NEW DIRECTIONAL CALL PLAYS
Curtiss-Wright Corp. - CW - close: 73.16 change: +1.36
Stop Loss: 69.25
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 187 thousand
Entry on September -- at $---.--
Listed on September 18, 2014
Time Frame: 8 to 12 weeks
New Positions: Yes, see below
Why We Like It:
CW is part of the industrial goods sector. They cover a lot of ground within that label. Their history dates back to Orville and Wilbur Wright's first flight back in 1903. CW was founded back in 1929 with the Wright brothers joined Glenn Curtiss, the father of naval aviation. The Curtiss Aeroplane and Motor Company mergered with Wright Aeronautical Corporation to create Curtiss-Wright.
The company describes itself as "a global innovative company that delivers highly engineered, critical function products and services to the commercial, industrial, defense and energy markets." CW supports the full spectrum of aircraft from passenger planes, business jets, and helicopters in the commercial aviation industry. They're also heavily involved in the defense industry with products for naval defense, ground defense, and aerospace defense.
The company is involved in the construction, maintenance, and improving nuclear power plants and has been since the first U.S. nuclear power plant was built in 1957. They have also been a part of the oil and gas industry from the 1950s. CW has recently expanded from focusing on downstream refining operations and now provides equipment and services for midstream and upstream operations. Every single one of these markets is growing and shares of CW just closed at all-time highs.
CW's latest earnings report was July 30th. They missed Wall Street's EPS estimate by four cents with a profit of 74 cents a share. Yet revenues came in above expectations with a +9.1% improvement to $652 million. Their net earnings were up +31% from a year ago. Their backlog is growing. CW's operating margins increased from 10.1% to 11.7%. Management then raised their 2014 EPS guidance above analysts' estimates. The only fly in the ointment was CW's soft revenue guidance. Yet the stock has not suffered for it.
Technically shares of CW are in breakout mode. The $70.00 level was major resistance. Shares had been consolidating sideways under $70 for months. The breakout past this resistance in August is bullish. CW has already retested this area as new support and renewed its up trend.
The intraday highs are in the $73.45 area. Tonight we're suggesting a trigger to buy calls at $73.55. I'm not listing a target tonight but I will note the point & figure chart is suggesting a long-term target of $98.00.
Trigger @ $73.55
- Suggested Positions -
Buy the DEC $75 call (CW141220C75) current ask $3.10
Option Format: symbol-year-month-day-call-strike