Trading Tips: Recent Episodes
Manny Backus
The weight-loss drug wars just went international. Eli Lilly won UK approval for its oral GLP-1 pill Foundayo (orforglipron) on Monday, its first green light outside the United States, setting up a direct clash with Novo Nordisk’s Wegovy pill in one of the world’s most closely watched pharmaceutical markets. It’s only the second oral weight-loss pill approved in Europe, arriving just two months after Novo’s version launched there.
The competitive dynamics are worth tracking closely. Foundayo launched in the U.S. back in April and generated $98 million in second-quarter sales — a respectable start, but notably slower than Wegovy’s pill uptake, according to Lilly CEO David Ricks, who told CNBC in April the drug simply needs more time to establish itself with doctors and patients. Lilly is leaning on a key differentiator: unlike Wegovy, which requires patients to take it first thing in the morning with water and no food for 30 minutes, Foundayo is a small-molecule drug that can be taken without those food restrictions. Novo, meanwhile, is showing strong momentum of its own — CEO Mike Doustdar said roughly 300,000 UK patients started on the Wegovy pill within its first three weeks of availability, and he’s betting the oral pill market could eventually rival injectables in size. Foundayo will still need a cost-effectiveness review from the UK’s NICE body before it’s available through the National Health Service, a hurdle that could delay broader uptake.
For investors in either name, this is a market-share story more than a binary win-or-lose event. Both companies argue oral pills are expanding the overall weight-loss market rather than just cannibalizing injectable sales, which is bullish for total addressable market size across the sector. Lilly shareholders should watch U.S. prescription trends for Foundayo as the best leading indicator of whether its ease-of-use pitch is resonating, while Novo holders should track UK reimbursement decisions as a proxy for how fast reimbursement-dependent, international markets adopt these pills. Either way, the GLP-1 pill category looks like it has room to grow for both players.
Wall Street’s bulls just got more ammunition. JPMorgan raised its year-end S&P 500 target to 8,000 on Monday, up from 7,800, arguing that this earnings season has finally proven the AI spending boom is paying off rather than just burning cash. The new target implies roughly 3% more upside from Friday’s close of 7,757.64 — modest on paper, but notable because it comes from one of the Street’s most closely watched strategists.
The earnings data backing this call is striking. With 87% of S&P 500 companies having reported, 78% beat analyst estimates, and the average beat came in around 31% — more than triple the roughly 9% average surprise seen over the past four quarters. JPMorgan’s Dubravko Lakos-Bujas pointed to Alphabet, Amazon and Microsoft as the clearest proof points, noting improving cloud growth, expanding backlogs and stronger operating cash flow. He revised his 2026 S&P earnings estimate up to $365 and set 2027 at $420, implying 35% and 15% year-over-year growth respectively — though he kept his valuation multiple flat at roughly 20x, citing risks from higher-for-longer interest rates and heavy equity and debt issuance ahead. JPMorgan isn’t alone: CFRA lifted its target to 8,050 from 7,400 last week, and UBS raised its call to 8,100 last month, putting all three firms among the most bullish shops on Wall Street.
For retail investors, the message is that the market’s AI-driven rally has broadening support beyond just sentiment. If backlog and cash flow trends at the hyperscalers keep improving, it reduces the risk of a valuation air pocket even as spending stays elevated. That said, watch the risks JPMorgan flagged — rate pressure and a wave of new equity supply could cap gains even if earnings keep delivering. A portfolio tilted toward the mega-cap AI beneficiaries driving these upgrades, balanced with exposure to sectors less sensitive to rate moves, looks like the more resilient play here.
Intel just made its boldest capital move of the year. The chipmaker upsized its stock offering to $20 billion at $95 per share on Tuesday, a sharp jump from the $15 billion raise it announced just one day earlier. The move signals just how fast demand for AI computing power is outpacing even aggressive spending plans, and it comes as Intel tries to cement its comeback in the semiconductor race.
The numbers tell the story. Intel expects to net $19.7 billion after underwriting costs, money it says will go toward capital expenditures and working capital tied to its AI buildout. Last month the company posted its fastest revenue growth in nearly 15 years and hiked its own capex guidance to $20 billion, with CFO David Zinsner warning investors to brace for a ‘meaningful increase’ in spending heading into 2027. Big Tech is pouring gasoline on the fire too: Goldman Sachs estimates industry-wide AI capex will hit $765 billion this year and balloon to $1.2 trillion by 2027, with Amazon flagging a persistent memory chip crunch as a key bottleneck. Despite the bullish backdrop, Intel shares fell 4% on the news, a classic case of dilution jitters overshadowing growth optimism. Even so, the stock has surged 175% in 2026 and quintupled over the past year, boosted further by a 10% equity stake the U.S. government took earlier this year to support domestic chip manufacturing.
For investors, the dip is worth watching rather than fearing. Large secondary offerings often pressure a stock short-term, but they can also signal management’s confidence that demand will justify the raise. Intel is positioning itself around ‘physical AI’ and custom silicon, two growth areas that could pay off if the AI infrastructure buildout continues at its current pace. Anyone holding Intel or eyeing an entry point should watch how the stock behaves once the offering closes on August 12 — a stabilization above the $95 offer price would be a bullish signal that the market has absorbed the new supply and is buying the growth story.
Energy stocks caught a fresh bid Monday as hopes for reopening the Strait of Hormuz faded, pushing crude oil prices sharply higher and reversing last week’s brief relief rally. Brent crude futures jumped 3.3% to $84.64 a barrel, while U.S. West Texas Intermediate climbed 3.1% to $80.63, as Iran continued to demand an end to military threats, sanctions relief, and compensation before agreeing to reopen the critical waterway. The renewed uncertainty erased much of last week’s seven percent pullback in both benchmarks, which had briefly given U.S. drivers a break at the pump.
The move flowed straight through to energy equities. ExxonMobil rose 2.9% in midday trading, Chevron gained 3.1%, BP added 2.1%, Shell climbed 1.2%, and ConocoPhillips advanced 2.7% as the group tracked crude’s rebound. U.S. gasoline prices had actually eased nine cents over the past week to a national average of $4.00 a gallon, according to AAA, but analysts at GasBuddy warned that relief could prove temporary. With the strait still effectively closed to shipping traffic, six months into the broader regional conflict, any further breakdown in negotiations threatens to push pump prices back toward record territory for this time of year. Energy-sector ETFs tracking major producers and refiners have already logged a roughly 40% total return over the trailing 12 months, driven by this same combination of tight supply and geopolitical risk premium.
For investors, the setup cuts both ways. Energy names remain a hedge against further Middle East escalation, and producers like Exxon and Chevron continue to benefit from elevated prices even as they’ve flagged that tight refined-fuel supplies could keep margins wide through year-end. But some analysts now caution that current energy valuations already price in a lot of good news, meaning any actual diplomatic breakthrough on Hormuz could trigger a sharp pullback in both crude and the stocks tracking it. Investors overweight energy should consider trimming into strength, while those without exposure may want a small hedge position given how quickly headlines out of the Gulf have been moving markets in either direction.
Taiwan Semiconductor Manufacturing just delivered the clearest proof yet that AI chip demand isn’t cooling off, even as investors have grown nervous about the sustainability of the artificial intelligence spending boom. The world’s largest contract chipmaker reported July revenue of 467.58 billion New Taiwan dollars, roughly $14.5 billion, up 44.7% from a year earlier. That pace puts TSMC ahead of its own full-year guidance of roughly 40% revenue growth, a rare case of a bellwether company outrunning its own bullish forecast.
The number matters because TSMC manufactures chips for nearly every major AI player, including Nvidia and Google’s custom silicon, making its monthly sales one of the most closely watched proxies for real-world AI infrastructure spending. High-performance computing, the segment where TSMC books its AI chip revenue, made up 66% of total sales last quarter. Management has also raised its 2026 capital expenditure plans to a range of $60 billion to $64 billion, a sign the company expects the current demand environment to persist rather than fade. The reaction was immediate: European semiconductor names ASML, Infineon, and STMicro all traded higher Monday on the read-through, even though the broader chip sector, as tracked by the PHLX Semiconductor Index, remains down roughly 15% from its June peak on lingering AI capex jitters.
For investors, this is a meaningful data point in the ongoing debate over whether AI infrastructure spending is a bubble or a durable multi-year trend. TSMC shares are still up 50% for the year despite the recent chip-sector pullback, and a monthly sales beat of this magnitude gives bulls fresh ammunition heading into a period when the market has been jittery about capex sustainability. Investors holding semiconductor exposure through TSMC, or through customers like Nvidia, should treat this as a reason to stay the course rather than chase the sector’s recent volatility. Those on the sidelines waiting for AI enthusiasm to crack may need to keep waiting — the underlying demand signals from the industry’s most important supplier just got stronger, not weaker.
Berkshire Hathaway just gave investors the clearest signal yet that the Warren Buffett era of pure cash hoarding is over. New CEO Greg Abel ended a 14-quarter streak of net stock selling in the second quarter, buying roughly $25 billion in equities while selling only $3.7 billion. It’s the most aggressive buying spree from Omaha since 2022, and it came alongside a record $4.5 billion in share buybacks — the largest quarterly repurchase total in five years.
The numbers back up the shift in posture. Operating earnings climbed 16% year-over-year to $12.98 billion, powered by a 24% jump in manufacturing, service, and retailing income to $4.47 billion and a 27% surge in energy profits to $891 million. Berkshire’s cash pile, which peaked at a record $397.4 billion, dropped to $365.5 billion as Abel put money to work — including a $6.8 billion acquisition of homebuilder Taylor Morrison and a $10 billion private placement investment in Alphabet during the quarter. Alphabet is now Berkshire’s fifth-largest equity holding, and regulatory filings show it was the single most aggressively purchased stock since Abel took the reins. Insurance underwriting was the soft spot, with profits down 13% to $1.73 billion as investment income from that segment slipped 9%.
For retail investors, this is a signal worth watching closely. Berkshire shares are up just 3% year-to-date, badly lagging the S&P 500’s 13% gain, but the stock has gained 9% over the past three months as the market starts pricing in Abel’s more active capital deployment. A management team willing to buy back its own stock at scale, while also increasing its bet on Alphabet, suggests insiders see value that the broader market hasn’t fully priced in yet. Investors sitting on Berkshire shares should view the buyback acceleration as a floor-builder for the stock, while those looking for a value entry point may want to watch whether Abel keeps deploying capital at this pace into the back half of 2026. The message from Omaha is unmistakable: the cash-hoarding chapter is closing, and a more active investing playbook is beginning.
The space sector is having a moment, and two smaller players are riding the wave straight into their own earnings reports today. Rocket Lab (NASDAQ: RKLB) shares jumped 27.5% over the past week, while AST SpaceMobile (NASDAQ: ASTS) climbed 22%, both set to report second-quarter results after Monday’s market close. The rally traces directly back to SpaceX, which posted its first-ever public quarterly report on August 3 and blew past expectations — April-June revenue nearly doubled year-over-year to $7.8 billion, up from $4.1 billion, driven by a 66% jump in Starlink satellite revenue and a stunning 250% surge in its AI business. SpaceX stock has risen 16% since that report landed.
Wall Street’s expectations for the two smaller names are similarly aggressive. Analysts project Rocket Lab’s quarterly revenue will rise 15% from the prior quarter to $230.94 million, though its adjusted loss is expected to widen slightly to $0.05 per share. The company enters earnings fresh off a $397 million Space Force contract to build and operate satellites that track airborne threats, plus a separate $266 million deal covering 12 suborbital launches. AST SpaceMobile’s numbers look even more dramatic: analysts expect revenue to surge 133% quarter-over-quarter to $34.4 million, with the adjusted loss narrowing from $0.66 to $0.23 per share. The company also just landed Japanese government backing worth roughly $900 million, covering up to half the costs of a broader $1.8 billion satellite and gateway build-out with Mitsubishi.
For investors, this is a high-beta way to play the broader AI-and-space infrastructure theme that’s been lifting names like SpaceX all year — but the risk cuts both ways. Both stocks have already run hard heading into tonight’s numbers, meaning a lot of good news may already be priced in, and any miss on revenue or wider-than-expected losses could trigger a sharp reversal. Retail sentiment on platforms like Stocktwits has stayed decisively bullish on both names, but investors should watch guidance commentary closely — specifically whether Rocket Lab’s launch cadence and AST SpaceMobile’s satellite deployment timeline stay on track, since execution delays have hit both stocks hard in the past.
Micron Technology just delivered a reminder that even the hottest AI trades can get volatile — and that volatility may be creating an opening. Shares plunged 28.7% in July before staging a rebound in August, and the stock now trades at a trailing price-to-earnings ratio of about 19, far below the broader tech sector’s average multiple of 35. That gap is notable given Micron sits at the center of one of the tightest supply crunches in the chip industry: memory prices have been climbing for months as AI data centers gobble up an outsized share of global DRAM and NAND production.
The supply squeeze shows no signs of easing soon. Micron’s own management believes the memory shortage will persist at least through 2027, while rival SK Hynix has gone even further, suggesting tightness could last through 2030. Apple CEO Tim Cook recently confirmed the pressure is real, telling investors he expects memory prices to stay elevated — a big enough deal that Apple has already raised prices on several devices directly because of higher component costs. In a sign of just how tight the market has become, Apple is reportedly testing memory chips from China’s CXMT, a homegrown DRAM manufacturer, as it looks to diversify away from the Samsung-SK Hynix-Micron trio that has historically dominated global supply.
For investors, the setup is straightforward: Micron is a direct beneficiary of AI infrastructure spending, and the current valuation discount versus tech peers looks tough to justify given the demand backdrop. Memory suppliers with capacity already sold through 2027 have real pricing power, and that dynamic should keep flowing into Micron’s margins even if near-term shares stay choppy. Investors comfortable with volatility may want to view pullbacks like July’s as buying opportunities rather than reasons to avoid the stock — just size positions knowing memory-chip stocks can swing hard in both directions around earnings and guidance updates.
Gold mining stocks just had one of their best weeks in years, and Monday brought a fresh catalyst that could keep the rally going. The VanEck Gold Miners ETF (GDX) surged 21% over five trading days to $89.73, while the VanEck Junior Gold Miners ETF (GDXJ) climbed even harder, up 22% to $116.78. Individual names moved just as sharply: Newmont (NYSE: NEM) gained more than 20% to $112.97, Agnico Eagle rose nearly 23%, and Barrick Mining (NYSE: B) added 19%. The move accelerated Monday when Barrick and Newmont announced a landmark settlement resolving their long-running dispute over the Nevada Gold Mines joint venture — one of the largest gold-producing complexes on Earth.
The numbers behind the rally are striking. Gold futures pushed above $4,390 an ounce, near two-month highs, after a shockingly weak July jobs report — the U.S. economy shed 23,000 jobs versus expectations for an 80,000 gain — sent traders piling into bullion as a hedge against a softening economy and looming Fed rate cuts. Miners carry outsized leverage to rising gold prices because production costs don’t rise nearly as fast as revenue, letting stronger bullion prices flow disproportionately into profit margins. That dynamic played out in Barrick’s own numbers: the company posted Q2 net earnings of $1.22 billion, up 50% year-over-year, on EPS of $0.73. Separately, Newmont agreed to pay Barrick $1.95 billion in cash to fold its Fourmile gold discovery into the Nevada joint venture, clearing the path for Barrick to spin off and IPO its North American gold assets as a standalone pure-play company by the end of 2026.
For investors, this is a two-part opportunity. Short-term, gold miner ETFs like GDX and GDXJ offer leveraged exposure to further bullion strength if the Fed keeps cutting rates into a weakening labor market — junior miners in particular tend to outperform in sharp gold rallies given their smaller, higher-cost operations. Longer-term, the Barrick spinoff is worth watching closely: a pure-play North American gold IPO could unlock value that’s been trapped inside a diversified, multi-continent mining conglomerate, and early investors in Barrick shares today get a stake in that eventual separation. Watch gold prices and Fed rate-cut odds this week — both are now the key swing factors for the entire mining sector.
AppLovin, the AI-powered advertising platform that became one of Wall Street’s most-loved growth stories, hit a speed bump Thursday as shares plunged roughly 20% after the company reported second-quarter results that fell just short of expectations. Q2 revenue came in at $1.92 billion — up 53% from a year ago — but marginally below the analyst consensus of $1.935 billion. Adjusted EBITDA rose 58% year-over-year to $1.61 billion, also slightly under guidance. It was the company’s first meaningful earnings miss in several quarters, and for a stock that had been priced for perfection, even a whisker of disappointment was enough to trigger a severe selloff.
CEO Adam Foroughi acknowledged the shortfall directly, telling investors the miss came down to timing rather than a structural deterioration in the business. AppLovin attributed the gap primarily to slower-than-expected model improvements in its AI advertising engine — the Axon platform that powers its rapid growth. The company is aggressively expanding beyond mobile gaming into e-commerce advertising, a newer and potentially larger market, but Foroughi cautioned that it takes time to ramp that vertical. Third-quarter revenue guidance was issued at approximately $2.07 billion, which came in 0.6% below Street estimates — a guidance miss that amplified the negative market reaction. Despite the turbulence, the underlying metrics remain impressive: 84% adjusted EBITDA margins, accelerating consumer vertical momentum, and year-over-year revenue growth well above 50%.
For retail investors, the 20% drop raises a critical question: buying opportunity or warning sign? The bull case is straightforward — a one-quarter timing miss at a company growing 53% with 84% EBITDA margins looks like a classic overreaction. If the e-commerce ad vertical scales as management projects, AppLovin’s total addressable market expands dramatically beyond its mobile gaming roots, opening up a multibillion-dollar opportunity. The bear case centers on valuation: even after the selloff, APP trades at a significant premium to the broader market, meaning any sustained guidance shortfall could trigger further multiple compression. Investors considering an entry point should weigh that while the business fundamentals remain strong, AppLovin is now in show-me mode — the next two quarters of e-commerce scaling will determine whether the growth story is intact or entering a slower, more competitive phase.
Walt Disney’s fiscal third-quarter results, reported August 5, gave investors a powerful vote of confidence in new CEO Josh D’Amaro’s early stewardship of the entertainment giant. The company posted adjusted earnings per share of $2.06, handily beating the Wall Street consensus of $1.86 — a 28% year-over-year increase. Total revenue came in at $25.25 billion, up 7% from a year earlier, while total segment operating income surged 21% to $5.56 billion. Disney stock jumped roughly 7% in response, with several analysts raising their price targets following the print.
The two engines driving the beat are streaming and parks — and both fired on all cylinders. Disney’s entertainment streaming unit, which encompasses Disney+ and Hulu, generated $712 million in operating income during the quarter, more than doubling the $329 million recorded a year ago. Streaming margins expanded from 6.6% to a striking 12.9%, while subscription revenue climbed 15% to $4.72 billion. Entertainment streaming revenue overall rose 11% to $5.53 billion. On the parks side, the Experiences division — covering theme parks and Disney Cruise Line — posted 10% revenue growth to nearly $10 billion, driven by higher per-guest spending and increased cruise capacity. The blockbuster performance of Toy Story 5 in theaters also lifted studio results for the quarter. Disney reiterated its full-year fiscal 2026 outlook for adjusted EPS growth of about 12%, excluding the impact of a 53rd calendar week.
For investors, Disney’s report reframes what was once a messy streaming-versus-parks turnaround story into a cleaner, dual-engine growth narrative. The doubling of streaming profit margins signals that Disney+ and Hulu have crossed a meaningful inflection point — they are now reliably profitable at scale, not just breaking even. Parks revenue approaching $10 billion per quarter underscores the durability of Disney’s experiential business, which commands premium pricing power few consumer brands can match. With D’Amaro five months into the top job and delivering above expectations, investor confidence in the transition is building. Analysts see full-year adjusted EPS north of $8 for FY2026, implying a forward P/E that remains reasonable for a company with this level of franchise value. DIS looks compelling heading into the fall season for investors who want entertainment exposure with improving profitability.
The US labor market delivered a shock on Friday as the Bureau of Labor Statistics reported that nonfarm payrolls fell by 23,000 in July — the first monthly job loss in months and a dramatic miss versus the 83,000 gain economists had forecast. Government employment led the decline, with federal and local government education roles shedding a combined 53,000 positions. The unemployment rate ticked down to 4.1% from 4.2%, but that improvement was driven in part by workers exiting the labor force rather than finding jobs — a nuance the market quickly picked up on.
For investors, the headline number arrived with important context. The prior month’s payroll print was revised sharply lower, reinforcing a trend of softening labor demand. Average hourly earnings growth remained moderate, keeping wage-inflation concerns in check. Wall Street’s reaction was immediate and decisive: stocks rallied broadly as traders slashed the odds of the Federal Reserve hiking interest rates at its September meeting. Before the report, markets had priced in a roughly 30% chance of a September hike. That probability collapsed to under 10% within minutes of the release. Bond yields fell in tandem, with the 10-year Treasury dropping several basis points as rate-sensitive sectors like utilities and real estate led equity gains.
For retail investors, this data changes the calculus heading into fall. A Fed that stays on hold — or pivots to discussing cuts — is broadly supportive of equities, particularly growth stocks and long-duration assets that suffered when rate-hike fears were running hot. Sectors that benefit most from a pause include technology, homebuilders, and dividend-heavy names in utilities and consumer staples. While a single weak jobs report does not guarantee the Fed stands pat, it materially reduces the pressure to tighten further. Investors looking to reposition should note that the bond market is now pricing in a more accommodative Fed through year-end, and history suggests equities tend to respond favorably to that environment — especially if corporate earnings continue their current 24%-plus growth pace.
Honeywell Aerospace (Nasdaq: HONA) made a rough introduction to life as a standalone public company. Reporting its first independent quarterly results on August 5 — just five weeks after completing its spin-off from Honeywell International on June 29 — the aerospace and defense systems maker slashed its full-year guidance and reported a steep drop in GAAP earnings, sending shares tumbling as much as 23% intraday before closing down between 17% and 20% on the session.
The headline numbers laid out the problem clearly. Q2 2026 organic sales grew 5% year-over-year to $4.5 billion, but that missed analyst expectations. Adjusted EPS came in at $1.78 per share, also short of consensus. The bigger hit was the guidance revision: Honeywell Aerospace now expects full-year organic revenue growth of just 4% to 5%, down sharply from its prior forecast of 7% to 9%. Adjusted EBITDA guidance was cut to $4.35–$4.45 billion from $4.65–$4.75 billion — a $300 million reduction at the midpoint. GAAP diluted EPS cratered 71% year-over-year to just $0.78, weighed down by one-time separation costs from the spin-off. The culprit driving the guidance cut is a precision casting shortage — a supply chain bottleneck forcing scarce components toward Boeing and Airbus original equipment lines and away from higher-margin commercial aftermarket sales, squeezing both revenue mix and profitability.
For investors, Honeywell Aerospace presents a classic spin-off dilemma: a structurally sound business in a growing sector — commercial aviation aftermarket demand remains robust, defense budgets are rising — now weighed down by near-term supply constraints and spin-off execution costs. The 20% single-day drop may overstate the fundamental damage. The precision casting shortage is an industry-wide issue, not unique to HONA, and supply normalization could quickly restore earnings power. Investors comfortable with spin-off turbulence might find beaten-down HONA shares attractive at current valuations. The key risk is that the guidance cut arrived just five weeks after the spin-off closed, raising early questions about management’s forecasting credibility at a pivotal moment for the newly independent company.
Uber Technologies posted its strongest quarter on record in Q2 2026, with gross bookings topping $58 billion — a 22% jump year-over-year — and trailing twelve-month free cash flow surpassing $10 billion for the very first time. Despite those milestones, investors sent shares down more than 5% on August 5 after the company’s third-quarter guidance landed just a hair below Wall Street’s expectations, reigniting concerns about intensifying competition from autonomous vehicle operators.
The guidance miss was razor-thin: Uber projected Q3 2026 gross bookings of $58.25 billion to $60.25 billion, for a midpoint of $59.25 billion against the Street’s $59.33 billion consensus. Revenue in Q2 itself came in at $14.19 billion, narrowly below the $14.22 billion estimate. Non-GAAP EPS was in line. The modest shortfalls wouldn’t have rattled investors much on their own, but they landed alongside growing noise about the robotaxi threat. Waymo is expanding aggressively across U.S. cities, Tesla’s Full Self-Driving rollout is in focus, and newer entrants like Wayve are testing in international markets. CEO Dara Khosrowshahi pushed back directly, framing Uber as building “the world’s largest platform for autonomous vehicles” — already partnering with Waymo to integrate robotaxi rides directly into the Uber app.
For retail investors, Uber’s story is a genuine long-term opportunity wrapped in near-term noise. The $10 billion in trailing free cash flow validates the company’s shift from a cash-burning startup to a durable cash machine. The Q3 guidance miss amounts to less than $100 million on a $59+ billion base — rounding error at this scale. The more important question is whether Uber’s platform strategy lets it monetize autonomous rides rather than be displaced by them. Management’s answer is yes, with a growing roster of autonomous vehicle partnerships already in place. Investors who can look past the headline sensitivity may find the post-earnings dip a compelling entry point into one of the few profitable, high-growth consumer platforms in today’s market.
Advanced Micro Devices delivered a blockbuster second quarter, reporting record revenue of $11.54 billion on August 4 — a 50% jump year-over-year and a 13% sequential increase. The results beat analyst expectations across the board and underscored AMD’s rapid transformation from a PC-focused chipmaker into a bona fide AI infrastructure powerhouse. Non-GAAP EPS came in at $1.66, up 82% year-over-year, while non-GAAP gross margin expanded to 56% from just 43% a year earlier.
The real story is AMD’s Data Center segment, which more than doubled to $6.7 billion — a 107% year-over-year surge that now accounts for 58% of total company revenue. Demand was driven by surging orders for AMD’s Instinct MI300 series GPUs from hyperscalers including Anthropic, Meta, Microsoft, and OpenAI, as well as strong adoption of 6th Gen EPYC server processors. The company also launched its Helios rack-scale AI infrastructure platform during the quarter, a move designed to compete more directly with Nvidia’s end-to-end system offerings. Client and Gaming revenue held steady at $3.8 billion, up 6% year-over-year, providing a stable foundation while the data center segment accelerates.
For Q3 2026, AMD guided revenue to approximately $13 billion (plus or minus $300 million), implying roughly 41% year-over-year growth and another 13% sequential jump, with non-GAAP gross margin expected to hold near 56%. Wall Street’s average analyst price target sits around $598 — more than 23% above current levels. For investors who missed Nvidia’s historic run, AMD offers a credible second-mover opportunity in the AI chip race with accelerating data center revenue, improving margins, and a growing roster of hyperscaler customers. The modest size of the Q2 beat relative to elevated expectations may explain why shares slipped slightly after hours — but the long-term trajectory remains firmly intact. Investors should focus on the MI400-series ramp and Helios adoption as the key catalysts heading into year-end.
Sandisk Corporation (NASDAQ: SNDK) delivered record-breaking fiscal fourth-quarter results on August 5 — and the market punished it anyway. The NAND flash memory specialist reported Q4 FY2026 revenue of $8.97 billion, up 371% year-over-year, with adjusted earnings per share of $39.25 that crushed the $34.37 consensus estimate. Data center revenue surged 103% sequentially, fueled by explosive AI-driven storage demand. Despite the blowout numbers, SNDK stock tumbled approximately 13% on Thursday as investors fixated on one thing: the forward guidance.
The issue is Sandisk’s Q1 FY2027 outlook. The company guided revenue of $10.30 billion to $10.80 billion, with the midpoint of $10.55 billion falling short of the FactSet analyst consensus of $10.8 billion — a gap of roughly $250 million that triggered the selloff. This matters especially for a stock that had already surged nearly 490% year-to-date before this report, making SNDK the best performer in the S&P 500 in 2026. Analysts noted that consumer-grade NAND pricing is softening, even as enterprise and AI data center demand continues to surge. Sandisk has secured $16.5 billion in financial guarantees through long-term New Business Models agreements, providing strong multi-year revenue visibility — but investors worried the extraordinary valuation left no room for guidance misses. Adjusted EPS guidance for Q1 2027 of $44–$46 did exceed some estimates, but the top-line revenue shortfall dominated the narrative.
For retail investors, the Sandisk story illustrates a classic high-growth dilemma: exceptional fundamentals can still produce painful short-term losses when valuations price in perfection. The structural case for NAND memory remains intact — AI workloads require enormous storage capacity, and Sandisk is a leading supplier alongside Micron and SK Hynix. The 103% sequential jump in data center revenue is evidence of real demand, not hype. However, the 490% YTD run-up had baked in flawless execution quarter after quarter. If you’re a long-term investor with conviction in the AI storage build-out, the 13% dip may warrant a closer look — but manage position sizing carefully given the valuation remains elevated even after the pullback. Q2 FY2027 results will be the real test of whether this guidance miss was a one-off or the start of a broader deceleration.
So here’s the thing about stock market bubbles: everyone’s an expert until they’re not. And right now, with AI stocks flying higher than Elon’s rockets, the big question isn’t whether your portfolio is green (it probably is), but whether we’re all about to get a reality check that makes 1999 look like a gentle correction.
Two Business Insider editors just had the finance equivalent of a Twitter beef, and honestly? It’s the most entertaining market debate I’ve seen all year.
Team “Chill Out, It’s Fine”In the blue corner, we have Joe Ciolli, who’s basically saying “relax, this isn’t your grandpa’s dot-com bubble.” His argument? Today’s AI darlings actually make money. Wild concept, I know.
Unlike those 1999 companies that burned through cash faster than a crypto bro at a Lamborghini dealership, today’s heavy hitters like Nvidia, Microsoft, and Amazon have actual profits, cash flow, and margins that would make a CFO weep tears of joy. When Goldman Sachs starts creating new metrics to justify valuations, Joe’s not immediately reaching for the panic button.
“Sure, the Shiller P/E ratio looks scary,” Joe admits, “but these companies are just built different.” It’s like comparing a Tesla to a horse and buggy – same transportation category, completely different game.
Team “This Ends Badly”In the red corner, Steve Russolillo is channeling his inner market pessimist, and honestly? His points hit harder than a margin call.
That Shiller P/E ratio Joe mentioned? It’s sitting pretty above 40 – a level that historically screams “maybe take some profits and buy a bunker.” Steve’s not just worried about valuations; he’s freaking out about concentration risk. The Magnificent 7 stocks now make up over a third of the S&P 500. That’s like having your entire retirement plan depend on whether seven people show up to work on Monday.
But here’s where it gets spicy: Steve thinks all these AI deals flying around are basically companies playing hot potato with billions of dollars. OpenAI gets money from Microsoft, who gets chips from Nvidia, who gets cloud services from Amazon – it’s like a financial human centipede, and nobody wants to be the one asking “but where’s the actual profit?”
The Plot TwistThe beautiful irony? Joe thinks the “AI bubble” warnings are becoming their own bubble. Meta level achieved.
Meanwhile, Steve’s just sitting there like “this is getting too philosophical for a guy who just wants to know if his 401k is about to implode.”
The Real TalkHere’s what both sides agree on: this market is weird. We’ve got companies throwing around hundred-billion-dollar deals like they’re buying coffee, valuations that would make your economics professor cry, and enough AI hype to power a small country.
The truth? Nobody knows if this is a bubble until it pops. But watching two smart people argue about it while the market keeps hitting new highs? That’s entertainment worth the price of admission.
Just maybe don’t bet the farm on either side being right.
Remember when everyone said AI was just hype? Well, tell that to Applied Digital (NASDAQ: APLD) shareholders who watched their stock absolutely launch 28% on Friday morning. We’re talking about a company that’s now up a mind-melting 372% this year. Yeah, you read that right.
So what’s got Wall Street’s attention? Applied Digital basically builds the digital real estate that AI needs to exist – think massive data centers where all those ChatGPT conversations actually happen. And they just dropped some numbers that made analysts reach for their calculators (and probably their blood pressure medication).
The Numbers That Made Everyone Lose Their MindsHere’s the tea: Applied Digital pulled in $64.2 million in revenue, crushing estimates by nearly 30%. That’s an 84% jump from last year, which in finance speak means “holy cow, this thing is growing fast.”
Sure, they’re still losing money – about 11 cents per share – but here’s the kicker: analysts expected them to lose 13 cents. In the weird world of Wall Street, losing less money than expected is basically like winning the lottery.
The real story? They just signed a lease deal with CoreWeave (think of them as the landlord for AI companies) for 150 megawatts at their North Dakota campus. That’s enough power to run a small city, and it brings their total anticipated revenue for just this one campus to $11 billion. With a B.
Building the Picks and Shovels of the AI Gold RushCEO Wes Cummins dropped this gem: they’re positioning themselves as the “modern-day picks and shovels of the intelligence era.” Translation: while everyone’s fighting over who builds the best AI, Applied Digital is selling the infrastructure everyone needs to make it work.
Smart move, considering hyperscalers (the big tech companies) are expected to throw around $350 billion at AI deployment this year. That’s more money than most countries’ entire GDP.
They’re not stopping there either. Applied Digital is breaking ground on a second campus that’ll come online in 2026, and they’re already in “advanced discussions” with another major player to fill it up. Once both sites are locked down, they’ll have 600 megawatts of capacity across two locations.
Wall Street Goes WildThe analyst upgrades came fast and furious. Roth Capital bumped their price target to $56 – that’s a 55% upside from current levels. Needham and Northland jumped in too, raising their targets to $41 and $40 respectively.
Here’s the thing about AI infrastructure plays: they’re not as sexy as the companies building the actual AI, but they might be smarter investments. While AI companies duke it out in an increasingly crowded market, someone’s got to keep the lights on and the servers humming.
Applied Digital seems to have figured out that in a gold rush, sometimes it pays more to sell the shovels than to dig for gold yourself. And judging by Friday’s rocket ship performance, investors are starting to get it too.
So here’s the thing about rare earth elements – they’re like that one friend who has the only car in your group. Sure, they’re not actually rare (despite the name), but China basically owns the entire supply chain. And this week, they reminded everyone who’s boss.
While you were probably scrolling through your feeds, China quietly tightened the screws on rare earth exports. Now foreign companies need licenses to export anything containing even 0.1% of these materials. It’s like China saying, “Oh, you want to build AI chips and fancy weapons? That’s cute. Here’s some paperwork.”
President Trump wasn’t having it. He basically canceled his upcoming meeting with Xi Jinping and started floating the idea of “massive” tariffs. Because nothing says diplomatic relations like a good old-fashioned trade war threat, right?
But here’s where it gets interesting (and a little weird). While all this geopolitical drama was unfolding, AMD decided this was the perfect time to announce a deal with OpenAI that’s so convoluted, it makes your head spin.
The AMD Deal That Makes No SensePicture this: OpenAI wants $60 billion worth of AMD chips. Normal companies would write an IOU for $60 billion. But OpenAI? They convinced AMD to pay them $33 billion in stock warrants for the privilege of maybe getting paid later.
Let me break down this “magical thinking” (as one analyst called it): OpenAI gets warrants that only become valuable if AMD’s stock price goes up. If the stock hits certain milestones, OpenAI can sell those warrants to… pay AMD for the chips they’re buying. It’s like paying for your groceries with a lottery ticket that only wins if the grocery store’s stock goes up.
The kicker? OpenAI doesn’t expect to be profitable until 2029, and only if their revenue magically jumps from $13 billion to $125 billion. Meanwhile, they’re signing deals worth nearly a trillion dollars. It’s the corporate equivalent of buying a Ferrari when you’re still paying off your student loans.
Why This Matters for Your PortfolioHere’s the thing – we’re seeing classic late-stage bull market behavior. When companies start doing deals that require “magical thinking” to work, it’s usually a sign that everyone’s gotten a little too comfortable with risk.
The rare earths situation is the real story here. These materials are crucial for everything from your iPhone to military drones. China controls about 80% of global processing, and they’re not shy about using that leverage. When geopolitical tensions heat up, tech stocks get nervous – and for good reason.
Smart money is already moving. Rare earth mining stocks exploded this week, with some gaining over 700% on options plays. But the broader message is clear: supply chain vulnerabilities are real, and they can bite fast.
The takeaway? Keep an eye on companies with heavy China exposure, especially in tech. And maybe be a little skeptical when you see deals that sound too good to be true – because they usually are.
After all, in a world where China holds the rare earth cards and companies are making billion-dollar bets on stock price movements, a little healthy paranoia might just save your portfolio.
Remember when your crypto-mining buddy kept talking about Applied Digital (APLD)? Well, turns out they weren’t completely wrong for once. This company just pulled off the kind of earnings beat that makes you wonder if someone accidentally added an extra zero somewhere.
APLD stock is up a casual 587% in six months. Yeah, you read that right. Five hundred and eighty-seven percent. That’s the kind of number that makes you question every life choice that led to not buying this stock earlier.
Here’s what happened: Applied Digital used to be just another crypto mining company (remember when everyone was doing that?). But they smartly pivoted to AI infrastructure right when everyone realized we need massive data centers to power all these chatbots that can write your emails for you.
The numbers from their latest quarter are honestly ridiculous. Revenue jumped 84% year-over-year to $64.2 million. Analysts were expecting them to lose 13 cents per share – instead, they only lost 3 cents. In Wall Street math, that’s basically like winning the lottery.
But here’s where it gets interesting. They just expanded their deal with CoreWeave (think of them as the cool kids building AI infrastructure) by another 150 megawatts. Their prospective lease revenue is now sitting at $11 billion. That’s billion with a ‘B.’ Their Polaris Forge 1 data center is fully booked, and they’re talking about expanding to 1 gigawatt by 2030.
To put that in perspective: a gigawatt could power about 750,000 homes. These guys are basically building the electrical backbone for our AI-powered future, one massive data center at a time.
The stock hit $39 recently before pulling back to around $34. But here’s the thing – if they keep landing these big contracts, $50 by year-end isn’t crazy talk. The company wants to hit $1 billion in net operating income within five years, and at this rate, they might get there faster than a Tesla in ludicrous mode.
Look, I’m not saying mortgage your house for APLD stock (please don’t do that). But when a company successfully pivots from the wild west of crypto mining to becoming essential infrastructure for the AI boom, and then proceeds to absolutely demolish earnings expectations… well, that’s worth paying attention to.
The AI revolution needs massive computing power, and someone has to build and run those data centers. Applied Digital seems to have figured out how to be that someone, and they’re getting paid handsomely for it.
Could it hit $100 next year? In this market, stranger things have happened. Just ask anyone who bought NVIDIA before the AI craze hit.
Remember when we thought the housing market was just “cooling off”? Well, turns out it might be having more of a full-blown fever dream. Foreclosure filings just jumped 17% compared to last year, and honestly, that’s about as fun as it sounds.
Here’s the deal: Over 101,000 properties filed for foreclosure in Q3 alone. That’s not just a number—that’s 101,000 families dealing with what’s probably the worst financial stress of their lives. And before you ask, no, this isn’t some dramatic spike from nowhere. Foreclosures have been creeping up like that friend who “just wants to chat” but really needs to borrow money.
Why Is This Happening?
Plot twist: It’s not just one thing. It’s like a perfect storm of financial annoyance:
First, mortgage rates are still hanging out above 6%, which is basically the financial equivalent of that expensive coffee you buy but immediately regret. The 30-year fixed rate hit 6.34% recently, and for context, that’s roughly double what people were getting used to during the pandemic’s “everything is free money” era.
Then there’s home prices, which are still sitting pretty at a median of $410,800. That’s not quite record-breaking, but it’s close enough to make your wallet cry. Combine high prices with high rates, and you’ve got monthly payments that would make even a tech bro think twice.
But wait, there’s more! (I know, I know.) The job market is getting a bit wobbly, and inflation has been doing that thing where it pretends to calm down but still makes everything cost more than it should. Nearly three-quarters of adults are stressed about housing costs, according to a recent survey. Three-quarters! That’s more people than who actually understand what NFTs were supposed to be.
What This Actually Means
Rob Barber from ATTOM (the data folks tracking all this) put it pretty diplomatically: these numbers are “within a historically reasonable range” but the trend “could be an early indicator of emerging borrower strain.” Translation: It’s not 2008-level chaos yet, but we’re definitely not in Kansas anymore.
The thing is, most of the people getting hit by this bought homes in the last few years when everything seemed fine-ish. They’re dealing with the financial hangover from pandemic-era decisions, plus current economic reality, plus the general stress of existing in 2025.
The Bottom Line
This isn’t necessarily a sign that the housing market is about to implode (though it’s not exactly a good sign either). It’s more like a warning light on your financial dashboard—not an immediate emergency, but definitely something to keep an eye on.
For investors, this could signal opportunities in distressed properties down the line. For everyone else, it’s a reminder that the “soft landing” everyone keeps talking about might have a few more bumps than expected.
Stay tuned, because if there’s one thing we’ve learned, it’s that housing market drama never really ends—it just takes intermissions.
Remember when your crypto-mining buddy wouldn’t shut up about Applied Digital (APLD)? Well, turns out they might’ve been onto something – just not for the reasons they thought.
APLD used to be one of those companies digging for digital gold in the crypto mines. But like any smart player watching the AI boom unfold, they pivoted faster than a startup changing its pitch deck. And boy, did it pay off.
The company just dropped Q1 2026 numbers that made analysts look like they were guessing stock prices with a Magic 8-Ball. Revenue jumped 84% year-over-year to $64.2 million – analysts were expecting a measly $50 million. Even better? They only lost 3 cents per share when the smart money was betting on a 13-cent loss.
But here’s where it gets spicy: APLD isn’t just beating expectations, they’re basically printing money contracts. Their CoreWeave deal (you know, the AI infrastructure darling) just got expanded by another 150 MW. For context, that’s like adding another small city’s worth of power to their data center empire.
The real kicker? Their Polaris Forge 1 data center is now at full capacity, and they’re sitting on $11 billion in prospective lease revenue. That’s not a typo – eleven billion with a ‘B.’ They’re planning to scale this thing up to 1 GW between 2028 and 2030, which is basically enough power to run a small country’s worth of AI computations.
Now, about that $100 price target that sounds like someone’s fever dream: APLD has already rocketed 587% in six months and hit $39 earlier this year before settling around $34. The math isn’t as crazy as it sounds when you consider they’re targeting a $1 billion net operating income run rate within five years – and at this pace, they might hit it sooner.
Think about it: we’re in the middle of an AI infrastructure gold rush, and APLD just became the guy selling premium shovels to everyone digging. While other companies are still figuring out their AI strategy, APLD is already cashing checks from the biggest players in the game.
