#2. However, Additional Expenses of ~$115 Million Are Expected To Be Incurred Due To Shape Integration
Purchase accounting adjustments and anticipated one-time expenses related to the transaction and integration are likely to weigh on the company’s earnings in the near term. Moreover, the company is funding 40% ($400 million) of the transaction through debt which is likely to further impact the company’s earnings.
As a result, we expect the division’s net income margin to contract by 4 percentage points and 2 percentage points in 2020 and 2021, respectively.
Notably, this translates into an increase in expenses for F5 by $115 million by the end of FY21.
#3. Additional expenses are likely to weigh on the company’s earnings resulting in erosion of $0.49 per share in FY’21
Additional revenue of $140 million is likely to be offset by additional expenditures of $145 million over 2020-2021.
We expect the company’s net income to decline to $534 million as opposed to our existing forecast of $561 million. Our analysis also takes into account the fact the company will be funding a part of the transaction through debt which will result in additional costs.
Assuming shares outstanding of around 55 million, this translates to a reduction in EPS by around $0.49 per share.
#4. This reduces our price estimate for F5’s shares by 5%
In our base case (pre-acquisition) scenario, we estimate a price estimate of $182 for F5’s Stock.
This figure reduces to $173 after factoring in the impact of the acquisition.
However, we remain optimistic about F5’s growth prospects over coming years, and maintain a price estimate that is almost 25% ahead of its current market price
Details about our forecast for F5’s EPS for FY21 are available in our interactive dashboard.
To sum things up, the acquisition of Shape will help F5 to become an end-to-end application protection company that would protect the applications from the development stage all the way to when end users interact with them. However, the price tag of $1 billion looks a bit steep for the company that has just around $70 million of revenues. Moreover, the means of financing the deal will likely be a drag on the earnings in the near future. In fact, the reduction in the company’s projected valuation as detailed above indicates that F5 paid roughly $500 million more than it should have for Shape Securities.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 1,131 |
Zihan1004/FNSPID | Why Coach's Success Remains Key To Tapestry's Growth
Tapestry (NYSE: TPR) sells luxury accessories and lifestyle brands. The company has achieved steady growth in the last couple of years driven by rising comparable-store sales (comps) as well as e-commerce sales for its largest brand, Coach. While the company’s other brands have struggled, Coach’s importance to Tapestry has further increased over the years. Trefis highlights the importance of its Coach brand for Tapestry in an interactive dashboard. You can modify any of our key drivers to gauge the impact changes would have on Tapestry’s valuation.
Why Is Coach So Important To Tapestry?
#1 Coach Contributes Nearly 70% Of Tapestry’s Revenues
Coach consistently contributes a majority of the company’s revenues, with an average revenue share of more than 80% in the last 4 years.
The segment grew by 1.2% year-over-year in fiscal 2019 (ending June), contributing nearly $50 million to total incremental revenues.
We expect the segment to remain the key growth driver for the company, and record $4.3 billion in revenues in FY’20.
The growth is expected to be driven by strong international growth and increased usage across e-commerce platforms
Moreover, the brand’s brick-and-mortar business is also expected to thrive, particularly in China, thanks to strong product offerings.
#2 Notably, the contribution of the biggest brands to the top line of Tapestry’s competitors is lower and ranges from 50% to 60%
Data around trends in the contribution of their biggest brand to the top line of competitors Gap, L Brands, and Abercrombie & Fitch is available in our interactive dashboard.
#3 Coach Has Delivered Positive Comparable Sales Growth Over The Last Couple Of Years
Coach has seen steady growth in the last few years, with the brand achieving positive comparable sale growth of 1.5% and 2% in FY’18 and FY’19 respectively
On the other hand, Tapestry’s second-largest brand and latest acquisition, Kate Spade has actually weighed on the company’s performance with the brand delivering negative comparable sales growth of over 7% in the last couple of years.
#4 Coach Has Also Been Operating At A Higher Margin
Coach’s three-year average operating margin was 17.5%, almost 25% more than that of Tapestry’s total operating margin of 14.2%
Coach has consistently operated at a margin of over 15% while Tapestry’s margin declined to nearly 11% in 2018 before recovering to 13.5% in 2019. The primary reason for the decline in profitability was the one-time charges related to the integration and acquisition of Kate Spade.
#5 Finally, Average Revenue Per Store of Coach Is More Than 10% Higher Than The Consolidated Figure For Tapestry
As of 2019, Coach was operating more than 985 stores, with an average per store revenue of $4.3 million
On the other hand, Tapestry’s total store count stood at 1,540, generating average per store revenue of $3.9 million – almost 10% less than that of Coach’s.
Conclusion
Coach is Tapestry’s largest brand – accounting for most of the company’s incremental revenue growth.
With growth fundamentals remaining strong for the brand, particularly in China, we expect Coach to be pivotal to the company’s long-term revenue growth, profitability improvement and enhanced shareholder returns.
Moreover, Tapestry has made huge investments on its e-commerce platform and Coach should continue to benefit from its development.
Finally, Tapestry’s latest acquisition, Kate Spade, has clearly failed to generate the kind of success Tapestry had hoped to achieve after the acquisition – increasing the importance of the Coach brand to Tapestry’s long-term growth.
Starting with our forecast for Tapestry’s revenues as detailed above, we estimate the company’s adjusted EPS for full-year 2019 is to be around $2.35. Using this figure with our estimated forward P/E ratio of 12.3x, this works out to a price estimate of $29 for Tapestry’s stock, which is roughly 10% ahead of the current market price.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 980 |
Zihan1004/FNSPID | Underperforming Pinterest Stock Should Surge in 2020
It was going so well there for a while. Until late October, it appeared thatÃÂ PinterestÃÂ (NYSE:) would be one of the few hot 2019 initial public offerings to post gains for the year. But following a soft earnings report, PINS stock tanked and it joined the struggling unicorns club. Now, Pinterest is ending the year on a sour note as the PINS stock price is just a buck above its all-time low.
Should investors give up all hope for Pinterest stock in 2020, though? No. In fact, the last earnings report from Pinterest actually had a lot to like. Pinterest may need a few quarters to turn sentiment around, but at the core, thereâÂÂs still a solid bull case here. And the stock price is certainly more attractive for buyers down here under $20 per share.
An Underappreciated Platform
I suspect that a lot of investors are sleeping on PINS stock because itâÂÂs not a particularly popular social media website among investors. Something like Twitter (NYSE:) tends to attract more finance types. Even if it doesnâÂÂt get much hype in the investing community, however, Pinterest has built a rather impressive environment.
As of the latest quarter, monthly active users grew to 322 million, up an impressive 28% year-over-year. ThatâÂÂs nearly equivalent to TwitterâÂÂs user base, and is slightly ahead of Snap (NYSE:). Yet both Snap and Twitter have twice the market capitalization of Pinterest.
And arguably, Pinterest has a more monetizable user base than those rival social networks. Pinterest has a ton of people interested in verticals like cooking, gardening, arts and crafts, and home decorating where fans tend to buy high-dollar items and are already accustomed to purchasing things online. ThereâÂÂs a much clearer road map to large profit margins at Pinterest than you have trying to build advertising businesses at Twitter or Snap.
Cracking the Profit Code
For years, the knock on Pinterest has been that they built a good platform but they didnâÂÂt figure out monetization. However, the company is now building out free classes to help small businesses advertise on Pinterest, among other clever user engagement features. ItâÂÂs paying off. On a quarter-over-quarter basis, the number of merchants uploading their catalogs to Pinterest soared 75%, for example.
Look at ShopifyâÂÂs (NYSE:) success. As Amazon (NASDAQ:) has lost momentum and been overrun with lower-quality merchandise, drop-shippers, and other such maladies, it has opened up the playing field to the next generation of more personalized e-commerce. Pinterest hasnâÂÂt proven they can succeed yet, but thereâÂÂs clearly a large opportunity for something like it to succeed. And the company appears to be drawing a critical mass of users and merchants already.
A Differentiated Advertising Platform
On the latest conference call, PinterestâÂÂs CEO Benjamin Silbermann made a key point. He said that advertisers are increasingly seeking out platforms with positive messages and a friendly environment. Given the increasingly toxic environment on much of social media â something likely to only grow worse as the 2020 presidential election nears â Pinterest could be the biggest winner.
ItâÂÂs a cheery upbeat platform where users wonâÂÂt be overrun with political fighting, trolling, flame wars, and the like.
Another big benefit for Pinterest is that ads are less of a burden than on other platforms. If youâÂÂre scrolling through a Facebook (NASDAQ:) timeline, for example, itâÂÂs often easy to tell when your personalized content is interrupted by some generic ad.
But with Pinterest, the whole platform is so visual. People are going there to be inspired with image-driven ideas about their hobbies or interests. The difference between an organic photo and an advertiser-supplied photo on the same topic is rather small and may not even be noticeable much of the time. At least with the high-quality ads, theyâÂÂre a type of additional content in their own right.
So Why IsnâÂÂt the Stock Performing?
Pinterest stock is near its all-time lows despite the compelling long-term opportunity and strong user growth numbers. WhyâÂÂs that? Like many of the recent batch of unicorn IPOs, PINS stock came out at a frothy valuation. This made it vulnerable to any sort of decline in both performance and sentiment.
The company still trades at a valuation of $11 billion and is running negative cash flow. ThatâÂÂs not real healthy for a company that is already this mature and has hundreds of millions of users. You have to assume a fair bit of growth, both in the top line and in profitability, for Pinterest to justify its valuation.
ThereâÂÂs a more specific problem as well. The companyâÂÂs North American growth decelerated dramatically. Pinterest is piling up tons of users internationally. This has kept user growth rates high but hasnâÂÂt translated into the sort of revenue growth youâÂÂd get from additional American users. Pinterest is taking steps to raise international monetization, but the market is clearly skeptical about whether it will play out.
PINS Stock Takeaway
Arguably, Pinterest is still in the early stages of monetization. Look at video ads for example. The company tripled video advertising revenues year-over-year. On the one hand, thatâÂÂs a thrilling number. It also shows just how small a base Pinterest is starting off of in some of its growth markets.
Facebook didnâÂÂt solve mobile monetization until after it was public, leading to huge shareholder returns for anyone that bought before the inflection point became obvious. PINS stock could follow that example.
That said, there are no guarantees. Twitter, for example, has been publicly traded many years now, and itâÂÂs never fully worked out the monetization code. With Pinterest shares already pummeled, though, you have to like the potential for a big rally in 2020.
At the time of this writing, Ian Bezek owned FB stock. You can reach him on Twitter at @irbezek.
The post appeared first on InvestorPlace.
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Zihan1004/FNSPID | SWN February 14th Options Begin Trading
Investors in Southwestern Energy Company (Symbol: SWN) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the SWN options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $2.00 strike price has a current bid of 7 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $2.00, but will also collect the premium, putting the cost basis of the shares at $1.93 (before broker commissions). To an investor already interested in purchasing shares of SWN, that could represent an attractive alternative to paying $2.35/share today.
Because the $2.00 strike represents an approximate 15% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 3.50% return on the cash commitment, or 29.71% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Southwestern Energy Company, and highlighting in green where the $2.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $2.50 strike price has a current bid of 14 cents. If an investor was to purchase shares of SWN stock at the current price level of $2.35/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $2.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 12.34% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if SWN shares really soar, which is why looking at the trailing twelve month trading history for Southwestern Energy Company, as well as studying the business fundamentals becomes important. Below is a chart showing SWN's trailing twelve month trading history, with the $2.50 strike highlighted in red:
Considering the fact that the $2.50 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 5.96% boost of extra return to the investor, or 50.57% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $2.35) to be 63%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | IEMG, WFIG: Big ETF Inflows
Comparing units outstanding versus one week ago at the coverage universe of ETFs at ETF Channel, the biggest inflow was seen in the iShares Core MSCI Emerging Markets ETF, which added 5,400,000 units, or a 0.5% increase week over week. Among the largest underlying components of IEMG, in morning trading today Alibaba Group Holding is up about 3.2%, and Baidu is up by about 5.6%.
And on a percentage change basis, the ETF with the biggest increase in inflows was the WisdomTree U.S. Corporate Bond Fund, which added 100,000 units, for a 33.3% increase in outstanding units.
VIDEO: IEMG, WFIG: Big ETF Inflows
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Zihan1004/FNSPID | First Week of August 21st Options Trading For Kilroy Realty (KRC)
Investors in Kilroy Realty Corp (Symbol: KRC) saw new options begin trading this week, for the August 21st expiration. One of the key data points that goes into the price an option buyer is willing to pay, is the time value, so with 232 days until expiration the newly trading contracts represent a possible opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the KRC options chain for the new August 21st contracts and identified one put and one call contract of particular interest.
The put contract at the $75.00 strike price has a current bid of $1.40. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $75.00, but will also collect the premium, putting the cost basis of the shares at $73.60 (before broker commissions). To an investor already interested in purchasing shares of KRC, that could represent an attractive alternative to paying $83.22/share today.
Because the $75.00 strike represents an approximate 10% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 82%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 1.87% return on the cash commitment, or 2.94% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Kilroy Realty Corp, and highlighting in green where the $75.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $85.00 strike price has a current bid of $3.10. If an investor was to purchase shares of KRC stock at the current price level of $83.22/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $85.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 5.86% if the stock gets called away at the August 21st expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if KRC shares really soar, which is why looking at the trailing twelve month trading history for Kilroy Realty Corp, as well as studying the business fundamentals becomes important. Below is a chart showing KRC's trailing twelve month trading history, with the $85.00 strike highlighted in red:
Considering the fact that the $85.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 55%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.73% boost of extra return to the investor, or 5.86% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example is 22%, while the implied volatility in the call contract example is 17%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $83.22) to be 15%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the REITs »
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Zihan1004/FNSPID | Bullish Two Hundred Day Moving Average Cross - PSTG
In trading on Thursday, shares of PURE Storage Inc (Symbol: PSTG) crossed above their 200 day moving average of $17.78, changing hands as high as $17.81 per share. PURE Storage Inc shares are currently trading up about 4% on the day. The chart below shows the one year performance of PSTG shares, versus its 200 day moving average:
Looking at the chart above, PSTG's low point in its 52 week range is $12.675 per share, with $23.53 as the 52 week high point — that compares with a last trade of $17.80.
Click here to find out which 9 other stocks recently crossed above their 200 day moving average »
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Zihan1004/FNSPID | How Much Revenue Does Merck Generate From The United States?
Merck (NYSE:MRK) generates its revenue primarily from sales of pharmaceutical products. The company generated $18 billion in sales in the United States, accounting for over 40% of its total revenue in 2018. This figure has been on a decline and it dropped from 46% in 2016 to 43% in 2018, as the company’s drugs penetrate in international markets. Merck’s sales in the United States are much lower than that of Roche, Johnson & Johnson, and AbbVie. Below we show region-wise breakup of Merck’s revenues, its business model, and revenue trajectory. We also compare the United States as a market for Merck with that for other large pharmaceutical companies. You can look at our interactive dashboard analysis ~ How Big Is The United States Market For Merck? ~ for more details.
United States As A Region Accounts For Over 40% of The Company’s Total Revenue
Merck’s Revenue Contribution As of 2018:
United States ~ 43%
EMEA ~ 29%
Japan ~ 8%
ASPAC ~ 7%
LATAM ~ 6%
China ~ 5%
Others ~ 3%
United States As A Market Garnered Lowest Sales For Merck Among Large Pharmaceutical Companies
Merck’s sales in the United States declined from $17.1 billion in 2016 to $16.6 billion in 2018.
This compares with Johnson & Johnson’s US sales, which grew from $20.1 billion to $23.3 billion over the same period.
Roche’s sales in the United States grew from $18.8 billion to $23.7 billion between 2016 and 2018.
AbbVie’s sales in the United States grew from $15.9 billion to $21.5 billion in 2018.
Merck’s Business Model
What Need Does It Serve?
Merck primarily serves the pharmaceuticals products markets. The company discovers, develops, and sells pharmaceutical products globally. Its drugs are used for the treatment of various types of diseases, including cancer, heart-related, and infectious, among others. Merck also operates in the animal health market.
Merck is one of the largest pharmaceuticals companies with a global presence. The firm used to develop consumer healthcare products, but the business was sold to Bayer in 2014.
Who Pays To Merck?
Chain stores (Walgreens, CVS, Rite-Aid, Walmart), clinics, long-term care facilities, health maintenance organizations, federal facilities, non-federal institutions, mail order pharmacies, retail stores, and animal healthcare centers.
What Buyers Care About?
Price
Subsidies available in the form of reimbursements
Availability
Any possible side effects
What Are The Alternatives To Merck?
Within pharmaceuticals, other alternatives are Bristol-Myers Squibb, Johnson & Johnson, Roche, Pfizer, Abbvie, GlaxoSmithKline, and Teva, among others.
Outside of pharmaceuticals, other alternatives are acupuncture, aromatherapy, ayurvedic medicine, chiropractic care, homeopathy, and nutritional counseling, among others.
The Contribution of United States To Merck’s Total Sales Has Hovered Around the 43% Mark In Recent Years
Merck’s total sales grew from $39.8 billion in 2016 to $46.6 billion in 2018.
The sales growth in the United States rose from $18.5 billion to $20.2 billion over the same period. Given the sales growth in the U.S. was much slower than the overall sales, the contribution of the United States as a region declined from 46% to 43%.
The Contribution of United States To Total Sales For Merck Is Lower Than That For Its Peers
Merck’s Total Revenue Grew 6% Between 2015 And 2018, And It Can Grow Another 10% In 2019
Merck’s sales growth over the recent years has primarily been led by Keytruda.
In fact, Keytruda alone is expected to generate over $10 billion in sales in 2019. And out of this $10 billion, we estimate $6 billion sales to come from the United States.
Looking forward, the sales growth is expected to slow, as the company will see the end of the market exclusivity period for some of its drugs. You can look at our interactive dashboard analysis for more details on Merck’s segment-wise revenues here.
What’s behind Trefis? See How it’s Powering New Collaboration and What-Ifs
For CFOs and Finance Teams | Product, R&D, and Marketing Teams
More Trefis Data
Like our charts? Explore example interactive dashboards and create your own.
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Zihan1004/FNSPID | February 14th Options Now Available For Ulta Beauty (ULTA)
Investors in Ulta Beauty Inc (Symbol: ULTA) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the ULTA options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $250.00 strike price has a current bid of $8.50. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $250.00, but will also collect the premium, putting the cost basis of the shares at $241.50 (before broker commissions). To an investor already interested in purchasing shares of ULTA, that could represent an attractive alternative to paying $251.73/share today.
Because the $250.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 3.40% return on the cash commitment, or 28.86% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Ulta Beauty Inc, and highlighting in green where the $250.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $255.00 strike price has a current bid of $8.20. If an investor was to purchase shares of ULTA stock at the current price level of $251.73/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $255.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 4.56% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if ULTA shares really soar, which is why looking at the trailing twelve month trading history for Ulta Beauty Inc, as well as studying the business fundamentals becomes important. Below is a chart showing ULTA's trailing twelve month trading history, with the $255.00 strike highlighted in red:
Considering the fact that the $255.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.26% boost of extra return to the investor, or 27.65% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $251.73) to be 47%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
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Zihan1004/FNSPID | National Health Investors (NHI) Shares Cross Below 200 DMA
In trading on Thursday, shares of National Health Investors, Inc. (Symbol: NHI) crossed below their 200 day moving average of $80.28, changing hands as low as $79.34 per share. National Health Investors, Inc. shares are currently trading down about 2.2% on the day. The chart below shows the one year performance of NHI shares, versus its 200 day moving average:
Looking at the chart above, NHI's low point in its 52 week range is $73.62 per share, with $86.54 as the 52 week high point — that compares with a last trade of $79.61.
Click here to find out which 9 other dividend stocks recently crossed below their 200 day moving average »
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Zihan1004/FNSPID | Pros' Picks: The 13 Best Dividend Stocks for 2020
The bull market went into overdrive in 2019. The S&P 500 rushed ahead by 29% - its best showing in six years. But as much as investors will always welcome such returns, it does make it tougher to be an income investor.
When dividend stocks go up in price, their yields go down. The dividend yield on the S&P 500 started 2019 at more than 2% but finished the year at 1.8%. Yes, the market keeps setting new all-time highs, but the rally that seems to never end also makes it difficult to find excellent dividend stocks with generous or even decent payouts.
High-quality dividend stocks with better-than-average yields do exist, however. We're here to help you find them.
We scoured the S&P 500 for dividend stocks with yields of at least 2%. From that pool, we focused on stocks with an average broker recommendation of Buy or better. S&P Global Market Intelligence surveys analysts' stock ratings and scores them on a five-point scale, where 1.0 equals Strong Buy and 5.0 means Strong Sell. Any score of 2.0 or lower means that analysts, on average, rate the stock a Buy. The closer the score gets to 1.0, the stronger the Buy call. Lastly, we dug into research and analysts' estimates on the top-scoring names.
Here are the 13 best blue-chip dividend stocks for 2020, then, based on the strength of their analyst ratings.
SEE ALSO: Every Warren Buffett Stock Ranked: The Berkshire Hathaway Portfolio
Mondelez International
Market value: $79.3 billion
Dividend yield: 2.1%
Average broker recommendation: 8 Strong Buy, 8 Buy, 6 Hold, 0 Sell, 0 Strong Sell
The packaged food business is notoriously competitive, and even analysts who call Mondelez International (MDLZ, $55.08) a mere Hold applaud its strategy.
"The company is investing heavily back into the business and remains in the early stages of executing its playbook behind the business emphasizing reinvestment across the world and particularly behind its local jewels (local brands with strong presence in their markets), say Stifel analysts, who rate MDLZ a hold.
Mondelez, which was spun off from what was then known as Kraft Foods in 2012, is an international snacks company whose brands include Cadbury, Oreo and Trident. The dividend stock has raised its payout every year since the spinoff.
And while Mondelez does compete in a difficult business, some analysts are more bullish than Stifel, including Buckingham analyst Eric Larson. Larson, who rates shares a Buy with a $62-per-share price target, lauds its marketing investments and exposure to emerging markets, calling the stock "well-positioned long-term."
Of the 22 analysts covering MDLZ tracked by S&P Global Market Intelligence, 16 give it a Buy rating or better, while six have it Hold.
SEE ALSO: The 20 Best ETFs to Buy for a Prosperous 2020
CVS Health
Market value: $96.6 billion
Dividend yield: 2.7%
Average broker recommendation: 13 Strong Buy, 5 Buy, 10 Hold, 0 Sell, 0 Strong Sell
Analysts think CVS Health's (CVS, $74.29) triple-role as a pharmacy chain, pharmacy benefits manager and now health insurance company - after acquiring Aetna in 2018 for $69 billion - give it a unique profile among health-care stocks.
JPMorgan analysts put CVS atop their best health-care stocks to buy as the sector becomes more consumer-centric. Patients are taking a greater role in their health and are increasingly paying for their own care. CVS's combination of retailer, pharmacy benefits manager and health insurer makes it the company best positioned to capitalize on this trend, says JPM, which rates shares at Overweight (Buy).
CVS Health's yield might not stand out among other dividend stocks, and the company upset some investors in 2018 by putting a brake on its string of payout hikes. Still, the dividend is dependable. For the 12 months ended Sept. 30, CVS spent $2.5 billion on dividends and had free cash flow of $15.7 billion. And as a percentage of profits, the stock's payout ratio comes to only 28%. The S&P 500's payout ratio is north of 40%.
SEE ALSO: The 20 Best Stocks to Buy for 2020
Morgan Stanley
Market value: $82.7 billion
Dividend yield: 2.7%
Average broker recommendation: 12 Strong Buy, 8 Buy, 7 Hold, 1 Sell, 0 Strong Sell
Morgan Stanley (MS, $51.12) - Wall Street's second-largest investment bank after Goldman Sachs (GS) - isn't getting enough respect from the market, some analysts say.
Sandler O'Neill upgraded MS to Buy from Hold in October, saying the bank was trading too cheaply compared with its peers. The low valuation is "unwarranted," Sandler's analysts say.
Goldman Sachs finished 2019 up nearly 38%, while Morgan Stanley lagged with a roughly market-matching gain of 29%. Where MS really stands out, from a valuation perspective, is price/earnings-to-growth (PEG), which factors growth expectations into the company's P/E. Morgan Stanley trades at a PEG of 1.4, where anything over 1 is considered overpriced - but GS trades at nearly twice that, with a PEG of 2.7.
MS shares, at a 2.7% yield, also offer more income than Goldman's 2.2% at the moment.
Longer-term, analysts see Morgan Stanley delivering average annual earnings growth of more than 10%. Goldman Sachs, its closest peer, has a growth forecast of 8.4% over the next three to five years.
SEE ALSO: Hedge Funds' Top 25 Blue-Chip Stocks to Buy Now
Broadcom
Market value: $125.7 billion
Dividend yield: 4.1%
Average broker recommendation: 17 Strong Buy, 5 Buy, 13 Hold, 0 Sell, 0 Strong Sell
Semiconductor manufacturer Broadcom's (AVGO, $316.02) recent payout growth has sizzled compared to even the best dividend stocks. Since 2014, the payout has exploded by more than 1,000%, from 29 cents per share quarterly to its current $3.25.
The China-U.S. trade war has been trouble for semiconductor companies, but now the impasse appears to be headed toward at least a partial resolution. Craig-Hallum analysts, who rate AVGO at Buy, write that "stronger than expected iPhone sales and continued strength in their software infrastructure business offset the Huawei ban impact."
JPMorgan analyst Harlan Sur calls Broadcom his top pick in the semiconductor industry, raising his price target from $350 per share to $380 following the company's "solid" October-quarter results and dividend hike.
Twenty-two analysts tracked by S&P Global Market Intelligence rate AVGO a Buy or better, while 13 say it's a Hold. Those same analysts, on average, say Broadcom will deliver long-term earnings growth of almost 13% a year. That should help support AVGO's bid to keep raising its dividend.
SEE ALSO: The 15 Best Tech Stocks to Buy for 2020
Bristol-Myers Squibb
Market value: $150.5 billion
Dividend yield: 2.8%
Average broker recommendation: 8 Strong Buy, 2 Buy, 6 Hold, 0 Sell, 0 Strong Sell
You'll typically find at least a few Big Pharma names in most annual lists of the best dividend stocks. Pharmaceutical companies are known for their good-to-great dividends, and Bristol-Myers Squibb (BMY, $63.74) is no exception.
Analysts are largely optimistic about Bristol-Myers following its $74 billion merger with fellow pharmaceutical giant Celgene (CELG), which closed in November 2019. They cite Celgene's drug pipeline as a key reason to buy this cheap stock.
William Blair analysts, who rate the stock at Buy, note that the Celgene acquisition makes BMY "well positioned to remain a leader in the multiple myeloma space and further penetrate into additional hematological indications such as non-Hodgkin lymphoma and myelofibrosis."
Celgene's blockbuster drugs include a pair of multiple myeloma treatments: Pomalyst and Revlimid, the latter of which also treats mantle cell lymphoma and myelodysplastic syndromes.
The rollup strategy has served BMY well since Bristol-Myers merged with Squibb three decades ago. A long track record of successful acquisitions has kept the pharma company's pipeline primed with big-name drugs over the years. Among the better-known names today are Coumadin, a blood thinner, and Glucophage, for type 2 diabetes.
It's also worth mentioning that Bristol-Myers is one of the best stocks of all time.
SEE ALSO: 10 High-Yield Monthly Dividend Stocks to Buy in 2020
BlackRock
Market value: $78.0 billion
Dividend yield: 2.6%
Average broker recommendation: 7 Strong Buy, 7 Buy, 3 Hold, 0 Sell, 0 Strong Sell
Analysts see a decent runway for shares of BlackRock (BLK, $502.70) over the next 12 months or so.
Citigroup calls BLK a Buy, citing its "customization and technology differentiation" in the wealth management industry. Its analysts affixed a 12-month price target of $565 on the stock in mid-December, giving shares in the world's largest asset manager - responsible for BlackRock mutual and closed-end funds (CEFs), as well as iShares exchange-traded funds (ETFs) - implied upside of 13%.
Meanwhile, BlackRock's earnings are forecast to grow at an average annual pace of almost 10%, while shares trade at a reasonable a forward-looking price-to-earnings ratio of only 16.5. It's clear Wall Street thinks BLK is a bargain at current levels, given 14 ratings of Buy or better versus just three Holds and zero Sells.
On the dividend front: BLK has hiked its payout every year without interruption for a decade and is expected to lift it again in 2020.
SEE ALSO: The 10 Best Value Stocks to Buy for 2020
Citigroup
Market value: $174.4 billion
Dividend yield: 2.6%
Average broker recommendation: 12 Strong Buy, 10 Buy, 4 Hold, 1 Sell, 0 Strong Sell
Analysts expect good things from Citigroup (C, $79.89), the nation's fourth-largest bank by assets, and the biggest of the financial-sector dividend stocks on this list.
Sandler O'Neill, which rates C shares at Buy, notes that the money-center bank is racking up one good quarter after another. Revenues are up, costs are down and credit metrics are solid, analysts say.
"C reported solid 3Q19 results. Credit metrics remain strong, Branded Cards continue to deliver revenue and profit growth, and operating efficiency was in-line with our expectations," Sandler O'Neill's analysts write.
Wells Fargo analysts say that the extension of Citigroup's information-sharing agreement with hedge fund ValueAct Capital should "help them to continue to push and prod management behind the scenes for more strategic evolution and better performance."
All told, 22 analysts rate Citigroup a Buy or better, versus four Holds and one Sell. S&P Global Market Intelligence data says Citigroup is forecast to deliver average annual earnings growth of almost 13% over the next three to five years. The dividend, meanwhile, continues to recover from its post-Great Recession slashing, now at 51 cents per share quarterly after sitting at a penny per share five years ago.
SEE ALSO: 20 Best Retirement Stocks to Buy in 2020
McDonald's
Market value: $148.8 billion
Dividend yield: 2.5%
Average broker recommendation: 18 Strong Buy, 8 Buy, 9 Hold, 0 Sell, 0 Strong Sell
McDonald's (MCD, $197.61), a Dow component, has an average target price of $223.69. In other words, analysts are looking for the stock to rise more than 13% over the next 52 weeks, which is better than most S&P 500 outlooks.
Not bad for a stock with a market value of about $150 billion.
Stephens analysts reiterated their Overweight rating and $225 price target after tests in Houston and Knoxville showed strong consumer demand for McDonald's Crispy Chicken Sandwich. (Fellow fast food retailers Popeyes and Chick-fil-A are currently in a lucrative fight over which chain has the best fried chicken sandwich.)
"We believe the high-quality chicken sandwich market is a place MCD wants to become more relevant and anticipate a mid-year national launch," Stephens analysts write.
As for the dividend, you can't beat MCD for reliability. McDonald's is a member of the Dividend Aristocrats - 57 dividend stocks that have raised their payouts every year for at least a quarter-century. The world's largest hamburger slinger's dividend dates back to 1976 and has gone up every year since. MCD last raised its payouts in September, by 8% to $1.25 a share. That marked its 43rd consecutive annual increase.
SEE ALSO: 7 Dow Stocks That Didn't Survive the Decade
NextEra Energy
Market value: $118.4 billion
Dividend yield: 2.1%
Average broker recommendation: 9 Strong Buy, 6 Buy, 2 Hold, 1 Sell, 0 Strong Sell
NextEra Energy (NEE, $242.16) - an electric utility with wind, natural gas, nuclear, pipeline and storage assets - isn't a sexy stock by any means. But it had one heckuva 2019. Shares gained 39% last year to trump not only the utility sector's 22%, but the S&P 500, which is quite a feat during a roaring bull market.
Analysts remain bullish on NextEra Energy's infrastructure programs in Florida. KeyBanc, which rates NEE at Buy, says the company's strong record of regulatory relations and Florida's "constructive" regulatory environment should lead to "significant growth."
Guggenheim's Shahriar Pourreza (Buy) is optimistic about the company's regulated and unregulated businesses, as well as the project pipeline for its Energy Resources green-energy division.
NEE has a long-term growth forecast of almost 8% a year for the next three to five years, which is pretty hot for a utility stock. The dividend is no slouch, either. While the stock yields just 2.1%, the payout has jumped 72% over the past five years.
SEE ALSO: 20 Large-Cap Dividend Stocks With More Cash Than Debt
Schlumberger
Market value: $55.7 billion
Dividend yield: 5.0%
Average broker recommendation: 17 Strong Buy, 8 Buy, 7 Hold, 0 Sell, 0 Strong Sell
Oilfield services companies have been struggling ever since oil prices crashed in 2014. But some of them, such as Schlumberger (SLB, $40.20), are coming back, analysts say.
"International oilfield-service markets are firmly in recovery mode, signaling the start of a much needed multiyear growth cycle," Deutsche Bank says, slapping a Buy rating on the stock. "SLB is the primary beneficiary of this, with nearly four times the international earnings power of its nearest competitor."
Analysts at Tudor Pickering & Co. applaud Schlumberger's belt-tightening, noting that the company is "already well down the path of lowering the capital intensity of its business portfolio." They double-upgraded SLB, from Sell to Buy, in December.
The drop in oil prices has resulted in SLB's dividend being stuck at 50 cents a share quarterly since April 2015. And it's far from the only energy stock feeling the sting of commodity pricing.
The flip side? Share-price declines have turned many energy plays into high-yielding dividend stocks ... and perhaps a pickup in growth after years of lackluster performance will enable the board to start padding the payout once more.
SEE ALSO: European Dividend Aristocrats: 41 Top-Flight International Dividend Stocks
ConocoPhillips
Market value: $71.4 billion
Dividend yield: 2.6%
Average broker recommendation: 11 Strong Buy, 9 Buy, 3 Hold, 0 Sell, 0 Strong Sell
ConocoPhillips (COP, $65.03) spun off its transportation and refining business in 2012 as Phillips 66 (PSX) to focus solely on exploration, development and production. That's what differentiates it today from major integrated energy companies such as Chevron (CVX), which also transport and refine oil and natural gas.
The leaner profile is supposed to help ConocoPhillips deliver superior long-term profit growth. Analysts expect the firm to deliver average annual earnings growth of 6.5% for the next three to five years. Chevron, for comparison's sake, has a long-term growth forecast of 4.5%.
MKM Partners initiated coverage of COP stock with a Buy rating and $72 price target in early December. Its analysts like ConocoPhillips' Eagle Ford and Alaska assets as core growth drivers over the next several years.
If you're looking for dividend stocks to hold you the next decade, and not just 2020, JPMorgan's Phil Gresh (Overweight) seems to think ConocoPhillips is on the right track. He calls the company's 10-year business plan "impressive" and in November raised his 12-month price target from $70 per share to $74, implying a 14% run through late 2020. The average analyst price target of $73.18 isn't far off.
SEE ALSO: The Top 10 Stocks of the Past Decade
Prologis
Market value: $56.3 billion
Dividend yield: 2.4%
Average broker recommendation: 10 Strong Buy, 4 Buy, 2 Hold, 1 Sell, 0 Strong Sell
Prologis (PLD, $89.14), a real estate investment trust (REIT) specializing in industrial properties and assets, is analysts' No. 2 among blue-chip dividend stocks thanks to its global footprint and favorable economics.
A quick snapshot: Prologis owns nearly 800 million square feet of logistics real estate (think warehouses and distribution centers) across 19 countries on four continents. PLD is well-situated to take advantage of the evolving retail economy, in which companies increasingly must distribute directly to consumers rather than brick-and-mortar retail stores.
Stifel, which has shares at Buy, notes that "industrial fundamentals within the U.S. and internationally remain strong," and "as the largest industrial REIT globally and with a deep team in the U.S. and abroad, it is well positioned to execute on all fronts with a high degree of selectivity."
Analysts expect Prologis, which recently acquired competitor Liberty Property Trust (LPT) for $12.6 billion, to grow its profits by 6.6% annually over the next three to five years. That means good things for PLD's dividend, which has swelled by more than 60% over the past half-decade.
SEE ALSO: 9 Ways You Can Own Famous Landmarks
Merck
Market value: $231.6 billion
Dividend yield: 2.7%
Average broker recommendation: 12 Strong Buy, 3 Buy, 3 Hold, 0 Sell, 0 Strong Sell
Pharma giant Merck (MRK, $90.95), a Dow stock, has the strongest analyst rating among large-cap dividend stocks.
That's partly due to Keytruda, MRK's blockbuster cancer drug that's approved for more than 20 indications, as well as the company's vaccines business not being properly valued by the market.
"Our (sum of the parts) valuation analysis indicates a highly inexpensive valuation when incorporating a premium for the company's Animal health and Vaccines franchises," says JPMorgan, which has MRK at Overweight.
While shares lagged the broader market in 2019, they trade at around 16 times next year's earnings estimates. The S&P 500, meanwhile, trades for nearly 20.
And MRK's dividend, which had been growing by a penny per share for years, is starting to heat up. Merck upgraded its payouts by 14.6% in 2019, then followed that up with a nearly 11% improvement for 2020, starting with the quarterly dividend scheduled to be paid Jan. 8.
SEE ALSO: 25 Small Towns With Big Millionaire Populations
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Zihan1004/FNSPID | February 14th Options Now Available For CME Group
Investors in CME Group (Symbol: CME) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the CME options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $200.00 strike price has a current bid of $4.60. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $200.00, but will also collect the premium, putting the cost basis of the shares at $195.40 (before broker commissions). To an investor already interested in purchasing shares of CME, that could represent an attractive alternative to paying $201.35/share today.
Because the $200.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 2.30% return on the cash commitment, or 19.52% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for CME Group, and highlighting in green where the $200.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $202.50 strike price has a current bid of $4.90. If an investor was to purchase shares of CME stock at the current price level of $201.35/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $202.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.00% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if CME shares really soar, which is why looking at the trailing twelve month trading history for CME Group, as well as studying the business fundamentals becomes important. Below is a chart showing CME's trailing twelve month trading history, with the $202.50 strike highlighted in red:
Considering the fact that the $202.50 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.43% boost of extra return to the investor, or 20.66% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $201.35) to be 19%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | Interesting KEY Put And Call Options For February 14th
Investors in KeyCorp (Symbol: KEY) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the KEY options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $19.50 strike price has a current bid of 27 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $19.50, but will also collect the premium, putting the cost basis of the shares at $19.23 (before broker commissions). To an investor already interested in purchasing shares of KEY, that could represent an attractive alternative to paying $20.06/share today.
Because the $19.50 strike represents an approximate 3% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 1.38% return on the cash commitment, or 11.75% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for KeyCorp, and highlighting in green where the $19.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $20.50 strike price has a current bid of 40 cents. If an investor was to purchase shares of KEY stock at the current price level of $20.06/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $20.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 4.19% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if KEY shares really soar, which is why looking at the trailing twelve month trading history for KeyCorp, as well as studying the business fundamentals becomes important. Below is a chart showing KEY's trailing twelve month trading history, with the $20.50 strike highlighted in red:
Considering the fact that the $20.50 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 1.99% boost of extra return to the investor, or 16.93% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $20.06) to be 26%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | Look Under The Hood: PJP Has 11% Upside
Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the Invesco Dynamic Pharmaceuticals ETF (Symbol: PJP), we found that the implied analyst target price for the ETF based upon its underlying holdings is $71.93 per unit.
With PJP trading at a recent price near $64.72 per unit, that means that analysts see 11.14% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of PJP's underlying holdings with notable upside to their analyst target prices are Ligand Pharmaceuticals Inc (Symbol: LGND), Alexion Pharmaceuticals Inc. (Symbol: ALXN), and Mylan NV (Symbol: MYL). Although LGND has traded at a recent price of $104.29/share, the average analyst target is 71.32% higher at $178.67/share. Similarly, ALXN has 39.16% upside from the recent share price of $108.15 if the average analyst target price of $150.50/share is reached, and analysts on average are expecting MYL to reach a target price of $26.08/share, which is 29.77% above the recent price of $20.10. Below is a twelve month price history chart comparing the stock performance of LGND, ALXN, and MYL:
Combined, LGND, ALXN, and MYL represent 7.75% of the Invesco Dynamic Pharmaceuticals ETF. Below is a summary table of the current analyst target prices discussed above:
NAME SYMBOL RECENT PRICE AVG. ANALYST 12-MO. TARGET % UPSIDE TO TARGET
Invesco Dynamic Pharmaceuticals ETF PJP $64.72 $71.93 11.14%
Ligand Pharmaceuticals Inc LGND $104.29 $178.67 71.32%
Alexion Pharmaceuticals Inc. ALXN $108.15 $150.50 39.16%
Mylan NV MYL $20.10 $26.08 29.77%
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
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Zihan1004/FNSPID | February 14th Options Now Available For Infinera (INFN)
Investors in Infinera Corp (Symbol: INFN) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the INFN options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $8.00 strike price has a current bid of 45 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $8.00, but will also collect the premium, putting the cost basis of the shares at $7.55 (before broker commissions). To an investor already interested in purchasing shares of INFN, that could represent an attractive alternative to paying $8.18/share today.
Because the $8.00 strike represents an approximate 2% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 5.62% return on the cash commitment, or 47.75% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Infinera Corp, and highlighting in green where the $8.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $8.50 strike price has a current bid of 40 cents. If an investor was to purchase shares of INFN stock at the current price level of $8.18/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $8.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 8.80% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if INFN shares really soar, which is why looking at the trailing twelve month trading history for Infinera Corp, as well as studying the business fundamentals becomes important. Below is a chart showing INFN's trailing twelve month trading history, with the $8.50 strike highlighted in red:
Considering the fact that the $8.50 strike represents an approximate 4% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 4.89% boost of extra return to the investor, or 41.51% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $8.18) to be 60%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | Thursday Sector Leaders: Technology & Communications, Industrial
Looking at the sectors faring best as of midday Thursday, shares of Technology & Communications companies are outperforming other sectors, up 0.8%. Within that group, Advanced Micro Devices Inc (Symbol: AMD) and Western Digital Corp (Symbol: WDC) are two of the day's stand-outs, showing a gain of 6.0% and 3.9%, respectively. Among technology ETFs, one ETF following the sector is the Technology Select Sector SPDR ETF (Symbol: XLK), which is up 1.4% on the day, and roughly flat year-to-date. Advanced Micro Devices Inc, meanwhile, is roughly flat on a year-to-date basis, and Western Digital Corp, is roughly flat on a year-to-date basis. Combined, AMD and WDC make up approximately 1.2% of the underlying holdings of XLK.
The next best performing sector is the Industrial sector, higher by 0.5%. Among large Industrial stocks, General Electric Co (Symbol: GE) and Wabtec Corp (Symbol: WAB) are the most notable, showing a gain of 4.5% and 2.5%, respectively. One ETF closely tracking Industrial stocks is the Industrial Select Sector SPDR ETF (XLI), which is up 0.8% in midday trading, and roughly flat year-to-date. General Electric Co, meanwhile, is roughly flat on a year-to-date basis, and Wabtec Corp, is roughly flat on a year-to-date basis. Combined, GE and WAB make up approximately 4.6% of the underlying holdings of XLI.
Comparing these stocks and ETFs on a trailing twelve month basis, below is a relative stock price performance chart, with each of the symbols shown in a different color as labeled in the legend at the bottom:
Here's a snapshot of how the S&P 500 components within the various sectors are faring in afternoon trading on Thursday. As you can see, two sectors are up on the day, while six sectors are down.
SECTOR % CHANGE
Technology & Communications +0.8%
Industrial +0.5%
Energy -0.0%
Services -0.2%
Healthcare -0.3%
Financial -0.5%
Consumer Products -0.9%
Materials -1.1%
Utilities -1.6%
10 ETFs With Stocks That Insiders Are Buying »
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Zihan1004/FNSPID | MRO February 14th Options Begin Trading
Investors in Marathon Oil Corp. (Symbol: MRO) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the MRO options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $13.50 strike price has a current bid of 56 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $13.50, but will also collect the premium, putting the cost basis of the shares at $12.94 (before broker commissions). To an investor already interested in purchasing shares of MRO, that could represent an attractive alternative to paying $13.57/share today.
Because the $13.50 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 4.15% return on the cash commitment, or 35.21% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Marathon Oil Corp., and highlighting in green where the $13.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $14.00 strike price has a current bid of 46 cents. If an investor was to purchase shares of MRO stock at the current price level of $13.57/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $14.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 6.56% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if MRO shares really soar, which is why looking at the trailing twelve month trading history for Marathon Oil Corp., as well as studying the business fundamentals becomes important. Below is a chart showing MRO's trailing twelve month trading history, with the $14.00 strike highlighted in red:
Considering the fact that the $14.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.39% boost of extra return to the investor, or 28.77% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $13.57) to be 39%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | S&P 500 Analyst Moves: FFIV
The latest tally of analyst opinions from the major brokerage houses shows that among the components of the S&P 500 index, F5 Networks, is now the #357 analyst pick, moving up by 10 spots.
This rank is formed by averaging the analyst opinions for each component from each broker, and then ranking the 500 components by those average opinion values.
Looking at the stock price movement year to date, F5 Networks, is showing a gain of 0.6%.
VIDEO: S&P 500 Analyst Moves: FFIV
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Zihan1004/FNSPID | Notable Thursday Option Activity: C, MMM, UNH
Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Citigroup Inc (Symbol: C), where a total of 58,524 contracts have traded so far, representing approximately 5.9 million underlying shares. That amounts to about 48% of C's average daily trading volume over the past month of 12.2 million shares. Particularly high volume was seen for the $80 strike call option expiring January 17, 2020, with 6,161 contracts trading so far today, representing approximately 616,100 underlying shares of C. Below is a chart showing C's trailing twelve month trading history, with the $80 strike highlighted in orange:
3M Co (Symbol: MMM) saw options trading volume of 11,862 contracts, representing approximately 1.2 million underlying shares or approximately 43.9% of MMM's average daily trading volume over the past month, of 2.7 million shares. Especially high volume was seen for the $210 strike put option expiring January 17, 2020, with 900 contracts trading so far today, representing approximately 90,000 underlying shares of MMM. Below is a chart showing MMM's trailing twelve month trading history, with the $210 strike highlighted in orange:
And UnitedHealth Group Inc (Symbol: UNH) saw options trading volume of 12,676 contracts, representing approximately 1.3 million underlying shares or approximately 43.7% of UNH's average daily trading volume over the past month, of 2.9 million shares. Particularly high volume was seen for the $230 strike put option expiring January 15, 2021, with 1,031 contracts trading so far today, representing approximately 103,100 underlying shares of UNH. Below is a chart showing UNH's trailing twelve month trading history, with the $230 strike highlighted in orange:
For the various different available expirations for C options, MMM options, or UNH options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
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Zihan1004/FNSPID | GDXJ, SBGL, PAAS, KGC: Large Inflows Detected at ETF
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Junior Gold Miners ETF (Symbol: GDXJ) where we have detected an approximate $61.3 million dollar inflow -- that's a 1.2% increase week over week in outstanding units (from 120,637,446 to 122,087,446). Among the largest underlying components of GDXJ, in trading today Sibanye-Stillwater (Symbol: SBGL) is up about 1.9%, Pan American Silver Corp (Symbol: PAAS) is down about 0.2%, and Kinross Gold Corp. (Symbol: KGC) is higher by about 2.3%. For a complete list of holdings, visit the GDXJ Holdings page » The chart below shows the one year price performance of GDXJ, versus its 200 day moving average:
Looking at the chart above, GDXJ's low point in its 52 week range is $27.80 per share, with $43.10 as the 52 week high point — that compares with a last trade of $42.79. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
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Zihan1004/FNSPID | Ex-Dividend Reminder: CoreCivic, Erie Indemnity and Brixmor Property Group
Looking at the universe of stocks we cover at Dividend Channel, on 1/3/20, CoreCivic Inc (Symbol: CXW), Erie Indemnity Co. (Symbol: ERIE), and Brixmor Property Group Inc (Symbol: BRX) will all trade ex-dividend for their respective upcoming dividends. CoreCivic Inc will pay its quarterly dividend of $0.44 on 1/15/20, Erie Indemnity Co. will pay its quarterly dividend of $0.965 on 1/22/20, and Brixmor Property Group Inc will pay its quarterly dividend of $0.285 on 1/15/20. As a percentage of CXW's recent stock price of $17.40, this dividend works out to approximately 2.53%, so look for shares of CoreCivic Inc to trade 2.53% lower — all else being equal — when CXW shares open for trading on 1/3/20. Similarly, investors should look for ERIE to open 0.58% lower in price and for BRX to open 1.32% lower, all else being equal.
Below are dividend history charts for CXW, ERIE, and BRX, showing historical dividends prior to the most recent ones declared.
