Take CMI Profits
Lock in Another Earnings Winner
Dear Bottarelli Research Member,
Good morning. Cummins (CMI – NYSE) reported powerful numbers, and the stock is reacting with a strong move to the upside. CMI reported earnings of $1.36 a share, which blew away the consensus estimates of $0.76 per share. Revenues rose 3.4% to $3.4 billion, which also beat the Wall Street expectation of $2.83 billion. As a result, CMI’s upside move has pushed our earnings basket into the money.
As you know, we entered the CMI February 47 Calls (O:CMI 10B47.00) and CMI February 45 Puts (O:CMI 10N45.00) for a total price of $3.25. As I write, the calls alone have hit a high of $5.00, good for a 53% gainer. But since this pop, CMI has come off those highs. This combination currently trades for around $3.90. While I’d love to sell into strength, I also don’t want to get greedy and let our profits evaporate. Therefore, let’s take the safe route and lock in our profits now!
PLAY: Sell your the CMI February 47 Calls (O:CMI 10B47.00) and CMI February 45 Puts (O:CMI 10N45.00) at market, good for the day.
And as always…
Lock and load!
Sincerely,
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