The stock could easily double in the next 12 months if management keeps executing like this. Sure, $100 sounds ambitious, but so did a 587% gain six months ago. In a market where AI infrastructure is the hottest commodity since sliced bread, APLD is positioned like they own the bakery.
Of course, this is still a volatile growth stock in a sector that changes faster than TikTok trends. But when a company beats earnings this decisively while expanding major contracts, it’s worth paying attention. Your portfolio might thank you later – just don’t bet the farm on any single stock, no matter how promising the spreadsheet looks.
So here’s a fun Friday story: while most of us were probably thinking about weekend plans, Applied Digital (NASDAQ: APLD) decided to absolutely lose its mind and rocket up 28% in a single day. And honestly? Good for them.
This AI data center company just dropped earnings that made Wall Street analysts do that thing where they frantically recalculate their spreadsheets and bump up price targets like they’re bidding at an auction.
The Numbers That Made Everyone Lose Their MindsLet’s talk about what actually happened here, because the numbers are pretty wild:
- Revenue: $64.2 million (up 84% year-over-year) vs. estimates of $50 million. That’s not just beating expectations—that’s dunking on them.
- Net loss per share: 11 cents vs. estimates of 13 cents loss. Still losing money, but hey, losing less money than expected is basically winning in startup land.
But here’s the real kicker: this stock is now up a completely ridiculous 372% year-to-date. That’s the kind of return that makes your boring index fund look like it’s moving in slow motion.
Why Everyone’s Suddenly ObsessedApplied Digital isn’t just running some random data centers—they’re building the digital real estate that AI companies are desperately fighting over. Think of them as the landlords in the hottest neighborhood in tech.
They just signed a massive lease deal with CoreWeave for 150 megawatts at their North Dakota campus. And get this—the total anticipated revenue from just this one campus? $11 billion. That’s “buy a small country” money.
CEO Wes Cummins dropped this gem: “We believe we are in a prime position to serve as the modern-day picks and shovels of the intelligence era.” Translation: while everyone else is digging for AI gold, they’re selling the shovels. Smart move.
The Wall Street Love FestAfter these earnings, analysts basically turned into Applied Digital cheerleaders:
- Roth Capital went completely wild and boosted their price target by $13 to $56 per share
- Needham raised theirs to $41
- Northland bumped it to $40
When multiple analysts are raising price targets on the same day, that’s usually a pretty good sign you’re onto something.
The Reality CheckNow, before you mortgage your house to buy APLD stock, let’s be real for a second. This company is still burning cash and building out infrastructure. They’re betting big on AI demand continuing to explode, which seems like a pretty safe bet, but still—it’s a bet.
That said, with hyperscalers expected to throw around $350 billion at AI deployment this year, Applied Digital is positioned to catch some serious spillover. They’re not just riding the AI wave—they’re building the surfboards.
Sometimes the best plays aren’t the flashy AI software companies everyone’s talking about. Sometimes it’s the boring infrastructure companies quietly building the foundation for the future. And judging by today’s 28% pop, the market is starting to figure that out.
So OpenAI just casually signed nearly a trillion dollars worth of deals, and honestly? It’s like watching someone buy every house on the Monopoly board while everyone else is still trying to pass Go.
Here’s what went down: Sam Altman and the ChatGPT crew have been on an absolute shopping spree that would make even the most dedicated Black Friday warrior jealous. We’re talking:
- $300 billion with Oracle (starting 2027, because why rush?)
- $100 billion with NVIDIA (the usual suspects)
- $11.9 billion with CoreWeave
- $10 billion with Broadcom
- And a casual $500 billion “Stargate Project” with Oracle and SoftBank
But here’s where it gets spicy: AMD just jumped into the party with their own multibillion-dollar deal, and their stock shot up 20% faster than you can say “artificial intelligence.”
The AMD Plot TwistAMD basically said “Hey OpenAI, we’ll give you six gigawatts of computing power, AND we’ll let you buy 10% of our company for a penny per share.” Which sounds insane until you realize there’s a catch – those shares only unlock if AMD’s stock hits $600 (it’s currently around $200).
It’s like offering someone your car for free, but only if they can prove they’re fast enough to drive in Formula 1. Clever, right?
Why would AMD do this? Simple: they just got a $33 billion endorsement from the hottest AI company on the planet, and their market cap jumped by $100 billion in response. Sometimes you gotta spend money to make money – except in this case, they might make money by potentially spending money later. Finance is weird like that.
The Real Game HereWhat’s fascinating is how these tech giants can’t decide if they’re best friends or mortal enemies. One day they’re competing for market share, the next they’re signing partnership deals worth more than most countries’ GDP.
OpenAI is basically building the AI equivalent of OPEC – except instead of controlling oil, they’re controlling the computing power that runs our digital future. And honestly? It’s working.
NVIDIA is still the king of this castle (their stock grading remains stronger than AMD’s), but AMD just bought themselves a seat at the cool kids’ table. Whether they can stay there depends on hitting some pretty ambitious targets.
What This Means for YouIf you’re wondering which horse to bet on, NVIDIA still looks like the safer play. They’ve got the track record, the institutional support, and basically every AI model on Earth running on their chips.
But AMD? They just proved they’re not going down without a fight. This deal gives them credibility and a real shot at breaking NVIDIA’s stranglehold on AI computing.
The bottom line: we’re watching the formation of an AI oligarchy worth nearly a trillion dollars. Whether that’s exciting or terrifying probably depends on how much tech stock you own.
Either way, grab some popcorn. This AI arms race is just getting started.
Remember when your friend threw that house party that started with just a few people and somehow turned into the entire neighborhood showing up? That’s basically what’s happening with AI stocks right now, and some folks are starting to wonder if maybe we should call it a night before someone breaks something expensive.
Yesterday, the markets took a breather from their relentless “AI everything!” rally, with all the major indexes closing in the red. It’s like everyone suddenly realized they’ve been dancing on the tables for months and maybe it’s time to check if the floor can actually hold all this weight.
Here’s the thing that’s got people nervous: According to Morgan Stanley (and these guys count everything twice), the Magnificent 7 stocks plus about three dozen AI data center companies are responsible for 75% of the S&P 500’s gains since ChatGPT crashed the party in November 2022. That’s not a broad-based rally – that’s more like a very exclusive VIP section while everyone else is stuck at the bar.
Even Nvidia’s CEO Jensen Huang is out there saying “this isn’t a bubble, guys!” which, let’s be honest, is exactly what someone would say if they were worried it might be a bubble. It’s like when your friend insists they’re “totally fine to drive” after their fifth drink.
Meanwhile, the smart money is quietly backing away from the punch bowl. Gold and silver just hit record highs above $4,000 and $50 per ounce respectively, Bitcoin briefly touched $125,000, and everyone’s suddenly very interested in “safe haven assets.” Translation: People are hedging their bets because they’ve seen this movie before, and it doesn’t always end well.
The pre-market action shows some interesting moves: Intel’s up 1.7% on their new 18A PC chip launch (because apparently we need even more AI processing power), while Qualcomm is giving back some gains after yesterday’s OpenAI partnership announcement. It’s like the market is playing hot potato with AI stocks.
What’s really keeping people up at night is how concentrated this whole thing has become. When 75% of your gains come from a handful of companies all betting on the same trend, you’re basically putting all your eggs in one very expensive, AI-powered basket. One bad earnings report, one regulatory hiccup, or one “actually, maybe AI isn’t going to solve world hunger” moment, and things could get ugly fast.
The Fed’s probably watching all this with the same expression your parents had when they came home to find that house party in full swing. They’re likely to keep cutting rates (betting markets say another 0.25% drop is coming), but they’re also probably wondering if they should start turning the lights on and telling everyone to go home.
Look, AI is genuinely revolutionary stuff. But so was the internet in 1999, and we all remember how that particular party ended. The technology was real, the potential was massive, but the valuations got a little… creative. Right now, we’re in that phase where everyone’s having a great time, but the responsible adults in the room are starting to eye the exits.
Just saying – maybe keep some cash handy for when the music stops.
Remember when everyone was obsessed with flipping houses and HGTV made real estate look like a fun hobby? Well, plot twist: the housing market just served us a reality check that’s about as pleasant as finding out your favorite coffee shop raised prices again.
Foreclosure filings just jumped 17% compared to last year, hitting over 101,000 properties in Q3 alone. That’s not exactly the kind of “growth” we like to see in our portfolios, folks.
Here’s what’s actually happening: About 72,317 properties started the foreclosure process last quarter—up 16% from last year. And bank repossessions? They’re up a whopping 33%. It’s like watching a slow-motion train wreck, except the train is made of mortgage payments and the tracks are paved with good intentions.
Why Everyone’s Suddenly Struggling
This isn’t happening in a vacuum. Americans are basically playing financial Jenga right now, and inflation has been pulling out blocks for years. Add a slowing job market to the mix, and you’ve got a recipe for stress that would make a yoga instructor reach for wine.
The real kicker? If you bought a house in the last few years, you’re probably feeling like you got punk’d by the market. Mortgage rates are still hanging out above 6% (currently at 6.34%, because apparently 6% wasn’t painful enough). Meanwhile, the median home price is chilling at $410,800—which is basically a small fortune for what used to be called “starter homes.”
The Numbers Don’t Lie (Unfortunately)
Rob Barber from ATTOM Data (the folks keeping track of this mess) put it diplomatically: “While these figures remain within a historically reasonable range, the persistence of this trend could be an early indicator of emerging borrower strain.” Translation: “It’s not apocalyptic yet, but we’re definitely not in Kansas anymore.”
An AP-NORC survey found that nearly three-quarters of adults are stressed about housing costs. Three-quarters! That’s more people than agree on literally anything else in America right now.
What This Means for Your Money
If you’re thinking about buying, this might actually be good news in disguise. More foreclosures typically mean more inventory, which could eventually ease some pressure on prices. But don’t hold your breath—we’re not exactly in fire-sale territory yet.
For current homeowners, this is a reminder that the housing market isn’t a one-way ticket to wealth. It’s more like a roller coaster that occasionally makes you question your life choices.
The bottom line? The housing market is having what we might politely call “a moment.” Whether you’re buying, selling, or just trying to keep up with your mortgage, remember that markets are cyclical—even when they feel personal. And maybe keep that emergency fund a little more emergency-ready than usual.
Stay smart, stay solvent, and remember: even Warren Buffett probably checks his mortgage rate twice.
Salesforce, a leading provider of cloud-based customer relationship management (CRM) software, has been making headlines with its recent acquisition of Slack for $27.7 billion. But there’s another aspect of the company that investors should keep an eye on: Agentforce.
Agentforce, a small but promising startup, was acquired by Salesforce in 2019 for $100 million. Since then, it has been integrated into Salesforce’s Service Cloud platform, which helps businesses manage customer inquiries and support. This integration has led to a surge in Agentforce’s growth, with its revenue increasing from $100 million to $1 billion in just two years.
So why should retail investors pay attention to Agentforce? Well, with its impressive growth and integration into Salesforce’s already successful platform, there is a good chance that Agentforce will continue to thrive. And with the growing demand for efficient customer service solutions, Agentforce’s offerings are likely to remain in high demand.
Furthermore, Agentforce’s acquisition by Salesforce also speaks to the company’s credibility and potential for success. As a well-established and trusted player in the CRM market, Salesforce’s decision to invest in Agentforce further solidifies its potential for growth and profitability.
In conclusion, while Salesforce’s acquisition of Slack may have grabbed the headlines, it’s Agentforce that may hold the most promise for investors. With its impressive growth and integration into a successful platform, Agentforce has the potential to be a game-changer in the customer service industry. So keep an eye on this small but mighty startup, it could be the next big thing in investing.
Jim Cramer, the well-known stock market expert and host of CNBC’s “Mad Money,” recently shared his thoughts on Cardinal Health, Inc. (CAH) and its CEO, Michael Kaufmann. In an interview with TheStreet, Cramer had high praise for Kaufmann, calling him “terrific.”
Cramer highlighted Kaufmann’s leadership during the COVID-19 pandemic, noting that Cardinal Health has been able to meet the increased demand for medical supplies and equipment. He also commended Kaufmann for his focus on the company’s long-term growth and diversification, particularly in the pharmaceutical distribution and medical device sectors.
Investors may find Cramer’s endorsement of Cardinal Health and Kaufmann encouraging, especially in a time of economic uncertainty. With a market capitalization of over $14 billion and a steady dividend yield of 3.12%, Cardinal Health may be an appealing investment option for those looking for stability and potential growth.
While Cramer’s praise for Kaufmann and Cardinal Health may be reassuring, it’s always important for investors to do their own research and due diligence before making any investment decisions. It’s also worth noting that Cardinal Health has faced some challenges in recent years, including legal battles and a decline in its stock price.
In summary, Jim Cramer’s positive review of Cardinal Health and its CEO may be a promising sign for the company’s future. However, investors should still carefully consider all factors when evaluating this stock as a potential investment opportunity. As always, stay informed and make educated decisions when it comes to your portfolio.
Hedge fund managers and insider traders never fail to make headlines, and this week is no exception. From Anthony Scaramucci’s latest moves to Michael Burry’s surprising investment, here’s what you need to know as a retail investor.
First up, former White House communications director Anthony Scaramucci’s SkyBridge Capital has been making some bold moves. The hedge fund recently sold its stake in energy company Energy Transfer (ET), while also buying into gaming and entertainment company Dave & Buster’s Entertainment Inc (PLAY). This strategic shift in focus could signal a bullish outlook for the entertainment sector, making it a potential profitable opportunity for investors to keep an eye on.
In other news, billionaire hedge fund manager Michael Platt’s BlueCrest Capital Management has been busy as well. The fund recently increased its stake in Warren Buffett’s Berkshire Hathaway, a move that could indicate confidence in the company’s long-term prospects. Additionally, Stanley Druckenmiller, another prominent investor, has increased his investments in financial services company Axar Capital. These moves from the big names of Wall Street could provide valuable insight for retail investors looking to make informed decisions.
But perhaps the most surprising news comes from Michael Burry, the infamous investor who predicted the 2008 financial crisis. Burry’s Scion Asset Management has recently revealed a significant stake in healthcare company Gilead Sciences Inc. This unexpected move has caught the attention of many investors, with some speculating that Burry sees potential in Gilead’s COVID-19 treatments.
As retail investors, it’s important to stay updated on the latest news and moves from the big players of Wall Street. While it’s always wise to do your own research and make independent decisions, keeping an eye on the actions of hedge fund managers and insider traders can provide valuable insights and potential profitable opportunities.
Many investors are wondering if Uber Technologies (UBER) can withstand the impact of a potential recession. After all, the ride-sharing giant has faced numerous challenges in its short history, including regulatory hurdles, lawsuits, and intense competition.
However, despite these obstacles, there are several reasons to believe that Uber can weather an economic downturn. For one, the company has a diverse range of services, including food delivery and freight, which can help mitigate any decline in ride-sharing demand. Additionally, Uber has a strong balance sheet with over $10 billion in cash and minimal debt, providing a cushion in case of a downturn.
Moreover, Uber’s business model is relatively recession-proof. As people look for ways to save money, they may be more inclined to use Uber’s cost-effective ride-sharing services instead of owning a car or taking more expensive forms of transportation. Plus, the company’s global presence provides diversification and reduces its reliance on any one market.
Of course, no company is completely immune to the effects of a recession, and there are some risks to consider with Uber. The company has yet to turn a profit and faces ongoing regulatory challenges in some markets. There is also the possibility of increased competition from other ride-sharing companies or new entrants into the market.
In conclusion, while there are certainly risks involved, Uber may be a wise choice for retail investors looking for a recession-resistant business. Its diverse services, strong financials, and business model make it a compelling option to consider. As always, it’s essential to do thorough research and consult with a financial advisor before making any investment decisions. But for those willing to take on some risk, Uber could be a smart addition to their portfolio.
Online gambling has been a hot topic in the U.S. for years, with many states legalizing and regulating the industry. This trend is expected to continue, making it a lucrative opportunity for investors. So, what companies should you keep an eye on to capitalize on this growing market?
One company that stands out is DraftKings. The company initially gained popularity through its daily fantasy sports platform, but has since expanded into the sports betting market. With partnerships with major sports leagues and a strong presence in several states, DraftKings is well-positioned for success in the online gambling industry.
Another player in the online gambling space is MGM Resorts International. The company has been making strategic moves to establish itself as a leader in the industry, including partnerships with major sports teams and the acquisition of online gaming platform BetMGM. With its established brand and strong foothold in the market, MGM Resorts is poised for significant growth in the coming years.
And let’s not forget about Caesars Entertainment, a household name in the gambling industry. The company has been making strides in the online gambling world, with a strong presence in several states and partnerships with major sports leagues. With its recognizable brand and established customer base, Caesars is in a prime position to benefit from the rise of online gambling in the U.S.
In conclusion, the future of online gambling in the U.S. is looking bright, and investors have the opportunity to join in on the potential profits. Keep an eye on companies like DraftKings, MGM Resorts, and Caesars Entertainment as they continue to expand and innovate in this rapidly growing market. As they say in the gambling world, you have to be in it to win it.
Stan Druckenmiller, a successful billionaire investor, has recently released his top 10 stock picks that he believes have significant upside potential. These picks are worth considering for retail investors looking to make profitable investments in the stock market.
Druckenmiller’s first pick is Amazon, which he believes has a strong competitive advantage and a successful track record of innovation. He also sees potential in Microsoft, citing its dominant position in the cloud computing market and its strong financials. Both of these companies have been top performers in the stock market and are poised for continued growth.
Another pick from Druckenmiller is Adobe, a company that has consistently shown strong financials and a solid product portfolio. He also recommends Booking Holdings, the parent company of popular travel booking site Booking.com. With the potential for travel to pick up in the near future, this stock could see a significant surge in value.
Druckenmiller also has his eye on several healthcare companies, including Intuitive Surgical and Thermo Fisher Scientific. These companies have strong fundamentals and are leaders in their respective fields. He also suggests investing in Visa and Mastercard, two companies that dominate the digital payment space and have seen a surge in use during the pandemic.
Overall, Druckenmiller’s top 10 stock picks showcase a mix of established, successful companies and ones that are well-positioned for future growth. Retail investors should carefully consider these picks and do their own research before making any investment decisions. With the right approach, these stocks could lead to significant profits in the long run.
Bristlemoon Global Fund, a major player in the investment world, has recently made a surprising move – they have completely sold off their position in Interactive Brokers (IBKR). This decision has caught the attention of many investors and traders, and for good reason.
So why did Bristlemoon Global Fund decide to exit their position in IBKR? According to their recent 13F filing, the fund cited a lack of growth potential and concerns over the company’s future performance. This news may come as a shock to some, as IBKR has been a strong performer in the market, with a 66% increase in stock price over the past year. However, Bristlemoon Global Fund’s decision serves as a reminder that even top performers can have their flaws, and it’s important for investors to reevaluate their positions regularly.
For retail investors, this move by Bristlemoon Global Fund is a valuable lesson in portfolio management. It’s crucial to constantly reassess your investments and make adjustments when necessary. Don’t get too comfortable with a single stock, no matter how well it’s been performing. Keep an eye on market trends and company news, and be prepared to pivot if needed. As the saying goes, “don’t put all your eggs in one basket.”
So what does this mean for Interactive Brokers and its investors? While Bristlemoon Global Fund’s exit may have caused some initial concern, it’s important to remember that they are just one player in the market. IBKR still has a strong financial standing and has been consistently profitable. However, this news does highlight the importance of diversifying your portfolio and not relying too heavily on a single stock. With Bristlemoon Global Fund’s move, it may be a good time for investors to reassess their own positions in IBKR and make any necessary adjustments.
In conclusion, Bristlemoon Global Fund’s decision to sell out of their position in Interactive Brokers serves as a reminder to retail investors to stay vigilant and make smart decisions when it comes to their investments. Keep a diverse portfolio and don’t be afraid to make changes when needed. As always, do your own research and consult with a financial advisor for personalized advice.
When it comes to investing, following the lead of successful billionaires can be a smart strategy. These individuals have a track record of making profitable decisions, so it’s worth taking a look at where they’re putting their money. Here are the top 10 growth stocks that billionaires are buying right now, and why you should consider adding them to your portfolio.
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Amazon (AMZN): This e-commerce giant is a favorite among billionaires, with big names like Warren Buffett and George Soros investing in the company. With its dominance in the online retail space and continued growth in other sectors like cloud computing and streaming services, Amazon is a solid long-term bet for investors.
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Tesla (TSLA): Despite its volatility, Tesla is a top choice among billionaires like Cathie Wood and Elon Musk himself. The company’s focus on renewable energy and electric vehicles puts them in a strong position for future growth and disruption in the automotive industry.
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Microsoft (MSFT): This tech giant is a staple in many billionaire portfolios, with its steady growth and diverse range of products and services. With its strong financials and continued innovation, Microsoft is a safe bet for investors looking for stability and growth.
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Alphabet (GOOGL): The parent company of Google is another top pick among billionaires, thanks to its dominance in the digital advertising market and its continued expansion into other areas like cloud computing and artificial intelligence.
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Facebook (FB): Despite recent controversies, Facebook remains a popular choice among billionaires, including names like Peter Thiel and Chase Coleman. The company’s strong advertising model and continued growth in users make it a valuable investment.
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PayPal (PYPL): This digital payment company is a top pick among billionaire investors like Steve Cohen and Carl Icahn. With the rise of online shopping and the move towards a cashless society, PayPal is poised for continued growth and innovation.
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Netflix (NFLX): The streaming giant is a favorite among billionaires like Bill Ackman and Daniel Loeb. With its strong content offerings and global expansion, Netflix is a top contender in the entertainment industry and a popular choice for investors.
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Adobe (ADBE): Another tech company on the list, Adobe is a top pick among billionaires like Philippe Laffont and Andreas Halvorsen. With its leading software products and subscription-based model, Adobe is a strong player in the tech sector.
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Visa (V): This payment processing company is a popular choice among billionaires, including names like Ken Fisher and Leon Cooperman. With its global reach and steady growth, Visa is a solid choice for investors looking for stability and potential for growth.
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Salesforce (CRM): The cloud computing company is a favorite among billionaires like Ken Griffin and Ray Dalio. With its strong financials and continued growth in the technology industry, Salesforce is a top pick for investors.
In conclusion, following the lead of successful billionaires can be a smart strategy for retail investors. These top 10 growth stocks have caught the attention of some of the most successful investors in the world, making them worth considering for your own portfolio. Keep in mind that the market is always changing, so it’s important to do your own research and make informed decisions when it comes to investing.
It’s that time of year again – hedge fund investor letters are out for the first quarter of 2025. While these letters are typically reserved for institutional investors, they can provide valuable insights for retail investors as well. So, let’s dive into the top takeaways from these letters and see what we can learn.
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Mind the macro trends: Despite a tumultuous year, hedge fund managers are largely optimistic about the global economy. They see potential for growth in emerging markets and are bullish on sectors such as technology, healthcare, and renewable energy. Keep an eye on these areas for potential investment opportunities.
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Don’t overlook small caps: While many investors tend to focus on large-cap stocks, hedge funds are increasingly turning to smaller companies for higher returns. They see potential in the growing trend of disruptive technologies and innovative business models from emerging small-cap companies.
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Pay attention to ESG: Environmental, Social, and Governance (ESG) investing is gaining momentum in the hedge fund world. This is a clear indication that companies with strong ESG practices are not only doing well financially, but also aligning with societal values. Keep an eye out for companies with a strong ESG focus for potential long-term growth.
Overall, these investor letters provide valuable insights into the minds of hedge fund managers and can give retail investors a glimpse into their strategies. Keep these key takeaways in mind when making investment decisions and remember to always do your own research. Happy investing!
Ryman Hospitality Properties (RHP) has been making headlines recently as a potential short opportunity in the market. But is this real estate investment trust (REIT) really worth betting against? Let’s take a closer look at the numbers and see if there’s potential for profit.
First, let’s address the elephant in the room: the COVID-19 pandemic. With the travel and tourism industry taking a massive hit, it’s no surprise that RHP, which owns hotels and entertainment venues, has seen a significant decline in business. However, the company has taken steps to mitigate the impact, including cost-cutting measures and securing additional financing. And with the vaccine rollout and easing of restrictions, the company is poised for a rebound in the near future.
But that’s not the only reason why RHP may not be the best short opportunity. The company has a strong balance sheet, with a low debt-to-equity ratio and a solid cash position. Plus, RHP has a history of consistently paying dividends, which may not be attractive for short sellers looking for a quick profit. Additionally, the stock has already seen a significant drop in price, potentially reducing the potential for further decline.
In conclusion, while RHP may seem like an enticing short opportunity at first glance, digging deeper into the company’s financials and prospects reveals a different story. With potential for a rebound in the travel industry and a strong financial position, RHP may not be the best choice for short sellers. As always, it’s important for investors to do their own research and consider all factors before making any investment decisions.
Since the election, markets have shifted back to rally mode. Optimism is back, as it’s likely that growing the economy will be the focus out of Washington for the next four years.
If that’s the case, then stocks have more room to rally. And the big winners could be smaller players in their industry that benefit from higher growth and increased deregulation. Traders are already making their bets, but these plays have more room to rally.
Given that consumers are getting more optimistic, consumer spending trends may increase. That could bode well for companies like Shopify (SHOP). The e-commerce retailer’s earnings showed a hefty jump in revenues compared to last year’s third quarter.
With revenues up over 20% in the past year amid a challenging environment for retail sales, Shopify is well-positioned to offer investors better returns as consumer confidence comes roaring back. Given the company’s strong outlook for Q4, shares are likely to continue with their strong uptrend.
Action to take: With shares jumping to new 52-week highs, Shopify is a strong momentum trade now. And investors could see shares take aim at their old all-time highs from late 2021 in the months ahead.
For traders, the January 2025 $125 calls, last trading for about $3.65, could see mid-to-high double-digit returns on a further rally into next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
David Sachs, a director at Terex Corp (TRX), recently bought 10,000 shares. The buy increased his stake by 2%, and came to a total cost of $569,800.
This is the first insider buy since August, when another company director bought 2,205 shares, paying $119,864. One company insider has been a seller recently, a division president who sold off nearly 10% of his stake for just over $1 million. Going further back, insiders were more likely to be sellers.
Overall, Terex insiders own 2.4% of shares.
The construction machinery producer is up 8% over the past year, far underperforming the overall stock market. Revenues are down by 6%, and overall earnings are off by over 25%.
However, while the performance has been lackluster, shares trade at about 0.7 times their price-to-sales. And Terex trades for less than 10 times forward earnings.
That suggests that the stock may be a value play here.
Action to take: Value investors may like shares here. Terex has some upside, particularly if they can turn around their flagging earnings. At current prices, shares also pay a 1.2% dividend.
For traders, Terex has been rangebound over the past year, and could see a rally up to the $60 range over the coming months. The January 2025 $60 calls, last trading for about $1.40, could see mid-to-high double-digit returns on a further rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Chip manufacturer Taiwan Semiconductor (TSM) is up 96% over the past year, nearly triple the return of the overall stock market. One trader sees shares continuing higher in the weeks ahead.
That’s based on the December 13 $200 calls. With 29 days until expiration, 19,727 contracts traded compared to a prior open interest of 310, for a 64-fold rise in volume on the trade. The buyer of the calls paid $5.25 to make the bullish bet.
TSM shares recently traded for about $191, so they would need to rise by $9, or about 4.7%, for the option to move in-the-money.
TSM has been trending higher all year, and shares recently pulled back from a 52-week high of $212.60.
Thanks to the AI chip boom, TSM has been a major beneficiary. The company has grown revenues by 39% over the past year and overall earnings are up 54%.
Plus, TSM sports a hefty 39% profit margin, reflecting its position as a leader in manufacturing.
Action to take: Investors may like shares here or on any pullback, as the rollout in AI likely still has a few strong years ahead of it. At current prices, TSM also pays a 1.3% dividend.
For traders, the December 13 $200 calls are an inexpensive way to bet on a continued rally in shares in the weeks ahead. Traders can likely see high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
With stocks breaking out to new all-time highs, the play that kicked off the current market rally over two years ago, AI, remains strong. But investors are breaking out beyond chip plays to other aspects of the AI rollout.
That includes everything from hardware such as server racks, to data centers, to the land, electricity, and copper needed to build the physical infrastructure of today’s most-advanced software. With so many avenues open, investors still have plenty of ways to profit.
For instance, network switches and other tools for data centers are in hot demand. That’s good news for a company like Arista Networks (ANET), whose devices are critical for developing fast networks.
Arista has boasted a 20% jump in revenues over the past year, and a 37% rise in earnings. Best of all, Arista earns a fat 40% profit margin. With AI centers taking years to build out, that’s years of big performance ahead for shareholders.
Action to take: Investors may like shares here, and should consider the stock as a buy on any short-term market pullback. Arista does not currently pay a dividend.
For traders, shares are likely to keep trending higher into the new year. The January 2025 $420 calls, last trading for nearly $17.50, could see mid-to-high double-digit returns depending on the strength of a year-end rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Apmh Invest, a major holder of Noble Corp (NE), recently bought 1,330,000 shares. The buy increased the fund’s position by 5%, and came to a total cost of $46,104,795.
The fund was the last buyer with a 638,018 share pickup in July, increasing their position by 2%, at a cost of just over $28.9 million. The company CFO was also a buyer of nearly $100,000 back in March.
Overall, Noble Corp insiders own 19.8% of shares.
The oil and gas drilling company is down 27% over the past year. Weak energy prices and a lack of new major development projects have kept a lid on shares. Noble has seen earnings growth slide by 61%, although overall revenues are up 14%.
Fundamentally, Noble is still in strong shape, with a reasonable debt level and with shares trading at about 13 times earnings.
Action to take: Shares have started to trend higher, following the stock hitting a 52-week low last month. If the trend continues, shares could see low double-digit returns over the coming months.
Plus, at current prices, Noble pays a 5.7% dividend, which is well covered by the company’s earnings.
For traders, the March 2025 $40 calls, last trading for about $1.60, could see high double-digit returns over the coming weeks on a further rally higher in shares. Traders may want to take quick profits if the option moves in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Mailing and logistics firm Pitney Bowes (PBI) is up 93% over the past year, more than double the returns of the S&P 500. One trader sees more upside ahead over the coming weeks.
That’s based on the December 13 $9 calls. With 30 days until expiration, 27,755 contracts traded compared to a prior open interest of 120, for a 231-fold rise in volume on the trade. The buyer of the calls paid $0.19 to make the bullish bet.
Pitney Bowes shares recently traded for just under $8, meaning shares would need to rally by $1, or just over 12%, for the option to move in-the-money. The strike price is right above the stock’s 52-week high of $8.80, set just last week.
Following its massive rally, shares still look like a value play, trading at 0.4 times its price-to-sales ratio, and at less than 8 times forward earnings.
Action to take: Pitney Bowes shares are in a strong uptrend, and momentum investors may like the stock here. Shares can likely also continue to rally given their relative value, and on an improving outlook for the economy and shipping needs.
Plus, at current prices, Pitney Bowes pays a 2.6% dividend.
For traders, the December 13 $9 calls are aggressive, but also inexpensive enough to potentially see mid-to-high double-digit returns in the span of a few trading days.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
One of the big winners of the 2024 election? Law enforcement. From the election of pro-law enforcement Donald Trump to state referendums to get tougher on crime, it’s clear that personal defense could play a big role.
It’s also a sign that law enforcement will get more funding for its various activities. That could benefit just a handful of companies that supply law enforcement.
That may be why Axon Enterprise (AXON) may be on a tear. Best known for manufacturing TASER brand stun guns, Axon also provides the hardware and software for body camera footage by law enforcement.
That’s a higher-level service that can mean big contracts with police departments. And that may be helping boost earnings, which are now up 32% over the past year.
Even though shares have rallied substantially, Axon’s increasing profits and high-margin software business is capable of leading shares to new heights.
Action to take: Momentum investors may like shares of Axon here, as the stock is jumping higher and likely has more upside ahead over the coming months. Axon shares do not currently pay a dividend.
For traders, the March 2025 $640 calls, last trading for about $47.70, could see mid-double-digit returns on a further trend higher in shares over the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Timothy Go, President and CEO of Sinclair Corp (DINO), recently bought 2,500 shares. The buy increased his stake by 1%, and came to a total cost of $99,923.
The buy comes a few days after a company director bought 5,000 shares, paying $193,775. Going back over the past two years, there has been a mix of insider buys and sells, with sellers generally having the upper hand. However, most of those sales occurred over $50 per share.
Overall, Sinclair insiders own 8.9% of shares.
The oil and gas refiner is down over 22% in the past year, amid weak demand for fossil fuels. Revenues dropped 20% overall, and earnings growth has been negative, but Sinclair has been able to eke out a 1% profit margin.
Sinclair shares look like a value play today, with the stock trading at 11 times earnings and with energy companies out of favor with the market. Oil prices have stabilized around $70 per barrel, and the energy sector as a whole looks oversold after being a significant underperformer this year.
Action to take: Investors may like shares here, as the stock has recently started to move off its 52-week low. Plus, at current prices, Sinclair also pays a 4.8% dividend.
For traders, the March 2025 $45 calls, last trading for about $2.25, could see mid-double-digit returns if the uptrend underway continues higher in the months ahead. Traders may want to take profits if the option moves in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Steel producer U.S. Steel Corporation (X) is up 22% over the past year. Shares have trended higher amid acquisition discussions. One trader sees shares pulling back over the next few weeks.
That’s based on the December 20 $32 puts. With 37 days until expiration, 4,806 contracts traded compared to a prior open interest of 116, for a 41-fold rise in volume on the trade. The buyer of the puts paid $1.15 to make the bearish bet.
U.S. Steel recently traded for about $41.25, so shares would need to drop by $9.25, or over 23%, for the option to move in-the-money.
Shares traded as high as $50.20 last December, but fell to a low under $30 as the merger deal was shut down, and shares have since started to pull back after topping over $40.
Operationally, U.S. Steel has struggled in a fiercely competitive global environment. Revenues are down 13% over the past year, and earnings growth has declined by 60%.
Action to take: Shares are largely a speculation on this point as a buyout opportunity, which may or may not materialize. It’s likely at this point that shares could pull back under $40 in the coming weeks. For now, interested investors should wait for a clearer picture before buying.
For traders, the December 20 $32 puts would play well to where shares have averaged over the past year, and could offer a hedge against today’s high-flying overall market.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Artificial Intelligence-related stocks continue to be the top tech trend. Many of the big names are growing by leaps and bounds, and smaller firms are retooling to catch up. But that’s just one tech trend out there.
Other trends are also at play, and also continue to show signs of strong growth. That includes tech trends that utilize AI tools themselves, particularly software plays. Investors should look for leaders in such tech plays.
One overlooked software play is in cybersecurity. Digital threats continue to evolve, and companies need to adapt accordingly, particularly when data is stored or sent via the cloud.
That’s where a company like Datadog (DDOG) can come into play. The cybersecurity software company just reported a strong quarter that beat expectations, and revenues are up 27% over the past year.
Datadog also increased their annual forecast that they expect AI-driven cybersecurity demand to rise.
Shares are up 28%, underperforming the stock market overall, but continued high growth can result in strong earnings growth over time.
Action to take: Datadog hit a yearly low over the summer and has been trending higher since. Momentum investors may like shares here, given the rising price and earnings beat.
For traders, the March 2025 $140 calls, last trading for about $8.25, could see low-to-mid double-digit returns on a further uptrend from here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Amy Chronis, a director at Kinder Morgan (KMI), recently bought 2,241 shares. The buy increased her stake by 10%, and came to a total cost of $55,790. Chronis was the last insider to buy with a 9,732 share buy back in August for just over $200,000.
These are the only insider buys over the past two years. Otherwise, insiders have generally been sellers of shares, mostly at the VP level. However, the company’s President also sold 100,000 shares earlier this year.
Overall, Kinder Morgan insiders own 12.8% of shares.
The oil and gas pipeline network is up 62% over the past year, roughly double the returns of the overall stock market. That’s also bucked the trend of weaker energy prices.
Revenues are down 5%, but overall earnings are up 17%. And the pipeline sports a 17% profit margin, a relatively high amount for the energy infrastructure space.
Action to take: Investors may like shares here, or on any pullback. Increased energy production should benefit Kinder Morgan’s pipeline operations, irrespective of the price of oil or natural gas.
Plus, at current prices, shares pay a 4.4% dividend.
For traders, shares have been trending higher over the past year, and just spiked higher. There may be a short-term pullback, but the longer-term trend is in place. The March 2025 $28 calls, last trading for about $0.80, could see mid-to-high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Data center REIT Digital Realty Trust (DLR) is up 36% over the past year, about in-line with the overall stock market, before accounting for its dividend. One trader sees shares pulling back over the coming weeks.
That’s based on the December 20 $170 puts. With 39 days until expiration, 8,417 contracts traded compared to a prior open interest of 191, for a 44-fold rise in volume on the trade. The buyer of the puts paid $2.10 to make the bearish bet.
Digital Realty last traded for about $178, meaning shares would need to drop by $8, or about 4.5%, for the option to move in-the-money.
Shares recently spiked to a 52-week high of $193.88 before they started to pull back. Filling the price gap would take the stock back to the $165 range.
Digital Realty is seen on a play on the growing demand for data centers to power AI. But the REIT’s performance has been sluggish, with revenues up by just 2% over the past year.
Action to take: While there’s a long-term uptrend, in the short-term the trend has been lower. Interested buyers can likely pick up shares in the mid $160 range, at the gap fill.
As a REIT, Digital Realty is structured to pay a 2.8% dividend.
For traders, the December 20 $170 puts are well positioned for shares to continue their short-term downtrend and look to fill the prior price gap higher. Traders can likely see mid-to-high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
With the election over, markets are betting that stocks will continue to rally. Not only that, but that investment activity may even tick higher. That could bode well for wealth managers and brokerage firms.
These companies tend to benefit from increased economic activity. More buying and selling of stocks means more fees. Even in a world where some brokerages offer zero trading fees, other fees can handily bump up the bottom line.
That’s why brokerage firms like Interactive Brokers (IBKR) could see massive returns from here. IBRK runs a more robust trading platform than other online brokerages, with more asset classes and trading features.
Shares have already soared over 90% in the past year, on the back of a 15% rise in revenues. More trading activity means that revenue growth rate could accelerate.
Plus, with shares valued at 24 times earnings, IBKR is still trading at a slight discount to the overall stock market.
Action to take: Even with shares spiking to new 52-week highs, the longer-term uptrend still looks attractive. Investors may want to start accumulating shares at current prices, using any pullbacks to continue building up a position.
At current prices, Interactive Brokers also pays a 0.7% dividend.
For traders, the March 2025 $200 calls, last trading for about $3.40, could see high double-digit returns or better on a continued rally into early next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
While the overall stock market tends to trend higher over time, individual sectors within the market tend to take the lead. At the tail end of the 2022 bear market, tech companies kicked off the rally as AI became a bullish theme.
Since then, the market has rushed higher. Other sectors have started to show some signs of life in recent months. That trend will likely continue now that interest rates are coming down.
Lower interest rates make it easier for companies to expand and for consumers to spend. Consumer-related stocks, which have been market laggards, could now see some signs of life.
That includes spending on dining out, which has waned over the past year. Yet stocks like Darden Restaurants (DRI) are starting to see signs of life.
Shares are starting to trend higher, but are only up 16% over the past year, about half the return on the S&P 500 index. Yet shares are reasonably priced at 17 times earnings, and the chain sports a 9% profit margin, a healthy level for the industry.
Action to take: Investors may like shares here, given the current uptrend in shares. Plus, at current prices, Darden pays a 3.4% dividend.
For traders, the January 2025 $170 calls, last trading for about $5.00, could see mid-to-high double-digit returns if shares stage a year-end rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Kevin Vann, CFO of Helmerich & Payne (HP), recently bought 3,300 shares. The buy came to a total cost of $99,627, and is a new position for the CFO. The buy is also the first insider purchase over the past two years.
Insiders have been periodic sellers of shares over the last 24 months, with the most recent sale coming from the company’s prior CFO. The company President and CEO was also a seller of shares in late 2022.
Overall, Helmerich & Payne insiders own 3.4% of shares.
The oil and gas drilling company is down 18% over the past year, amid a lackluster energy market. Operationally, HP has struggled, with revenues down by 4%, and earnings off by 7%.
On the plus side, shares trade at 9 times earnings, a significant discount to the overall market, and the stock trades right at book value. Plus, HP managed to make a 13% profit margin, on the higher end for commodity-related services.
Action to take: Shares are starting to perk up after hitting a new 52-week low in September, and look attractive as a speculative buy here. HP pays a 3.2% dividend at current prices.
For traders, the March 2025 $35 calls, last trading for about $2.50, could see high double-digit returns or better by their expiration, especially as energy prices tend to rally into the spring.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Payment technology company Global Payments Inc (GPN) is down 11% over the past year. One trader sees further downside in the weeks ahead.
That’s based on the November 15 $85 puts. With 42 days until expiration, 6,093 contracts traded compared to a prior open interest of 190, for a 32-fold rise in volume on the trade. The buyer of the puts paid $1.20 to make the bearish bet.
Global Payments shares recently traded for about $97.50, so the stock would need to drop by $12.50, or about 13%, for the option to move in-the-money. The strike price is well under the stock’s 52-week low of $91.60.
Operationally, the company has held up rather well. Earnings are up 37% over the past year, even though revenues are up by just 5%, indicating the company is improving its back-end features.
GPN also has a 14% profit margin, on the high side for payment services, and shares trade at 8 times forward earnings.
Action to take: Investors may like shares as a contrarian trade here. There’s a lot to like about the company operationally, although the share price has traded weakly over the past few months. GPN also offers a 1% dividend.
Traders can still bet on further downside in the immediate short-term. The November $85 puts could see mid-double-digit returns from a further selloff in shares here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The goal of any company is to grow its products and services. However, sometimes a company is structurally prevented from growth. That could come from having a local or regional monopoly, like a railroad or utility.
Sometimes, other government restrictions can hold back a stock. When those restrictions disappear, however, a company can suddenly get set to grow. And that could lead to a catch-up rally reflecting the opportunity for faster growth.
For instance, regulators just cleared megabank Wells Fargo (WFC) from its prior scandals. The company is no longer under an asset cap. That could allow the bank to underwrite more business, or acquire a moderately sized regional bank.
