As we move into the normally weak Aug/Sep period the markets are passing time as we wait for directional indications.

The markets were positive on Monday but it was far from bullish. The S&P gained 4 points and the Russell 2000 only gained a point. The Dow posted its 9th consecutive record high but only added 25 points. This was the 10th day of Dow gains. The Nasdaq added 32 points on gains in biotech and chip stocks.

The S&P is in a stealth rally. It never declined very far from its recent highs on a closing basis. Every intraday dip was bought and while today was a closing high it was still 4 points under the July 27th intraday high. If the S&P were to break out and run like the Dow we could have a major market move. However, the gain today to a new high was lackluster. There is still significant resistance and the closer we get to 2,500 the stronger that psychological resistance will be.


The Dow rotation continued with GS, BA and AAPL the point leaders for Monday. As long as we hae 2-3 different stocks take the lead each day, the rally can continue. However, note that the advancers (12) and decliners (18) were imbalanced. In a rising market you want to have more advancers than decliners. This suggests investors are starting to get worried about the overbought conditions.


There is no material resistance on the Dow other than gravity. The index is well over the psychological 22,000 level and investors no longer have an upside target. The 23,000 level is too far away to become a target until after some profit taking appears. Support is well back at 21,500.


The Nasdaq gains came from stocks not normally on the leader board. This is actually good for the market because it means the big cap FAANG stocks are not carrying the load. FB, AAPL, NFLX and GOOGL were absent from the top 30 gainers list.



The resistance at 6,395 has held on the last two attempts and a breakthrough could be very good for the market. The Nasdaq has been the anchor for the last 7 days. Support remains around 6,350.


The Russell 2000 gained only 1 point and that is not bullish in this market. That was just treading water while we wait to see what the market will do in August. The Russell is 2,000 stocks so this is more representative of the broader market than the Dow or even the S&P.


The major earnings for Tuesday are Priceline and Monster Beverage. The earnings likely to get the most attention this week come from Nvidia. The stock was up $6 today on news its new processor will be 12 times faster than the current processor, which is the current performance leader for GPU cloud processing. I would love to play them in the newsletter but the options prices are obscene.


The economic calendar does not have any market moving reports this week so all eyes will be on the remaining earnings reports.


We are reaching the point where post earnings depression will increase. This is the last major week for earnings and the calendar will fade quickly starting next week. The normal Aug/Sep weakness begins late this week or early next week. August has been down 5 of the last 7 years and up only 5 of the last 20 years. While there is never any guarantee of historical patterns repeating, we should be aware they exist so any market moves do not surprise us.

I continue to recommend not being overly long over the next few weeks. Find some stock you would like to buy at less than their current price and then you will be ready if/when a late summer decline actually appears. Think of it as a buying opportunity rather than a disaster.

We lost 80% of the portfolio over the last two weeks. The volatility in the Nasdaq and our exits before earnings eliminated nearly all of our positions. I am adding two plays today in an effort to replenish it. Futures are down -3 points as I type this. If the market gaps down at the open, be patient and don't rush into the new recommendations. There is always another day to trade and always another buying opportunity somewhere in our future.

Enter passively, exit aggressively.

