JOYG and CSIQ Earnings
Sell JOYG, Hold CSIQ
PLAY: Sell your JOYG March 50 Calls (JOYG 10C50.00) and your JOYG March 49 Puts (JOYG 10O49.00) at market, good for the day.
Dear Bottarelli Research Member,
Good morning. Before the bell, mining equipment maker Joy Global (JOYG – NYSE) posted better-than-expected quarterly results and raised the lower end of their 2010 earnings outlook. For the quarter ended January 29th, JOYG reported earnings of $76.2 million ($0.73 per share) compared with earnings of $85.7 million ($0.83 per share) in the year-ago period. Since analysts were expecting earnings of $0.64 per share, this number has pleased Wall Street. JOYG also raised the low-end of their prior 2010 earnings view by $0.20, which further added to the bullish tone.
The basket of JOYG March 50 Calls (JOYG 10C50.00) and JOYG March 49 Puts (JOYG 10O49.00) that we entered on February 26th for $4.45 has opened the session trading for a total of $5.00. Let’s take the money and run!
PLAY: Sell your JOYG March 50 Calls (JOYG 10C50.00) and your JOYG March 49 Puts (JOYG 10O49.00) at market, good for the day.
Next comes Canadian Solar (CSIQ – NASDAQ), which posted a quarterly profit that missed market estimates. Net income for the fourth quarter was $14.9 million ($0.35 per share) versus a loss of $49.2 million ($1.38 per share) in the year-ago quarter. Analysts were looking for earnings of $0.45 per share, so despite a strong turnaround, CSIQ missed by $0.10. But despite these numbers, there was a large silver lining. You see, on a year-over-year basis, CSIQ’s revenue soared 317% to $287 million. This outlines a very nice recovery going forward, which is why Chief Executive Shawn Qu said, “demand is expected to be very strong for all of 2010. In the first quarter of 2010, we are expecting shipments growth over the fourth quarter of 2009 with further sequential shipments growth in the second quarter." With a prediction of brisk demand in the current year, CSIQ is moving higher on this news.
The basket of CSIQ March 20 Calls (O:CSIQ 10C20.00) and CSIQ March 19 Puts (O:CSIQ 10O19.00) that we entered on February 26th for $2.40 has opened the session trading for a total of $1.90. Let’s hold onto this one for a tad longer to see how the markets makers want to move it.
As always, I’ll follow up as the trading day progresses. But until then…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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