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.
Investors who have owned stocks in the last year have generally experienced some big gains. In fact, the SPDR S&P 500 (NYSE:SPY) total return over the last 12 months is 33.1%. But there is no question some big-name stocks performed better than others along the way.
Nike’s Bumpy Road: One company that has been a solid investment in the last year has athletic apparel company Nike Inc (NYSE:NKE).
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Fortunately for Nike investors, the company’s online sales business was relatively insulated from the COVID-19 pandemic. Unfortunately, Nike has struggled with supply chain disruptions that have negatively impacted sales.
Nike’s fiscal 2021 revenue was up 19% to $44.5 billion, while net income jumped $125.5% to $5.7 billion. In June, Nike reported 41% fiscal fourth-quarter online sales growth and 147% online sales growth compared to pre-pandemic levels in 2019.
At the beginning of 2020, Nike shares were trading at $101.36. By the beginning of March, the stock was down to $89.60 as news of the coronavirus spreading in China prompted concerns about a U.S. pandemic.
Nike ultimately bottomed at $60 during the pandemic-driven March sell-off. Fortunately for Nike investors, the dip didn't last long.
By September, Nike shares were back at new all-time highs above $110, and the stock got as high as $147.95 in December 2020.
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Nike In 2021, Beyond: Nike traded as high as $146.66 in March 2021 before drifting back down to as low as $125.44 in the months that followed. Fortunately for Nike investors, the company’s fiscal fourth-quarter earnings report in June was a home run.
Nike reported record earnings, revenue and guidance beats along with record North American revenue in the quarter. The stock initially jumped more than 13% following the report, hitting a new all-time high of $174.38 in August. The stock has since cooled back down to around $155.50.
Still, Nike investors who bought one year ago and held on have generated a solid return on their investment. In fact, $1,000 in Nike stock bought on Sept. 21, 2020, would be worth about $1,357 today, assuming reinvested dividends.
Looking ahead, analysts are expecting Nike to be back at new all-time highs once again in the next 12 months. The average price target among the 26 analysts covering the stock is $185, suggesting 18.9% upside from current levels.
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.