Weekly Options Trade – Workhorse
Group Inc (NASDAQ: WKHS) Calls
Thursday, January 07,
TRADE: Buy WKHS JAN 22 2021 25.000 CALLS at approximately $1.50.
have asked for the following.....
pre-determined sell at $3.00.
Include a protective stop loss of $0.60.)
EV stocks were among the best-performing consumer stocks last year, and
it appears that this theme is to continue in 2021. Many were up several
hundreds of percentage points since the beginning of 2020 and the gains have
only just begun – look for this continuation into 2021. It’s easy to see the
potential in EV (electric vehicle) companies, with carbon emissions a major
environmental concern worldwide and numerous financial incentives for electric
With EV accounting for only 2.6% of global sales this is more than just
a consumer trend we are talking about. In terms of technology and its impact on
society, this is a secular change. Eventually, most cars and trucks will be EV
and, to some extent, autonomous. What this means for investors is a
multi-billion multi-decade growth opportunity.
EV upstart Workhorse
Group Inc (NASDAQ: WKHS) made big headlines last year when it went public.
Workhorse Group’s flagship line is in production with new models on the way
which will continue to reflect increased price action.
Workhorse Group’s flagship line is the C-Series of last-mile delivery
trucks. The company is manufacturing both the 650 and 1000 models, named for
the carrying capacity, and expected to dominate the industry. Over the past
year, the company has garnered approvals from all 50 states making it the only
EV delivery vehicle licenses for operation nationwide. That’s important for any
EV fleet with a nationwide presence.
The Major Catalyst for This
The Major Catalyst for This
Trade.....Delivery Van Order.....
Workhorse Group booked its largest order of electric last-mile delivery
vans to date.
Mississauga, Ontario, Pride Group
Enterprises, a privately held commercial-vehicle wholesaler that operates in
the U.S. and Canada, has placed an order for 6,320 of its new C-Series electric
package-delivery vans, said Workhorse.
large order solidifies our first-mover advantage and indicates the heightened
interest in our last mile delivery products," said CEO
Duane Hughes in a statement. "Our
new agreement with Pride marks our largest individual order to date and expand
our sales channel internationally into Canada for the first time,"
Workhorse's C-Series, designed with input from United Parcel Service
(NYSE:UPS), is a short-range electric van designed for so-called
"last-mile" service, such as deliveries to homes and businesses. The
company received U.S. government approval to begin building the van last year.
It's a big order for Workhorse, which has told investors that it aims to
build about 1,800 vehicles in 2021. Workhorse said that the deliveries to Pride
Group "may begin by July 2021 and will run through 2026." Pride Group
will distribute the vehicles to commercial-fleet customers through its dealer
Workhorse said that inventory financing — the cash to purchase parts and
tooling to build the vehicles — will be provided by Hitachi Capital America
(HCA), as per a previously announced partnership between Workhorse and HCA
parent Hitachi (OTC: HTHIY).
ongoing partnership with [Hitachi Capital America] continues to bear fruit as
we gear up for scaled production in 2021."
Slowed by a COVID
outbreak at its factory in Union City, Indiana, Cincinnati-based Workhorse
expects to build 1,800 vans this year, gradually reaching production of 200
vans a month. It built just seven vans in the third quarter, two of which were
delivered to Ryder System Inc. R 0.06% for use in its COOP short-term rental
Workhorse plans to
begin fulfilling a pending order from United Parcel Service for 950 C-Series
vans this year. It had a total backlog of about 1,100 vans at the end of the
third quarter of 2020, not counting a 500-truck order from commercial vehicle
distributor Pritchard Cos.
Workhorse may have
a slight lead in building last-mile delivery vans over market startups Arrival
Workhorse Group Inc designs, manufactures, builds, sells, and leases battery-electric
vehicles and aircraft in the United States.
It operates through two divisions, Automotive and Aviation. The company
also develops cloud-based and real-time telematics performance monitoring
systems that enable fleet operators to optimize energy and route efficiency.
Workhorse stock has been trading for the past decade or so. But it did
not get much attention until last year. Consider that WKHS stock has soared
from $1.32 to a high of $30.99 in 2020.
Workhorse is the developer of electric vehicles for last-mile delivery.
The company got its start back in 2007 and was called AMP Electric Vehicles. At
first, the focus was on developing EVs for two-seat roadsters. But the company
would eventually pivot to create trucks and vans for commercial purposes.
A big part of this involved a merger with Workhorse Custom Chassis,
which was founded in 1998. The company was the developer of General Motors’
(NYSE:GM) chasses. As a result, the merger allowed for the new entity —
Workhorse — to become a full-blown manufacturer.Summary.....
For months now the story surrounding
Workhorse has been the imminent contract announcement from the US Postal
Service to replace its fleet of aged vehicles. While this is certainly still on
investors’ minds, it is promising to see that Workhorse has secured contracts
on its own, proving that the company is able to support itself without having
to rely on the USPS contract as previously believed.
Weekly Options Trade – Constellation
Brands, Inc. Class A (NYSE: STZ) Calls
TRADE: Buy STZ JAN 08 2021 222.500 CALLS at approximately $4.40.
have asked for the following.....
pre-determined sell at $8.80.
Include a protective stop loss of $1.75.)
The beer and spirits
specialist, Constellation Brands, Inc. Class A (NYSE: STZ), could grow more
than 12% year-on-year to $2.26 billion.