Jim Brown

Send Jim an email



NEW DIRECTIONAL CALL PLAY

ABBV - AbbVie - Company Profile

AbbVie Inc. discovers, develops, manufactures, and sells pharmaceutical products worldwide. The company offers HUMIRA, a biologic therapy administered as a subcutaneous injection to treat autoimmune diseases; IMBRUVICA, an oral therapy for the treatment of patients with chronic lymphocytic leukemia; and VIEKIRA PAK, an interferon-free therapy, with or without ribavirin, for the treatment of adults with genotype 1 chronic hepatitis C. It also provides Kaletra, an anti- human immunodeficiency virus(HIV)-1 medicine used with other anti-HIV-1 medications as a treatment that maintains viral suppression in HIV-1 patients; Norvir, a protease inhibitor indicated in combination with other antiretroviral agents to treat HIV-1; and Synagis to prevent RSV infection at-risk infants. In addition, the company offers AndroGel, a testosterone replacement therapy for males diagnosed with symptomatic low testosterone; Creon, a pancreatic enzyme therapy for exocrine pancreatic insufficiency; Synthroid to treat hypothyroidism; and Lupron, a product for the palliative treatment of prostate cancer, endometriosis, and central precocious puberty, as well as for the treatment of patients with anemia. Further, it provides Duopa and Duodopa, a levodopa-carbidopa intestinal gel to treat Parkinson's disease; Sevoflurane, an anesthesia product for human use; and ZINBRYTA, a subcutaneous treatment for relapsing forms of multiple sclerosis. The company sells its products to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies, and independent retailers from its distribution centers and public warehouses. AbbVie Inc. has collaboration agreements with C2N Diagnostics; Calico Life Sciences LLC; Infinity Pharmaceuticals, Inc.; M2Gen; and Principia Biopharma Inc. Company description from FinViz.com.

A lot of companies have 1-2 real drugs in the pipeline that may be approved. Several companies have one drug that could be a blockbuster and reach $1 billion in sales annually. AbbVie has multiple blockbusters in the pipeline and dozens of other drugs already in the market.

AbbVie was a spinoff from Abbott Labratories in 2012 and they are doing great. In the first quarter they reported earnings of $1.28, that rose 11.3% and beat estimates by 2 cents. Revenue of $6.5 billion rose 10.1% and that was higher than three of its biggest competitors Amgen, $2.8 billion, Biogen $5.5 billion and Celgene $3.0 billion.

Earnings are expected to continue growing with analyst estimates for 14% annual growth over the next five years. AbbVie guided for 13% to 15% in 2017. Despite the earnings growth the stock only trades at a PE of 11. AbbVie reported Q2 earnings of $1.42 compared to estimates for $1.40. Revenue of $6.94 billion narrowly beat estimates for $6.93 billion. They guided for the full year for $5.44-$5.54. Shares declined because the sales of its Hep-C drug, Viekira Pak were $225 million and well below estimates for $257 million. This is a temporary setback because they have multiple drugs in the pipeline that are expected to generate more than $1 billion in sales annually. Shares declined $3 on the earnings.

Next expected earnings Oct 27th.

Shares dipped back in May when Coherus won a court battle invalidating one of AbbVie's patents on Humira, their biggest drug. However, AbbVie said it was not a problem because there were 61 other patents on the drug and they would fight it in the courts until 2020. The first trial is not even scheduled until 2019. Amgen won FDA approval for a biosimilar but AbbVie said it would not happen until 2020 at the earliest.

The company's confidence that there would not be a biosimilar drug until 2021-2022 matched analyst estimates. This is a steep uphill battle for anyone trying to copy this drug.

The company's other drugs are going to be cash cows. Imbruvica generated $1.8 billion in sales in 2016 and could reach $7 billion annually over the next couple of years. Venclexta was approved in 2016 for leukemia and sales could peak at $3.5 billion a year. An experimental cancer drug called Rova-T could hit $5 billion a year when approved. A psoriasis drug called risankizumab could produce $4 billion a year and arthritis drug upadacitinib could peak at $3.5 billion. Given all these cash flow giants in the pipeline, I am amazed the company only trades at a PE of 11.

The company received a favorable opinion on MAVIRET, a once daily Hep-C drug, from the European Medical Agency and the CHMP. This is an 8-week cure for Hep-C that will compete with Gilead's products.

Analysts claim AbbVie's pipeline is the strongest in the industry. The post earnings drop is a buying opportunity and shares are rebounding.

Options are very cheap.

Buy Nov $72.50 call, currently $1.82, initial stop loss $69.35.



