Estee Lauder Companies Inc. (NYSE: EL) this morning reported Q1 profit that dropped to $0.20 per share compared to $0.27 in the same quarter a year ago, but the company doubled analysts' expectations of just $0.10 per share. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on EL.

After hitting a one-year high of $52.31 in April, the stock fell to a 52-week low of $38.41 in August. EL opened this morning at $45.00. So far today the stock has hit a low of $44.95 and a high of $47.05. As of 10:40, EL is trading at $45.64, up $2.32 (5.4%). The chart for EL looks bullish and steady, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.

For a bullish hedged play on this stock, I would consider a January bull-put credit spread below the $40 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 6.4% return in just 3 months as long as EL is above $40 at January expiration. Estee Lauder would have to fall by more than 12% before we would start to lose money. Learn more about this type of trade here.