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.
MFA Financial (NYSE:MFA) announces its next round of earnings this Tuesday, February 23. Here is Benzinga's everything-that-matters guide for this Tuesday's Q4 earnings announcement.
Net Income, Earnings, 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 covering MFA Financial modeled for quarterly EPS of $0.07 on revenue of $34.80 million. In the same quarter last year, MFA Financial announced EPS of $0.21 on revenue of $70.66 million.
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.
If the company were to report earnings in line when it publishes results Tuesday, quarterly profit would be down 66.67%. Revenue would have fallen 50.75% from the same quarter last year. MFA Financial's reported EPS has stacked up against analyst estimates in the past like this:
| Quarter | Q3 2020 | Q2 2020 | Q1 2020 | Q4 2020 |
|---|---|---|---|---|
| EPS Estimate | 0.06 | 0.23 | 0.14 | 0.20 |
| EPS Actual | 0.17 | 0.19 | -2.01 | 0.21 |
| Revenue Estimate | 37.77 M | 49.63 M | 152.30 M | 73.95 M |
| Revenue Actual | 10.12 M | -623.00 K | 61.70 M | 70.66 M |
Stock Performance
Shares of MFA Financial were trading at $4.025 as of February 19. Over the last 52-week period, shares are down 46.17%. Given that these returns are generally negative, long-term shareholders are likely a little upset going into this earnings release.
Do not be surprised to see the stock move on comments made during its conference call. MFA Financial is scheduled to hold the call at 10:00:00 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.