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Posts Tagged ‘Earnings Announcement’

Visa (V) Regains Momentum Following Earnings Report

Monday, October 28th, 2019

Visa’s earnings report in the past week has boosted sentiment among analysts. The following two articles include two upward price target revisions and a case for why the stock can continue to strengthen from here – Visa Analysts Encouraged By Q4 Results, 2020 Guidance and Visa stock gains after forecast paints a picture of continued strength in 2020.

The rally that followed the earnings report has lifted Visa’s stock back above all of the commonly looked at moving averages (20, 50 & 100-day). What’s appealing about V is the long-term trend and that dips have been shallow over the year which points to strong demand. There was a correction lower since early September, but the post-earnings upward momentum suggests the stock may have resumed within its broader uptrend.

Visa Chart October 2019 vertical options spread

Visa Chart October 2019

If you agree there’s further upside ahead for V, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open V 29NOV19 175 Puts (V191129P175)
Sell To Open V 29NOV19 177.5 Puts (V191129P177.5) for a credit of $0.99 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when V was trading near $178.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $1.30 per spread.  Each contract would then yield $97.05 and your broker would charge a $250 maintenance fee, making your investment $152.30 ($250 – $97.05).  If V closes at any price above $177.5 on November 29, both options would expire worthless, and your return on the spread would be 63% (730% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates October 26, 2019

IBD Underlying Updates October 26, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Synchrony Financial (SYF) Gets a Boost From its Latest Earnings Report

Monday, October 21st, 2019

Synchrony Financial rallied to a two-month high in the past week and several analysts think it can continue higher. Here is what the IBD had to say about the stock – This GE Spinoff Nears Buy Point On Strong Earnings. Also take a look at the following article which discusses Warren Buffett’s stake in the company – Here is What Hedge Funds Think About Synchrony Financial (SYF).

SYF recently regained both its 50 and 100 day moving averages which signals the broader bullish trend has potentially restarted. Of the two, the 100-day moving average was particularly strong resistance throughout September. For this reason, the indicator is now seen as strong support on near-term dips. The break above the 100-day moving average also means a break above the September high which in turn has set a successions of higher highs and higher lows. Another way to look at it is as a range breakout since the stock was essentially consolidating sideways above its 200-week moving average for the past two months or so.

SYF Chart October 2019 vertical options spread

SYF Chart October 2019

If you agree there’s further upside ahead for SYF, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least a little bit.

Buy To Open SYF 22NOV19 31.5 Puts (SYF191122P31.5)
Sell To Open SYF 22NOV19 34.5 Puts (SYF191122P34.5) for a credit of $0.93 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when SYF was trading near $34.50.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $1.30 per spread.  Each contract would then yield $91.70 and your broker would charge a $300 maintenance fee, making your investment $208.30 ($300 – $91.70).  If SYF closes at any price above $34.50 on November 22, both options would expire worthless, and your return on the spread would be 44% (502% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates October 19, 2019

IBD Underlying Updates October 19, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Lululemon Athletica Nears Major Technical Support Area

Monday, September 30th, 2019

Lululemon Athletica’s reported earnings in early September which led to a rally to fresh all-time highs. Several analysts are expecting more upside, here are two of them – Is Lululemon (LULU) a Solid Growth Stock? 3 Reasons to Think ” Yes “ and UBS Group Analysts Give Lululemon Athletica (NASDAQ:LULU) a $210.00 Price Target.

After hitting all-time highs, LULU has edged lower to pare gains related to the earnings report. A confluence of support is in sight and considered quite strong. The confluence consists of the 50-Day moving average, a horizontal level, and the lower bound of a long-term bullish trend channel. The horizontal level comes in at $188 and previously acted as resistance on several rallies since June. The trend channel dates back to a low printed in late December and has contained price action since.

