NEW BEARISH Plays
On Assignment Inc. - ASGN - close: 29.48 change: +0.17
Stop Loss: 30.45
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Entry on September -- at $---.--
Listed on September 04, 2014
Time Frame: 8 to 12 weeks
Average Daily Volume = 509 thousand
New Positions: Yes, see below
Why We Like It:
The U.S. labor market is slowly improving. Naturally you might think that would be good news for temporary labor and staff placement services. ASGN is one such company. According to their press release, "On Assignment, Inc. is a leading global provider of in-demand, skilled professionals in the growing technology, healthcare, and life sciences sectors, where quality people are the key to success. The Company goes beyond matching rÃ©sumÃ©s with job descriptions to match people they know into positions they understand for temporary, contract-to-hire, and direct hire assignments. Clients recognize On Assignment for its quality candidates, quick response, and successful assignments. Professionals think of On Assignment as career-building partners with the depth and breadth of experience to help them reach their goals."
The company has beaten Wall Street's earnings estimates three quarters in a row. Their latest report was July 30th. Analysts were expecting a profit of $0.36 a share on revenues of $470.9 million. ASGN reported a profit if $0.56, significantly above expectations, yet revenues were only $468.6 million.
ASGN said their gross margins were up from a year ago and the prior quarter. They offered bullish EPS guidance for the next quarter but their revenue guidance was below Wall Street's estimates. Investors chose to focus on the revenue miss and the lower revenue guidance. Shares of ASGN collapsed more than 20% the next day. The stock has produced an oversold bounce but that bounce is fading.
Currently ASGN appears to have short-term support in the $29.00-29.20 zone. We're suggesting a trigger to open bearish positions at $28.90.
Trigger @ $28.90
- Suggested Positions -
Short ASGN stock @ (trigger)
- (or for more adventurous traders, try this option) -
Buy the Oct $30 PUT (ASGN141018P30) current ask $1.65
Option Format: symbol-year-month-day-call-strike