Is Hasbro Inc (HAS) Setting Up for Another Bull Run on Earnings?

Hasbro, Inc. (HAS) offers toys, games, entertainment products and various television and motion picture offerings through a variety of brands. The company’s stock is currently trading around $66.25 in a 52 week range of $48.01-$66.32. Stock has been on a tear this year and is very near to its 52 week highs. HAS has rallied over 20% year to date and is looking like it could add more gains on their most recent quarterly earnings report set to be released on Monday before the market opens.

HAS has an extremely strong historical earnings performance record. Over the past 12 quarters the stock has rallied 9 times on earnings day with an average move of 4.93%. The stock is also very strong on a chart with shares of HAS trading well above the Ichimoku Cloud. The cloud is also strongly upward sloping implying further upside for HAS. Market makers are currently implying a move of around $4.25 by May expiration which gives us an upside target of $70.50 by May expiry. Using this target we can then set up a potential options strategy to get long HAS ahead of earnings.

Trade: Buying the HAS May 67.5-70 Call Spreads for $0.75
Risk: $75 per 1 lot
Reward: $175 per 1 lot
Breakeven: $68.25

This gets a trader long through May with a point of max profit right at the implied target. This trade also offers a trader better than 2-1 on their money.