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.
Finish Line Inc (NASDAQ:FINL) reported a narrower-than-expected loss of 26 cents per share on net sales of $378.5 million in third-quarter results Thursday.
The retailer raised its fiscal 2018 earnings per share guidance, citing the third quarter outperformance; the earnings per share guidance for the fourth quarter, including the holiday season, is in line with the consensus.
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The Analyst
Buckingham Research Group analyst Scott Krasik reiterated an Underperform and $7 price target on shares of Finish Line.
The Thesis
Finish Line banked on promotions throughout the quarter to keep inventories clean, which hurt gross margins, Krasik said in a Thursday note. (See the analyst's track record here.)
Gross margins contracted 100 basis points in the quarter.
Krasik viewed the results with caution, as the company's fourth-quarter guidance implied an expansion in gross margins — even as it said industry promotions will be at an all-time high.
Finish Line is more exposed to competitive risk, given Amazon.com, Inc. (NASDAQ:AMZN)'s foray into the category in a more direct way, Krasik said. This is due to Finish Line's assortments being less differentiated, the analyst said.
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Buckingham Research Group sees the better-than-expected sales trend relayed by Finish Line as a positive read-through for peer Foot Locker, Inc. (NYSE:FL).
Buckingham's estimates and price target were under review pending Finish Line's Thursday earnings call, Krasik said.
The Price Action
Finish Line shares were down about 38 percent for the year-to-period ahead of the results.
Traders have bid up the stock after the quarterly report, with the shares of the athletic footwear retailer up 12.57 percent to $13.16 at last check.
Foot Locker was up 3.28 percent at $47.80.
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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.