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!
Underperformance
Union Pacific shares have modestly underperformed the market over the past quarter, rising 2.7 percent versus 3.9 percent gain for the S&P 500. Compared to the peer group, Argus said its multiples are mixed, but generally point to undervaluation.
"We think this comparison is important, as UNP shares have outperformed the peer group over the past 1-, 5- and 10-year periods," analyst John Eade wrote in a note.
The analyst maintains his Buy rating on Union Pacific, which reported an in-line second-quarter EPS, as the shares are on a recovery mode after slumping in recent quarters due to weak industry fundamentals.
FREE REPORT: How To Learn Options Trading Fast
In this special report, you will learn the four best strategies for trading options, how to stay safe as a complete beginner, a 411% trade case study, PLUS how to access two new potential winning options trades starting today.Claim Your Free Report Here.
"At current levels, we think that UNP still offers exceptional value," Eade noted.
Looking Ahead
Over the long term, Argus remains positive about North American railroad companies based on strengthening consumer demand for finished goods, low fuel prices and modest growth in automotive/parts shipments, as car sales approach record levels.
However, in the near term, the company has to deal with lower coal shipments amid low natural gas prices.
That said, the analyst highlighted Union Pacific's potential to receive profitable contracts due to its pricing power, as it is the sole major railroad to serve several Midwest and West Coast regions. In addition, the company's industry-low operating ratio helps strengthen the bottom line.
Based on the continued weak outlook for coal shipments, Eade trimmed his 2016 EPS estimate to $5.00 from $5.35, and slashed 2017 estimate to $5.60 from $5.90.
At time of writing, shares of Union Pacific rose 1.78 percent to $92.55. The analyst has a price target of $100 on the stock.
Full ratings data available on Benzinga Pro.
Did you like this article? Could it have been improved? Please email feedback@benzinga.com with the story link to let us know!
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.