LULU Chart September 2019 vertical earnings spread

LULU Chart September 2019

If you agree there’s further upside ahead for LULU, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open LULU 01NOV19 187.5 Puts (LULU191101P187.5)
Sell To Open LULU 01NOV19 190 Puts (LULU191101P190) for a credit of $1.10 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when LULU was trading near $190.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $107.50 and your broker would charge a $250 maintenance fee, making your investment $142.50 ($250 – $107.50).  If LULU closes at any price above $190 on November 1, both options would expire worthless, and your return on the spread would be 75% (855% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates September 28, 2019

IBD Underlying Updates September 28, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

CDW Corp. (CDW) Is Poised to Break to Fresh Record Highs

Monday, September 9th, 2019

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

CDW Corp. (CDW) Is Poised to Break to Fresh Record Highs

Several Analysts are optimistic about CDW’s outlook, take a look at what there two publications have to say – Is CDW (CDW) Outperforming Other Computer and Technology Stocks This Year? And With EPS Growth And More, CDW (NASDAQ:CDW) Is Interesting.

The most impressive part of CDW is how steadily it has been rising throughout the year. Dips in the stocks price are shallow and appear to be quickly bought up. A rising trend channel has encompassed price action and there are several layers of downside support. The first is a horizontal level that comes in just above $116. Further support comes from the 50-day moving average, currently near $113.50. The moving average is near the bottom of the trend channel and therefore is considering to be major support.

CDW Chart September 2019 verticle options spread

CDW Chart September 2019

If you agree there’s further upside ahead for CDW, consider this trade which is a bet that the stock will continue to advance over the next six weeks, or at least not decline very much.

Buy To Open CDW 18OCT19 110 Puts (CDW191018P110)
Sell To Open CDW 18OCT19 115 Puts (CDW191018P115) for a credit of $1.18 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when CDW was trading near $118.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $115.50 and your broker would charge a $500 maintenance fee, making your investment $384.50 ($500 – $115.50).  If CDW closes at any price above $115 on October 18, both options would expire worthless, and your return on the spread would be 30% (281% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates September 5, 2019 weekly trade idea

IBD Underlying Updates September 5, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

PayPal (PYPL) Dips Following Earnings, What’s Next?

Monday, July 29th, 2019

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

PayPal (PYPL) Dips Following Earnings, What’s Next?

PayPal slipped lower after reporting earnings in the past week. Take a look at what these analysts are saying about the stock post-earnings – PayPal Q2 Earnings Beat Estimates, Revenues Up Y/Y and PayPal’s Earnings May Have Disappointed but Its Chart is “BTF”.

Paypal dipped to the 50-day moving average on Thursday and held above the moving average on Friday. The stock trades at a confluence of support as there is also a horizontal level in play. The level comes in at $113.70 and acted as both resistance and support in the past. In the event the stock falls to hold here, there is further support from the 100-day moving average close to around $112.

PYPL Chart July 2019 vertical options spread after earnings announcement

PYPL Chart July 2019

If you agree there’s further upside ahead for PYPL, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open PYPL 30AUG19 112 Puts (PYPL190830P112)
Sell To Open PYPL 30AUG19 115 Puts (PYPL190830P115) for a credit of $1.45 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when PYPL was trading near $115.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $142.50 and your broker would charge a $300 maintenance fee, making your investment $157.50 ($300 – $142.50).  If PYPL closes at any price above $115 on August 30, both options would expire worthless, and your return on the spread would be 90% (1027% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates July 25, 2019 weekly trade ideas

IBD Underlying Updates July 25, 2019

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Can PayPal (PYPL) Continue It’s Earnings-Driven Momentum?

Sunday, October 28th, 2018

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Last week was an awful one for the market.  SPY fell 4% after whip-sawing both up and down all week.  Most option portfolios probably suffered as well.  We were delighted that our newest portfolio which trades options on MSFT notched a gain of 20.4% for this otherwise bad week for the market.  Chalk up another victory for well-executed option strategies.

Terry

Can PayPal (PYPL) Continue It’s Earnings-Driven Momentum?

PayPal received a recent boost from it’s earnings report and these Seeking Alpha articles suggest it can continue the upside momentum – PayPal: It’s A Buy and It’s Not Too Late To Buy PayPal.

Payal appears to be supported near the $83 price point which was where the stock gapped up to following their earnings report earlier this month.  The 20 and 50-day moving averages are converging in this area as well to offer further technical support.  In the event of a dip lower, further support near the psychological $80 handle is likely to trigger strong buying as technical traders often look to position following a gap close.