The asset cap has curbed Wells Fargo from growth, which is seen with revenues up just 3.4% over the past year, and with earnings down about 1%.
Wells trades at 1.2 times book value, a discount to many of the other ultra-large banks in the United States today. And shares trade at 10 times earnings, indicating a compelling valuation here.
Action to take: Wells Fargo looks like a relative value among the big bank stocks today, and the company has an opportunity to grow more quickly now that regulators are stepping back. That could help shares rally even further in the months ahead.
Today’s investors also get a 2.8% dividend.
For traders, the January 2025 $60 calls, last trading for about $2.05, could see high double-digit returns on a year-end rally for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Stephen Mahoney, President and CEO of Viridian Therapeutics (VRDN), recently bought 21,400 shares. The buy is an initial stake for the CEO, and came to a total cost of $499,262.
He was joined by the company COO, who bought 5,000 shares. That buy increased the COO’s stake by 500%, and cost $117,050. A major holder has also been a buyer earlier this year. Going further back, insider activity has been more mixed, with more insiders selling in 2022 and 2023 when the share price was higher.
Overall, Viridian insiders own 0.01% of shares.
The biotech company targeting autoimmune and thyroid eye diseases is up 61% over the past year, nearly double the return of the overall stock market.
As an early-stage biotech company, Viridian isn’t making a profit right now and burned through $250 million over the past year.
If that run rate holds, the company has two years to develop a successful product before it will have to raise more capital, most likely by issuing more shares.
Action to take: Viridian has been trending higher since the summer, and the returns have strengthened in recent weeks. Momentum investors may like shares here for further upside over the coming months.
For traders, the January 2025 $25 calls, last trading for about $2.90, could see high double-digit returns depending on how much further shares rally in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Digital platform Sea Limited (SE) is up 121% over the past year, and is up nearly 50% alone since August. One trader sees shares pulling back over the coming months.
That’s based on the December 20 $82.50 puts. With 78 days until expiration, 10,001 contracts traded compared to a prior open interest of 320, for a 31-fold rise in volume on the trade. The buyer of the puts paid $2.70 to make the bearish bet.
Sea Limited shares recently traded for about $98, right at their 52-week high, so the stock would need to decline by $15.50, or just over 16%, for the option to move in-the-money.
Meanwhile, Sea shares have been on a tear despite mixed results. Revenues are up 23% over the last 12 months, but earnings have collapsed by 75% as the company lost $200 million.
That puts shares trading at a hefty 48 times forward earnings.
Action to take: Shares are starting to look overextended in the short-term, with a recent RSI rating of 83, a sign well into overbought territory. Interested investors should wait for a pullback before buying.
Based on how overbought shares are, traders have an opportunity on the short side right now. That plays well to the December $82.50 puts, which could see mid-to-high double-digit returns in the coming weeks. Traders will likely want to take profits well before expiration on any sudden drop in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Activist investors sometimes get a bad rap. But often times, they buy a significant stake in a company, at last 5%, and push for management to make changes. For a struggling company whose share price has lagged, that can be a good thing.
Even the news of an activist investor getting in can be a sign that improvements are on the way. The only question is whether the activist pushes for them, or if management steps up.
Shares of struggling pharmacy store giant CVS Health Corporation (CVS) are getting an interest from Glenview Capital, looking to make changes at the company. Specifically, Glenview is looking for ways to improve the company’s operations.
Given CVS’s low-profit margin of 2%, there are plenty of opportunities that could significantly increase profitability.
CVS shares also trade at 8 times forward earnings, suggesting that the stock is a value play here. Improving profitability could mean a big move higher for shares.
Action to take: Shares are a value play here, and an activist campaign could lead to unlocked shareholder value. Plus, at current prices, CVS pays a 4.3% dividend.
For traders, the January $65 calls, last trading for about $3.55, could see mid-double-digit returns on the trade, assuming shares start to trend higher with activists putting the company in the spotlight.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Jose De Nigris, a director at Freightcar America (RAIL), recently bought 4,000 shares. The buy increased his position by 6%, and came to a total cost of $40,741.
The director last bought shares in May 2023, picking up 10,000 shares for $30,000. Around the same time, a major holder also bought 85,412 shares, and the company’s President and CEO bought 32,578 shares for just over $93,000. Two company directors sold small positions earlier this year.
Overall, Freightcar American insiders own 27.1% of shares.
The manufacturer of railcars is up 266% over the past year, even as profitability has been elusive. Revenues rose by 66%, but the company lost $20 million overall.
However, Freightcar could boom with a long-term economic boom underway. And Freightcar has a relatively strong balance sheet, with almost as much cash as debt. Shares trade at an estimated 11 times forward earnings, so look inexpensive here.
Action to take: Shares recently pulled back from 52-week highs, but are likely to resume their uptrend over the coming months. Momentum investors may like shares here.
At present, Freightcar does not pay a dividend.
For traders, the December 2024 $10 calls are already about $0.50 in-the-money. Last trading for about $1.45, traders may see mid-to-high double-digit returns on a further push higher on shares through the end of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
China-based EV manufacturer NIO (NIO) is down 25% over the past year, but shares have started to rally in recent weeks. One trader is betting that shares will continue to rally over the next month.
That’s based on the November 1 $9 calls. With 30 days until expiration, 10,172 contracts traded compared to a prior open interest of 400, for a 25-fold rise in volume on the trade. The buyer of the calls paid $0.36 to make the bullish bet.
NIO shares recently traded for about $6.75, so shares would need to rise by at least $2.25, or 33%, for the option to move in-the-money. The strike price of $9 is right under the stock’s 52-week high of $9.57.
Although NIO has been selling more vehicles over the last year and revenues have soared by 99%, the company has still failed to earn a profit, and has a -32% profit margin.
Action to take: It’s likely that some of the recent boost in shares has come from China’s recent stimulus measures. Those measures likely still have some time to play out, which could lead to a continued rally for NIO over the coming months.
But this would still be a very speculative trade on momentum out of Chinese stocks right now.
For traders, the November 1 $9 calls play to this aggressive trend, and the options are inexpensive enough to see high double-digit returns, or even better, depending on how much shares rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Over time, a company’s earnings can go a long way to determining the value of its share price. A company that can keep increasing earnings will likely see their share price trend higher.
However, sometimes, the market will look at other factors besides earnings. One related issue is revenues, the raw cash that comes in the door before costs are factored in. A company with rising earnings but concerned over revenues may get punished by the markets, leading to a buying opportunity.
That could be the case with retailer Costco (COST). The warehouse giant beat on earnings, but didn’t provide strong future revenue estimates. And the company continues to grow its overall sales, including the sales of one-ounce gold bars.
Costco shares are up 60% over the past year, but the stock remains near its all-time highs. The recent drop based on earnings likely won’t change the uptrend, making this recent pullback worthy of a buy.
Action to take: Costco is a leading retailer, and will always command a premium. It’s a stock to buy on a market pullback, and interested investors may want to nibble at shares during times of market weakness.
Costco pays a 0.5% dividend, but also periodically pays special dividends based on earnings.
For traders, shares will likely trend higher. The March 2025 $1,000 calls, last trading for about $23.00, could see mid double-digit returns on a further uptrend.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
William Shepard, a director at CME Group (CME), recently bought 293 shares. The buy increased his stake by less than 1%, and came to a total cost of $63,945.
Shepard was the last insider buyer with a 326 share pickup back in June, for the same cost. And again in March. One other director has been a buyer over the past two years, otherwise company insiders have been periodic sellers of shares.
Overall, CME Group insiders own 0.4% of shares.
The stock exchange operator is up 9% over the past year, far lagging the overall stock market. Earnings and revenues are both up about 13% over the same timeframe, reflecting a trend higher in trading volume over the past year. CME also sports a hefty 57% profit margin.
CME Group benefits from ongoing transactions in financial markets, including rising options trading and increased trading in cryptocurrency markets.
Shares trade at about 21 times forward earnings, about in-line with the overall market. Given the company’s high profit margin, increased market activity could lead to a boom for shares.
Action to take: CME shares have been trending higher since the summer and look set to break higher in the months ahead. The stock also pays a 2.1% dividend, which has a history of growth over time.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Exercise technology company Peloton Interactive (PTON) is down 2% over the past year, with shares coming off extreme lows from earlier in the year. One trader sees the stock surging higher into next spring.
That’s based on the April $7 calls. With 197 days until expiration, 13,239 contracts traded compared to a prior open interest of 209, for a 63-fold rise in volume on the trade. The buyer of the calls paid $0.67 to make the bullish bet.
Peloton shares recently traded for about $4.80, meaning shares need to rise by about $2.20, or 48%, for the option to move in-the-money. The strike price is right near the stock’s 52-week high of $7.24.
Shares of Peloton may continue to struggle. The company remains deeply unprofitable, but they are working on restructuring the company to move to profitability.
Revenues are up 0.2% over the past year, but Peloton still lost $551 million over the past year.
Action to take: Given Peloton’s shaky operational history, investors may want to look at shares as a speculation. With the stock in an uptrend, momentum investors may like shares here for further upside in the months ahead.
For traders, the April $7 calls are inexpensive and have plenty of time to play out before expiration. From here, a further rally in shares could mean high double-digit returns or better.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
While the stock market remains near all-time highs, many individual stocks haven’t taken off for the ride. Some companies have simply been out of favor, or haven’t been able to grow quickly over the past few years, making for a poor investment.
Other companies have had to deal with significant headwinds, whether from consumer tastes, regulatory costs, or other challenges. The airline industry is no stranger to any of those issues over the past few years.
The industry has been looking to consolidate carriers, and further make strides on profitability. And others, such as Southwest Airlines (LUV) are looking to fend off activist investors.
Over the past year, Southwest shares have been basically flat. That’s not bad, considering earnings growth sank 46% in the past year. The industry is having to contend with higher costs, which even activist investors can’t fix.
But the company is working on several innovations, including ending its practice of open seating, and charging more for various services.
Action to take: Southwest are starting to trend higher, and could break out of their trading range for further gains in the months ahead. That makes the stock an interesting speculation as a breakout play.
At current prices, shares pay a 2.5% dividend.
For traders, a breakout bodes well for call options. The January 2025 $35 calls, last trading for about $0.90, could see high double-digit gains, especially on a year-end rally for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Mary Lindsey, a director at Methode Electronics (MEI), recently bought 8,800 shares. The buy increased her stake by 31%, and came to a total cost of $100,108.
The buy came a week after another director bought 9,320 shares, also paying in the low $100,000 range, and after a $500,000 buy from the company CEO. These mark the only insider buys over the past two years, although there have been some slight sales by Methode insiders.
Overall, Methode insiders own 5.7% of shares.
The electronic device company has seen shares get cut in half over the past year.
Methode has struggled operationally over the past year, failing to turn a profit and seeing revenues drop by 10%.
However, on a valuation basis, shares appear inexpensive, trading for about 14 times earnings and about half their book value, plus about 0.4 times their price-to-sales.
Action to take: Shares are starting to show signs of life and have started trading higher in recent weeks. The stock could be a surprise winner over the months ahead if this trend holds. That makes shares a speculative play now.
At current prices, Methode also pays a 5% dividend.
For traders, options are limited, but the January 2025 $12.50 calls are an at-the-money trade. Last going for about $1.50, the options could see high double-digit returns if shares continue to see positive price action.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Uranium producer Cameco (CCJ) is up 16% over the past year, and shares have started to rebound strongly after selling off over the summer. One trader sees further gains ahead.
That’s based on the November 15 $60 calls. With 47 days until expiration, 8,083 contracts traded compared to a prior open interest of 137, for a 59-fold increase in volume on the trade. The buyer of the calls paid $0.52 to make the bullish bet.
Cameco shares recently touched $48, so they would need to soar by $12, or another 25%, to hit the option’s strike price of $60. That would also entail share breaking past their old 52-week high of $56.24.
Operationally, business is going strong for Cameco. Earnings are up 163% over the past year, and revenues are up 24%. Uranium prices have been rising on increased demand, as investors are looking to use nuclear power to generate what they need to run AI infrastructure.
Action to take: Cameco likely have more upside from here, even after popping higher. Today’s buyers will get a 0.2% dividend, which may increase as earnings increase down the line.
For traders, the November $60 calls are aggressive, but could see high double-digit gains or even into triple-digits depending on how quickly shares continue higher. Less aggressive traders may want to buy an option with more time on it to play a potential multi-month trend higher through the end of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Companies don’t operate in a vacuum. They have competitors, and often look to see what a competitor is doing to see if it’s an idea worth emulating (or not). Sometimes, a company gets into legal trouble.
Legal cases can drag on for years. And they can cost millions of dollars. And customers may want to shop and invest elsewhere while a lawsuit plays out. That may create opportunities for a company to grow their market share while their competitor is defending themselves.
Earlier this week, credit card network giant Visa (V) sank on news of an antitrust lawsuit filed by the Department of Justice. Visa is by far the largest player in the game, but the other companies in the network payment oligopoly could end up gaining market share.
Among the other big players, American Express (AXP) caters to a higher-income customers, and tends to carry a premium.
But right now shares trade at about 18 times forward earnings, even after rising 77% over the past year.
Action to take: American Express is a top brand, and can likely grow its market share as long as Visa has to defend against a suit. Shares are worth picking now, and during any market selloff.
At current prices, AXP also pays a 1% dividend, which it has a history of growing over time.
For traders, the January 2025 $290 calls, last trading for about $7.75, could see mid-double-digit returns if shares break higher into early next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Equitable Holdings, a major holder of Alliance Bernstein (AB), recently increased their position by 500,000 shares. The buy increased their total holdings by 12%, and came to a total cost just over $17 million.
This marks the first insider buy at the company over the past two years. Insiders have been occasional sellers of shares, particularly the company CFO back in 2023, and the company’s Head of Global Investments sold of about half his stake back in July.
Overall, Alliance Bernstein insiders own about 1.5% of shares.
The asset manager is up 13% over the past year, far lagging the overall stock market’s returns of about 34%. However, AB has managed to increase earnings by 87%, suggesting that shares could see a catch-up rally at some point.
Shares also look like a value play here, trading at 10 times forward earnings.
Action to take: Shares are trading near the high-end of their 52-week range and have traded that way for months.
At current prices, AB pays an 8.2% dividend. Patient investors may like shares here, with an eye towards high current income and future capital gains.
For traders, shares look likely to break higher once their current sideways range ends. The January 2025 $35 calls, last trading for about $1.40, could see mid-double-digit returns or better on a break higher, possibly from a year-end rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Wall Street megabank Citigroup (C) is having a strong year, with shares up 52%. One trader sees the stock taking a break over the coming weeks.
That’s based on the October 25 $55 puts. With 28 days until expiration, 10,038 contracts traded compared to a prior open interest of 115, for an 87-fold rise in volume on the trade. The buyer of the puts paid $0.43 to make the bearish bet.
Citigroup shares recently traded for just over $60, so the stock would need to drop by just over $5, or about 8%, for the option to move in-the-money. Shares have already pulled back nearly 10% from their 52-week highs of $67.81, set during the summer.
The bank appears to be at a support zone, and market weakness over the coming weeks could cause a break lower, but only temporarily. That makes a short-term trade to the downside look attractive here.
Action to take: The bank is still inexpensive at about 9 times forward earnings and trading for about 0.6 times its book value. However, the share price weakness suggests further potential downside. Interested investors should hold off on buying until market fears strike.
For traders, the October $55 puts may not move in-the-money, but they could catch mid-double-digit returns or better on any seasonal weakness in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Several key technologies have come to the forefront over the past few years. That includes electric vehicles, which reduce dependence on fossil fuels and lower carbon emissions. And artificial intelligence technology could be as transformative as the internet, if not more.
Both of these technologies require electricity. Lots of it. And investors are starting to move into utility stocks as a play on the higher power demand likely in the years ahead.
But one energy source looks best placed for this rising demand right now: nuclear power. A new generation of nuclear reactors are coming online. And utilities are getting approval to start using them at scale.
That could bode well for companies like Vistra (VST), a Texas-based utility. Shares have soared 238% over the past year, but the stock is still inexpensive at 16 times forward earnings.
Nuclear energy could offer a high baseload for powering AI and charging smartcars, and unused energy could be used for crypto mining.
Action to take: Investors may want to build a stake here, and use any pullback to add to that position. At current prices, Vistra pays a 0.8% dividend, and has a history of growing that payout over time.
For traders, the January 2025 $140 calls, last trading for about $6.50, could see high double-digit returns on a further uptrend in shares over the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Prescott General Partners LLC, a major holder of Credit Acceptance Corporation (CACC), recently added 4,000 shares. The buy increased the LLC’s stake by less than 1%, and came to a total cost of $1,784,530.
This marks the first insider buy at the company in over two years. Several company executives, including the COO and General Counsel, have been sellers of shares this year. Nearly all insider sales by executives have come following the exercise of stock options.
Overall, Credit Acceptance insiders own 31% of shares, and institutional investors own 66.2% of shares.
The credit services company for the automotive industry is down 2% over the past year, significantly underperforming the overall stock market.
Operationally, CACC has struggled over the past year, with revenues down 31% amid a slow market for auto credit services. But with interest rates declining, there may be a pickup in business in the quarters ahead.
Action to take: CACC shares now trade for 10 times forward earnings, and the stock has started to trend higher over the coming weeks.
The stock is a speculative play on lower interest rates keeping the economy, and therefore auto lending, strong. CACC does not pay a dividend.
For traders, the January 2025 $560 calls, last trading for about $6.50, could see high double-digit returns if shares stage a strong end-year rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Oil and gas exploration company Antero Resources (AR) is up 19% over the past year, lagging the overall market. One trader sees the potential for shares to move higher into the middle of next year.
That’s based on the June 2025 $35 calls. With 267 days until expiration, 5,048 contracts traded compared to a prior open interest of 141, for a 36-fold rise in volume on the trade. The buyer of the calls paid $1.86 to make the bullish bet.
Antero shares recently traded for about $28.75, so the stock would need to rise by about $6.25, or about 22%, for the option to move in-the-money.
The strike price of the option is close to the stock’s 52-week high of $36.28, set back in June.
Despite a challenging year for energy prices, Antero’s revenues are up 4.3%. Profitability has been low, leading to shares trading at 111 times current earnings, but about 17 times forward estimates.
Action to take: Investors may like shares here, as oil prices look undervalued in the low $70 range. Any oil price spike should see a bit move higher for oil-related stocks. Natural gas also tends to perform strongly in the winter months and can be prone to price strikes depending on weather conditions and demand.
Antero does not currently pay a dividend.
For traders, the June $35 calls have ample time to play out, and could see high double-digit returns or better if energy prices see a spike higher at some point between now and next June.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
For nearly two years, AI has been the word that’s helped push many tech companies higher, particularly large-cap companies. That’s because those firms have been at the forefront of AI spending. For large enough companies, spending a few billion to build out AI is no big deal.
While the market is shifting towards other parts of the AI story, many big-tech companies can still trend higher for a more fundamental reason. They generate massive amounts of cash.
If that money isn’t being spent on AI, it can go elsewhere. Dividends, share buybacks, acquisitions, or growing the core business are the main choices.
And some big cap stocks are still cheap, even near all-time highs. For instance, Meta Platforms (META), has rallied 86% over the past year thanks to strong advertising on the platform.
But shares can trend higher, given the company’s massive 73% growth in earnings and hefty 34% profit margin. Shares still look inexpensive at 23 times earnings, given the high growth today.
Action to take: While shares are near 52-week highs, they’re still trending higher. Buyers may want to build a stake now, and use any market weakness over the coming weeks to add to that position. Meta recently started paying a dividend, with a 0.3% yield.
For traders, the February 2025 $660 calls, last trading for about $24.00, could see mid-double-digit returns on a year-end rally into the start of next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Mike Spanos, a director at Casey’s General Stores (CASY) recently bought 267 shares. The buy increased his position by 11%, and came to a total cost of $100,440.
Spanos was the last insider to buy shares, with a 725 share buy back in January, at a total cost of $199,687. Otherwise, company insiders have been sellers of shares. That includes a $5 million sale from the company CEO, who reduced his stake by 15%. The company COO also sold.
Overall, Casey’s insiders own 0.6% of shares.
The convenience store owner and operator is up 32% over the past year, about in-line with the overall stock market.
Casey’s has been rapidly expanding its total locations in recent years, which has helped fuel share price growth. However, the underlying business has a 3.4% profit margin, on the thin side. And earnings and revenues are both up about 6% over the past year.
Shares also trade at 26 times earnings, a slight premium to the overall stock market.
Action to take: Casey’s shares have been trading sideways since June, and could be pausing before renewed momentum pushes shares higher. That makes the stock a speculative buy here.
Shares also pay a 0.5% dividend.
For traders, a longer-term uptrend may prevail in the months ahead. The February 2025 $400 calls, last trading for about $13.50, could see low-to-mid double-digit returns on a further uptrend into next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Digital asset mining services company Core Scientific (CORZ) is up 248% over the past year, and shares are near their 52-week highs. One trader sees further gains in the days ahead.
That’s based on the October 11 $13 calls. With 16 days until expiration, 9,989 contracts traded compared to a prior open interest of 129, for a 77-fold rise in volume on the trade. The buyer of the calls paid $0.55 to make the bullish bet.
Core Scientific shares recently traded for about $12.50, meaning shares would need to rise by $0.50, or just 4%, for the option to move in-the-money. The strike price is just above the stock’s 52-week high of $12.72.
The digital asset miner trades closely in-line with moves in the cryptocurrency market, particularly bitcoin. Revenues are up 11% over the past year, and Core shares trade at 10 times forward earnings.
Action to take: Crypto prices tend to fare well in October, even as other assets, such as stocks, tend to have a more mixed record. That suggests that crypto-related stocks could be ready to trend higher over the coming weeks.
Investors interested in the crypto space could be pleasantly surprised after the lackluster trading in the space over the past few months.
For traders, the October $11 calls are inexpensive enough to see high double-digit gains on a crypto rally. Less aggressive traders may want to look at options with more time left until expiration, to get the full potential benefit of a crypto rally in October.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Lower interest rates mean it costs less for companies to borrow. And that it’s easier for them to expand operations. That’s why the market has taken off as it’s clear that companies will look to leverage up as the cost to borrow goes down.
Combining that with sectors that are seeing increased spending could make for a winning investment strategy in the months ahead. With a construction, manufacturing, and infrastructure boom underway, a few possible winners look likely.
One contender for a winner is Caterpillar (CAT). The producer of heavy construction machinery is cyclical. But they’ve benefitted from the boom underway for infrastructure spending and manufacturing reshoring in recent years. Lower interest rates may fuel further growth.
Caterpillar is an industry leader, still trading at about 17 times earnings, a reasonable valuation here. And the company sports a 17% profit margin, on the higher end for a company that produces and manufactures physical products.
Action to take: Investors may like shares here, and to add to such a position on any drop lower. Shares pay a 1.5% dividend as well, and Caterpillar has a history of growing that payout over time.
For traders, the January 2025 $410 calls, last trading for about $8.35, could see mid-double-digit gains or better from a further rally into early next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Sumitomo Mitsui Financial Group, a board member of Jefferies Financial Group (JEF), recently opened a new position in the company with a 9,247,081 share buy. The cost of the buy came to $551,773,323.
Jefferies insiders have been sellers of shares this year, with the company CEO selling 1.5 million shares back in April for over $65 million. And the company CFO sold over 280,000 shares in May, netting nearly $13 million. Going further back, another major holder was a seller in 2023.
Overall, Jefferies insiders own 21.8% of shares, and institutional investors own another 68.7% of shares.
The investment banking giant is up 67% over the past year, aided by a hefty 60% jump in revenue growth and soaring earnings of over 1,180%.
Even with improving profitability, shares trade at about 15 times forward earnings, a solid discount to the overall market. And the financial giant has over $48 billion on its books in cash, more than its debt and more than enough to cover a financial emergency.
Action to take: Investors may like shares here, as they pay a 2.2% yield, which has a history of growing over time, and because the stock remains in an uptrend.
For traders, the December $65 calls, last trading for about $2.30, could see mid-double-digit returns on a continued rally through year-end.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Automotive chip manufacturer ON Semiconductor (ON) is down 22% over the past year, as investors have been more focused on other tech trends and EV sales have been lackluster. One trader sees further weakness in the weeks ahead.
That’s based on the November 15 $55 puts. With 52 days until expiration, 8,839 contracts traded compared to a prior open interest of 155, for a 57-fold rise in volume on the trade. The buyer of the puts paid $1.08 to make the bearish bet.
ON shares recently traded for about $70, so the stock would need to drop by $15, or 22%, for the option to move in-the-money. That’s an aggressive drop in the span of a few weeks, and would require shares to drop under their 52-week low of $59.34.
The company has struggled operationally in the past year thanks to lower demand. Earnings are down by 40%, and revenues are off by 17%. However, with interest rates coming down, auto demand may push higher over the coming months.
Action to take: Shares have largely been range-bound this year, and a drop into the lower $60 range is possible. Interested investors can likely get into shares under $65 in the coming weeks on any market weakness, and should look to gradually build a stake from that level.
For traders, the stock is near the higher end of its recent trading range, and combined with the seasonality of markets, a pullback is possible. That means the November 15 $55 puts could see mid-double-digit returns or better, although the option may not move in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Interest rates are finally starting to go down. That means the cost to borrow will decline, benefitting highly leveraged companies. But the cost to lend will also decline, meaning that fixed-income investors will get paid less for their holdings.
For long-term bondholders, the price of the bond will rise to match interest rates. This is a concept known as duration. But short-term bond holders don’t have exposure to duration, and will see their bonds roll over at a lower interest rate.
That’s bad news for companies loaded up with U.S. Treasury notes, which most companies use as a substitute for cash. The worst off? Berkshire Hathaway (BRK-B). The conglomerate is sitting on a cash position of over $280 billion.
While the interest on that pile of cash will decline, Berkshire owns dozens of businesses outright, as well as quality dividend-paying stocks. It remains a long-term winner, and is now poised to buy up any market opportunity that arises.
Action to take: Berkshire shares are down almost 5% from their all-time high. Investors may want to use any market weakness over the coming weeks to build a position. While Berkshire doesn’t pay a dividend, it is uniquely able to capitalize on a market crisis.
For traders, shares are likely to trade higher into next year. The January 2025 $490 calls, last trading for about $7.75, could see mid-double-digit returns on a year-end rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The AI rollout continues. Earnings season indicates that many companies are continuing to invest and build in AI projects. While that growth may slow down in a few years, for now, the trend is on.
That means investors should look to buy AI-related plays on any reasonable selloff. Finding high-growth companies and buying them after a quick 10-20% pullback is one way to play the AI trend without buying in at the top.
One AI-related play is the growth of data centers and the hardware needed to operate them. That’s where a company like Vertiv Holdings (VRT) comes into play.
The manufacturer of data center technologies creates everything from power and rack systems to cooling systems, making it a strong winner as AI continues to grow.
Vertiv shares are up over 100% in the past year, but have taken a 20% ding from their recent high. That could create a buying opportunity over the coming weeks for a play into the end of the year.
Action to take: Vertiv shares have already started trending higher since early August, and still have considerable room to run. Shares look like an ideal AI momentum play through the end of the year.
For traders, the December $85 calls, last trading for about $9.65, could see high double-digit returns from further gains through the end of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Rene Lacerte, CEO of Bill Holdings (BILL), recently bought 42,248 shares. The buy increased his stake by 2%, and came to a total cost of $2.095 million. He was joined by the company CFO, who bought 21,124 shares, paying just over $1.04 million.
A company director also bought 25,000 shares the day after, shelling out $1.34 million. These marks the first insider buys at the company since November 2023. Otherwise, company insiders have generally been regular and steady sellers of shares.
Overall, Bill Holdings insiders own 3% of shares.
The small business financial platform company is down nearly 50% over the past year. The space is highly competitive, and Bill has struggled to gain market share.
While unprofitable over the past year, Bill did manage to increase its revenues by 16%, and further increases could allow the company to flip to profitability.
Action to take: Shares have started to trend higher after hitting a 52-week low in August. Combined with improving profitability, it’s likely that Bill shares could continue to trend higher in the months ahead. That makes shares a speculative buy based on their current momentum.
For traders, the November $60 calls have significant activity behind them lately. Last trading for about $4.15, the calls could see mid-to-high double-digit returns or better on a further rally for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Clothing retailer Victoria’s Secret (VSCO) is up nearly 30% over the past year, but shares started to decline following earnings. One trader sees a further decline in the weeks ahead.
That’s based on the October 18 $23 puts. With 45 days until expiration, 5,247 contracts traded compared to a prior open interest of 198, for a 26-fold rise in volume on the trade. The buyer of the puts paid $1.20 to make the bearish bet.
Victoria’s Secret shares recently traded for about $24, meaning they would need to decline by about $1, or just over 4%, for the options to move in-the-money. Shares are well off their 52-week high of $30.80, and could gap down to the low $20 range.
Revenues are down 3% over the past year, and earnings growth have been negative. Shares look a bit like a value trap, as the stock trades at just 13 times earnings, but Victoria’s Secret also carries significant amounts of debt.
Action to take: With shares potentially facing a downtrend and an open gap around the $20 range, interested investors can likely get a better price in the weeks and months ahead and should avoid shares for now.
For traders, the October $23 puts are well positioned for a quick downturn over the weeks ahead. Depending on the severity of the downturn, investors could see mid-to-high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
AI stocks remain hot, although it’s clear that many companies expect sales to start to cool off. The initial wave of AI buying will likely be over by the end of next year. That still offers investors plenty of time to make a little more out of big hardware plays.
But it also suggests that investors may fare better investing with software companies. That’s because software tends to be a high-margin product.
Even better, many software services generate recurring revenues through monthly billing. Wall Street loves to see that kind of consistency.
That’s why companies like Salesforce (CRM) could be a big winner moving forward. They already beat handily on earnings and revenue expectations, and adding more AI features to their software could justify increasing prices well into the future.
More AI-related opportunities could also help Salesforce push its profit margins past the current 15% level.
Action to take: With CRM posting double-digit revenue and earnings growth, shares could continue the trend higher they’ve been making since May.
Investors can play the current momentum higher in the months ahead. Plus, Salesforce also recently started paying a dividend, with a yield of 0.6%.
For traders, more upside in the months ahead looks likely. The December $280 calls, last trading for about $11.20, could see mid-double-digit returns and far outperform shares over the next few months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Teresa Harris, a director at Ziff Davis (ZD), recently bought 1,000 shares. The buy increased her stake by 10%, and came to a total cost of $46,760.
This marks the first insider buy since May 2023, when several company insiders, including both the CEO and CFO, picked up shares. There was one insider sale by an EVP earlier in the year, for just under $290,000, but that insider also bought shares at a far lower price in 2023.
Overall, Ziff Davis insiders own 2.8% of shares.
The advertising agency is down nearly 30% over the past year. Ad spending has been down across the economy as a whole, although Ziff Davis only saw their revenues drop by about 2%. Meanwhile, they managed to increase earnings by a massive 121%.
That’s pushed shares to about 7 times forward earnings. And any improvement in the advertising market could see shares push far higher.
Action to take: Ziff Davis shares hit a 52-week low in early August and have now started to trend higher. Momentum investors may like shares over the coming months for further upside. At present, shares do not pay a dividend.
For traders, the December $55 calls, last trading for about $1.85, could see mid-to-high double-digit returns depending on how much shares rally into the end of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Consumer tech giant Apple (AAPL) is up 21% over the past year, slightly lagging the overall market. One trader sees shares pulling back slightly over the coming weeks.
That’s based on the October 4 $210 puts. With 32 days until expiration, 6,261 contracts traded compared to a prior open interest of 175, for a 36-fold rise in volume on the trade. The buyer of the puts paid $1.35 to make the bearish bet.
Apple shares recently traded for about $230. Shares would need to drop by $20, or about 9.5%, for the option to move in-the-money. Apple is slightly off its 52-week high of $237.23, set back in July.
Markets do tend to trade lower in September and even into October, particularly in election years. Some pullback could be possible in the months ahead. And with Apple trading at 34 times earnings, it’s a bit expensive to go long shares right now.
Action to take: Investors looking to buy shares may want to wait for a seasonal pullback to take place first, as shares could easily get cheaper. Apple currently pays a 0.4% dividend.
For traders, the October $210 puts are an inexpensive way to profit on a market decline over the next few weeks, including the possibility of another correction. Traders can likely see mid-double-digit returns on a modest pullback, and higher returns if markets have a steep decline again.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Amid a strong showing for tech stocks, the recent market rotation has allowed other sectors to come into their own. That includes companies that continue to grow, even without necessarily investing heavily into the AI space.
Overall, companies with slow-and-steady growth should be able to keep on moving higher. And investors who buy into these higher-trending stocks may see better returns than investing in AI-related tech stocks after that space has had its big run.
One company moving higher is Berkshire Hathaway (BRK-B). The conglomerate is even flirting with a $1 trillion market cap, and its various insurance and subsidiary holdings make it a reasonable proxy for the economy.
Plus, the company’s cash hoard has been rising, which should insulate the firm against the impact of an unexpected economic setback. Shares are still relatively inexpensive at 14 times forward earnings, which should allow investors to see further upside ahead.
Action to take: Long-term investors may like shares here, and should look to add to that stake during any market pullback. Berkshire’s long-term track record is one of the best in markets today, although the company famously doesn’t pay a dividend.
For traders, shares likely have more upside through the end of the year. The December $490 calls, last trading for about $9.15, could see mid-double-digit returns as shares continue higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Albert Monaco, a director at Weyerhaeuser (WY), recently bought 31,500 shares. The buy increased his stake by 80%, and came to a total cost of $988,376. This marks the only insider buy over the past two years.
Insiders have otherwise been sellers of shares, with the company CEO and CFO as the largest sellers, usually following the exercise of stock options. A few company directors have also been steady sellers of shares.
Overall, Weyerhaeuser insiders own 0.3% of shares.
The timberland owner and operator is down 7% over the past year, lagging the stock market’s overall gain. Earnings are off 25%, and revenues declined 3%.
Typically, timber assets hold up well over time, as lumber can grow and harden when not in demand. And timber tends to hold its own against inflation, making for a reasonable long-term investment.
Timber demand could also soar as demand for housing rises, which could occur as interest rates come down later this year.
Action to take: Weyerhaeuser shares are an attractive long-term play on lumber demand, which should remain robust as long as the economy continues expanding, particularly housing demand. Shares are a worthwhile buy here, and pay a 2.6% dividend at current prices.
For traders, the January 2025 $32 calls, last trading for about $1.15, could see mid-double-digit returns on a year-end uptrend for Weyerhaeuser shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Asset manager Apollo Global Management (APO) has been on a tear, surging 33% higher over the past year. One trader expects shares to trend higher over the next 17 months.
That’s based on the January 2026 $185 calls. With 502 days until expiration, 90,774 contracts traded compared to a prior open interest of 260, for a massive 350-fold rise in volume on the trade. The buyer of the calls paid $1.93 to make the bullish bet.
Apollo shares last traded for just under $115, so the stock would need to rise by $70, or about 61%, for the options to move in-the-money. Apollo hit a 52-week high of $126 back in July and are still recovering from the recent market pullback.
Revenues have declined for the asset manager, but overall earnings are up 42% in the past year, boosted in part by rising asset values. At current prices, shares trade at just 12 times earnings.
Action to take: With shares trending higher, the stock likely has more upside in the months ahead. At current prices, Apollo pays a 1.6% dividend, and has a history of increasing its payout over time.
For traders, the January 2026 $185 calls have ample time to play the current uptrend. Today’s traders can likely see the options clear high double-digit returns on a further uptrend in shares, and could even take profits well before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The stock market is made up of many sectors. Most investors focus on whatever sector is hot right now. For nearly two years, that’s been tech thanks to the rollout of AI. But tech returns have slowed in recent quarters. Other sectors are starting to show stronger returns.
Investors who shift more towards these other sectors can buy into a more reasonable value right now. And they can also get a higher income than in tech plays.
Either way, that can help investors through a tough time, whether the economy sinks into a recession next year or not.
One top play is the utility sector. There’s rising demand for power, especially thanks to the rollout of AI technologies and their growing power demand. This sector is now performing even better than tech stocks.
Investors can simply stick with their local utility or with a sector-based ETF like the Utilities Select SPDR Fund (XLU). This low-cost fund owns a basket of utility ETFs, which should continue to rally higher as interest rates trend lower.
Action to take: Investors may like XLU shares around $75.00. At that price, the ETF pays a 3% dividend, higher than the market average.
For traders, with shares trending higher, an option trade like the December $80 calls could deliver even better returns than buying and holding shares. The December $80 calls last traded for about $4.10.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Jennifer Johnson, President and CEO of Franklin Resources (BEN), recently bought 18,900 shares. The buy increased her stake by less than 1%, and came to a total cost of $396,000.
This marks the first insider buy since June, when a major holder bought 300,000 shares over two transactions, totaling over $6.8 million. Going further back to 2023, two company insiders sold shares. Those represent the only insider sales over the past two years.
Overall, Franklin Resources insiders own 46.7% of shares.
The asset manager is down 22% over the past year. That’s about in-line with the company’s 25% drop in earnings. Revenues are up 8% over the same time.
At current prices, Franklin Resources trades at less than 8 times forward earnings. The asset management space can be prone to changes depending on market moves, but with interest rates set to decline, investors may see further gains in the quarters ahead.
Action to take: Investors may like shares here, as the stock is starting to show signs of life after hitting a 52-week low a few weeks back. At current prices, Franklin also pays a 6% dividend.
For traders, more upside is likely ahead in the coming months. The January 2025 $22.50 calls, last trading for about $0.70, could see high double-digit returns or better into next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Automaker General Motors (GM) is up 45% over the past year thanks to strong growth even as higher interest rates have weighed on car sales. One trader sees a pullback in the weeks ahead.
That’s based on the September 20 $47.50 puts. With 22 days until expiration, 10,897 contracts traded compared to a prior open interest of 248, for a 30-fold rise in volume on the trade. The buyer of the puts paid $0.60 to make the bearish bet.
General Motors shares recently traded for about $49. Shares would need to drop by about $1.50, or about 3%, for the option to move in-the-money.
GM shares are right near their 52-week high of $50.50, set back in July before a moderate selloff.
Earnings are up nearly 15% over the past year, and revenues are up by 7%. But GM shares are still inexpensive, trading at about 5 times current and forward earnings.
Action to take: Shares can likely continue to trend higher in time, but the stock is looking overbought in the very short term following a strong rally over the past few weeks. Interested traders can likely buy in the mid-$40 range at some point in the coming few weeks.
At current prices, GM pays a dividend of about 1%.
For traders, the September $47.50 puts play well to a potential market pullback in the coming weeks, and for shares to come off of their overbought conditions. Given the price of the option, traders can likely see mid-double-digit returns at some point before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Most green energy stocks have been out of favor with the market over the past few years, thanks to low conventional energy prices. But with the prospect of a renewed interest in green energy and the upcoming election, these stocks may find support.
In the green energy space, only a handful of players have been able to thrive on their own. One of them is a major play on the continued rollout of solar energy.
That leader is First Solar (FSLR). It’s slightly outperformed the market year-to-date, even as other plays in the solar space have struggled.
Plus, earnings are up 105% over the past year, and revenues have surged 25%. That’s even amid a sluggish demand for green energy projects.
Best of all, First Solar has over $1.7 billion in cash on its balance sheet. That will give the company staying power even as other green energy firms face a financial cash crunch.
Action to take: Shares have been trending higher over the past year, but are well off their 52-week highs. Today’s investors can likely see a low-double-digit return, possibly more depending on how green energy policies fare in the upcoming election. That makes the stock a speculative buy now.
For traders, the December $280 calls, last trading for about $14.40, could see mid-double-digit returns on a continued uptrend through the end of the year, with the prospect of even better returns depending on the election.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The housing market has been effectively frozen for nearly two years. High interest rates created high mortgage rates. That deterred possible sellers from changing homes, given the high jump in interest rate costs.
Now, with rates set to decline later in the year, the housing market could be set to open up. And lower rates could help all homeowners, but especially make it easy for first-time buyers to get into a starter home.
That’s good news for companies like D.R. Horton (DHI). The construction company builds a number of homes, from single-family to townhomes, to multi-units. It could benefit no matter how the housing market thaws out.
While shares have already rallied 50% in the past year, future earnings growth still makes this an attractive momentum play. Over the past year, earnings and revenue are both up less than 3% thanks to the sluggish housing market. A thawing market could lead to a big jump for earnings.
D.R. Horton trades at just 11 times forward earnings, indicating there’s still more upside as the housing market starts to heat up.
Action to take: Momentum investors may like shares here. D.R. Horton also pays a 0.7% dividend at current prices.
For traders, the January 2025 $200 calls, last trading for about $7.00, could turn a year-end rally into mid-to-high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Kelcy Warren, a director at Energy Transfer (ET), recently bought 3,000,000 shares. The buy increased his stake by just over 1%, at a cost of $47 million.
He was joined by the company’s Co-CEO, who bought 20,000 shares, paying $313,600. The buy increased his stake by less than 1%. The transactions mark the first insider buys of 2024. Going further back, company insiders were buyers throughout the last two years, with no insider sales.
Overall, Energy Transfer insiders own 10% of shares.
The oil and gas exploration company is up 24% in the past year, about in-line with the overall market.
Shares still trade at 10 times forward earnings, which surged 44% over the past year, even amid a slow market for the energy space. Pipelines and energy storage remain a key necessity, even with energy prices trending flat.
As an LP, Energy Transfer pays out most of its earnings as dividends. At current prices, shares pay a hefty 8% yield.
Action to take: Investors looking for current income may like shares here. However, as an LP, additional tax considerations may apply.
For traders, shares have been trending higher over the past year. The December $16 calls, last trading for about $0.68, could see high double-digit returns on a further rally in shares into year-end.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Fast fresh food chain Chipotle Mexican Grill (CMG) saw shares slip last week as the company’s CEO was poached to run Starbucks (SBUX). One trader is betting that Chipotle shares will continue to slide in the coming weeks.
That’s based on the September 27 $46 puts. With 39 days until expiration, 10,159 contracts traded compared to a prior open interest of 228, for a 45-fold rise in volume on the trade. The buyer of the puts paid $0.30 to make the bearish bet.
Chipotle shares recently traded for about $54, meaning shares would need to drop by about $8, or 15%, for the option to move in-the-money. Shares hit a 52-week high of $69.26 back in June, and have been trending lower since.
