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.
The house doesn’t always win, at least according to Morgan Stanley analyst Thomas Allen. Allen downgraded Boyd Gaming Corporation (NYSE:BYD) from Overweight to Equal Weight, but raised its price target from $23 to $26.
Boyd shares are up 26 percent this year, and is ahead of consensus for 2017–2018, but the analyst doesn’t see a favorable risk/reward any longer.
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!
The Bull Case
On the lucky side, Allen estimates the company could see 33 percent further upside, to $34 per share.
The winning streak would have to be driven in part by growth in the Las Vegas Locals market as a result of increased development, employment, and home values.
Boyd would also need to see greater-than-expected acceleration in regional gaming demand from low and middle-income households.
Increased margins in these areas, along with the company’s recent dividend initiation, would support valuing the company at a higher multiple.
The Bear Case
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.
Allen’s bear case would see the stock fall back from the mid-$25 handle it’s currently at to $18, about a 30 percent downside.
This would result from Las Vegas Locals tailwinds failing to transform into gaming revenues, which are flat this year. The company has also struggled with its regional properties.
In this scenario, Allen thinks an average multiple of 8.2x would be fair.
Given these extremes, MGM Resorts International (NYSE:MGM) and Wynn Resorts, Limited (NASDAQ:WYNN) may turn out to be more attractive gaming stocks.
Related Links:
Jim Cramer Gives His Opinion On Ferrari and MGM Resorts
24% Monthly Growth In Macau Gaming Win Pushes Casino Stocks Higher
_______Image Credit: Coolcaesar at en.wikipedia [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia Commons
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.