Profit Pregame

The Covid-19 Effect: This Company Just Cleared $20 Billion in Quarterly Sales

Impressive numbers from FedEx…

There’s no doubt that everyone has heard about the current shipping surge the U.S. is seeing. It seems every delivery service company out there is struggling to keep up with the demand. And it makes sense seeing that most Christmas gifts have been bought online or shipped to family and friends.

And FedEx has ridden this surge to some nice-looking earnings. The company generate better-than-expected profits and revenue during its most recent quarter – bolstered by a record-breaking volume of U.S. and international package deliveries.

Here’s a closer look at the numbers:

  • Adjusted earnings per share: $4.83 per share vs. $4.01 expected.
  • Revenue: $20.6 billion vs. $19.45 billion expected.
So, as you can see – FedEx really outdid the predicted levels. But even with these impressive numbers, the package delivery service did not reveal an earnings forecast for 2021, blaming the ongoing uncertainty brought on by the pandemic. And this led to the stock actually dropping – but I’m not counting FedEx out just year. And that’s why I’ll be keeping a close eye on this big name and I’ll be sure to keep you updated.

Trading tip of the week…

One of the most important skills you can ever learn when it comes to your trading game is understanding your risk tolerance.

For instance, let’s say you’re looking to trade weekly options. It makes sense that you’d want to get your piece of these fast-moving setups seeing they are very profitable. But while they are incredibly lucrative, they also come with the highest gamma and theta, making them the highest risk and highest reward options.

That’s why, when trading them, you have to assess your risk tolerance and be comfortable with the amount of risk you’re putting out there.

Here’s a simple breakdown: Let’s say you decided to invest in a February option, risking $500. This investment does not come with the same amount of risk as putting that same $500 into an option expiring at the end of the week.

That’s why, when it comes to trading, you must look past the price tag on an option and dig into the risk of the investment. And you can do this by really digging into the time till expiration, theta, gamma, and more.

By doing this, you’ll be able to set yourself up for big profits while also protecting your bottom dollar-a big win-win.

The only earnings report I’m looking at this Christmas.

It’s Christmas week, and there’s only one earnings report that’s worth focusing on over the holidays…

CarMax, Inc. (KMX)

Established in 1993, CarMax has grown into the largest used-car retailer in America. And the pandemic hasn’t slowed down this company at all. In their previous earnings report on September 24th, KMX reported $1.79 earnings per share (EPS). Analysts predicted their EPS to be $0.95. But CarMax made nearly double what they were expecting.

It’s because CarMax’s online experience is one of the best in the entire industry. They completely remove the unnecessary haggling and negotiating with a dealer. And they are renowned for their fantastic customer service.

Not to mention, CarMax is getting more brand-name recognition. It recently became the official auto retailer of the NBA and the WNBA. This sort of partnership will only help CarMax spread its outstanding reputation. And let’s not forget about KMX stock. KMX dropped alongside the entire market back in March when the pandemic shutdown started. But in just five months, it bounced back to an all-time high.

This is why I’m paying extremely close attention to CarMax’s earnings, and the moment I see KMW present a lucrative opportunity for us, I’ll let you know right away.

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