Additional Trading Ideas:
In addition to tonight's new candidate(s), consider these stocks as possible trading ideas and watch list candidates. Some of these may need to see a break past key support or resistance:
DAL, VSH, BSX, KR, TSS, ENR, IMAX
NEW BULLISH Plays
Fortune Brands Home & Security - FBHS - close: 56.07 change: +0.60
Stop Loss: 53.85
Target(s): To Be Determined
Current Gain/Loss: Unopened
Entry on December -- at $---.--
Listed on December 16, 2015
Time Frame: Exit PRIOR to earnings in February
Average Daily Volume = 1.4 million
New Positions: Yes, see below
FBHS is a relative strength trade. The S&P 500 is up +0.7% year to date thanks to the strong three-day rally this week. Yet shares of FBHS are up +23% in 2015 and poised to close the year at all-time highs.
FBHS is in the consumer goods sector.
According to the company, "Fortune Brands Home & Security, Inc., headquartered in Deerfield, Ill., creates products and services that help fulfill the dreams of homeowners and help people feel more secure. The Company's trusted brands include MasterBrand cabinets, Moen faucets, Therma-Tru entry door systems, and Master Lock and SentrySafe security products. Fortune Brands holds market leadership positions in all of its segments."
Their most recent earnings report was October 21st. FBHS said their Q3 earnings per share rose +17.3% to $0.64 a share. That actually missed Wall Street estimates of $0.65. Revenues were up +17% to $1.24 billion. Management guided in-line with estimates. The stock rallied anyway in spite of the miss.
Fast-forward to December and FBHS raised their dividend +14% to $0.16 a share. Chris Klein, FBHS CEO, commented on the move, "This represents the third consecutive year of a double digit increase in our dividend rate. We are continuing to deliver profitable growth and are following through on our commitment to use our strong balance sheet, capital structure and free cash flow to drive incremental shareholder value."
Technically shares have developed a bullish trend of higher lows and higher highs. The $52-53 area was major resistance and FBHS broke out in mid November. The stock held up very well during the market's December weakness. Now shares are bouncing along the trend line of support and poised to hit new all-time highs. The point & figure chart is very bullish and forecasting at long-term $74.00 target. Tonight we are suggesting a trigger to open bullish positions at $56.65.
Trigger @ $56.65
- Suggested Positions -
Buy FBHS stock @ $56.65
- (or for more adventurous traders, try this option) -
Buy the MAR $60 CALL (FBHS160318C60) current ask $1.50
option price is a current quote and not a suggested entry price.
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.
Option Format: symbol-year-month-day-call-strike