This Is My Third Time Recommending This Name; It's Still Not too Late

LPL Financial is the No. 1 player in its market niche of providing support and back office services to independent financial professionals. They've been unusually successful in attracting huge numbers of financial advisors away from competitors. LPLA has also grown through shrewd deals to bring over entire blocks of business via acquisitions. If this year's estimates prove accurate EPS will have grown by about 439% since Dec. 31, 2012. Continuous shareholders have been well rewarded as detailed below. Adviser headcount had grown nicely over the previous few years, rising to 17,672 from 16,067 through April of this year. Also, an enormous new contract was just signed that will greatly expand LPLA's business even further. Benefits from the deal will begin flowing in 2022. That implies much higher earnings are likely to be on tap in 2022 and beyond. Estimates for 2021 and 2022 had already been upgraded, even before this announcement. All-time record EPS were expected at $7.39 and $9.13 respectively. My conservative target price for the end of next year would put LPLA near $183. That goal might well be exceeded if things go as well as they might; $200-plus is not at all out of the question. Yahoo Finance sees things the same way. Its 12-month target price for LPLA was $183 before the big Credit Union news. Analysts have been regularly underestimating LPLA's earnings power. EPS exceeded estimates by from 9.2% to 21.2% during each of the most recent four quarters. That is another reason I suspect higher projections will be coming in the future. Buying LPLA shares outright looks like a good play. Option-minded traders have lots of choices in how to play with LPLA. Actual pricing, with the stock at $137.25 on June. 15, 2021 are shown below. Naked puts sales would bring in decent premiums while also providing margins of safety as shown next. If you like the stock at its current quote you should love it at the even lower, worst-case, if exercised prices. More sophisticated option players could consider setting up the following Jan. 21, 2022 $150 strike price buy/write combination. Cash flow details on a 100-share, 1-call and 1-put combo are shown below. If LPLA rises to at least $150 by expiration day the best-case scenario detailed here would apply. Any gain of at least 9.3% from the trade inception price would morph into a very fine 39.2% total return over just 220-days. Outright buyers of LPLA at $137.25, without using options, would need to see it at about $190 by next January to do as well percentage-wise. What if LPLA fails to reach and hold $150? If so, combination sellers would end up with a double-sized long position, but at the reduced price of $128.78 per share. Any close on expiration day above $128.78 would allow for immediate liquidation for at least a small gain, and perhaps a pretty large one, if LPLA finishes not far below $150. I first wrote about the shares here in March of 2020, when the stock was available for just shy of $51. I penned another recommendation on LPLA last October, with the shares still under $76. It's not too late to get on board, even at $137.25. LPL Financial is a true market-leading, left-to-right growth company, offering classic GARP (growth at a reasonable price). Buy some shares, sell some puts or consider setting up full buy/write combinations.

This Is My Third Time Recommending This Name; It's Still Not too Late

I wrote about LPL Financial Holdings in March 2020, then October and now I am again. Why? It's got premier growth, yet is a reasonable value.

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