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.
- Deere & Company (NYSE: DE) share are down 12 percent year-to-date, following a sharp decline in August.
- RBC Capital Markets’ Joel Tiss maintained a Market Perform rating on the company, while reducing the price target from $77 to $70.
- Weaker volumes could result in lower capacity unitization, which may exert pressure on Deere’s decremental margins in 2016, Tiss mentioned.
Following a meeting with Deere, analyst Joel Tiss said that although the company did not share any new information, it appears that it would not be able to sustain the decremental margins achieved so far this year in 2016.
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Thus far in 2015, Deere has achieved decremental margins in the 30 percent range. However, they are likely to contract next year, since large agricultural equipment capacity utilization levels are currently believed to be near 50 percent.
Tiss said that North America and Latin America are likely to continue to be lackluster for the industry in 2016. Therefore, HP tractor sales for Deere and the rest of the industry could remain under pressure next year.
A further weakening of volumes could push Deere’s capacity utilization below 50 percent. This would exert pressure on the company’s decremental margins, possibly toward 40 percent.
In the report RBC Capital Markets noted, “Separately, based on CAT’s recent commentary and Deere’s context that lowered 2015 sales guidance in construction and forestry (from +2% to -5%) was not just energy and rental related exposures but a broad-based slowdown across the board, we also lowered our construction and forestry equipment sales forecast in 2016 from -3% to -5% assuming that nothing really gets better next year.”
The EPS estimates for FY2016 and FY2017 have been reduced from $4.75 to $4.00 and from $5.50 to $4.40, respectively.
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.