New Watch List Entries

GD - General Dynamics

VFC - V.F. Corp.


Active Watch List Candidates

None, see below.


Dropped Watch List Entries

ATVI, MS, NUE, ORLY, and TMO have all graduated to our active play list.



New Watch List Candidates:


General Dynamics - GD - close: 125.45

Company Info

GD is considered part of the industrial goods sector. The company is a huge aerospace and defense company. They have four significant segments: aerospace, combat systems, information systems, and marine systems (ships and submarines). The defense industry in the U.S. has been saddled with significant budget cuts due to the 2011 sequestration deal that will shave $500 billion from U.S. defense spending from 2012 through 2021. The industry has managed to thrive in spite of these budget cuts.

GD has beaten Wall Street's earnings estimates four quarters in a row. The company is also seeing margin improvement. Their latest report on July 23rd not only beat analysts estimates but management raised their EPS and revenue guidance for 2014. Multiple analysts raised their price target on GD following this announcement.

Technically shares of GD look like a buy right here at $125.45. I'd like to see a little bit of follow through. Wait for a close above $126.25 and then buy calls the next day. We'll start with a stop loss at $119.75. Our long-term target is the $140-150 zone.

Breakout trigger: Wait for a close above $126.25
Then buy calls the next day with a stop at $119.75

BUY the 2016 $140 call (GD160115c140) current ask $5.20

Option Format: symbol-year-month-day-call-strike

Chart of GD:

Originally listed on the Watch List: 09/07/14


V.F. Corp. - VFC - close: 65.32

Company Info

Wall Street remains concerned about the consumer, especially on apparel spending. Yet shares of VFC have managed to weather these concerns pretty well. The company offers a broad range of apparel, footwear, accessories, and more.

According to a company press release VFC describes itself as, "a global leader in the design, manufacture, marketing and distribution of branded lifestyle apparel, footwear and accessories. The company's highly diversified portfolio of 30 powerful brands spans numerous geographies, product categories, consumer demographics and sales channels, giving VF a unique industry position and the ability to create sustainable, long-term growth for customers and shareholders. The company's largest brands are The North Face, Vans, Timberland, Wrangler, Lee and Nautica." Sales are nearing $11.8 billion a year.

Management decided to split its stock 4-for-1 back in December 2013. Stocks splits are normally seen as a sign of confidence by the management. VFC missed earnings estimates and guided lower back in February 2014. Since then the earnings picture has improved. Investors have been buying the dips and the point & figure chart is bullish with a $77 target.

Technically the stock looks like a buy right now with Friday's bounce from its 10-dma and the close near all-time highs. I'd like to see a little bit more confirmation. Wait for a close above $65.75 and then by calls. We'll start with a stop at $60.75, just under the simple 200-dma.

Breakout trigger: Wait for a close above $65.75
Then buy calls the next day with a stop at $60.75

BUY the 2016 $70 call (VFC160115c70) current ask $4.10

Option Format: symbol-year-month-day-call-strike

Chart of VFC:

Originally listed on the Watch List: 09/07/14


Active Watch List Candidates:



Currently we do not have any active watch list candidates.

They have all graduated to our active play list.

Please see the new watch list candidates added (above).

In addition to the new watch list candidates above you may want to keep an eye on these stocks below.

Radar Screen:
Here is a list of stocks on my radar screen. These have potential to be LEAPS trades down the road if the right entry point presents itself. In no particular order:

IACI, ACT, PANW, BLL, HBI, FB, CALM, CVS, SNA, FXI, AA, UAL, CHKP, BBY, FDX, CAH, ECL, GILD, AMGN, MCK, UNP, NSC, FLT, SWK, INGR, TPX, HOT