Amgen Inc. (AMGN) – Last month, we initiated a position on AMGN via a long call. On February 25, we closed that position for a profit. The momentum continued to the upside but has now pulled back, and we are looking at a credit spread to take a bullish stance this time around.
Fundamentally, AMGN is moderately undervalued, trading in line with its industry median. However, recent growth suggests that estimates may be too low, supporting a higher valuation. AMGN has a forward P/E ratio of 15.28x compared to the industry average of 12.86x. Expected EPS growth for AMGN is 3.91% versus 8.61% for the industry, while expected revenue growth stands at 2.94% compared to the industry average of 7.74%. Net margins for AMGN are 12.24%, slightly below the industry average of 13%.
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AMGN – Daily
Trade Details
Strategy Details
Strategy: Short Put Vertical Spread
Direction: Bullish Credit Spread
Details: Sell to Open 2 Contracts AMGN April 11 $315/$300 Put Vertical Spreads @ $4.50 Credit per Contract.
Total Risk: This trade has a max risk of $2,100 (2 Contracts x $450) based on a hypothetical $100k portfolio risking 2%. We suggest risking only 2% of the value of your portfolio and divide it by $450 to select the # contracts for your portfolio.
Trend Continuation Signal: This is a bullish trade on a stock that is expected to continue its bullish trajectory over the duration of this trade.
1M/6M Trends: Bullish/Bullish
Relative Strength: 6/10
OptionsPlay Score: 86
Stop Loss: @ $9.00 (100% loss to value of premium)
Use the following details to enter the trade on your trading platform. Please note that whenever there is a multi-leg option strategy, it should be entered as a single trade.
PLEASE NOTE that these prices are based on Thursday’s closing prices. Should the underlying move significantly during the pre-market hours, we will likely adjust the strikes and prices to reflect a more accurate trade entry.
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