Best Stock on the Market

Call Options on CAR on 8/9/2012

Avis Budget Group (CAR) provides car and truck rentals, and ancillary services to businesses and consumers worldwide. It supplies rental cars to the premium commercial and leisure segments of the travel industry under the Avis brand; and to the value-conscious segments of the industry under the Budget brand. The company operates or licenses the Avis car rental system that includes approximately 5,200 locations; and operates approximately 2,100 Avis car rental locations in on-airport and local rental markets; and operates or licenses the Budget vehicle rental system comprising approximately 3,050 car rental locations, and operates approximately 1,100 Budget car rental locations. It also operates local and one-way truck rental businesses, and operates a combined fleet of approximately 26,000 trucks, which are rented through a network of approximately 1,850 dealers and 300 company-operated locations in the continental United States serving the consumer and light commercial sectors. In addition, the company engages in the sale and rental of optional products and services, including loss damage waivers; insurance products, such as additional/supplemental liability insurance or personal accident/effects insurance; automobile towing equipment and other moving accessories consisting of hand trucks, furniture pads, and moving supplies; and products for driving convenience, such as where2 GPS navigation units, optional roadside assistance, fuel service options, and electronic toll collection, as well as other ancillary products and services comprising rental of satellite radio units and child safety seats. Its rental fleet comprises approximately 393,000 vehicles.

Flag on CAR

Stockwinners is bullish on this name for the following reasons:

  1. This stock will be named by the leading stock advisory service as one of its "top picks."
  2. Shares have formed a bullish "FLAG" and are ready to break to the upside.

TRADE: Buy 1 September $15 CALL  (CAR120922C00015000) FOR LESS THAN $1.20

Breakeven & Profit/Loss Analysis:

  • Breakeven at $16.20 on Sept expiration
  • Profit above $16.20 , unlimited Max gain
  • Losses btwn$16.20 to $15 up to $1.20 , max loss of $1.20 below $15

The payoff table is presented below:

Trade

  • Buy 1 January $50.00 Call at $1.20
  • For a net debit of $1.20

Profit/Loss Analysis

  • Breakeven at $51.20
  • Maximum profit is unbounded
  • Maximum loss is ($120.00) at strike of $50.00

Closing Summary

  • Sold 1 January $50.00 Call at $1.50

Position closed on 8/21/2012 at price of $1.50 with a 25.00% gain in 11 days.

Back to Portfolio