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12:05pm (EST)
Although the market is slightly lower, there have been a few bright spots today.
Walt Disney (DIS, $54.81, up $0.51) reported earnings after the bell last night and the numbers came in at $0.79 a share on revenue of $11.3 billion. The suit-and-ties were expecting $0.77 a share on revenue of $11.2 billion. The company recently acquired the “Star Wars” franchise from Lucas Films and announced a new movie will be in theaters in 2015. There are also plans to spin-off characters from the hit films into their own gigs that may or may not work.
Disney has done a brilliant job with its Marvel Entertainment acquisition (one we predicted) from a few years back and they could work magic with developing Star Wars. Time will tell. The company’s Interactive division posted a profit, for the first time ever, while other investments in its parks and cruise ships seem to be paying off.
Disney shares could be headed to $60 over the near-term and we wouldn’t be surprised to see $75 at some point this year if the company continues to fire on all cylinders. Shares have traded past double-nickels today.
Elsewhere, Time Warner (TWX, $52.17, up $2.21) is trading higher after beating estimates by 4 pennies. We listed several option trades last Friday and we said we would take a swing at one or two of them. We also said Time Warner was our favorite trade and we established positions on Monday in the March 52.50 calls (TWX130316C00052500, $0.90, up $0.35).
We recommended the options at 50 cents and set limit orders to close the calls at $1 or better today. The options opened at 60 cents and hit our target of $1 shortly after the open when shares reached a peak of $52.72. The calls traded up to $1.23 and have since fallen back.
These options could still move higher over the next few weeks but this is why it is important so set limit prices on earnings plays. Our auto-trading buddies did a fantastic job of getting our subscribers in-and-out for triple-digit profits in 48 hours and that was our plan. Plan the trade, trade the plan. Sweet Nelly.
We mentioned our portfolio is getting lighter and we are using short-term trades to play this mini trading range until the bulls (or bears) make their next move. We do have room for a few more trades and we are recommending 2 more today. One of them is an earnings trade so we are suggesting smaller positions or HALF positions. We also plan to be out of the trade by Thursday or Friday but for the other, we are establishing March positions.
Subscribers, check the Members Area for the NEW TRADES and for the current updates for our other open positions. We will be back in the morning with a full report and we will also be sending out a new trade or 2 for our Weekly Wrap within the next hour.
As we head to press, the Dow is down 8 points to 13,970 while the S&P 500 is off by a points to 1,510. The Nasdaq is up a half-point to 3,171.
