NEW BULLISH Plays
Bright Horizons Family Solutions - BFAM - close: 62.81 change: +0.32
Stop Loss: 59.75
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on August -- at $---.--
Listed on August 17, 2015
Time Frame: Exit
Average Daily Volume = 176 thousand
New Positions: Yes, see below
BFAM has been a publicly traded company for less than three years. Since its IPO in early 2013 the stock has been marching higher and currently trading near all-time highs. The stock's relative strength is noteworthy with BFAM up +33% in 2015 versus an S&P 500 that's only up +2.1%.
BFAM is in the services sector. According to the company,
"Bright Horizons Family Solutions is a leading provider of high-quality child care, early education and other services designed to help employers and families better address the challenges of work and life. The Company provides center-based full service child care, back-up dependent care and educational advisory services to more than 900 clients across the United States, the United Kingdom, Ireland, the Netherlands, Canada and India, including more than 130 FORTUNE 500 companies and more than 80 of Working Mother magazine's 2014 "100 Best Companies for Working Mothers". Bright Horizons is headquartered in Watertown, MA."
The company delivered +26.6% earnings growth in 2014. Their long-term earnings growth is estimated at +19%. However, 2015 is likely to outperform.
Looking at BFAM's recent results the company has been beating analysts' estimates on the bottom line while the revenue number has been relatively close to in-line each quarter.
BFAM's most recent report was August 4th. They announced their Q2 earnings rose +29% to $0.53 a share. That was four cents above estimates. Revenues were up +6.4% to $370.5 million. Management raised their 2015 guidance. They now expect 2015 revenues to grow +7-10%. They're guiding for earnings growth to be in the +23-26% range.
Shares of BFAM surged to new highs and hit $66.00 following this earnings report and bullish forecast. The stock held support near its prior highs recently. This is impressive because on August 10th BFAM announced a secondary offering of three million shares. Normally investors tend to sell stocks when a company announces a secondary offering. No one likes seeing their investment diluted. Yet shares of BFAM held support. The secondary, being sold by stock holders and not the company, priced at $61.25 a share.
The trend of higher lows continues and now BFAM looks poised to rally again. Tonight we are suggesting a trigger to open bullish positions at $63.05.
Trigger @ $63.05
- Suggested Positions -
Buy BFAM stock @ $63.05
Entry disclaimer: To avoid an unfavorable entry point, we will not launch a new play if the stock gaps open more than $1.00 past our suggested entry point.