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.
Wildhorse Resource Development Corp (NYSE:WRD), is a single-basin story and pure-play NE Eagle Ford company whose stock sold off Wednesday for no legitimate reason, according to SunTrust.
The Analyst
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SunTrust Robinson Humphrey's Welles Fitzpatrick upgraded WildHorse Resource Development from Hold to Buy but with a price target lowered from $26 to $25.
The Thesis
Wildhorse Resource's 15-percent decline in reaction to its earnings report "makes little sense," Fitzpatrick said in a note.
Investors have shown some concern with capital expenditure coming in at $249 million versus the consensus estimate of $230 million. However, the $249 million figure is "not far off" the implied run-rate of the high end of management's guidance. The consensus estimate's full year 2018 of $861 million is already at the high-end of management's $765-$875 million guidance.
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The analyst said management discussed oil pipes filling up, which is in reference to the Magellan and Eaglebine pipelines which are in fact getting full. However, the company can truck to Houston for $6 per barrel meant a "blow out for them is going to top out at a couple bucks."
The stock is trading at 4.3 times estimated 2019 EV/EBITDA, which is a discount to the Eagle Ford group average of 4.6 times. Even out of an " abundance of caution," the stock should be valued at $25 per share and is based on a net asset value of $42 per share minus $17 per share in liabilities.
Price Action
Shares of Wildhorse Resource Development were trading lower by 1.6 percent to $19.74 Thursday.
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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.