ACN Earnings Trade

Today’s earnings play is Accenture, a management consulting,
technology services and outsourcing company.

Accenture stock, ACN, is currently trading at $64.82, up $0.42 a half hour into trading today.
The stock has about a $16 dollar 52-week range with a low of $50.34
and a high of $66.75. The stock surged in at the beginning of this
year, and hit its high by late March, followed by a about a ten point
dip only to return to the $60-$65 range by the beginning of this month.

Accenture has beat expected earnings in the last five quarters. The
stock gained following earnings in all but one quarter, quarter one of
2012, where the stock only beat expectations by only 2%. In the past
two quarters, the stock has over $2 gains after earnings.

Accenture will be releasing its earnings after the bell today.
Earnings are expected to be the lowest since at least Q3 2011, but
earnings should be higher for 2012 in total.

The stock gapped higher on September 6, 2012 and has not looked back.
Even if it sells off on Earnings, I think there will be buyers looming
that missed the big move last time.

My trade is to sell the Oct 62.5 – 60 put spread for a $0.65 credit.

Risk: $1.85

Reward: $0.65

Break Even: $61.85


Andrew Keene