AMED - Amedisys - Company Profile

Amedisys, Inc., together with its subsidiaries, provides healthcare services in the United States. It operates through three segments: Home Health, Hospice, and Personal Care. The Home Health segment offers a range of services in the homes of individuals for the recovery of patients from surgery, chronic disability, or terminal illness, as well as prevents avoidable hospital readmissions through its skilled nurses, physical and speech therapists, occupational therapists, and aides for its patients to complete their important personal tasks. The Hospice segment offers care that is designed to provide comfort and support for those who are dealing with a terminal illness, including heart disease, pulmonary disease, Alzheimer's, HIV/AIDS, and cancer. The Personal Care segment provides assistance for patients with the activities of daily living. As of March 1, 2017, the company owned and operated 420 care centers in 34 states. Amedisys, Inc. was founded in 1982. Company description from FinViz.com

On July 26th, the Centers for Medicare and Medicaid Services (CMS) said it may reduce reimbursements for home healthcare in 2018 by 0.6$. This was less than the 0.7% reduction in 2017 but shares imploded. On July 27th, the company reported earnings of 63 cents that beat estimates for 50 cents. Revenue of $378.8 million missed estimates for $380.6 million. The combination of the two events knocked $15 off the stock.

Amedisys has 385,000 home health, hospice and personal care patients in 34 states. In Q1, home health was responsible for $271 million of the total $370 million in revenue. Medicare paid 73.4% of the billing for those services. Obviously a -0.4% drop in reimbursements would be painful, it was less than the -0.7% decline in 2017. Amedisys understands this annual reimbursement process and they deal with it. The news was not worth a $15 drop in the stock price.

Next expected earnings October 25th.

I would normally go for the $50 strike price but since we are entering the normally weak Aug/Sep period, I am bumping the recommendation to the $55 strike and the 50% cheaper option. There is not a November option series so the December $55 gives us plenty of time for a decent rebound.

Buy Dec $55 call, currently $1.51, initial stop loss $45.45.


If there is a trade you would like me to consider or you have comments on this newsletter please click the email link below.

Jim Brown

Send Jim an email



Current Portfolio


Open Positions

Check the graphic below for any new stop losses in bright yellow. We need to always be prepared for an unexpected decline. Any items shaded in blue were previously closed.




Current Position Changes


AKAM - Akamai Technologies
The long call position was entered at the open on Tuesday.

HAS - Hasbro
The long call position was stopped at $103.50.

HAIN - Hain Celestial
The long call position was stopped at $43.45.

THO - Thor Industries
The long call position was stopped at $103.85.

BABA - Alibaba
The long call position was stopped at $149.85.


Original Play Recommendations (Alpha by Symbol)


AKAM - Akamai Technologies - Company Profile

Comments:

No specific news. We bought the dip and shares were rebounding nicely until today. Hopefully this is just a one day event but the futures are negative on Monday evening.

Original Trade Description: July 31st.

Akamai Technologies, Inc. provides cloud services for delivering, optimizing, and securing content and business applications over the Internet in the United States and internationally. The company offers Web and mobile performance solutions, such as Ion, a situational performance solution that consists of an integrated suite of Web delivery, acceleration, and optimization technologies; Dynamic Site Accelerator that helps in consistent Website performance; IP Application Accelerator to enable enterprises to deliver Internet Protocol-based applications; Global Traffic Management, a fault-tolerant solution; Image Manager that automatically optimizes online images; and Cloudlets, which provides self-serviceable controls and capabilities. It also provides cloud security solutions, including Kona Site Defender, Bot Manager, Fast Domain Name System, Prolexic Routed, and Client Reputation; enterprise solutions comprising Enterprise Application Access and Akamai Cloud Connect. In addition, the company offers media delivery solutions, such as adaptive delivery solutions, download delivery solutions, media delivery acceleration solutions, media services, media analytics, and NetStorage, a cloud storage solution. Further, it provides network operator solutions, including Aura Licensed CDN suite of solutions, Aura Managed CDN solutions, and Intelligent DNS Solutions; and professional services and solutions. Company description from FinViz.com

Expected earnings Oct 24th.

