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.
In a new report, Morgan Stanley analyst Adam Jonas gives his cautious take on the strong February U.S. auto sales numbers released this week. According to Jonas, the amount of discounting and pull-forward financing currently in the industry is an important caveat to the stellar sales numbers.
On the surface, Ford Motor Company (NYSE: F) was a big winner, delivering 20.2 percent year-over-year (Y/Y) sales growth compared to consensus estimates of +11.8 percent. Ford rival General Motors Company (NYSE: GM)’s 1.5 percent Y/Y growth came up short of +5.0 percent consensus estimates.
Related Link: Wells Fargo Sees 23.5% Recession Probability In Next 6 Months
Morgan Stanley is calling for SAAR of 18.2 million in 2016 and 18.9 million in 2017.
Despite the strong numbers, Jonas notes a certain degree of uneasiness regarding the easy financing and high levels of incentives in the industry.
“We reiterate our view that OEMs are not the best way to gain exposure to SAAR beats,” he explains. Morgan Stanley instead prefers equities with less direct exposure to the U.S. auto credit cycle and more exposure to powerful secular trends within the industry.
Morgan Stanley has Outperform ratings on Fiat Chrysler Automobiles NV (NYSE: FCAU), Delphi Autimotive PLC (NYSE: DLPH), Harley-Davidson Inc (NYSE: HOG), Lear Corporation (NYSE: LEA), Magna International Inc. (USA) (NYSE: MGA), Meritor Inc (NYSE: MTOR), Mobileye NV (NYSE: MBLY) and Tesla Motors Inc (NASDAQ: TSLA).
Disclosure: the author holds no position in the stocks mentioned.
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.
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!