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.
Shares of Federal Signal Corporation (NYSE:FSS) gained 17 percent Tuesday and hit a new all-time high of $28.32 in reaction to its second-quarter earnings report. This now puts an end to KeyBanc's year-long bullish stance on the stock.
The Analyst
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KeyBanc Capital Markets' Steve Barger downgraded Federal Signal from Outperform to Sector Weight with no assigned price target (prior price target of $27).
The Thesis
Federal Signal, a provider of variety of emergency lighting, sirens and related products, reported a top-and-bottom-line earnings beat that pushed the stock north of KeyBanc's prior $27 price target, Barger said in a note. The company's solid execution since a revenue and operating margin trough in 2016 continued in the quarter and management deserves credit for managing growth since then.
Looking forward, Federal Signal's move into new markets and management's continued pursuit of accretive acquisitions should drive growth for the near-term, the analyst said. At the end of the day, however, the stock is up 72 percent since the firm turned bullish in May 2017 versus the S&P 500's 19 percent gain over the same time period. The stock is now trading at 18.1 times 2019 estimates, which implies a balanced risk/reward profile at current levels.
Price Action
Shares of Federal Signal were trading down 8 percent at $25.62 Wednesday afternoon.
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Earnings Scheduled For August 8, 2018
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.