Under Armour, Inc. (UA) is engaged in the development, marketing and distribution of apparel, footwear and accessories for men, women and youth. UA is currently trading around $66.05 in a 52 week range of $38.01 – 73.42. The company’s stock has been outperforming the market this year with shares increasing 51.84% year to date. Shares have traded flat in the last month, down only .29% since Sept 23.
UA is scheduled to report Q3 2014 earnings at 8:30AM EDT tomorrow, Thursday, October 23th. Last earnings season, UA reported $610 million in revenue, a 34 percent increase from the same period in 2013. The company posted a profit of $18 million, or 8 cents per share. For Q3, the company is expected to post profits of 40 cents per share when the company releases its third-quarter earnings Thursday. If analysts’ predictions are on target, the Baltimore sportswear maker will have brought in $925.8 million in revenue for the quarter.
Looking at the company’s earnings history, UA has rallied 5 of the last 8 quarters. On average, the stock has moved about 7.7% in the last 8 quarters as a result of earnings releases. This earnings season, market makers are implying about a +- 8.2% move in the stock for the November monthly option chain. Under Armour is trading inside the Ichimoku Cloud, as shares have recently come off of 52 week highs. Based on the neutral chart, and the fact that the stock has just recently sold off of its highs, there is a chance that UA might be overbought at these levels.
The Trade:
Buying the UA Weekly 62-58-54 Put Fly for $.58
Risk: $58 for every 1 lot
Greeks of these Trade:
Delta: Short
Gamma: Long
Theta: Short
Vega: Long
Full Disclosure: I am currently in this trade
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