Trader Mike's Picks for Next Week (8/26)

Here's the next weekly installment of Trader Mike's picks.  Trader Mike spends hours a week combing the internet doing deep research on stocks he thinks will have great short term profit prospects.  Lately, he has been bullish on retail names that have been reporting earnings.




Let's see how last week's picks did:

Home Depot - Home Depot (HD) reported earnings of $3.17, beating the estimate of $3.09 by 2.6%, jumping $10 per share or almost 5% by the end of the day.  Calls were rock solid

Target - Target (TGT) reported blow out earnings of $1.82, beating the estimate of $1.62 by 12.3%, jumping almost $17 per share or almost 20% by the end of the day.  Calls were rock solid.

Foot Locker - Foot Locker (FL) reported disappointing earnings of $0.66, missing the estimate of $0.67 and the stock got hammered closing down almost $8 or 19% by the end of the day after rising almost 10% in after hours trading leading up to the announcement.  Additionally, Jerome Powell speech and Trump trade war angst didn't do much to help the market in general on Friday.  Calls got destroyed.  
Two out of three, not bad.  
Here are Trader Mike's picks for next week:

Best Buy - Best Buy (BBY) reports earnings on 8/29 before the market opens; call options priced around $1.80 expiring 9/6 look good ($70); BBY closed on Friday at $66.21 (Friday's market sell-off has driven down cost of calls quite a bit, creating an opportunity)

Rationale: 

>Consistently beats earnings   

>US consumer is doing well based on WalMart, Target, Home Depot,  Lowe's and other big box retailers who have reported recently

>Improved online sales platform; recent cost efficiency initiatives have been effective; smart television/gaming/health and wellness/connected home/virtual reality technologies offer product cycles that can drive near term top line outperformance

Ulta Beauty - Ulta Beauty (ULTA) reports earnings on 8/29 after hours; call options priced around $5 expiring 8/30 look good ($342.50); ULTA closed on Friday at $322.10 (Friday's market sell-off has driven down cost of calls quite a bit, creating an opportunity)

Rationale:

>Consistently beats earnings   

>US consumer is doing well based on WalMart, Target, Home Depot,  Lowe's and other big box retailers who have reported recently

>Robust traffic and sales, savvy partnerships with social media stars, attracting consumers to stores even as malls remain empty


I hope you find this post useful as you chart your personal financial course and Build a Financial Fortress this year.
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