bonhuang's  Instablog

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Equity research with fundamental and technical analysis. Option player.
  • Two ER Plays Next Week 0 comments
    Sep 10, 2012 4:20 AM | about stocks: FIVE, PIR

    Five Below : This will be the 1st time ER show, the stock is unbelievable to have such a high price with current negative earnings, seems people have high expectations here. This quarter may not be crucial but the holiday season, however, it'll show sth. really helpful for prediction.

    Be attention that the sales growth rate keeps going down, and analyst's expectation this quarter is about 38% higher than last year, last quarter is around 51%. Will it go down so much? I doubt it. Probably lots of people think the same way as I do, and the stock price keeps being all time high. Now, what about if they beat both sales & EPS? Are we sure the price will go up? The possibility gets higher, but not much. Last Thursday's 9% up may be the key for this ER play. If it beats a lot, the price will go up, if not so much, and the outlook is dim, people could realize the growth rate is down and will keep lower, the stock price falls.

    From my perspective, long strangle call@35, put@30 may be a better choice. No big gamble, anyway it's the 1st time ER.

    Pier 1 Imports : This one is also at its all time high. Can you imagine this stock was 0.15 at 2008? Why it's popular? Insider buying, real estate is coming back, recent furniture stocks ER mostly show great results, such as LZB, WSM(Pottery Barn) and etc. Why this one cannot? Every tech spec shows a strong ER ahead, what do you think?

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in PIR over the next 72 hours.

    Stocks: FIVE, PIR
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