27% profits every 20 days?
This is what Nic Chahine averages with his options 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.
HSBC initiated Carnival Corp (NYSE: CCL) with a Buy rating and $60 price target following the company showed significant improvement in revenue management and cost discipline, while the investor fears around China and fuel were overdone.
As a result, despite geopolitical events, Zika and Brexit, the company's third quarter EPS was $1.92 versus a guidance midpoint of $1.85 and FY guidance has been increased by $0.05. In the quarter, the company repurchased $700 million of shares.
"With scope to generate c15% EPS growth pa over the coming years, and 5.2% FCF yield (likely to go entirely to s/h), we think the shares looks compelling on 12.7x 2017eP/E," analyst Lena Thakkar wrote in a note.
Thakkar noted that Carnival is still 3 percent below its 2008 yields vs. RCL at 12 percent above its 2008 yields, leaving 15 percent of potential catch-up.
"We forecast 3% yield growth for 2017 but see upside to this figure. Each 1% on yield is worth 4% on EPS," Thakkar continued.
Further, the analyst said concerns around lower ticket pricing in China is overblown saying such market is bound to have "have pockets of pricing weakness as demand catches up with supply."
In addition, Thakkar said Carnival generates average profitability from the region for its 5 percent exposure.
Regarding fuel, Thakker said the sensitivity is limited to 3 percent on EPS for a 10 percent move in fuel.
At time of writing, shares of Carnival were up 0.51 percent to $49.06.
27% profits every 20 days?
This is what Nic Chahine averages with his options 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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