EOT Trade Alert – April 1, 2015

Trade Alert:

Buy BSX May 15th 2015 $18.00 calls at $0.55 or better

 

Company Background:

Boston Scientific $BSX is a medical device company. They operate in three segments- Cardiovascular, Rhythm Management, and MedSurg.

 

Short-Term Catalyst:

BSX has been on fire so far this year. The stock is up 34% year-to-date. Needless to say, there’s a lot of bullish momentum behind this stock right now.

And for good reason…

The new management team has reversed the follies of previous management. And after years of underperformance, the company has finally turned the corner.

They’re innovating and developing new products. And these innovations are resulting in more sales and faster earnings growth.

At every turn we’ve seen forward earnings estimates for BSX being stepped up. And the stock price is following in lock-step.

What’s more, BSX still has a lot of room for improvement in their operating margins. Over the last 12 months, their operating margin was 12.9%. Management has promised to push operating margins to 25% by 2017.

Margin expansion is a sign of good management. And one reason investors are so excited about this stock right now.

BSX will release their next quarterly earnings at the end of the month. I believe in this management team… they’ll say the right things to bring even more money flooding into this high flying stock.

Let’s grab call options on BSX ahead of their quarterly earnings to profit from the bullish momentum in this hot stock.

 

Trade Details:

Underlying Stock Symbol:	BSX
Current Bid-Ask Price:	$0.43 – $0.47
Option “Buy Up To” Price:	$0.55
Break-Even On Stock At Expiration:	$18.55
Maximum Risk Per Contract:	$55

 

Exit Strategy:

BSX is trading at $17.50 per share.  Resistance levels will be at $18.50 and again at $19.00. Remember, we want this stock to move higher.  Support levels will be at $17.00 and $16.00. Conservative investors should look to exit at the first support or resistance level. Aggressive investors may want to hold for a bigger move.

 

Chart:

 

Category: EOT Trade Alert