CoreCivic Inc (Symbol: CXW):
Erie Indemnity Co. (Symbol: ERIE):
Brixmor Property Group Inc (Symbol: BRX):
In general, dividends are not always predictable, following the ups and downs of company profits over time. Therefore, a good first due diligence step in forming an expectation of annual yield going forward, is looking at the history above, for a sense of stability over time. This can help in judging whether the most recent dividends from these companies are likely to continue. If they do continue, the current estimated yields on annualized basis would be 10.11% for CoreCivic Inc, 2.32% for Erie Indemnity Co., and 5.27% for Brixmor Property Group Inc.
In Thursday trading, CoreCivic Inc shares are currently up about 0.1%, Erie Indemnity Co. shares are up about 0.1%, and Brixmor Property Group Inc shares are up about 0.1% on the day.
Click here to learn which 25 S.A.F.E. dividend stocks should be on your radar screen »
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Zihan1004/FNSPID | Noteworthy Thursday Option Activity: TGT, SQ, WRLD
Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Target Corp (Symbol: TGT), where a total volume of 42,759 contracts has been traded thus far today, a contract volume which is representative of approximately 4.3 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 118.9% of TGT's average daily trading volume over the past month, of 3.6 million shares. Especially high volume was seen for the $127 strike call option expiring January 24, 2020, with 2,374 contracts trading so far today, representing approximately 237,400 underlying shares of TGT. Below is a chart showing TGT's trailing twelve month trading history, with the $127 strike highlighted in orange:
Square Inc (Symbol: SQ) saw options trading volume of 51,308 contracts, representing approximately 5.1 million underlying shares or approximately 100.4% of SQ's average daily trading volume over the past month, of 5.1 million shares. Particularly high volume was seen for the $64.50 strike call option expiring January 03, 2020, with 4,134 contracts trading so far today, representing approximately 413,400 underlying shares of SQ. Below is a chart showing SQ's trailing twelve month trading history, with the $64.50 strike highlighted in orange:
And World Acceptance Corp. (Symbol: WRLD) saw options trading volume of 1,065 contracts, representing approximately 106,500 underlying shares or approximately 93.9% of WRLD's average daily trading volume over the past month, of 113,420 shares. Particularly high volume was seen for the $90 strike call option expiring February 21, 2020, with 300 contracts trading so far today, representing approximately 30,000 underlying shares of WRLD. Below is a chart showing WRLD's trailing twelve month trading history, with the $90 strike highlighted in orange:
For the various different available expirations for TGT options, SQ options, or WRLD options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
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Zihan1004/FNSPID | Interesting HUYA Put And Call Options For February 14th
Investors in HUYA Inc (Symbol: HUYA) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the HUYA options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $19.50 strike price has a current bid of $1.05. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $19.50, but will also collect the premium, putting the cost basis of the shares at $18.45 (before broker commissions). To an investor already interested in purchasing shares of HUYA, that could represent an attractive alternative to paying $19.60/share today.
Because the $19.50 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 5.38% return on the cash commitment, or 45.71% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for HUYA Inc, and highlighting in green where the $19.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $20.00 strike price has a current bid of 70 cents. If an investor was to purchase shares of HUYA stock at the current price level of $19.60/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $20.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 5.61% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if HUYA shares really soar, which is why looking at the trailing twelve month trading history for HUYA Inc, as well as studying the business fundamentals becomes important. Below is a chart showing HUYA's trailing twelve month trading history, with the $20.00 strike highlighted in red:
Considering the fact that the $20.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.57% boost of extra return to the investor, or 30.32% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $19.60) to be 64%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | FOLD February 14th Options Begin Trading
Investors in Amicus Therapeutics Inc (Symbol: FOLD) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the FOLD options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $9.50 strike price has a current bid of 45 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $9.50, but will also collect the premium, putting the cost basis of the shares at $9.05 (before broker commissions). To an investor already interested in purchasing shares of FOLD, that could represent an attractive alternative to paying $9.69/share today.
Because the $9.50 strike represents an approximate 2% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 4.74% return on the cash commitment, or 40.21% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Amicus Therapeutics Inc, and highlighting in green where the $9.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $10.00 strike price has a current bid of 35 cents. If an investor was to purchase shares of FOLD stock at the current price level of $9.69/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $10.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 6.81% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if FOLD shares really soar, which is why looking at the trailing twelve month trading history for Amicus Therapeutics Inc, as well as studying the business fundamentals becomes important. Below is a chart showing FOLD's trailing twelve month trading history, with the $10.00 strike highlighted in red:
Considering the fact that the $10.00 strike represents an approximate 3% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.61% boost of extra return to the investor, or 30.66% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $9.69) to be 46%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | Notable ETF Outflow Detected - SPGP, ANET, FTNT, ETFC
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco S&P 500 GARP ETF (Symbol: SPGP) where we have detected an approximate $94.7 million dollar outflow -- that's a 16.5% decrease week over week (from 9,100,000 to 7,600,000). Among the largest underlying components of SPGP, in trading today Arista Networks Inc (Symbol: ANET) is up about 0.6%, Fortinet Inc (Symbol: FTNT) is up about 2.7%, and Etrade Financial Corporation (Symbol: ETFC) is up by about 0.2%. For a complete list of holdings, visit the SPGP Holdings page » The chart below shows the one year price performance of SPGP, versus its 200 day moving average:
Looking at the chart above, SPGP's low point in its 52 week range is $44.41 per share, with $63.72 as the 52 week high point — that compares with a last trade of $63.30. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs experienced notable outflows »
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Zihan1004/FNSPID | Analysts Expect BBH To Hit $157
Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itself. For the Biotech ETF (Symbol: BBH), we found that the implied analyst target price for the ETF based upon its underlying holdings is $156.86 per unit.
With BBH trading at a recent price near $139.42 per unit, that means that analysts see 12.51% upside for this ETF looking through to the average analyst targets of the underlying holdings. Three of BBH's underlying holdings with notable upside to their analyst target prices are United Therapeutics Corp (Symbol: UTHR), Alnylam Pharmaceuticals Inc (Symbol: ALNY), and Ionis Pharmaceuticals Inc (Symbol: IONS). Although UTHR has traded at a recent price of $88.08/share, the average analyst target is 37.88% higher at $121.44/share. Similarly, ALNY has 21.00% upside from the recent share price of $115.17 if the average analyst target price of $139.36/share is reached, and analysts on average are expecting IONS to reach a target price of $68.00/share, which is 12.56% above the recent price of $60.41. Below is a twelve month price history chart comparing the stock performance of UTHR, ALNY, and IONS:
Combined, UTHR, ALNY, and IONS represent 6.55% of the Biotech ETF. Below is a summary table of the current analyst target prices discussed above:
NAME SYMBOL RECENT PRICE AVG. ANALYST 12-MO. TARGET % UPSIDE TO TARGET
Biotech ETF BBH $139.42 $156.86 12.51%
United Therapeutics Corp UTHR $88.08 $121.44 37.88%
Alnylam Pharmaceuticals Inc ALNY $115.17 $139.36 21.00%
Ionis Pharmaceuticals Inc IONS $60.41 $68.00 12.56%
Are analysts justified in these targets, or overly optimistic about where these stocks will be trading 12 months from now? Do the analysts have a valid justification for their targets, or are they behind the curve on recent company and industry developments? A high price target relative to a stock's trading price can reflect optimism about the future, but can also be a precursor to target price downgrades if the targets were a relic of the past. These are questions that require further investor research.
10 ETFs With Most Upside To Analyst Targets »
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Zihan1004/FNSPID | 3 Chip Stocks to Trade in 2020
Last year turned out great for equity investors as the S&P 500 rose 30%. However, for much of the year it was rough sailing as there were panic moments over headlines. Some spaces like semiconductors were especially exposed to China, and therefore particularly vulnerable to trade war headlines. But despite all the challenges that chip stocks had in 2019, Wall Street investors bought every dip.
The setup for 2020 resembles that of last yearâs. The bulls are still in charge and the favorable macroeconomic conditions are looking like they will persist. The central banks are still committed to easy lending conditions, and mega caps are delivering strong results. So in order for the bears to overwhelm this bullish market they will need new scenarios to emerge. So past winners like Advanced Micro Devices (NASDAQ:), Intel (NASDAQ:) and Nvidia (NASDAQ:) will continue to win.
So after a great 2019, the idea is to roll the profits into 2020 inside a bullish sentiment for business. Last year, the markets struggled with global headlines about tariffs and more. Yet, companies still managed to deliver great results; therefore, it will take a black swan event to derail this bullish market.
Chip Stocks to Trade: Advanced Micro Devices (AMD)
Source: Charts by TradingView
AMD was the best performing stock in the S&P two years straight. The odds for repeating once are low, so a third time is almost impossible to pull off. Meaning that from this perspective, AMD stock is the least likely to outperform in 2020.
But I also like to bet on winners. So until AMD shows me weakness, I stick with it as a great choice for 2020. This is a strong stock because Wall Street strongly believes in its CEO Lisa Su. If this situation changes, then the selling will happen very fast.
So, the stock ascent being this fast, I can argue that there will be better entry points into AMD. Meaning new entries into it here are vulnerable to losses in the next two months. If it falls to the areas around $39 and $36 per share it would shake out enough people to make a much better new entry point. The base after a very steep rally is usually shaky and makes for a poor springboard.
I am not saying that AMD stock is a good short because it is not. In 2018 when the equity markets were falling into an abyss, AMD closed the year up 50%. This year was even better. So the easy trade on AMD is to stay long it into 2020 but from better starting points.
Fundamentally, AMD is not cheap. But value is not very important for a stock like this. It gets a pass on valuation for as long as its thesis is that management is setting it up for awesome profits in the long run.
Nvidia (NVDA)
Source: Charts by TradingView
For a long while and coming into Fall 2018, NVDA stock could do no wrong. Consensus then was that it had to be in every portfolio. The experts drooled over its forays into several areas, including bitcoin. But then, as the crypto craze faded, Nvidia stock corrected hard as it fell almost 60% before it bottomed at $125 per share on Christmas of 2018.
This past Christmas was the opposite result. NVDA rallied 80% from its May lows to salvage a great year. So barring a management flub, the momentum could carry it on higher still from here. Indeed, the Wall Street experts are back on the Nvidia stock band wagon and perhaps too much once more. And therein lies reason for caution.
This recent increase in conviction should make the bulls nervous. At least until they shake out a few weak hands. So donât confuse my point here with disliking its fundamentals. I just am leery of the speed by which consensus swung from one extreme to the other. Somewhere in the middle lies a better slope.
Intel (INTC)
Source: Charts by TradingView
Of the three stocks today, Intel has the clearest technical opportunity. All year long it has played catch up. This was probably the result of the churn in leadership. But now it is in sync and trading well.
Intelâs chart now resembles AMDâs back in October just before it broke out from $34 per share. The rally was massive for AMD and it could be just as impressive for INTC soon.
If the bulls can breakout and establish $60 per share as a base then the measured move would be to reach $69 per share area. But the first step is to solidify this breakout and retest the neckline for footing. This task will be easier to accomplish if the whole market starts the year with greens.
Nicolas Chahine is the managing director of . As of this writing, he did not hold a position in any of the aforementioned securities. Join his live chat room for free here.
The post appeared first on InvestorPlace.
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Zihan1004/FNSPID | Stock To Watch - General Mills
(RTTNews) - Shares of food company General Mills, Inc. (GIS) closed Tuesday's trading at $53.56, close to its 52-week high of $56.40.
General Mills' brands include Nature Valley, Betty Crocker, Annie's organic snacks, Häagen-Dazs, Cheerios, and Pillsbury among others.
In November last year, the company achieved its 20% sodium reduction goal across all 10 key U.S. product categories, that was announced in 2010.
Last month, the Fortune 100 multinational company reported better- than- expected adjusted earnings of $0.95 per share in the second quarter. This was a 67% increase from the same quarter a year ago. The Consensus estimate stood at $0.88 per share. Revenue for the quarter was flat at $4.4 billion versus last year.
For FY2020, the company expects earnings, on an adjusted basis, to be in the range of $3.31- $3.38 per share. This compares with the Street expectation of $3.38.
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Zihan1004/FNSPID | Invesco S&P 500 Pure Value ETF Experiences Big Outflow
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco S&P 500— Pure Value ETF (Symbol: RPV) where we have detected an approximate $329.0 million dollar outflow -- that's a 23.5% decrease week over week (from 20,250,000 to 15,500,000). Among the largest underlying components of RPV, in trading today Macy's Inc (Symbol: M) is down about 2.1%, Baker Hughes Company (Symbol: BKR) is down about 0.7%, and General Motors Co (Symbol: GM) is relatively unchanged. For a complete list of holdings, visit the RPV Holdings page » The chart below shows the one year price performance of RPV, versus its 200 day moving average:
Looking at the chart above, RPV's low point in its 52 week range is $56.3156 per share, with $70 as the 52 week high point — that compares with a last trade of $69.15. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs experienced notable outflows »
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Zihan1004/FNSPID | EEM December 31st Options Begin Trading
Investors in iShares Trust - iShares MSCI Emerging Markets ETF (Symbol: EEM) saw new options become available today, for the December 31st expiration. One of the key inputs that goes into the price an option buyer is willing to pay, is the time value, so with 364 days until expiration the newly available contracts represent a potential opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the EEM options chain for the new December 31st contracts and identified one put and one call contract of particular interest.
The put contract at the $45.00 strike price has a current bid of $2.87. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $45.00, but will also collect the premium, putting the cost basis of the shares at $42.13 (before broker commissions). To an investor already interested in purchasing shares of EEM, that could represent an attractive alternative to paying $45.44/share today.
Because the $45.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 6.38% return on the cash commitment, or 6.40% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for iShares Trust - iShares MSCI Emerging Markets ETF, and highlighting in green where the $45.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $46.00 strike price has a current bid of $2.88. If an investor was to purchase shares of EEM stock at the current price level of $45.44/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $46.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 7.57% if the stock gets called away at the December 31st expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if EEM shares really soar, which is why looking at the trailing twelve month trading history for iShares Trust - iShares MSCI Emerging Markets ETF, as well as studying the business fundamentals becomes important. Below is a chart showing EEM's trailing twelve month trading history, with the $46.00 strike highlighted in red:
Considering the fact that the $46.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 6.34% boost of extra return to the investor, or 6.36% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $45.44) to be 15%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | Why Canopy Growth Stock Will Stage a Huge Rebound in 2020
Calendar 2019 was a bad, bad year for pot stocks. Everything that could go wrong, did go wrong. Legal market demand in Canada fell flat. Revenue growth rates meaningfully decelerated. Margins were killed by black market competition and aggressive production capacity expansion. Losses widened. Progress on the U.S. market front went nowhere. Executives left in droves. Stock prices across the industry collapsed.
Source: Shutterstock
Canopy Growth (NYSE:) â the marketâÂÂs biggest and most well-known company â was no exception to the trend. Their revenue growth rates fell flat. Their margins were hit hard and their losses widened. Consequently, in 2019, Canopy Growth stock dropped more than 20%.
But, thatâÂÂs 2019. Now itâÂÂs 2020. A whole new year. Does that mean a whole new outlook for CGC stock?
I think so. If 2019 was the year that Canopy Growth lost its âÂÂmojoâ or momentum, 2020 will be the year that the company gets it back. In the process of getting its mojo back, Canopy Growth stock will roar above $30. HereâÂÂs why.
Canopy Growth Will Get Its Mojo Back
Three big catalysts will enable Canopy Growth â and a handful of other pot stocks â to regain momentum in 2020.
First, demand trends in the Canadian market will improve. Such improvements will be a byproduct of a few things: First, there will be more products in the legal channel, including very popular edibles and vape products, as well as more supply of existing products, thanks to huge capacity expansion in 2019 from legal producers like Canopy Growth.
There will be more retail store openings, as Canada is that slow retail expansion has been partly to blame for the legal marketâÂÂs challenges to-date. Legal producers will also have a better handle on distribution and logistics, which will help them better compete with black market sellers.
Second, Canopy Growth will make meaningful inroads in the U.S. market. This breaks into two components. The first component is legislation, and is based on the idea that because the House just passed the MORE act, U.S. federal legalization of cannabis could become a reality in 2020. The second component is pre-legalization expansion, as Canopy , a line of hemp-derived CBD products, in the U.S. So long as progress is made on both of these fronts in 2020, Canopy GrowthâÂÂs sales trajectory should improve.
Third, the positioning of CGC stock will allow for good news to have a hugely positive impact on the stock price. That is, in early 2o19, CGC stock was flying higher with a huge valuation, and needed perfect to work. Perfect didnâÂÂt happen, so shares collapsed.
Heading into 2020, though, we have an opposite situation. Canopy Growth stock is depressed, beaten up, and trading at a multi-year low valuation. If good news materializes in 2020, then the convergence of good news on a depressed valuation could spark a big rally.
Canopy Growth Stock Will Move Above $30
My modeling suggests that the aforementioned favorable developments will posses enough firepower to drive Canopy Growth stock above $30 in 2020.
An in-depth look at my numbers can be found . But, to succinctly recap, current consumption trends among younger demographics imply that younger crowds like to smoke/eat/drink cannabis almost as much as they like to drink alcohol. As such, once the cannabis market becomes fully legal â and it will, given consumption trends and shifting government attitudes â it will also become very, very big. Like almost alcohol-big.
The alcoholic beverage market is a trillion dollar-plus market globally. Most estimates peg the global cannabis market as being around $200 billion in size within a decade. Given the aforementioned reasoning, that number seems entirely doable.
Canopy Growth is the biggest, deepest pocketed, most well-equipped player in the space. They reasonably project to be the Altria (NYSE:) or Anheuser-Busch (NYSE:) of the cannabis market. Those are $100 billion companies. Canopy may not get that big because the cannabis market wonâÂÂt be as big as peer tobacco and alcoholic beverage markets. But, it will get very big one day â much bigger than its current $7 billion market cap.
Within this mental framework, my modeling suggests that Canopy Growth will hit roughly $10 billion in sales by 2030, with 30% operating margins, and $5 in earnings per share.ÃÂ Based on a forward earnings multiple of 16, which is average for the market, that yields a $100 price target for CGC stock by 2029. Discounted back by 10% per year, that equates to a 2020 price target of about $33 to $34.
Bottom Line on CGC Stock
2019 was the year that Canopy Growth lost its âÂÂmojoâ and Canopy Growth stock tanked. Calendar 2020 will be the exact opposite. Over the next twelve months, Canopy Growth will regain its âÂÂmojoâ as demand trends in Canada improve and the company makes inroads in the U.S. market. This will power CGC stock back above $30 in 2020.
As of this writing, Luke Lango was long CGC.ÃÂ
The post appeared first on InvestorPlace.
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Zihan1004/FNSPID | My No. 1 Renewable Energy Stock for 2019 Rocketed 37%
A little over a year ago, I selected TerraForm Power (NASDAQ: TERP) as my top renewable energy stock for 2019. It turned out to be a solid pick. While the wind and solar energy producer's shares weren't quite as hot as those of some solar stocks, it still delivered market-beating total returns. Overall, shares of TerraForm gained 37% in 2019. Add in its high-yielding dividend, and the total return approached 45%. That easily outpaced the equally red-hot S&P 500, which produced a 31% total return in 2019.
While TerraForm likely won't deliver quite such strong returns in 2020, the company has plenty of market-beating potential. Here's a look back at what went right in 2019 and why that has TerraForm set up for success in 2020 and beyond.
Image source: Getty Images.
A banner year on many fronts
TerraForm Power entered 2019 in its best position in years. Thanks to the help of its new sponsor, Brookfield Asset Management (NYSE: BAM) -- which bought a controlling stake in late 2017 -- the company made excellent progress on its transformation plan throughout 2018. Highlights included buying Spanish wind and solar power company Saeta Yield for $1.2 billion, signing agreements with vendors to reduce costs, and reinstating a high-yielding dividend.
The company built on that success throughout 2019 by continuing to improve the profitability of its legacy assets while at the same time expanding its portfolio and bolstering its financial profile. The company's moves to enhance its earnings helped grow its cash flow per share by 14% through the third quarter. Meanwhile, it acquired a 320 megawatt (MW) portfolio of solar assets in the U.S. for $720 million and made several financing transactions to improve its balance sheet. Because of that, TerraForm enters 2020 with lots of momentum.
Why 2020 could be another excellent year for TerraForm Power
TerraForm's most recent acquisition will help drive cash flow growth over the next few quarters. On top of that, the company will continue benefiting from its margin enhancement efforts. Those two factors set TerraForm up to continue growing its cash flow at a healthy rate in 2020. Because of that, it's in a solid position to deliver on its goal of increasing its dividend by 5% to 8% per year.
Meanwhile, the company is working on ways to add more power to its 2020 growth plan by pursuing additional opportunistic acquisitions. TerraForm already has a transaction in the pipeline to acquire 100 MW of solar in Europe that it expects to close during the first quarter. On top of that, it has a 50 MW pipeline of solar acquisition opportunities in Spain that it's pursuing. Further, it also has the potential to buy out some of its minority partners, and it holds the right of first offer on several other acquisition opportunities. Because of that, 2020 could be another busy year for TerraForm on the M&A front. That sets the company up to potentially grow its payout at the top end of its target range not only in 2020, but also in future years.
Another possible catalyst for TerraForm in 2020 is additional improvements to its financial profile. While the company has a solid balance sheet, its credit rating remains below investment grade, which makes it more expensive to borrow money. However, with a much higher stock price, a red-hot renewables market, and lower interest rates, TerraForm could make additional moves to improve its credit profile. Doing so would enhance the company's long-term sustainability, which should boost shareholder value.
Set up for another strong year
TerraForm Power is coming off an excellent year. Because of that, it has lots of momentum heading into 2020 since its recent acquisitions and margin enhancement initiatives position it to grow its cash flow and dividend toward the top end of its target range. As such, the company could potentially generate a total return in the low to mid-teens this year, making it one of the top renewable energy stocks to buy for 2020 as well.
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Matthew DiLallo owns shares of Brookfield Asset Management and TerraForm Power. The Motley Fool owns shares of and recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.
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Zihan1004/FNSPID | February 14th Options Now Available For Yelp
Investors in Yelp Inc (Symbol: YELP) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the YELP options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $33.50 strike price has a current bid of 2 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $33.50, but will also collect the premium, putting the cost basis of the shares at $33.48 (before broker commissions). To an investor already interested in purchasing shares of YELP, that could represent an attractive alternative to paying $34.73/share today.
Because the $33.50 strike represents an approximate 4% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.06% return on the cash commitment, or 0.51% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Yelp Inc, and highlighting in green where the $33.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $35.00 strike price has a current bid of 37 cents. If an investor was to purchase shares of YELP stock at the current price level of $34.73/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $35.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 1.84% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if YELP shares really soar, which is why looking at the trailing twelve month trading history for Yelp Inc, as well as studying the business fundamentals becomes important. Below is a chart showing YELP's trailing twelve month trading history, with the $35.00 strike highlighted in red:
Considering the fact that the $35.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 1.07% boost of extra return to the investor, or 9.04% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $34.73) to be 36%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | Is Navistar a Buy for 2020?
Trucking is a cyclical industry, and truck manufacturers like Navistar (NYSE: NAV) have certainly seen significant volatility in revenue and earnings over time. With 2020 set to be a down year for the industry -- the latest results from Navistar only served to confirm this expectation -- it's understandable if the market decides to take a dim view of prospects. That said, there's a strong case for the argument that stocks in the sector remain a good value. Here it is.
Image source: Getty Images.
Guidance for 2020
The uncertainty in the timing of the cycle of trucking demand makes guidance very hard to formulate. It's a common feature of investing in such stocks that guidance can turn out to be too optimistic on the way down and too pessimistic on the way up.
Unfortunately, the industry is heading down in 2020, and Navistar's updated guidance demonstrates how easy to is to overshoot on guidance when an industry is cyclically declining. Note that the guidance given on the investor day is from just three months ago.
METRIC
CURRENT GUIDANCE
INVESTOR DAY, SEPTEMBER 2019
Industry Retail Deliveries of Class 6-8 trucks and buses, U.S. and Canada (units)
"Low end of the range"
335,000 to 365,000
Revenue
$9.25 billion to $9.75 billion
$10 billion to $10.5 billion
Adjusted EBITDA
$700 million to $725 million
$775 million to $825 million
Data source: Navistar presentations. EBITDA = earnings before interest, tax, depreciation, and amortization.
Discussing the outlook for 2020 on the fourth-quarterearnings call Navistar CEO Troy Clarke painted a picture of lower economic growth in 2019 leading to a year of transition for the industry. However, he also noted that "recent industry orders have been running below replacement level, as I believe the industry is working through a period of transition and then orders will pick up and recover in the second half of the year."
