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.
- While Five Below Inc (NASDAQ: FIVE) shares are down 13 percent since July 6, shares of Ollie's Bargain Outlet Holdings Inc (NASDAQ: OLLI) have lost 14 percent.
- Jefferies’ Daniel Binder maintained Buy ratings on both companies, with price targets of $48 for Five Below and of $23 for Ollie's.
- Binder raised the estimates for both companies, citing Holiday sales upside.
Analyst Daniel Binder said that field checks indicated sales strength at Five Below and Ollie's in December. He added that their shares should respond favorably to the healthy holiday results.
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Five Below
Field checks suggested an improvement in Five Below’s business in December, following a somewhat softer November, Binder mentioned. Since December represents 60-65 percent of the quarter, and November only about 25 percent, a strong performance in December “should have outweighed softer November results.”
The comp store sales estimate for Q4 has been raised from 2.5 percent to 3.0 percent. The EPS estimate for the quarter has been raised from $0.75 to $0.76.
Binder said that licensed products performed well. Shopkins seemed “particularly strong” and Frozen continued to sell well. He added, “We also think management was better prepared heading into December this year as it amped up its marketing and promotional programs and implemented merchandising resets and better operational plans to improve throughput at registers during peak periods.”
The EPS estimate for 2016 has been raised from $1.04 to $1.05.
Ollie's
Field checks suggest that Ollie’s Q4 performance was better than the -1.7 percent implied by the company’s annual comp store sales guidance for 4 percent, Binder commented. He expects the company report record comp store sales in a range of +0-2 percent. Seasonal goods, toys and games were areas of strength.
The analyst said that Ollie’s is an “appealing growth story,” citing:
- Early-stage growth company with strong and visible unit expansion ahead
- Favorable new store economics with a cash payback of less than two years
- Strong and improving stable of brands
- Merchant-driven organization with fanatical focus on great closeout buys and low costs
- Strong pricing discipline with an intense focus on the value proposition
- Strong loyalty base with 5.2 million Ollie’s Army members at the time of the IPO
- Wide demographic appeal across a range of age groups and household income levels
The EPS estimates for 2016 and 2017 have been raised from $0.66 to $0.67 and from $0.71 to $0.73, 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.