“We believe the focus of Constellation Brands’ FQ3 EPS
will be on accelerating and above consensus beer depletions to +8.3% y-o-y in
FQ3 (vs. 5% in F1H21) with improving beer out-of-stocks, as well as a beer shipment
recovery after the under-shipment in F1H21. We also expect an update on beer
depletion trends in December, with solid U.S. scanner data trends but likely
weakening on-premise trends with more on-premise restrictions, particularly in
California (about a quarter of Constellation Brands’ volumes),” said Dara Mohsenian, equity analyst at Morgan
“Additionally, we believe investors will focus on beer
margins, which we believe could surprise to the upside in FQ3 (we are 20 bps
above consensus on beer margins and 2.3% above consensus on beer profit) and in
F2H21, with Constellation Brands full year FY21 guidance of flat beer margins
implying -160 bps of y-o-y margin declines in H2, with our estimates above
guidance at -20 bps y-o-y,” Mohsenian
The Major Catalyst for This
The Major Catalysts for
Constellation Brands will report earnings at approximately 7:30 AM ET on
Thursday, January 07, 2021, and Wall Street expects a year-over-year increase
in earnings on higher revenues for the quarter ended November 2020. The
consensus earnings estimate is for $2.39 per share on revenue of $2.22 billion;
but the Whisper number is a bit higher at $2.45 per share.
Consensus estimates are for year-over-year earnings growth of 11.68% with
revenue increasing by 1.76% in the past seven days.
The consensus mark for revenues is pegged at $2,257 million, suggesting a
12.9% increase from the prior-year quarter’s reported figure.
For the last reported quarter, it was expected that Constellation Brands
would post earnings of $2.51 per share when it actually produced earnings of
$2.76, delivering a surprise of +9.96%. Its bottom line beat estimates by
16.7%, on average, over the trailing four quarters.
Over the last four quarters, the company has beaten consensus EPS estimates
Short interest has decreased by 37.7% and overall earnings estimates have
been revised higher since the company's last earnings release.
Why Constellation Brands?
reported a 5% uptick in its overall beer business, which kept it ahead of
larger rivals such as Anheuser-Busch InBev but behind Boston Beer.
recent entry into the hard seltzer segment aims to close that growth gap with
Boston Beer, the owner of the blockbuster Truly franchise. We'll get updates on
how well Constellation's Corona Hard Seltzer fared in its third quarter of
Two of the biggest
reasons to like this stock involve such as investments in recreational
marijuana products and Constellation's massive investment in its brewery
Constellation Brands Company Profile.....
Constellation Brands, Inc, together with
its subsidiaries, produces, imports, and markets beer, wine, and spirits in the
United States, Canada, Mexico, New Zealand, and Italy. The company sells wine
across various categories, including table wine, sparkling wine, and dessert
It provides beer primarily under the
Corona Extra, Corona Light, Modelo Especial, Modelo Negra, Modelo Chelada,
Pacifico, and Victoria brands, as well as Funky Buddha, Obregon Brewery, and
Ballast Point brands.
Constellation Brands said last week that the U.S. Federal Trade
Commission approved the sale of the company’s lower-price wine and spirits
portfolio to E. & J. Gallo Winery. The deal is slated to close the week of
January 4, 2021.
Despite the impacts of the coronavirus outbreak, Constellation Brands
has been gaining from robust depletions and strength in the off-premise
channel. The depletion volume for the beer business has been benefiting from
strength in the Modelo and Corona Brand Families. Also, depletion gains from
robust off-premise channel sales have been offsetting the declines in the
on-premise channel due to the coronavirus outbreak. Continuation of these
trends in the off-premise business is expected to have aided depletions and the
top line in the fiscal third quarter.
As well, continued strength in the Modelo and Corona brand families and
constant innovation have been driving portfolio depletions and market share
The company’s wine & spirits premiumization strategy has been
yielding results, as evident from the recent acceleration in depletions for the
power brands, namely Kim Crawford, Meiomi and The Prisoner Brand Family.
Also, investments in e-commerce and increased hard seltzer market share have
been acting as growth drivers. The Corona Hard Seltzer, launched earlier last
year, has achieved the number four position in the category and is currently
the second-fastest-moving hard seltzer. Market share gains in the fast-growing
hard seltzer market are likely to have boosted the top line in the
In the last reported quarter, e-commerce for beverage alcohol has expanded
significantly, increasing three to four times in volume from the prior year. Two-thirds
of consumers plan to continue their e-commerce purchases even in the post-COVID
The digital business has been gaining share through platforms like
Instacart, Drizly and other retailer online sites as consumers look for the
convenience offered by these channels, which should bolster the results for the
Fourteen analysts who offered stock ratings
for Constellation Brands Sciences in the last three months forecast the average
price in 12 months at $224.29 with a high forecast of $250.00 and a low
forecast of $154.00. The average price target represents a 2.79% increase from
the last price of $218.21. From those 14 equity analysts, ten rated “Buy”,
three rated “Hold” and one rated “Sell.”
Morgan Stanley gave a base target price of $240 with a high of $280
under a bull scenario and $138 under the worst-case scenario. The firm
currently has an “Overweight” rating on the beverage alcohol company’s stock.
Other equities research analysts have also recently issued research
reports about the stock......
- Constellation Brands had its price target increased by stock analysts at
JP Morgan to $248 from $218. The firm currently has an “overweight” rating on
- UBS Group increased their price objective to $238 from $220 and gave the
company a “buy” rating.
- Citigroup increased their price objective to $209 from $200 and gave the
company a “neutral” rating in October.
With improving beer category growth trends, the
STZ beer market share should see plenty of upside, have greater innovation
incrementality (eg Corona Hard Seltzer), more beer margin upside, and upside
from STZ’s Canopy stake.