Akamai beat on earnings and revenue for Q2 but analysts thought the guidance was a little light. Shares were crushed for an $8 loss. The company posted earnings of 62 cents that beat estimates for 60 cents. Revenue rose 6.4% to $608.9 million and beat estimates for $604.5 million.

The company guided for Q3 earnings of 57 to 60 cents and analysts were expecting 61 cents. Revenue guidance was $604-$616 million and expectations were $619.4 million.

Akamai is losing business from the "Big Six" including Apple, Amazon and Netflix as those companies refine their "do it in house" strategies to keep from having to pay so much to Akamai. The income from the big six fell 9% to $178.9 million. Akamai has reported on this metric for the last two years and this was the 7th quarter of decline. Akamai is still the largest content delivery service and total revenues are still rising.

Revenues in their new cyber security business rose 32% and the web performance business rose 15%. Akamai said the rapid advancement of video on demand was a strong factor in future earnings since they are the largest provider of content. Also seeing a rapid ramp was the cloud storage business. Akamai has a security hook in that growth and the redundancy of that storage.

I believe the big drop in the shares was an overreaction and their new businesses are growing so rapidly that revenue will continue to expand. They are forecasting 6% growth in Q3 and 5% to 8% growth for the year with a 64% gross margin. There is nothing wrong with their business.

If the market is going to be weak, these shares in companies that have already been punished will look like value stocks to investors looking for a safe haven after they exit the FAANG stocks.

Position 8/1/17:

Long Nov $50 call @ $2.28, see portfolio graphic for stop loss.



BABA - Alibaba - Company Profile

Comments:

Last week I tightened the stop loss on Alibaba because of the Nasdaq volatility. The -81 point Nasdaq drop at the open on Wednesday knocked us out of BABA and two other positions. Of course Alibaba recovered and closed at a new high today. This is highly frustrating but at least we exited for a breakeven rather than a big loss if the Nasdaq had continued lower.

Original Trade Description: July 17th.

Alibaba Group Holding Limited, through its subsidiaries, operates as an online and mobile commerce company in the People's Republic of China and internationally. It operates Taobao Marketplace, an online shopping destination; Tmall, a third-party platform for brands and retailers; Juhuasuan, a sales and marketing platform for flash sales; Alibaba.com, an online wholesale marketplace; Alitrip, an online travel booking platform; 1688.com, an online wholesale marketplace; and AliExpress, a consumer marketplace. The company also provides pay-for-performance and display marketing services through its Alimama marketing technology platform; Taobao Ad Network and Exchange (TANX), a real-time bidding online marketing exchange in China; and data management platform through TANX for marketers to execute their campaigns with proprietary and tailored data. In addition, it offers cloud computing services, including elastic computing, database, storage and content delivery network, large scale computing, security, and management and application services through its Alibaba Cloud Computing platform; Web hosting and domain name registration services; payment and escrow services; and develops and operates mobile Web browsers. The company provides its solutions primarily for businesses. Company description from FinViz.com

Alibaba is the poor investor's Amazon. With shares at $135, the options are at least reasonable but not cheap. Alibaba is growing as fast or faster than Amazon and tries to copy everything Amazon does.

When the company reported earnings for the last quarter at 63 cents, they missed estimates for 68 cents. Revenue of $5.6 billion easily beat estimates for $5.2 billion. Other than the earnings miss it was a solid quarter with ecommerce up 47% and cloud computing up 102%. Digital media growth was up 234%. Mobile MAUs rose from 493 to 507 million. That is important because 90% of China's ecommerce occurs on a mobile device.

The company announced plans to buy back $6 billion in stock over a two-year period.

Earnings August 18th.

Shares dipped on the earnings miss then spiked on the guidance to $125.50, which was a new high. After a little more than two weeks of post earnings consolidation, shares returned to that $125.50 level and closed at a new high.

