NEW DIRECTIONAL CALL PLAYS
Carlisle Companies - CSL - close: 99.97 change: +0.46
Stop Loss: 97.75
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 417 thousand
Entry on May -- at $---.--
Listed on May 19, 2015
Time Frame: 8 to 12 weeks
New Positions: Yes, see below
Why We Like It:
Consistent earnings growth has helped lift CSL to new all-time highs. Year to date shares of CSL are up +10.8% versus a +3.4% gain in the S&P 500.
CSL is in the consumer goods sector. According to the company,
"Carlisle Companies Incorporated is a global diversified company that designs, manufactures and markets a wide range of products that serve a broad range of niche markets including commercial roofing, energy, agriculture, mining, construction, aerospace and defense electronics, medical technology, foodservice, healthcare, sanitary maintenance, transportation, general industrial, protective coating, wood, specialty and auto refinishing.
Through our group of decentralized operating companies led by entrepreneurial management teams, we bring innovative product solutions to solve the challenges facing our customers. Our worldwide team of employees, who generated $3.2 billion in net sales in 2014, is focused on continuously improving the value of the Carlisle brand by developing the best products, ensuring the highest quality and providing unequaled customer service in the many industries we serve."
The last three quarters have seen CSL deliver consistent growth. The company has beat Wall Street estimates on both the top and bottom line the last few quarters. If you look at CSL's daily chart you can see the post-earnings rally in October, early February, and again in late April.
Their most recent report was April 23rd. Analysts were expecting a profit f $0.58 a share on revenues of $699 million. CSL delivered $0.59 with revenues up +9.1% to $709 million.
A couple of Q1 highlights include their CCM and CIT segments. Here's a couple of excerpts from their earnings release.
Carlisle Construction Materials (CCM): Net sales in the first quarter 2015 grew 6.9% to $371.3 million, reflecting organic sales growth of 9.3% primarily on higher demand for new commercial construction, partially offset by a 2.4% negative impact from foreign exchange fluctuations in the stronger U.S. dollar versus the Canadian dollar and Euro.
Carlisle Interconnect Technologies (CIT): Net sales in the first quarter 2015 grew 29% to $194.4 million, reflecting organic growth of 12% and acquisition growth of 17%. Sales in CITâ€™s aerospace market were up 12%. Sales to the military and test and measurement markets were up 12% and 53%, respectively. Sales to the industrial market were down 8%.
CSL does not have a lot of analyst coverage (about eight firms) and currently the consensus is mostly bullish. The median price target is $110.00. That's a little bit less than CSL's point & figure chart, which is bullish and forecasting at $113.00 target.
Goldman Sachs recently studied the global medical technology medical supplies market. The research team sees the global plasma market growing at
6-to-8 percent. They believe that CSL and rival Grifols (GRFS) are the best ways to play this industry and suggested CSL was a "buy".
Technically CSL has digested its post-earnings pop from April. The consolidation appears to be over. Shares have rallied back to round-number, psychological resistance at the $100.00 level. The intraday high was $100.83 on April 24th. We are suggesting a trigger to buy calls at $101.00.
Trigger @ $101.00
- Suggested Positions -
Buy the SEP $105 CALL (CSL150918C105) current ask $2.40
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