9 Father's Day Trades
OptionsZone Experts, June 19, 2009
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Father's Day Trade #6: Limited Brands Inc. (LTD)
By Nick Atkeson and Andrew Houghton
Dad may have his eye on a new toy -- the flat screen, the home entertainment system, the power boat -- but dads are fiscally responsible. In the financial crisis, fathers are the first to give up their wishes for those of their children and their wife.
Limited Brands Inc. (LTD) is a specialty retailer of women's intimate and other apparel, beauty and personal care products and accessories under various trade names including Victoria's Secret and Bath & Body Works. Analyst earnings estimates for this year and next are 82 cents and 98 cents, respectively, but the company has almost $2 of earnings power. LTD is currently trading around $12 per share, which should prove to be an incredible bargain for the patient investor.
Times are tight -- see the Top 10 'New Frugal' Stocks.
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Houghton and Atkeson
Looking into June, the market should begin refocusing on upcoming earnings reports for evidence the economy is gaining momentum.
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In the short-term, the government's bond auction is likely to be a key driver of stocks.
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The credit market, a reliable indicator of equity direction, suggests we will break out of the SPX's trading range to the upside.
The market seems to be saying that a 30% move up from the lows is ahead of the real economy and the market needs to allow the economy to catch up.
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