Kimberly-Clark Corporation (KMB), which is engaged in the manufacturing and marketing of a range of products made from natural or synthetic fibers across three segments: Personal Care, Consumer Tissue and K-C Professional, is reporting earnings on Monday, July 25, after market closing: (Source: TD Waterhouse)The company beat earnings estimates in 50% of time in the last eight quarters, underperforming in the rest of time, and has seen subtle movements in the market price of its stock over the last three months: $KMB, Kimberly-Clark Corporation / 60 The market participants expect the following numbers over the next few quarters, including the upcoming one: (Source: TD Waterhouse)On the other hand, market data show that the August options are relatively cheap: (Source: TD Waterhouse)The monthly straddles (options with a strike price of $130) are worth around 5.3% of the current market price of the stock. Historically, the stock has been almost as volatile as that on a monthly basis over the last year: (Source:Google Finance. Calculations by author)As you can see, the stock has had a monthly standard deviation of 5.2% over the last 52 weeks, while the straddle expiring in a bit less than a month has an implied monthly volatility of around 5.1%, also including volatility from the earnings event next week. I therefore see signs of some undervaluation in these options.What do you think of this trade?