In other words, a recovery in orders and ultimately a recovery in revenue should be in place by 2021. Discussing the matter further on theearnings call Clarke said that should the economy slip into something "that might look like a manufacturing recession in the first half of 2020" then "the recovery in orders in the market may be something that takes place late in 2020 or early in 2021."
Of course, the economy could slip into a deeper and more lasting recession, in which case all bets are off, but under Clarke's bad-case scenario the recovery in orders expected in the second half will merely be pushed out by a quarter or two.
The investment case for Navistar
It appears that the argument over truck demand, and Navistar earnings, isn't about whether a recovery will happen but rather about when. In other words, when the overall economy starts to grow at above 2% again, Clarke believes freight demand will exceed capacity and freight companies will start to order trucks again. In addition, truck prices will need to stabilize before companies buy new trucks again.
The good news is that the current analyst earnings estimates -- the 2020 EBITDA consensus is inside Navistar's range -- seem to suggest there is enough room for error in them to leave Navistar still looking like a good value.
The key figure to focus on in the table is the enterprise value (EV) or market cap plus net debt to EBITDA. The EV/EBITDA multiple is a commonly used valuation metric. I'll come back to that shortly, but first note that the modest recovery expected in 2021 and 2022 would still leave revenue below the level of the boom years of 2018 and 2019, and that Navistar's margin expansion plans are expected to result in high-single-digit earnings growth from the trough formed in 2020.
NAVISTAR
2016
2017
2018
2019
2020 (ESTIMATE)
2021 (ESTIMATE)
Revenue
$8,111 million
$8,570 million
$10,250 million
$11,251 million
$9,467 million
$9,753 million
EBITDA
$508 million
$582 million
$826 million
$882 million
$722 million
$774 million
EV/EBITDA*
13.5
11.8
8.3
7.8
9.5
8.9
Data sources: Navistar presentations and analyst estimates. *Based on the current enterprise value of $6.85 billion.
To put these figures into context, here's a look at Navistar's valuation during the last trough in heavy truck sales at the end of 2016 compared to those of industry peers PACCAR (NASDAQ: PCAR) and Cummins (NYSE: CMI). For reference, the forecast EV/EBITDA for PACCAR and Cummins at their trough in 2020 is for 13.4 times and 9.1 times, respectively. In addition, all three are expected to generate earnings significantly in excess of those generated in the last trough, in 2016.
NAV EV to EBITDA data by YCharts
Is Navistar a buy?
When you put it all together, the stock looks like a very good value, but anyone buying in will have to appreciate that it's not going to be a smooth ride, and it's possible that some downward revisions to earnings estimates could come along. It's not easy predicting the timing of a cycle.
Nevertheless, if you believe in the long-term prospects for the U.S. economy and trucking demand, trucking stocks are attractively priced right now and have a good margin of safety for what's likely to be a rough six months.
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Lee Samaha has no position in any of the stocks mentioned. The Motley Fool owns shares of Paccar. The Motley Fool recommends Cummins. The Motley Fool has a disclosure policy.
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Zihan1004/FNSPID | 3 Reasons Why GE Stock Could Rally Another 20% in 2020
After several years of declines, General Electric (NYSE:) stock finally bounced back in 2019, posting a huge gain of over 50% as new management appropriately executed on cost-cutting and debt-reduction measures, against the backdrop of a steadily improving industrial economic outlook.
Source: Carsten Reisinger / Shutterstock.com
Now, on the heels of its best annual performance since 1982, GE stock looks positioned to add to this record rally in 2020.
Specifically, there are three big catalysts which should power sustained gains in GE stock over the next twelve months. First, the industrial economic backdrop will continue to improve amid easing global trade tensions. Second, management will continue to execute on cost-cutting and debt-reduction measures, and profit margin and leverage trends will continue to improve. Third, the valuation underlying GE stock remains cheap, and there is ample room for further fundamentally supported share price gains.
Put together, those three catalysts should provide enough firepower for General Electric stock to rise another 20% or more in 2020.
The Backdrop Will Improve
The first big catalyst which will help power GE stock higher in 2020 is a sustained rebound in the global industrial economy.
Throughout 2018 and for most of 2019, the industrial economy tumbled amid escalating global trade tensions, which sparked geopolitical and economic uncertainty and curtailed capital investment. Over the past few months, however, those escalating global trade tensions have meaningfully de-escalated. As they have, uncertainty has turned into certainty, capital investment levels have rebounded, and the industrial economy has bounced backâ¦.
This rebound will persist in 2020. U.S. President Donald Trump doesnâÂÂt want to upset the egg carton in an election year, because doing so would harm his chances at re-election (citizens like stability). China doesnâÂÂt want to upset the egg carton, either, because they want their economy to keep rebounding, which it is doing in the absence of trade volatility. As such, for the next few quarters, trade tensions between the U.S. and China will continue to de-escalate.
As they do, capital investment levels will continue to rebound, and industrial economic activity will continue to perk up. This sustained rebound in the industrial economy will provide a meaningful tailwind for GE stock.
Management Will Remain on Track
Second, throughout 2020, GE management will continue to cut costs, sell unrelated business units and reduce leverage, the sum of which will help keep GE stock on a winning path.
A big part of the 2019 rebound in General Electric stock was new management, led by CEO Larry Culp, doing everything right to get the business back on track. Specifically, Culp shed non-core business units, and used the proceeds to pay down debt and streamline investments into the core businesses. At the same time, he cut back on operating expenses in order to create a viable pathway to sustainable profitability.
All of this will continue in 2020. GE still has a lot of moving parts. Culp will continue to sell some of those moving parts in 2020 and use the proceeds to pay down debt. Leverage reduction will have a positive impact on investor sentiment and the stockâÂÂs multiple. At the same time, cost-cutting initiatives will start to bear fruit in 2020, at the same time that streamlined investments into the core airline and power businesses should bring revenue growth back into the picture.
Altogether, GEâÂÂs balance sheet and revenue and profit trends will improve in 2020. As they do, GE stock should continue to move higher.
The Valuation Remains Discounted
The third big idea behind the 2020 bull thesis in GE stock is that shares remain discounted relative to the companyâÂÂs intermediate profit growth prospects.
Thanks to the improving economic backdrop and management maintaining disciplined cost control, General Electric should be able to stabilize and potentially even grow sales at a mild pace over the next few years, while margins should improve as revenues rise on a falling expense base. Assuming this dynamic continues to play out, Wall StreetâÂÂs consensus 2021 earnings per share estimate of 86 cents seems entirely doable for this industrial conglomerate.
The average forward earnings multiple in the industrials sector is about 16.5. Based on that industry average multiple, 86 cents in 2021 EPS reasonably equates to a 2020 price target for General Electric stock of over $14.
GE stock trades hands around $11 today. Thus, the fundamentals say that shares could rise another 20%-plus over the next twelve months.
Bottom Line on GE Stock
General Electric has its groove back, in that: 1) the industrial economy is back to expanding, and 2) General Electric is doing everything right to maintain healthy and profitable positioning in that expanding industrial economy. As long as those two things remain true â and so long as GE stock remains reasonably valued, which it does today â then this record rally in GE stock will live on.
As of this writing, Luke Lango did not hold a position in any of the aforementioned securities.
The post appeared first on InvestorPlace.
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Zihan1004/FNSPID | Interesting NTAP Put And Call Options For February 14th
Investors in NetApp, Inc. (Symbol: NTAP) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the NTAP options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $61.50 strike price has a current bid of $2.46. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $61.50, but will also collect the premium, putting the cost basis of the shares at $59.04 (before broker commissions). To an investor already interested in purchasing shares of NTAP, that could represent an attractive alternative to paying $62.16/share today.
Because the $61.50 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 4.00% return on the cash commitment, or 33.95% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for NetApp, Inc., and highlighting in green where the $61.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $62.50 strike price has a current bid of $2.68. If an investor was to purchase shares of NTAP stock at the current price level of $62.16/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $62.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 4.86% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if NTAP shares really soar, which is why looking at the trailing twelve month trading history for NetApp, Inc., as well as studying the business fundamentals becomes important. Below is a chart showing NTAP's trailing twelve month trading history, with the $62.50 strike highlighted in red:
Considering the fact that the $62.50 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 4.31% boost of extra return to the investor, or 36.60% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $62.16) to be 37%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
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Zihan1004/FNSPID | CGC February 14th Options Begin Trading
Investors in Canopy Growth Corp (Symbol: CGC) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the CGC options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $20.00 strike price has a current bid of $1.42. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $20.00, but will also collect the premium, putting the cost basis of the shares at $18.58 (before broker commissions). To an investor already interested in purchasing shares of CGC, that could represent an attractive alternative to paying $20.29/share today.
Because the $20.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 7.10% return on the cash commitment, or 60.27% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Canopy Growth Corp, and highlighting in green where the $20.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $21.50 strike price has a current bid of 71 cents. If an investor was to purchase shares of CGC stock at the current price level of $20.29/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $21.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 9.46% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if CGC shares really soar, which is why looking at the trailing twelve month trading history for Canopy Growth Corp, as well as studying the business fundamentals becomes important. Below is a chart showing CGC's trailing twelve month trading history, with the $21.50 strike highlighted in red:
Considering the fact that the $21.50 strike represents an approximate 6% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.50% boost of extra return to the investor, or 29.70% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $20.29) to be 66%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | RRC February 14th Options Begin Trading
Investors in Range Resources Corp (Symbol: RRC) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the RRC options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $4.50 strike price has a current bid of 35 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $4.50, but will also collect the premium, putting the cost basis of the shares at $4.15 (before broker commissions). To an investor already interested in purchasing shares of RRC, that could represent an attractive alternative to paying $4.69/share today.
Because the $4.50 strike represents an approximate 4% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 7.78% return on the cash commitment, or 66.02% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Range Resources Corp, and highlighting in green where the $4.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $5.00 strike price has a current bid of 30 cents. If an investor was to purchase shares of RRC stock at the current price level of $4.69/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $5.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 13.01% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if RRC shares really soar, which is why looking at the trailing twelve month trading history for Range Resources Corp, as well as studying the business fundamentals becomes important. Below is a chart showing RRC's trailing twelve month trading history, with the $5.00 strike highlighted in red:
Considering the fact that the $5.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 6.40% boost of extra return to the investor, or 54.30% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $4.69) to be 71%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | Is Citigroup's Card Business In Better Shape Than Capital One's?
Citigroup (NYSE: C) and Capital One (NYSE: COF) are among the five largest credit card issuers in the U.S. Since the recession, Citigroup has transformed itself from a financial institution with a significantly diversified business model to one that focuses considerably on core-banking services. Citigroup’s card business has remained a key part of its business model with an average revenue share of 27% over the last decade. In comparison, Capital One is dependent much more on its credit card business, even though the segment’s revenue share has decreased over from 72% in 2008 to 64% in 2018 due to an increase in Capital One’s consumer lending business.
Trefis captures trends in the credit card business for Citigroup vs. Capital One in an interactive dashboard and concludes that although Citigroup has a larger credit card business both in terms of credit card loans and purchase volume, it is less profitable than its peer. Further, Capital One has delivered a better return on credit card loans and generated higher fees per dollar of purchase volume.
Citigroup has higher revenues, but Capital One has shown higher growth over recent years
Although Citigroup has reported higher credit card revenues than Capital One over the last 4 years, its revenues have grown 3% between 2015 and 2018 as opposed to the 21% increase in Capital One’s figure.
Citigroup’s credit card business is bigger than its peer in terms of purchase volume and outstanding card loans. Its segment revenues increased from $19.1 billion in 2015 to $19.7 billion in 2018 – 11% more than Capital One’s figure in 2018.
However, Capital One’s credit card division has grown at a much faster pace than Citigroup – growing at an average annual rate of 6.7% over 2015-2018. Citigroup’s card revenues grew at an average rate of 1.1% over this period.
Going forward, we expect Citigroup’s credit card revenues to improve 6% and cross $20.9 billion in 2019, whereas Capital One is expected to report $18.1 billion in card revenues – up 2.6%.
This growth of 6% in Citigroup’s credit card revenues would be driven by higher net interest income from credit card loans due to an expected increase of 50 bps in the segment’s net interest yield.
Capital one’s annual growth rate has decreased over recent years, from 9% in 2016 to 4% in 2018. This could be attributed to slower growth in outstanding credit card loans and a decrease in fees as % of purchase volume due to an increase in competition in the industry.
Our interactive dashboard for Citigroup details the factors that have driven changes in revenues of Citigroup’s individual revenue streams over recent years along with our forecast for 2019-2020.
Credit cards contributed more than 63% to Capital One’s revenues in 2018, which was 2.4x Citigroup’s figure.
Capital Ones credit card revenues have averaged around 62.9% of total revenues, while Citigroup’s figure was less than half of its peer – around 26.5% of total revenues.
This implies that Capital One is heavily dependent on the credit card business compared to its peer.
Citigroup’s outstanding card loans in 2018 were almost 1.45x of Capital One’s figure.
Citigroup’s outstanding card loans were almost 1.4x of Capital One’s figure over each of the last 4 years.
Additional details about how the outstanding card loans for Citigroup and Capital One has grown over the years are available in our interactive dashboard.
However, Capital One’s net interest yield from credit card loans was 108 bps more than Citigroup’s figure in 2018.
Capital One has reported a higher net interest yield from credit card loans than Citigroup over each of the last three years.
This implies that Capital One is generating better returns on its credit card loans as compared to its peer.
Citigroup’s Card Purchase Volume was 1.4x more than Capital One’s figure in 2018
Purchase Volume is the dollar value of total purchases made on credit cards.
Citigroup’s purchase volume was almost 39% more than its peer over each of the last 4 years.
Additional details about how the purchase volume for Citigroup and Capital One has grown over the years are available in our interactive dashboard.
However, Capital One generates higher fees on every dollar in purchase volume
Although fees as % of purchase volume have decreased for both the banks over recent years, Capital One’s figure of 0.91% in 2018 was still 6.5x of its peer.
As a result of this stark difference in fees percent, Capital One has generated significantly higher fees income than Citigroup despite lower purchase volume.
Capital One reported card fees of $3.5 billion in 2018, which was 4.6x Citigroup’s figure.
Capital One’s credit card business is more profitable than Citigroup despite its higher card provision rate
Higher return on credit card loans and better fees income from purchase volume have helped Capital One’s card division pre-tax margin to average around 22% over the last four years, which was higher than the 15.6% average pre-tax margin for Citigroup’s card business.
Capital One’s credit card business is much more profitable than its peer: it reported a pre-tax margin of 23.5% in 2018 – significantly higher than Citigroup’s figure of 11.8%.
Conclusion: Although Citigroup’s credit card business is larger, Capital One’s card operations are more profitable
Although Citigroup has a larger credit card business both in terms of credit card loans and purchase volume, it is less profitable than its peer.
Capital One has delivered a higher return on credit card loans and has generated more card fees per dollar of card purchase volume.
Citigroup has diversified revenues streams with credit card business contributing almost 27% of total revenues over the last decade. On the other hand, Capital One is heavily dependent on credit card business which accounts for more than 60% of its revenues.
Notably, the difference in credit card revenues for both the banks is not huge, and given the higher return on loans and purchase volume of Capital One, it is possible for Capital One’s card business to grow larger than Citigroup’s in the foreseeable future.
Trefis estimates Citigroup’s stock (shows cash and valuation analysis) to have a fair value of $82, which is roughly 5% higher than the current market price (Our price estimate takes into account Citigroup’s earnings release for the third quarter).
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Zihan1004/FNSPID | Under Armour Stock Appears Balanced Heading Into 2020
In early December, I highlighted Under Armour (NYSE:, NYSE:UAA) stock as a , saying that valuation and operational tailwinds could breathe life back into shares of the athletic apparel maker.
Source: 2p2play / Shutterstock.com
But, there is now one problem with that 2020 bull thesis: UAA stock rallied nearly 15% in December 2019. ThatâÂÂs a big rally in a short amount of time. And, it has entirely changed the bull thesis on the stock. A month ago, UAA was trading at a discounted valuation. Today, though, the valuation appears full. With the discounted valuation part of the bull thesis now gone, Under Armour stock doesnâÂÂt look all that compelling in 2020 anymore.
In other words, a big portion of the 2020 rebound has already been realized in December 2019. That leaves shares with minimal upside potential over the next year.
All else equal, then, I think now is a good time to take profits on Under Armour stock.
Under ArmourâÂÂs Fundamentals Will Improve
Calendar 2019 was a messy year for Under Armour. Sure, UAA stock rose more than 20%, which by itself, constitutes a good year. But, Nike (NYSE:) rose more than 30%, Adidas (OTCMKTS:) rose nearly 60%, and Skechers (NYSE:) and Lululemon (NASDAQ:) both rose about 90%. Thus, relative to peer athletic apparel names, Under Armour was a big underperformer in 2019.
This underperformance was the byproduct of three things. First, revenue growth rates slipped, as the companyâÂÂs international business meaningfully slowed. Second, slowing revenue growth caused margins to slip, as positive operating leverage turned into negative operating leverage. Third, negative optics from a federal investigation into the companyâÂÂs accounting practices as well as C-Suite turnover weighed on investor sentiment.
Those three headwinds will reverse course in 2020, paving the way for Under ArmourâÂÂs fundamentals to materially improve.
Revenue growth rates should rebound, led by stabilization in the international business as geopolitical tensions ease and consumer spending trends pick back up. A weaker dollar should also help boost sales in 2020. This revenue growth rebound will once again drive positive operating leverage, as expense growth rates should not change heading into the new year. At the same time, the into the companyâÂÂs accounting practices could very likely come to an end over the next few quarters.
Big picture â the things which caused underperformance in UAA stock in 2019 will reverse course in 2020, and the fundamentals underlying this company will go from bad to much better.
Under Armour Stock Is Fully Priced
Fundamental improvements alone do not make a stock a strong buy. Instead, fundamental improvements and a discounted valuation are the necessary ingredients for a strong buy stock.
A month ago, Under Armour stock had both of those. Today, it only has one.
In early December 2019, Under Armour stock was trading at $18. That was a sizable discount to , which was based on a few long-term assumptions. First, steady 3%-4% revenue growth over the next few years thanks to sustained athletic apparel market tailwinds, offset somewhat by slight market share erosion because the brand continues to emphasize performance over fashion. Second, continued margin expansion from gross margin improvements and consistent positive operating leverage. Third, earnings per share growth to $1.50 by 2025, driven by low single-digit revenue growth and significant margin improvements.
My long-term assumptions for Under ArmourâÂÂs growth trajectory have not changed over the past month. The price tag on UAA stock has. A month ago, this was an $18 stock, with 25% upside potential in 2020. Today, it is a $21.50 stock, with much less compelling 5% upside potential in 2020.
Because of this, UAA stock no longer looks that great heading into 2020. Yes, fundamental improvements will drive shares higher. But, a full valuation will limit the magnitude and challenge the sustainability of those gains.
Bottom Line on UAA Stock
A month ago, UAA stock looked like a great rebound candidate for 2020, with 20%-plus upside potential over the next 12 months. But, it has since rallied 15% in a month. Yet, the long-term fundamentals underlying shares have not changed.
Thus, the big 2020 rebound in UAA stock has mostly played out in late 2019. Over the next 12 months, UAA stock will likely be choppy, with fundamental improvements being offset by valuation friction.
As of this writing, Luke Lango was long NKE.ÃÂ
The post appeared first on InvestorPlace.
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Zihan1004/FNSPID | Sol-Gel Technologies Gets Makeover, Stock More Than Doubled In A Month
(RTTNews) - Shares of Sol-Gel Technologies Ltd. (SLGL) have more than doubled over the last one month, thanks to positive data from its acne trials.
Sol-Gel Technologies is a clinical-stage dermatology company.
On December 30, 2019, the Company reported positive top-line results from two phase III trials of Twyneo for the treatment of acne vulgaris.
The primary endpoints for both trials included the proportion of patients who succeeded in achieving at least a two-grade reduction from baseline and Clear (grade 0) or Almost Clear (grade 1) at Week 12. Both the trials achieved the primary endpoints. Twyneo was also found to be well tolerated.
Twyneo is an investigational, combination of microencapsulated tretinoin 0.1% and microencapsulated benzoyl peroxide 3% cream. The Company is planning to submit the NDA for Twyneo in the second half of 2020. If approved, Twyneo has the potential to be the first acne vulgaris treatment to bring together benzoyl peroxide and a potent retinoid, tretinoin, in a once-daily cream.
Sol-Gel's lead drug candidate is Epsolay for papulopustular rosacea for which a New Drug Application is expected to be filed in the first half of 2020.
Papulopustular rosacea is a subtype of rosacea, a chronic inflammatory skin condition. It is characterized by persistent redness with transient papules and pastules (bumps and pimples). (Source: NCBI).
The Company's branded pipeline is supplemented by a portfolio of generic product candidates.
A bioequivalence study comparing Sol-Gel Technologies' 5-FU Cream with the marketed Efudex Cream in the treatment of actinic keratosis is underway. The results from this study, due by the end of 2019, are yet to be reported. This study is part of a collaboration with Douglas Pharmaceuticals.
Besides Douglas Pharmaceuticals, Sol-Gel also has a collaboration with Perrigo Company plc (PRGO) for generic product candidates.
Sol-Gel has seven collaborations with Perrigo and one with Douglas Pharmaceuticals for its generics portfolio with 50/50 gross profit sharing.
In January 2018, Perrigo received tentative approval from the FDA for Ivermectin cream, 1%, developed in collaboration with Sol-Gel, for the treatment of rosacea. In February 2019, Perrigo received approval from the FDA and launched the sale of acyclovir cream, 5%, developed in collaboration with Sol-Gel, for herpes.
Balance Sheet…
Sol-Gel reported a loss of $7.4 million or $0.35 per share for the third quarter of 2019 compared to a loss of $7.7 million or $0.40 per share for the same period in 2018.
Revenue from sales of a generic product from the collaboration arrangement with Perrigo in the third quarter of 2019 was $4.7 million compared to $38 thousand in the year-ago quarter and $7.8 million in the second quarter of 2019. The decrease in revenue from the previous quarter follows the entry of an authorized generic product to the market.
As of September 30, 2019, Sol-Gel had $7.6 million in cash, cash equivalents and deposits and $50.1 million in marketable securities for a total balance of $57.7 million. Based on current assumptions, the existing cash resources are expected to be sufficient to fund operational and capital expenditure requirements into the first quarter of 2021.
SLGL has traded in a range of $5.71 to $21.00 in the last 1 year. The stock closed Tuesday's (Dec.31, 2019) trading at $17.15, up 17.47%.
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Zihan1004/FNSPID | UPRO February 14th Options Begin Trading
Investors in ProShares Trust - ProShares UltraPro S&P 500 (Symbol: UPRO) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the UPRO options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $64.00 strike price has a current bid of 90 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $64.00, but will also collect the premium, putting the cost basis of the shares at $63.10 (before broker commissions). To an investor already interested in purchasing shares of UPRO, that could represent an attractive alternative to paying $70.61/share today.
Because the $64.00 strike represents an approximate 9% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 1.41% return on the cash commitment, or 11.94% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for ProShares Trust - ProShares UltraPro S&P 500, and highlighting in green where the $64.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $71.50 strike price has a current bid of $1.70. If an investor was to purchase shares of UPRO stock at the current price level of $70.61/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $71.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.67% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if UPRO shares really soar, which is why looking at the trailing twelve month trading history for ProShares Trust - ProShares UltraPro S&P 500, as well as studying the business fundamentals becomes important. Below is a chart showing UPRO's trailing twelve month trading history, with the $71.50 strike highlighted in red:
Considering the fact that the $71.50 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.41% boost of extra return to the investor, or 20.44% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $70.61) to be 37%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | Interesting AIG Put And Call Options For February 14th
Investors in American International Group Inc (Symbol: AIG) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the AIG options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $51.00 strike price has a current bid of $1.38. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $51.00, but will also collect the premium, putting the cost basis of the shares at $49.62 (before broker commissions). To an investor already interested in purchasing shares of AIG, that could represent an attractive alternative to paying $51.27/share today.
