CNBC Street Signs Summary for March 27 (BWLD, CMG, LEN, AIG)


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.


Earlier on CNBC, during Street Signs, Jim Cramer and crew discussed a variety of stocks.Cramer was bullish on Buffalo Wild Wings, (NASDAQ: BWLD) despite the company's rating being lowered at Deutsche Bank. The company announced a weaker sales perspective which may have hurt the stock price. The company instead is setting a higher price target which is good news for shareholders. Buffalo Wild Wings is expected to keep increasing its stock price in part because it is a momentum stock just like Chipotle (NASDAQ: CMG) and others in the fast food industry where earnings can go up faster than the price of the stock.In the same line, Cramer and crew discussed the rise of companies in the construction sector with Lennar (NYSE: LEN) leading an early rally with its stock price going up over 4%. This is fueled in part to its announcement of better than expected new order sales for the first quarter of 2012. Lennar also announces its level of new building orders is at its best since late 2008 and cancellation levels in line with a low industry level of 18%, an excellent level for the industry if compared to previous years. Cramer considers margins along the industry are in better shape now than they have been for the last three of years with an average gross margin for the industry of 20%, far better than what it has being for the last 3 years. Finally, Lennar announced Q4 EPS of $0.8 as compared to the expected 0.4 a 50% jump over earlier expectations. During the earlier hours of the Street Signs show, the crew gave an overview of what we will see tonight when Cramer brings American International Group (NYSE: AIG) CEO's Robert Benmosche to comment on the company's future profitability. To start, AIG is up 1.45% during the first hour of today's trading although some analysts believe the future is uncertain due to the company selling most of its international units as part of the shakeout to save it from bankruptcy. In words of its CEO, AIG is now a more domestic company with focus in few very profitable operations which will eventually have a positive impact in taxpayers returns with an expected $10 billion profits for 2012. This means the company is concentrating operations in local operations with overall high potential. Cramer is consistent in believe the stock price could go much higher due to its focus and its move towards efficiency and flexibility.One more company in today's table was National Oilwell Varco (NYSE: NOV), Jim Cramer believes this stock is seriously undervalued because although it is intrinsically linked to the oil and gas price fluctuations it has all the potential of an innovative tech corporation that makes deep drilling possible in locations where new technologies are in high demand. Cramer considers the company should fare better. The stock is selling for less than 12 times next year earnings despite having a 19% growth rate. Cramer believes the company is trading like a commodity play, while in reality is a highly innovative company that posses a huge proprietary technology valuation.In relation to natural gas and other forms of power generation, Cramer and crew believe natural gas and the companies that form part of the industry should do better than coal related companies due to higher scrutiny related to CO2 emissions. The rail industry should be one to suffer greatly in the downturn of coal due to its high dependency on the commodity. However, during the last sessions, the gas industry is not doing so well, in part because its being hit by the mild weather reducing the need for heating powered by gas and a surplus of inventories that pushes the price lower.

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.


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