NEW DIRECTIONAL CALL PLAYS
Helen of Troy Limited - HELE - close: 89.85 change: +1.75
Stop Loss: 87.25
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 193 thousand
Entry on May -- at $---.--
Listed on May 11, 2015
Time Frame: 8 to 12 weeks
New Positions: Yes, see below
Why We Like It:
Shares of HELE are looking pretty good. After bottoming out near $52.00 back in September-October 2014 this stock has soared to new all-time highs. The stock is up +73% from its fall 2014 lows. The last couple of earnings reports have been better than expected.
HELE is in the consumer goods sector. According to the company,
"Helen of Troy Limited is a leading global consumer products company offering creative solutions for its customers through a strong portfolio of well-recognized and widely-trusted brands, including: Housewares: OXOÂ®, Good GripsÂ®, Soft WorksÂ®, OXO totÂ® and OXO SteelÂ®; Healthcare/Home Environment: VicksÂ®, BraunÂ®, HoneywellÂ®, PURÂ®, FebrezeÂ®, StingerÂ®, DuracraftÂ® and SoftHeatÂ®; and Personal Care: RevlonÂ®, Vidal SassoonÂ®, Dr. Scholl'sÂ®, Pro Beauty ToolsÂ®, SureÂ®, PertÂ®, Infusium23Â®, BrutÂ®, AmmensÂ®, Hot ToolsÂ®, Bed HeadÂ®, KarinaÂ®, OgilvieÂ® and Gold 'N HotÂ®. The Nutritional Supplements segment was formed with the recent acquisition of Healthy Directions, a U.S. market leader in premium doctor-branded vitamins, minerals and supplements, as well as other health products sold directly to consumers."
On the daily chart you can see how shares of HELE soared back in early January 2015 after report earnings. The company beat estimates by a very wide margin. Wall Street was looking for $1.31 per share and HELE delivered $2.17. Revenues also came in above expectations and management guided higher.
The earnings momentum continued in the last quarter. HELE reported its 2015 Q4 results on April 28th. Earnings soared +311% from a year ago to $1.40 per share. Wall Street was expecting $1.09 a share. Revenues were up +19.7% to $377.7 million, which was significantly above estimates. Their gross margins improved 3.5 percentage points to 43.7%.
Julien R. Mininberg, Chief Executive Officer, stated, "We are pleased to report a strong fourth quarter, capping a successful fiscal year of growth. Fourth quarter revenue rose approximately 21%, building on favorable third quarter results. Our Healthcare/Home Environment and Housewares segments lead our core business sales growth with double digit increases in the fourth quarter. Our Nutritional Supplements segment, acquired in June 2014, grew in line with expectations. Our Personal Care business slowed its decline in the fourth quarter as we make progress toward stabilizing that segment. For the full fiscal year, despite foreign currency headwinds, Helen of Troy grew revenue by 9.7%, adjusted income by 16.6%, and adjusted diluted EPS by 30%."
Management issued a mixed picture for fiscal year 2016. HELE expects earnings in the $4.33-4.73 range, which is below analysts' estimates. Yet they see revenues in the $1.485-1.536 billion zone versus estimates for $1.47 billion.
The stock popped on its Q4 report on April 29th. The point & figure chart is bullish and forecasting at $97.00 target. HELE has managed to ignore most of the market's recent volatility. Instead shares are just consolidating sideways as they try and generate enough steam to breakout past resistance at $90.00.
Tonight we are suggesting a trigger to buy calls at $90.25.
Trigger @ $90.25
- Suggested Positions -
Buy the AUG $95 CALL (HELE150821C95) current ask $3.10
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