AGU Reports, FCX Pops
Plus, Table Setter Alert: Next Week’s Earnings
PLAY: Sell your FCX February 70 Calls (O:FCX 10B70.00) at market, good for the day.
Dear Bottarelli Research Member,
Good morning. As we expected, Agrium (AGU – NYSE) is opening the session on a high note, after reporting Q4 net earnings of $30 million ($0.19 per share) compared with the net earnings of $124 million ($0.79 per share) in Q4 2008. While this might appear like a disappointment, I noted yesterday that fertilizer/potash companies have the tendency to talk up their numbers in a way that makes investors excited about the future. This case is no different. Agrium President and CEO Mike Wilson said that these results indicated the initial stages of recovery in the crop input sector. He also noted increasing demand for domestic potash and a tight supply situation for nitrogen and phosphate products – all of which paints a strong picture for AGU in 2010. Let’s hold onto our AGU March 60 Calls (O:AGU 10C60.00) and AGU February 55 Puts (O:AGU 10N55.00) to see how things play out in today’s session.
Also moving our way is the FCX February 70 Calls (O:FCX 10B70.00). After entering these calls yesterday for $3.60, they dipped by the close of trading. But as I mentioned, this was a play designed to profit off a quick and sudden snap-back in gold prices, which we might be seeing today. Therefore, given the choppiness in the sector, I don’t want to let this morning’s pop go to waste. Go ahead and lock in a modest return now.
PLAY: Sell your FCX February 70 Calls (O:FCX 10B70.00) at market, good for the day.
Also, I’d like to take a moment to set up some earnings announcements for next week. Below, you’ll see some companies that have the right combination of earnings potential, strike price skew, and option premiums. Going forward, you may see new earnings-based plays on any of these companies. Stay tuned.
February 16th
Abercrombie & Fitch (ANF – NYSE)
- $0.87 Expected Earnings per Share
- $1.00 Strike Price Increments
- Report Pre-market
Whole Foods Market (WFMI – NASDAQ)
- $0.26 Expected Earnings per Share
- $1.00 Strike Price Increments
- Report After Market Close
February 17th
Agnico-Eagle Mines Limited (AEM – NYSE)
- $0.25 Expected Earnings per Share
- $5.00 Strike Price Increments
- Report After Market Close
Career Education (CECO – NASDAQ)
- $0.33 Expected Earnings per Share
- $1.00 Strike Price Increments
- Report After Market Close
Deere & Company (DE – NYSE)
- $0.18 Expected Earnings per Share
- $1.00 Strike Price Increments
- Report Time not Supplied
Priceline.com (PCLN – NASDAQ)
- $1.67 Expected Earnings per Share
- $5.00 Strike Price Increments
- Report Pre-market
February 18th
Barrick Gold (ABX – NYSE)
- $0.59 Expected Earnings per Share
- $1.00 Strike Price Increments
- Report Pre-market
As always, I’ll follow up with further updates as the trading day progresses. Until then…
Lock and load!
Sincerely,
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