Even with the recent pullback, shares are up nearly 40% over the past year. And with CMG shares trading at 48 times forward earnings, the stock looks a bit expensive, and certainly capable of pulling back further.
Action to take: Interested investors should hold off for now, as they’ll likely get an opportunity to buy shares more cheaply in the months ahead.
For traders, the September 27 $46 puts play well to the current downtrend in shares. The low cost of the option could result in high double-digit returns or better depending on how much further shares decline.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The market continues to rebound from its steep selloff. With many of the most heavily sold names bouncing back the strongest, investors who look for slower-moving companies could see the best value here.
That’s because the market rally this year has been driven higher by just a few big-cap tech companies. Other companies are starting to show signs of catching up, and will likely end the year strong.
That means investors who buy during today’s market fears could see the best returns with less popular companies right now.
Computer hardware manufacturer Cisco (CSCO) is one such play now. While the company is best known for modems, they’re also an AI play thanks to rising demand for routing and switching technology.
Shares trade at 13 times forward earnings, making it look like a compelling value play, especially with news of a restructuring that could help push its valuation higher.
With earnings looking to rebound from their poor performance over the last year, shares could be on track for an end-year rally.
Action to take: Investors might like shares at current levels or on any market drop over the next few months. At current prices, Cisco pays a 3.5% dividend.
For traders, the October $50 calls, last trading for about $0.55, could see mid-double-digit returns or better, especially with Cisco likely to trend higher after its restructuring plan.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Max Mitchell, a director at The Goodyear Tire & Rubber Company (GT), recently bought 25,000 shares. The buy increased his holdings by 60%, and came to a total cost of $194,000.
Two other directors bought around the same time, each making an initial buy. One bought 31,408 shares for $252,206. The other bought 26,000 shares, shelling out $205,400.
Overall, Goodyear insiders own 0.7% of shares.
The producer of tires and other rubberized products is down 34% over the past year. Vehicle sales have slowed, a big component of tire sales. Earnings are off, and revenues at Goodyear dropped 6% last year.
Even with that drop, however, shares trade at 8 times forward earnings, a significant discount to the overall market. And shares trade at half their book value, and just over 0.1 times their price-to-sales ratio. Both indicate that shares may be a value play here.
Action to take: Shares hit a 52-week low in early August, and could be in the early stages of pushing higher. Speculative investors may want to buy a small stake here for low double-digit gains in the months ahead. At current prices, Goodyear does not pay a dividend.
For traders, call options look inexpensive here as a rebound play. The January 2025 $9 calls, last trading for about $0.85, could see high double-digit returns if shares continue to recover from their recent selloff.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Gold mining operator Barrick Gold (GOLD) is up 21% over the past year, about in-line with gold’s move higher. One trader is betting on a further rally through the end of 2026.
That’s based on the December 2026 $22 calls. With 854 days until expiration, 7,466 contracts traded compared to a prior open interest of 146, for a 51-fold rise in volume on the trade. The buyer of the calls paid $3.35 to make the bullish bet.
Barrick shares recently traded for about $19. The stock would need to rally by $3, or about 16%, for the option to move in-the-money. Shares are near their 52-week high of $19.45.
Barrick is one of the largest gold mine operators globally. Revenues are up 4% over the past 12 months, but earnings have soared 146% thanks to a rising gold price.
Action to take: Trends for precious metals and commodities remain favorable over the next few years. Investors can also get a 2.1% dividend today, although that payout will vary based on Barrick’s earnings.
For traders, the December 2026 $22 calls have a long time to play out, but could easily see triple-digit gains along the way, especially as gold prices continue to trend higher. More aggressive traders could look for a shorter timeframe for a gold rally to let this trade play out.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Companies are focused on growth. Sometimes, things don’t go to plan, and they have to cut back on headcount. That’s a bad sign. But sometimes, a company that’s growing finds ways to do more with fewer employees.
That’s why markets send shares of a company higher after what first appears to be bad news. If a company can continue to grow with a smaller headcount, its profitability improves.
With many of today’s AI trends underway, job layoffs at a company could be good news. For now, it’s good news for Dell Technologies (DELL).
Reducing their total employees and refocusing on the AI trend will allow Dell to grow faster. The computer hardware producer is expected to see strong growth with AI-enabled computer manufacturing, and with large-scale digital infrastructure projects.
Even though shares are up 70% over the past year, Dell is still cheap at 13 times forward earnings. And improving sales could help boost its profit margins further.
Action to take: Investors may like shares here, and should keep an eye out to add to that position on market pullbacks. Dell also pays a 1.9% dividend at current prices.
For traders, the December $115 calls, last trading for about $8.50, could see mid-double-digit returns over the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Mark Alexander, a director at W.P. Carey (WPC), recently bought 3,500 shares. The buy increased his stake by 10%, and came to a total cost of $195,531.
This marks the first insider buy in 15 months, as Alexander was the last buyer with a 1,000 share buy in May, 2023. Otherwise, the company’s Chief Accounting Officer sold a small position over two transactions in the past year, making the only other insider activity.
Overall, W.P. Carey insiders own 1.2% of shares.
The commercial real estate investment trust (REIT) is down about 12% over the past year. High interest rates, sluggish consumer spending, and concerns over the commercial market have weighed on shares.
However, Carey is largely focused on properties such as warehouses and industrial spaces. And tenants have long-term net leases. That puts the company in a strong position relative to other peers in the REIT space, with 35% profit margins right now.
Action to take: As a REIT, Carey is structured to pay out a high yield. Shares currently pay a 6.2% yield, up from the five-year average of 5.9%. Investors looking for high current income may want to buy a small stake and build from there.
For traders, the January 2025 $60 calls, last trading for about $1.70, could see mid-to-high double-digit returns over the coming months. Shares are likely to trend higher as interest rates come down later in the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Technology company MicroStrategy (MSTR), best known for holding a massive amount of bitcoin, is up 250% over the past year. One trader sees shares trending higher in the months ahead.
That’s based on the October 18 $139 calls. With 64 days until expiration, 29,760 contracts traded compared to a prior open interest of 115, for a 259-fold rise in volume on the trade. The buyer of the calls paid $21.05 to make the bullish bet.
MicroStrategy recently traded at a post-stock-split price of $136. Shares would need to rise by $3, or 2.2%, for the options to move in-the-money.
Shares have a 52-week high of $200 on a split-adjusted basis, so are well off this high as bitcoin prices have traded in a range over the past few months.
MicroStrategy’s operating company has been a poor performer over the last 12 months, with revenues sliding by 7%.
Action to take: MicroStrategy is essentially a proxy trade on bitcoin prices. The cryptocurrency’s price should increase over the next 12 months, and today’s buyers of shares should see a gain. However, there will be extreme volatility in the price along the way.
For traders, the October $139 calls are an inexpensive way to bet on a big move higher on bitcoin prices over the coming weeks. If such a breakout happens, the calls could see high double-digit returns or higher.
Disclosure: The author of this article has a position in the company mentioned here, and may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Every company operates differently. A great company is one that can operate with a lean platform. That means they may not be in the business of acquiring physical goods that then have to be manufactured.
Ideally, investors should see the best returns with a company that has a high profit margin, and low cost to acquire that revenue in the first place. Companies with that structure that lead their industry should deliver great returns over time.
One potential winner is Airbnb (ABNB). The company operates a platform that matches the supply and demand for space to rent. With consumer demand for travel slowing, the company has lowered is guidance.
However, shares trade at 15 times earnings. And since Airbnb doesn’t operate properties themselves like a hotel chain, they’re in a strong position to prosper over time, even if short-term conditions can get rough.
That’s likely also why the company sports a hefty 46% profit margin, greater than the returns in the hotel space.
Action to take: With shares knocked back down to their lows from last year, the stock may be in a strong position for a short-term rally over the next few months.
For traders, the November $120 calls, last trading for about $6.40, could see mid-to-high double-digit returns on a bounce higher for the stock.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Prithvi Gandhi, CFO at Beacon Roofing Supply (BECN), recently added 5,000 shares. The buy came to a total cost of $411,000, and is an initial position for the CFO.
This is the first insider buy since last November, when a division president paid $125,603 to buy 1,725 shares. Otherwise, company insiders have been steady sellers of shares, evenly mixed between regular sales and sales following the exercise of stock options.
Overall, Beacon Roofing insiders own 0.6% of shares.
The distributor of roofing supplies is up less than 5% in the past year, significantly underperforming the overall stock market.
Beacon has had a mixed year, with earnings off by 17%, even as revenues rose by 7%. Roofing demand has been lower, as the housing market has stayed slow.
Shares recently sold off from their 52-week highs, and now trade at 11 times earnings.
Action to take: Beacon Roofing shares could be set to trend higher over time following this recent selloff. Shares are inexpensive, and the housing market is showing signs of opening up as interest rates are set to decline over the coming months.
Beacon shares also sometimes see some volatility during the summer months, depending on hurricane activity, which could make the stock a speculative buy now.
For traders, the January 2025 $90 calls, last trading for about $5.10, could trend higher on a rebound in shares over the coming months. Traders should look to take quick mid-to-high double-digit profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Wall Street megabank Citigroup (C) is up 31% over the past year, far outperforming the overall stock market. One trader sees shares continuing higher over the next 13 months.
That’s based on the September 2025 $67.50 calls. With 401 days until expiration, 10,144 contracts traded compared to a prior open interest of 148, for a 69-fold rise in volume on the trade. The buyer of the calls paid $3.30 to make the bullish bet.
Citigroup shares recently traded for just under $58, meaning shares would need to rise by $9.50, or just over 16%, for the option to move in-the-money. The strike price is also right at the bank’s 52-week high of $67.81.
While shares have had a strong year, the bank is still inexpensive at 11 times forward earnings. And Citigroup shares are rallying on the likelihood of interest rate cuts, which should improve bank earnings.
Over the last year, earnings grew by 10%, but revenues rose by less than 1%, amid a slowdown in lending demand and M&A activity on Wall Street.
Action to take: Shares can likely trend higher over the next year, and Citigroup pays a 3.7% dividend, which can boost returns over time.
For traders, the September 2025 calls have plenty of time to play out. Traders could build a position now, and use any seasonal market weakness over the next few months to add to that position for a year-end rally into 2025.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
With the entire market selling off in recent weeks, investors have a chance to buy shares of great companies, no matter what sector they’re in. For tech companies, it can mean getting a hefty discount to recent higher.
For other companies, any dips may be short-lived. Investors who focus on industry leaders may have to pay up no matter what happens in the market. But in many cases, that can be worth it.
Amid last week’s market volatility, only a handful of companies made new all-time highs. One such company is Parker-Hannifin (PH). The maker of motion and control components for vehicles has gone 30 years with positive cash flow and profitability.
While shares are up 37% over the past year and making new all-time highs, they’re not overpriced on an earnings basis, trading at 21 times forward estimates.
And Parker-Hannifin sports a 14% profit margin, in a space where most industrial component producers are lucky to make 10%.
Action to take: Investors may like shares at current prices, and should keep an eye for any market dip that could lead to a bargain. At current prices, shares pay a 1.1% dividend, with a history of growth over time.
For traders, the trend higher is likely to continue. The November $500 calls, last trading for about $23.50, could see mid-double-digit returns from the further uptrend in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Ruth Porat, a director at Blackstone (BX), recently bought 269 shares. The buy increased her stake by 1%, and came to a total cost of $34,868.
Porat was the last buyer, with a 277 share pickup for just over $33,000 back in May. She and a second director also bought in February. Otherwise, two insiders, a director and the company’s Chief Accounting Officer, sold shares in the past few months. Over the past two years, sellers outnumber buyers.
In total, Blackstone insiders own 1% of shares.
The asset manager has jumped 33% in the past year, far outpacing the S&P 500, largely thanks to a rebound in the value of assets under management.
Operationally, Blackstone has not fared well over the last year, with earnings down by 26% and revenues down by 3%. However, rising asset prices have helped overlook that operational shortfall, and
Blackstone has managed to maintain a 20% profit margin, an above-average return for financial companies in the past year.
Shares trade at 27 times forward earnings, a slight premium to the overall market.
Action to take: Interested investors could buy a small position here, and use any market fears in the coming months to add to that stake. At current prices, shares pay a 2.6% dividend.
For traders, the January 2025 $150 calls, last trading for about $4.30, could see mid-to-high double-digit returns by year-end.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Mortgage REIT AGNC Investment Corp (AGNC) has traded flat over the past year, as interest rates have held steady. One trader sees the potential for shares to rally over the next few weeks.
That’s based on the September 13 $10.00 calls. With 31 days until expiration, 10,421 contracts traded compared to a prior open interest of 244, for a 43-fold rise in volume on the trade. The buyer of the calls paid $0.26 to make the bullish bet.
AGNC shares trade right at $10, making this an at-the-money trade. The stock is close to its 52-week high of $10.57.
Mortgage REITs are essentially a leveraged play on the cash flows from home mortgage payments that have been bundled together. Mortgages are more likely to get paid off if interest rates decline and a property is then sold.
While highly leveraged, mortgage REITs like AGNC are one way to earn a high current income. AGNC currently pays a 14.3% dividend.
Action to take: Investors looking for current income may want to build a small stake here. Lower interest rates could help fuel a small price move higher over time.
For traders, the September $10 calls could play out well if there’s more fear in the markets over the coming weeks. The calls could produce mid-double-digit returns if events play out in AGNC’s favor.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
With markets undergoing high volatility, it will likely take a few weeks for the market to get back to a calmer daily trading range. Investors unused to volatility may want to look for ways to avoid watching big daily swings.
One such way is to look for stocks with a low beta. Beta is a measure of how a single stock trades relative to the market. A stock that trades exactly with the market has a beta of 1.0.
Companies with a beta under 1.0 are less volatile. They also tend to include many dividend-growth stocks, which can offer investors better long-term returns with the dividends reinvested.
One such low-volatility stock is drug manufacturer Eli Lilly (LLY). The stock has a beta of 0.4, and just reported better-than-expected earnings.
That could help boost shares in the months ahead, while delivering a smoother ride for investors.
Action to take: Investors may like shares here. While Eli Lilly pays a 0.7% dividend, it has a long history of growing that payout over time. That and the short-term upside potential after the recent market drop could give investors a double-digit return by year-end.
For traders, the November $950 calls, last trading for about $26.50, could see mid-to-high double-digit returns from a further rally going forward.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
When consumers go to any store and see a sale, they get excited to buy. When investors see stocks on sale, however, they’re fearful.
This recent market pullback, which has seen the Nasdaq drop over10% from its July highs, has played out quickly. But it also looks like a healthy pullback after a massive run higher this year. Investors can use this selloff to buy shares of great companies that are on sale now. Especially dividend-paying stocks
Dividends take some of the sting out of market swings. And they offer investors cash. That helps diversify over time. A strong dividend company also tends to grow its payout over time, making it the ideal stock to buy in a selloff.
This recent selloff has now hit across the board. Exxon Mobil (XOM) even took a dive last week, despite a strong earnings beat. The oil giant is up just 8% over the past year as energy prices have been lackluster. But that won’t be the case forever.
Action to take: Investors may want to buy shares at current prices. Exxon is a dividend growth stock with a current yield of about 3.3%, much higher than the S&P 500’s average of 2%.
For traders, shares are likely to see some rebound in the coming weeks. The October $125 calls, last trading for about $1.80, could see mid-double-digit returns or better on such a bounce.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Julie Southern, a board chair at NXP Semiconductors (NXPI), recently bought 146 shares. The buy increased her stake by 1%, and came to a total cost of $27,600.
Southern was the last insider to buy shares in August 2023, when she bought 203 shares for $44,268. There have been a dozen insider sales over the past year, including some sales from the company President and CEO totaling nearly $10 million.
Overall, NXP insiders own 0.1% of shares.
The semiconductor producer is up 14% over the past year, underperforming both the chip sector and the market as a whole. Earnings and revenues are down about 5% in the past year, indicating a slow performance for NXP.
However, NXP has a 21% profit margin, which can be easily expanded with increased sales, and shares are cheaper than many semiconductor plays at 18 times forward earnings.
Action to take: Investors may like shares here, given their recent 20% slide in just the past few weeks. There is some technical support in the low $230 area where shares are trading now, and if that holds, the stock could quickly rebound.
Plus, at current prices, NXP pays a 1.7% dividend.
For traders, the September 20 $260 calls, last trading for about $5.50, could see high double-digit returns on a rebound for shares. Traders may want to use any relief rally day for the markets to take profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Consumer goods company Procter & Gamble (PG) is up 7% over the past year, underperforming the market amid fears of a consumer spending slowdown. One trader is betting on a rally higher in the weeks ahead.
That’s based on the August 30 $175 calls. With 24 days until expiration, 15,722 contracts traded compared to a prior open interest of 143, for a 49-fold rise in volume on the trade. The buyer of the calls paid $0.91 to make the bullish bet
Procter & Gamble shares recently traded for about $170, meaning shares would need to rally by $5, or about 3%, for the option to move in-the-money.
Shares just hit a new 52-week high of $170.92, so the stock would need to continue trending higher.
The company has had a lackluster year, with revenues declining 0.1% and earnings dipping by 7.3%.
Action to take: With P&G shares trending higher and breaking to new highs, shares make sense as a momentum play now. The company’s defensive nature in a slowing economy could allow it to hold up better than other stocks.
At current prices, shares pay a 2.4% dividend. P&G has a strong history of dividend growth.
For traders, the August $175 calls are aggressive, with just a few weeks to play out. But shares could continue higher from here, allowing the option to deliver high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
When stocks pull back, the first instinct is to be cautious, if not fearful. With markets down significantly from their July highs and even down over the past month, fear is creeping up.
However, the market volatility index sits near 20. That’s a level that typically separates a minor and necessary pullback from a bigger crisis. Seasonally, it’s not yet time for a bigger market decline.
That means investors have a chance to buy into this pullback. And they should target great companies with strong earnings. Those are the firms that can rebound strongly in the coming weeks.
One company that’s had a steep pullback is Chipotle Mexican Grill (CMG). Since June, shares are down over 20%.
However, Chipotle has continued to remain a high growth play in the restaurant sector, with earnings up 33% in the past year alone. And they continue to see strong same-store sales, even as consumers have gotten more cautious about dining out.
Action to take: Chipotle shares look ready to break higher following their steep drop over the past few weeks. Investors can likely see low double-digit returns over the coming months from an oversold rebound.
For traders, the September 20 $60 calls, last trading for about $0.70, can see high double-digit returns depending on how high shares move over the rest of the summer.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Richard Anderson, a director at Norfolk Southern Corp (NSC), recently bought 2,000 shares. The buy increased his stake by 200%, and came to a total cost of $494,960.
Insiders were previously buyers in June, when a company director bought 2,000 shares for $438,500. And a cluster of company directors bought in May, with the largest buy coming to just under $1.25 million. Year-to-date, there have been only two insider sales, one of which occurred following the exercise of stock options.
Overall, Norfolk Southern insiders own less than 0.1% of shares.
The railroad network is up 9% over the past year, far lagging the returns of the overall stock market. Earnings soared 107% on better cost containment measures and slightly higher rail traffic, but overall revenues grew by a mere 2%.
Even with that lackluster performance, railroads are an oligopoly, and regionally tend to be a monopoly investment. Plus, the stock has started an uptrend since the end of June, and could be on track to retest its old 52-week highs by the end of summer.
Action to take: Shares are reasonably priced at 21 times forward earnings. NSC also pays a 2.2% dividend, slightly above its five year average yield just under 2%.
For traders, the uptrend could bode well for the September $260 calls. Last trading for about $3.40, the calls could see high double-digit returns on a continued rally higher over the summer.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Offshore oil and gas services company Transocean (RIG) is down over 30% in the past year. One trader is betting shares will stabilize and potentially even head higher through the end of 2026.
That’s based on the December 2026 $3.00 calls. With 865 days until expiration, 10,699 contracts traded compared to a prior open interest of 128, for an 84-fold rise in volume on the trade. The buyer of the calls paid $3.15 to make the bullish bet.
Transocean shares trade for about $5.50, meaning that the options are already about $2.50 in-the-money. Transocean is closer to its 52-week low of $4.45 than its 52-week high of $8.88.
Shares tend to move heavily based on the price of oil, which has been rangebound over the past year.
Transocean has struggled with profitability in this environment, losing $349 million over the past 12 months. Revenues have moved higher by 18%, but the costs of offshore servicing have weighed on profitability.
Action to take: Investors who believe oil prices will see a big jump higher may like shares here. The company’s moderate debt load and exposure to the offshore oil space will pay off best in an environment of soaring oil prices.
For traders, at least one such jump higher in oil is likely over the next 28 months, which is why the December 2026 calls could perform well. Traders can likely see high double-digit returns or better, and currently stand to lose little given how far in-the-money the options are.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
This latest earnings season has given investors more insight into the roll out of AI technologies. Some companies are able to show big revenues and profits from rolling out AI. Others are starting to show signs of stalling out, slowing down, or simply not growing as fast as expected.
Either way, that’s creating an opportunity for investors to separate great companies from the mediocre ones. And to determine which companies are best likely to rally in the challenging months ahead.
One big winner is chipmaker Advanced Micro Devices (AMD). They’re the second-best player in the space right now, and they just reported great earnings with their data center chip sales more than doubling.
Those earnings have helped shares break out of a six-month low, and a further upside looks likely in the months ahead.
AMD remains down nearly 33% from its March high, although it is still up 27% over the past year. Shares now trade for about 40 times forward earnings. That may sound expensive, but earnings have surged 880% in the past year and still remain strong.
Action to take: Investors may like shares here, as they likely have a sizeable upside in the months ahead. AMD does not currently pay a dividend.
For traders, the December $190 calls, last trading for about $5.25, could see high double-digit returns or better if AMD continues to surge from here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
William Jurgensen, a director at Lamb Westin Holdings (LW), recently bought 10,000 shares. The buy increased his position by 6%, and came to a total cost of $554,291. He was joined by another director who bought 5,000 shares, at a cost of $277,476.
These are the first insider transactions of 2024. The last insider activity was last October, with a buy for 3,000 shares. Going further back in 2023 and 2022, insiders were more likely to be sellers.
Overall, Lamb Westin insiders own 0.7% of shares.
The producer and seller of frozen potato products is down 42% over the past year.
Revenues are down about 5% over the past year, as consumers have cut back on spending, even on grocery staples, amid higher prices. Lamb Westin has also seen earnings collapse by 74%.
Despite that drop, shares trade at 15 times forward earnings, and has pushed the company’s dividend up to 2.4% compared to a five-year average yield of about 1.2%.
Action to take: Given the steep drop in shares, reasonable valuation, and insider buying now, shares are a speculative buy here, with an eye towards low double-digit returns by the end of the year, including the dividend.
For traders, with shares ready to tend higher, the December $70 calls, last trading for about $2.55, could see mid-to-high double-digit returns. That’s no small potatoes.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Electric and gas utility company Public Service Enterprise Group (PEG) is up 23% over the past year. One trader is betting the utility will trend even higher in the second half of the year.
That’s based on the December 20 $82.50 calls. With 140 days until expiration, 7,000 contracts traded compared to a prior open interest of 113, for a 62-fold rise in volume on the trade. The buyer of the calls paid $3.40 to make the bullish bet.
PEG shares recently traded for about $80, so shares would need to rally by $2.50, or about 3.1%, for the option to move in-the-money.
With the stock breaking higher and hitting new all-time highs, a further move higher in the coming months looks likely.
The utility has struggled in the past year, facing a 27% decline in revenues. Earnings are also off by nearly 60%. While earnings have been a miss, revenues are rising year-over-year, which may help drive the stock price higher.
Action to take: Shares are trending higher, and likely have more returns in the months ahead. Buyers of shares here can see low double-digit returns. At current prices, PEG pays a 3.1% dividend.
For traders, the December $82.50 calls have plenty of time to play out, and are likely to move in-the-money in the months ahead. Traders can likely nab high double-digit returns, a fantastic return for a utility stock.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Earnings season is underway. And this quarter, companies that miss on expectations are getting hit harder than average. However, companies that beat expectations are being rewarded above average.
And for companies that aren’t only beating on earnings, but are raising their expectations for the full-year, that trend is even better. As investors demand to see results from companies this quarter, those who can deliver are in great shape.
That includes payment company PayPal (PYPL). Shares popped higher after the company beat on earnings and raised full-year guidance.
However, PayPal shares are still down over 20% in the past year, as investors have piled into larger tech names more focused on AI. That’s despite posting reasonable growth, with revenues up 10% over the past year and earnings up 12%.
At current prices, PayPal is almost a value play, with shares trading near 14 times current and forward earnings.
Action to take: With their low valuation and earnings beat, PayPal may finally be ready to break higher. Today’s buyers can likely see double-digit returns by the end of the year, especially if earnings continue to impress.
For traders, the November $70 calls, last trading for about $3.15, could see mid-to-high double-digit returns on a follow-up rally to the earnings report in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
For nearly 18 months, big-cap tech stocks have dominated the market. Most stocks have traded flat or even declined over that time. But in the past few weeks, tech stocks have pulled back, but other stocks have started to show signs of life.
Given how long the big tech outperformance lasted, there’s more room to run higher. Even for stocks that have already had some big jumps over the past few weeks.
That includes industrial conglomerate 3M (MMM). Shares soared over 20% on Friday, following earnings results, which were far better-than-expected. With growth trending higher, shares can continue off this recent strength.
3M shares still trade at a discount to the overall market, at about 17 times forward earnings. 3M is coming off a 12-year period of flat revenue growth, so the push for growth now could mean far more upside for shares.
Action to take: Shares are in an uptrend, and now making new 52-week highs. 3M also pays a 2.7% dividend at current prices. While 3M had to reduce its dividend last year to preserve cash, the push towards higher profits now puts them on a path to raise the payout again.
For traders, there’s likely more upside ahead. The January 2025 $140 calls, last trading for about $5.00, can likely see high double-digit returns from here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
William Johnson, a director at United Parcel Service (UPS), recently bought 5,000 shares. The buy increased his position by over 1,000%, and came to a total cost of $643,025.
This is the second buy from insiders this year, following a 1,400 share buy from another director for just under $200,000 back in February. Going further bank, UPS insiders were more likely to be sellers of shares, largely following the exercise of stock options.
Overall, UPS insiders own less than 0.1% of shares.
The shipping and logistics giant is down 32% over the past year. That’s in-line with the company’s 33% drop in earnings amid higher operating costs. Revenues also decreased by 1% at UPS over the last 12 months.
Even with that decline, shares are reasonably valued at 17 times earnings. Global shipping is an oligopoly market, with just a few major players.
Action to take: Shares have been generally declining over the past year, and recently hit a new 52-week low. While UPS now pays a 5.1% dividend, patient investors may want to hold off on buying a position until shares retest the recent low under $125.
For traders, the October $125 puts, last trading for about $3.80, could see mid-double-digit returns. Markets are seasonally weak in September and October, and the stock’s downtrend points to further gains with a put option trade.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Drug manufacturer Pfizer (PFE) is down 16% over the past year, but shares have been in an uptrend since April. One trader sees shares trending higher through next spring.
That’s based on the March 2025 $34 calls. With 234 days until expiration, 9,332 contracts traded compared to a prior open interest of 252, for a 37-fold rise in volume on the trade. The buyer of the calls paid $1.48 to make the bullish bet.
Pfizer shares recently traded for just under $31, so they would need to rise by $3, or just under 10%, for the option to move in-the-money. The strike price is well under Pfizer’s 52-week high of $37.19.
Pfizer is coming off a rough year, with earnings down 43% and revenues off by 20%. The company is working on a new pipeline of drugs to replace the lost income from declining Covid-related treatments.
Following this underperformance, Pfizer trades at 13 times forward earnings.
Action to take: Investors may like shares here, as they’re cheap, and in an uptrend. Shares can likely see double-digit returns through the end of the year. Pfizer also pays a 5.6% dividend at current prices.
For traders, the March 2025 $34 calls have plenty of time for a long-term uptrend to play out. At their current prices, the calls can likely see high double-digit returns or better in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Usually, companies have to increase their sales to increase their revenues. However, companies that can add new features and services can increase their revenues. Even if they don’t have additional sales or customers either.
In an industry that’s built on such add-ons, companies that have offered low-cost frills have built a niche. But having additional add-ons can allow them to continue claiming a cost advantage, while also offering a higher-end experience.
That’s likely the move behind Southwest Airline’s (LUV) decision to abandon its open seating model and move to assigned seating.
The low-cost airliner beat earnings expectations as well, but the potential increased revenue from higher seat fares could mean far more growth for the company in the quarters ahead.
Southwest shares are down 15% over the past year, even with revenues up 11%. Shares are a bit pricey, trading at over 40 times earnings, but at about 27 times future earnings.
Action to take: Southwest shares have flatlined over the past month, but the earnings beat and new business plan could mean shares break higher over the months ahead.
At current prices, Southwest also pays a 2.7% dividend.
For traders, the December $30 calls, last trading for about $2.05, could see high double-digit returns or better in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
William Rogers, CEO of Truist Financial Corp (TFC), recently bought 57,300 shares. The buy increased his stake by 5%, and came to a total cost of $2,518,908.
The CEO was the last buyer of shares with a 10,000 share buy in October 2023, at a cost of $280,480. There were two additional insider buys from directors last year, with the largest buy for just under $500,000. There has been just one insider sale this year.
Overall, Truist insiders own 0.3% of shares.
The regional bank is up 36% over the past year, nearly twice the return of the S&P 500. That’s in spite of the bank’s earnings dropping by 31%.
However, even with that loss, Truist still looks like a relative value. That’s because shares trade at 12 times forward earnings, a significant discount to the overall market.
Plus, Truist trades right at its book value, a sign that shares are still on the side of being fairly valued.
Action to take: With shares trending higher and the stock still on the value side, there may be more upside for investors here. Truist shares also pay a 4.8% dividend at current prices.
For traders, shares are touching on 52-week highs. The October $45 calls, last trading for about $1.90, are at-the-money, and could deliver mid-double-digit returns from here over the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Space-based cellular broadband network AST SpaceMobile (ASTS) is up 240% over the past year. One trader is betting that shares will continue higher through the end of summer.
That’s based on the September 20 $22.50 calls. With 52 days until expiration, 6,160 contracts traded compared to a prior open interest of 103, for a 60-fold rise in volume on the trade. The buyer of the calls paid $1.40 to make the bullish bet.
ASTS shares recently traded for about $16.50, right near their 52-week high, meaning shares would need to rally by $6, or over 36%, for the option to move in-the-money. Shares have been trending higher, and recently hit a new 52-week high.
The company is still in its early stages and is far from profitable, losing over $90 million overall last year. Revenues also remain challenging, with ASTS barely reporting any over the last year.
Action to take: With ASTS launching commercial satellites, they’re still building out their network. The company can turn to profitability in time. The uptrend in shares is likely to continue at this early stage.
For traders, the September $22.50 calls are aggressive, but could still see high double-digit returns over the coming months. Shares have more than tripled since May, and have had a few periods of consolidation along the way.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
When investors expect a stock to grow like gangbusters, any sign of slowing growth can pose problems. But many companies offer decent growth right now, but not necessarily exceptional growth. Such companies can likely deliver strong returns, at least for investors who are patient over time.
That extends to growth stocks. AI is a trend that will take years to play out, much like the rollout of the internet. Investors who are focused on the fastest-growth stocks now are getting hit hard in a pullback.
But for companies that are taking a slow-and-steady approach to growth, like International Business Machines (IBM), the AI trend is pointing to further growth.
The company just beat revenue expectations thanks to software and their AI work. That’s bucking the overall tech trend this earnings season amid some early misses.
Even with shares up 30% over the past year, earnings are up by 73%, suggesting far more upside ahead for IBM shares.
Action to take: Shares likely have some room to trend higher in the months ahead, especially as shares trade at just 18 times forward earnings.
Today’s buyers can also lock in a 3.6% yield on shares.
For traders, the October $200 calls, last trading for about $4.65, could see high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Gregory Shepard, a major holder at Atlas Energy Solutions (AESI), recently bought 3,248 shares. The buy increased his holdings by less than 1%, and came to a total cost of $70,417.
He was a buyer earlier in July for 30,013 shares, paying just over $588,255 to do so. And he made two purchases in June for just under $1.5 million. Going further back, insiders, largely major shareholders, were likely to be sellers, not buyers of AESI.
Overall, Atlas Energy insiders own 42.7% of shares.
The oil and gas equipment services company is up less than 5% over the past year, far underperforming the overall stock market. However, that’s in-line with energy prices, which have run largely flat.
Atlas has had a mixed year operationally. Earnings have slid by 58%, but revenues are up by over 25%.
Atlas trades at 12 times earnings, making shares significantly cheaper than the overall market.
Action to take: Investors may like shares in the low $20 range or under, which is a sufficient pullback from the 52-week high near $25. At current prices, Atlas pays a 4.3% dividend, and likely has more upside that will be tied to rising energy prices.
For traders, the October $22.50 calls, last trading for about $0.65, could see high double-digit returns in the coming months. The option is priced midway between current prices and the 52-week high, so plays well as a rebound trade.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Apparel manufacturer V.F. Corporation (VFC) is down 17% over the past year and trending lower. One trader sees a further decline in the weeks ahead.
That’s based on the August $15.50 puts. With 21 days until expiration, 5,237 contracts traded compared to a prior open interest of 163, for a 32-fold rise in volume on the trade. The buyer of the puts paid $0.89 to make the bearish bet.
VFC shares recently traded for about $16, making this an at-the-money trade. Shares are well off their 52-week low of $11 per share set back in May, but have started to show signs they’re ready to trend lower.
VFC lost over $950 million last year, and managed to see revenues drop by 13%. The company cut its dividend in half last year, and still pays out more than 5 times its earnings, suggesting a further cut or elimination of the dividend is likely.
Action to take: Shares have recently had a strong bounce higher, but look overbought in the short-term. Interested investors may be able to get a better price for shares in the months ahead given the likely weakness underway.
For traders, the August $15.50 puts are well positioned for a quick drawdown over the coming few days. The option can likely see high double-digit returns or better depending on the extent of the selloff.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
During a market boom, it’s tempting to start buying into more speculative companies. While that can potentially mean bigger returns, it also increases the risks. Conversely, companies that have a conventional line of business can continue to grow, even if they also invest in more speculative endeavors.
Right now, many companies that have been dabbling in new technologies are seeing lower-than-expected demand. But as long as their core business is strong, shares should continue to rise.
For instance, demand for electric vehicles has not met some of the bullish expectations from a few years back. But automakers selling traditional gas-powered cars continue to fare well.
That includes global sales giant General Motors (GM). The carmaker just reported better-than-expected earnings, and even raised their guidance.
Shares declined on the news, pulling back from near 52-week highs. That could create a buying opportunity here, especially as GM trades at less than 6 times earnings right now.
Action to take: GM is still in a long-term uptrend, and will likely trend higher in the coming months. Shares also pay a dividend just shy of 1.0% at current prices.
For traders, the long-term uptrend makes the post-earnings dip a buying opportunity. The January 2025 $50 calls, last trading for about $2.60, could see high double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Andy Waters, an EVP at Community Trust Bancorp (CTBI), recently bought 10,000 shares. The buy increased his stake by 71%, and came to a total cost of $322,700.
This marks the first insider buy since January, when several executives bought shares. That includes a 10,033 buy from another EVP, for just over $324,000, and a director bought 2,129 shares for $84,205. There have been a few inside sales as well, but buyers have far outnumbered sellers over the past two years.
Overall, CTBI insiders own 3.2% of shares.
The Kentucky-based regional bank is up 34% over the past 12 months, following the banking crisis that knocked many bank stocks down last spring.
CTBI has remained profitable even with high interest rates and low consumer banking demand over the last year. Earnings rose by 1%, and revenues inched higher by 6%.
Action to take: CTBI trades at a reasonable 11 times earnings, and could see those earnings improve as interest rates come down later this year.
Plus, at current prices, CTIB also pays a 3.7% dividend, offering further returns for today’s investors.
For traders, options are somewhat limited. The December $50 calls are already slightly in-the-money. Last trading for about $2.55, a rally through the end of the year could see a high double-digit percentage return on the trade.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Aerospace and airplane component manufacturer GE Aerospace (GE) is up over 70% in the past year. One trader sees further gains in the weeks ahead.
That’s based on the August 16 $200 calls. With 22 days until expiration, 10,2298 contacts traded compared to a prior open interest of 107, for a 96-fold rise in volume on the trade. The buyer of the calls paid $0.31 to make the bullish bet.
GE Aerospace shares recently traded for about $174, meaning the stock would need to rise by $26, or 15%, for the option to move in-the-money.
The move is aggressive, but possible given that the company just reported strong earnings and surging demand for aftermarket parts, sending shares to a new 52-week high.
GE Aerospace is coming off a mixed year. Earnings are significantly lower, largely from the overall GE spinoff. But revenues for eh aerospace division are up 11%.
Action to take: Shares are surging higher as a momentum trade. Today’s buyers can likely see double-digit returns from here in the coming months, as a speculative trade. GE Aerospace also pays a 0.7% dividend.
For traders, the August $200 calls are aggressive, as they have just a few weeks to play out. The trade can likely see high double-digit or even triple-digit returns, given its low cost.
But the trade is unlikely to move in-the-money, so traders should look to take quick profits in the coming days.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Last week’s market selloff was heavy on tech. Given how tech stocks tend to outperform the market, their underperformance in a selloff makes sense. Investors patient enough to wait for a 10-20% pullback in industry-leading tech stocks are often rewarded for their performance afterwards.
Getting a reasonable entry price on a high-growth stock can lead to better returns than just buying at the top, or just holding indefinitely.
With last week’s selloff hitting the chip space rather hard, semiconductor stocks might be near an entry point for aggressive buyers.
Currently, the chip stock with the top investor sentiment is Broadcom (AVGO). Given their diversified mix of semiconductor devices, it’s easy to see why.
Currently, Broadcom shares are up about 75% over the past year, lagging some of the other big chip names. But with earnings soaring by 173%, there’s more room to run, making this an ideal chip stock to buy during market dips.
Action to take: Investors may like a small position here, and should keep an eye out to buy more shares following any 15% drop from a recent high. At current prices, Broadcom also pays a 1.3% dividend.
For traders, the January 2025 $200 calls, last trading for about $6.20, could see mid-to-high double-digit returns through the end of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Persio Lisboa, a director at J.B. Hunt Transportation Services (JBHT), recently bought 600 shares. The buy increased the director’s stake by 20%, and came to a total cost of $98,082.
This is the first insider buy since April, when the company CEO bought 6,200 shares, paying just under $999,000 to do so. And another company director bought shares in March. Otherwise, company insiders have largely been sellers over the past two years, and usually following the exercise of stock options.
Overall, JBHT insiders own 19.8% of shares.
The trucking company’s shares have declined 17% over the past year, compared to an overall gain of 21% for the S&P 500 index. Investors have been wary of declining demand for transportation services.
That’s reflected in JBHT’s financials. Earnings are down 28% over the last year, and revenues are off by 7%. However, a few competitors have closed operations over the last year, and one industry analyst sees the space on the cusp of recovery.
Action to take: If JBHT can see its earnings and revenue rise again, shares can likely trend higher. Shares also pay a 1.1% dividend at current prices.
For traders, shares have started to trend higher in recent weeks from near their 52-week lows. If it’s the start of a new bull market, a call option trade could fare well. The November $180 calls, last trading for about $5.00, could see mid-to-high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Copper producer Freeport-McMoRan (FCX), is up 9% over the past year, slightly lagging the overall market. One trader sees shares trending higher into the autumn.
That’s based on the October 18 $55 calls. With 86 days until expiration, 5,020 contracts traded compared to a prior open interest of 182, for a 28-fold rise in volume on the trade. The buyer of the calls paid $0.82 to make the bullish bet.
Freeport shares recently traded for about $46, so they would need to rise by $9, or nearly 20%, for the option to move in-the-money. The strike price is right near the stock’s 52-week high of $55.24.
Freeport has had a mixed year, with earnings off by 30%, even as revenues rose by 17%. Copper prices have held up over the last year amid increased spending on construction and infrastructure projects, a trend that looks likely to continue.
Action to take: Freeport shares look attractive here after a recent sharp pullback. At current prices, shares also pay a 1.3% dividend. Investors may want to build a partial stake now, and take advantage in the volatility of commodity stocks to add to that position during future pullbacks.
For traders, the October $55 calls are aggressive, but inexpensive enough to see high-double-digit returns, or even into the triple-digit if copper stocks soar in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Markets don’t just react to events. They often overreact. That’s why when a short-term problem flares up and goes away, the market tends to react sharply, then revert back to whatever it was doing before.
Last week saw the largest IT outage in history. A security software update caused a number of systems to slow down, crash, or otherwise stop responding altogether. However, the world was largely able to move on and get its work done.
However, the cybersecurity stock involved, CrowdStrike (CRWD), took an 11% drop on the news. This looks like a classic example of a short-term problem that’s easily solved. That means the drop in shares could be a buying event.
Even with its recent drop, CrowdStrike has more than doubled in the past year. Revenues are up by 33%, and are unlikely to take a hit from this latest event. Earnings have fared even better, soaring 8,600%.
Action to take: CrowdStrike shares will likely recover in the weeks ahead, as systems get back to normal. That could mean a short-term, low double-digit return for today’s buyers of shares.
For traders, the November $330 calls, last trading for about $27.00, could see high double-digit returns on a bounce higher in shares over the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Investors must often contend with different market cycles. Even in a bull market, some sectors will lead at times. Tech has been leading for some time. Now, its returns have started to slow. But other sectors are starting to join the market rally.
That’s good news, as it opens up new investment and trading opportunities alike. Many sectors are great at outperforming the market over time, even if their monthly returns aren’t anything special.
For instance, health insurance companies tend to beat the market over time. But the key word is over time. That could be good news for companies like UnitedHealth (UNH), which just reported better-than-expected earnings.
UnitedHealth has traded flat over the past year, largely missing the most recent market rally. But shares trade at a reasonable 19 times forward earnings. And love ‘em or not, health insurance companies are here to stay – and they’re giant cash-generating businesses.
Action to take: Investors may like shares at current prices, as the response to earnings suggests an uptrend. UNH is also a dividend grower, with a starting yield of 1.6% at current prices.
