NEW DIRECTIONAL CALL PLAYS
PPG Industries - PPG - close: 201.00 change: +0.75
Stop Loss: 192.90
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Time Frame: 8 to 10 weeks
New Positions: Yes, see below
Why We Like It:
Big cap industrial names have been leading the market higher. PPG is one of them. The company is in the basic materials sector. PPG manufacturers coatings, specialty materials, and glass products.
PPG has developed a strong trend of beating Wall Street's earnings estimates. They just did it again when they reported earnings on April 17th with EPS coming in 10 cents above estimates. Revenues were up +17% year over year to $3.64 billion. Earnings were up +33% from a year ago at $1.98 per share. The company is also seeing margin improvement.
Last month PPG's management announced a $2 billion stock buyback program and raised their dividend by +10% to $0.61 per share. PPG's CEO said that his company saw volumes improve in Europe for the first time in ten quarters. The tough winter in the U.S. did not hurt them. Thus far PPG has been able to pass along small price increases to offset rising commodity costs.
Technically the stock is in a long-term up trend. Shares have spent the last three months consolidating below the $200 level. Now the bullish pattern of higher lows is about to push PPG through major resistance near $200-201.
Tonight we are suggesting a trigger to buy calls at $202.00. We're not setting an exit target yet but the Point & Figure chart is bullish and forecasting at $222.00 target.
Trigger @ $202.00
- Suggested Positions -
Buy the Aug $210 call (PPG140816C210) current ask $3.50
Option Format: symbol-year-month-day-call-strike
Entry on May -- at $---.--
Average Daily Volume = 552 thousand
Listed on May 29, 2014