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.
On September 16, Johnson & Johnson (NYSE: JNJ) announced plans to acquire Abbott Medical Optics for $4.325 billion in cash.
Credit Suisse’s Vamil Divan maintains a Neutral rating on Johnson & Johnson, with a price target of $123.
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The Deal
The deal is expected to close in Q1:17, and Divan expects the acquisition to be immediately accretive to Johnson & Johnson’s non-GAAP EPS.
“While not transformative by any means given JNJ’s overall size and scale, we believe this deal is a good strategic fit within JNJ’s existing vision care business,” the analyst mentioned.
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Given that the company has also undertaken deals in medical devices and consumer, Divan wondered whether management would now focus its attention of strengthening the pharmaceutical segment via business development.
Pricey Deal
While Abbott Medical Optics has three key business segments, including cataract surgery tools, refractive laser surgery tools and consumer eye health, Divan pointed out that Johnson & Johnson did not as yet have a presence in the vision surgical equipment field space, although the company did have expertise and scale in consumer vision brands and medical device manufacturing.
The analyst also noted that the price for the deal is higher than previous comparable deals by peers, while stating that the current deal could “create both revenue as well as COGS synergies through JNJ’s consumer brand equity, geographic footprint, as well as manufacturing scale.”
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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.