For traders, the September $580 calls, last trading for about $10.85, could see mid-double-digit returns on a continued rally in shares over the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Willie Chaing, a director at Delta Air Lines (DAL), recently bought 10,000 shares. The buy increased his position by 71%, and came to a total cost of $438,967.
Chaing was the last buyer with a 10,000 share buy in May, representing an initial stake. Otherwise this year, a number of company executives have been sellers of shares. A director was a buyer of 20,000 shares in October last year, marking the last insider buy.
Overall, Delta Air Lines insiders own 0.3% of shares.
The airline operator is down about 6% over the past year. Shares recently fell following earnings. Rising travel demand is eating into, rather than increasing, profitability.
However, even with that recent dip, shares are still priced at less than 7 times earnings. That’s about one-third the valuation of the overall market. And energy prices have been tame, which can be a massive variable cost.
Action to take: Delta can likely find a way to improve profitability as it continues to increase its services. Shares have still been trending higher since late October, and the recent pullback could mean a new buying opportunity.
For traders, the October $50 calls, last trading for about $1.16, could see mid-to-high double-digit returns on a rebound in shares over the coming weeks. Traders likely won’t need to hold the option until expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Computer manufacturer Dell Technologies (DELL) is up 155% over the past year as surging AI demand is boosting computer sales. One trader sees a pullback ahead over the coming weeks.
That’s based on the September 20 $105 puts. With 64 days until expiration, 4,512 contracts traded compared to a prior open interest of 192, for a 24-fold rise in volume on the trade. The buyer of the puts paid $1.90 to make the bearish bet.
Dell shares recently traded for about $135, so shares would need to drop by $30, or over 22%, for the option to move in-the-money.
Given that Dell already peaked at $179.70 in late May, a further downtrend could push shares down quickly.
However, any drop in shares could prove short-lived. Dell is priced at 18 times forward earnings, so is hardly expensive by any means. Plus, earnings have jumped nearly 65% in the past year, a healthy sign for long-term gains.
Action to take: Investors interested in shares may be able to get them slightly cheaper in the coming weeks, as they appear to be trending lower. At current prices, Dell pays a 1.3% dividend, but patient investors could get a higher yield.
For traders, the September puts are well positioned for a brief downside in both Dell shares and the market in the coming weeks. Traders can likely see mid-to-high double-digit returns depending on the extent of any pullback.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Fees, surcharges, fines, taxes, and other add-ons are a perpetual annoyance. However, for investors, companies that are able to charge extra fees, or increase their fees substantially over time, may be on to something.
That’s because companies that can charge more and still keep their customers are likely on track to perform well as a business. And that means investors should be able to see increasing profits and a higher share price over time.
With earnings season underway, a big way banks can earn big bucks is with increased fees. For investment bank Goldman Sachs (GS), those fees just increased by 21%. That’s thanks to rising market interest in mergers and acquisitions.
While the news was enough to send Goldman shares to an all-time high, the stock still trades at a reasonable 14 times forward earnings. Shares likely have further upside ahead with their current valuation and earnings beat, and with growing interest in dealmaking on Wall Street.
Action to take: Investors may like shares here, as they likely have more upside potential in the months ahead. Plus, at current prices, Goldman also pays a 2.3% dividend.
For traders, the September $525 calls, last trading for about $5.45, could see mid-double-digit returns from a continued trend higher over the rest of the summer.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Arctis Global, a major holder of Rekor Systems (REKR), recently added 2,275,000 shares to their position. The buy increased the fund’s holdings by 23%, and came to a total cost of $3,185,000.
This is the fund’s first buy since last August, when it picked up $1.16 million in shares. Otherwise, company executives have been buyers over the past year, including the company CEO. There have been no insider sales at Rekor over the last year.
Overall, company insiders own 6.4% of shares, and institutions own 61.2%.
The AI traffic management software company has seen shares lose 35% of their value in the past year. Despite working on an AI technology, it’s for autonomous driving, which is taking a backseat to large language models and other potential AI rollouts right now.
As an early-stage company, Rekor has been burning through cash, losing $52 million in the last year, even as it grew earnings by 58%.
Action to take: Rekor shares have started to trend higher in recent weeks, and may constitute a rebound play from here. However, the company’s cash burn could mean taking on more debt or issuing more equity within the year, which could cause shares to dive.
Traders can also play the current short-term uptrend. The November $2.00 calls, last trading for about $0.50, are an at-the-money trade, and could leverage further returns higher in shares over the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Oil and gas refining giant Valero Energy Corporation (VLO) is up 30% over the past year, slightly beating the S&P 500’s return. One trader sees shares trending higher through the end of the year.
That’s based on the December 20 $175 calls. With 156 days until expiration, 10,247 contracts traded compared to a prior open interest of 423, for a 24-fold rise in volume on the trade. The buyer of the calls paid $4.10 to make the bullish bet.
Valero shares recently traded for about $150, so they would need to rise by $25, or about 17%, for the option to move in-the-money.
That would be close to Valero’s 52-week high of $184.79, set back in April before a sharp downturn. Shares have started to trend higher in recent sessions.
At current prices, Valero is priced at 10 times forward earnings and just 0.4 times its price to sales. Energy prices have been somewhat down over the past few months, but oil has started to show signs of life again.
Action to take: Investors may like shares here, as the stock looks ready to continue trending higher and breaking the downtrend of the past few months. Valero also pays a 2.9% dividend at current prices.
For traders, the December $175 calls are reasonably positioned for a move higher, and could see mid-double-digit returns if shares continue their recent trend higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Earnings season for the second quarter of 2024 are underway. Earnings season gives individual stocks the most volatility, and for good reason. If traders are wrong about how a company’s performance is playing out, big moves can be made in shares.
Earnings season typically kicks off with data from the big Wall Street banks. They’ve seen extra scrutiny recently, thanks to the fact that inflation has remained high, as have interest rates.
Both tend to weigh on a bank’s profitability. While a bank is happy to lend at high rates, investors haven’t been interested. In turn, inflation remains stubbornly high. Yet banks are faring well in today’s challenging environment.
Banking giant JPMorgan Chase (JPM) took a slight hit on Friday after reporting reasonable results. But CEO Jamie Dimon also warned on inflation and interest rates remaining higher for longer.
Action to take: Dimon’s warning likely resulted in shares selling off needlessly. The bank is still reasonably valued at less than 13 times earnings. Plus, at current prices, shares also pay a 2.2% dividend.
For traders, shares will likely resume their long-term uptrend. The September $215 calls, last trading for about $2.80, could see mid-to-high double-digit returns in the months ahead. Traders may want to look to take quick profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Liberty 77 Capital LP, a major holder of Lions Gate Entertainment (LGF), continues to add to its stake. The fund recently bought 1,129,609 shares, increasing its holdings by 12%, at a cost of $9.95 million.
That follows up on three buys the fund made back in June. Going further back, between late 2022 and March 2024, company directors and insiders also bought shares. There have been no insider sales at Lions Gate over the past two years.
Overall, LGF insiders own 7.7% of shares, and institutions own 98.8% of shares.
The entertainment production business is up 7% over the past year, far lagging the overall stock market. That’s on par with media stocks in general, which have lagged other segments of the market over the past two years.
Lions Gate shares currently trade at 0.5 times their price to sales, and at less than 11 times forward earnings. Both valuations point to shares potentially heading higher over time.
Action to take: LGF shares have started to trend higher since hitting a 52-week low in early June. They are likely to trend higher from here, at least as a momentum play.
For traders, the December 2024 $10 calls, last trading for about $1.05, could see high double-digit returns in the months ahead if shares continue their current uptrend higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Silver producer Pan American Silver (PAAS) is up 51% over the past year, more than double the return of the S&P 500. One trader is betting that shares will continue higher over the coming weeks.
That’s based on the August $30 calls. With 31 days until expiration, 12,601 contracts traded compared to a prior open interest of 100, for a 126-fold rise in volume on the trade. The buyer of the calls paid $0.13 to make the bullish bet.
Shares recently traded for just under $24, right at their 52-week high.
For the option to move in-the-money, shares would need to rise another $6, or 25%. Such a move is a bit aggressive, but not impossible, in the span of a few weeks.
Commodity prices have held up well amid stubborn inflation, and appear to be in a longer-term uptrend.
Action to take: Unlike most gold stocks, shares haven’t flipped to profitability yet. But revenues are up 54% over the past year, and shares should continue to trend higher with commodity prices.
At current prices, Pan American Silver also pays a 1.7% dividend.
For traders, the August $30 calls are fairly aggressive. They could see high double-digit returns, if there’s a strong rally in the coming weeks.
Less aggressive traders may like the October $30 calls. They cost $0.55 at current prices, but have far more time for a big rally to play out.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Consumer spending has been slowing down for months. One recurring theme is that consumers are reluctant to buy given the rapid price inflation of the past few years.
With consumers holding back on spending, companies will have to find ways to lower prices or create new bargains to bring consumers back. Those that can get there first could stand to gain substantial market share, especially in the consumer-goods space.
One possible winner is PepsiCo (PEP). While the company’s second-quarter earnings indicated that sales were weak, Pepsi is planning on lower-priced offerings. That could help allay consumer worries.
And if Pepsi is the leader, the snack and beverage giant may reap bigger rewards than competitors.
Pepsi shares are down 12% over the past year, far lagging the overall market as consumer spending has slowed. Even in the struggling environment, revenues rose 2%, and earnings rose by nearly 6%.
Action to take: Investors may like shares at current prices. The drop in price has pushed Pepsi’s dividend to 3.3%, well over its historic average of 2.7%. And if the company can grow earnings and offset weak consumers, shares could be due for a relief rally.
For traders, shares recently started bouncing higher after hitting a 52-week low. The September $170 calls, last trading for about $2.10, could see high double-digit returns if shares continue to rise off this recent low.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Abidel Capital Advisors, a major holder of Appian Corporation (APPN), recently bought 610,22 shares. The buy increased the fund’s holdings by 3%, and came to a total cost of $18.94 million.
This is the fund’s first buy since April 2023. The fund even had a number of sales in late 2023 and early 2024, with the last sale occurring in February. A company director also bought shares this year in late May, picking up 11,000 shares for $308,000.
Overall, Appian insiders own 2.7% of shares, and institutions own 83.4% of shares.
The software infrastructure company has slid 36% over the past year, in contrast to the S&P 500’s 24% rise.
While Appian has not been profitable over the past year, lowing over $107 million, revenues are up 11%. And shares have started to trend higher since late June. That could allow it to move into profitability in the years ahead.
Action to take: With insiders buying and shares trending higher, Appian could be ready to see some market-beating returns as it makes up for lost ground over the past year. As a tech software play, shares will continue to remain volatile.
For traders, the November $40 calls, last trading for about $2.10, could see high double-digit returns if the current rally continues over the summer.
Traders will likely want to take profits going into the early autumn, as September and October mark weak months for stock returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Brazilian based digital banking platform Nu Holdings (NU) is up 62% over the past year. One trader sees further gains ahead for shares going into 2026.
That’s based on the January 2026 $17 calls. With 550 days until expiration, 25,163 contracts traded compared to a prior open interest of 264, for a 95-fold rise in volume on the trade. The buyer of the calls paid $1.67 to make the bullish bet.
Nu Holdings recently traded for about $13.25. Shares would need to rise by $2.75, or about 28%, for the option to move in-the-money.
Given that shares are in an uptrend and recently broke to a new 52-week high, such a move in over 18 months is likely.
Nu Holdings has performed well operationally. Revenues are up nearly 80% in the past year, and earnings are up 167%. If anything, the share price hasn’t appreciated enough relative to the company’s growth.
Action to take: Investors may like shares as a momentum trade here. There’s likely further upside if Nu Holdings can continue to grow its earnings. At present, shares do not pay a dividend.
For traders, the January 2026 $17 calls are well positioned for potential gains in the months ahead, and even into next year, if not early 2026. Traders can likely see high double-digit returns, but should look for signs of a reversal to take profits on any trade.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
While fears of fatigue in the AI space have grown in recent weeks, the start of earnings season is pushing that idea off, at least for now. That’s because AI-related companies are reporting strong earnings.
Even better, companies are reporting strong sales. Since earnings can be cleverly adjusted by accountants, sales indicate raw cash flow before any potential accounting shenanigans. And with sales still soaring in the chip space, the sector isn’t quite ready to trend back down yet.
Semiconductor manufacturer Taiwan Semiconductor (TSM) gave chip stocks a boost this week, allowing the markets as a whole to soar to new highs. TSM reported a surge in sales, indicating that the semiconductor trend isn’t over yet.
TSM shares are now up 79% over the past year. That’s not as steep as some other players. And with sales still surging, the stock isn’t too expensive at 30 times forward earnings.
Action to take: Investors may like shares here, as the price may rise significantly higher before the next potential pullback. TSM also pays a 1.3% dividend at current prices.
For traders, the September $210 calls, last trading for about $7.50, could see mid-double-digit returns over the coming months if shares continue their current uptrend.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Lawrence Cheng, a director at GameStop (GME), recently bought 4,140 shares. The buy increased his stake by 6%, and came to a total cost of $102,879.
Cheng was the last insider to buy, with a 10,000 share pickup back in April, paying just over $112,000. A few company insiders have been slight sellers of shares over the past few months. The highest share sale came in at $26 per share, even as shares have had a push to $60 per share.
Overall, GameStop insiders own 10.8% of shares.
The retail game outlet is up 5% over the past year. Shares have been increasingly volatile over the past few months, going from a low of $10 to a high over $60.
GameStop has been able to raise over $2 billion in cash, which now gives it a strong balance sheet with nearly no debt.
Action to take: While GameStop may issue more shares in the future and further dilute existing shareholders, doing so when prices surge can mean the company gets more valuable over time.
Long-term investors may be interested in shares on a drop under $20, as GME’s large cash position earning interest could turn the company profitable.
For traders, shares have gotten rangebound in the past few days in the mid-$20 range. The September $30 calls, last trading for about $4.20, could see mid-to-high double-digit returns on a rally in shares over the summer.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Investment bank Morgan Stanley (MS) is up 20% over the past year, slightly lagging the overall stock market. One trader sees shares heading far higher in the months ahead.
That’s based on the October $120 calls. With 98 days until expiration, 4,009 contracts traded compared to a prior open interest of 124, for a 32-fold rise in volume on the trade. The buyer of the calls paid $0.64 to make the bullish bet.
Morgan Stanley shares recently traded for about $103, meaning the stock would need to rise by $17, or about 17%, for the option to move in-the-money.
Shares are already breaking to new 52-week highs right now by clearing $103, so further upside in the coming weeks and months is possible. Currently, shares trade at 15 times forward earnings, a sign on the value side that shares could be poised to continue rallying.
Action to take: Investors may like shares here as a momentum play. With MS shares breaking higher, investors could likely see low-double-digit returns in the coming months. At current prices, Morgan Stanley also pays a 3.3% dividend with a history of growth.
For traders, the October $120 calls are somewhat aggressive, but could trade for a far higher price in the coming weeks, as shares are likely to continue their uptrend.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Somehow, the artificial intelligence trend is here to stay. Most tech trends often fizzle out somewhat quickly. But with many companies insisting that AI is the real deal, and investing accordingly, it’s clear we’re in the early stages of a long-term tech trend like the rollout of the internet, even if it will take some time.
One sign that we could see a continuation is that some major laggards in the AI space are now poised to take the trend further in the years ahead.
For instance, consumer tech giant Apple (AAPL) is on track to become the first U.S. company to hit a $3.5 trillion market cap. Shares have moved out of their funk following the company’s announcement of its AI plans.
However, the stock has still been a laggard. Apple is now up just 21% over the past year, a weak performance among the big tech names. And it’s even slightly underperforming the stock market right now.
It hasn’t helped that the company has stalled a bit in the past year, with revenues off by 4%, and earnings down by 2%.
Action to take: With Apple’s AI plan in place, it could be on track to be the leader in consumer AI tech. That makes shares worth picking up now. Apple also pays a 0.4% dividend, with a slight history of dividend growth.
For traders, the September $240 calls, last trading for about $5.55, could see mid-double-digit returns in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Eric Dyer, CFO of Tamboran Resources Corporation (TBN), recently bought 2,500 shares. The buy increased his stake by 4%, and came to a total cost of $60,000.
He was outdone by the company COO, who bought 15,000 shares, increasing his position by 17%, paying $360,000 for the stake. A company director also recently bought 8,300 shares, for just over $199,000. Insiders have been buyers since the company reorganized and listed on the Nasdaq.
Overall, company insiders own 0.2% of shares.
Since going public, shares of the oil and gas exploration giant are up 8.5%. Energy prices have been trending higher in recent weeks.
On a technical basis, commodities in general have started to show signs of strengthening after a recent selloff.
Tamboran’s focus on natural gas properties in Australia are well positioned for the growing Australian market, and for the potential to export to energy-hungry Asia.
Action to take: While there’s a limited operating history on the U.S. exchange, investors could fare well in the years ahead, as natural gas demand remains strong. Currently, Tamboran does not pay a dividend. That could change over time, given its strong earnings.
Options traders will need to look elsewhere in the energy space for now, as Tamboran’s limited operating history means that options don’t trade against shares yet.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Semiconductor inspection and metrology equipment producer Camtek (CAMT) is up over 307% in the past year amid surging interest in chip stocks. One trader sees shares trending even higher over the next few months.
That’s based on the November $135 calls. With 127 days until expiration, 5,050 contracts traded compared to a prior open interest of 122, for a 41-fold rise in volume on the trade. The buyer of the calls paid $18.86 to make the bullish bet.
Camtek shares recently traded for about $137, meaning the option is already about $2.00 in-the-money. It should head higher with a further price increase in Camtek.
Camtek sits right near its 52-week high of $140.50, and have nearly doubled since April.
Operationally, Camtek has seen revenues rise by 34%, and earnings are up by 44%. That’s lagging the share price appreciation, however, which has taken the stock to about 77 times earnings.
Action to take: Shares have become a momentum play at this point. They could see further upside ahead, but could also be suspect to a steep drop given their recent steep gain. Investors should look to exit at the first sign of trouble.
For traders, the November $135 calls could see mid-double-digit returns on a further move higher in shares. And if there is the start of a pullback, starting in-the-money should help avoid a loss.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
While the world is always changing, there are many cyclical trends that play out while that happens. Commodities move on a long cycle, but tend to have years of a bullish uptrends before years of pulling back.
It’s common for stocks to rise at the start of the year, then pull back a bit over the summer. This summer, one market sector that hasn’t gotten much interest is starting to go back to its historical trend.
That trend is the movie theater business. Box office numbers are trending up again. While not back to their 2019 peak, the strength at the box office could continue to benefit movie companies.
Among the movie-related stocks, media companies are still out of favor with the markets. But theater chains, such as Cinemark (CNK), could be a big winner over the coming months.
Shares are already up 34% over the past year, beating the overall market. But they’re also still cheap, at 14 times earnings. That suggests a momentum play higher from here.
Action to take: Speculative buyers may like Cinemark shares here. Shares don’t pay a dividend, but could deliver low-double-digit returns over the coming months.
For traders, the September $22 calls, last trading for about $1.55, could see mid-double-digit returns if box office trends continue to bode well over the summer blockbuster season.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Aphm Invest, a major holder of Noble Corporation (NE), recently added 300,000 shares. The buy increased the fund’s stake by 1%, and came to a total cost of $13.2 million.
This is the fund’s second buy of the year, following a 192,156 share pickup back in May, for just over $8.9 million. The company’s CFO also bought nearly 2,000 shares in March, for just under $96,000. Otherwise, most insiders have been sellers over the past two years.
Overall, Noble insiders own 21.8% of shares.
The oil and gas drilling operator is down about 5% over the past year.
That’s holding up slightly better than the rest of the energy sector, which has seen earnings growth collapse as energy prices have trended sideways for nearly two years now.
Meanwhile, Noble trades at 13 times earnings, a sizeable discount to the overall market.
Action to take: Energy prices look attractive for the long-term, although there will likely be some short-term pullbacks over time. Today’s buyers of Noble are getting a hefty 4.5% dividend, and can look to add to that position if energy prices drop.
For traders, shares are near the low end of their 52-week range, and look set to trend higher. The September $45 calls, last trading for about $2.00, could see mid-double-digit returns from a rally higher in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Canadian bank The Toronto-Dominion Bank (TD), is down nearly 10% over the past year as relatively high interest rates have weighed on loan growth. One trader sees shares trending higher into next year.
That’s based on the January 2025 $57.50 calls. With 191 days until expiration, 5,090 contracts traded compared to a prior open interest of 138, for a 37-fold rise in volume on the trade. The buyer of the calls paid $2.15 to make the bullish bet.
TD shares recently traded for about $55.50, meaning the stock would need to rise by $2.00, or about 4.5%, for the option to move in-the-money.
TD stock hit a 52-week low of $53.52 in June, and has started trending higher over the past few weeks.
The bank is still inexpensive, trading at about 9 times forward earnings. TD also trades at about 1.3 times its book value. That’s a bit pricey compared to a regional bank, but for a mega-bank, it’s still on the inexpensive side.
Action to take: Investors may like shares here, given that they’re still near their lows and in an uptrend. Share also pay a 5.4% dividend at current prices.
For traders, the January 2025 calls have ample time to play out. If shares trend higher over the next few months, the options stand to see mid-double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Is the economy turning over? It’s possible. Friday’s jobs data suggests that the slowdown is underway. And it may slide into a recession if left unchecked. That suggests that investors may want to lighten up on winning tech stocks.
It also suggests that better investment returns may come from more defensive stocks going forward. These are companies that can continue to grow their earnings steadily, even in a declining economy. The latest earnings report suggest that some defensive plays are better than others.
For instance, global beverage giant Constellation Brands (STZ), just reported mixed earnings. But shares quickly recovered their losses, and analysts remain bullish.
Constellation shares are now flat over the past year. The company’s brands should continue to hold up well, even in a slowing economy.
At current prices, shares trade for about 18 times earnings, a slight discount to the overall stock market.
Action to take: Investors may like shares at current prices as a long-term holding. While Constellation pays a 1.6% dividend, Constellation has a history of growing that payout over time.
For traders, the quick recovery in shares from mixed earnings suggests a bullish trend in place. The September $270 calls, last trading for about $4.80, could see mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Darin Harper, CFO at Dave & Buster’s Entertainment (PLAY), recently bought 13,578 shares. The buy increased his stake by 61%, and came to a total cost of $526,540.
This is the first insider buy since April 2023, when a company SVP bought 500 shares, paying just over $17,000. Otherwise, company executives and directors have largely been sellers of shares, nearly all sales occurring following the exercise of stock options.
Overall, Dave & Buster’s insiders own 1.6% of shares.
Dave & Buster’s shares are down nearly 15% over the past year, far underperforming the overall stock market.
However, earnings have slid by about 40%, but revenues are off by just 2%. If Dave & Buster’s can stabilize its costs, shares could move back to profitability.
At its current prices, share trade at about 10 times forward earnings, a substantial discount to the overall stock market.
Action to take: Shares have been pulling back since the spring, and are nearing a one-year low and area of key supports. The stock could potentially bottom out in a few weeks and trend higher over the last few months.
For traders, the October $40 calls, last trading for about $3.10, could see mid double-digit returns if shares bottom out and trend higher over the summer.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Bitcoin miner Core Scientific (CORZ) is up 194% over the past year. Shares have even held up as bitcoin prices have pulled back in recent months. One trader sees a potential decline over the coming weeks.
That’s based on the August 16 $8 puts. With 38 days until expiration, 9,141 contracts traded compared to a prior open interest of 225, for a 41-fold rise in volume on the trade. The buyer of the puts paid $0.40 to make the bearish bet.
Core Scientific shares recently traded just over $10, meaning the stock would need to decline by at least $2, or 20%, for the option to move in-the-money. Core remains close to its 52-week high of $10.70, set in mid-June.
Thanks to rising bitcoin prices over the past year, revenues are up nearly 49%. And shares are on track to trade at 20 times forward earnings, down from 77 times right now.
Action to take: With bitcoin prices pulling back, Core is likely to see a pullback as well. Investors interested in the crypto space should look for a sign of prices trending higher before getting into trades like Core.
For traders, the August $8 puts don’t have much time to play out. But they could see mid-to-high double-digit returns in the coming weeks, if there’s a further pullback in crypto prices.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Most tech trends go through the same phases. First, there’s initial skepticism about whether or not a trend will play out. Once it does start to show some promise, rapid gains are made. But when rapid growth can’t be sustained, prices come back down.
From there, companies that can continue to show real growth over time can lead to bigger profits. It may not be quick, but it can be rewarding.
Right now, EVs are on the outs with investors. The rapid growth trend of the past few years has stalled out. Those who want to own an EV already likely own one.
Plus, the high costs relative to a gas car, including charge time and limited range, have led many EV companies to struggle.
But for diversified automobile manufacturer Ford Motors (F), it’s a different story. The company’s hybrid and fully electric offerings continue to sell well.
Shares are still down 14% over the past year, even as Ford’s valuation has dropped to just 6 times forward earnings.
Action to take: Investors looking for an EV play may perform well with Ford rather than the volatility from other EV offerings. Ford also pays a 4.1% dividend at current prices.
For traders, the September $13.82 calls, last trading for about $0.34, could see high double-digit returns or better on a trend higher in the weeks ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Robert Swan, a director at Nike (NKE), recently bought 2,941 shares. The buy increased his stake by 15%, and came to a total cost of $226,516.
Swan was the last buyer in October, picking up 13,072 shares for just over $1.25 million. Since then, a few company insiders have been sellers, largely following the exercise of stock options. Going back over the past two years, a similar trend of large insider sales relative to buys continues to hold up.
Overall, Nike insiders own 1.4% of shares.
The athletic apparel and shoe company is down 28% over the past year on concerns over a slowing consumer trends on items such as clothing and shoes. Nike has seen revenues drop by nearly 2%. However, earnings have also jumped 43%.
Meanwhile, shares of the powerhouse brand trade at 20 times earnings. While not a huge discount, its’ a reasonable value for a company with its global presence.
Action to take: Shares look oversold following a recent decline, and could see a reversal trend higher over the coming months. Investors may be able to see double-digit returns, while also collecting a dividend whose yield has been pushed up to 2%.
For traders, the September $80 calls, last trading for about $1.60, could see high double-digit returns over the coming weeks on a share rebound.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Oil and gas exploration company Permian Resources (PR), is up 59% over the past year, bucking the overall sideways or down returns for energy stocks. One trader sees a potential pullback over the summer.
That’s based on the September 20 $15 puts. With 74 days until expiration, 1,560 contracts traded compared to a prior open interest of 100, for a 16-fold rise in volume on the trade. The buyer of the puts paid $0.65 to make the bearish bet.
Permian shares recently traded for about $16.80. So shares would need to decline by about $0.80, or just under 5%, for the option to move in-the-money.
Permian is close to its 52-week high of $18.28, but is starting to trend higher once again. It’s easy to see why, with earnings up nearly 44% and revenues jumping by 102% over the past year.
Even with that move higher, shares are valued at 10 times forward earnings, less than half the valuation of the overall stock market.
Action to take: Investors may like shares here, as they’re likely trending towards retesting their prior 52-week highs. Plus at current prices Permian pays a solid 4.8% dividend.
For traders, the September $15 puts look unusual as shares are back in an uptrend. A better play may be the October $18 calls. Last trading for about $0.65 they could see high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Stocks have started to trade sideways in recent weeks. That’s not a huge problem with markets at all-time highs. The longer stocks trade sideways, the more likely they’ll have a strong breakout when that trend ends.
So far, signs point to a bullish breakout. The economy remains strong, if slowing. Inflation is coming down, and investors are looking forward to a decline in interest rates. That’s a good combination for consumers and companies alike.
That’s why investors may want to buy the ever-so-slight dip in Chipotle Mexican Grill (CMG). Shares just recently split for the first time, making them far more affordable for investors and traders.
Meanwhile, in today’s consolidating market, they’re down about 10% from their recent peak.
Chipotle has held up well in a rough environment for consumer spending. Revenues are up 14%, and earnings are up 23%.
While consumers may be cutting back, Chipotle may benefit from that trend compared to higher-priced offerings. That should allow shares to break their sideways trend to the higher side.
Action to take: Investors may like shares here in correction territory from their recent highs. Shares can likely resume their long-term uptrend in the months ahead.
For traders, the September $65 calls, last trading for about $2.40, could see mid-to-high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Katherine Losness-Larson, a SVP at Hormel Foods Corp (HRL), recently bought 830 shares. The buy increased her stake by 4%, and came to a total cost of $25,000.
This is the first insider buy since September, when another SVP bought 1,454 shares, paying just over $54,000 for the stake. Otherwise, insiders have been slight sellers of shares overall, with a mix of option exercises and traditional sales. And both executives and directors have been sellers.
Overall, Hormel insiders own 0.2% of shares.
The packaged food producer has declined about 25% in the past year. That’s a worse return than the company’s operations, which saw a 3% dip in revenues and a 13% decline in earnings.
Consumers have become more wary about food spending in light of recent inflation. Packaged food products are seeing a decline in demand as prices have jumped higher in recent years.
However, at current prices, Hormel now trades at 18 times earnings. And the worst of the inflation shift may be over.
Action to take: Investors may like shares here as a rebound trade in the months ahead. At current prices, Hormel also pays a 3.7% dividend.
For traders, the September $33 calls, last trading for about $0.40, could see high double-digit returns or better on a rally in shares over the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Pharmaceutical giant Pfizer (PFE) is down 23% over the past year. One trader sees further weakness ahead for shares in the coming weeks.
That’s based on the August 2 $26 puts. With 28 days until expiration, 15,300 contracts traded compared to a prior open interest of 630, for a 24-fold rise in volume on the trade. The buyer of the puts paid $0.26.
Pfizer recently traded for about $28, so shares would need to drop nearly $2, or nearly 7%, for the option to move in-the-money.
Pfizer already trades closer to its 52-week low of $25.20. And the company reports earnings on July 26, so a miss there could easily send the put option trade in-the-money.
Over the last year, Pfizer’s earnings slid by 44%, and revenues are off by 20%. While Pfizer may be able to add new drugs to its pipeline, that process will take time.
Action to take: Interested investors should hold off for now. At current prices, Pfizer pays a 6% dividend, but that dividend is four times the company’s revenues and is at high risk for a cut. News of a dividend cut will likely lead to a big drop for shares.
For traders, the August $26 puts look attractive even with their short timeframe to play out. Traders can likely see high double-digit returns or better.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Different market sectors move at different times. But when a sector does take off, it will often need to pause for a while before moving higher. This consolidation trend is normal, and in some sectors can last for years, in others, for weeks.
The cryptocurrency market has been consolidating for a few months now following bitcoin’s halving in April. That may have shaken out momentum traders hoping for a quick ride to new all-time highs.
Today, it’s creating an opportunity across the crypto space. And with discussion about more crypto ETFs, the big winner could be Coinbase (COIN).
The cryptocurrency brokerage serves as custodian for most of the bitcoin ETFs. An expansion into Ethereum ETFs would allow Coinbase to generate more fees.
And if crypto prices trend higher, trading volume stands to jump as well, which could further boost Coinbase’s revenues in the quarters ahead.
Action to take: Coinbase shares are about 20% off their 52-week highs. After this consolidation, shares look ready to trend higher in the months ahead. That could potentially offer investors mid-double-digit returns by year-end.
For traders, such an uptrend bodes well for today’s call buyers. The October $280 calls, last trading for about $19.00, could see mid-double-digit returns or better on a rally over the coming months.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The past year has been a challenge for investors. While tech stocks have been soaring, the data suggests that the real economy has been muted. Consumer spending is weak and trending lower. The labor market is showing a similar decline.
However, one industry leader has just indicated that business is faring well. And that could be a sign that the economy will continue to hold up, even with today’s lackluster data.
The industry leader is shipping and logistics giant FedEx (FDX). Shares hit a new 52-week high this week on the back of strong earnings, guidance, and analyst upgrades.
Freight is tied to moving physical goods around in the real economy, making the FedEx news bullish. Shares are now up about 15% over the past year, and the stock trades at a compelling 12 times forward earnings.
Plus, FedEx announced a big stock buyback plan, which could help keep a floor under share prices going forward.
Action to take: With the latest earnings, it’s clear that FedEx can continue higher, and break to new highs in the months ahead. Momentum investors may want to buy a stake here. FedEx also pays a 2.1% dividend at current prices.
For traders, the September $320 calls, last trading for about $5.90, could see mid-double-digit returns from a continuation higher for shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Oscar Munoz, a director at Salesforce (CRM), recently bought 2,051 shares. The buy increased his position by 41%, and came to a total price of $499,806.
That’s the second insider buy of the month, following a $99.8 million share buy from a major holder. Those are the only two insider buys over the past two years. Otherwise, company executives have largely been sellers of Salesforce stock, with about half of those sales occurring following the exercise of stock options.
Overall, Salesforce insiders own 2.6% of shares.
The sales and customer service software company is up about 14% over the past year, lagging the overall market’s return.
The stock is off about 25% from its 52-week high, on concerns over slowing consumer spending and the rise of AI tools.
Revenues are up 11% over the same time, and earnings have soared 670%.
At current prices, Salesforce trades at about 24 times overall earnings.
Action to take: After its big drop lower, the share price has started to stabilize in recent weeks, and could be setting up for the next move higher.
Investors may want to start a position in shares at current prices and use any drop to add to that position. Salesforce also pays a 0.6% dividend at current prices.
For traders, the possibility of a rally higher in the coming months could play well to the September $260 calls. Last trading for about $7.60, the options could see mid-double-digit returns on the move higher in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Cruise line Carnival Corporation (CCL) is up 3% over the past year, with shares trading towards the higher end of their 52-week range. One trader sees shares trending higher in the weeks ahead.
That’s based on the July 19 $18.50 calls. With 21 days until expiration, 28,491 contracts traded compared to a prior open interest of 616, for a 46-fold rise in volume on the trade. The buyer of the calls paid $0.68 to make the bullish bet.
Carnival shares recently traded for about $18.30, making this an at-the-money trade. Shares are trending higher and near their 52-week high of $19.74.
The cruise industry continues to benefit from consumer spending trends, which have stayed strong for travel and tourism, even as consumers cut back on spending elsewhere.
Revenues are still trending higher, up nearly 18% over the past year. Carnival trades at about 17 times forward earnings, a slight discount to the overall market.
Action to take: Shares are trending higher, so momentum traders may want to continue playing that trend in the coming weeks. Carnival does not currently pay a dividend.
For traders, the July $18.50 calls are at-the-money. While they don’t have much time to play out, they could see high double-digit returns given their low cost to trade in the time left for the option to play out.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Investors have several ways to hedge themselves from inflation. Owning shares of great companies that can pay an increasing dividend over time is one way. But when inflation spikes suddenly, companies can also take a hit to their profits.
Owning a small position in gold can reduce the impact of sudden inflationary jolts. And it can ensure that investors protect their purchasing power over time. Inflation is down but not out.
Gold is in a similar situation today. After making new all-time highs earlier this year, it’s pulled back. And now the metal may be in a buy range.
Given the expense of buying and storing physical gold, investors may want to simply stick with the SPDR Gold Shares ETF (GLD).
The ETF tracks the price of gold without the high costs of buying the metal outright. And it can be bought or sold just like any stock.
With gold likely to continue trending higher over the long haul, it could be an astute buy now.
Action to take: Investors may want to consider a small position here, with the metal down about 5% from its all-time high. Gold does not pay a dividend, and neither does GLD.
For traders, the September $225 calls, last trading for about $3.10, could see mid-double-digit returns if gold prices start to trend higher again over the summer.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Daniel Durn, a director at Marvell Technology (MRVL), recently bought 1,425 shares. The buy increased his stake by a massive 286%, and came to a total cost of $100,049.
This is the first insider buy at Marvell since September 2022, when a company director bought 6,781 shares at a cost of just over $314,000. Otherwise, company executives and directors alike have been heavy and steady sellers of shares over the past two years.
Overall, Marvell insiders own 0.5% of shares.
The data infrastructure semiconductor manufacturer is up 11% over the past year.
As with many other chip companies right now, Marvell is losing money. Revenues also dropped 12% over the past year.
However, Marvell is positioned well for future growth in data centers which will require specialized chips for that purpose.
The decline in revenues has pushed Marvell’s valuation to about 22 times earnings right now.
Action to take: Investors may want to consider a starting position here, and add to it on pullbacks. Trends for data center and other digital infrastructure growth bode well for Marvell over the next few years.
At current prices, Marvell also pays a 0.4% dividend.
For traders, the September $75 calls, last trading for about $3.75, could see mid-double-digit returns on a summer rally over the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Cybersecurity software firm SentinelOne (S) is up 21% over the past year. One trader sees a further rally for shares in the coming five months.
That’s based on the November $22 calls. With 141 days until expiration, 5,044 contracts traded compared to a prior open interest of 135, for a 37-fold rise in volume on the trade. The buyer of the calls paid $1.40 to make the bullish bet.
SentinelOne shares recently traded for just under $19, meaning the stock would need to rally by $3, or about 15%, for the option to move in-the-money.
While the stock is up over the past year, and is currently heading higher, it’s still well off its 52-week high of $30.76.
Cybersecurity stocks have been out of favor with the market more focused on AI opportunities. While SentinelOne hasn’t made a profit over the past year, things are looking up, with revenues jumping nearly 40%. And cybersecurity spending is expected to continue trending higher.
Action to take: With shares starting to trend higher over the past few weeks, investors may want to consider playing that momentum now.
For traders, the November $22 calls have plenty of time for the current uptrend to play out. The options stand a strong a strong chance of moving in-the-money, and traders can likely see mid-to-high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The past decade has seen retailers shift heavily into online sales. While there’s still demand for many goods at brick-and-mortar stores, investors are more willing to buy online.
Catering to that growing demand in new and innovative ways can give any retailer an opportunity to profit over time. It also means a retailer can continue to expand their market share as the world goes increasingly digital.
Discount store chain Target (TGT) has been shifting with digital trends in recent years. Now, it’s partnering with Shopify (SHOP) to improve its e-commerce experience.
The fit looks like a natural one, and could boost Target’s online sales and increase Shopify’s revenues.
Target has lagged the overall market, rising about 9% over the past year. Shares trade at 16 times earnings, also a discount to the market.
Action to take: At its current valuation, Target looks undervalued and ready to trend higher. Improved earnings and online sales from partnering with Shopify could also lead to increased growth in the quarters ahead.
At current prices, Target also pays a 3.1% dividend, which it has a history of growing over time.
For traders, Target shares look ready to trend higher in the coming weeks. The September $160 calls, last trading for about $4.10, could see mid-to-high double-digit returns on a further rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Justin Jacobs, CEO of Natural Gas Services (NGS), recently bought 2,500 shares. The buy came to a cost of $47,700, and increased his holdings by 691%.
This marks the first insider buy at the company over the past two years. The last insider activity as NGS was a sale of just 3,000 shares from a director in December 2022, for a total cost of $33,150.
Overall, NGS insiders own 7.6% of shares.
The natural gas compression equipment services company is up over 90% in the past year. While energy prices have been trading in a range, NGS has been on a tear. Revenues have jumped nearly 40%, and earnings are up nearly 1,300%.
Even with the soaring share price, NGS looks attractively valued at about 12 times forward earnings. And shares trade right at book value, suggesting future upside potential from here.
Action to take: Even with the big run higher in shares this year, NGS has come well off its 52-week highs, and appears to be looking to trend higher once again.
Investors can likely see low-double-digit returns from shares in the coming months.
For traders, options are limited. The October $20 calls, last trading for about $3.40, could see high double-digit returns or better on a resumed rally from here in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Medical device manufacturer Medtronic (MDT) is down 6% over the past year. One trader is betting that shares will continue to decline over the next 18 months.
That’s based on the January 2026 $85 puts. With 569 days until expiration, 9,101 contracts traded compared to a prior open interest of 167, for a 55-fold rise in volume on the trade. The buyer of the puts paid $9.36 to make the bearish bet.
Medtronic shares recently traded for about $81, meaning the option is about $4.00 in-the-money. Shares are about midway between their 52-week low and high of $68.84 and $91.00.
While shares look somewhat rangebound right now, over the longer term they look more bearish, especially with stocks near all-time highs. Earnings have declined by 45% in the past year, and revenues have been flat.
Action to take: Medtronic trades for 11 times forward earnings and could be a long-term buy once it breaks out of its current downtrend. Shares also pay a 3.4% dividend.
For traders, the January 2026 $85 puts suggest that shares will languish for some time and then possible decline in the next 18 months.
More aggressive traders may want to use a shorter-dated option trade to play the current downtrend first before paying for a higher-priced option that has longer to play out. That could provide multiple profit opportunities on shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The stock market’s returns this year have been concentrated heavily into tech stocks. That’s created an opportunity, as there’s are still several values in other segments of the market, even with stocks near all-time highs.
Astute investors will be able to find opportunities likely to trend higher in the coming months outside of tech. One place that could be ripe for big returns comes from companies with strong brands.
That’s because a strong brand tends to grow the most when the economy does well, and hold up relatively well even in down times.
It’s been a down time for Nike (NKE) over the past year. The sportswear giant is down 12%. However, the upcoming Olympic games will mean a big boost for the company’s visibility. And with Nike pushing for more global sales, it could be a big winner.
Nike’s earnings slid 5% last year, as slowing sales in mature markets like the U.S. took a hit. But rising global growth could push shares higher.
Action to take: Investors may like shares here. At current prices, Nike pays a 1.6% dividend.
For traders, shares have been trending higher since April. That trend looks likely to continue in the weeks ahead.
The September $100 calls, last trading for about $4.40, could see mid-double-digit returns and move in-the-money in the weeks to come.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Charles Johnson, a major holder at Franklin Resources (BEN), recently added 100,000 shares to his stake. The buy came to a total cost of $2.23 million, and increased his position by less than 1%.
This marks the first insider buy at the asset management company over the past two years. There have been a half dozen insider sales over the same time, mostly coming from company executives. The largest sale was for $1.6 million from the company CEO in mid-2022.
Overall, Franklin insiders own 46.3% of shares.
Franklin is down 11% over the past year. While asset managers have benefitted from higher interest rates, Franklin saw its overall earnings drop by one-third, even as revenues rose 12%.
However, the company now trades at about 0.9 times its book value, and shares are also trading for 8 times forward earnings, a significant discount to the overall market.
Action to take: Shares have started trending higher in recent days after hitting a 52-week low in mid-June. Investors may be able to see low-double-digit returns if the uptrend holds.
