NEW DIRECTIONAL CALL PLAYS
FleetCor Technologies - FLT - close: 144.70 change: +1.61
Stop Loss: 139.75
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 564 thousand
Entry on September -- at $---.--
Listed on September 17, 2014
Time Frame: 8 to 12 weeks
New Positions: Yes, see below
Why We Like It:
Tonight's candidate is in the business services industry. They have over 5,000 employees. They do business in 43 countries. The annual revenue is $1.0 billion. Who are they? It's FLEETCOR (FLT).
According to the company website, "FLEETCOR serves over 500,000 commercial accounts with millions of cardholders across the United States, Canada, Mexico, Europe, Africa and Asia. FLEETCOR manages relationships with more than 800 partners, ranging in size from major oil companies to small petroleum marketers with a single fueling location. We provide services ranging from transaction processing to full program management. Our platforms, programs and infrastructure are both adaptable and scalable, allowing us to fulfill the requirements of a broad range of partners."
The stock has been a winner for investors with shares up from $25 at their 2011 lows to almost $150 last month.
Their most recent earnings report was July 31st. Wall Street was expecting a profit of $1.25 a share on revenues of $273.8 million. FLT delivered $1.27 a share with revenues up +23.8% to $273.5 million. More importantly management raised their 2014 EPS and revenue guidance.
As a matter of fact, according to The Street we have seen FLT beat Wall Street estimates and raise guidance 14 quarters in a row!
Another interesting headline is FLT's recent announcement to buy Comdata for $3.45 billion. Comdata is a payments processing company. One analyst at The Street.com pointed out that FLT has an excellent track record with its acquisitions. According to the analyst, FLT acquires companies, strips out inefficiencies, then doubles their profitability within two years. If that wasn't impressive enough FLT has done this with all 60 acquisitions to date ( credit to Jack Mohr for the research).
Technically the trend is up. The recent pullback from its August highs is an entry point. FLT has found support in the $140 area and now investors have started to buy the dip.
Today's intraday high was $145.35. I'm suggesting a trigger to buy calls at $145.55. We are not setting a target tonight but I will point out that the point & figure chart is bullish and forecasting at long-term $190 target.
Trigger @ $145.55
- Suggested Positions -
Buy the NOV $150 call (FLT141122C150) current ask $4.90
Option Format: symbol-year-month-day-call-strike