There was an analyst day in early June that kicked the stock up to another level with a $10 gain. The company guided for 45% to 49% revenue growth in this year and analysts were only expecting 37%. Alibaba said it is targeting $1 trillion in gross merchandise volume in 2020. Alibaba's Singles Day promotion is 40 times larger in sales than Amazon's Prime Day. JP Morgan initiated coverage with an overweight rating and $190 target. MKM partners raised the price target to $177. Pacific Crest raised their price target to $160 from $137. Needham raised their target to $155. The Benchmark Company is targeting $175.

In late June, Mott Capital said Alibaba could be worth $210 on a fundamental basis.

In early July, Alibaba announced the Alexa clone called Genie X1, which will be available to the first 1,000 people for a one-month trial. The cost will be $73 during this live test and it only speaks mandarin.

Alibaba is far ahead of Amazon in the retail store concept. Watch this video and you wil know where Amazon is headed. Alibaba Stores

This is currently a short-term position in Option Investor.

Position 7/18/17: Closed 8/2/17: Short Oct $175 call @ $2.01, exit $2.27, -.26 loss
Net loss 10 cents.



HAIN - Hain Celestial - Company Profile

Comments:

No specific news. Shares declined on Tuesday to hit our tightened stop loss and we exited with a decent gain.

Original Trade Description: March 20th

The Hain Celestial Group, Inc. manufactures, markets, distributes, and sells organic and natural products in the United States, the United Kingdom, Canada, and Europe. Its grocery products include infant formula; infant, toddler, and kids foods; diapers and wipes; rice and grain-based products; flour and baking mixes; breads, hot and cold cereals, pasta, condiments, cooking and culinary oils, granolas, granola bars, and cereal bars; canned, chilled fresh, aseptic, and instant soups; Greek-style yogurt; chilies and packaged grains; and chocolates and nut butters, as well as plant-based beverages and frozen desserts, such as soy, rice, almond, and coconut. The company's grocery products also comprise juices, hot-eating, chilled and frozen desserts, cookies, crackers, gluten-free frozen entrees and bars, frozen pastas and ethnic meals, frozen fruits and vegetables, cut fresh fruits, refrigerated and frozen soy protein meat-alternative products, tofu, seitan and tempeh products, jams, fruit spreads and jelly, honey, marmalade, and other food products. In addition, it provides snack products, such as potato, root vegetable, and other vegetable chips, as well as straws, tortilla chips, whole grain chips, pita chips, puffs, and popcorn; specialty teas, including herbal, green, black, wellness, rooibos, and chai tea lattes; ready-to-drink beverages comprising organic kombucha and chai tea lattes; personal care products consisting of skin, hair and oral care, deodorants, baby care items, acne treatment, body washes, and sunscreens; and poultry and protein products, such as turkey and chicken products. The company sells its products through specialty and natural food distributors, supermarkets, natural food stores, mass-market and e-commerce retailers, food service channels and club, and drug and convenience stores in approximately 70 countries worldwide. Company description from FinViz.com

We played Hain before back in the fall. Basically, they have not filed their quarterly reports since last May because of a review of accounting procedures. They have suffered over the last year and have reportedly spent $20 million in the complete accounting review for years past and a review of their procedures. They are facing class action suits and SEC probes but none of these things will have a lasting impact.

They are facing a new deadline of May for their reports or they will be in default with their lenders. While they will not say when they will file the back reports, they continue to assure investors there was no wrongdoing and these types of corporate autopsies for prior years take time.

They are so undervalued compared to their peers and their historical norms, it is silly not to have a long position. Once they file the reports this will all be behind them.

I am recommending we buy the August $40 call and forget about it. At $2 it is not a lot of money and they could quickly return to the $50s once they file the reports.

Update 6/23/17: After a year of accounting research, HAIN said there was no need to restate earnings. The problems they found were so minor they were not worth the effort. They implemented some additional controls and promoted James Langrock to EVP and CFO. They discussed plans to cut costs by $350 million over the next three years and said they will buy back $250 million in stock.

They also reported earnings of 33 cents that missed estimates for 52 cents. They guided for the current quarter to earnings of 40-43 cents. For the full year they guided for $1.19-$1.22 and revenue of $2.84-$2.86 billion.