PYPL Chart October 2018

PYPL Chart October 2018

*source Tradingview.com

If you agree there’s further upside ahead for PYPL, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open PYPL 30NOV18 80 Puts (PYPL181130P80)
Sell To Open PYPL 30NOV18 83 Puts (PYPL181130P83) for a credit of $1.06 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when PYPL was trading near $83.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $103.50 and your broker would charge a $300 maintenance fee, making your investment $196.50 ($300 – $103.50).  If PYPL closes at any price above $83 on November 30, both options would expire worthless, and your return on the spread would be 53% (605% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates October 25, 2018

IBD Underlying Updates October 25, 2018

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Has The Tide Turned in Paycom Software (PAYC)?

Saturday, June 16th, 2018

This week we are looking at another of the Investor’s Business Daily (IBD) Top 50 List companies.  We use this list in one of our options portfolios to spot outperforming stocks and place option spreads that take advantage of the momentum.

Terry

Has The Tide Turned in Paycom Software (PAYC)?

Investor’s Business Daily, the website belonging to the creators of the IBD Top 50 list, named PAYC their IBD Stock of the Day on Friday.  Take a look at the article here for the reason behind the choice.  As well, an article published on The Motley Fool explains why Paycom Software is one of three stocks the analyst just added to his retirement portfolio.

After consolidating lower within a correction for about a month or so, PAYC has turned decisively higher, crossing above an important barrier.  Two prior attempts since May at the horizontal resistance level near $110 resulted in a notable correction, however, the stock managed to climb above it last week to signal that bulls may be retaking control.  The level has been significant since April, acting as both support and resistance.  In addition to the horizontal level, the stock has comfortably regained its 20-day moving average and trades near 52-week highs.

PAYC Chart June 2018

PAYC Chart June 2018

*source Tradingview.com

If you agree there’s further upside ahead for PAYC, consider this trade which is a bet that the stock will continue to advance over the next five weeks, or at least not decline very much.

Buy To Open PAYC 20JUL18 105 Puts (PAYC180720P105)
Sell To Open PAYC 20JUL18 110 Puts (PAYC180720P110) for a credit of $1.33 (selling a vertical)

This price was $0.02 less than the mid-point of the option spread when PAYC was trading near $112.  Unless the stock rallies quickly from here, you should be able to get close to this amount.

Your commission on this trade will only be $2.50 per spread (the rate charged by thinkorswim for Terry’s Tips’ subscribers).  Each contract would then yield $130.50 and your broker would charge a $500 maintenance fee, making your investment $369.50 ($500 – $130.50).  If PAYC closes at any price above $110 on July 20, both options would expire worthless, and your return on the spread would be 35% (399% annualized).

Changes to Investor’s Business Daily (IBD) Top 50 This Week:

IBD Underlying Updates June 14, 2018

IBD Underlying Updates June 14, 2018

We have found that the Investor’s Business Daily Top 50 List has been a reliable source of stocks that are likely to move higher in the short run.  Recent additions to the list might be particularly good choices for this strategy, and deletions might be good indicators for exiting a position that you might already have on that stock.

As with all investments, you should only make option trades with money that you can truly afford to lose.

Happy trading,

Terry

Diagonal Condor Earnings Strategy Update #5 – Mastercard (MA)

Tuesday, April 24th, 2018

When using the Diagonal Condor Earnings Strategy, one of the things we like to find is a stock about to announce earnings where the options have priced in a post-announcement price fluctuation which is greater than the historical average of the post-announcement changes for that company.

Our goal is to create two diagonal spreads at a credit (or slight debit) which allow for a profit to be made if the post-announcement fluctuation is within the historical average amount.  In the past few weeks, we have placed spreads that met these criteria on several companies, including Carmax (KMX), TD Ameritrade (AMTD), and Red Hat (RHT), and these plays were all profitable, with returns from 30% to over 70% including commissions in a single week.

This week, we are looking forward to taking a position in Mastercard (MA) which announces earnings before the market opens on May 2.  The 4May18 options have priced a 3.8% post-announcement price change while the average change for the last eight quarters has been only 1.1% (about $2 when the stock is trading about $175).