Because the $51.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 2.71% return on the cash commitment, or 22.97% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for American International Group Inc, and highlighting in green where the $51.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $52.00 strike price has a current bid of $1.25. If an investor was to purchase shares of AIG stock at the current price level of $51.27/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $52.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.86% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if AIG shares really soar, which is why looking at the trailing twelve month trading history for American International Group Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AIG's trailing twelve month trading history, with the $52.00 strike highlighted in red:
Considering the fact that the $52.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.44% boost of extra return to the investor, or 20.70% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $51.27) to be 23%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | Here's Why Mirum Pharmaceuticals' Stock Jumped in December
Mirum Pharmaceuticals (NASDAQ: MIRM) may not sound familiar, even to biotech investors; this company only went public in July. The stock spent much of the last few months trading in the $7 to $8 range, roughly a 50% haircut from its $15 IPO price. Then came developments with the U.S. Food and Drug Administration (FDA) in December, causing the stock to jump to the mid-$20 range where it sits today.
Mirum seeks to develop new treatments for debilitating liver diseases. Its lead drug maralixibat generated statistically and clinically significant, durable responses in children with Alagille syndrome, a rare genetic disorder that causes the bile ducts to be abnormally narrow, deformed, and reduced in number. This leads to an accumulation of bile in the liver, causing decreased liver function, chronic and severe itching called pruritus, jaundice, and stunted growth of the child. Mirum's maralixibat allows for excess bile to be excreted by the body, thereby lowering toxic levels of bile responsible for the liver damage.
Image Source: Getty Images.
What happened?
In December, Mirum announced that it held a successful meeting with the FDA regarding maralixibat as a treatment for pruritus in patients with Alagille syndrome. The drug allows the body to clear some of the excess bile, which in turn, reduces the severe symptoms like pruritus. Drug developers typically meet with the FDA prior to filing a New Drug Application (NDA) to make sure everyone is on the same page about what will be included in the submission for approval.
What appears to have transpired is that Mirum requested a Type C meeting, which is informational in nature. However, the FDA proactively changed the type of meeting from Type C to a pre-NDA meeting. To the casual observer, this may not seem like much. In reality, the distinction about which type of FDA meeting is held carries significant weight. The FDA only permits one pre-NDA meeting per drug per disease.
The fact that the FDA proactively changed the meeting type demonstrates the agency's desire to work with Mirum to bring the drug to market. Maralixibat previously garnered the FDA's Breakthrough Therapy designation, which facilitates greater interaction with the agency prior to approval. It does not guarantee that it will get approved.
Mirum still needs to prepare and complete the full NDA submission as well as demonstrate the ability to consistently manufacture the drug. Along these lines, Mirum also announced that it held a dedicated meeting with the FDA on chemistry, manufacturing, and controls, commonly referred to as CMC.
Mirum plans to submit a rolling NDA, meaning the components of the submission will be sent to the FDA as they are ready. It also allows the FDA to begin reviewing parts of the NDA sooner. The first section is slated to be submitted in the third quarter of 2020, with the CMC portion going in during the first quarter of 2021.
The FDA, in most cases, requires three separate batches of a drug to be manufactured and the documentation submitted to show that it can be reproducibly made. Mirum is likely working on one or more of these batches, resulting in the CMC filing timeline in early 2021.
Mirum targets rare liver diseases
In addition, Mirum is currently enrolling a phase 3 clinical trial with maralixibat as a treatment for progressive familial intrahepatic cholestasis (PFIC). According to the company, this rare genetic disease affects one in 50,000 to 100,000 births in the U.S. and Europe. Mirum estimates there are about 3,000 patients in the U.S. and 5,000 in Europe.
Mirum also has a second drug candidate named volixibat, which selectively inhibits a protein responsible for recycling bile acids from the intestine to the liver. In 2020, Mirum expects to start phase 2 clinical trials with volixibat for primary sclerosing cholangitis and intrahepatic cholestasis of pregnancy.
What do investors think?
As of Sept. 30, more than 70% of the stock was held by institutions. This seems reasonable considering the venture firms backing it prior to the IPO still own their positions. Healthcare investing heavyweights Baker Bros., Alyeska Investment, and Rock Springs Capital own a sizable amount. Takeda Pharmaceutical owns 8.1% due to its acquisition of Shire, which licensed the rights to develop and commercialize maralixibat and volixibat to Mirum.
Analysts tagged Mirum with buy ratings and targets from $27 to $33 per share. From today's stock price around $24.50, that implies 10% to 35% upside. The next significant catalyst will be phase 3 data at the end of 2020 for maralixibat in PFIC. The earliest time for an approval is 2021. Therefore, while Mirum's results are promising, I think investors can either slowly add on the stock during any dips or hold off buying until the second half of 2020.
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Zihan1004/FNSPID | Americold Realty Trust Breaks Below 200-Day Moving Average - Notable for COLD
In trading on Thursday, shares of Americold Realty Trust (Symbol: COLD) crossed below their 200 day moving average of $34.38, changing hands as low as $33.98 per share. Americold Realty Trust shares are currently trading off about 2% on the day. The chart below shows the one year performance of COLD shares, versus its 200 day moving average:
Looking at the chart above, COLD's low point in its 52 week range is $24.57 per share, with $40.42 as the 52 week high point — that compares with a last trade of $34.34.
Click here to find out which 9 other dividend stocks recently crossed below their 200 day moving average »
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Zihan1004/FNSPID | NOAH Makes Bullish Cross Above Critical Moving Average
In trading on Thursday, shares of Noah Holdings Ltd (Symbol: NOAH) crossed above their 200 day moving average of $36.55, changing hands as high as $37.17 per share. Noah Holdings Ltd shares are currently trading up about 4.8% on the day. The chart below shows the one year performance of NOAH shares, versus its 200 day moving average:
Looking at the chart above, NOAH's low point in its 52 week range is $26.48 per share, with $60.14 as the 52 week high point — that compares with a last trade of $37.05.
Click here to find out which 9 other stocks recently crossed above their 200 day moving average »
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Zihan1004/FNSPID | MS February 14th Options Begin Trading
Investors in Morgan Stanley (Symbol: MS) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the MS options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $51.00 strike price has a current bid of $1.47. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $51.00, but will also collect the premium, putting the cost basis of the shares at $49.53 (before broker commissions). To an investor already interested in purchasing shares of MS, that could represent an attractive alternative to paying $51.31/share today.
Because the $51.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 2.88% return on the cash commitment, or 24.47% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Morgan Stanley, and highlighting in green where the $51.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $52.00 strike price has a current bid of $1.11. If an investor was to purchase shares of MS stock at the current price level of $51.31/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $52.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.51% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if MS shares really soar, which is why looking at the trailing twelve month trading history for Morgan Stanley, as well as studying the business fundamentals becomes important. Below is a chart showing MS's trailing twelve month trading history, with the $52.00 strike highlighted in red:
Considering the fact that the $52.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.16% boost of extra return to the investor, or 18.36% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $51.31) to be 23%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | SHO Makes Notable Cross Below Critical Moving Average
In trading on Thursday, shares of Sunstone Hotel Investors Inc (Symbol: SHO) crossed below their 200 day moving average of $13.83, changing hands as low as $13.77 per share. Sunstone Hotel Investors Inc shares are currently trading down about 1% on the day. The chart below shows the one year performance of SHO shares, versus its 200 day moving average:
Looking at the chart above, SHO's low point in its 52 week range is $12.54 per share, with $15.4912 as the 52 week high point — that compares with a last trade of $13.77.
Click here to find out which 9 other dividend stocks recently crossed below their 200 day moving average »
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Zihan1004/FNSPID | Why Signet Jewelers Plunged Today
What happened
Shares of Signet Jewelers (NYSE: SIG) were down 14.8% as of 11:00 a.m. EST Thursday after analysts at Wells Fargo (NYSE: WFC) downgraded the parent company of jewelry chains including Kay, Zales, Jared, and Piercing Pagoda.
So what
More specifically, Wells Fargo's Ike Boruchow lowered his rating on Signet stock to underweight from equal weight, simultaneously reducing his per-share price target to $12 from $16 -- a steep discount from its previous close at $21.74 per share.
IMAGE SOURCE: GETTY IMAGES.
It likely didn't help that Signet shares rallied 25% last month -- a swift move upward spurred by the company's better-than-expected fiscal third-quarter 2020 results. To be fair, while those results handily outpaced analysts' consensus expectations, they weren't exactly stellar at a glance; revenue declined 0.3% (as store closures offset a modest 2.1% increase in same-store sales), translating to an adjusted net loss of $0.76 per share.
But Boruchow wasn't impressed, pointing to Signet's "very challenging" year, in which it battled tariffs and difficult year-over-year comparisons while working to implement its "Path to Brilliance" transformation plan. He further argued Signet's core business continues to face challenges, particularly as its credit segment remains "an overhang" to its consolidated results.
Now what
If the timing of Signet's past releases is any indication, investors could receive fresh color on its progress later this month as the company details its performance during the crucial fiscal 2020 holiday season.
Given its rapid gains last month and these words of caution from Wall Street in the meantime, however, it's no surprise to see shares of this consumer discretionary stock pulling back hard today.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 595 |
Zihan1004/FNSPID | February 14th Options Now Available For Fluor (FLR)
Investors in Fluor Corp. (Symbol: FLR) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the FLR options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $18.50 strike price has a current bid of 15 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $18.50, but will also collect the premium, putting the cost basis of the shares at $18.35 (before broker commissions). To an investor already interested in purchasing shares of FLR, that could represent an attractive alternative to paying $18.81/share today.
Because the $18.50 strike represents an approximate 2% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.81% return on the cash commitment, or 6.88% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Fluor Corp., and highlighting in green where the $18.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $19.00 strike price has a current bid of 10 cents. If an investor was to purchase shares of FLR stock at the current price level of $18.81/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $19.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 1.54% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if FLR shares really soar, which is why looking at the trailing twelve month trading history for Fluor Corp., as well as studying the business fundamentals becomes important. Below is a chart showing FLR's trailing twelve month trading history, with the $19.00 strike highlighted in red:
Considering the fact that the $19.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 0.53% boost of extra return to the investor, or 4.51% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $18.81) to be 61%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 884 |
Zihan1004/FNSPID | Interesting COF Put And Call Options For February 14th
Investors in Capital One Financial Corp (Symbol: COF) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the COF options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $101.00 strike price has a current bid of $2.24. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $101.00, but will also collect the premium, putting the cost basis of the shares at $98.76 (before broker commissions). To an investor already interested in purchasing shares of COF, that could represent an attractive alternative to paying $102.45/share today.
Because the $101.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 2.22% return on the cash commitment, or 18.83% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Capital One Financial Corp, and highlighting in green where the $101.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $103.00 strike price has a current bid of $2.36. If an investor was to purchase shares of COF stock at the current price level of $102.45/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $103.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 2.84% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if COF shares really soar, which is why looking at the trailing twelve month trading history for Capital One Financial Corp, as well as studying the business fundamentals becomes important. Below is a chart showing COF's trailing twelve month trading history, with the $103.00 strike highlighted in red:
Considering the fact that the $103.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.30% boost of extra return to the investor, or 19.55% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $102.45) to be 24%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 900 |
Zihan1004/FNSPID | Notable Thursday Option Activity: LVS, ATVI, NOC
Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Las Vegas Sands Corp (Symbol: LVS), where a total volume of 18,502 contracts has been traded thus far today, a contract volume which is representative of approximately 1.9 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 56.5% of LVS's average daily trading volume over the past month, of 3.3 million shares. Especially high volume was seen for the $71 strike call option expiring January 03, 2020, with 7,367 contracts trading so far today, representing approximately 736,700 underlying shares of LVS. Below is a chart showing LVS's trailing twelve month trading history, with the $71 strike highlighted in orange:
Activision Blizzard, Inc. (Symbol: ATVI) saw options trading volume of 26,483 contracts, representing approximately 2.6 million underlying shares or approximately 54.5% of ATVI's average daily trading volume over the past month, of 4.9 million shares. Especially high volume was seen for the $55 strike put option expiring February 21, 2020, with 8,079 contracts trading so far today, representing approximately 807,900 underlying shares of ATVI. Below is a chart showing ATVI's trailing twelve month trading history, with the $55 strike highlighted in orange:
And Northrop Grumman Corp (Symbol: NOC) options are showing a volume of 4,125 contracts thus far today. That number of contracts represents approximately 412,500 underlying shares, working out to a sizeable 48.2% of NOC's average daily trading volume over the past month, of 855,035 shares. Especially high volume was seen for the $355 strike call option expiring January 03, 2020, with 386 contracts trading so far today, representing approximately 38,600 underlying shares of NOC. Below is a chart showing NOC's trailing twelve month trading history, with the $355 strike highlighted in orange:
For the various different available expirations for LVS options, ATVI options, or NOC options, visit StockOptionsChannel.com.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 626 |
Zihan1004/FNSPID | Interesting MGM Put And Call Options For February 14th
Investors in MGM Resorts International (Symbol: MGM) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the MGM options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $31.50 strike price has a current bid of 45 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $31.50, but will also collect the premium, putting the cost basis of the shares at $31.05 (before broker commissions). To an investor already interested in purchasing shares of MGM, that could represent an attractive alternative to paying $33.33/share today.
Because the $31.50 strike represents an approximate 5% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 1.43% return on the cash commitment, or 12.13% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for MGM Resorts International, and highlighting in green where the $31.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $34.00 strike price has a current bid of 71 cents. If an investor was to purchase shares of MGM stock at the current price level of $33.33/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $34.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 4.14% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if MGM shares really soar, which is why looking at the trailing twelve month trading history for MGM Resorts International, as well as studying the business fundamentals becomes important. Below is a chart showing MGM's trailing twelve month trading history, with the $34.00 strike highlighted in red:
Considering the fact that the $34.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.13% boost of extra return to the investor, or 18.08% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $33.33) to be 26%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of Stocks Conducting Buybacks »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 875 |
Zihan1004/FNSPID | iShares TIPS Bond ETF Experiences Big Inflow
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares TIPS Bond ETF (Symbol: TIP) where we have detected an approximate $93.3 million dollar inflow -- that's a 0.5% increase week over week in outstanding units (from 177,200,000 to 178,000,000). The chart below shows the one year price performance of TIP, versus its 200 day moving average:
Looking at the chart above, TIP's low point in its 52 week range is $109.50 per share, with $118.215 as the 52 week high point — that compares with a last trade of $117.09. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 407 |
Zihan1004/FNSPID | February 14th Options Now Available For Apache (APA)
Investors in Apache Corp (Symbol: APA) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the APA options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $25.00 strike price has a current bid of $1.32. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $25.00, but will also collect the premium, putting the cost basis of the shares at $23.68 (before broker commissions). To an investor already interested in purchasing shares of APA, that could represent an attractive alternative to paying $25.33/share today.
Because the $25.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 5.28% return on the cash commitment, or 44.82% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Apache Corp, and highlighting in green where the $25.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $25.50 strike price has a current bid of $1.30. If an investor was to purchase shares of APA stock at the current price level of $25.33/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $25.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 5.80% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if APA shares really soar, which is why looking at the trailing twelve month trading history for Apache Corp, as well as studying the business fundamentals becomes important. Below is a chart showing APA's trailing twelve month trading history, with the $25.50 strike highlighted in red:
Considering the fact that the $25.50 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 5.13% boost of extra return to the investor, or 43.56% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $25.33) to be 49%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 876 |
Zihan1004/FNSPID | NKE February 14th Options Begin Trading
Investors in Nike (Symbol: NKE) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the NKE options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $97.00 strike price has a current bid of 77 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $97.00, but will also collect the premium, putting the cost basis of the shares at $96.23 (before broker commissions). To an investor already interested in purchasing shares of NKE, that could represent an attractive alternative to paying $101.36/share today.
Because the $97.00 strike represents an approximate 4% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.79% return on the cash commitment, or 6.74% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Nike, and highlighting in green where the $97.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $102.00 strike price has a current bid of 29 cents. If an investor was to purchase shares of NKE stock at the current price level of $101.36/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $102.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 0.92% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if NKE shares really soar, which is why looking at the trailing twelve month trading history for Nike, as well as studying the business fundamentals becomes important. Below is a chart showing NKE's trailing twelve month trading history, with the $102.00 strike highlighted in red:
Considering the fact that the $102.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 0.29% boost of extra return to the investor, or 2.43% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $101.36) to be 21%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Dow »
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Zihan1004/FNSPID | That Nike Store You Walked By Made $34 Million For Nike’s Stock
Nike (NYSE: NKE) is the largest athletic apparel company in the world. The company has achieved unparalleled growth in the apparel industry and is still going strong. This growth has been driven by upbeat performance for the retail (store) as well as direct to consumer (DTC) channels. Nike has been able to adapt to changing market dynamics quickly, with the company’s DTC (e-commerce as well as direct stores) segment witnessing tremendous growth over the last couple of years – helping Nike’s average store revenue cross $34 million in 2018.
Trefis compares average revenue per store for athletic apparel companies Nike, Under Armour and Lululemon in its interactive dashboard and concludes that Nike’s average per store revenue of $34 million in 2018 is more than 3 times the figure for competitor, Under Armour.
How Does The Average Revenue Per Store Of Athletic Apparel Companies Compare To Each Other?
*Includes total revenues for calculation of per-store revenues
Athletic apparel companies refers to those companies that primarily sell sports apparel and footwear products. Although a large percentage of the products are worn for casual or leisure purposes, the focus of these companies is to develop sportswear products.
Among the athletic apparel companies, Nike has the highest average revenue per store of $34 million.
On the flip side, other athletic apparel companies are way behind, with Under Armour generating sales of $10.4 million per store while Lululemon was further behind at $7.5 million.
How Does The Store Count Of Athletic Apparel Companies Compare To Each Other?
Notably, Nike has the largest store count among the athletic apparel companies. Nike’s store count of 1,150 at the end of 2018 was more than double to that of Under Armour’s 498. Lululemon was further behind at 440.
However, over 2015-2018, Under Armour has been rapidly adding to its store count, with the company opening more than 150 new stores (net of closure).
How Has Nike’s Average Revenue Per Store Trended Over The Last Few Years?
Nike’s average revenue per store has increased 10% over 2015-18 – going up from $31 million in 2015 to $34 million in 2018.
Although Nike has opened 154 new stores over this time-frame, Nike’s revenue growth has comfortably outpaced new store openings.
Nike’s revenue has witnessed a growth of 21% over the last four years led by growth across NIKE Direct and wholesale, key categories including Sportswear and the Jordan Brand, and continued growth across footwear and apparel.
Under Armour Average Revenue Per Store Has Steadily Declined Over The Last Couple of years
Lululemon’s Average Revenue Per Store Has Seen Robust Growth Over The Years
Additional details about how average store revenues for Lululemon and Under Armours have changed over recent years are available in our interactive dashboard.
Conclusion: Nike is the market leader and has done well to consolidate its position over the years
Nike has achieved robust growth over the years and is showing no signs of slowing down.
Despite having a larger number of stores, Nike’s average revenue per store is significantly ahead of its peers.
Although Lululemon is growing at a faster pace than Nike, it has a smaller scale than Nike.
Given Nike’s outreach among the consumers and geographical penetration, it is highly unlikely that any other athletic apparel company would be able to match Nike’s position in the apparel market.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 842 |
Zihan1004/FNSPID | Thursday Sector Leaders: Defense, Application Software Stocks
In trading on Thursday, defense shares were relative leaders, up on the day by about 1.6%. Leading the group were shares of Northrop Grumman, up about 2.1% and shares of Aerojet Rocketdyne Holdings up about 2% on the day.
Also showing relative strength are application software shares, up on the day by about 0.9% as a group, led by Renren, trading higher by about 12.1% and Telaria, trading higher by about 9.5% on Thursday.
VIDEO: Thursday Sector Leaders: Defense, Application Software Stocks
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Zihan1004/FNSPID | Looking Abroad For Real Estate ETF Opportunities in 2020
T
he combination of three interest rate reductions by the Federal Reserve and investors' preference for lower volatility assets was efficacious for real estate equities as highlighted by a 24.43% gain for the widely followed MSCI US Investable Market Real Estate 25/50 Index.
With 2020 here and with expectations plentiful that international stocks could finally outpace their U.S. rivals this year, ex-US real estate assets, including exchange traded funds (ETFs) could be worth considering in the new year. That includes the Vanguard Global ex-U.S. Real Estate ETF (VNQI).
Although investors are often under-allocated to international stocks, VNQI has carved out a niche for itself as it has $5.9 billion in assets under management. Much of that enthusiasm is derived from VNQI's low fee of just 0.12% per year, or $12 on a $10,000 investment, a hallmark of many Vanguard ETFs.
“This fund tracks a market-cap-weighted index that is representative of the opportunity set available to investors in this market segment,” said Morningstar in a recent note. “It also has a durable edge over peers in the form of its lowest-in-class expense ratio.”
Important Differences
VNQI is a worthwhile choice for income-hungry investors looking to augment other international holdings with some real estate exposure. The Vanguard fund yields about 3.60%, which is well above domestic real estate benchmarks as well as some ex-US indexes.
Additionally, many traditional international equity indexes are light on real estate names. For example, the MSCI ACWI ex USA Index devotes just 3.25% of its weight to the real estate sector, its smallest sector allocation.
There are other important differences between VNQI and domestic equivalents. For example, many US-focused real estate ETFs are heavily allocated to real estate investment trusts (REITs). Yes, there are REITs in international real estate funds, but VNQI's 47% weight to the asset class is comparatively light.
“Its remaining holdings are engaged in a diverse array of real-estate-related activities and include real estate operating companies, real estate developers, and non-REIT property managers,” according to Morningstar. “Developers construct buildings on new or underutilized land. Unlike REITs, which are restricted from building in some nations, developers can take on more-speculative projects. Developers are more volatile than REITs because their cash flows are less predictable, and payout ratios are generally much lower.”
The combination of property developers exposure and a 20.60% weight to emerging markets could spell increased volatility for VNQI, but as the chart below indicates, the fund was less volatile than its domestic counterpart over the past three years.
Outlook For Interest Rates
As is the case with a domestic real estate ETF, investors considering VNQI need to be aware of interest rate moves by central banks.
Fortunately, the fund allocates about 49% of its combined weight to Japan and Europe, regions where interest hikes appear unlikely in 2020. Additionally, the bulk of the countries comprising VNQI's 20.60% weight to emerging markets aren't credible raisers of borrowing costs entering the new year.
Although homebuilders and publicly traded real estate agents are excluded, VNQI is still home to nearly 700 components, giving it a substantially deeper bench than rival funds in the category.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 763 |
Zihan1004/FNSPID | February 14th Options Now Available For NIO
Investors in NIO Inc (Symbol: NIO) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the NIO options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $3.50 strike price has a current bid of 59 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $3.50, but will also collect the premium, putting the cost basis of the shares at $2.91 (before broker commissions). To an investor already interested in purchasing shares of NIO, that could represent an attractive alternative to paying $3.63/share today.
Because the $3.50 strike represents an approximate 4% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 16.86% return on the cash commitment, or 143.09% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for NIO Inc, and highlighting in green where the $3.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $5.00 strike price has a current bid of 13 cents. If an investor was to purchase shares of NIO stock at the current price level of $3.63/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $5.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 41.32% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if NIO shares really soar, which is why looking at the trailing twelve month trading history for NIO Inc, as well as studying the business fundamentals becomes important. Below is a chart showing NIO's trailing twelve month trading history, with the $5.00 strike highlighted in red:
Considering the fact that the $5.00 strike represents an approximate 38% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.58% boost of extra return to the investor, or 30.40% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $3.63) to be 99%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 874 |
Zihan1004/FNSPID | February 14th Options Now Available For ArcelorMittal SA (MT)
Investors in ArcelorMittal SA (Symbol: MT) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the MT options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $16.50 strike price has a current bid of 21 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $16.50, but will also collect the premium, putting the cost basis of the shares at $16.29 (before broker commissions). To an investor already interested in purchasing shares of MT, that could represent an attractive alternative to paying $17.79/share today.
Because the $16.50 strike represents an approximate 7% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 1.27% return on the cash commitment, or 10.80% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for ArcelorMittal SA, and highlighting in green where the $16.50 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $19.00 strike price has a current bid of 22 cents. If an investor was to purchase shares of MT stock at the current price level of $17.79/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $19.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 8.04% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if MT shares really soar, which is why looking at the trailing twelve month trading history for ArcelorMittal SA, as well as studying the business fundamentals becomes important. Below is a chart showing MT's trailing twelve month trading history, with the $19.00 strike highlighted in red:
Considering the fact that the $19.00 strike represents an approximate 7% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 1.24% boost of extra return to the investor, or 10.50% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $17.79) to be 44%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | S&P 500 Movers: LB, WDC
In early trading on Thursday, shares of Western Digital topped the list of the day's best performing components of the S&P 500 index, trading up 4.3%. Year to date, Western Digital registers a 3.5% gain.
