Currently the forward PE ratio is 21X. I expect the earnings will grow by about 20% in the next 12 months. The company seems to enjoy a strong competitive advantage as demonstrated by its operating margin of 37% and profit margin of 23%. The return on equity is 14% so the company should generate enough profits for future growth. For this combination of momentum and solid fundamentals I would look to a put sale or the sale of a credit spread.
Trade: Sell to open AMTD Nov 25 puts at $0.19.
This is another example of a high probability trade. Our goal in this trade is to wait it out and let the option expire giving us 100% cash return on the trade.
OptionsProfits can be followed on Twitter at twitter.com/OptionsProfits
EXCLUSIVE OFFER: Jim Cramer's Protégé, Dave Peltier, only buys Stocks Under $10 that he thinks could potentially double. See what he's trading today with a 14-day FREE pass.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV