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.
After a pullback in shares that followed Floor & Decor Holdings Inc (NYSE:FND)'s first-quarter print and a meeting with CFO Trevor Lang, Piper Jaffray is upwardly revising its stance on the retailer.
The Analyst
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Analyst Peter Keith upgraded shares of Floor & Décor from Neutral to Overweight and increased the price target from $51 to $58.
The Thesis
Floor & Décor shares are attractive relative to other growth retailers given the company's superior comp and earnings per share growth, Keith said in a Wednesday note.
The analyst highlighted the following takeaways from his meeting with CFO Lang:
- Increased confidence in long-term competitive strengths and positioning.
- Less drag from lapping hurricane comparisons beginning in the fourth quarter.
- A likely rebound in gross margins in 2019.
- Healthy and sustainable comp growth in 2019 and beyond courtesy of the ramping of key operating initiatives in 2019.
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The retailer is comfortable with the outlook for a moderation in hard surface flooring industry growth from 9 percent over the past five years to mid-single-digit growth for the next three to four years, Keith said.
The following initiatives should support continued strong comp growth in 2019, according to Piper Jaffray:
- A pro loyalty program set for a launch in the second half of 2018.
- The ramping of a new national marketing effort.
- Maturation curve benefits that should result in the bottoming of comps in Boston, Seattle and Long Island in 2019.
The Price Action
Floor & Décor shares were rallying 6.32 percent to $51.88 at the time of publication Wednesday afternoon.
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Stifel Downgrades Floor & Decor After 14% Year-To-Date Run
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.