EOT Trade Alert – March 20, 2015
Trade Alert:
Buy CDW June 19th 2015 $40.00 calls at $1.35 or better
Company Background:
CDW Corporation $CDW is an integrated IT solutions company. They provide mobility, security, data center optimization, cloud computing, virtualization, and collaboration services to 250,000 businesses in the US and Canada.
Short-Term Catalyst:
You’ve probably seen CDW’s television commercial featuring ex-NBA star Charles Barkley.
The Ad campaign has done a good job of elevating the public profile of the company.
In short, CDW provides IT solutions and have the experts to help their customers achieve their goals.
One of the great things about CDW is they offer more than 100,000 products from more than 1,000 different brands. They simply do what it takes with whatever technology is needed to make a business run better.
The company brings in $12 billion in revenue per year. But they’re just scratching the surface of the $215 billion per year market. In the 4th quarter, sales jumped 12.4% and earnings went up 8.6% year-over-year.
Needless to say, CDW has a healthy business and strong growth.
Right now the stock is in a solid uptrend. It’s up more than 50% from the 52-week low and it’s up 6.3% so far this year.
Despite the recent performance, the stock is trading at a forward PE of just 12.4. That’s cheap for a tech stock with the strength and growth opportunities like CDW has.
The combination of solid fundamentals, an uptrend, and a cheap stock is a great mix that should continue to send shares of CDW soaring higher.
Let’s grab call options on CDW to profit from this momentum stock.
Trade Details:
| Underlying Stock Symbol: | CDW |
| Current Bid-Ask Price: | $1.05 – $1.20 |
| Option “Buy Up To” Price: | $1.35 |
| Break-Even On Stock At Expiration: | $41.35 |
| Maximum Risk Per Contract: | $135 |
Exit Strategy:
CDW is trading at $37.81 per share. Resistance levels will be at $40.00 and again at $42.50. Remember, we want this stock to move higher. Support levels will be at $36.00 and $34.00. Conservative investors should look to exit at the first support or resistance level. Aggressive investors may want to hold for a bigger move.
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Category: EOT Trade Alert