At current prices, Franklin also pays a 5.5% dividend.
For traders, the October $25 calls, last trading for about $0.45, could leverage a bounce higher in the coming weeks and see high-double-digit returns or better, depending on the extent of the rally. Traders can likely book profits well before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Internet retailer Amazon (AMZN) is up 44% over the past year, nearly double the return of the overall stock market. One trader sees shares trending higher over the coming weeks.
That’s based on the August 2 $220 calls. With 38 days until expiration, 13,711 contracts traded compared to a prior open interest of 145, for a 95-fold rise in volume on the trade. The buyer of the calls paid $1.35 to make the bullish bet.
Amazon shares recently traded close to $190, meaning the stock would need to rise by $30, or nearly 16% in a month for the option to move in-the-money.
Shares are right at their all-time high of $191.70, so it would also mean the stock continues to break higher in the coming weeks.
The move higher looks like the right direction, both in terms of price and in terms of Amazon’s operating performance. Amazon’s earnings are up 229%, and revenues are up 12%, even with fears of a slowing economy right now.
Action to take: Amazon’s upward momentum looks likely to continue over the next few weeks. Buyers of shares can likely see low double-digit returns from here before shares likely face a seasonal pullback in the fall.
For traders, the August 2nd calls are aggressive and unlikely to move in-the-money. But before expiration, they could potentially see triple-digit returns.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The first wave of AI investments has been centered around big-tech companies providing hardware or software needed to run AI programs. The next wave is unfolding, and will create new investment opportunities elsewhere.
While the current generation of AI programs requires significant processing power, the next wave will include simpler programs that can be run on-the-go. That’s what creates new investment opportunities for investors today.
For those looking for an AI system that can run on a piece of hardware like a smartphone, communication chips are key. In the wireless chip space, Qualcomm (QCOM) looks set to expand on its dominance.
That’s leading to more upgrades from analysts, which could help Qualcomm add to its 95% return over the past year.
Even with the big rally higher, Qualcomm shares trade at 20 times earnings. Revenues are also up nearly 37% over the past year.
Action to take: Investors may like shares here, and may want to keep an eye out to buy more shares on any pullback. AI technology hasn’t quite gotten to smartphones yet, but as a leader in wireless communications patents, Qualcomm could be a big winner from here.
Shares also pay a 1.5% dividend at current prices.
For traders, the September $240 calls, last trading for about $7.55, could see high double-digit returns on a continued move higher in the coming weeks.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Maria Dreyfus, a director at ExxonMobil (XOM), recently bought 18,310 shares. The buy increased her stake by 105%, and came to a total cost just over $2 million.
This is the first insider buy at the oil giant since November, when another director bought 250,000 shares for just under $26.5 million. Over the past two years, Exxon executives have been slight sellers of shares, while directors have been buyers.
Overall, Exxon insiders own 0.04% of shares.
The oil giant is up 6% over the past year, far lagging the overall market. The move reflects the muted performance in oil and natural gas prices, which have been rangebound.
With oil prices still well off their 2022 highs, Exxon has seen earnings drop 28% and revenues slide nearly 4%.
However, shares are still inexpensive, trading at 11 times earnings, about half the valuation of the overall stock market. Plus, Exxon is sitting on $33 billion in cash, or about 7% of its market cap.
Action to take: Investors may like shares here. Oil prices are still muted, but could trend higher over time given steady demand and still facing a tight supply.
Exxon is also a dividend growth stock, with a current yield of about 3.5%.
For traders, shares have pulled back in recent weeks but could be starting a new trend higher. The October $120 calls, last trading for about $2.40, can likely see high double-digit returns on a further rally over the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Wildlife and pest control company Rollins (ROL) is up 20% over the past year, slightly underperforming the overall stock market. One trader sees shares trending higher through the summer.
That’s based on the August $52.50 calls. With 52 days until expiration, 3,936 contracts traded compared to a prior open interest of 116, for a 34-fold rise in volume on the trade. The buyer of the calls paid $0.88 to make the bullish bet.
Rollins shares recently traded for about $49.50, meaning the stock would need to rise by $3, or about 6%, for the option to move in-the-money.
Meanwhile, Rollins shares have been trending higher over the past few months, and are right near their 52-week high of $50.09.
At the operational level, Rollins has shown some growth recently, with earnings up 7% over the past year, and revenues are up nearly 14%. However, shares are priced somewhat expensively at nearly 50 time forward earnings.
Action to take: While the valuation is a little high, shares are trending higher. Momentum investors can likely see double-digit returns in the months ahead. And, at current prices, Rollins pays a 1.2% dividend.
For traders, the August $52.50 calls play well to the current uptrend. They can potentially see high-double-digit returns if the current rally holds over the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The stock market’s return has been massively influenced by the returns in Nvidia (NVDA). The designer of GPUs and other hardware has surged thanks to an interest in AI. But with the share split over, the stock price may slow its gains from here.
That will allow other chipmakers also seeing a big boost in business right now to see massive returns in their share price. A few could even outperform Nvidia in the second half of the year.
One contender is memory chip manufacturer Micron (MU).
While shares are already up 130% over the past year, the stock trades at just 10 times earnings. So it’s no surprise that shares continue to trend higher into its next report.
Revenues are up 57% over the past year, but Micron still needs to improve its earnings growth to truly take off. That can potentially happen over the next few quarters.
Action to take: Investors may want to buy a partial stake now, and use any pullback in shares to add to that stake.
Micron also pays a dividend, although the yield is slightly low at 0.3%.
For traders, the uptrend in Micron shares looks likely to continue. The September $185 calls, last trading for about $7.65, could see mid-to-high double-digit returns in the months ahead
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Bradley Ehrman, CEO of Dorchester Minerals, LP (DMLP), recently bought 2,800 shares. The buy increased his position by 2%, and came to a total cost of $82,600.
This is the sixth insider buy of the year. The company CFO was a buyer of $77,000 worth of shares in May. And the company’s operating LP has been accumulating shares throughout the year. There have been no insider sales over the past two years.
Overall, Dorchester insiders own 7.1% of shares.
The oil and gas exploration company is up about 3% over the past year. While lagging the overall market, that’s about in-line with the rangebound trading in oil prices.
That’s reflected in the company’s financials, with earnings sliding 36% and revenues down 23% over the past year.
However, while earnings are down, Dorchester is highly profitable, with a hefty 68% profit margin.
Action to take: Income investors may like shares of the LP, although an LP may carry different tax requirements than a common stock. At current prices, Dorchester pays out a 10.8% yield.
For traders, shares have been rangebound over the past year, but are at the lower end of their range. The August $30 calls, last trading for about $1.75, are already slightly in-the-money. The options could see mid-double-digit returns in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Packaging and container manufacturer Ball Corporation (BALL) is up 12% over the past year, returning about half as much as the overall market. One trader sees shares trading lower over the coming weeks.
That’s based on the August $65 puts. With 55 days until expiration, 6,754 contracts traded compared to a prior open interest of 151, for a 45-fold rise in volume on the trade. The buyer of the puts paid $3.83 to make the bearish bet.
Ball shares recently traded for about $62.50, meaning the $65 puts are already about $2.00 in-the-money.
Shares have recently started declining, and are well off their 52-week high of $71.32 set back in May.
Ball has had a mixed year operationally, as earnings surged nearly 2,000% despite a 4% decline in revenues.
While consumer spending has been weak and may weigh on packaging, Ball sports a 30% profit margin, which is huge for a manufacturer.
Action to take: Investors may like shares in the coming weeks, as soon as the current downtrend ends. Ball shares currently pay a 1.3% yield, which could potentially increase over time.
For traders, the August $65 puts play well to the current downtrend for shares. Traders may be able to earn mid-double-digit returns, but should look for signs of a stock bottom to take profits on the trade.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Supply and demand are the key elements to understanding economics. It can also be the key to understanding an investment opportunity. Right now, demand for semiconductor chips for AI is soaring. That will make those companies more profitable over time. And that’s why their share prices continue to soar.
But that’s just one part of the overall market. Other sectors likewise are seeing some big shifts in supply and demand. And those shifts can also lead to big profits.
One such sector is the homebuilder stocks. Housing is a tight market right now. Demand is also likely pent up due to high interest rates, which look set to start declining later in the year.
That could bode well for homebuilders, which are seeing strong prices already as they bring new supply to market.
In the homebuilder sector, KB Home (KBH) is well positioned.
Although shares are already up 34% over the past year, KB Home is still inexpensive at 9 times forward earnings. Plus, shares trade at less than 0.9 times their price-to-sales.
Action to take: Investors may like shares here or on a pullback. At current prices, KB Home pays a 1.5% dividend.
For traders, the October $75 calls, last trading for about $3.75, could see mid-double-digit returns on a continued rally over the summer.
Traders should look to take profits before getting into the autumn, as markets tend to perform their seasonal worst in September and October.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
James Pratt, a director at Heartland Express (HTLD), recently bought 9,000 shares. The buy increased his position by 62%, and came to a total cost of $107,619.
This is the seventh insider buy of the year. That includes two buys from the company CEO for a total of nearly $3 million in total, and a major holder who has continued to add to their stake. There have been no insider sales over the past two years.
Overall, Heartland insiders own 31.8% of shares.
The trucking services company is down 27% over the past year. The trucking industry has struggled as deliveries on goods has declined overall, reflecting a sluggish economy and the rise of digital services.
Heartland has been no exception, showing an 18% revenue drop, and the company has had a slight loss over the past year.
Currently, Heartland shares trade at an estimated 83 times forward earnings, and at 0.8 times their price-to-sales, indicating a mixed valuation view right now.
Action to take: Heartland shares hit a 52-week low in April and are trending higher. Investors can buy shares here as a momentum play. Heartland also pays a 0.7% dividend at current prices.
For traders, the September $12.50 calls, last trading for about $0.50, could see mid-to-high double-digit returns in the coming months as shares are likely to continue trending higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Cryptocurrency investment platform Coinbase (COIN) has soared over 320% in the past year. One trader sees the potential for a pullback in the coming weeks.
That’s based on the August $150 puts. With 57 days until expiration, 6,102 contracts traded compared to a prior open interest of 312, for a 20-fold rise in volume on the trade. The buyer of the puts paid $1.65 to make the bearish bet.
Coinbase shares recently traded for about $245. Shares would need to drop about 39% in just under two months for the option to move in-the-money. However, a quick pullback could still lead to excellent returns on the trade.
Currently, Coinbase isn’t turning a profit, and shares trade for over 30 times forward earnings. However, thanks to rising interest in crypto trading, revenues have soared over 115% in the past 12 months.
Action to take: Shares have had a strong run over the past year, but the stock has been range-bound since March.
It’s likely that shares could pull back. Interested investors can likely buy shares in the low $200 range at some point over the coming months.
For traders, the August $150 puts are aggressive and unlikely to move in-the-money. But on a pullback for shares, they’re inexpensive enough to see mid-double-digit returns in a short period of time.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Commodities have had a strong performance this year. However, prices in everything from gold and silver to base metals have pulled back in the past few weeks. For investors interested in the long-term opportunity in the commodity space, it may be close to a buying point.
That’s because the slight pullback in commodity prices has hit many commodity stocks even harder. With many of these stocks now in a correction off their recent highs, it may be time to buy.
One potential place to buy right now is with steel companies. While China has been stockpiling the metal, the potential for that buyback to end is pushing prices lower.
One leader in the space is Steel Dynamics (STLD). The share price has dropped as steel prices also come down. However, with shares already trading at 8 times earnings, it may be time to buy.
Steel Dynamics is down nearly 20% from its recent highs in March. A swing higher in commodity prices over the summer could lead to a similar swing higher.
Action to take: Long-term commodity investors may like shares here. Plus, at current prices, Steel Dynamics also pays a 1.5% dividend.
For traders, the November $150 calls, last trading for about $2.40, could see mid-double-digit returns or better over the summer. Traders can likely lock in a profit well before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Dimitar Karaivanov, President and CEO of Community Financial System (CBU), recently bought 1,000 shares. The buy increased his stake by 5%, and came to a total cost of $43,520.
This is the CEO’s second buy of the year, following a 1,000 share pickup in February, paying about the same price. Since then, one company director has sold 3% of his position. Going further back, insider buying far exceeded insider selling in 2023.
Overall, CBU insiders own 1.3% of shares.
The Syracuse-based regional bank is down 15% over the past year.
While most regional banks have struggled with the rise in interest rates over the past two years, CBU has held up well. The past 12 months showed a 42% rise in revenues, and earnings soared 605%.
Plus, the bank has a healthy 24% profit margin. And shares trade at a premium to book value, indicating that the market isn’t worried about the quality of the bank’s loans.
Action to take: Shares have been range-bound over the last year, and are at a six-month low. They could see a bounce from here over the summer.
At current prices, CBU also pays a 4.2% dividend.
For traders, the August $55 calls, last trading for about $2.50, could see mid-double-digit returns on a pop higher in the coming weeks. Traders should be able to book a profit well before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Specialty chemical producer Huntsman Corp (HUN) is down 7% over the past year. One trader is betting shares will continue to trend down over the next two months.
That’s based on the August $22 puts. With 58 days until expiration, 20,453 contracts traded compared to the prior open interest of 182, for a massive 112-fold rise in volume on the trade. The buyer of the puts paid $0.40 to make the bearish bet.
Huntsman shares recently traded just over $23, so they would need to drop by just over $1.00, or 4.3%, for the option to move in-the-money. The strike price is right near Huntsman’s 52-week low of $22.14.
Operationally, it’s easy to see why shares are struggling. The company lost money overall last year, and revenues slid by nearly 9%.
While the global economy is expanding and the demand for specialty chemicals should likewise rise, the slowdown here indicates potential danger ahead.
Action to take: Prospective investors may be interested in shares given the hefty 4.3% dividend yield here.
However, that yield represents 180% of the company’s current earnings. A dividend cut could be on the horizon, which would further impact shares. Best for interested traders to wait for now.
For traders, the August $22 puts look attractive, given the current downtrend here. The options could see high double-digit returns or better, especially if shares break down to a new low.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The best returns in the AI space have come from semiconductor designers and manufacturers. However, that’s just part of the hardware needed for AI programs to succeed.
Investors have started to branch out, rewarding companies that make power distribution systems and server racks. That’s still just scratching the surface. New devices will be needed to best utilize AI systems, and building out the next generation of technology will expand the hardware investment opportunities even further.
One such opportunity might be in Corning (GLW). The producer of glass has been a major producer of specialty glass for smartphone touchscreens for years.
Such technology will likely be part of new AI-enabled device sin the years ahead. That suggests that an AI-related boost is coming for shares in the years ahead.
Currently, Corning shares are up 7% over the past year. That reflects the sluggish global market for smartphones. Corning posted a 19% increase in earnings, even as revenues dropped by 6%.
But with shares trading at 20 times forward earnings, and higher growth potential ahead, shares may be an inexpensive buy for the longer-term AI rollout.
Action to take: Investors may like shares at current prices. Corning also pays a 3% dividend at current prices.
For traders, shares have been trending higher since October, and the trend looks likely to continue. The November $45 calls, last trading for about $0.50, could see high double-digit returns on a further gain in shares in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Arun Gupta, a director at LXP Industrial Trust (LXP) recently bought 15,000 shares. The buy increased his stake by 30%, and came to a total cost just over $134,000.
This marks the first insider activity of any kind at the industrial property REIT over the past two years. Overall, LXP insiders own 2.2% of shares, and institutions own nearly 96% of LXP shares.
LXP Industrial shares have declined about 12% in the past year.
While investors were once interested in industrial space for manufacturing and data centers, interest has waned as interest rates have stayed higher and weighed on valuations.
LXP has also struggled in the past year, as revenues grew by just 1.4%. Plus, the REIT didn’t make an overall profit.
That’s not as important in the real estate space, given the ability to depreciate property values and still earn a cash flow.
As a REIT, shares pay a high dividend of 5.9% at current prices. The current dividend payout is less than half of the total revenues per share, so the payout looks sustainable at present.
Action to take: Income-oriented investors may like LXP shares here. The valuation isn’t as extremely low as office or other commercial space, but is justified by how the industrial space is generally holding up.
For traders, shares have started to trend higher over the past few weeks. If that trend holds, the August $10 calls, last trading for about $0.15, could see high double-digit returns in the weeks ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Wall Street megabank JPMorgan Chase (JPM) has rallied 35% in the past year, exceeding the returns of the overall stock market. One trader sees the potential for a further rally over the coming weeks.
That’s based on the July 12 $205 calls. With 23 days until expiration, 13,453 contracts traded compared to a prior open interest of 314 for a 43-fold rise in volume on the trade. The buyer of the calls paid $1.10 to make the bullish bet.
JPMorgan shares recently traded for about $194, meaning shares would need to rise by $11, or 5.6%, for the option to move in-the-money.
The strike price of the option is right at the stock’s 52-week high of $205.88.
Besides being considered “too big to fail,” JPMorgan has been performing well in a high interest rate environment. Revenues are up 11%, and earnings are up 6%.
Plus, with shares still trading at 12 times forward earnings, a discount to the overall market, more upside for shares in the coming weeks looks likely.
Action to take: Investors may like shares here, as the stock may be on the path to retest and break above its prior 52-week high. At current prices, shares pay a 2.3% dividend.
For traders, the July 12 calls are aggressive, and may not move in-the-money before expiration. But traders can likely see mid-double-digit profits or better on a continued uptrend in the coming days.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The first phase of the AI rollout was centered around generative AI. This is simply a prompt that users could provide questions to, and receive information from a database. Now, AI is already rapidly improving.
One major change is the rise of better prompting. These tools can allow creative workers to generate images, and even videos from a prompt, far beyond the level of a text response. It’s also a strong sign for some companies.
One big winner that we’ve noted before is Adobe (ADBE).
Investors were originally skeptical that Adobe could benefit from AI. But the company’s push for AI integration in its software is starting to pay off.
Adobe just beat on earnings, and raised their guidance for the year.
Adobe shares are now in the green over the past 12 months, and likely has more upside ahead, as well as a chance to further expand on its 24% profit margin.
Action to take: With shares breaking higher, investors may like Adobe at current levels, and should keep an eye out to buy more on any of the market’s inevitable pullbacks. At present, Adobe does not pay a dividend.
For traders, the September $550 calls, last trading for about $25.50, could see even further gains in the months ahead as the bullish breakout continues.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Berkshire Hathaway (BRK-A), a major holder of Occidental Petroleum (OXY), has made two recent additions to their stake. Over two trades in the past two weeks, the company has bought $258 million of Occidental shares.
The most recent prior buy was back in February, the last time shares traded down to the low $60 range. With its latest stake, Berkshire now owns about 28% of Occidental. There have been no other insiders active over the last two years.
Overall, Occidental insiders own 28.3% of shares, and institutional investors own another 53.4% of the oil giant. Berkshire Hathaway has permission to buy up to 50% of the company.
Many investors see the Berkshire buy as part of a long-term plan to gradually acquire Occidental entirely.
Occidental trades at 14 times earnings, and shares have bobbed up and down in line with oil prices over the past year. Currently, shares are just up about 3%, and have a 1.5% dividend.
Action to take: Investors who think oil is inexpensive here (and under $80 it looks that way), may want to follow in Berkshire’s steps and build a stake. Look to buy in the low-$60 range or less.
For traders, shares do tend to bounce higher following a drop this low. The August $65 calls, last trading for about $0.70, could see mid-double-digit returns on a oil rally this summer that boosts Occidental shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Communication equipment producer Hewlett Packard Enterprise (HPE) is up nearly 20% over the past year. One trader sees shares surging higher in the months ahead.
That’s based on the September $35 calls. With 95 days until expiration, 5,433 contracts traded compared to a prior open interest of 128, for a 42-fold rise in volume on the trade. The buyer of the calls paid $0.20 to make the bullish bet.
HPE shares recently traded near $22, meaning the stock would need to soar about 59% for the options to move in-the-money. Shares recently broke to a new 52-week high over the past few weeks.
A further move higher is likely. Shares trade at about 11 times forward earnings, and the company has started to see some analyst upgrades, as the company has now beat earnings expectations in each of the past four quarters.
Action to take: Investors may like shares here. While at an all-time high, the break higher is a sign that the stock can continue to trend higher, and that it will settle into a higher trading channel in time.
At current prices, HPE also pays a 2.5% dividend.
For traders, the September $35 calls are aggressive. But they’re also inexpensive, and could see triple-digit gains if the current rate of price appreciation continues.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Usually, when a company breaks to new all-time highs, it’s likely going to trend higher for some time later. That’s especially true when a company can point to a positive trend such as growing earnings, a new product, or a new partnership.
Investors who typically might not be interested in a great company at all-time highs can carve out an exception when a great company has made it clear their business is on the rise.
That looks like the case with Oracle (ORCL). The database giant has made tremendous strides in transitioning to cloud services.
Now, they’ve announced a partnership with OpenAI that will boost its ability to service AI-related infrastructure.
The news caused shares to hit a new all-time high, and they’re now up about 12% over the past year.
Meanwhile, shares trade at 20 times forward earnings, a slight discount to the overall market. If more growth is ahead, shares should be valued at a higher earnings multiple.
Action to take: Investors may want to build a position at current prices, as Oracle is positioning itself as an AI play and can case further growth in the years ahead. At current prices, shares also pay a 1.3% dividend.
For traders, the August $150 calls, last trading for about $1.75, could see mid-double-digit returns or better in the coming weeks on a further push higher for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Hsenghung Hsu, a director at Fastenal (FAST), recently bought 1,000 shares. The buy increased his position by 33%, and came to a total cost of $63,115.
This marks the first insider buy since April, when another director bought 3,350 shares, paying just over $229,000. A few executives have been sellers year-to-date, largely at the EVP level, and all sales have occurred following the exercise of stock options.
Overall, Fastenal insiders own 0.2% of shares.
The construction supply manufacturer and distributor is up 14% over the past year, far lagging the overall stock market.
While Fastenal sports a 16% profit margin, a healthy level for its industry, earnings and revenues both rose by less than 2% last year. And shares trade at about 30 times earnings, a bit pricey compared to the overall market right now.
However, Fastenal shares have now slid nearly 20% from their March peak, and are starting to show signs of a turnaround.
Action to take: Investors may like shares here, as a turnaround could lead to low double-digit gains in the span of a few weeks. At current prices, Fastenal also pays a 2.4% dividend.
For traders, shares could see a quick boost on a short-term rally higher. The August $67.50 calls, last trading for about $1.30, could see mid-to-high double-digit returns over the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Copper producer Freeport-McMoRan (FCX) is up 23% over the past year, however shares have recently fallen about 10% from its 52-week high. One trader sees the potential for shares to rebound in the coming weeks.
That’s based on the July 5 $52 calls. With 21 days until expiration, 29,520 contracts traded compared to a prior open interest of 156, for a 189-fold surge in volume on the trade. The buyer of the calls paid $0.66 to make the bullish bet.
FCX shares recently traded for about $49, meaning the stock would need to rise by about $3, or 6%, for the option to move in-the-money.
Besides being down about 10% from its 52-week high of $55.24, FCX shares appear to be in a support zone. If that zone holds, shares can trend higher once again.
If not, a short-term bounce in the coming weeks may form the right shoulder of a head-and-shoulders pattern, which could mean a further drop from here.
Action to take: Long-term investors may be able to get a better entry price in the coming weeks, if shares fail to hold their current support zone.
For traders, the July $52 calls work as a very short-term trade. Look to take quick profits, as any very short-term rally may not hold, even with just three weeks potentially on the trade.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Some stocks are cyclical, and have big moves within a short period of time. But when the cycle turns, a big winner can become a big market loser.
Other companies tend to perform well steadily. While they may not be the market leader, over time, slow-and-steady stocks can compound into big winners. Investors looking for investment opportunities now will want to hold a mix of both to best profit from market trends.
One slow and steady investment is insurance companies. These companies tend to be steadier than banks, which can take a big dive in a crisis.
One insurance company trending higher is Chubb (CB). Despite the slow and steady returns on a daily basis, shares are up nearly 40% over the past year.
It helps that Chubb has done well pricing in market risk for insurance premiums. And despite the runup, shares trade at 12 times earnings.
Action to take: Long-term investors may want to buy shares here, and use any pullback to add to the position. Chubb is a dividend-growth stock, with a current yield of 1.4%.
For traders, the slow uptrend in shares is likely to continue. The August $270 calls, last trading for about $6.80, could see mid-double-digit returns in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Darrell Bracken, President and CEO of VFC Corp (VFC), recently bought 75,200 shares. The buy increased his position by 52%, and came to a total cost of $997,408.
This is the first insider buy since February, when a director bought 20,000 shares, paying $310,620 to do so. Other directors have been buyers over the past year, with one buying 40,000 shares. Over the past two years, there has been one insider sale for just four shares.
Overall, VFC insiders own 0.9% of shares.
The apparel manufacturer is down 30% over the past year. Slowing consumer spending and higher costs from inflation have hit VFC. Revenues are down nearly 15%, and VFC failed to turn a profit last year.
Plus, VFC has a sizeable amount of debt relative to its current market cap. But if it can turn around on revenues, shares should hold up just fine.
Action to take: Shares trade at 17 times forward earnings, a reasonable price if VFC can start to turn a profit again. VFC also pays a 2.7% dividend at current prices, after cutting its payout last year.
Speculative investors could see double-digit returns from shares in the months ahead.
For traders, shares are near their 52-week lows, but have started to trend higher in recent sessions. The August $15 calls, last trading for about $0.75, could see mid-double-digit returns in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Theater chain operator Cinemark Holdings (CNK) has dropped 9% over the past year, as consumers have largely spent their money on other leisure activities. One trader sees the potential for shares to rally over the summer.
That’s based on the July 19 $19 calls. With 36 days until expiration, 12,768 contracts traded compared to a prior open interest of 145, for an 88-fold rise in volume on the trade. The buyer of the calls paid $0.40 to make the bullish bet.
Cinemark shares recently traded just over $17, so the stock would need to rise by $2, or about 12%, for the option to move in-the-money.
Shares have been trending lower since hitting a 52-week high of $20.40 in early April. But the summer season tends to be stronger for movie theater revenues amid the blockbuster season.
Cinemark is also fairly inexpensive, trading at 11 times earnings.
Action to take: Shares could be oversold enough here to start moving meaningfully higher in the coming weeks. However, investors may want to book profits at the end of the summer season when ticket sales typically start to see a cyclical downturn.
For traders, the July $19 calls could see mid-to-high double-digit returns from here, as shares could see an oversold rally over the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Companies have to contend with competition. That’s a good thing. Competition means similar services, often with new features that customers demand. Or it can mean lower prices.
When one company announces a new product that directly competes with an existing service somewhere else, shares may take a dive. The extent and length of the drop depends on how credible a new offering is at displacing existing customers.
For instance, Apple (AAPL) is working on ways to improve its payment system, Apple Pay. That’s seen as a direct threat to payment platform PayPal (PYPL).
Apple’s latest iOS is designed to increase tap payments via iPhones. However, given how quickly PayPal’s shares recovered from the new development, it’s likely that their market share isn’t going away anytime soon.
PayPal has been out of favor with the market, with shares up less than 6% in the past 12 months. And the industry leader in the payment space now trades for less than 16 times earnings.
Action to take: Investors may want to build a stake here, and use any price drop to add to it over time.
For traders, PayPal has been steadily trending higher since October. The August $70 calls, last trading for about $3.50, could see mid-double-digit returns on a further trend higher over the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
John Thornton, a director at Ford Motor Company (F), recently bought 24,790 shares. The buy increased his position by 7%, and came to a total cost of $299,463.
This is the first insider buy of 2024. The last insider buy occurred back in December, when the company’s chief EV design officer bought 182,000 shares, priced at just over $2.01 million. There have been some moderate sales by company insiders over the past year, largely following the exercise of stock options.
Overall, Ford insiders own 0.3% of shares.
The automaker’s shares have slid 12% over the past year. That’s not as bad as the 24% decline in the company’s earnings.
But sales are down, and Ford has also delayed billions of dollars in spending to build out EV production facilities.
Ford shares now trade at 6 times forward earnings, and at 0.3 times their price to sales. The reduced spending could mean that the company’s profitability improves from here.
Action to take: Shares have been range-bound this year, so investors may not see significant upside until shares break to the higher end of their range. At current prices, Ford pays a 4.9% dividend.
For traders, the July $14 calls, last trading for about $0.47, could see mid-double-digit returns, provided shares trend to the higher end of their recent trading range.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Coffee chain Starbucks (SBUX) is down 17% over the past year, as same-store sales in the U.S. have considerably slowed. One company expects shares to trend higher over the next month.
That’s based on the July 12 $82 calls. With 30 days until expiration, 8,367 contracts traded compared to a prior open interest of 129, for a 65-fold rise in volume on the trade. The buyer of the calls paid $2.05 to make the bullish bet.
Starbucks shares recently traded for about $81.50, making this an at-the-money trade. Shares are closer to their 52-week low of $71.80 than their 52-week high of $107.66.
Starbucks hit its 52-week low in early April, and has been trending higher since.
The company saw earnings slide 15% over the last year, and revenues dropped by 2%. A potential turnaround play is underway to improve same-store sales, and continue to expand internationally.
Action to take: With Starbucks now in an uptrend, today’s buyers can likely see low-double-digit returns in the coming months. Plus, shares now pay a 2.8% dividend.
For traders, a continued rally higher from here are why the July 12 $82 calls have become popular.
Based on their current price, they could see high-double-digit returns, or even provide investors with a 100% gain or more, depending on how much shares continue to rally in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Investors in the chip space have fared well over the past year and a half. Soaring interest in AI technologies bodes well for any designer and manufacturer of semiconductor stocks.
Within that space, some companies have done better than others. What really matters for investors is finding which companies can continue to trend higher from here, and even become the leading play in the space.
For semiconductor stocks, the real story is insatiable chip demand. And that means that manufacturing plays could be the best performers.
That likely makes Taiwan Semiconductor (TSM) a top play going forward. Shares are up nearly 60% in the past year, but have far lagged some other names in the chip space.
As the leading manufacturer of chips, TSM profits no matter which chip company takes the lead in design. And with shares trading at 26 times earnings, TSM is still a relative value in a space that’s already had a big move higher.
Action to take: Investors may like shares here, or on any pullback. TSM pays a 1.5% dividend, but the real returns could come from a further rally in the years ahead as the AI chip buildout takes place.
For traders, shares are in a strong uptrend that looks likely to continue. The September $185 calls, last trading for about $6.50, could see mid-double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Big companies can often go in and out of favor with the market. But companies that underperform tend to catch up over time. And investors who have been disappointed with such a company will be happy when that outperformance occurs.
Many stocks are still underperforming. In a market that’s driven by news about AI developments, that’s no surprise. But it also means that today’s buyers can get a relative value in non-AI parts of the market.
Defense contractors are one such play. These companies are set to benefit from increased government spending on defense. Many countries have announced increased spending over the past few years, but the real ramp up in spending is just getting started.
That could be great for a company like Lockheed Martin (LMT). The defense contractor has now traded flat over the past year.
As a result, shares now trade at 18 times earnings, a discount to the market. And with increased earnings on the horizon, shares may soon become a catch up trade.
Action to take: Investors may like shares at current prices, or on any drop lower. Lockheed also pays a 2.7% dividend at current prices.
For traders, the September $485 calls, last trading for about $9.50, could see mid-to-high double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Mary Hopkins, a director at American States Water (AWR), recently bought 560 shares. The buy increased her position by 18%, and came to a total cost of $40,057.
The buy comes after another director bought 640 shares, paying $49,677 to do so. Other directors have been buyers of shares going back to last August. There has only been one insider sale, also from a director, over the past year.
Overall, American States Water insiders own 0.8% of shares.
The water utility is down 20% over the past year. That’s about in-line with the company’s operating performance, with revenues down 16%, and earnings down by one-third.
Shares trade at about 24 times earnings, a slight premium to the overall market. As with many utility companies, regulation and population growth trends tend to lead to slow, but steady, growth over time.
Action to take: The stock has been trending higher since late April, and shares could have more upside in the months ahead.
American States Water is a dividend growth player, so long-term investors may want to look at building a stake here. Shares currently pay a 2.4% yield. While not a high yield, increased dividend payouts over time mean a larger stream of cash.
For traders, the September $80 calls, last trading for about $1.15, could see mid-double-digit returns from a further rally in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Mega-bank Bank of America (BAC) has been a market favorite over the past year, beating the overall S&P 500 by nearly 50%. One trader sees shares trending even higher in the coming months.
That’s based on the September $39 calls. With 104 days until expiration, 4,696 contracts traded compared to a prior open interest of 159, for a 30-fold rise in volume on the trade. The buyer of the calls paid $2.38 to make the bullish bet.
Bank of America shares recently traded for about $39.70, meaning the option is already about $0.70 in-the-money. Shares are also right at their 52-week high of $40.19.
The bank’s shares have fared better than the company itself, which saw earnings drop nearly 20% in the last 12 months.
However, with shares trading at 12 times forward earnings, shares still look undervalued compared to the rest of the market.
Action to take: Shares are in an uptrend, which can likely continue through the summer. Today’s buyers could see low-double-digit returns in shares from here.
Bank of America also pays a 2.4% dividend at current prices.
For traders, the September $39 calls could see mid-double-digit returns, given that the trade is already slightly in-the-money.
More aggressive investors may want to use a strike price out of the money, such as the $42 calls, which last traded for about $1.05.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Historically, all companies go through a period of rapid growth while they build market share. Once they hit saturation, they tend to see a decline. To avoid that, most companies have to innovate and come up with a new product or service to keep customers.
For other assets, such as commodities, demand can fluctuate in cycles. Investors who buy near the low of the cycle and sell near the top can often make market-beating returns.
Today, utility companies are behaving like commodity stocks at the start of a bull market. That’s because rising demand for AI means a demand for more energy. That means building out new power facilities to meet those needs.
Power-plant operators have fared well over the past few months. But with demand expected to go from a growth rate of 0.4% to 2.8%, bigger gains are ahead.
Action to take: Investors can buy a number of utilities in areas where new data centers are being built out. One play that looks attractive is NextEra Energy (NEE), given the rising population in the company’s service area of Florida.
Shares pay a 2.7% dividend, and NextEra has a history of increasing that payout over time.
For traders, the September $80 calls, last trading for about $3.30, could see mid-double-digit returns from a further move higher in shares over the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Richard Blackley, a director at SLM Corp (SLM) recently bought 11,702 shares. The buy came to a total cost of $249,378, and increased the director’s stake by 99%.
This marks the first insider buy over the past year. Otherwise, there have been 8 insider sales over the last 12 months. That includes one sale from an EVP valued at over $1.9 million. And the company’s CFO was also a seller of shares.
Overall, SLM insiders own 1% of shares.
The student loan company is up 22% over the past year, about in-line with the overall stock market.
Business has been much stronger than the stock’s performance, as revenues are up 75% and earnings have surged nearly 145%.
Shares of SLM are still inexpensive at less than 8 times forward earnings. Plus, SLM has a hefty 44% profit margin, indicating that business remains strong.
Action to take: Investors may like shares here given their current uptrend. At current prices, SLM also pays a 2.1% dividend yield. The payout could increase over time, given the low payout ratio.
For traders, shares have been trending gradually higher over the past few months. The October $22 calls, last trading for about $1.15, could see mid-double-digit returns from a further rally going forward.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Drug manufacturer Pfizer (PFE) has struggled in the past year, with shares shedding nearly 25%. One trader sees a further decline in the coming weeks.
That’s based on the July 5 $28 puts. With 28 days until expiration, 18,025 contracts traded compared to a prior open interest of 165, for a massive 109-fold increase in volume on the trade. The buyer of the calls paid $0.21 to make the bearish bet.
Pfizer shares recently traded for about $29.50. They would need to decline $1.50, or about 5%, for the option to move in-the-money. Such a move in a short period of time is possible for shares, having rallied that much higher in the past week.
While Pfizer has struggled in the past year, shares have been trending higher since late April. Operationally, Pfizer has been a wreck, with revenues down 20% and earnings off 44% in the past month.
Action to take: While Pfizer looks attractive and pays a 5.7% dividend at current prices, there could be some short-term downside in the coming weeks. Interested investors may get an opportunity to buy shares on a pullback in the coming weeks.
For traders, the July 5 $28 puts are somewhat aggressive, but are also inexpensive enough to provide investors with high-double-digit returns or better in the span of a few weeks. Traders should look to take quick profits on a down day for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Semiconductor companies have been on a tear. Part of their rally is driven by anything related to AI. But another part is the announcement of new chips that can truly expand on the breakthroughs occurring in AI today.
Part of that could mean that some lagging companies may end up grabbing more market share. And that slower-growing companies out of the market’s favor may become the new market leaders in the quarters ahead.
For instance, Intel (INTC) has struggled in recent years. It’s long underperformed in the industry. But the company’s push for personal computer (PC) chips that can enable AI could be a game changer.
Intel just unveiled details on its Lunar Lake models, which will start debuting in the third quarter.
Intel shares have traded flat over the past year, but a win with PC AI chips could mean the company starts to attract big market interest.
Action to take: With shares at a 52-week low, Intel looks like a contrarian play in the AI space. If the new chips are successful, it could mean a big move higher for shares. Today’s investors may like a position in the AI chip space.
For traders, the August $35 calls, last trading for about $0.66, could see mid-to-high double-digit returns in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Jimmy Duan, Chief Customer Officer at BlackLine (BL), recently bought 2,000 shares. The buy increased his stake by 4%, and came to a total cost of $95,450. The buy came a week after the company Co-CEO bought 3,000 shares, paying $149,650 for the position.
Those are the only insider buys over the past two years. Otherwise, company executives and directors have been moderate sellers of shares over the past two years. The last insider sales following the exercise of stock options occurred over a year ago.
Overall, BlackLine insiders own 8.1% of shares.
The finance and accounting application software company is down 14% over the past year. That’s in contrast to the 13% increase in revenues BlackLine saw over the same period.
Shares have slid from a 52-week high to a 52-week low in the span of a few weeks, and appear to be nearing oversold levels now. While the company has beaten on its latest earnings report, a plan to raise money in convertible notes has led to the drop.
Action to take: Investors may want to look for signs of a bottom here before buying. After raising capital, BlackLine may be in a better position to expand and even turn to profitability.
For traders, the August $50 calls, last trading for about $2.65, could see mid-double-digit returns on a rebound higher in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Air carrier United Airlines Holdings (UAL) has been trending higher since October. One trader sees shares hitting an air pocket over the summer.
That’s based on the September $46 puts. With 106 days until expiration, 47,599 contracts traded compared to a prior open interest of 306, for a massive 156-fold rise in volume on the trade. The buyer of the puts paid $1.74 to make the bearish bet.
UAL recently traded for about $52, so shares would need to drop by $6, or about 11.5%, for the option to move in-the-money.
UAL trades closer to its 52-week high of $58.23 than the low of $33.68.
But the price movements over the past few weeks appears to be forming a bearish head-and-shoulders pattern. That suggests some downside ahead, with the next support potentially in the low-$40 range.
Action to take: Shares have had a considerable runup in the past few months and appear to be taking a breather.
The head-and-shoulders pattern is a fairly reliable and consistent one, so interested traders should wait for a pullback before buying.
For traders, the September $46 puts are well positioned for any downside in the coming weeks, even out over the next few months.
Traders can likely nab mid-double-digit returns or better depending on the severity of the drop.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
“It’s only when the tide goes out that you learn who has been swimming naked.” That Warren Buffett quite is about the danger of investing in companies during bull markets. Some companies that are flying high today may have some problems that are being overlooked.
That trend could easily reverse. So with markets still near all-time highs, investors may want to look for companies that have clean financial books and are in good shape.
One such company is Autodesk (ADSK). Shares have rallied following an investigation into the company’s accounting. Autodesk reports there will be no need to restate or adjust past financial results.
The company even replaced its CFO, which should assure markets that there will not be any appearance of further accounting issues anytime soon.
The initial news of accounting trouble sent shares lower. The design software company is slightly down over the past year, as revenues have been flat.
But shares trade at 25 times earnings, and the company’s preliminary earnings suggest that Autodesk is growing at 20.6% year-over-year.
Action to take: Investors may like shares here, as there is likely more upside in the months ahead following the resolution of this accounting concern.
For traders, the August $230 calls, last trading for about $7.75, could see mid-double-digit returns on a further rally in the weeks ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Claude Mongeau, a director at Norfolk Southern (NSC), recently bought 5,650 shares. The buy increased his stake by nearly 40%, and came to a cost just under $1.25 million.
He is one of four directors who picked up shares last week. The smallest buy was for $150,000 shares. A third director saw their position grow by over 1,000%, and the last director to buy was building an initial stake. These mark the first insider buys over the past two years.
Overall, Norfolk Southern insiders own 0.1% of shares.
The railroad is up 5% over the past year, far lagging the overall stock market. Revenues are down by 4%, and earnings are off by 88%. Consumers have been spending less on physical goods, which has reduced rail volume.
However, the railroad remains profitable, and shares trade at 18 times forward earnings. Railroads operate as a regional transportation and logistics monopoly, which should allow them to fare better over time.
Action to take: Investors may like shares here. After sliding over the past few months, NSC shares appear to be starting a new uptrend. At current prices, buyers can also get a 2.4% dividend.
For traders, the September $250 calls, last trading or about $3.35, could see mid-to-high double-digit returns in the coming weeks following further upside for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Sports gaming site DraftKings (DKNG) is up 39% in the past year, beating the overall returns of the stock market. One trader sees shares trending higher in the coming weeks.
That’s based on the July 5 $36 calls. With 30 days until expiration, 11,050 contracts traded compared to a prior open interest of 119, for a 93-fold rise in volume on the trade. The buyer of the calls paid $1.57 to make the bullish bet.
DraftKings shares recently traded for about $35.50, making this an at-the-money trade. Shares are well off their 52-week high of $49.57, set back in March.
While DraftKings is still unprofitable overall, the business is performing well. Revenues are up 53% in the past year. And the company has ample cash on the balance sheet to avoid having to raise capital anytime soon.
Action to take: Shares have just had a sizeable pullback and look heavily oversold in the short-term. Investors may like shares here as a contrarian buy, but it may be prudent to wait for a few sessions to ensure that the stock can reverse higher from here.
