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 both LyondellBasell Industries NV (NYSE: LYB) and Dow Chemical Co (NYSE: DOW) are down 13 percent since January 4.
- RBC Capital Markets’ Arun Viswanathan downgraded the rating for LyondellBasell from Top Pick to Outperform, while raising Dow Chemical from Outperform to Top Pick.
- Sustainability of Dow Chemical’s above-market volume growth and margins make it more attractive than LyondellBasell, Viswanathan stated.
LyondellBasell
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The price target for the company has been reduced from $105 to $95.
LyondellBasell’s strong exposure to the North American shale gas boom, robust organic growth through low-cost and high return buybacks and value return via buybacks and dividends make it an attractive investment option, analyst Arun Viswanathan said.
He added, however, that compression in the oil-to-gas ratio and oncoming NA ethylene capacity could potentially overshadow LyondellBasell’s positive features.
LyondellBasell’s 4Q EPS of $2.20 was marginally ahead of the RBC estimate of $2.10 as Americas and Europe O&P offset weaker-than-expected I&D segment results.
The EPS estimates for 2016 and 2017 have been reduced from $9 to $8.75 and from $10 to $9.50, respectively, to reflect lower I&D income and lower refining income.
Dow Chemical
The price target for Dow Chemical has been raised from $51 to $60.
The company’s robust 4Q15 results were boosted by one-time factors, Viswanathan mentioned. Dow Chemical recorded a 4 percent y/y volume growth excluding divestitures in 4Q15, versus a 2 percent increase in 3Q15.
Although the company faces some headwinds in 1H16, it has several positive features, including sustainable strong above-market volume and margin growth, a robust growth pipeline of EBITDA and benefits expected from its cost cutting efforts and merger synergies, the analyst stated.
The RBC Capital Markets report noted, “Dow provides strong above-market volume and margin growth that appears sustainable, a compelling 2-3 year EBITDA growth pipeline, and most different from LYB, a robust 12-18 month self-help backstop from cost cutting and merger synergies.”
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.