Shares were very volatile on Friday with all the headlines in the press release and the CEO's appearance on CNBC. On Monday shares rose $6.4% to $33.63. We have an August $40 call and we actually have a chance of it regaining value. I was hoping for more of a spike on the earnings release but the earnings miss overshadowed the positive news about the restatement. Since there is nothing wrong with the company or the past financials and it was crushed from $57 to $31 on the initial restatement warning, we could see funds begin to buy it again.

Update 7/2/17: After waiting for three months, we finally got lucky. Hain is under attack by Engaged Capital with a 9.9% stake and they are pushing the company to sell itself and to replace 7 of the 8 board members. Shares spiked 8.5% on Friday and probably have farther to go. Engaged has had several successful attacks recently against other companies and even though they are small they are aggressive. Shares popped to $39 and we are holding the $40 strike.

Update 7/10/17: The Amazon deal for Whole Foods made the Hain position a lot more interesting. Whole Foods is Hain's largest customer. Amazon can explode Hain's sales or even acquire Hain to further reduce costs and market reach. BMI Capital said at the least it will boost sales and with Engaged Capital (10% stake) demanding the company sell itself, there may be interest in actually doing that. Other potential acquirers include Pepsi, Campbell, Hormel, General Mills, Kraft Heinz, Nestle and Unilever. There is no shortage of candidates that could be sniffing around.

Position 3/21/17:

Closed 8/1/17: Long Aug $40 call @ $1.97, exit $3.86, +$1.89 gain



HAS - Hasbro - Company Profile

Comments:

We bought the dip with support at $105 and that support failed to stop us out. The support break came when Hasbro ended talks to acquire Lions Gate Entertainment (LGF-A).

Original Trade Description: July 24th.

Hasbro, Inc., together with its subsidiaries, operates as a play and entertainment company. The company operates through U.S. and Canada, International, and Entertainment and Licensing. The U.S. and Canada segment markets and sells action figures, arts and crafts, and creative play products; electronic toys and related electronic interactive products; fashion and other dolls, infant products, play sets, preschool toys, plush products, and sports action blasters and accessories; and vehicles and toy-related specialty products, as well as traditional board games, and trading card and role-playing games primarily in the United States and Canada. The International segment markets and sells both toy and game products primarily in the European, the Asia Pacific, and Latin and South American regions. The Entertainment and Licensing segment engages in consumer products licensing, digital gaming, and movie and television entertainment operations. The company sells its products to wholesalers, distributors, chain stores, discount stores, drug stores, mail order houses, catalog stores, department stores, and other traditional retailers, as well as Internet-based e-tailers. Hasbro, Inc. was founded in 1923 and is headquartered in Pawtucket, Rhode Island. Company description from FinViz.com

The company reported earnings on Monday of 53 cents, that rose 30% and beat estimates for 46 cents. Revenue of $972.5 million rose 11% but missed estimates of $973 million. Shares were crushed for a 9% drop. Seriously, earnings rose 30%, revenue 11% and the stock was killed.

The CEO said most of their products performed well but the Super Soaker and Baby Alive dolls were weaker than expected. Sales in the UK and Brazil were weak due to economic conditions. Sales in the U.S. and Canada rose 16%. He said Q2 was always their weakest quarter but Q3/Q4 should be strong because of new toys for Star Wars and My Little Pony movies.

Analysts were quick to run to Hasbro's defense for obvious reasons. There was no rational justification for a 9% decline. We are going to buy the dip. I am making the initial stop loss a little wider than usual to try and dodge any remaining volatility on Tuesday.

Position 7/25/17:

Closed 8/2/17: Long Oct $110 call @ $2.50, exit $1.40, -1.10 loss.



THO - Thor Industries- Company Profile

Comments:

No specific news. Lots of positive comments about the booming RV sales. However, the market drop on Wednesday caused shares to break below initial support and stop us out. I considered reloading the position but decided to wait since we are moving into the normally weal Aug/Sep period.

