EOT trade alert August 15, 2014

| August 15, 2014

August 15, 2014

Trade Alert:

Buy BDBD December 19th 2014 $12.50 Calls at $2.05 or better

Company Background:

Boulder Brands (BDBD) is a health and wellness food producer.  They specialize in gluten-free items.  The products are marketed under the Udi’s, Earth Balance, Smart Balance, and Level Life brand names.

Short-Term Catalyst:

Boulder Brands reported quarterly earnings on August 8th.

Their 5 cents of earnings per share were in line with expectations.  And their revenue of $131.3 million was better than the $130.3 million analysts expected them to earn.

On a year-over-year basis, revenue grew 18.6%.  And, they updated earnings guidance for their fiscal 2014 from 39 cents to 41 cents per share.

The company is clearly benefiting from increased demand for organic, gluten-free, and non-GMO food products.  And they are in position to take advantage of continued growth in this segment.

Next quarter BDBD is launching a new gluten-free baked goods line.  And they are quickly expanding their footprint in North America grocery stores as well as the UK.

In short, the company is on the verge of a major growth spurt.

What’s more, the company has instituted many programs to reduce costs, improve products, and grow profit margins.

That’s a winning combination that should help grow the top and bottom line as well as push the stock price higher in the weeks ahead.

BDBD’s recent price action indicates a bullish breakout above resistance of the downtrend that was in place since April.  And could trigger a quick rally back to the 52-week high of $18.46.

Let’s grab call options on BDBD now to profit from the coming surge.

Trade Details:

Underlying Stock Symbol: BDBD
Current Bid-Ask Price: $1.60 – $1.95
Option “Buy Up To” Price: $2.05
Break-Even On Stock At Expiration: $14.55
Maximum Risk Per Contract: $205


Exit Strategy:

BDBD is trading at $13.15 per share.  Resistance levels will be at $15.00 and again at $17.50.  Remember, we want this stock to move higher.  Support levels will be at $12.00 and $11.00.  Conservative investors should look to exit at the first support or resistance level.  Aggressive investors may want to hold for a bigger move.



Category: EOT Trade Alert

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