And the worst performing S&P 500 component thus far on the day is L Brands, trading down 2.1%. L Brands, is lower by about 2.1% looking at the year to date performance.
Two other components making moves today are HanesBrands, trading down 2.0%, and Advanced Micro Devices, trading up 3.6% on the day.
VIDEO: S&P 500 Movers: LB, WDC
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Zihan1004/FNSPID | Jumia Faces an Uncertain Future as it Retreats from Key Markets
Jumia Technologies (NYSE: JMIA), the self-styled 'Amazon of Africa,' has had a rough time since its IPO in April 2019. The Africa-focused e-commerce platform currently trades at a fraction of its earlier unicorn valuation as it continues to post massive losses. Even Jumia's management seems to be losing faith in the old business model -- retreating from non-core markets as part of a pivot toward JumiaPay, the company's fast-growing fintech offering.
Jumia recently ended operations in Rwanda and divested its hotel and flight service, Jumia Travel, to a South African partner. While these divestments may buy time for Jumia to rework its business model, investors should avoid the tech stock until the company's long-term vision becomes clearer.
Africa's first unicorn start-up
Initially valued at $1.1 billion, Jumia was the first Africa-focused start-up to earn a unicorn valuation and list on the New York Stock Exchange. Although initially well received, things quickly went downhill for the e-commerce platform.
Image Source: Jumia
The situation reached a head in May 2019 when short-seller Andrew Left of Citron Research published a scathing report alleging fraud on Jumia's marketplace. Citron claimed to have obtained a confidential presentation from October 2018 that showed material discrepancies with the information Jumia reported to the SEC in its IPO filing. The short-seller accused Jumia of inflating active user numbers and pointed out the massive amount of deliveries that were being returned, canceled, or not delivered.
In August, the company responded in its second-quarter earnings report:
"As disclosed in our prospectus dated April 11, 2019, we received information alleging that some of our independent sales consultants, members of our JForce program in Nigeria, may have engaged in improper sales practices. In response, we launched a review of sales practices covering all our countries of operation and data from January 1, 2017, to June 30, 2019."
But fraud allegations aren't the only problem at Jumia. The firm's core e-commerce operations seem to be in trouble.
Lower quality customers and mounting losses
The third-quarter earnings report revealed that while annual active consumers grew by 56%, average order value fell 29%. This trend suggests that while Jumia's marketplace is still growing at an impressive rate, it may be attracting lower-quality customers.
More evidence for Jumia's declining customer value can be found in Jumia's fulfillment expense -- which rose 55% quarter-over-quarter due to a higher proportion of orders shipped from overseas and/or delivered to locations outside of primary cities. Meanwhile, losses continue to mount, increasing to 54.6 million euros from 40.6 million euros quarter over quarter.
Consolidating the business
But Jumia's third quarter wasn't all bad news.
The report revealed impressive performance in JumiaPay, the company's payment processor which management hopes to eventually develop into a stand-alone entity. The fintech offering grew by 95% in total payment volume and 262% in total transaction volume.
Jumia seems to be consolidating its business in an attempt to stem losses and pivot to its more promising JumiaPay platform.
Jumia announced plans to suspend on-demand food delivery in Rwanda and close all customer accounts on Dec. 9, 2019. This comes not long after its retreat from Tanzania and Cameroon. The company is also divesting Jumia Travel, its hotel and flight service, to Travelstart for an undisclosed amount.
When the divestments go through, Jumia will operate in only 11 countries, down from 14 at the time of its IPO. While these divestments will hurt revenue growth in the short-term, they may improve margins and buy time for Jumia to focus on developing JumiaPay.
Right now, JumiaPay is active in six countries, including Nigeria and Egypt -- the company's largest markets in terms of GDP and population size. Management seems to be consolidating the business around the markets where JumiaPay can achieve maximum scale.
What is the long-term outlook for Jumia?
Jumia's future will depend on how well it can pivot to fintech -- using its e-commerce platform as a way to drive adoption of its payments platform -- much like how eBay's popularity boosted Paypal.
But while there is hope for the company over the long-term, investors should avoid the stock until more information becomes available.
The constant string of divestments suggests there is still more downside from current prices. Investors should look to the fourth quarter to see if growth in JumiaPay will make up for the losses elsewhere in the business.
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Zihan1004/FNSPID | Interesting PXD Put And Call Options For February 14th
Investors in Pioneer Natural Resources Co (Symbol: PXD) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the PXD options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $150.00 strike price has a current bid of $5.40. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $150.00, but will also collect the premium, putting the cost basis of the shares at $144.60 (before broker commissions). To an investor already interested in purchasing shares of PXD, that could represent an attractive alternative to paying $151.26/share today.
Because the $150.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 3.60% return on the cash commitment, or 30.56% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Pioneer Natural Resources Co, and highlighting in green where the $150.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $152.50 strike price has a current bid of $5.70. If an investor was to purchase shares of PXD stock at the current price level of $151.26/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $152.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 4.59% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if PXD shares really soar, which is why looking at the trailing twelve month trading history for Pioneer Natural Resources Co, as well as studying the business fundamentals becomes important. Below is a chart showing PXD's trailing twelve month trading history, with the $152.50 strike highlighted in red:
Considering the fact that the $152.50 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.77% boost of extra return to the investor, or 31.99% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $151.26) to be 36%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of Stocks Analysts Like »
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Zihan1004/FNSPID | CRON February 14th Options Begin Trading
Investors in Cronos Group Inc (Symbol: CRON) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the CRON options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $7.00 strike price has a current bid of 11 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $7.00, but will also collect the premium, putting the cost basis of the shares at $6.89 (before broker commissions). To an investor already interested in purchasing shares of CRON, that could represent an attractive alternative to paying $7.49/share today.
Because the $7.00 strike represents an approximate 7% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 1.57% return on the cash commitment, or 13.34% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Cronos Group Inc, and highlighting in green where the $7.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $10.00 strike price has a current bid of 13 cents. If an investor was to purchase shares of CRON stock at the current price level of $7.49/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $10.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 35.25% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if CRON shares really soar, which is why looking at the trailing twelve month trading history for Cronos Group Inc, as well as studying the business fundamentals becomes important. Below is a chart showing CRON's trailing twelve month trading history, with the $10.00 strike highlighted in red:
Considering the fact that the $10.00 strike represents an approximate 34% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 87%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 1.74% boost of extra return to the investor, or 14.73% annualized, which we refer to as the YieldBoost.
The implied volatility in the call contract example above is 77%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $7.49) to be 68%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | Noteworthy ETF Outflows: RFG, SEDG, MTDR, OLED
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco S&P MidCap 400— Pure Growth ETF (Symbol: RFG) where we have detected an approximate $222.1 million dollar outflow -- that's a 35.8% decrease week over week (from 4,050,000 to 2,600,000). Among the largest underlying components of RFG, in trading today SolarEdge Technologies Inc (Symbol: SEDG) is up about 1.9%, Matador Resources Co (Symbol: MTDR) is up about 0.5%, and Universal Display Corp (Symbol: OLED) is higher by about 0.7%. For a complete list of holdings, visit the RFG Holdings page » The chart below shows the one year price performance of RFG, versus its 200 day moving average:
Looking at the chart above, RFG's low point in its 52 week range is $128.348 per share, with $155 as the 52 week high point — that compares with a last trade of $153.15. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs experienced notable outflows »
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Zihan1004/FNSPID | Why 2020 Could be Another Big Year for Luckin Coffee Stock
Small but rapidly expanding Chinese coffee retailer Luckin Coffee (NYSE:) hit the public markets with a May 2019 initial public offering (IPO) at a price of $17 per share. In the days following its debut, I called LK stock a long-term winner.
Source: Keitma / Shutterstock.com
A few months later, I doubled down on that thesis, arguing that the coffee chain is a both now and for the long haul.
Indeed, Luckin Coffee stock today trades hands at $40, up a whopping 135% from its IPO price. ThatâÂÂs an impressive rally, especially considering that the 58-stock Renaissance IPO ETF (NYSEARCA:) is flat over that same stretch.
In other words, while IPO stocks have fallen flat over the past six months, LK stock has not. Instead, itâÂÂs more than doubled. ThereâÂÂs a reason for this out-performance, and that reason is that Luckin Coffee has consistently been undervalued relative to its enormous growth opportunity in ChinaâÂÂs rapidly expanding retail coffee market.
Fortunately for bulls, all of this remains true today. LuckinâÂÂs growth drivers remain robust. The growth opportunity remains large. And, importantly, LK stock remains undervalued relative to the companyâÂÂs long-term growth potential, even after a 100%-plus rise in 2019.
Thus, a new year wonâÂÂt mark the end of the LK stock rally. Instead, it will be an extension of the rally. In 2020, LK stock can and will continue to head significantly higher. Prices above $50 are not out of the question for this growth stock over the next twelve months.
Fundamentals Will Remain Strong
The fundamentals underlying LK stock are very strong, and will only improve in 2020. As WhatâÂÂs on Weibo, a website that in China, noted, in âÂÂthe motherland of tea, coffee is rapidly gaining in popularity.âÂÂ
The story here is pretty simple. Chinese consumers donâÂÂt drink a lot of coffee. They average about three cups of coffee per year. Here in America, U.S. consumers drink about 360 cups of coffee per year. But, ChinaâÂÂs consumers, especially the young ones, are starting to adopt Western coffee drinking habits in a big way, and coffee consumption rates throughout the country have been growing at a for several years. Further, because this is a youth-driven trend, it is likely to persist in a big way for a lot longer.
That means that over the next decade, there will tremendous growth in ChinaâÂÂs retail coffee market. Luckin Coffee is at the heart of this growth market. ItâÂÂs the biggest player in the market, bigger even than Starbucks (NASDAQ:). Its presence is growing rapidly, opening 2,000 to 3,000 new stores a year across the country. And, Luckin employs a highly attractive and unique business model which is winning over Chinese consumers with lower prices (they discount their coffee), easier access (they operate very small stores, so their stores can fit essentially anywhere), and faster coffee prep times (they employ an âÂÂorder aheadâ model, where consumers order their coffee drinks ahead of time on their phones, and simply stop into a Luckin store to pick-up their already made drink).
Given these favorable characteristics, Luckin Coffee projects to become the âÂÂStarbucks of China.â Starbucks operates about 15,000 stores in the U.S. for some 340 million people. Luckin Coffee presently operates less than 4,000 stores serving ChinaâÂÂs more than a billion people. That makes for a very long and quite robust long-term growth runway. Coca-Cola (NYSE:KO) unit, the U.K.âÂÂs Costa has 344 branches in China, and plans to have a total of 900 stores open by 2020.
Luckin Coffee traveled down that growth runway in 2019 at blitzing speed. It will continue to do so in 2020, opening thousands of new stores in the new year. Average monthly customers and average ticket size will continue to roar higher, boosted by the fact that ChinaâÂÂs economy will rebound in 2020 on the back of easing trade tensions. With both of those growth drivers set to remain healthy, LuckinâÂÂs revenue will continue to soar higher in 2020, accompanied by sustained margin expansion. That combination will keep LK stock on a winning path.
Luckin Coffee Stock Could Cruise to $50
My numbers indicate that Luckin Coffee stock could power its way to $50 in 2020, about 27% upside from the current $39.36 level.
The numbers are a bit complex. But, to put it simply, there are three big growth drivers here â unit growth, transaction growth and margin expansion. All three of those metrics will work together over the next five years to drive LuckinâÂÂs enormous revenue and profit growth.
On the unit growth front, Luckin is vowing to open at least 10,000 stores by 2021. From 2019âÂÂs projected ending store base count of 4,500, that implies about 2,750 new store openings per year. That seems entirely doable, given that they are already opening about 2,500 new stores per year, and that 10,000 really isnâÂÂt that many coffee stores for a billion-person country. Looking out to 2025, I entirely expect 2,000 to 3,000 new stores to remain the norm, and for Luckin to grow its store count in China to about 20,000.
With respect to transaction growth, the number of purchases per Luckin coffee house per year should grow as more and more Chinese consumers become regular coffee drinkers over the next few years. Sure, Luckin stores wonâÂÂt ever be as busy as Starbucks stores on a per unit basis, because Chinese consumers will never be as heavy coffee drinkers as U.S. consumers. But, considering that total transactions rose nearly 500% year-over-year last quarter, there is significant runway for transaction volume to keep growing at a heady pace for the next several years.
Meanwhile, Luckin runs at negative profit margins today, but thatâÂÂs a temporary phenomena during this hyper-growth phase. Eventually, Luckin will be past the days of doubling its store base every year. Once those days do pass, expense growth will moderate, and Luckin will look more like a stable retail coffee chain. We know those are profitable businesses with 15%-20% operating margins â see Starbucks and Dunkinâ Brandsà(NYSE:). Consequently, long term, Luckin is heading for 15%-20% operating margins.
When you put all of that together, my modeling suggests that Luckin has a realistic opportunity to hit $4.50 in earnings per share by 2025. Based on a market-average 16x forward earnings multiple and a 10% discount rate, that equates to a 2020 price target for LK stock of nearly $50.
Bottom Line on LK Stock
Luckin Coffee is a long-term winner, thatâÂÂs still in the early stages of a huge multi-year growth narrative, with healthy operational tailwinds heading into 2020, and with a stock price that continues to trade at a discount to the companyâÂÂs long-term profit growth potential.
In other words, LK stock is going higher in 2020. DonâÂÂt fade this record rally. Stick with it.
As of this writing, Luke Lango was long LK.ÃÂ
The post appeared first on InvestorPlace.
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Zihan1004/FNSPID | February 14th Options Now Available For Harley-Davidson (HOG)
Investors in Harley-Davidson Inc (Symbol: HOG) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the HOG options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $37.00 strike price has a current bid of $1.40. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $37.00, but will also collect the premium, putting the cost basis of the shares at $35.60 (before broker commissions). To an investor already interested in purchasing shares of HOG, that could represent an attractive alternative to paying $37.34/share today.
Because the $37.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 3.78% return on the cash commitment, or 32.12% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Harley-Davidson Inc, and highlighting in green where the $37.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $38.00 strike price has a current bid of $1.22. If an investor was to purchase shares of HOG stock at the current price level of $37.34/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $38.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 5.03% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if HOG shares really soar, which is why looking at the trailing twelve month trading history for Harley-Davidson Inc, as well as studying the business fundamentals becomes important. Below is a chart showing HOG's trailing twelve month trading history, with the $38.00 strike highlighted in red:
Considering the fact that the $38.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.27% boost of extra return to the investor, or 27.73% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $37.34) to be 31%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | Netflix Is Still Thriving, Just as Management Predicted
During the months that preceded the launch of two much-hyped streaming platforms, Walt Disney's (NYSE: DIS) Disney+ and Apple's Apple TV+, many pundits declared the imminent fall from grace of the current top streaming services providers, namely Netflix (NASDAQ: NFLX). These new streaming services -- particularly Disney+ and its lineup of blockbuster movies and TV shows loaded with A-list celebrities -- threatened to lure viewers away from Netflix. However, Netflix itself didn't seem to be particularly worried. In its third-quarter letter to shareholders, Netflix's management had the following to stay about the increasingly stiff competition in the streaming services industry:
The launch of these new services will be noisy. There may be some modest headwind to our near-term growth, and we have tried to factor that into our guidance. In the long-term, though, we expect we'll continue to grow nicely given the strength of our service and the large market opportunity.
As if to back up this claim, Netflix recently released some data showing that its platform is making some serious strides in international markets.
Image Source: Getty Images.
Netflix's growth abroad
According to a recent SEC filing, Netflix's growth in international markets is outpacing its growth in North America. During the third quarter, the company recorded 3.1 million net additions in Europe, the Middle East, and Africa (EMEA), and the company ended the quarter with 47.4 million paying subscribers in these regions, a 40% increase year over year. Further, Netflix's net additions in Asia-Pacific were 1.5 million, and the company's end-of-quarter paying subscriber count was 14.5 million for this region, 53% higher than it was during the year-ago period. Lastly, in Latin America, Netflix added 1.5 million subscribers during the third quarter, and the company ended the quarter with 29.4 million subscribers, a 22% increase year over year. Note that by comparison, Netflix only added 613,000 subscribers in North America during the third quarter.
Disney+ isn't the end of Netflix
Now, it is important to give credit where credit is due. Disney+ has been hugely successful thus far, much more so than many people expected. The streaming service managed to land 10 million subscribers right out of the gate, and it has already surpassed the 20-million-subscriber mark, which is quite an impressive feat. However, Disney+ doesn't look likely to be the end for Netflix after all. First, Netflix obviously recognizes the "large market opportunity" found abroad, and the company is still looking to grow in these markets.
In its third-quarter letter to shareholders, Netflix vowed to "expand" its non-English original shows and movies, because "they continue to help grow our penetration in international markets." Second, it turns out most Disney+ subscribers -- an estimated 80%, to be exact -- also have a Netflix subscription. So it isn't the case that Disney+ is stealing all -- or even most -- of Netflix's customers. And although Netflix will likely suffer some losses in its core market as a result of competition from Disney+, its gains in international markets could offset these losses.
In other words, for Netflix's shareholders, it isn't time to push the panic button, at least not yet. And although Netflix probably won't repeat the performance it delivered during the last decade -- with its shares soaring by more than 4,100% since 2010 -- during this decade, it is still, in my view, a growth stock worth buying.
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Zihan1004/FNSPID | The Yield Curve Is No Longer Inverted: Has The U.S. Economy Dodged The Recession Bullet?
Unfortunately, not yet. As we pointed out in a detailed interactive dashboard a couple of months ago, the Inverted Yield Curve is an important indicator of recession. But the yield curve has not always remained inverted before and during the recession. In a follow-up interactive dashboard, Trefis focuses on trends in the yield curve for the period between yield curve inversion and a recession, and finds that in the past the yield curve normalized several times before the onset of each of the last three recessions.
What is Yield Curve, and when does it become ‘Inverted’?
The yield curve is a graph depicting yields on U.S. Treasury bonds at multiple maturities.
Typically, it slopes upward, as short-term rates are lower than long-term rates as long-term investments attract additional risk premiums.
An inverted yield curve is a situation in which long-term rates are lower than short-term rates – suggesting that markets expect a recession, which will reduce interest rates in the near- to -mid-term.
How Many Times Did The Yield Curve Normalize Before The Start Of Recession In The Past?
As shown in the chart below, the number of yield curve ‘corrections’ have ranged from 0 to 8 in the last 5 recessions.
Before the first two recessions, the yield curve remained inverted before the beginning of the recession.
However, during the last 3 recessions, the yield curve corrected itself several times before the U.S. economy slumped into recession.
The number was highest at 8 during the 2008 recession.
Over recent months, the yield curve has corrected itself just once since the inversion.
What Was The Duration Between The First Normalization And Beginning of Recession?
The duration between the first yield curve normalization after it has inverted and the beginning of the recession (the ‘lag period’) has varied from 0 to more than 1000 days (33 months) in the last 5 recessions.
During the first two recessions, there was no lag since the yield curve remained inverted before the recession.
The lag was highest at over 1000 days during the 2001 crisis but was lower at 700 days before the 2008 recession.
For How Many Days During The Lag Period Was The Yield Curve Normal?
The yield curve remained normal more than 50% of the times in each of the last 3 lags before the recession.
The curve remained corrected for almost 65% of the time during the lag preceding the 2001 recession.
However, the yield curve remained inverted for the entire period during the lag in the 1980 and 1981 recessions.
For How Many Days During The Recession Was The Yield Curve Normal?
Interestingly, apart from the recessions that occurred in the 1980s, the yield curve remained normal 100% of the time during the time span of recessions.
Additional details about the number of days the yield curve remained normal during the 1980 and 1981 crisis are available in our interactive dashboard.
Conclusion: Inverted Yield Curve Normalizes Several Times Before The Onset Of The Recession
The inverted yield has normalized each of the last 3 times before the recession.
With the global economy becoming increasingly integrated and the federal banks across the globe cutting rates to revive the economy, the chances of normalization have increased considerably.
Although the economy is not showing any clear signs of an impending recession yet, the U.S. economy is slowing down with a decline in trade and a contraction in manufacturing.
If recessionary trends continue to grow more pronounced in the next months, there are chances that the yield curve may invert and then corrects itself several times before the economy goes into recession.
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Zihan1004/FNSPID | 2 Stocks That Fizzled on Thursday
The stock market's 2020 got off to a roaring start on Thursday, the first trading day of the year. With the headwind of a strong 2019 behind it, investor optimism burst into the new year. Top stocks and indexes shot skyward like a cork fired from a Champagne bottle.
So far, this year is quite a party, but as ever we had a few wallflowers. Here are two stocks that didn't share in the merriment Thursday.
Image source: Getty Images.
Aurora Cannabis
So much for the Big Marijuana Stock Rally of 2019/20. On Dec. 31, the share prices of weed companies saw a sudden and unexpected spike, which was a great relief considering the lousy 2019 most of them had. But the hangover came quickly, with more than a few recording declines on Thursday. Aurora Cannabis (NYSE: ACB), a bellwether stock in the industry, slumped by 6.5% on the day.
The catalyst for Aurora in particular seems to be a new analyst note from Cantor Fitzgerald. Analyst Pablo Zuanic lowered his price target for the company's stock, to 5 Canadian dollars ($3.85) from the previous CA$5.85 ($4.50). Zuanic also said Nelson Peltz should "call for the same greater financial discipline at ACB" that he did for underperforming companies such as PepsiCo and Mondelez.
The man Zuanic is addressing is a renowned (or notorious, depending on your point of view) activist investor. In March 2019 Peltz was hired as a strategic advisor to Aurora.
We don't yet know if Peltz is heeding this call, but Cantor Fitzgerald has a point. Aurora frequently lands well in the red on the bottom line, and its formerly ambitious expansion program has burned cash at a rapid rate. The company is also quite deeply in debt. Meanwhile, the cannabis industry at the moment has a host of intrinsic challenges.
Put another way, the company has a lot of tough problems to contend with as it posts losses and spends money. Its stock doesn't feel like a buy at the moment.
General Mills
Another party pooper on Thursday was General Mills (NYSE: GIS). The comestibles company's stock fell by nearly 3% on 2020's inaugural trading day.
A lawsuit filed on Wednesday might be the culprit. It was reported in various media that a woman in New York state is attempting to bring a class action lawsuit against General Mills for deceptive advertising. According to those reports, dog owner Shannon Walton believes that certain products in General Mills' premium Blue Buffalo pet food brand are quite heavy in carbohydrates, and are thus not the healthy products they purport to be.
General Mills hasn't commented on these allegations, for which Walton estimates her class should be compensated by over $5 million.
It remains to be seen what kind of traction this lawsuit will get, but I wouldn't see it as particularly threatening -- either in legal force or in potential renumeration. It's a bit of a stretch to believe the suit's intimations that the company is deliberately deceiving customers about the nutritional composition of Blue Buffalo products. Even so, $5 million when matched against General Mills' almost $17 billion in annual revenue is chump change.
Still, it illustrates the fact that Blue Buffalo, a pricey 2018 acquisition, has quickly become a critical part of General Mills' operations. In fact, during the company's most recently reported quarter, its now-large pet segment was the only one that recorded a meaningful increase in year-over-year sales, at 16%.
Overall, though, General Mills is built on a foundation of breakfast cereals -- not really an exciting product category these days. So the company is basically a slow-growth veteran in its industry.
This isn't necessarily a bad thing, as in this case it washes out in reliable net profits and decent cash flow. As a result, General Mills' dividend, which is paid on the regular and currently yields over 3.7%, is pretty compelling. This stock, then, should be on the consider list for income investors looking for better-than-average yield.
