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.
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The brokerage's Outperform-rated stocks with limited U.K./European exposure include Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ: ULTA) (0 percent), Lululemon Athletica inc. (NASDAQ: LULU) (<2 percent), Kohl's Corporation (NYSE: KSS) (0 percent) and J C Penney Company Inc (NYSE: JCP) (0 percent).
Baird also likes Nordstrom, Inc. (NYSE: JWN) and Vera Bradley, Inc. (NASDAQ: VRA) due to their negligible international exposure.
Other Elements To Keep In Mind
"F/X translation presents the greatest near-term risk to estimates following sharp currency moves today — although U.K. exposure is rather modest across our list," analyst Mark Altschwager wrote in a note.
"Looking beyond currency exposure, we're mindful of the risks of a broader economic slowdown as events in Europe and the U.S. presidential election cycle add uncertainty to an already low-growth backdrop — all of which may pressure stock valuations (group relative valuation now 1 standard-deviation below 10-year average)," the analyst continued.
The analyst remains constructive on his 2016 top ideas including Ulta, Lululemon and Sally Beauty Holdings, Inc. (NYSE: SBH) given stronger category growth (beauty, active) and company-specific sales and margin initiatives.
The analyst also sees tactical opportunities in the second half in the shares of Kohl's and JC Penney due to easy fourth-quarter sales/margin comparisons, no international exposure, inexpensive valuation and customer bases that are less sensitive to stock market volatility.
International Exposure
Baird also presented a list of stocks in its coverage that has international revenue exposure:
- Coach Inc (NYSE: COH) international: "~42 percent of sales, although Europe (including U.K.) remains rather small (<3 percent)."< li>
- Abercrombie & Fitch Co. (NYSE: ANF) international: "~35 percent of sales, including U.K. ~5 percent and rest of Europe ~19 percent."
- Michael Kors Holdings Ltd (NYSE: KORS) international: "~32 percent of sales, including U.K. ~3 percent and rest of Europe ~18 percent."
- Lululemon international: "~27 percent of sales; U.K./Europe exposure remains small today (<2 percent)."< li>
- Gap Inc (NYSE: GPS) international: "~24 percent of sales, including U.K. ~4 percent and rest of Europe ~1 percent."
- Sally Beauty international: "~19 percent of sales, including U.K. ~5 percent and rest of Europe ~4 percent."
- Urban Outfitters, Inc. (NASDAQ: URBN) international: "~15 percent of sales, including U.K. ~2 percent and rest of Europe ~6 percent."
- L Brands Inc (NYSE: LB) international: "~14 percent of sales (VS & BBW), including UK estimated <2 percent and rest of europe <2 percent."< li>Vince Holding Corp (NYSE: VNCE) international: "~10 percent of sales, including Europe <2 percent."< ul>
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.