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.
Investors assuming that Netflix, Inc. (NASDAQ:NFLX)'s more than 100 percent gain in 2018 makes it the top performing streaming video outlet are wrong as shares of World Wrestling Entertainment, Inc. (NYSE:WWE) are up more than 150 percent.
What Happened
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WWE's strong performance is due to multiple factors, most notably the company's continued focus on creating original content for its streaming library, Mark Tepper, CEO of Strategic Wealth Partners, said during a recent CNBC "Trading Nation" segment. The company successfully renegotiated rights to its weekly TV shows, which prompted a notable surge in the stock.
WWE uniquely positioned itself as being the leader in wrestling at a time when the entire streaming video space is seeing heightened competition, Tepper said. As such, the company "really got the wrestling niche obviously locked down," which makes it difficult for any competition to enter the market and compete against WWE.
Why It's Important
WWE's business is uniquely positioned to grow like no other given its large moat and its right fees should surge by more than 350 percent from around $113 million to $470 million by 2021, Tepper said. While this does represent a great opportunity for the company, the stock's forward P/E multiple of 80 may imply all of the "good news is already priced in" at current levels.
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What's Next
The stock's multiple implies it's "tough to justify buying any new positions" at current levels, Tepper said. But as noted by CNBC's Sara Eisen, "people have said that about Netflix, too."
Shares of WWE were up another 2.7 percent Monday, trading around $79 at time of publication.
Related Links:
Over The Top? Morgan Stanley Bumps WWE's Price Target To $100
Booking The Territory: 4 Reasons Why BTIG Sees More Upside For WWE
Image credit: Ed Webster, Flickr
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.