Here are the trades we made this week using the Diagonal Condor Earnings Strategy that is outlined here in case you missed it earlier. Here are the spreads we will place just prior to May 2 (prices as they exist now):

Buy To Open MA 1Jun18 170 puts (MA180601P170)
Sell To Open MA 4May18 175 puts (MA180504P175) for a credit of $.25 (buying a diagonal)

Buy To Open MA 1Jun18 182.5 calls (MA180601C182.5)
Sell To Open MA 4May18 177.5 calls (MA180504C177.5) for a credit of $.17 (buying a diagonal)

After paying a commission of $2.50 per spread at the commission rate charged to Terry’s Tips subscribers at thinkorswim, each pair of spreads will incur a maintenance requirement of $500 less the $42 plus the $5 commission, making it an investment of $463 (the maximum theoretical loss).  One of the spreads is guaranteed to make a gain no matter what the stock might do after the announcement.

Here is the risk profile graph for the above spreads, assuming that implied volatility (IV) of the 1Jun18 option series will fall by 3, from 28 to 25 after the announcement.  This compares to the current IV of the 4May18 series which carries an IV of 35.

MA Risk Profile Graph April 2018

MA Risk Profile Graph April 2018

The break-even range for these positions goes from about $170 to $183.  If the price ends up at any price within this range, there should be a profit.  Historically, the stock has fluctuated by an average of about $2, which would place it between $173 and $177.

If the historical fluctuation continues, these positions could deliver 60% or more on investment for a single week of waiting it out.

If the stock fluctuates more than we expect (and finishes outside of the break-even range), we would roll over the expiring options before they expire on May 4 and sell new weekly out-of-the-money options for the 11May18 series, and continue doing so until we took in sufficient new premium to make the entire experience a profitable one.  We would have five weekly opportunities to accomplish this.  Of course, nothing is guaranteed, but weekly fluctuations tend to be much more moderate once the earnings week has passed, and that is the kind of market where this kind of diagonal or calendar spreads do their best.

If the stock fluctuates more than $2.50 from the $166.36 price when we placed the spreads, you might want to adjust the strike prices by $2.50 in the same direction.

Final note: MA has been a good underlying for Terry’s Tips.  In 2017, one of our actual portfolios traded MA options, and the portfolio gained 152% for the year. You can get a full (and free) report on how this worked out by requesting it below.

Diagonal Condor Earnings Strategy Update #3

Thursday, April 12th, 2018

This is our third suggestion on how to carry out the Diagonal Condor Earnings Strategy on companies which are about to announce earnings. The first two suggestions (RHT and KMX) resulted in 40% gains in a single week when the stock fluctuated only moderately after the announcement.  One of these times, the stock is likely to fluctuate more than we would like, and we will be able to put the second part of the strategy to work.  This will involve selling out-of-the-money weekly puts and calls over the next few weeks until the initial trade turns into a net gain.

This week’s choice is TDAmeritrade (AMTD) which announces before the market opens on Tuesday, April 24, 2018.  Implied volatility (IV) of the 27Apr18 options has not escalated at this point – it is 32.5, barely higher than a six-week-out 25May18 series (31).  We expect IV for the 27Apr18 series to move much higher over the next 10 days, and we hope to take advantage of higher option prices as well as a possibly higher stock price before the announcement date.

Here are the trades we made this week.  Note that the diagonals were set up at a small debit rather than the credit that we seek with this strategy, but when we roll over the 20Apr17 puts and calls to the next weekly series, we expect to create solid credits, especially if IV for those options moves higher as we expect.

BTO 1 AMTD 25May18 57 put (AMTD180525P57)
STO 1 AMTD 20Apr18 60 put (AMTD180420P60) for a debit of $.11  (buying a diagonal)

BTO 1 AMTD 25May18 64 call (AMTD180525C64)
STO 1 AMTD 20Apr18 61 call (AMTD18042061) for a debit of $.28  (buying a diagonal)

Once we roll over these options to the 27Apr17, we expect our net investment will be about $250 per set of spreads ($300 maintenance requirement less $50 net credit).  Here is the risk profile graph for those spreads after the roll has been made:

AMAT Risk Profile Graph April 2018

AMAT Risk Profile Graph April 2018

For the past 8 quarters, the post-announcement fluctuation has averaged 1.75%.  This graph shows that a profit should result if the stock fluctuates less than 5% in either direction.  The potential gains may not appear to be significant, but there seems to be a fair chance to make 20% on the investment for a single week of waiting.

