June 8, 2011 8:27 AM | 2 min read |
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.
J.M. Smucker (NYSE: SJM) is scheduled to report fourth-quarter fiscal 2011 results before the markets open on Thursday, June 9. Investors hope that last quarter's profit decrease was a one-off and that the company will begin a new streak of consecutive quarters of year-over-year profit growth.Analysts anticipate that the company will announce earnings of $0.99 per share, the same as in the fourth quarter of last year. The consensus estimate was $0.98 per share 60 days ago. But note that analysts have underestimated Smucker earnings in the past ten quarters. The beat was a dime per share in the third quarter.The EPS forecast for the full year calls for an increase of 8.8% year-over-year to $4.77. Annual earnings have grown in each of the past five years, topping consensus estimates each time.
Revenue Expectations During the three months that ended in April, the company raised prices on its Folgers brand products and boosted its full-year earnings per share forecast. The revenue forecast for the quarter calls for an increase of 9.1% from the same quarter of last year to $1.2 billion. Analysts also are looking for year-over-year growth of revenues for the current quarter as well. The full-year forecast calls for $4.8 billion, a 4.3% increase from a year ago.
The CompanyOhio-based J.M. Smucker produces and markets branded food products worldwide. It offers products under many brands, including Smucker's, Folgers, Jif, Hungry Jack, Crisco and Pillsbury. The company sells products to food retailers and wholesalers, drug stores, club stores, mass merchandisers, discount and dollar stores, military commissaries, health and natural foods stores, restaurants, schools and universities, and health care operators. The company has manufacturing and processing facilities in the United States and Canada.
PerformanceSmucker has a dividend yield of 2.2%. The 16.3 P/E ratio is much lower than the industry average, but the 2.1 PEG ratio suggests overvaluation. The long-term EPS growth forecast is only 7.5%. Yet short interest has fallen since the beginning of the year to about 1.3% of the float. After rising more than 18% since the beginning of the year, the share price recently reached a multi-year high of $79.84. Year to date, the stock has outperformed competitors ConAgra Foods (NYSE: CAG) and Kraft Foods (NYSE: KFT), as well as the processed and packaged foods industry average.
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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