NEW DIRECTIONAL CALL PLAYS
Sirona Dental Systems - SIRO - close: 100.79 change: +1.21
Stop Loss: 97.85
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Average Daily Volume = 316 thousand
Entry on June -- at $---.--
Listed on June 11, 2015
Time Frame: 8 to 12 weeks
New Positions: Yes, see below
Revenue growth in SIRO's business has been disappointing due to foreign currency headwinds thanks to the strong dollar. Yet investors seem to be ignoring this issue. Shares of SIRO have outperformed the broader market with a +15.3% gain this year.
SIRO is in the healthcare sector. They sell dental equipment. According to the company, "Sirona, the dental technology leader, has served dealers and dentists worldwide for more than 130 years. Sirona develops, manufactures, and markets a complete line of dental products, including CAD/CAM restoration systems (CEREC), digital intra-oral, panoramic and 3D imaging systems, dental treatment centers and handpieces."
The last couple of earnings reports for SIRO have only been mediocre. The company has been meeting analysts estimates on the bottom line (earnings). Unfortunately revenues have been seeing declines in U.S. dollar terms. On a local currency basis their sales have grown. One positive that helps the bullish picture for SIRO is margin growth. The company has seen margin growth improve the last two quarters in a row.
Shares of SIRO spiked down on May 8th, it's most recent earnings report, but traders immediately bought the dip at technical support on its 50-dma. The stock seems to be stair stepping higher with a rally, then a week or two of consolidation that breaks out into another rally. Shares just broke through major round-number resistance at the $100.00 mark today.
Tonight we are suggesting a trigger to buy calls at $101.05.
Volume on SIRO's stock and its options is a little light. I would start this trade with small positions to limit risk.
Trigger @ 101.05 *small positions to limit risk*
- Suggested Positions -
Buy the SEP $105 CALL (SIRO150918C105) current ask $2.25
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