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.
On Friday, February 19, Magna International (NYSE:MGA) will report its last quarter's earnings. Here is Benzinga's preview of the company's release.
What Are Earnings, Net Income, And Earnings Per Share?
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Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.
Earnings And Revenue
Analysts predict Magna International will report earnings of $2.03 per share on revenue of $10.12 billion. In the same quarter last year, Magna International posted EPS of $1.41 on sales of $9.39 billion.
Why Analyst Estimates And Earnings Surprises Are Important
Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.
The analyst consensus estimate would represent a 43.97% increase in the company's EPS figure. Revenue would be up 7.72% on a year-over-year basis. Here is how the Magna International's reported EPS has stacked up against analyst estimates in the past:
| Quarter | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2020 |
|---|---|---|---|---|
| EPS Estimate | 1.35 | -1.63 | 0.81 | 1.33 |
| EPS Actual | 1.95 | -1.71 | 0.86 | 1.41 |
| Revenue Estimate | 9.08 B | 4.14 B | 8.50 B | 9.17 B |
| Revenue Actual | 9.13 B | 4.29 B | 8.66 B | 9.39 B |
Stock Performance
Over the last 52-week period, shares are up 49.35%. Given that these returns are generally positive, long-term shareholders can relax going into this earnings release. Long-term shareholders are already enjoying 12-month gains prior to the announcement.
Do not be surprised to see the stock move on comments made during its conference call. Magna International is scheduled to hold the call at 08:00:00 ET and can be accessed here.
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.