27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
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The firm says no, and downgraded shares of Valero Energy from Overweight to Neutral. However, this status did afford the stock an adjusted price target to the upside, from $75 to $78.
Analysts Phil Gresh, John Royall and Anthony Yu think the stock has already received some multiple uplifts due to more stable returns recently and improved capital discipline under the direction of CEO Joe Gorder. The analysts are of the view, for a further uplift, it could take some time, given the cyclical nature of the industry.
JPMorgan believes 2016 was not a recession for refining, despite the year being tough on it. Rather, the firm said the industry was beset by problems arising out of capacity additions outpacing demand growth. Although the year was potentially below "mid-cycle," the firm thinks it was not a trough.
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The firm said its hypothetic downside case suggested that free cash flow should not be as bad as 2009, assuming Valero maintains capital discipline. The firm feels the free cash flow would be adequate to cover the dividend, although it feels buyback could be cut to zero.
As such, the firm is encouraged by Valero's improved free cash flow profile and commitment to return capital, leading up to some multiple enhancement already, but it thinks achieving a more significant multiple upgrade could take time. The firm estimates the total return potential from Valero's stock, including the dividend, to be 6 percent compared to 7 percent for the group.
________Image Credit: By Zereshk - Own work, CC BY 3.0, via Wikimedia Commons27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.