Welcome Subscribers New and Old (well, new subscribers and dear loyal friends):

I know that we have many new subs so I want to take a moment and give a quick tour of how Profit Catalyst Alert operates:

Stock and Options Recommendations:

All of my recommendations are based on fundamental trends I have noticed and analyzed at publicly traded companies. I have spent almost 30 years researching stocks and derive all of my ideas from deep research and analysis of each stock.

When I find a stock I am bullish on, you will see an alert of a stock buy. I try to find a reasonable call options purchase to recommend along with these stock recommendations. Some do not trade options and others might not have reasonably priced ones. Otherwise, you will see an options call trade in addition to the traditional stock buy.

When I find a stock that I am bearish on, you will see an alert for a put options purchase. I do not recommend outright short sales.

Earlier today, you should have seen a trade alert regarding the purchase of put options on Pinnacle Foods (NYSE: PF) and Post Holdings (NYSE:POST).

You will also occasionally see a call options recommendation for a group of stocks that I think will rise due to an external trend that is impacting those stocks immediately. Please see my recent truckers call purchase recommendation or my hurricane infrastructure call purchase recommendation as examples.

Anyone considering trading options should spend some time reviewing Investing Daily’s Introduction to Options guide. This can be found via this link or under the Frequently Asked Questions tab on the Profit Catalyst Alert site.

This is an excellent guide to learning about options. Although I endeavor to deliver profitable trade ideas, I must emphasize how risky options are. They are constrained by strike prices and expiration dates. Many expire worthless. Please know what your personal risk tolerance is before considering these trades.

That said, Profit Catalyst has had a terrific track record with options trades. Please consider signing up for text alerts for trades which should allow you to see the ideas in almost real time.

Portfolio Page:

On the Portfolio page you will see a table listing of all the open stock and option recommendations. In the stock section, those with a green BUY button are trading below my “buy up to” price limits so should be considered good values.

I routinely assign a “buy up to” limit that is roughly 20% lower than my target. Just because a stock is trading above my limit does not mean that it is not a good buy, but rather that there might be less upside.

I update my targets and therefore, my limit prices, on a quarterly basis post earnings season.

The options table does not include a live price feed so you are not able to immediately see if a position is trading above or below my limit price. You need to check those online via your quote service.

The price limits on options are more strict. I do not recommend entering a new options position if the price is significantly higher than my limit.

There are times, however, when the prices of options fall and represent what I consider good value.

As you might expect from recent bullish market activity, all of our call options recommendations are above the limit prices. However, the two put purchases, in VF Corporation (NYSE: VFC) and Columbia Sportswear (NSDQ: COLM) are trading well below my limits.

At the end of this page I summarize my thoughts on VFC and COLM, who report earnings in the next month.

Communication:

I am delighted to answer any questions that you have regarding my process and recommendations. As a publisher, we are prohibited from giving personalized advice so I cannot give specific advice on your trade or position but am happy to provide a general comment.

All questions or comments can be posted in the Stock Alert section. I try to answer as quickly as possible but am sometimes traveling or listening in on calls so there may be a short delay. Don’t fret, I’ll be to you as soon as I can.

Each Monday you will see a much shorter version of this Weekly Update which reviews news on the stocks in the portfolio.

Around the Portfolio:

Ichor Holdings (NSDQ:ICHR) should respond well to continued good news from its top two customers, Applied Materials (NSDQ:AMAT) and Lam Research (NSDQ:LRCX). Applied Materials, who represents 46% of revenue, hosted a very positive analysts’ day last week.

It raised its long term growth targets which should result in higher demand for Ichor’s products.

VF Corporation (NYSE: VFC) was downgraded to Sector Weight from Overweight at KeyBanc.  Analyst Edward Yruma noted the company’s current valuation adequately reflects recent results but that the company remains susceptible to any slowdown at Vans, its sneaker company which has buoyed results.

Update on VFC and COLM Put Options:

I originally recommended the VF Corp and Columbia Sportswear puts in July based on the expectation that management might lower estimates for these companies when they reported earnings in the summer.

Both companies kicked the can down the road and we’ll get our first look at fall demand when they report later this month.

New subscribers or those looking to add to positions at lower levels might consider these puts. Both trade at much lower prices than my original recommendation and I think offer terrific potential over the next few months.

VFC and COLM report September quarter earnings this month. Mark the dates below on your calendar and listen in to hear management’s response to a rough retail environment:

VFC earnings

Date: October 23, 2017

Time: 8:30 am (EST)

Call Details: The conference call will be broadcast live on the Internet, accessible at ir.vfc.com.

What to Listen For:

1. On its second quarter call VFC management kept revenue estimates for the year but said it expected a shift in orders from September to October. This means revenue in the September quarter is expected to drop 2.5% but jump more than 8% in the December quarter. Most of these orders come in during the month of October. How much are sales up versus last October?
2. Profit margins have improved in prior quarters but sales and marketing expense is rising rapidly- is the company including promotional dollars in its marketing line?
3. The North Face, which makes up most of the Outdoor/Action sales, is being displaced by Patagonia as the must-have winter brand. How did Outdoor/Action sales perform and what is the expectation for the December quarter?
4. VFC announced a very expensive acquisition of Dickie’s workwear in August. Does the company still expect that purchase to contribute $200 million in revenue?

COLM earnings

Date: October 26, 2017

Time: 5 pm (EST)

Call Details: To listen to the conference call, please dial 877-407-9205. The call will also be webcast live on the Investor Relations section of the Company’s website at http://investor.columbia.com.

What to Listen For:

1. Like VFC, Columbia has pushed out expectations for sales growth from the September quarter to the December quarter. What is the early read on winter sales? Look for tell-tale negative words like customers being “conservative” or remarks regarding more “structural change” for retailers. These are codes for weaker demand from wholesale retail customers.
2. Sales and marketing expenses have been increasing faster than sales- when will the company get some leverage from this expense and what are they spending it on?
3. Columbia lost one of its seasoned execs in the prAna yoga clothing team. Last quarter management guided that all of prAna’s growth would be pushed into the December quarter. Were prAna sales down in the September quarter?