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.
China-based Luckin Coffee Inc (NASDAQ:LK) is blessed with the opportunity of selling coffee in a country with a population of more than 1 billion.
The case for liking the Starbucks Corporation (NASDAQ:SBUX) rival extends beyond its total addressable market, Chantico Global founder and CEO Gina Sanchez said Thursday on CNBC's "Trading Nation."
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Luckin 'A Really Interesting Long-Term Buy'
Luckin deserves a lot of credit for not only focusing on the competitive environment but for its expense discipline, Sanchez said. The company has managed to keep its fixed costs low, which translates to "massive" margins, she said. By the third quarter of 2019, the company achieved break-even profit at the store level.
"That just really paves the road, from a fundamental perspective, for a really interesting long-term buy."
Luckin Vs. Starbucks
Luckin is "going for the gold" in the large Chinese market, which makes it possible for it to become a stronger growth stock than Starbucks, Sanchez said.
The Chinese company continues to innovate with new products, which shows it is "doing all the right things" at the right times, she said.
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"I'm not saying that Starbucks is not a well-run company. I think Starbucks is a great company," Sanchez said. "It's just that Luckin is at a totally different place in their growth cycle."
What's Next
The fundamentals "still favor Luckin" despite the stock's triple-digit percentage gain over the past six months, the Chantico Global CEO said.
Yet TradingAnalysis.com founder Todd Gordon said during the "Trading Nation" segment that it is difficult to jump to any conclusion given the stock's "short history."
"Clearly, Starbucks is having no luck against Luckin," he said. "But don't discount Starbucks. I still hold Starbucks in my portfolio. I love the long-term chart here."
Luckin shares were trading 2.87% higher at $49.92 at the time of publication Friday.
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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.