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Zihan1004/FNSPID | Notable Thursday Option Activity: V, ILMN, TGTX
Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Visa Inc (Symbol: V), where a total of 34,917 contracts have traded so far, representing approximately 3.5 million underlying shares. That amounts to about 45.4% of V's average daily trading volume over the past month of 7.7 million shares. Especially high volume was seen for the $190 strike call option expiring January 03, 2020, with 1,873 contracts trading so far today, representing approximately 187,300 underlying shares of V. Below is a chart showing V's trailing twelve month trading history, with the $190 strike highlighted in orange:
Illumina Inc (Symbol: ILMN) options are showing a volume of 3,496 contracts thus far today. That number of contracts represents approximately 349,600 underlying shares, working out to a sizeable 45.4% of ILMN's average daily trading volume over the past month, of 770,480 shares. Especially high volume was seen for the $325 strike call option expiring January 03, 2020, with 325 contracts trading so far today, representing approximately 32,500 underlying shares of ILMN. Below is a chart showing ILMN's trailing twelve month trading history, with the $325 strike highlighted in orange:
And TG Therapeutics Inc (Symbol: TGTX) options are showing a volume of 11,574 contracts thus far today. That number of contracts represents approximately 1.2 million underlying shares, working out to a sizeable 44.7% of TGTX's average daily trading volume over the past month, of 2.6 million shares. Particularly high volume was seen for the $16 strike call option expiring March 20, 2020, with 3,604 contracts trading so far today, representing approximately 360,400 underlying shares of TGTX. Below is a chart showing TGTX's trailing twelve month trading history, with the $16 strike highlighted in orange:
For the various different available expirations for V options, ILMN options, or TGTX options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
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Zihan1004/FNSPID | Jeff Clark’s Market Minute: A Mickey Mouse Tax Plan to Save America
MikeâÂÂs note:àMike Merson here, JeffâÂÂs managing editor. With our offices closed for the holidays, weâÂÂre bringing you some of the best essays JeffâÂÂs written throughout his career.
Source: ilikeyellow / Shutterstock.com
TodayâÂÂs essay, originally published back in 2012, happens to be one of his most popularâ¦
It involves a radical tax plan to fix the U.S. governmentâÂÂs deficit problem. And as youâÂÂll see, it applies just as well today as it did back then.
The United States of America could be the happiest place on Earth.
We just need to change our income-tax structure.
After filing and paying my 2011 taxes, there was still a little money left in my checking account. So I decided to splurge a bit and take the wife and kids on a mini-vacation to Disneyland.
As I stood in the ticket line outside âÂÂthe happiest place on Earth,â I noticed the wide variety of people standing in line with me. There were tall people⦠short people⦠fat people⦠skinny people⦠people of every ethnic background imaginable. There were kids, teenagers, young adults, mid-lifers, and senior citizens. Every genetic and chromosomal background possible was represented, as was â I think â every income class.
Certainly, the gentleman in front of me â with the tapered slacks, the Façonnable pullover shirt, and the Cole Haan walking shoes â earned a decent living. In front of him, though, was a man wearing oversized denim shorts, a âÂÂBattle of the Bands 2009â t-shirt, and a stained baseball cap. He probably wasnâÂÂt doing as well financially.
But hereâÂÂs the thing⦠we all paid the same price for our admission tickets.
It doesnâÂÂt matter how young or old you are. It doesnâÂÂt matter where you come from or what nationality your ancestors were. And it doesnâÂÂt matter how much or how little money you make. Everyone pays the same price to gain access to all the rides and attractions at Disneyland.
And Disney (NYSE:) is a hugely profitable corporation. Just look at the stock over the past 10 yearsâ¦
ItâÂÂs up 175%.
Still, I had to wonder⦠If the best country on Earth operates with a progressive tax policy â where higher-income earners pay more for the privilege of living within its borders â why doesnâÂÂt Disney charge higher-income earners more to enjoy its theme parks?
I called DisneyâÂÂs shareholder services department to get an answer. After being transferred about five times, I was finally able to convince the lady on the other end of the line that this wasnâÂÂt a joke⦠and I was a serious financial analyst.
She agreed to answer my questions on the condition of anonymity. So, letâÂÂs just call her âÂÂSnow White.âÂÂ
HereâÂÂs how the interview wentâ¦
Me:àWhy doesnâÂÂt Disney charge different admission prices based on the income level of the people visiting its theme parks?
Snow White:àUm⦠because thatâÂÂs a stupid idea.
Me:ÃÂ Are you saying the tax policy of the United States of America is stupid?
Snow White:àAlright⦠if youâÂÂre asking this as a serious question, maybe âÂÂstupidâ is too strong a word.
At Disney, we charge everyone the same admission rate because once inside the park, everyone has equal access to all the rides and attractions. We do have discount tickets for young children, since they may not be permitted on some of the rides because of safety concerns. And we do offer a small discount to organizations that purchase a large number of tickets all at once. For the most part, though, everyone pays the same price to enjoy our parks.
Me:àOK. Everyone pays the same because everyone has the same opportunity. But letâÂÂs say someone has an unfair advantage to the rides, would he have to pay more?
Snow White:ÃÂ There are no unfair advantages at Disney.
Me:àOh, sure there are. For example, my favorite ride is the Indiana Jones Adventure â which is located all the way over at the north side of the park. If I enter the park from the south side, I donâÂÂt have the same opportunity to ride the ride as someone who enters from the north. He should have to pay more.
Snow White:àWell⦠no⦠You can always just enjoy the rides that are closer to where you enter the park. Or you can walk over to the north side to ride Indiana Jones Adventure.
Me:àBut heâÂÂs closer⦠And thatâÂÂs an advantage.
Snow White:ÃÂ Walk faster.
Me:àNever mind⦠Can you tell me how you decide what to charge for admission?
Snow White:ÃÂ Yes. Admission prices are set to ensure a good value for the consumer, enable us to keep the park in excellent condition, allow us to pay our employees a competitive rate, and provide a reasonable return to our shareholders.
Me:àBut what if I canâÂÂt afford your admission price? Can you just charge some rich guy in line in front of me for two tickets and then just give one to me?
Snow White:àThatâÂÂs not really a serious question, is it? Of course we couldnâÂÂt do that.
Me:àBut what if IâÂÂm out of work? Or if I just spent my extra money on a new set of headphones? Or if there are just other things I need to pay for first, and I donâÂÂt have the money for a ticket to Disneyland? What am I supposed to do then?
Snow White:àWell⦠I guess like anything else you might want out of life, youâÂÂre going to have to work hard and save for it.
Me:ÃÂ Thank you for your time, Snow White.
Snow White:àYouâÂÂre welcome⦠I think.
As I hung up on Snow White, it occurred to me that I shouldnâÂÂt be asking Disney why it doesnâÂÂt have an admissions rate similar to the United States progressive tax policy. The company is doing great. Go back and take another look at the DIS chart.
Instead⦠we should be asking the U.S. government why it doesnâÂÂt have a tax policy similar to DisneyâÂÂs admissions rate.
Think about it⦠Just take a look at the âÂÂstockâ of the United States of America over the past 10 yearsâ¦
The U.S. dollar has lost one-third of its value in the last 10 years. Our debt level is exploding. We canâÂÂt balance our budget. And weâÂÂre about to tumble over the fiscal cliff.
Maybe we should take a page out of the Disney playbook⦠and see if we can adjust our tax policy to turn America into the âÂÂhappiest place on EarthâÂÂâ¦
Forty years ago, Disneyland had a âÂÂprogressiveâ ticket structure. Different rides cost different amounts of money depending on the âÂÂthrillâ of the attraction.
I remember fighting with my brothers over who would get the rare and valuable âÂÂEâ tickets that allowed us to ride the Matterhorn⦠and who would get stuck with the cheap âÂÂAâ tickets and have to hang out on King ArthurâÂÂs Carousel.
Disney doesnâÂÂt operate that way anymore. It ditched the progressive ticket policy in favor of a flat-rate plan.
Everybody pays the same price to get into Disneyland. It doesnâÂÂt matter if you spend the entire day riding Space Mountain⦠or park yourself on a bench in the shade and wait all day for the character parade. Everyone pays the same amount to spend time in the happiest place on Earth.
The United States should adopt a similar policy.
Forget about taxing people on a percentage of their income. The rich guy shouldnâÂÂt have to pay more for an admission ticket than the poor guy. Instead, everybody should pay the same price for the chance to enjoy all the rides, attractions, and opportunities available in the United States of America.
The tax amount should be based on the same principles Disney uses to set its admission prices. As âÂÂSnow Whiteâ told me when I called up DisneyâÂÂs shareholder services department, those principles are: âÂÂTo ensure a good value for the consumer, enable us to keep the park in excellent condition, allow us to pay our employees a competitive rate, and provide a reasonable return to our shareholders.âÂÂ
For example, the U.S. government plans to spend a total of $3.8 trillion in 2013. Since we have roughly 315 million people who call America âÂÂhome,â each person would be required to pay $12,060 to stay here. That means a family of four would pay taxes of just over $48,000.
ThatâÂÂs an obscene amount. But it reflects the current spending habits of the U.S. government. So thatâÂÂs the ticket price. ThatâÂÂs what you need to pay if you want to take advantage of any or all of the opportunities available in America.
If itâÂÂs too expensive, remember what Snow White told me yesterday: âÂÂWell⦠I guess like anything else you might want out of life, youâÂÂre going to have to work hard and save for it.âÂÂ
If youâÂÂre unwilling or unable to do that, leave. Nobody is required to stay at Disneyland.
If enough people leave because they canâÂÂt afford the admission ticket, the government will have to adjust the price â which means itâÂÂll have to adjust its spending plans.
Maybe it scraps the plans to build Mr. ObamaâÂÂs Wild Health Care Ride. Maybe it stops subsidizing Solar-Powered Fantasyland. Maybe â like any well-run corporation or household â the government starts paying better attention to where it wastes its money.
Then it can lower the price of admission and everyone can enjoy the happiest place on Earth.
It sure worked well for Disney.
Best regards and good trading,
Jeff Clark
In Case You Missed Itâ¦
Teeka Tiwari made the BIGGEST crypto prediction of his career.
Five tiny coins have the potential to transform $500 into a $5 million fortune â in as little as 10 months. That means 300 days from now you could be a crypto multi-millionaire. And all you have to do is take $500 and put it in five cryptocurrencies.
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Zihan1004/FNSPID | Is Popular Pot Stock Cronos Group a Buy in 2020?
New year, clean slate: That's the thesis for most marijuana stock investors following the drubbing they took in 2019.
Last year was expected to represent a major leap forward for cannabis stocks, with Canada allowing derivatives to reach dispensary shelves, and a number of U.S. states forecast to legalize adult-use weed. But very little of what was expected at the beginning of the year went according to plan. When the curtain closed on 2019, most marijuana stocks wound up losing money, and Canadian weed sales fell significantly short of expectations.
The question is, does the substantive decline in pot stocks over the past nine months represent an intriguing buying opportunity? Investors are probably asking that right now of pot stock Cronos Group (NASDAQ: CRON), which ended the year about 40% lower, and nearly 75% below its closing high, which was set in early March.
But does this make Cronos Group a buy in 2020?
Unfortunately, dear optimists, the answer to that question remains a firm no.
Image source: Getty Images.
Cronos isn't a lost cause...
I'll admit, there are three factors working in Cronos Group's favor. First, it has a boatload of cash stemming from Altria Group's (NYSE: MO) $1.8 billion equity investment in the company. The deal, which closed in March, gave Altria a 45% stake in Cronos and, in turn, supplied Cronos Group with plenty of cash to expand domestically and internationally.
Second (but to build off the first point), Altria is an excellent company to have in Cronos' corner. As a 45% stakeholder, Altria is incentivized to help Cronos Group launch its line of derivative pot products, such as vapes. Altria has keen knowledge of how to market and brand vice products to consumers and will be invaluable in helping Cronos gobble up early stage market share.
Third, there's the aforementioned launch of cannabis derivatives, which happened a little more than two weeks ago. Derivatives are a much higher-margin product than traditional dried cannabis flower, which should result in an improved bottom line throughout the industry.
However, none of these factors outweighs the issues Cronos will contend with in 2020.
Image source: Getty Images.
...But it's not a pot stock to buy in 2020
Although not company-specific, Cronos Group will be dealing with ongoing supply issues for much of the year. As an example, Canada's most populous province, Ontario, had just 24 open dispensaries on Oct. 17, 2019, the one-year anniversary of adult-use sales commencing. That's one store for every 604,000 people in the province. The supply channels needed to efficiently move product (including derivatives) from growers to consumers just don't exist at the moment, and they'll continue to be a work in progress throughout 2020. This means the Canadian black market will continue to thrive at the expense of legal growers like Cronos Group.
Another important point is that Cronos Group isn't the major player that its market cap implied it was. The company's only reasonably sized grow farm is Peace Naturals, which is capable of 40,000 kilos annually at its peak, with its joint-venture grow farm capable of 70,000 kilos a year not expected to be producing until the latter half of 2020. The point is, Cronos isn't a major grower, and that could leave it on the outside looking in when it comes to wholesale supply agreements with provinces. Furthermore, it might also create the need to purchase wholesale cannabis down the line to make up for its own lack of production. This would ultimately be a margin killer (just ask Tilray's shareholders).
Cronos Group is also losing money on an operating basis, and should continue to do so in 2020. Even though the company has produced a number of huge per-share profits in 2019, this was solely a result of revaluing derivative liabilities (i.e., warrants) tied to its equity investment with Altria. If we get past the frosting, we see a business with considerably smaller sales than its similarly sized peers and ongoing operating losses. With Wall Street now focused on profits in the cannabis industry, Cronos' one-time-benefit-laden reports won't pass muster.
Image source: Getty Images.
What needs to happen for Cronos Group to rebound
But just because Cronos Group isn't a pot stock to buy doesn't mean it's not worth keeping an eye on. After all, the company is only valued at roughly $740 million more than its cash and short-term investments on hand. If a couple of things go its way, it might be worth a closer look.
Perhaps the most important resolution needed is a more efficient pathway for cannabis products to reach consumers. Ontario, for instance, is shelving its lottery system in favor of a more traditional licensing program for dispensaries. The goal will be to approve about 20 retail stores per month, leading to 250 new locations being opened in 2020. While this would be 10 times as many stores as the province had in October, there would still be a way to go before Ontario is anywhere near retail saturation. If these store openings happen on time, or even ahead of schedule, Cronos could begin to see a real improvement in its bottom line.
It will also have to be mindful of its costs and marketing. The U.S. is fresh off a vape-related health scare, so Cronos is going to have to work closely with Altria to safely navigate a launch of vape products in Canada. Cronos has also already repurposed some of its cultivation space at Peace Naturals for derivatives research and production, but additional cost-cutting may prove necessary to improve operating cash flow as the year moves on.
There's no denying that Cronos Group is one of the most popular pot stocks on the planet. But popularity is not a guarantee of profitability, and investors would be wise to keep their distance in the meantime.
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Sean Williams has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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Zihan1004/FNSPID | First Week of January 3rd Options Trading For Tripadvisor (TRIP)
Investors in Tripadvisor Inc (Symbol: TRIP) saw new options become available this week, for the January 3rd expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the TRIP options chain for the new January 3rd contracts and identified one put and one call contract of particular interest.
The put contract at the $30.00 strike price has a current bid of 5 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $30.00, but will also collect the premium, putting the cost basis of the shares at $29.95 (before broker commissions). To an investor already interested in purchasing shares of TRIP, that could represent an attractive alternative to paying $30.51/share today.
Because the $30.00 strike represents an approximate 2% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 77%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.17% return on the cash commitment, or 60.83% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Tripadvisor Inc, and highlighting in green where the $30.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $31.00 strike price has a current bid of 5 cents. If an investor was to purchase shares of TRIP stock at the current price level of $30.51/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $31.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 1.77% if the stock gets called away at the January 3rd expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if TRIP shares really soar, which is why looking at the trailing twelve month trading history for Tripadvisor Inc, as well as studying the business fundamentals becomes important. Below is a chart showing TRIP's trailing twelve month trading history, with the $31.00 strike highlighted in red:
Considering the fact that the $31.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 75%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 0.16% boost of extra return to the investor, or 59.82% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example is 45%, while the implied volatility in the call contract example is 53%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $30.51) to be 44%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
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Zihan1004/FNSPID | Noteworthy Thursday Option Activity: BLK, REGN, TMUS
Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Blackrock Inc (Symbol: BLK), where a total volume of 1,840 contracts has been traded thus far today, a contract volume which is representative of approximately 184,000 underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 42.9% of BLK's average daily trading volume over the past month, of 429,110 shares. Especially high volume was seen for the $330 strike put option expiring January 15, 2021, with 225 contracts trading so far today, representing approximately 22,500 underlying shares of BLK. Below is a chart showing BLK's trailing twelve month trading history, with the $330 strike highlighted in orange:
Regeneron Pharmaceuticals, Inc. (Symbol: REGN) saw options trading volume of 3,086 contracts, representing approximately 308,600 underlying shares or approximately 42.6% of REGN's average daily trading volume over the past month, of 723,930 shares. Especially high volume was seen for the $260 strike put option expiring January 24, 2020, with 186 contracts trading so far today, representing approximately 18,600 underlying shares of REGN. Below is a chart showing REGN's trailing twelve month trading history, with the $260 strike highlighted in orange:
And T-Mobile US Inc (Symbol: TMUS) options are showing a volume of 11,446 contracts thus far today. That number of contracts represents approximately 1.1 million underlying shares, working out to a sizeable 41.7% of TMUS's average daily trading volume over the past month, of 2.7 million shares. Particularly high volume was seen for the $77.50 strike put option expiring January 17, 2020, with 2,833 contracts trading so far today, representing approximately 283,300 underlying shares of TMUS. Below is a chart showing TMUS's trailing twelve month trading history, with the $77.50 strike highlighted in orange:
For the various different available expirations for BLK options, REGN options, or TMUS options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
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Zihan1004/FNSPID | Better Buy: Square vs. Visa
Visa (NYSE: V) and Square (NYSE: SQ) are two of the best-known financial services companies in the world right now, but they're very different from an investment perspective.
Visa is the financial giant that's at the center of trillions of dollars in credit card transactions and Square is the nimble upstart trying to disrupt the established financial system, starting with mobile payments. Another way to differentiate the two companies would be to say that Visa is a stock for value investors and Square is better for growth investors.
But there's a lot more to these financial services companies than that.
Image source: Getty Images.
The core businesses of Visa and Square
Both Visa and Square take a skim off every transaction that happens on their platforms, but Visa's is much larger and more profitable than Square's. As the charts below illustrate, Visa is more than five times larger from a revenue standpoint and is highly profitable while Square is yet to post a profit.
SQ Revenue (TTM) data by YCharts
Much of the difference comes from the scale at which they operate, but part of it also derives from each company's place in the value chain. Visa is a worldwide payment company with only a few genuine competitors to think about. It has pricing power as a result.
Square is in a highly competitive market niche, with dozens of specialized rivals offering similar suites of services beyond transactions, like scheduling, payroll, and even capital. As a result, it generates fairly low margins, and will even offer discounts to high-volume customers to win their business. Visa, by contrast, gets customers because businesses have to use its service almost by default.
Growth is Square's specialty
When it comes to making money, Visa is clearly the winner. But Square's revenue growth on a percentage basis is far more rapid, albeit from a much smaller base.
SQ Revenue (TTM) data by YCharts
Square has been able to grow in a couple of ways. First, it's adding customers to the platform rapidly, both by reaching new clients and expanding the capabilities that make it attractive to businesses like restaurants and retailers. It has also expanded the number of services it can offer (and charge) existing customers, including payroll, scheduling, capital, and much more.
Where Square has a lot of room for growth is in niches outside of business transactions. It has tried to do that with Square Cash, which essentially cuts out the fees that Visa and other legacy financial institutions charge for fund transfers. If it can create a new ecosystem that sidesteps the traditional intermediaries, it could lower its costs and increase margins. It's a long shot, but that's the best-case scenario for Square long term.
The best stock today
The battle between these two companies comes down to a choice between a growth stock and a stock that has a highly profitable business and a wide competitive moat. I prefer the stability of the moat that Visa has built, and don't see any reason to think it will be disrupted in the near future.
Better yet, as Square grows, it actually helps grow Visa's network and revenue as well. That's another reason Visa is the better of these two stocks, even if it can't match Square's growth rate.
10 stocks we like better than Visa
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Travis Hoium owns shares of Square and Visa. The Motley Fool owns shares of and recommends Square and Visa and recommends the following options: short January 2020 $70 puts on Square. The Motley Fool has a disclosure policy.
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Zihan1004/FNSPID | Asian, European Shares Boosted by Trade Deal Optimism
FXEmpire.com -
European shares are trading higher Thursday on optimism over global economic growth. Stocks were underpinned after U.S. President Donald Trump said that a Phase One trade deal with China will be signed on January 15, although he did not release any details of the expected signing ceremony.
Not only are traders excited about the signing of the trade deal, which was struck on December 15, but they are also enthusiastic about the possibility of finally seeing some of the details of the deal that have so far been sketchy. Although the markets have hit record highs since the deal was announced, some say the market reaction has actually been stunted by a lack of clarity over the full extent of the agreement.
In the U.K., the FTSE 100 Index is trading 7611.61, up 69.17 or +0.92%. Germany’s DAX Index is at 13369.33, up 120.32 or +0.91% and in France, the CAC is trading 6058.94, up 80.88 or +1.35%.
Corporate and Stocks News
Airbus has become the world’s largest airplane manufacturer for the first time since 2011, ousting Boeing from the top spot after beating forecasts on its 863 aircraft in 2019, Reuters reported on Wednesday citing airport and tracking sources.
German banks led the upward momentum on Thursday with Commerzbank climbing 5.9% while compatriot Deutsche Bank added 5.4%. Tullow Oil shares slid 6.6% after the British oil company announced the results of drilling at its Carapa-1 well, paring sharp early losses by the afternoon.
Shares Rise in Asia on Back of Strong Chinese Private Survey Data
Shares in China led gains among major markets in the Asia Pacific region as they surged on Thursday, after a private survey showed manufacturing activity in the country rising in December.
The Markit/Caixin Purchasing Managers’ Index (PMI) for manufacturing in the month of December came in 51.5, versus 51.8 in November. Still, that was below expectations by analysts in a Reuters poll of a reading of 51.7 for December.
That came after the official manufacturing PMI released Tuesday came in slightly above expectations.
South Korea Exports Fall Less Than Expected
Data released Wednesday showed the South Korea’s exports falling less than expected in December.
South Korea’s exports for that month declined 5.2% in December as compared to a year earlier, Reuters reported Wednesday, citing data from the country’s trade ministry. That was lower than median expectations of a 6.0% fall from a Reuters poll.
People’s Bank of China Makes Move
The People’s Bank of China also announced Wednesday on its website that it was going to lower the reserve requirement ratio for banks by 50 basis points with effect from Jan. 6.
This article was originally posted on FX Empire
More From FXEMPIRE:
U.S. Dollar Index Futures (DX) Technical Analysis – Trade Through 97.005 Confirms Closing Price Reversal Top
Corporate Earnings & US-China Trade Deal to Dictate Markets’ Direction
Let’s Make a Deal
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Zihan1004/FNSPID | Kronos Worldwide (KRO) Shares Cross Below 200 DMA
In trading on Thursday, shares of Kronos Worldwide Inc (Symbol: KRO) crossed below their 200 day moving average of $13.16, changing hands as low as $13.14 per share. Kronos Worldwide Inc shares are currently trading off about 1% on the day. The chart below shows the one year performance of KRO shares, versus its 200 day moving average:
Looking at the chart above, KRO's low point in its 52 week range is $9.65 per share, with $16.13 as the 52 week high point — that compares with a last trade of $13.26.
Click here to find out which 9 other dividend stocks recently crossed below their 200 day moving average »
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Zihan1004/FNSPID | Why and Where You Buy Qualcomm Stock
Now that itâÂÂs 2020 there will be challenges in the stock market to be certain. Still, when it comes to Qualcomm (NASDAQ:), off and on the price chart the rewards outweigh the threats for buying shares today. Let me explain.
Source: Akshdeep Kaur Raked / Shutterstock.com
No doubt the market has had an incredible 2019. A broad-based rally emerging from last yearâÂÂs fourth-quarter corrective meltdown has seen the large-cap, tech-heavy NASDAQ surge by 35% to all-time highs. And Qualcomm stock has been a beneficiary of that strength. Shares have returned an outsized 60% in 2019. But if you think QCOM is finished, think again.
As we enter 2020 the roll-out of a global 5G network is just underway. ItâÂÂs a game changer. Once unfathomable technologies like artificial intelligence or quantum computing will now have a platform capable of unleashing their full potential. Because of this crucial role, 5G is one of the leading next big things in investing. And Qualcomm stockâÂÂs wireless communication chips are at the forefront of this revolution. But thatâÂÂs not all QCOM has up its sleeve.
QCOM and 5G
As InvestorPlaceâÂÂs Josh Enomoto notes, than simply producing the chips to power the 5G network. The company is looking to cash in on how 5G changes our technological landscape by developing new applications for its chips such as facial recognition, which could prove a huge boon for its bottom-line in the years to come.
