2014-08-10 Low Risk Buying Opportunity In This Auto Parts Maker

Posted on August 10th, by Mitchell Warren in Free Articles, Options Risk Management, Trade Ideas. Comments Off on 2014-08-10 Low Risk Buying Opportunity In This Auto Parts Maker

Low Risk Buying Opportunity In This Auto Parts Maker

Tenneco Automotive

Notes: Tenneco (TEN) reported Q2 EPS on 7/28 of $1.45 vs the $1.28 estimate (they’ve beat EPS estimates for 6 straight quarters) and revenue of $2.24B vs the $2.20B estimate (8.4% year over year growth). Margins rose to 13.4% from 11.3% last year. For Q3 they expect global light vehicle production to increase 5% (9% in North America, 11% in China, 9% in India, 0% in Europe, and -12% in South America).

Tenneco (TEN) Options Trade Idea

Buy the (TEN) Oct $60/$65 bull risk reversal for a $1.00 debit or better

(Buy the Oct $65 call and sell the Oct $60 put, all in one trade)

Stop loss reference- A move below $60 in the stock

Upside target- A move up to the high $60’s/low $70’s

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