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.
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
Company Description
99c Only Stores sells consumer products through its retail stores for 99c or less in the United States. The company was founded in 1965, operates more than 279 stores and has a market cap of $1.13 billion.
In 2008, after a few tough years in which NDN's income was steadily declining, the company launched its "Profit Improvement Plan," a strategic initiative designed to drive long-term profits on new pricing, merchandise, reduced labor costs and improved distribution efficiencies. The results were apparent on Feb 4 when the company reported better than expected Q4 results.
Fourth-Quarter Results
Revenue for the period was up 2.3% from last year to $359 million. Same-store sales were up 3.1%. Earnings came in at 35 cents, 40% ahead of the Zacks Consensus Estimate. NDN has surprised in each of the last four quarters by an average of 79%.
NDN gained in a couple of key categories, with gross margin up 240 basis points to 43.1% of sales. Retail operating costs decreased 60 basis points to 3.2%, while corporate general and administrative costs were down 60 basis points to 3.2%.
Want Private Access to Benzinga Analyst?
Check out the latest strategies our team of experts are using every week so that you can always adapt to the market like the pros!—Get FULL Access to This Week's Webinar Here.
Strong Balance Sheet
NDN also boasts a very strong balance sheet, with $187 million in cash and no debt.
Estimates Up
Analysts like what they are seeing from the company, recently raising estimates on the strong quarter. The current-year is up 13 cents in the last two months to 77 cents. The next-year estimate is up 13 cents in the same time to 90 cents per share.
Valuation
After the string of gains, shares of NDN are a bit pricey, trading with a forward P/E multiple of 21X, a premium to the overall market. The company does however have a favorable P/B multiple of 2X, a discount to both the S&P 500 and the industry average.
The Chart
Shares of NDN continue to trade near the 52-week high in spite of the higher valuation. If shares do pull back look for support at the long-term trend line, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service. Zacks Investment Research
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.