For traders, the July $36 calls are inexpensive, and offer high double-digit returns for a bounce higher in shares over the coming weeks. Traders may want to take quick profits on any short-term bounce higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Most market sectors move in and out of favor with investors over time. One simple strategy for investors is to buy out-of-favor sectors, and then look to take profits when that sector turns around.
Doing so can create market-beating returns consistently, and keep out of sectors that are overly loved and may be poised to see a massive drop. Today, a few sectors remain out of the market’s favor, including one in the tech space.
That niche part of the tech market is cybersecurity. Despite increased budgets to deal with digital threats, cybersecurity stocks remain unloved by the market.
Case in point? SentinelOne (S).
Despite reporting strong quarterly earnings that beat expectations, shares took a big dive, losing nearly 15% on Friday. That’s even though the company has been expanding its AI-powered security solutions.
Shares have now been cut nearly in half from their 52-week high, even as revenues have soared nearly 40%.
Action to take: Shares of SentinelOne may still have some weakness in the coming days, but shares are heavily oversold in the short-term and are now near long-term support. Investors may want to start building a position in the coming weeks.
For traders, the August $18 calls, last trading for about $0.90, could see high-double-digit returns or better if shares rebound partially from the earnings-related selloff.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Marvin Riley, a director at Wolfspeed (WOLF), recently bought 1,866 shares. The buy increased his stake by 16%, and came to a total cost of $50,481.
This is the first insider buy since February, when a cluster of four directors bought nearly 10,000 shares each, at a cost of around $250,000 for each director. The last insider sale occurred last December, when the company CFO sold about 6% of his stake.
Overall, Wolfspeed insiders own 0.9% of shares.
The silicon carbide wafer manufacturer is down 47% over the past year, in stark contrast to the monster rally in the semiconductor sector as a whole.
Wolfspeed hasn’t been profitable over the past year, and managed to lose over $500 billion, even as revenues rose 4%.
Even though shares have been knocked down, the company has a large amount of cash on the balance sheet, and the company’s wafers area key component in particular for wireless communications chips.
Action to take: Shares have been trading around the same price since February, and may be forming a longer-term base from which to head higher.
Speculative investors may like shares here, especially given their higher return potential. Shares do not pay a dividend, so income investors should look elsewhere.
For traders, the September $30 calls, last trading for about $2.85, could see mid-to-high double-digit returns if shares start to trend up to the higher end of their trading range. Traders should look to take quick profits on any large one-day rally for Wolfspeed shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Discount retailer Dollar Tree (DLTR) is down 10% over the past year amid a slowdown in consumer spending on goods. One trader sees shares trending lower in the weeks ahead.
That’s based on the August $110 puts. With 72 days until expiration, 3,502 contracts traded compared to a prior open interest of 110, for a 32-fold rise in volume on the trade. The buyer of the puts paid $1.76 to make the bearish bet.
Dollar Tree shares recently traded for about $118, so shares would need to drop $8, or nearly 7%, for the option to move in-the-money. The strike price of the puts is near Dollar Tree’s 52-week low of $102.77.
While the company failed to turn an overall profit in the past year, revenues did rise 12%. Shares are pried slightly better than the overall market at 17 times forward earnings.
Action to take: Dollar Tree shares have been in a downtrend since March. But the price has perked up in recent days. Investors should wait for a possible re-test of the recent lows before buying shares.
For traders, the August $110 puts are an attractive play. Any weakness in the markets or in consumer spending could lead to a sizeable drop in shares. Traders can likely see mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
For all the clamor in the AI space, most investors have largely focused on large companies. On the surface level, that makes sense.
Big-name tech firms have billions of dollars that they can easily throw into AI projects. If there’s even a small boost to the company’s bottom line, it can mean big bucks for shareholders. But smaller AI plays look attractive now too. That’s because these companies have a smaller market cap.
As smaller companies grow, they can see a massive percentage return. And that move likely isn’t priced in yet.
For instance, pure-play AI application firm C3.ai (AI) is growing with the AI trend. While analysts expected revenues to rise by just 5%, instead they jumped by 20%.
While shares jumped 20% on the news, they’re still slightly down over the past year. As a smaller company with a market cap around $3 billion, C3.ai also isn’t profitable yet.
Action to take: Speculative investors may like shares here or on any big one-day drops. The company continues to perform well for an early-stage AI play. And if they have a breakthrough, the overall company could be worth significantly more.
For traders, the September $35 calls, last trading for about $2.20, could see mid-double-digit returns if shares carry through their current uptrend and rise higher.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Melanie Healey, a director at Hilton Worldwide Holdings (HLT), recently bought 2,000 shares. The buy increased her stake by 15%, and came to a total cost of $399,299.
This is the first insider buy in just over a year. Another director bought 695 shares for just under $100,000 in May 2023. Otherwise, company insiders have been slight sellers of shares in the last year, with most of those sales coming following the exercise of stock options.
Overall, Hilton insiders own 2.1% of shares.
Hilton shares are up 42% in the past year. Strong tourism and travel demand has pushed earnings 29% higher, and revenues are up 12%.
The hotel chain also sports a 27% profit margin, a good sign that business remains strong and the company’s brand remains popular.
Shares now trade at 28 times forward earnings, a slight premium to the overall market.
Action to take: Shares have pulled back about 8% from their recent highs, and may be nearing a support level where they could trend higher. Investors may like shares here for a slight rebound in the coming weeks.
Hilton currently pays a 0.3% dividend.
For traders, the July $210 calls, last trading for about $1.60, could see mid-to-high double-digit gains if shares bounce higher in the coming weeks.
The option may not move in-the-money, so traders should look to take quick profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Shares of United Parcel Service (UPS) dropped to a 52-week low last Thursday, and shares are now down 20% over the past year. One trader sees a rebound in the coming weeks.
That’s based on the June 21 $136 calls. With 18 days until expiration, 10,588 contracts traded compared to a prior open interest of 109, for a 97-fold rise in volume on the trade. The buyer of the calls paid $3.40 to make the bullish bet.
UPS recently traded just over $136, making this an at-the-money trade. In intra-day trading last week, shares hit a 52-week low of $133.63.
The freight and logistics company has performed poorly in the past year. Declining demand for services resulted in revenues dropping by 5%, and earnings are off 41%.
Despite those drops, UPS remains an industry leader. And shares now trade at less than 17 times forward earnings, a slight discount to the overall stock market.
Action to take: With shares at a 52-week low, they may bounce around a bit before starting a new trend in either direction. Today’s buyers can get a 4.8% dividend at current prices, another sign that shares may be near their lows for some time.
For traders, the June 21 calls don’t have much time to play out. But they could see high double-digit returns if the stock pops higher in the coming days. Traders should look to take quick profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Different companies have different ways of offering products and services to their consumers. Wall Street prefers to see companies that have as much consistency to their revenues as possible. That’s why cyclical companies tend to vastly underperform the markets at some times, and outperform at others.
Today, Wall Street loves seeing companies that can generate recurring revenues. It’s better to have monthly billing rather than make one-time sales, even if the overall revenue is the same.
While this has been seen as the preferred model for streaming services, other companies are posting strong recurring revenue numbers and are also getting rewarded.
Online pet store Chewy (CHWY) has an auto-ship feature, and the increase there has shares popping. The feature is also helping the company beat analyst estimates overall.
Even with the pop higher after earnings, shares are still down nearly 30% over the past year. Earnings have soared over 400%, but revenues are up just 5%, and the company still has less than a 1% profit margin.
Action to take: Shares have been heavily beaten down, but now look on track to see a rebound. The post-earnings pop higher is likely to continue in the months ahead, making for a speculative buy now.
For traders, the September $25 calls, last trading for about $1.95, could see mid-to-high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Jarrod Yahes, CFO of Shutterstock (SSTK), recently bought 5,350 shares. The buy increased his stake by 14%, and came to a total cost of $199,822.
This is the first insider buy since a director bought 10,000 shares in June 2022. Otherwise, company insiders have been sellers, with the biggest sales coming from the company’s Chairman of the Board, who is also a major holder.
Overall, Shutterstock insiders own 31.2% of shares.
The image service company is down 27% over the past year. The rise of AI technologies for image creation is seen by many as a potential threat to companies that produce and license images.
That’s reflected in the company’s financials. Earnings are down by 51%, and revenues have been flat over the past 12 months.
Despite that falloff, shares are somewhat inexpensive at 14 times earnings, and Shutterstock has slightly more cash than debt on its balance sheet.
Action to take: Shares are near a 52-week low, are oversold, and have started to trend higher in recent sessions. They may make for a quick rebound play in the coming weeks and months.
At current prices, Shutterstock also pays a 3.2% dividend.
For traders, the September $40 calls, last trading for about $3.10, could see mid-to-high double-digit returns on a bigger bounce higher for shares in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Major U.S. carrier American Airlines (AAL) slid 15% earlier this week, amid a warning on earnings. One trader sees a further slide over the next six months.
That’s based on the November $8 puts. With 168 days until expiration, 47,299 contracts traded compared to a prior open interest of 433, for a massive 109-fold rise in volume on the trade. The buyer of the puts paid $0.18 to make the bearish bet.
American Airlines shares recently traded for over $11.50. Shares would need to decline by $3.50, or about 30% for the option to move in-the-money.
The strike price is well under American Airline’s 52-week low of $10.86 per share.
Although passenger traffic is up and energy prices haven’t soared, the company cut its latest quarterly guidance, citing demand. Even with beneficial factors at play, American Airlines only saw revenues rise 3% in the past year, and profitability has been elusive.
Action to take: American Airlines shares are in a downtrend, so interested investors should stand aside for now. Shares will likely retest their recent low, and could end up bouncing from there.
For traders, the November $8 puts play well to the current downtrend. The options are inexpensive enough to see high-double-digit, if not triple-digit returns on a further drop lower. But look for the 52-week low area as a sign of potential strength and reversal for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Traders looking to profit over a multi-month period can often get a good return following activist shareholders. Typically, activists build a position then disclose it. Once they do, they also make note of changes they’d like to see at the targeted company.
Some companies will work to make those changes, and get the activist shareholder to move on. Others may resist, and then have to deal with a boardroom battle. How this plays out can lead to wide returns in how the stock performs.
Recently, Elliott Investment Management has targeted semiconductor chip manufacturer Texas Instruments (TXN). The activist investor sees the potential to increase TXN’s free cash flow and put it to better use.
Shares were barely unchanged on the news. But TXN has been rallying in recent months, and is up 13% over the past year. That’s well under the performance of many other semiconductor companies.
Action to take: Even with its recent run higher, Texas Instruments has more room to run. And the company’s 35% profit margin can likely improve, and along with it investors can obtain higher cash flows.
At current prices, Texas Instruments pays a 2.6% dividend.
For traders, the July $210 calls, last trading for about $3.20, could see high double-digit returns in the coming weeks on a further push higher in TXN shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Joseph Kim, President and CEO of Sunoco LP (SUN), recently added 5,000 shares. The buy increased his holdings by 1%, and came to a total cost of $252,516.
Kim also bought 5,000 shares last June, paying $177,475 for that tranche. One company director bought 1,500 shares for just over $78,000 last month. There has been one insider sale over the past year from the company’s General Council.
Overall, Sunoco insiders own 21.5% of shares.
The oil and gas refining and marketing company is up 16% over the past year. That’s lagged the overall S&P 500, but is reflective of the slow performance in the energy sector.
Shares trade at 9 times forward earnings, and about 0.2 times their price-to-sales. That indicates that there could be further upside ahead for Sunoco, particularly as demand for oil tends to rise during the summer driving months.
Action to take: Shares have pulled back significantly from their 52-week highs, and shares look oversold enough to be near a buying point.
As an LP, Sunoco is structured to pay a high dividend. Shares currently pay a 7% yield.
For traders, the September $55 calls ,last trading for about $1.05, could see mid-to-high double-digit returns.
Traders should look to take profits if shares see a quick spike higher, which is likely to occur if there’s a similar spike in oil prices.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Gold producer Kinross Gold (KGC) is soaring along with the price of the metal, with shares up 73% over the past year. One trader sees the stock taking a breather over the next two months.
That’s based on the July $8.00 puts. With 50 days until expiration, 4,779 contracts traded compared to a prior open interest of 109, for a 44-fold rise in volume on the trade. The buyer of the puts paid $0.35 to make the bearish bet.
Kinross shares recently traded for about $8.25, so they would need to drop about 3% for the option to move in-the-money. The stock is right at its 52-week high of $8.27.
Operationally, Kinross has had a reasonable year. Revenues and earnings are up nearly 20% each in the last 12 months. And shares still look attractively valued at 15 times earnings. But most of the price movement will be based on how gold prices move in the months ahead.
Action to take: Gold just had a recent pullback, which may take a few more weeks to play out. Interested investors can still build a small position on any down day for Kinross. At current prices, shares pay a 1.5% dividend.
For traders, the July $8 puts could see mid-double-digit returns or better on a pullback in the coming weeks. Going into the fall months, traders may see better strength in the gold market, so consider flipping profits on the short side to a long position.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The Wall Street saying “Sell in May and go away,” isn’t about getting out of the market. Rather, it’s a warning that the market’s returns in the middle few months of the year tend to slow.
But even through the summer, it makes sense to stay invested. It’s only September and October that are historically challenging for investors. With a summer slowdown the seasonal norm, investors can find opportunities, particularly with dividend-paying stocks.
While dividends haven’t gotten as much attention in the age of AI, the total payouts by corporations to their shareholders have hit a record.
That’s thanks to increasing payouts from profitable companies. And it’s also from companies like Meta Platforms (META), which is offering a dividend for the first time.
Meta’s starting dividend was nothing special at 0.1%, but the company is looking for a bigger payout going forward. The overall yield is still low at 0.4%. But Meta’s payout ratio is a low 3% of earnings.
That means there’s more room for big dividend hikes in the next few years alone.
Action to take: Long-term investors may like Meta here or on any drop lower, given the potential income growth in the years ahead.
For traders, shares are trending higher over the past few weeks, but are still under their 52-week highs. The September $530 calls, last trading for about $19.00, could see mid-double-digit returns on a further trend higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Jenna Bedsole, a Senior Vice President at AutoZone (AZO) recently bought 36 shares. The buy is an initial stake for the SVP, and came to a total cost of $99,256.
This is the first insider buy since June, when another company SVP bought 476 shares at a cost of $1.1 million. Otherwise, company insiders have largely been sellers of shares, with nearly all of those sales coming following the exercise of stock options.
In total, AutoZone insiders own 0.3% of shares.
The auto parts store chain is up 14% over the past year. While Americans are holding onto their cars for longer periods of time, which should drive up demand for auto parts, AutoZone has struggled.
Earnings grew by less than 1% in the past year, and revenues were up just 4%. Shares do trade at a slight discount to the overall stock market at 17 times forward earnings.
Action to take: Shares have recently dropped about 14% from their 52-week highs.
Plus, it looks like the stock just completed the final selloff from a head and shoulders pattern. That suggests a trend higher in the coming months. Investors may like shares here for a low-double-digit rally in the coming months.
For traders, the September $3,200 calls, last trading for about $24.00, could see high double-digit returns from a rebound in shares in the months ahead. Traders should look to take quick profits from a jump higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Office workflow software giant Workday (WDAY) is up 6% over the past year, far underperforming the overall market. Shares have been trending lower since late February, and one trader sees that trend continuing in the coming months.
That’s based on the July $210 puts. With 51 days until expiration, 11,397 contracts traded compared to a prior open interest of 343, for a 33-fold rise in volume on the trade. The buyer of the puts paid $3.85 to make the bearish bet.
Workday shares recently traded for about $220, so they would need to drop by $10, or less than 5%, for the option to move in-the-money. The strike price is well over the company’s 52-week low of $192.68.
Besides sliding lower in recent months, shares dropped 15% last Friday as the company warned on potential sales, giving a slowing economy and large companies continuing to announce layoffs.
Action to take: With shares still in a downtrend and the company warning on dangers, there may be further downside for shares in the months ahead.
Interested investors should wait for the declining to stop and for signs of a turnaround before buying.
For traders, the July $220 calls could see mid-double-digit returns or better in the short-term, given the potential for shares to trend lower in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
In any industry, there’s one leader. Even if there are two big players that seemingly duke it out, one of them is still king of the hill. In the tech space, today’s leaders can become tomorrow’s laggards.
That also means that when a leading stock is soaring, smaller players may be more attractive. Those smaller players could win from a “catch-up” trade when the leader’s momentum slows down.
Right now, Advanced Micro Devices (AMD) could be the catch-up trade against industry giant Nvidia (NVDA).
Shares have pulled back after earnings, as investors have noted that AMD isn’t making as much progress in AI compared to Nvidia. But that’s created a relative value, and a stock that hasn’t surged as far over the past few years.
AMD still has a big stake in auto chips and video gaming, which will continue to prove profitable in the years ahead no matter what happens with AI.
Action to take: With shares down nearly 30% from their all-time high, investors can start building a stake today. Any further declines can be used to add to the position.
For traders, shares have started to trend higher in recent weeks.
The July $175 calls, last trading for $5.35, should see mid-double-digit returns or better on a further rally in the weeks ahead. Traders should take a quick profit on any big one-day jump in AMD shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Frank Svoboda, CEO of Globe Life (GL), recently bought 5,000 shares across two days. The buys increased his position by 4%, and came to a total cost just over $420,000.
He was joined by the company’s Co-Chairman of the Board, who bought 3,000 shares in total, at a cost of over $250,000. And the company CFO recently picked up $42,214 worth of shares. Going back to 2023, insiders were more likely to be sellers of shares rather than buyers.
Overall, Globe Life insiders own 2.2% of shares.
The life insurance provider is down nearly 20% over the past year.
Operationally, Globe has been faring well. Higher interest rates have improved performance on the company’s investments, with revenues up 7% and earnings up nearly 14%.
Plus, shares trade at about 10 times forward earnings.
Life insurance companies tend to perform well over long periods of time, although they also tend to have lower demand than property and casualty insurance.
Action to take: Shares are trading at a reasonable valuation for investors today, and the stock is trending higher off its April lows.
Plus, Globe pays a 1.1% dividend.
For traders, the continued move higher off the lows looks likely in the months ahead. The July $85 calls, last trading for about $4.00, could see mid-double-digit returns on a further trend higher in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Digital payment system operator Block (SQ) is up 14% over the past year, far lagging the overall market, and now in a downtrend. One trader sees shares continuing lower in the months ahead.
That’s based on the August $62.50 puts. With 80 days until expiration, 7,482 contracts traded compared to a prior open interest of 119, for a 63-fold rise in volume on the trade. The buyer of the puts paid $3.85 to make the bearish bet.
Block shares recently traded for about $67, so they would need to drop about $4.50 for the options to move in-the-money. The strike price is closer to the stock’s 52-week high of $87.52 than the low of $38.85.
Block has been a strong performer over the past year, with earnings surging 380%. But concerns of a slowdown in consumer spending are also impacting shares are there may be fewer financial transactions.
Action to take: If shares don’t find support here in the mid-$60 range, as they have in the past few months, they may trend lower.
If they find support, shares could bounce higher from here in the coming months. For now, investors should try and buy in the low-$60 range and build on that position following a drop.
For traders, the August puts could deliver mid-to-high double-digit returns on a break lower for shares. Traders will likely have some time to exit the trade if it starts to break the other way.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Defensive stocks tend to hold up well in just about any market. This recent market rally has been an exception. Tech stocks have handily beaten other sectors. And high interest rates have made dividend-paying defensive stocks look less attractive.
But the businesses behind those stocks aren’t playing defense. By creating new products and expanding operations, they can continue to grow, and provide investors with great long-term returns. Buying these companies today could fare well when the tech trade slows down.
One such company is Keurig Dr Pepper (KDP). The company is largely considered a distant third in the soft drink space, even with its ownership of leading coffee brands.
But shares are slightly less expensive than those big players. And management is looking to boost the performance of its coffee division.
This shakeup may help KDP see higher growth than its 3.4% revenue increase over the past year, and underwhelming 9% move higher.
Action to take: Investors may like shares here as a long-term holding. Besides the potential for improved growth, shares also pay a 2.5% dividend, which KDP has a history of increasing over time.
For traders, the July $35 calls, last trading for about $0.50, could see mid-to-high double-digit returns in the coming weeks, given the current uptrend in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Gerald Johnson, a director at Caterpillar (CAT), recently bought 100 shares. The buy increased his position by 5%, and came to a total cost of $35,640.
Johnson is the second director to buy this month, following a 500 share pickup from another director. There has been a large sale from a company Group President in the past month, amounting to a $7.8 million sale. Other executives have also been sizeable sellers in the past year, largely following the exercise of stock options.
Overall, Caterpillar insiders own 0.2% of shares.
The agricultural machinery manufacturer is up 70% over the past year, far beating the overall market, thanks to strong construction and infrastructure spending. So it’s easy to see why many executives are cashing out shares now.
But with the stock trading at 16 times forward earnings, and with those earnings up 47% in the past year, investors who buy shares on a pullback should fare just fine with the stock.
Action to take: Shares have recently pulled back from an all-time high of $382.01. Today’s buyers may want to build a position up to $360. At current prices, Caterpillar also pays a 1.5% dividend.
For traders, the July $380 calls, last trading for about $4.25, could see mid-double-digit returns on a trend higher in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Shares of pizza chain Papa John’s International (PZZA) are down 33% over the past year. One trader is betting on a further decline into the autumn.
That’s based on the October $57.50 puts. With 144 days until expiration, 21,310 contracts traded compared to a prior open interest of 111, for a 192-fold rise in volume on the trade. The buyer of the puts paid $11.12 to make the bearish bet.
Papa John’s shares recently traded for about $47.50, meaning the puts are about $10.00 in-the-money. Shares are trading close to their 52-week low of $46.81.
Operationally, high costs and a competitive dining environment have eaten into profitability. Revenue dropped 3% in the past year, and overall earnings are down about 35%.
With consumers starting to cut back on dining-related spending, some further pressure on the stock is likely in the months ahead.
Papa John’s shares now trade for about 20 times earnings, a slight discount to the overall market.
Action to take: Investors should avoid shares for now. While getting oversold in the short-term, the downtrend is clear and doesn’t show a sign of a long-term bottom or even turnaround at this time.
For traders, the October $57.50 puts could see mid-double-digit returns in the months ahead. More aggressive traders could also look for a strike price closer to the current price of the stock.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Consumer spending has been declining. That bodes poorly for most retail stocks from here. However, not all retail stocks are created equal. Some retailers can thrive in a challenging environment.
Specifically, companies that cater to cost-conscious consumers. Even with tight budgets, those looking for a deal and seeing price tags with steep discounts on them will likely continue to flock to companies that continue to have massive deals.
One company that could hold up well amid slowing consumer spending is TJX (TJX). The discount retailer does a fantastic job of keeping shoppers coming back to look for deals.
TJX isn’t immune to recent trends. Their most recent same-store sales growth projections came in lower than expected. But the company did beat on overall earnings and raised their guidance for the full year 2024.
Over the last 12 months, revenues are still up 13%, and earnings are up 35%. And shares are valued about in-line with the overall stock market.
Action to take: Investors may like shares here or on any drop lower. TJX has a business model poised to continue profiting in a dour spending environment like today’s.
For traders, shares are tending higher, and the stock has made a new 52-week high. The July $110 calls, last trading for about $0.70, could see mid-to-high double-digit returns in the coming weeks on the back of a continued uptrend.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Marvin Boakye, Chief HR Officer at Cummins (CMI), recently bought 1,745 shares. The buy is a new position for the director, who paid $499,133 for the stake.
This is the second insider buy of the year, following a director’s purchase of 562 shares for just under $150,000 back in February. Since then, one director has sold part of their position, and the company’s Chief Administrative Office has made three separate sales.
Overall, Cummins insiders own 0.4% of shares.
The industrial machinery manufacturer is up 36% in the past year, outperforming the overall stock market. Revenues have been flat, but earnings are up over 150%. Cummins has benefited from increased infrastructure spending.
Cummins trades at 15 times forward earnings, still making it inexpensive relative to the average stock. Plus, Cummins has a strong balance sheet, with over $3 billion in cash on hand.
Action to take: Long-term investors may like shares here, or on any drop lower. At current prices, Cummins pays a 2.4% dividend, and has a history of raising its payout over time.
For traders, shares have had a strong uptrend in recent months, but that rate of trade has slowed. A call option like the July $300 calls, last trading for about $4.75, could see mid-double-digit returns in the weeks ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Fuel cell system producer Bloom Energy (BE) is up 10% over the past year, far lagging the overall stock market. One trader is betting that shares will trend higher in the coming weeks.
That’s based on the July $18 calls. With 56 days until expiration, 3,976 contracts traded compared to a prior open interest of 127, for a 31-fold rise in volume on the trade. The buyer of the calls paid $1.47 to make the bullish bet.
Shares recently traded for about $16, meaning the stock would need to rise $2, or about 12.5%, in order for the option to move in-the-money. The strike price is near the stock’s 52-week high of $18.76.
Bloom Energy has struggled in the past year as an alternative energy play. Revenues are down nearly 15%, and the company has been unprofitable.
However, the company has sufficient cash on hand to make it through today’s environment, and shares are expected to turn a small profit in the next quarter.
Action to take: With shares trending higher, Bloom Energy is a momentum play for investors now. More risk averse investors may want to look for a pullback before buying a position.
For traders, the July $18 call is well positioned for mid-to-high double-digit returns in the coming weeks. If the share trend starts to stall out, look to take a quick profit.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
In any industry, market share is a key metric. How much of the total market one company gets can result in bigger profits, and also open up opportunities to take advantage of a larger size.
Investors remain wary about inflation and rising costs. Those costs are usually seen when making a purchase, even if inflation has worked its way through the entire system. Retail companies are working on ways to lower prices and knock down inflation.
One way is by finding products that can be sold at a lower price. Retailer Target (TGT) is working on plans to lower prices on about 5,000 frequently bought items.
That could help encourage customers to open up their wallets, and help the company boost its market share.
Target shares are up a scant 7% over the past year, rising about one-fourth as much as the overall market. The stock trades at 17 times earnings, and at 0.7 times its price to sales, a moderate discount to where it usually trades.
Action to take: Investors may like shares here or on any pullback. At current prices, Target pays a 2.8% dividend.
For traders, shares are gradually trending higher, but have pulled back in recent weeks. The September $170 calls, last trading for about $1.15, could see mid-to-high double-digit returns in the weeks ahead on a bounce higher from the current oversold levels.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Alan Patterson, a director at Hamilton Insurance Group (HG), recently bought 21,135 shares. The buy is an initial stake for the director, and came to a total cost of $352,109.
This is the first insider buy of the year. The company’s Chief Accounting Officer sold nearly half his stake around the same time. Going further back, another director bought 10,000 shares back in December. But company insiders were largely sellers of shares in late 2023.
Overall, Hamilton Insurance Group insiders own 12.6% of shares.
The reinsurance company is up less than 10% over the past year, far lagging the overall stock market, although the stock is trending to new 52-week highs.
Operationally, Hamilton has been performing well, with a 104% jump in revenues, and a surging 205% earnings growth.
Hamilton Insurance currently trades at a 15% discount to its book value, and shares trade at just 5 times earnings.
Action to take: Shares look like a reasonable value at current prices. Reinsurance companies tend to get less attention than regular property and casualty insurance companies.
At present, shares do not pay a dividend.
For traders, the ongoing uptrend is likely to continue. The October $15 calls, last trading for about $2.50, are already about $1.60 in-the-money. The options can likely see mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Consumer tech company Pelton Interactive (PTON) is down 46% over the past year. Shares dropped 15% alone on Tuesday, as the company looked to issue a $1 billion loan. One trader sees shares bouncing higher.
That’s based on the June 28 $4 calls. With 36 days until expiration, 5,027 contracts traded compared to a prior open interest of 205, for a 25-fold rise in volume on the trade. The buyer of the calls paid $0.24 to make the bullish bet.
Shares recently traded for about $3.30, so they would need to rise $0.70, or about 21%, for the option to move in-the-money.
The strike price is almost mid-way between the 52-week low of $2.70 and the 52-week high of $9.87.
Operationally, Peloton has faced some heavy losses, including a $762 million loss over the past year.
The company has been working to restructure and improve its revenues, but continues to struggle. Taking on new debt now could mean more selling pressure for shares.
Action to take: Shares are moving lower again on the loan issue, and may move to re-test their prior lows before moving higher. If Peloton has any positive developments, shares could see a jump higher.
For traders, the June $4 calls could be a winner, but it may take a day or two for shares to reach a low before moving to bounce higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
While the market trends higher over time, some companies can be out of favor with the market. If they’re capable of finding ways to improve their business and profitability, they’ll likely have a catch-up rally.
Such rallies can beat the overall market returns handily over time. And they’re the kind of move that can be common in large, established companies that tend to otherwise perform as slow-moving investments. One way to find these opportunities is to follow activist investors.
For instance, right now activist investors are targeting Johnson Controls (JCI), a manufacturer of building security and HVAC technologies.
Despite trending higher the past few months, the stock is up about 10% over the last year, lagging the overall market. Shares aren’t overpriced at 19 times earnings, either.
But JCI has lagged due to its mixed earnings overall in the past year, and its lackluster 0.2% revenue growth during a time of economic expansion.
Action to take: An activist investor can cause the company to make positive changes that improve the business, even if that investor doesn’t win board seats or control of the company.
That could bode well for JCI in the months ahead. Plus, today’s buyers will also get a 2.1% dividend.
For traders, the July $75 call, last trading for about $0.95, could see mid-to-high double-digit returns from a further uptrend in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Gary Cohen, President and CEO of iRobot Corp (IRBT), recently bought 2,050 shares. The buy increased his stake by over 1,000%, and came to a total cost of $25,189.
This is the first insider buy in over two years. Otherwise, company executives and directors have been sellers of shares, including one director who sold over $2 million in shares back in February. iRobot’s prior CEO was also a seller of shares at a price nearly four times higher from where the stock trades today.
Overall, iRobot insiders own 2.1% of shares.
The home robotics manufacturer has seen shares slide by two-thirds over the past year. Regulatory issues kept tech giant Amazon (AMZN) from acquiring the company outright.
iRobot has struggled operationally over the past year. The company hasn’t turned a profit and revenues dropped 6%.
However, the company could be a prospective buyout opportunity for another company. Shares trade at just 5 times revenues, and the company trades at about one-third its price to sales.
Action to take: Shares have been trending higher over the past few months after hitting their recent lows. The stock is likely to keep trending higher over time from here, making for a contrarian investment opportunity today.
For traders, the July $14 calls, last trading for about $0.65, could see mid-double-digit returns on a continued rally higher. Traders may want to take quick profits on any large one-day rally for shares.
Healthcare services operator Astrana Health (ASTH) is up 30% over the past year, despite a recent pullback. One trader sees further gains in the weeks ahead.
That’s based on the June $45 calls. With 30 days until expiration, 6,037 contracts traded compared to a prior open interest of 110, for a 55-fold surge in volume on the trade. The buyer of the calls paid $0.26 to make the bullish bet.
Astrana shares recently traded for about $39, meaning shares would need to rise about $6, or 7.5%, for the option to move in-the-money. The strike price of the option is close to Astrana’s 52-week high of $45.71.
Operationally, the company has performed well. Earnings grew 13% over the last year, and revenues are up nearly 20%.
Healthcare spending continues to rise at a faster rate than the economy, which tends to make for a reasonable investment for patient investors who buy when shares are declining.
Action to take: Astrana shares can be volatile in the short term, but investors looking for a small-cap play in the healthcare space may want to use those dips to accumulate positions.
For traders, the June $45 calls could see mid-double-digit returns in the coming weeks. Shares are trending higher in the short-run but could be prone to steep pullbacks. Traders should look to take a quick profit.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
There’s a saying in the video game industry that a delayed game can become good. But a game that’s rushed out with flaws will never be great. Some video game companies have taken that philosophy to heart, even when it means delaying an anticipated release.
That can be tough for some studios, since they have to develop the game before they can sell it and generate revenue. For larger studios working with multiple properties, it’s somewhat easier.
For instance, Take-Two Interactive Software (TTWO) just announced the delay of the anticipated Grand Theft Auto VI. The move also brought a forecast for lower revenues.
While that’s disappointing, it simply means that the company’s revenues and profits will simply occur later. Given that it’s been over 10 years since the last game in the series, anticipation remains high – so those future profits look likely.
Take-Two has significantly underperformed the market over the past year, up just 6%. It may continue to trading sideways, but should break higher as the game gets close to launch.
Action to take: Long-term investors may want to consider building a position here, and using any declines in the coming months to add to that position.
For traders, shares have traded in a narrow range over the past year. For that kind of pattern, a strategy like covered call writing could add some income for shareholders.
For those without shares, the September $130 puts, last trading for about $3.75, could be sold for income, at the risk of being assigned shares near their 52-week low.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Gerhard Zeiler, International President at Warner Bros Discovery (WBD), recently bought 100,000 shares. The buy increased his stake by 12%, and came to a total cost of $830,000.
This marks the first insider buy of 2024. Zeiler was a buyer last year, picking up 38,000 shares at a cost of $535,420. Another company director was a buyer late last year, and the company CFO bought 15,000 shares in mid-2023.
Overall, Warner Bros Discovery insiders own 9.2% of shares.
The media conglomerate has seen shares slide by one-third over the past year, and shares trade at a level last seen in 2008. Media companies have struggled amid high competition for streaming services.
WBD is currently unprofitable, although shares are arguably a value play, given that the company is valued at half its book value, which includes a number of massive intellectual properties.
Action to take: As with other media companies, there’s no sign of a meaningful move higher quite yet. WBD does not pay a dividend either. Interested investors should look for a clearer sign of the downtrend to end and a turn higher before buying.
For traders, the current trend is lower. The July $7.50 puts, last trading for about $0.30, could see high double-digit gains or better if the current downtrend continues.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Coffee chain Starbucks (SBUX) is down nearly 30% over the past year, and shares have been trending down since reporting earnings. One trader expects a rebound in the coming weeks.
That’s based on the June 14 $81 calls. With 24 days until expiration, 2,684 contracts traded compared to a prior open interest of 110 contracts, for a 24-fold rise in volume on the trade. The buyer of the calls paid $0.63 to make the bullish bet.
Starbucks shares recently traded for about $78, so shares would need to rise by $3, or just under 4%, for the options to move in-the-money.
Shares are close to the 52-week low of $71.80.
Operationally, Starbucks has struggled in the past year. Earnings have dropped by 15%, and revenues are down by 2%. Plus, same-store sales dropped 10% in the U.S., the company’s key market, in the last year.
Action to take: While shares sold off heavily after earnings, they’re starting to show signs of trending higher and closing up the gap lower they had. That suggests shares could see a continued resurgence in the coming months.
At current prices, shares pay a 3% dividend. Starbucks has a history of raising its payout over time.
For traders, the June $81 calls could see high double-digit returns on a continued rally higher for Starbucks shares in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The AI rally of the past 18 months has largely focused on big-tech names and semiconductor manufacturers. But AI’s applications can encompass and benefit every company, no matter what industry it’s in.
That’s leading to a number of stealth AI plays. These are companies that will benefit from the rise of this technology and its rollout in the years ahead. Investors who buy into these companies can see market-beating returns in the years ahead.
One such company is Dell Technologies (DELL). Best known for personal computer manufacturing, the company’s expansion into servers plays right into the AI boom.
Shares just received an analyst upgrade, and the stock hit a new 52-week high last week. That pushed the company’s market cap to $100 billion, which still makes it a fraction of the big-tech players benefitting from AI today.
Earnings have surged 89% over the past year. And shares are reasonably valued at 19 times earnings.
Action to take: Long-term investors may want to buy a small stake now, and use any market pullback to add to that position. Dell shares currently pay a 1.2% dividend.
For traders, shares are in an uptrend and are likely to continue in the months ahead. The July $160 calls, last trading for about $7.80, could see mid-double-digit returns from a further rally in Dell shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Kristy Pipes, a director at Public Storage (PSA), recently bought 2,149 shares. The buy is a new stake for the director, and came to a total price of $599,485.
This marks the first insider buy since December 2022, when the company President and CEO bought 2,500 shares at a price of $744,137. Otherwise, there have been a few insider sales in 2023, including some large sales by a director following the expiration of stock options.
Overall, Public Storage insiders own 10.2% of shares.
The self-storage facility REIT has traded flat over the past year.
The company has had a mixed year. Revenues are up 6%, reflecting price increases for storage units. However, overall earnings have dropped 2%, amid lingering concerns over real estate valuations.
Most importantly for investors, the REIT sports a hefty 46% profit margin. And as a REIT, investors get a high income. Shares pay a 4.2% dividend at current prices.
Action to take: Self-storage demand remains strong, and Public Storage is one of the largest players in the industry. Shares likely have some long-term upside, in addition to the large dividend that the stock pays now.
For traders, shares are trending higher in the short-term. The September $310 calls, last trading for about $6.90, could see mid-double-digit returns from a push higher in shares in the weeks ahead. Traders may want to look to take quick profits rather than hold the trade until expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Base metals mining company BHP Group (BHP) has traded flat over the past year. One trader sees shares trending higher in the coming weeks.
That’s based on the July $62.50 calls. With 58 days until expiration, 47,106 contracts traded compared to a prior open interest of 702, for a 67-fold rise in volume on the trade. The buyer of the calls paid $1.70 to make the bullish bet.
BHP shares recently traded for about $60. So shares would need to rise by about $2.50, or 4.1%, for the option to move in-the-money. That’s well within BHP’s trading range over the past year, given its 52-week high of $69.00.
Besides trending higher over the past few months, shares are attractively valued at about 12 times forward earnings.
Metals prices remain robust, which bodes well for mining companies such as BHP, which produces iron, copper, and other key metals.
Action to take: Investors may like shares here, which could continue to the high $60 range in the coming months following its uptrend higher.
Plus, shares pay a dividend of 5.1% at current prices.
For traders, the July $62.50 calls stand a good chance of moving in-the-money, and could see mid-to-high double-digit returns.
Traders should look to take profits if shares get to the high $60 range, as that’s where the stock last saw a top before selling off.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
10 AI Stocks to Buy Now
Since its launch in November 2022, ChatGPT has unleashed a massive investor interest in artificial intelligence (AI).
That’s because generative AI like the kind developed by ChatGPT shows how powerful this trend has become. And it’s kicked off a race by companies to develop AI programs and systems of their own.
With AI tools, companies can create more efficient manufacturing processes. Reduce waste. Better utilize their workforce.
Even if there are only small gains in those areas, that can add up to billions of dollars in added value for a large company – and trillions across the entire economy.
Already, the market has been looking for the top AI winners. While they’ve already had a run up, AI is so early in its development stages that these stocks have years of big gains ahead of them.
Here are the top 10 AI stocks to buy now:
Top AI Stock #1: Nvidia (NVDA)
Graphics processing units (GPUs) are the key technology for processing data quickly. They’re a key component for AI technologies.
And in the GPU manufacturing game, there’s one runaway winner, Nvidia.
Starting as a GPU provider for the gaming and computer space, AI demand is driving higher-level uses. They’re expanding into data center markets, the automotive space for self-driving cars, and GPUs are critical for successful cryptocurrency mining.
For AI, Nvidia has created the H-100 cloud server GPU. It’s become the industry standard for companies employing AI technology, given its rapid processing speed.
Nvidia is now even using AI tools to better design chips, which could help them expand their lead over competitors in the years ahead.
In short, Nvidia isn’t just the top AI stock … it’s likely going to be the top overall tech stock of the 2020s.
Even though Nvidia’s share price has surged by over 500% in the past few years, its earnings and revenues have grown just as fast.
In other words, even with a big price rally, shares aren’t overvalued. Especially when looking out at their growth potential in the years ahead.
One sign of Nvidia’s continued success? A hefty 48% profit margin. That’s a great level for a software company. For a company in the manufacturing space? It’s incredible.
Nvidia is a must-own stock for the AI trend … and for most of the other tech trends underway today.
Top AI Stock #2: Advanced Micro Devices (AMD)
While Nvidia has a big lead in the GPU space, nearly all chipmakers are benefitting from the booming demand for chips to meet the AI boom.
Among them, the leader for AI chips is Advanced Micro Devices.
They’re transitioning their business to increase exposure to the AI space, but they’re still the big chip leader in the PC market.
To that end, they’ve partnered with companies like Microsoft (MSFT) to supply chips to power their Azure platform.
Given Microsoft’s relationship with ChatGPT, that means AMD could be at the forefront of new developments in the AI space. That makes them the chipmaker best poised to grab market share. In time, they could eventually run neck-and-neck with Nvidia.
AMD is also working on AI-powered PCs. Rather than using a central server and requiring an internet connection, an AI-powered PC could make it easier for everyday users to employ AI in their work and play.
Given its expanding position in AI, the years ahead may be better for AMD than for Nvidia. That makes it a company worth owning as the AI trend takes off.
Top AI Stock #3: Microsoft (MSFT)
For years, tech giant Microsoft has been an investor in OpenAI. They invested $1 billion in the company back in 2019, well before the launch of OpenAI’s flagship product, ChatGPT.
In 2023, they confirmed a multi-billion-dollar investment that makes them a minority partner of the company.
That puts them at the forefront of AI technologies.
Given Microsoft’s existing products, AI integration is a no-brainer. Adding in AI to Microsoft’s Office suite, or in its gaming division, could create better products and improved revenue opportunities.
Microsoft sees itself as being the company to bring the top AI tools, infrastructure, and models to the world, akin to its dominance in operating systems with Windows back in the 1990s.
Currently, Microsoft has a series of AI programs, such as its AI Skills Initiative. This offers free online courses and grants for generating AI and data science.
There’s also a Professional Program, providing hands-on experience in AI systems.
Microsoft is also one of several tech giants working on an AI committee to shape AI policy in in the United States government.
Even though it’s one of the largest companies on earth, Microsoft’s investment in OpenAI pays off, the company could continue to see the massive growth continue.
Top AI Stock #4: Meta Platforms (META)
Meta Platforms is best known as the holding company for the social media sites Facebook and Instagram.
Social media sites have come under fire in recent years, as their algorithms have created a system that causes users to come back again and again. So it should be no surprise that Meta is developing its own AI programs as well.
Meta’s AI division is working on everything from generative AI systems, which can be immediately tested out on its social networks.
That includes AI programs that can now generate videos from text prompts. Such tools could continue to keep eyeballs on social media platforms, where the users generate content.
Meta is also a player in the machine learning space. Those systems can be used to develop new ideas faster than what a team of humans can do alone.