To be clear, risks exist in owning Qualcomm stock today. Shares of QCOM are historically expensive. Its lucrative 5G-driven modem business with Apple (NASDAQ:) could vanish, as could its relationship with ChinaâÂÂs Huawei. Licensing risks persist. Qualcomm is also facing intense competition in the space. WhatâÂÂs more, along the build-out of 5G could prove disastrous in capturing this technologyâÂÂs full profit potential on shares.
All of those worries and more regarding Qualcomm stock have been well-chronicled by my colleagues. Moreover, most of it is simply speculation, no matter how well-intentioned each warning might be. Bottom-line, right now QualcommâÂÂs business is in the in the as Mark Hake wrote last month. And now, so are QCOM shares.
Qualcomm Stock Weekly Chart
Source:
A bit more than a month ago, Qualcomm stock was discussed as ripe for profit-taking. Shares of QCOM were overbought and challenging monthly channel and Bollinger Band resistance. The observed takeaway was investors should wait to buy Qualcomm on weakness within the trend rather than attempt to chase shares following an overly-aggressive, earnings-related bid.
The caution in QCOM stock Less than a handful of weeks later a much more durable-looking weekly hammer tested key support from $75 â $80. QualcommâÂÂs price action then went on to confirm the bottoming candlestick within its uptrend. Now and following a fast bullish reaction out of the reversal pattern, QCOM stock is in position to be purchased.
After three weeks of consolidating its price gains, shares of Qualcomm are set up in a constructive-looking handle pattern. The small pullback is finding support at the 62% retracement level tied to QCOMâÂÂs all-time-high within a larger cup which has developed since earnings.
With stochastics backing up the bullish pattern, IâÂÂd recommend buying Qualcomm stock as shares stage a breakout of the handle above $90.46. If QCOM continues to cooperate, taking initial profits at the numerically-pleasing $100 level and possibly during overbought conditions makes ample sense. And to contain exposure on an adverse move, an exit marginally beneath the handleâÂÂs low is an equally smart-looking decision off and on the price chart.
Investment accounts under Christopher TylerâÂÂs management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher TylerâÂÂs observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies, related musings or to ask a question, you can find and follow Chris on Twitter and StockTwits.
The post appeared first on InvestorPlace.
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Zihan1004/FNSPID | Purchase Qualcomm Stock Gradually Until Earnings Growth Heats Up
Qualcomm (NASDAQ:) stock trended higher in the last quarter of 2019. However, QCOM still trades at flat levels compared to May 2019. Therefore, the last two quarters have been sideways in terms of stock movement. I believe that Qualcomm has priced in the near-term 5G opportunity. However, there is no doubt that QCOM stock is attractive from a 24-36 month investment horizon.
Source: nikkimeel / Shutterstock.com
I want to start with a quick note on the valuation. Qualcomm stock trades at $88 and based on 2019 earnings per share of $3.59, the price-to-earnings ratio is 24.7. For financial year 2020, . This implies a price-earnings-to-growth ratio of 1.5. Clearly, QCOM stock is not inexpensive. This is one reason to advise gradual accumulation on declines instead of a big plunge in the stock.
It is important to add here that analyst estimates suggest earnings growth of 48.5% for fiscal 2021. I believe that 2021 and beyond will be the time when real growth traction is witnessed related to 5G. This makes QCOM attractive when considering a 24-36 month horizon.
Qualcomm Makes 5G More Accessible
One of the challenges in the overall 5G launch is to keep costs affordable, be it mobile operator charges or the cost of handsets. The reason is that China and India have a combined population of 2.5 billion and represent a big long-term market.
In September, Qualcomm announced new chips to make . With several handset makers already on board to use the chip, there is potential for growth acceleration. The handsets with these chips will launch in the second half of 2020. This makes a strong case for earnings growth in 2021.
Qualcomm is also rolling out 5G in India in 2020. The initial focus is likely to be on . Therefore, be it emerging markets or developed markets, 5G has a much broader application. The true potential will be unleashed in the next three to five years.
I want to add here that Qualcomm has launched a . ItâÂÂs a venture capital fund to invest in 5G startups. The point I am making is that a focus on developing markets will be a potential long-term game changer.
Challenges Can Impact Growth Outlook
There is little doubt that Qualcomm is a leader when it comes to bringing innovative 5G technology. However, infrastructure concerns can impact the likely growth estimate.
Craig Moffett, a leading telecommunication analyst, is of the opinion that âÂÂspectrum â the range of frequencies an operator network is allowed to radiate â is mobile.â He further opined toàCNBC that 5G has zero chance of being a ubiquitous technology by 2021.
Similarly, Europe is lagging behind in 5G adoption due to challenges that include . Furthermore, Qualcomm is focused on non-telecom 5G deployment in India. For mobile deployment, India has challenges that include awaited allocation of 5G spectrum and the high cost of 5G spectrum for mobile operators.
The key point being that the total addressable market is significant, but it will be years before some markets reach inflection point.
My Final Thoughts on QCOM Stock
Qualcomm certainly has a big market opportunity when it comes to 5G.
However, in all probability, the near-term 5G earnings upside is priced in QCOM stock. Long-term investors can consider buying on dips, but I expect real earnings growth traction only in 2021 and beyond.
I therefore remain âÂÂneutralâ on QCOM stock for the foreseeable future.
As of this writing, Faisal Humayun did not hold a position in any of the aforementioned securities.
The post appeared first on InvestorPlace.
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Zihan1004/FNSPID | Does Visa Deserve Its Bullish Valuation?
Visa (NYSE: V) leads the global digital payment market with a secure payment network that is capable of processing over 65,000 payments per second. The company does not extend loans or credit but offers a technology platform that allows financial institutions and vendors to transact with credit, debit, and gift cards. The company has issued bullish guidance for next year, indicating internal optimism about the growth prospects in the near term. Is this war-on-cash stock worth buying at today's price?
Visa's valuation is bullish but in-line with peers
Visa stock currently trades at 30.3 times forward earnings and 35.5 times free cash flow, which are slightly lower than peers such as Paypal and Mastercard, but much higher than American Express. Visa's EV/EBITDA ratio of 26.9 follows a very similar pattern. Analysts are forecasting 15% annual earnings growth over the medium term, resulting in a PEG ratio of approximately two. This battery of valuation metrics suggests that Visa is priced in-line with peers based on multiple profitability measurements, even when adjusting for variations in growth outlook and capital structure.
Image Source: Getty Images
As a further kicker for investors, Visa pays a 0.55% cash dividend yield, which helps to deliver some income returns independent of market price performance. The company also has consistently returned value to shareholders with a stock repurchase program that has a buyback yield above 2%, which helps to augment market returns through anti-dilution. The overall dividend and repurchase activity is rather modest compared to companies in other sectors, but it is nonetheless a nice bonus to have some reliable upside along with the growth potential.
Visa has some very pleasing operational metrics
Visa leads its peer group with a stellar 67% operating margin and a 52.6% net profit margin. Only Mastercard approaches these figures but is still roughly ten percentage points lower. This is not an aberration, because the company's margins have been stable for the past five years, and its operating margin was still over 56% for each year of the past decade. This spread has allowed the company to deliver an excellent return on invested capital (ROIC) of 26.5%, which is double the industry average and far in excess of the company's 6.8% weighted average cost of capital. Visa's operating metrics indicate an efficiently run organization, with high-quality earnings that translate to cash flows.
Visa is a great position to capitalize on global trends
Financial technology is rapidly changing the ways that people transfer money and pay for goods and services. Digital transfers, blockchain, and other new solutions are quickly disrupting the market, creating new players and forcing incumbents to adapt through acquisition. The result is a fairly fragmented industry.
It is difficult to make long-term forecasts at a time with so much innovation and change on a global scale, but Visa is in a great position to benefit from market trends. The company has shown a willingness to participate in innovation through acquisitions, having purchased Verifi, Payworks, Earthport in 2019. These will provide solutions for issues related to disputed charges, cross-border transfers, and payment efficiency. Visa is participating in the benefits of blockchain, having announced its use of the technology to facilitate B2B payments with B2B Connect.
Visa has a massive market share, and there are switching costs associated with moving away from Visa's services. This is especially true for the largest providers of goods and services, which would require a substantial overhaul to completely revamp payment systems to a different competitor. The fact that it's hard for businesses to leave creates a moat that protects the company's fundamentals from rapid deterioration. Even in situations of rapid market shifts, such as the wide-spread adoption of Square's mobile payments platform, new solutions can actually function hand-in-hand with Visa, so some competitive innovations might even benefit the company's legacy business.
Overall, consumers are showing a declining preference for cash payments, and Visa is in an excellent position to capitalize on this evolving trend. Fintech and payment solutions will be buoyed fundamentally by strong tailwinds for the foreseeable future, and investors would be wise to gain some exposure to these trends. The nature of innovation makes it impossible to identify one clear winner in the group, especially if changes in blockchain and digital currency have even greater impacts than anticipated. However, Visa makes a clear case to be among the shares best-suited to provide exposure to the boom.
10 stocks we like better than Visa
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Visa wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of December 1, 2019
Ryan Patrick has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Mastercard, PayPal Holdings, Square, and Visa and recommends the following options: short January 2020 $70 puts on Square and short January 2020 $97 calls on PayPal Holdings. The Motley Fool has a disclosure policy.
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Zihan1004/FNSPID | 5 Top Stock Trades for Friday: The Dow’s Best of 2019
2019 was a banner year, as we saw record high after record high. What drove the indices higher? Letâs look the top stock trades from 2019, and specifically, the top five performers from the Dow.
Top Stock Trades for Tomorrow No. 1: United Technologies (UTX)
Source: Chart courtesy of
United Technologies (NYSE:) was the fifth-best performer in the group, up 41% in 2019. After struggling with the $142 area in late October, UTX gapped up over this mark in November.
Later in the month, it actually pulled back and retested this former resistance levels. This time, though, it acted as support, a clear sign that bulls were in control. Unlike some of the stronger performers on the list below, UTX does not have as well-defined of an uptrend.
Notably, though, buyers have been stepping in around the 50-day moving average, giving bulls one significant point of reference. With shares above $150 â resistance in November and support in December â itâs hard to be bearish on UTX, which hit a new high on Thursday.
Below the 50-day could send it back down to range support around $142.
Top Stock Trades for Tomorrow No. 2: Visa (V)
Source: Chart courtesy of
Up 42% in 2019, Visa (NYSE:) just barely nudged out UTX for No. 4 on the list. Unlike the rest of the market, Visa didnât begin barreling higher until just a few weeks ago.
After hitting a high of $183.50 in July, Visa slowly but surely plowed higher. In November and early December, it had a solid uptrend guiding it higher (blue line), before erupting over $184, then $186.
Itâs now in a steeper uptrend channel (purple lines) and continues to climb. Surprisingly, shares are not overbought like many others, so buyers could continue to push this name higher.
At this point, I would not bet against Visa if the stock is above the 20-day moving average. Below puts uptrend support, $184 and the 50-day moving average on the table.
Top Stock Trades for Tomorrow No. 3: JPMorgan (JPM)
Source: Chart courtesy of
Just one percentage point above Visa, JPMorgan (NYSE:) rang up gains of 43% in 2019. JPM had struggled with the $114 to $116 area for almost two years. In October, the bank burst over this mark, and hasnât looked back since.
Shares hit a new high on Thursday, breaching the $140 level. Now what?
JPMorgan is a buy-the-dips stock until bulls are proven wrong. This one has been very strong over the past few months and expecting it to continue forever is unrealistic. But for now, dips to the 20-day moving average have been bought aggressively.
Until this mark fails to buoy JPMorgan, bulls can continue to buy on pullbacks to it. Below the $137 to $138 area, and the tone will shift more cautious â note: not bearish, but cautious. Below the 20-day moving average and $137, and the 50-day moving average is next.
Top Stock Trades for Tomorrow No. 4: Microsoft (MSFT)
Source: Chart courtesy of
Up 55% on the year, Microsoft (NASDAQ:) was the second-best Dow stock this year.
After consolidating between $132 and $142 for about five months, shares gapped up and over the range, and have been trending higher since. Like JPM, dips to the 20-day moving average have been bought aggressively by the bulls.
Until that trend changes, we shouldnât bet against it. Flirting with $160 now, MSFT is trying to break out again. If it does, look for a continued run higher. If it canât muster the strength to hurdle $150, see that uptrend support (blue line) and the 20-day moving average support the stock.
Below puts the $152.50 area on watch, with the 50-day moving average just below that.
Top Stock Trades for Tomorrow No. 5: Apple (AAPL)
Source: Chart courtesy of
These last two are the most impressive to me. Not only do Microsoft and Apple (NASDAQ:) command $2.5 trillion worth of equity, but they are both up incredible amounts this year. The combined rally between the two of them added $1.13 trillion to their market caps!
Thatâs such a remarkable figure, itâs hard to comprehend. Letâs put it this way, AAPL and MSFTâs gains total more than the market caps of Amazon (NASDAQ:), Netflix (NASDAQ:) and Roku (NASDAQ:) ⦠combined.
Apple was the best performer in the Dow last year, up a resounding 86%. I love Apple, but if you took a pass at $150 in January 2018 or $190 in August, I would not suggest $290-plus as being the time to buy.
Shares sport an overbought condition (blue circle) and while they can continue higher from here, we need a better dip to buy before getting long. That starts with a correction down to the 20-day moving average and/or the $280 level. Below that and uptrend support (blue line), and the 50-day moving average should buoy the stock.
Bret Kenwell is the manager and author of and is on Twitter @BretKenwell. As of this writing, Bret Kenwell is long AAPL, AMZN, V and ROKU.
The post appeared first on InvestorPlace.
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Zihan1004/FNSPID | 3 Top Retail Stocks to Watch in January
January is a big month for investors in retail stocks. Not only are the businesses seeing elevated customer traffic tied to the holiday season crush, but the start of the year is when companies issue financial updates that cover the peak period around Christmas. That report often determines whether a company will reach its ambitious annual growth targets.
With those high stakes in mind, let's look at three major retail stocks that will issue their holiday season updates in the next few weeks.
Image source: Getty Images.
iRobot has a lot to prove
2019 was a brutal year for iRobot (NASDAQ: IRBT), which was slammed by tariffs on its robotic cleaning devices that ended up reshaping its entire industry. After soaring into the $1 billion annual sales club in the prior year, sales growth collapsed, with revenue even falling 7% in the fiscal third quarter.
CEO Colin Angle and his team responded by slashing prices just ahead of the holidays hoping to protect market share so that the company can be positioned for a rebound in 2020. But the major risks around that gamble mean investors will be closely watching for official updates from iRobot in January.
That update will likely happen on or before Jan. 14, when management holds a presentation at an investor conference. Shareholders can expect plenty of volatility in the stock around those mid-quarter comments, given the high stakes involved.
Costco keeps winning
Costco (NASDAQ: COST) is one of just a few major retailers that still issue monthly sales updates, and this next one could easily move the stock. On Jan. 8, the warehouse retailer will announce results for the all-important month of December that should set the tone for its fiscal second-quarter announcement in early March.
If recent history is any guide, Costco will likely have good news to report. The retailer's last quarterly update showed accelerating customer traffic and record renewal rates among its members. The chain's results have even been lifted by a few splashy single purchases, too, including a $400,000 diamond ring. These metrics reflect the increasing value that subscribers are getting from their memberships, which points to a likely record December haul for the warehouse shopping leader.
Target is ready
If you asked investors in late December last year which stocks might double over the next 12 months, Target (NYSE: TGT) probably wouldn't have made the list. Yet that's exactly what happened as the retailing chain announced some of its fastest sales growth in a decade. Target's transition to multichannel selling even helped push operating margin higher, since customers are showing a real willingness to pay up for the convenience of ultra-fast fulfillment options like same-day delivery and in-store pickup.
We'll find out on Jan.15, when Target announces its holiday season sales results, whether those wins allowed the company to continue capturing share against peers like Walmart during the ultra-competitive December weeks. That report will likely focus on revenue trends rather than profitability, so investors might want to withhold their judgment until seeing Target's full-year results in early March. But the soaring stock price suggests Wall Street is expecting good news to follow the retailer's blockbuster third-quarter earnings report from late November.
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Zihan1004/FNSPID | Thursday 1/2 Insider Buying Report: CNFR, OFC
As the saying goes, there are many possible reasons for an insider to sell a stock, but only one reason to buy — they expect to make money. So let's look at two noteworthy recent insider buys.
On Monday, Conifer Holdings' Director, Jeffrey Anthony Hakala, made a $54,692 buy of CNFR, purchasing 13,673 shares at a cost of $4.00 a piece. Conifer Holdings is trading up about 1% on the day Thursday. Before this latest buy, Hakala made one other buy in the past twelve months, purchasing $698,526 shares at a cost of $4.50 a piece.
And at Corporate Office Properties Trust, there was insider buying on Monday, by CEO Stephen E. Budorick who bought 1,028 shares at a cost of $29.17 each, for a total investment of $29,987. Before this latest buy, Budorick bought OFC on 10 other occasions during the past year, for a total cost of $254,956 at an average of $28.56 per share. Corporate Office Properties Trust is trading off about 0.9% on the day Thursday.
VIDEO: Thursday 1/2 Insider Buying Report: CNFR, OFC
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Zihan1004/FNSPID | Why General Electric Stock Popped 5% Today
What happened
General Electric (NYSE: GE) stock had a great year in 2019 -- its best year since 1982, reports MarketWatch, with GE shares surging 53% through Tuesday's close.
But given that investors ordinarily want to buy stocks low, and sell them when they're priced high, here's a question: With GE's stock now setting new highs, why are investors buying more today, and bidding up GE stock by another 5.3% (as of 3:20 p.m. EST)?
Image source: Getty Images.
So what
Possibly, this is because investors think GE is poised to reap even greater gains in 2020 as the U.S. calls a truce in its trade war with China.
On New Year's Eve, President Trump announced that he plans to sign a "phase one" trade deal with China on Jan. 15. This would remove or reduce tariffs on some $275 billion or more in Chinese imports to the U.S., and open the doors to new agricultural products and other sales from the U.S. to China.
Now what
As it happens, General Electric does a lot of business with China already. Final figures for 2019 aren't in just yet, but according to data from S&P Global Market Intelligence, fully $22.9 billion of GE's revenue came from its "Asia" region, of which China is a big part, in 2018. That number was 19% of GE's total revenue in 2018, and it was up nearly 19% from three years earlier, a sizable growth rate for revenue.
Overall sales at GE dropped 2% year over year in the first three quarters of 2019. While we don't have all the data yet, I'd be willing to bet money that China, and the U.S.-China trade war, played a part in GE's overall revenue drop. Should a truce be declared later this month, and trade with China boom, American industrial bellwether GE would almost certainly be a beneficiary -- and that's why investors are bidding up GE stock today.
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Zihan1004/FNSPID | February 14th Options Now Available For T Rowe Price Group (TROW)
Investors in T Rowe Price Group Inc. (Symbol: TROW) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the TROW options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $123.00 strike price has a current bid of $2.70. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $123.00, but will also collect the premium, putting the cost basis of the shares at $120.30 (before broker commissions). To an investor already interested in purchasing shares of TROW, that could represent an attractive alternative to paying $123.93/share today.
Because the $123.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 2.20% return on the cash commitment, or 18.63% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for T Rowe Price Group Inc., and highlighting in green where the $123.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $125.00 strike price has a current bid of $3.00. If an investor was to purchase shares of TROW stock at the current price level of $123.93/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $125.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 3.28% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if TROW shares really soar, which is why looking at the trailing twelve month trading history for T Rowe Price Group Inc., as well as studying the business fundamentals becomes important. Below is a chart showing TROW's trailing twelve month trading history, with the $125.00 strike highlighted in red:
Considering the fact that the $125.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.42% boost of extra return to the investor, or 20.55% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $123.93) to be 23%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of S.A.F.E. Dividend Stocks »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 909 |
Zihan1004/FNSPID | Interesting SWK Put And Call Options For February 14th
Investors in Stanley Black & Decker Inc (Symbol: SWK) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the SWK options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $165.00 strike price has a current bid of $5.30. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $165.00, but will also collect the premium, putting the cost basis of the shares at $159.70 (before broker commissions). To an investor already interested in purchasing shares of SWK, that could represent an attractive alternative to paying $166.00/share today.
Because the $165.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 3.21% return on the cash commitment, or 27.27% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Stanley Black & Decker Inc, and highlighting in green where the $165.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $167.50 strike price has a current bid of $5.50. If an investor was to purchase shares of SWK stock at the current price level of $166.00/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $167.50. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 4.22% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if SWK shares really soar, which is why looking at the trailing twelve month trading history for Stanley Black & Decker Inc, as well as studying the business fundamentals becomes important. Below is a chart showing SWK's trailing twelve month trading history, with the $167.50 strike highlighted in red:
Considering the fact that the $167.50 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 3.31% boost of extra return to the investor, or 28.12% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $166.00) to be 33%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 907 |
Zihan1004/FNSPID | February 14th Options Now Available For Emerson Electric (EMR)
Investors in Emerson Electric Co. (Symbol: EMR) saw new options begin trading today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the EMR options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $74.00 strike price has a current bid of 45 cents. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $74.00, but will also collect the premium, putting the cost basis of the shares at $73.55 (before broker commissions). To an investor already interested in purchasing shares of EMR, that could represent an attractive alternative to paying $76.42/share today.
Because the $74.00 strike represents an approximate 3% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 0.61% return on the cash commitment, or 5.16% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Emerson Electric Co., and highlighting in green where the $74.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $77.00 strike price has a current bid of 40 cents. If an investor was to purchase shares of EMR stock at the current price level of $76.42/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $77.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 1.28% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if EMR shares really soar, which is why looking at the trailing twelve month trading history for Emerson Electric Co., as well as studying the business fundamentals becomes important. Below is a chart showing EMR's trailing twelve month trading history, with the $77.00 strike highlighted in red:
Considering the fact that the $77.00 strike represents an approximate 1% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 0.52% boost of extra return to the investor, or 4.44% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $76.42) to be 22%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of S.A.F.E. Dividend Stocks »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 885 |
Zihan1004/FNSPID | ICF Crosses Below Key Moving Average Level
In trading on Thursday, shares of the iShares Cohen & Steers REIT ETF (Symbol: ICF) crossed below their 200 day moving average of $115.41, changing hands as low as $115.00 per share. iShares Cohen & Steers REIT shares are currently trading down about 1.5% on the day. The chart below shows the one year performance of ICF shares, versus its 200 day moving average:
Looking at the chart above, ICF's low point in its 52 week range is $93.24 per share, with $123.0799 as the 52 week high point — that compares with a last trade of $115.30.
Click here to find out which 9 other ETFs recently crossed below their 200 day moving average »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | 뉴스 | 225 |
Zihan1004/FNSPID | Interesting PYPL Put And Call Options For February 14th
Investors in PayPal Holdings Inc (Symbol: PYPL) saw new options become available today, for the February 14th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the PYPL options chain for the new February 14th contracts and identified one put and one call contract of particular interest.
The put contract at the $109.00 strike price has a current bid of $3.40. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $109.00, but will also collect the premium, putting the cost basis of the shares at $105.60 (before broker commissions). To an investor already interested in purchasing shares of PYPL, that could represent an attractive alternative to paying $110.27/share today.
Because the $109.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 100%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 3.12% return on the cash commitment, or 26.48% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for PayPal Holdings Inc, and highlighting in green where the $109.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $113.00 strike price has a current bid of $2.84. If an investor was to purchase shares of PYPL stock at the current price level of $110.27/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $113.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 5.05% if the stock gets called away at the February 14th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if PYPL shares really soar, which is why looking at the trailing twelve month trading history for PayPal Holdings Inc, as well as studying the business fundamentals becomes important. Below is a chart showing PYPL's trailing twelve month trading history, with the $113.00 strike highlighted in red:
Considering the fact that the $113.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 2.58% boost of extra return to the investor, or 21.86% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $110.27) to be 25%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
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Zihan1004/FNSPID | Notable ETF Inflow Detected - SCHC
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the SCHC ETF (Symbol: SCHC) where we have detected an approximate $65.8 million dollar inflow -- that's a 2.7% increase week over week in outstanding units (from 70,800,000 to 72,700,000). The chart below shows the one year price performance of SCHC, versus its 200 day moving average:
Looking at the chart above, SCHC's low point in its 52 week range is $28.8101 per share, with $34.92 as the 52 week high point — that compares with a last trade of $34.83. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
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