Stone-Cold Earnings Trade Lock of the Week



That’s the sound of another winning Stone-Cold Earnings Trade. Last week the call option for Jabil Circuits (JBL) recommended here doubled in value.

Not bad for a holding period of less than 24 hours.

And that wasn’t all for those playing the earnings trading game. Every single one of the trades I looked at last week were winners, although we did not get to trade on Oracle (ORCL), given that company’s early release of results.

All told, an approximate $1,000 committed to each earnings trade would have netted a gain of more than $5,000. Now that’s how you make money when Wall Street is conspiring against most other investors.

One of the biggest winners last week was Bed Bath & Beyond (BBBY). I mention this name not for the fantastical gain in a put option buy, but because prior to the company releasing earnings, other pundits including the famous shill, Jim Cramer, suggested this company was poised for an earnings beat.

Obviously these folks don’t bother to do a little bit of common sense research.

It was a no-brainer that this company was looking at a miss on earnings or reduction of future guidance. That fact plus a huge valuation set the table for a big earnings trade win.

I can’t wait for this quarter to end and the next earnings reporting season to begin.

There are so many tempting trades to make. It should be happy hunting for those willing to take the risk. Given the alternatives in the market, I would think that the number of investors playing the earnings trading game is growing significantly.

I would challenge you to find a better way to make money in this environment.

This week’s Stone-Cold Earnings Trade Lock of the Week provides an essential service for consumers. Its products are unlikely to be impacted by a recession and yet shares are down hard thanks to the company lowering guidance for the future.

The earnings hurdle is not set very high at the moment and there is a ton of fear in the stock. It is a great setup for a upside surprise that, if it comes, will push shares 5% to 10% higher. Owning a call option seems on this baby seems like a no-risk, high-return opportunity.

Here are five names to consider trading including this week’s Stone-Cold Earnings Trade of the Week:

James (Jamie) Dlugosch is a contributing editor to MSN Money, The, and Traders Reserve. He has a long and distinguished career in the investment industry that includes editorial and publishing stints with the highly rated Rational Investor, The Prudent Speculator and the current Penny Stock Winners. Jamie was a contributing editor to InvestorPlace Media where his content was syndicated to numerous on-line financial sites including MSN Money and AOL Finance. At the turn of the Millennium he was the President and CEO of Al Frank Asset Management where he honed his skills under the tutelage of the well respected guru, Al Frank. With The Rational Investor Jamie adapted Al Frank’s long-term market beating strategy to reduce risk and increase ease of use for subscribers. He was quickly rewarded for his efforts by compiling the second highest total return of all investment newsletters in 2004 according to The Hulbert Financial Digest. His investment approach has produced winning returns in competitions held by MSN Money in their long running Strategy Lab. He also has successfully raised private capital for a variety of private ventures including the purchase of Al Frank Asset Management, an investment now worth many times its original cost. Jamie is frequent guest and contributor to a wide range of financial television, radio and internet broadcasts including CNBC, Market Watch and MSNMoney. Jamie holds a B.A. in Political Science from UCLA and a Masters in Business Administration (MBA) from the University of North Carolina, Chapel Hill. He resides in Minneapolis, MN with his wife Sarah and two daughters, Julia and Ellie.

Tags: , , , , , ,