Original Trade Description: June 19th.

Thor Industries, Inc., through its subsidiaries, designs, manufactures, and sells recreational vehicles, and related parts and accessories primarily in the United States and Canada. It operates through Towable Recreational Vehicles and Motorized Recreational Vehicles segments. The company offers travel trailers under the Airstream International, Classic Limited, Sport, Flying Cloud, Land Yacht, and Eddie Bauer trade names, as well as Interstate and Autobahn Class B motorhomes; gasoline and diesel Class A and Class C motorhomes under the Four Winds, Hurricane, Chateau, Challenger, Tuscany, Axis, Vegas, Palazzo, Synergy, Quantum, Compass, Gemini, A.C.E, Alante, Precept, Greyhawk, and Redhawk trade names; and fifth wheels under the Redwood and DRV Mobile Suites trade names. It also provides conventional travel trailers and fifth wheels under the Montana, Springdale, Hideout, Sprinter, Outback, Laredo, Alpine, Bullet, Fuzion, Raptor, Passport, Cougar, Coleman, Kodiak, Aspen Trail, Voltage, Cameo, Cruiser, ReZerve, Sunset Trail, Zinger, Landmark, Bighorn, Sundance, Elkridge, Trail Runner, North Trail, Cyclone, Torque, Prowler, Wilderness, Shadow Cruiser, Fun Finder, Stryker, Sportsmen, Spree, Venom, Durango, SportTrek, Connect, Sportster, Sonic, Jay Flight, Jay Feather, Eagle, Pinnacle, Seismic, AR-One, Launch, Autumn Ridge, Travel Star, Highlander, Roamer, and Open Range trade names. In addition, the company offers equestrian recreational vehicle products with living quarters under the Premiere, Silverado, Ranger, Laredo, Trail Boss, and Trail Hand trade names; lightweight travel trailers and specialty products under the Camplite and Quicksilver trade names; and Class A motorhomes under the Insignia, Aspire, Anthem, and Cornerstone trade names, as well as provides aluminum extrusions and specialized component products. Company description from FinViz.com

In a weak economy Thor is kicking butt. The company reported earnings of $2.11 which rose 41.6% compared to estimates for $1.87. Revenue of $2.02 billion rose 57% beat estimates for $1.96 billion. Operating cash flow rose 26.2% and gross profits rose 45.5%.

Sales of towable travel trailers rose 52.6% and sales of motorized RVs rose 78.7%. There was no bad news in the Thor report.

Estimated earnings date September 4th.

With the company posting record earnings the stock spiked from $94 to $104 on June 6th. When the market dipped, shares only pulled back to $102. Over the last week they have returned to $106 and Monday's close was a four-month high.

Winnebago (WGO) reports earnings this week and that is going to remind investors how strong Thor's report really was. I believe we will see Thor break through that post earnings resistance and head back to the highs at $115.

Position 7/3/17:

Closed 8/2/17: Long Sep $110 call @ $1.90, exit $1.45, -.45 loss.

Previously closed 6/29/17: Long Aug $110 call @ $3.20, exit $1.80, -1.40 loss.



Prices Quoted in Newsletter

At Option Investor, we have a long-standing policy prohibiting the editors and staff from actually trading the individual recommendations in order to conform to SEC rules concerning trades.

The prices quoted in the newsletter are the end of day prices in most cases.

When discussing fills or stops the prices quoted are the bid/ask at the time the entry trigger or exit stop is hit. This is NOT a price that someone on staff actually got using a live order.

For entry/exit points at the market open the prices quoted will be the opening print. The majority of the time readers are able to get a better fill than the opening print because of market maker bias at the open.

For trades with an opening qualification the prices quoted will be the bid/ask at the time the qualification was met.

All of these rules normally produce worse prices than an active trader would normally get. Because they are standardized there may be some cases where a price quoted was better than an actual fill. If you received a price that was dramatically different than what was quoted please let us know.