A Carmax Spread Trade to Put the Diagonal Condor Earnings Strategy to Work

Tuesday, April 3rd, 2018

A Carmax Spread Trade to Put the Diagonal Condor Earnings Strategy to Work:

Carmax (KMX) announces earnings before the market opens on Wednesday, April 4, 2018.  If anyone would like to place the spread trade that we suggest below, the order must be placed no later than the market close on Tuesday, April 3rd.

Here are the numbers we compiled for KMX for the last eight quarters:

The prices in green are lower than the last pre-announcement price, suggesting that expectations are rising.  Most companies we tested show much many more green numbers than KNX.  Most of the time, KMX showed a high correlation between the actual results and what the stock price did after the announcement (while one might expect this would be universally true, our back-testing and personal experience has proved otherwise).  While the direction of the change for KMX was highly consistent (beating estimates resulted in a higher stock price, and vice versa), the magnitude of the change was not consistent.

In the June 2017 announcement, earnings were a whopping 23% above estimates, but the stock only gained 4% after they became public. In the next quarter, September 2017, earnings exceeded estimates by only 3% while the stock gained 10%.

KMX does not seem consistently beat or fall behind estimates.  This is a different pattern than we see in many companies who low-ball guidance, and then exceed estimates by a large amount quarter after quarter.  KMX does not seem to do this.

The average post-announcement stock price change for KMX was 4.9%.  This is less than the current option prices which have priced in a likely 5.7% change.  Someone who likes the stock might take advantage of the higher option prices and write an out-of-the-money call against their stock, and collect some nice premium in addition to some price appreciation if the stock manages to move higher.

We do not have a strong feeling concerning which way we feel the stock is headed after next week’s announcement other than that we think it will probably go in the same direction as the actual results compared to estimates. Since there is no clear pattern of how well the company does compared to estimates, this leaves us with a neutral position on the direction the stock might take after the announcement.

We have developed what we call the Diagonal Condor Earnings Strategy as our preferred options play prior to announcements.

Based on our neutral outlook on KMX, these are the spreads we placed for the upcoming announcement:

Buy to Open KMX 11May18 58 puts (KMX180511P58)
Sell to Open KMX 06Apr18 61 puts (KMX180406P61) for a credit of $.08  (buying a diagonal)

Buy to Open KMX 11May18 67 calls (KMX180511C67)
Sell to Open KMX 06Apr18 64 calls (KMX180406C64) for a credit of $.08 (buying a diagonal)

The net maintenance requirement (investment) on these spreads is $294 per pair ($300 – $16 plus $10 commission), and we have a net credit of $6 per pair in the account.

This is what the risk profile graph looks like after the market close on April 6, assuming that implied volatility (IV) of the May options falls by 3, from the current 33 to 30 (which is consistent with prior earnings week IV drops for 5-week-out options).

With KMX currently trading just below $62, the graph shows that we should end up with a gain if the stock ends up at any price between $59 and $67 on Friday, April 6th.  The sweet spot of the graph shows an approximate gain of $200 (about 66%) if the price ends up between $61 and $64.

If the stock fluctuates by its average post-announcement amount (4.9%), it would end up somewhere between about $59 and $65. In six of the last eight quarters, the fluctuation would have landed somewhere inside of this range, and in two of the quarters, it would not have.

To summarize our thinking, based on the level of IV for the options prior to the announcement (67) compared to IV for further-out options (33), investors do not get unduly excited about earnings announcements from KMX. The stock generally fluctuates after the announcement in the same direction as the results compared to estimates.  The company does not show a pattern of either consistently beating or falling behind estimates.  We believe this pattern is a perfect candidate for the options play outlined above which is essentially a neutral outlook, neither particularly bullish or bearish, but does best if the stock only fluctuates moderately after the announcement.

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