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.
Shares of Sunedison Inc (NYSE: SUNE) are down more than 21 percent on Thursday trading, after the company missed earnings estimates in the morning, on the back of lower than expected third party sales and a higher mix of retained projects.
For the second quarter of 2015, the company reported a net loss of ($0.67) per share on revenue of $455 million, while the Street was expecting a consensus net loss of ($0.45) per share on sales of $403.77 million.
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Despite the miss, Credit Suisse analysts Patrick Jobin, Maheep Mandloi and Jennifer Ky reiterated an Outperform rating and $45.00 price target on the stock following the earnings call. They argue there is “a fundamental disconnect between the stock performance and the (…) stellar execution of the organic project development business that exceeded expectations on all metrics, (…) increased disclosure to pacify liquidity concerns, and the company making the (right) decision to ensure accretive drop-down economics.”
In fact, the experts note, the drop in the stock price provides investors with a buying opportunity, even in spite of the vast volatility.
The Issue Causing Consternation
According to the note, investors are somehow frustrated with TerraForm Power Inc (NASDAQ: TERP) not having raised its 2016 guidance, and with Sunedison having demonstrated it could still drop down assets at highly attractive levered yields (below 10 percent) to TerraForm, “by dialing back the cash contribution (i.e. gross margin) at SUNE's DevCo.” However, the analysts note that subsidizing drop economics calls TerraForm’s cash generation into question, even in spite of a higher GP value.
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.