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.
Building products and services company BMC Stock Holdings Inc (NASDAQ:BMCH) is a beneficiary of a strong U.S. housing market, according to an analyst at Wedbush.
The Analyst
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Jay McCanless initiated coverage of shares with an Outperform rating and $27 price target.
The Thesis
Rising single-family construction, multi-family construction as well as renovation/remodel spending bode well for BMC Stock Holdings, McCanless said in a note.
The analyst said nationwide single-family housing starts rose 8.5 percent year-over-year in Q2, while multi-family starts climbed 5.1 percent, belying expectations for a negative comp.
Single- and multi-family starts make up about 85 percent of the company's revenues, the analyst said.
McCanless believes the company's guidance for a mid-single-digit percentage revenue gain from organic growth and M&A is achievable due to the rising demand.
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The analyst expects the lumber price volatility to weigh on gross margin and overhead leverage in Q2, but expects the pressure to subside in the second-half, as lumber prices stabilize.
Wedbush said it's in line with the consensus adjusted earnings per share estimate of 45 cents, while it looks ahead to revenues of $1 billion compared to the $987 million consensus estimate.
Of the two issues likely to plague shares, the firm believes gross margin weakness is more serious than the lack of a CEO.
"At current levels, we view the shares as undervalued, and we would be buyers ahead of F2Q18 EPS scheduled for release on 7/30," the firm said.
Price Action
BMC Stock Holdings shares have lost about 14 percent in the year-to-date period.
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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.