Plus, Meta’s focus on virtual spaces could make it a leader in AI for the metaverse. While that part of the business hasn’t taken off as Meta has hoped, better AI tools could lead to the successful launch of a metaverse platform in time.
With the success of its existing social media platforms, Meta has the ability to invest billions into AI projects.
It’s already showing some early success, which may allow them to improve their core business and find ways to expand into new ones. That would allow the company go grow even larger in the years ahead as a top AI play.
Top AI Stock #5: Alphabet (GOOG)
Among the top tech players, Google has been slower in developing AI technologies.
The company, which still has nearly 90% of the global search engine market, can use AI tools such as voice prompts, to allow users to search the web without having to type in text on a screen.
Google is developing Project Astra, a digital assistant, powered by AI. One of the early tools is the ability to use a smartphone’s camera to identify the source of noises, and the ability to help users find misplaced items.
Google is also working on new technologies that can employ AI. While smartphones are still the standard handheld tool, Google Glass and other technologies could become leaders in the “wearables” part of the AI market.
While Google is developing AI tools focused on maintaining its market share, there could be some further gains ahead for Google.
That’s because Google has a history of innovation on other projects. That includes the user-friendly Gmail platform, or the Android operating system, which has become the dominant operating system for non-Apple smartphones.
In short, while Google has been a late bloomer in the AI race among the big tech players, it may come up with some surprising applications that become an industry standard. And that could do much to lift shares.
Top AI Stock #6: Oracle (ORCL)
Database giant Oracle (ORCL) is rapidly shifting to providing key services in the AI space. The company has spent the past few years shifting from physical database solutions to cloud infrastructure, and AI is the next step.
The company’s AI services allow developers to apply AI applications to their business operations, and Oracle’s database cloud severs are already running with Nvidia H100 GPUs, putting them as the industry leader.
Oracle’s AI services include the use of large language models and machine learning to best customize a user’s experience. That also allows for improved forecasting and labelling on datasets for further training AI models.
To grow this business, Oracle has invested over $2 billion in contracts with AI startups, which could lead to further breakthroughs.
That includes Cohere, which can provide private and secure generative AI services. While systems like ChatGPT are available for anyone to use, Oracle could carve out a strong niche in privacy-centered AI services.
Analysts have a moderate buy rating on the stock. While not expected to be the hypergrowth AI play as the semiconductor space, Oracle has posted strong revenue growth in the past few years as it’s shifted from physical databases to cloud services. AI stands to accelerate that trend.
Top AI Stock #7: Palantir Technologies (PLTR)
Originally created to sift through the world’s surging amount of data, Palantir Technologies (PLTR) is at the forefront of the AI trend.
Palantir deploys software programs, largely for the intelligence community, to provide signals intelligence from large data sets. AI and machine learning tools are utilized to speed up the process and create a more efficient business over time.
The company was founded on the idea of identifying the next terrorist target after noting how airline stocks were heavily shorted before the 9/11 attacks.
The company’s use of AI systems to sift through this data has made it a nearly leader in AI, and its tools could expand beyond government customers to corporate ones as well. Commercial revenues grew 32% over the past year, indicating strong demand for the company’s products in that market.
The company’s Artificial Intelligence Platform (AIP) is powered by GPD-4, and is used for defense and war planning strategies.
The platform uses data from a number of sectors, including government, healthcare, and financial markets to predict potential attacks and defenses to those attacks.
Palantir has been publicly traded for a few years now, and the company is finally starting to turn a profit. Revenues are growing at a double-digit rate, and an increased go-to-market strategy is leading to an increased number of long-term government contracts.
Top AI Stock #8: Adobe (ADBE)
Content creation is a huge growth component of the digital landscape. AI tools can help expand on that by creating content from simple, but increasingly complex, prompts.
That could prove a boon to digital media software giant Adobe (ADBE).
Best known for running the PDF standard for documents, Adobe also operates Photoshop and Illustrator for image creation.
While some investors have seen the company at risk of AI, the truth has been the opposite so far. 2023 was a solid year for Adobe, with double-digit top line growth and strong profit margins.
As Adobe management has noted, the increase in text-to-image creation from generative AI tools simple means more content that needs to be edited. That’s a boon for the Adobe and the digital creation industry as a whole, not a threat.
Adobe is also introducing AI tools for its software to increase the east of use and expand the features available to users.
One such tool is an AI assistant that can help companies better understand and exploit the data that gets embedded in PDF files. Tools such as this could be a huge boon for corporate customers, who could see an increase in workplace productivity.
Shares have been a laggard in the big-tech AI boom, but the fear surrounding Adobe is likely to subside in time as they continue to embrace AI technology and see continued double-digit growth.
Top AI Stock #9: C3.ai (AI)
C3.ai is a smaller play in the AI space that could have huge growth ahead.
That’s because C3.ai is an AI software company that provides businesses with the ability to design, develop, and deploy their own AI applications.
For companies that don’t want to take an “off the shelf” approach to AI, C3.ai can provide ample solutions.
The company’s tools include analysis-ready data sets, customer relationship management (CRM) solutions, inventory optimization tools, supply chain network risk tools, sustainability tools, and much more.
That’s a robust suite of products that can be tailor-made to fit a company’s specific AI tool needs.
Currently, C3.ai is inking deals with several large companies, including energy firms, defense contractors, and even the big tech players like Amazon, Google, and Microsoft.
C3.ai rebranded to push into the AI space in 2019, and as such, it’s still operating like an early-stage company. That means there’s a high growth potential, but investors looking for profits now may have to wait a while.
As long as C3.ai can continue to build up a list of large corporate partnerships, sales should improve in time.
Unlike many of the businesses that have benefitted from the AI boom so far, C3.ai is a small-cap play, with a market cap of about $3 billion.
As a pure player in the industry, shares could see a massive jump higher based on its size. Plus, it’s also small enough that a big player may be willing to pay a sizeable premium to acquire the company.
Top AI Stock #10: BigBear.ai (BBAI)
With a market cap under $500 million, BigBear.ai (BBAI) is the most speculative AI play today.
But it stands to see massive growth. That’s because BigBear provides AI-powered decision intelligence solutions, which could make it a leader in digital security in the AI age.
The company’s tools are designed to better visualize the impact of changes that are made, often from using raw or even incomplete data.
With BigBear’s tools, users can make better decisions that improve the overall outcome, and in a fraction of the time.
That includes tools related to national security, supply chain management, biometrics, and digital identity.
Most of the company’s customers are government agencies, such as the U.S. Air Force, but they’ve expanded into the commercial space as well, with over 160 corporate clients.
BigBear has tremendous opportunities to expand simply through government contracts. But the overall AI security space offers tremendous upside in the coming years.
BigBear sees its niche of AI security as a $45 billion market today, which can grow to over $130 billion by the end of the decade.
With a rising need for strategic planning services, improved supply chain security, and protection from digital threats, BigBear is a small play today that could become a dominant player in just a few years.
Investors looking for market-beating returns have several strategies that they can use. One strategy is to buy a company that’s out of favor with the market. Ideally, the company is even hated.
As long as that company can survive and the issues surrounding shares are temporary, the stock should trend higher in time. That could include big one-time events, like buying an oil company after a major oil spill.
Today, the top contrarian opportunity is in Boeing (BA). The airline manufacturer has had a series of high-profile issues in recent months. It’s now come out that the company has violated the terms of a non-prosecution agreement from back in 2021.
Chances are Boeing will recover. They may have some management changes in store. They may have to spend more time and money on quality control. But if they do those things, the stock can go from being hated to simply undervalued.
Action to take: Investors may want to buy a small stake in Boeing, as a contrarian play. Bear in mind that the issues involved may take over a year to sort out. And at the moment, shares don’t pay a dividend.
For traders, shares have moved slightly higher off their 52-week lows recently. That may not mean a big rally is likely, but shares could trend modestly higher in the coming weeks.
The July $190 calls, last trading for about $4.75, could see mid-double-digit returns on a short-term bounce higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Ravi Thanawala, CEO at Papa John’s International (PZZA), recently bought 1,900 shares. The buy increased his stake by 5%, and came to a total cost of $99,579.
This is the only insider buy over the past three years. One director sold shares earlier this year following the exercise of a stock option. The last company executive who sold shares did so back in August 2022, selling off 20% of his position.
Overall, Papa John’s insiders own 1.3% of shares.
The pizza chain is down 27% over the past year. Consumers have been cutting back on dining out as prices there have soared higher than overall inflation.
Papa John’s saw revenues slide about 3% last year, faring better than many competitors.
While profit margins are low in the industry, Papa John’s has still managed to beat analyst expectations. As long as the company can continue to maintain its market share, it should see the stock trend higher in time.
Action to take: Shares have fallen to a new 52-week low following earnings, and continue to trend lower. They’re starting to look oversold, so interested investors may want to look in building up a position as shares turn around.
At current prices, Papa John’s also pays a 3.5% dividend.
For traders, the July $50 puts, last trading for about $1.45, could see mid-double-digit returns on a continued decline for shares in the weeks ahead. Traders should look to take profits on any sign that the downtrend is over.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Gold miner and explorer Newmont Mining (NEM) is trending higher, but shares are still down 5% over the past year. One trader is betting the stock will break higher in the next 18 months.
That’s based on the January 2026 $65 calls. With 609 days until expiration, 5,016 contracts traded compared to a prior open interest of 136, for a 37-fold rise in volume on the trade. The buyer of the calls paid $2.82 to make the bullish bet.
Newmont shares recently traded for about $43. So the stock would need to rise by $22, or 51%, for the option to move in-the-money. It’s also well over the stock’s prior 52-week high of $46.75.
Shares of the gold miner tend to move up or down with the price of gold. In a strong gold market, prices of gold miners tend to see even larger percentage moves higher.
Thanks to rising gold prices, revenues are up 50% over the past year, and shares are valued at 13 times forward earnings.
Action to take: Investors may like shares here, as they’re inexpensive, and trending higher. A further move higher in gold prices is likely, which could lead to further gains.
At current prices, Newmont also pays a 2.3% dividend.
For traders, the January 2026 calls have plenty of time to play out. And if there’s a big spike higher in shares, the option could see triple-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Consumers are finally starting to feel the impact of higher interest rates. They’re cutting back on spending to avoid having to pay high interest rates on borrowed money. That trend is impacting sales, particularly for larger products that often need to be financed.
However, that trend could easily shift the other way when interest rates start to decline. Today’s investors may want to start looking for consumer goods companies to grab on sale. Today’s weakening sales numbers can easily reverse when rates drop.
Home improvement retailer Home Depot (HD) is one of the first retailers to report. Sales have slowed. But not all of their sales are tied to expensive items. Normal home maintenance needs suggest that sales won’t slow too far for the industry leader. That kept shares from a big selloff following their sales miss.
Shares trade at 22 times earnings, about in-line with the overall stock market. And shares have slightly lagged the market over the past year, indicating a potential recovery play for patient investors.
Action to take: Home Depot is a long-term holding worth picking up when shares are out of favor with the market. At current prices, shares pay a 2.6% dividend, and Home Depot has a history of raising its payout over time.
For traders, the August $360 calls, last trading for about $7.05, could see mid-double-digit returns in the coming weeks as shares continue their long-term uptrend.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Mollie Fadule, a director at Landsea Homes (LSEA), recently bought 10,000 shares. The buy increased her stake by 16%, and came to a total cost of $97,800.
Fadule was one of several insiders who bought back in March, with an 8,621 share pickup. The company CEO and COO also bought about $200,000 of shares around the same time. Going further back, there have been some insider sales, largely from major holders of shares.
Overall, Landsea insiders own 51% of shares.
The homebuilder’s stock has rallied 50% over the past year. While the housing market for used homes has largely frozen up, homebuilders have been able to meet today’s strong demand. That’s allowed them to profit, even with interest rates at their highest levels in 15 years.
Landsea is still a strong value, with shares trading at a 40% discount to their book value, and at less than one-third its price to sales. Plus, Landsea trades at 14 times earnings, a big discount to the overall market.
Action to take: Investors may like shares here, and to add to that position on any further drop. Housing demand remains strong, and homebuilders are the best positioned to profit from today’s markets.
For traders, shares look ready to trend higher after their recent pullback. The August $10 calls, last trading for about $0.90, are already about $0.20 in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Credit card provider Mastercard (MA) is up 20% over the past year, just slightly underperforming the overall stock market. One trader sees shares trending higher in the coming months.
That’s based on the July $475 calls. With 64 days until expiration, 8,589 contracts traded compared to a prior open interest of 133, for a 65-fold rise in volume on the trade. The buyer of the calls paid $4.50 to make the bullish bet.
Mastercard shares recently traded for about $454. So shares would need to rise $21, or about 4.6%, for the option to move in-the-money. The strike price is still under Mastercard’s 52-week high of $490.
Operationally, the company has been going strong. Revenues are up 10% over the last year and earnings have jumped by 28%. Even better, Mastercard has a hefty 46% profit margin.
Some recent concern about slowing consumer spending has weighed on shares. But Mastercard will continue to earn fees and interest and generate big profits for investors.
Action to take: Investors may like shares here, or on any market pullback. Currently, Mastercard pays a 0.6% dividend, which it has a history of increasing over time.
For traders, shares look likely to trend higher in the coming weeks and months. That makes the July $475 calls a reasonable trade, with the opportunity for mid-double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
AI stocks have been on a tear, particularly big-tech companies that have been spending big on AI to grab an early lead. However, the market is showing an increasing reluctance to simply invest in any company willing to throw billions in AI.
Now, we’re seeing that some companies that have been late to the party have been biding their time well. That’s because they can get in now, by employing technology that someone else has already developed.
That’s the apparent plan for consumer tech giant Apple (AAPL). The company may be making a deal with OpenAI to build AI onto devices such as the iPhone.
If so, that could give Apple a fantastic tool for its customers without having to spend billions of dollars developing that technology itself.
That offers an opportunity for Apple to continue its market dominance, and still benefit from the AI developments being made by others.
Action to take: Shares of Apple are worth picking up at current prices, and it’s an ideal company to buy on a pullback as a long-term holding.
Apple pays a small 0.5% dividend, but also has a massive share buyback program in place that could help push share prices higher over time.
For traders, the September $195 calls, last trading for about $6.25, could leverage the stock’s next leg higher into mid-double-digit gains.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to further trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Ruth Porat, a director at Blackstone (BX), recently added 277 shares. The buy increased her position by 1%, and came to a total cost of $33,121.
This is the first insider activity since another insider bought back in February, picking up 2,400 shares at a cost of $301,500. Going further back, there’s been a mix of insider buying and selling, with executives and directors more likely to be sellers than buyers.
Overall, Blackstone insiders own 1.0% of shares.
The asset manager has soared 49% over the past year, seeing nearly double the return of the S&P 500.
Improving investment returns in the past year have allowed revenues to soar by 173% and earnings are up over 800%. However, shares are still conventionally on the expensive side, as they trade at 25 times forward earnings.
With asset prices likely to trend higher, however, it’s likely shares will move higher as well.
Action to take: Shares have pulled slightly off their recent 52-week highs, and look set to continue to their longer-term uptrend. At current prices, Blackstone also pays a 2.7% dividend.
For traders, the September $130 calls, last trading for about $5.65, could see mid-to-high double-digit gains in the coming months on a push higher for shares.
Traders may want to take profits on any big one-day jump higher in Blackstone shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Brazilian-based oil giant Petroleo Brasiliero (PBR) is having a strong year, with shares up 46%. One trader sees shares pulling back in the second half of the year.
That’s based on the January 2025 $15 puts. With 247 days until expiration, 15,005 contracts traded compared to a prior open interest of 197, for a 76-fold rise in volume on the trade. The buyer of the puts paid $1.21 to make the bullish bet.
PBR shares recently traded just over $17, so the stock would need to fall just over $2, or just over 12%, for the options to move in-the-money. PBR has been trending back to its 52-week high of $17.91, set back in February.
The oil giant has seen revenues and earnings drop 15% and 30% respectively in the past year compared to the year before. That’s in line with the slowdown in energy prices, which have now been flatlining.
Plus, as the Brazilian government has an ownership stake in the company, PBR can be susceptible to wide swings in prices.
Action to take: In the short-term, if shares don’t break higher, they’ll likely pull back and take a breather. Investors interested in shares can likely get them closer to $15 in the coming months, given how the stock periodically gets slammed lower.
PBR pays a dividend, but that payout fluctuates over time. Right now, it’s a hefty 12.4%.
For traders, the January $15 puts could see some double-digit returns, particularly on any brutal one-day drop for shares in the months ahead. That makes them a reasonable speculation now.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The past 18 months have been great for just about any stock related to artificial intelligence (AI). However, the biggest moves have occurred in massive, big-tech companies. These companies have the capital to move in quickly and build out their AI infrastructure, after all.
However, the real opportunity now may be in smaller companies playing to niche corners of the AI trend. That’s because it’s easier for a smaller company to double its earnings or market cap than a multi-billion-dollar tech giant.
One smaller play is SoundHound AI (SOUN). The company’s AI voice technology services are logical place for many AI players to move into.
SoundHound’s shares soared following better-than-expected earnings and the announcement of a new partnership.
While shares are already up over 90% in the past year, there’s still more room for this company, with a market cap of under $2 billion, to run.
Action to take: Speculative investors may like shares here, as there’s likely more upside ahead in the coming months. As with any small-cap tech stock, expect some big daily swings in price, which could be used to add to that position.
For traders, the July $6 calls, last trading for about $0.60, could see high double-digit returns on a further trend higher for this small-cap AI stock.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
James Gorman, a director at The Walt Disney Company (DIS), recently bought 20,000 shares. The buy increased the director’s stake by over 1,000%, and came to a total cost of $2.1 million.
This is the first insider buy at Disney since another director bought 1,078 shares for just over $99,900 back in December 2023. Otherwise, company insiders have been modest sellers of shares, with executives typically selling following the exercise of stock options.
Overall, Disney insiders own just under 0.01% of shares.
The media conglomerate is up 15% over the past year, lagging the overall stock market. But it’s fared better than other media companies.
Their most recent earnings suggest a slowdown in spending at theme parks, but streaming services are finally nearing a profit.
Disney is an industry leader for family entertainment, and its intellectual properties are currently valued at 22 times forward earnings.
Action to take: Disney shares fell slightly following earnings, but could be on track for a longer-term trend higher in the coming months.
Long-term investors may want to buy a partial stake now, and use any further weakness to add to that position. At current prices, Disney pays a 0.8% dividend.
For traders, the August $115 calls, last trading for about $2.35, could see mid-double-digit returns on a continued long-term uptrend in shares in the next three months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Commerce platform Shopify (SHOP) fell last week following earnings. As a result, shares are now trading flat over the past year. One trader is betting shares will rebound from the earnings drop in the months ahead.
That’s based on the September $120 calls. With 129 days until expiration, 12,376 contracts traded compared to a prior open interest of 444, for a 28-fold rise in volume on the trade. The buyer of the calls paid $0.14 to make the bullish bet.
Shopify shares recently traded for just under $60, so the stock would need to double for the options to move in-the-money. It would also mean a new 52-week high over the prior high of $91.57.
Shopify has had a mixed year. While still unprofitable, earnings have grown by 24%. And Shopify has over $4 billion in net cash on its balance sheet, which puts them at low risk of bankruptcy now.
Action to take: Shares may have a few more days around their current levels, but could see a bounce from here. Following the earnings drop. Shopify is well into oversold territory based on relative strength.
For traders, the September $120 calls are aggressive, but are inexpensive enough that a strong bounce could see triple-digit gains.
Traders willing to pay more for a trade closer to the money, such as the September $80 calls, trading for about $1.50, could see a lower percentage return but may find it easier to make money overall.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Markets tend to get jittery during earnings season. In the long-term, earnings matter. In the short-term, other factors may be at play. That can include how a company discusses its forward outlook. Or there may be some aspect to a company’s revenues or profit margins that lead to a selloff.
Fortunately, that’s an opportunity for investors. While short-term traders may beat down shares of a great company, its creates a buying opportunity for those with a bullish outlook.
For instance, metaverse video game company Roblox (RBLX) just reported fantastic earnings. However, the company didn’t have as bullish as a forward outlook as analysts were hoping for.
The result? Shares taking a massive one-day dive.
With revenues now up 26% year over year, and bookings up 23%, Roblox is still on a growth path. And while losing money overall, Roblox is narrowing its losses. With nearly $2.2 billion in cash on their balance sheet, Roblox has the cash to continue growing profitably.
Action to take: Following this massive selloff, shares may take a few days to form a base and start moving higher. Speculative investors may want to build a partial position now and look to catch the oversold bounce in the coming weeks.
For traders, the July $35 calls, last trading for about $0.95, could see high double-digit returns in the coming months as shares move higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Every industry will have several players. Depending on the structure of the industry, there may be dozens of players or just a few. The ease of entering the industry and successfully competing can make a big difference.
That’s why the restaurant industry has dozens of options. But the credit card networks have just four players due to the high cost of entry and building a network. Today’s tech companies often have just a handful of players.
That’s because these companies can successfully build a network and become the most-used in their industry before competition can set in.
When competition does set in, it’s often a far distant second place to the industry leader.
Ride-share industry leader Uber Technologies (UBER) just took a hit following a surprise loss in earnings.
While investors were expecting a profit, this kind of quarterly fluctuation is normal for a company.
Even with the recent drop, Uber shares are still up over 80% in the past year.
Action to take: Investors willing to hold volatile tech names may want to build a stake in Uber following its recent drop. The drop has now taken shares back to a low last seen in February.
For traders, the August $70 calls, last trading for about $4.40, can likely see high double-digit returns in the coming week from a bounce off the earnings season drop.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
David MacLennan, a director at Caterpillar (CAT), recently bought 500 shares. The buy increased his position by 10%, and came to a total cost of $168,195.
This is the director’s second buy of the year, following a 350 share pickup for just over $113,000 back in February. Otherwise, there has been one insider sale from a company Group President, following the exercise of stock options. Going further back, insiders were more likely to be sellers of Caterpillar stock.
Overall, Caterpillar insiders own 0.2% of shares.
The heavy equipment manufacturer has soared 62% in the past year.
Earnings have soared 47%, even as revenues have been flat. That means that even after the big run, Caterpillar trades at just 16 times earnings.
A multi-year boom in construction and infrastructure spending is underway, which should continue to push shares higher in the years ahead.
Shares have pulled back in recent weeks, in line with the overall market. However, the longer-term uptrend looks intact.
Action to take: Long-term investors may want to build a position in shares under $350, as a long-term holding. Caterpillar pays a 1.5% dividend, and has a history of growing that payout over time.
For traders, the July $370 calls, last trading for about $5.15, could see mid double-digit returns in the coming months as shares get back to their long-term uptrend.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Drug manufacturer Teva Pharmaceutical (TEVA) has been on a tear, with shares soaring 67% over the past year. One trader sees shares continuing higher into the autumn.
That’s based on the September $18 calls. With 133 days until expiration, 7,964 contracts traded compared to a prior open interest of 171, for a 47-fold rise in volume on the trade. The buyer of the calls paid $0.71 to make the bullish bet.
Teva shares recently soared to a 52-week high just under $16 following its latest earnings. So shares would need to rally another $2, or 12.5%, for the option to move in-the-money.
The company beat on earnings expectations in the first quarter, and reported promising results from a study on one of its drug candidates. Both trends can likely push shares higher in time.
Following its jump higher, shares trade at about 6 times forward earnings, and right at 1 times their price-to-sales. Both metrics indicate that Teva has room to rally higher in the months ahead.
Action to take: Investors may like shares here, as they’re trending higher and have the momentum to keep doing so.
For traders, the September $18 calls have ample time to play out, and can likely move in-the-money in the coming months. Traders can likely see mid-double-digit profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
For investors, a company’s prospects come down to earnings. Rising earnings will drive a stock higher over time. And when a company reports great earnings, but shares sell off, it may create a buying opportunity in the short-term.
That’s especially true when a company isn’t just reporting great earnings but manages to consistently beat bullish expectations. Such a company can likely lead to far higher returns for investors when bought during a selloff.
Right now, app performance monitoring company Datadog (DDOG) fits the bill.
Earnings surged and far exceeded expectations in each of the last four quarters. However, shares sold off as the company President announced his retirement.
Over time, management changes are inevitable in any business. The market selloff reflects disappointment in the move. But as long as earnings can trend higher, that disappointment will be short-lived.
With the recent selloff, shares are now down 17% from their 52-week highs, and look like a reasonable buying point given their growing earnings.
Action to take: Investors should build a partial position here, and use any further market weakness to add to that position in time.
For traders, a rebound from the earnings-related selloff looks likely in the months ahead. The July $125 calls, last trading for about $3.75, could see mid-to-high double-digit returns from a rebound in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Anthony Noto, CEO Of SoFi Technologies (SOFI), recently bought 28,775 shares. The buy increased his position by less than 1%, and came to a total cost of $198,548.
Noto was the last insider buyer with a 22,500 share pickup back in November. Since then, the company’s CTO has sold off about 27% of his holdings across two sales. Going further back, there have been more insider buys from Noto and the company’s CFO.
Overall, SoFi insiders own 3.2% of shares.
The financial services provider is up 32% over the past year, far beating the overall stock market, even as high interest rates have led to fears that financial companies may not perform well.
The move higher has been driven by a 38% surge in revenues, although SoFi isn’t profitable yet.
Following first quarter earnings, the company gave a mixed outlook, which led to a selloff in shares. As long as revenue can keep trending higher, however, the stock is likely to resume its further uptrend.
Action to take: Investors may like shares here, as the stock dropped to a six-month low and is now trending higher again.
For traders, a possible bounce higher in here could lead to big returns for a call option trade. The July $8 calls, last trading for about $0.35, could see mid-to-high double-digit returns in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Electric utility NextEra Energy (NEE) is down 5% over the past year, but is surging higher from well off its lows. One trader sees shares continuing to rise over the next 13 months.
That’s based on the June 2025 $80 calls. With 407 days until expiration, 4,685 contracts traded compared to a prior open interest of 109, for a 43-fold rise in volume on the trade. The buyer of the calls paid $4.90 to make the bullish bet.
NextEra recently traded for about $71.50, meaning shares would need to rise $8.50, or about 12%, for the option to move in-the-money. That’s well over the stock’s 52-week high of $78.53, set last May.
Operationally, the utility has had a mixed year, with revenues down nearly 15%, even as earnings are up nearly 9%.
However, longer-term growth looks likely given the company’s geographic market, which includes much of Florida where population growth continues to surge. Shares sold off during last year’s interest rate fears, but have now spent the past few months in an uptrend.
Action to take: Long-term investors may like shares here. The stock pays a 2.9% dividend, but further growth potential could push both shares and the dividend higher.
For traders, the June 2025 calls are a long-term bet that could see high double-digit returns on a continue ramp higher from shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Even with stocks near all-time highs, the recent pullback has left investors jittery. Small pullbacks are often just a healthy part of an overall longer-term market uptrend. However, they can also be the prologue to a bigger selloff.
So far, it looks more like a normal pullback. For investors who want protection, however, the best strategy may involve buying a great company that’s also sitting on record cash.
That company is Berkshire Hathaway (BRK-B), which is sitting on nearly $190 billion in cash. That’s a healthy level compared to its total market cap.
But more importantly, its operations, led by insurance, allowed profits to soar 39% over the past year. That gives investors a solid combination of safety and potential upside.
Berkshire is up about in-line with the overall stock market in the past year, a notable achievement given its high level of cash.
Action to take: Shares are well valued now at 9 times earnings, and could trend higher thanks to the combination of a high cash balance and operational growth.
Berkshire famously doesn’t pay a dividend, but buying shares following a market pullback should lead to excellent results over time.
For traders, the July $420 calls, last trading for about $4.85, could see mid-double-digit returns or better in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Willie Chaing, a director at Delta Air Lines (DAL), recently bought 10,000 shares. The buy is a new stake for the director, and came to a total cost of $494,955.
This is the first insider buy since last October, when a director bought 20,000 shares across two transactions for just under $638,000. Otherwise, there have been some moderate sales by company insiders in the prior few months.
Overall, Delta Air Lines insiders own 0.3% of shares.
The airliner is up 49% over the past year, as moderate energy prices and continued strong demand have boosted demand.
Revenues rose nearly 8% in the last year, and shares are valued just under 8 times forward earnings.
That’s allowed shares to soar to new 52-week highs, even with some high-profile safety issues impacting airlines recently.
Action to take: Investors may like shares here as a momentum trade higher. Delta Airlines is still inexpensive, and has a number of positive factors that can keep its performance strong in the months ahead.
At current prices, Delta also pays investors a 0.8% dividend.
For traders, with shares breaking to new highs, a continuation to the upside looks likely. The September $55 calls, last trading for about $3.30, could see mid-to-high double-digit returns from a further rally in Delta shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Retail giant Walmart (WMT) is up 17% in the past year, slightly underperforming the overall market. One trader sees shares pulling back by the end of the month.
That’s based on the May 31 $59 puts. With 23 days until expiration, 6,514 contracts traded compared to a prior open interest of 154, for a 42-fold rise in volume on the trade. The buyer of the puts paid $1.23 to make the bearish bet.
Shares recently traded for just under $60, meaning the stock has to decline less than $1 or less than 2% for the option to move in-the-money.
Walmart trades near its 52-week high of $61.65, but has been gradually trending lower in the past few weeks.
Besides the slight trend lower, Walmart next reports earnings on May 16. Any weakness in consumer spending could lead to a miss, sending the stock lower.
Action to take: Investors may want to wait until after earnings before buying shares, as Walmart may see a downtrend through its earnings report.
Plus, shares are still on the expensive side at 31 times earnings, and the 1.4% dividend isn’t the highest investors can usually get from shares.
For traders, the May 31 puts are well-timed for any further market weakness this month and a possible drop from earnings season.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
While investors have flocked to AI stocks in the past 18 months, some companies have sold off as AI technology threatens their business model. Software can now replace what an employee does, not only saving money, but also completing the work at a much faster rate.
A third set of companies is one where AI may lead to some big opportunities but also has the potential to decimate an existing business. These companies are likely to get whipsawed.
One such company is Adobe (ADBE). The software company’s core business could be under threat from AI. But the content creation ecosystem still runs on Adobe’s software.
Shares have been dropping this year, down nearly 20%. But they’re showing no signs of slowing down. Earnings have beat expectations in each of the last four quarters.
Plus, Adobe has a 24% profit margin. Sporting a PE ratio of 26, shares trade at a premium to the overall market. That’s a sign that investors haven’t given up on shares yet.
Action to take: Adobe looks ready to trend higher after several months of underperforming the market. Shares can likely see double-digit returns in the coming months.
For traders, the July $520 calls, last trading for about $16.00, could see mid-to-high double-digit returns from a bounce higher in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Mandy Yang, CFO of Enphase Energy (ENPH), recently bought 4,000 shares. The buy increased her stake by 4%, and came to a total cost of $416,972.
This is the second insider buy of the year following a 4,000 share buy from the company CEO in February, which came to just over $482,000. So far this year, three insiders have sold, including a $4.8 million sale from a company director.
Overall, Enphase Energy insiders own 3.3% of shares.
The solar energy system designer and manufacturer is down by 33% over the past year. Lower demand for solar systems, particularly home systems, have led to a big drop in business.
Enphase is currently unprofitable, and revenues are down by a massive 64% in the past year.
However, a strong economy, and the big rebates available may make solar attractive in the coming quarters, especially if the prospect of the rebates disappear.
The costs to finance a solar system may also drop when interest rates start to trend lower later in the year.
Action to take: Shares have been somewhat rangebound in the past few months, and Enphase looks ready to trend to the higher end of its range. That could make for a short-term, low double-digit return for shares.
For traders, the August $125 calls, last trading for about $9.75, could see mid-double-digit gains or better on a bounce higher for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Bitcoin mining company Marathon Digital Holdings (MARA) is up 62% over the past year as bitcoin prices have trended higher. One trader expects shares to drop considerably in the coming months.
That’s based on the September $5.00 puts. With 136 days until expiration, 5,008 contracts traded compared to a prior open interest of 196, for a 26-fold rise in volume on the trade. The buyer of the puts paid $0.15 to make the bearish bet
Marathon recently traded for about $17.50. So the stock would need to slide by $12.00, or over 70%, in just over four months.
Shares would also need to break under their prior 52-week low just over $7.00.
Marathon’s share price is strongly correlated to movements in bitcoin. Shares have already slid nearly 50% from a high back in February, as bitcoin has pulled back over 20% from its peak.
However, bitcoin will likely see shares perk up in the coming months. That’s because bitcoin prices typically soar in the months after the halving.
Action to take: While the reward for mining has been cut in half, bitcoin miners remain profitable due to network demand. That suggests that Marathon may trend higher when bitcoin prices rise, not decline too much further.
Speculative investors may like shares on any big drops in the coming weeks, to profit from a big swing higher later in the year.
For traders, the September puts could see some quick short-term gains, potentially even triple-digit ones. But traders may want to switch to calls once bitcoin rallies again.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
While the market focuses on earnings, companies can do a lot to impact that number. It’s harder to impact revenues, or the raw cash coming in the door.
When business is good, more money is coming in. And that will translate to higher earnings and should also propel shares higher over time. When an industry leader is seeing higher revenues, it’s also a great sign for the sector as a whole
Hotel and casino operator MGM Resorts (MGM) just saw a big revenue beat, as well as strong earnings.
Money is coming in hot for the company’s Macau operations, and Las Vegas revenues also look bullish.
While the earnings report pushed shares higher, they’re still down 7% over the past year, and off more than 20% from their peak.
That’s also caused shares to slide to less than 13 times earnings.
Action to take: Investors may like MGM shares here, as they’ll likely push higher in the weeks ahead following the latest earnings report. MGM does pay a dividend, but it’s stingy at only a penny.
For traders, shares look ready for a bounce higher.
The September $45 calls, last trading for about $2.00, could see mid-double-digit returns or better in the coming weeks. Traders may want to take quick profits following a strong day for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
David Osborn, a director at Cincinnati Financial (CINF), recently bought 2,000 shares. The buy increased his position by 4%, and came to a total cost of $223,283.
He was joined by another director who bought 1,000 shares on the same day, paying $113,470, to increase their position by 2%. Insiders have been buyers in seven transactions over the past year. The last insider sale occurred last May.
Overall, Cincinnati Financial insiders own 1.5% of shares.
The insurance provider is up 13% in the past year, lagging the overall market by about 10 points.
However, Cincinnati Financial has had a great year operationally. Earnings have soared a massive 235%, and revenues are up 31%.
While customers are wary about large insurance increases over the past year, CINF has navigated the challenging environment well, and its investment portfolio has also provided a boost.
Shares now trade at about 8 times earnings.
Action to take: Cincinnati Financial has been trending higher since November, but have pulled back with markets in recent weeks. Given the earnings strength, investors may be interested here.
At current prices, CINF pays a 2.8% dividend.
For traders, shares look likely to resume their longer-term uptrend in the coming weeks.
The September $125 calls, last trading for about $3.15, could leverage a bounce higher into mid-double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Online marketplace Etsy (ETSY) sank 16% last week following its latest earnings report. One trader sees a rebound for shares playing out in the months ahead.
That’s based on the January 2025 $65 calls. With 256 days until expiration, 4,447 contracts traded compared to a prior open interest of 134, for a 33-fold increase in volume on the trade. The buyer of the calls paid $8.10 to make the bullish bet.
Etsy shares traded around $58, meaning they would need to rise by about $7, or about 12% between now and the start of next year for the option to move in-the-money.
That’s well under the stock’s 52-week high of $102.81.
Etsy reported slowing revenue and earnings growth. As with other retailers, there’s been a notable slowdown in results this quarter as consumer spending has stalled out.
Even with the poor report, Etsy is still profitable, and trades at about 19 times forward earnings.
Action to take: Following its large gap lower, shares may try to trend higher in the coming weeks and months.
Investors may like shares as a speculation, but should keep a tight stop loss in place to avoid a further move down for shares.
For traders, the call options could be a big winner if shares rebound by the end of the year.
A post-earning push higher in the coming weeks can likely see the options return mid-double-digit returns without having to hold the option until expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
To get a great investment return, look for companies with a high barrier to entry. This likely means a sector only has a few players for customers to choose from. It also means that those companies can earn consistently high profits, which in turn is great for shareholders.
A company with a high barrier to entry has a powerful business model that can allow it to earn big profits. Investing when those companies are down can lead to great returns.
One area that investors can come back to time and again are the credit card companies. They’ve built up powerful networks that no startup could easily get into and break.
Right now, MasterCard (MA) is struggling, even after better-than-expected earnings.
In a sluggish economy, revenues are up 13% and earnings are up 11%. Even better, MasterCard’s powerful network effect allows it to make massive returns, as seen by its 45% profit margin.
Action to take: MasterCard and the other credit card companies are reasonable buys on any market drop, as they’ll eventually trend higher over time. With shares down about 9% from their recent highs, investors can start building a position now.
MasterCard also pays a 0.6% dividend with a long history of growth.
For traders, shares are likely to rebound from their recent pullback. The September $475 calls, last trading for about $12.00, could see mid-double-digit returns as shares rebound in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Mark Miller, President and COO of Goosehead Insurance (GSHD) recently bought 10,000 shares. The buy increased his stake by 50%, and came to a total cost of $580,650.
This is Miller’s second buy of the year following a 5,000 share pickup in January for $369,725. And other company insiders, including the company CFO have been buyers so far this year. One major holder, a trust, has been a moderate seller of shares so far this year.
Overall, Goosehead insiders own 3.6% of shares.
The insurance company is down 3% over the past year, far underperforming the overall market.
Operationally, things are improving with shares seeing an 11.6% rise in revenue growth. And the stock is moving from 90 times earnings to 30 times earnings as operations improve.
Insurance companies are seeing some customers scale back on services as insurance premiums have soared in recent years.
However, insurance company portfolios have also improved as the stock market has rebounded and interest rates have trended higher.
Action to take: Goosehead shares just had a massive drop in recent months, and shares appear to be looking for a bottom. Investors may like shares as they have double-digit bounce potential from their current level.
For traders, the June $65 calls, last trading for about $1.50, could see mid-double-digit returns on an oversold bounce in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Investment bank Jefferies Financial Group (JEF) has had a strong year, with shares up over 40%. One trader sees shares trending even higher through the autumn.
That’s based on the September $50 calls. With 140 days until expiration, 3,003 contracts traded compared to a prior open interest of 120, for a 25-fold rise in volume on the trade. The buyer of the calls paid $0.67 to make the bullish bet.
Jefferies shares recently traded for about $43, so the stock would need to rise by $7, or 16%, for the option to move in-the-money. Shares would also need to break past their old 52-week high of $57.39, set back in March.
Jefferies is performing well as the financial sector continues to expand. Revenues soared 35% last year, and earnings rose by 21%.
Yet shares are still inexpensive at 13 times forward earnings. Plus, shares trade near their book value, a strong sign among the investment bank stocks.
Action to take: Investors may like shares here, as they are forming a base following the recent pullback and are starting to trend higher. At current prices, Jefferies also pays a 2.8% dividend.
For traders, the September calls are far out-of-the-money, but shares are trending in that direction. The options could see high-double-digit returns or better in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
A company that’s out of favor with the market can see big returns once it moves back into favor. But first, it has to have been out of favor for so long that shares are cheap. It also helps if the company is growing earnings and revenues.
From there, it’s best to wait until an uptrend starts. A hated company will typically start to move higher even if shares are out of favor with investors. Once perception flips positive, the rally can really take off.
That could be the case with payment platform PayPal (PYPL). Shares have been out of favor with the market for years. Yet the company handily beat earnings and revenues in its most recent quarter.
Even better, PayPal is changing its reporting methodology. That will reflect the cost of the company’s stock-based compensation to employees.
PayPal is down about 7% over the past year, far lagging the overall market. But shares now trade at 13 times earnings, indicating a reasonable value now.
Action to take: Shares are cheap, still hated by the market, but are starting to trend higher. That points to market-beating returns in the months ahead. Currently, PayPal does not pay a dividend.
For traders, the July $75 calls, last trading for about $1.85, could see high double-digit returns if shares really start to take off in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
John Roberts, CEO of JB Hunt Transport Services (JBHT), recently bought 6,200 shares. The buy increased his holdings by 2%, and came to a total cost of $998,550.
The buy comes a month after a company director bought 5,000 shares, paying $1.01 million to start an initial stake. These mark the first insider buys since September 2022. Going further back, insiders have largely been sellers, usually following the exercise of stock options.
Overall, JB Hunt insiders own 19.8% of shares.
The trucking transportation company is down 7% over the past year. Physical shipments have trended lower over the past few years.
That’s showing up in JB Hunt’s operations, with earnings slowing by 35% and revenues declining by 9%. Shares just hit a new 52-week low.
On the valuation side, shares trade at 24 times earnings, a bit steep for the transportation sector. However, JB Hunt has a reasonable balance sheet with a low debt level overall.
Action to take: With shares trending lower, interested investors should hold off for signs of a bottom before buying in. At current prices, JB Hunt pays a 1.1% dividend, but that could go higher on a further move lower.
For traders, the short-term trend is lower. The June $150 puts, last trading for about $1.85, could see mid-double-digit returns in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Semiconductor manufacturer Intel (INTC) has underperformed its peers over the past year, as the company spends billions of dollars on constructing new foundries. One trader is betting shares will continue to underperform for the next two years.
That’s based on the June 2026 $25 puts. With 777 days until expiration 1,907 contracts recently traded, a 15-fold increase over the option’s open interest of 129 contracts. The buyer of the puts paid $2.90 to make the bearish bet.
Intel shares recently traded for just over $30, so they would need to drop by $5, or about 20%, for the option to move in-the-money.
Intel hit a 52-week high of just over $51 in December, and has been trending lower since.
The most recent earnings showed an increase in revenues, but Intel is spending considerable sums to build out new chip fabrication plants. The first of the new plants won’t be open until late 2025, assuming no delays.
Shares may be a compelling long-term buy, but short-term construction costs could keep shares trending lower for now.
Action to take: Interested investors should hold off for now. Shares may continue to trend lower for some time.
For traders, the June 2026 puts could see mid-to-high double-digit returns. It’s likely shares will bottom and start to turn around well before the option expires, but this specific option has plenty of time for the current downtrend to play out.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The market is starting to show some mixed signals. The effects of above-average inflation over the past few years has hit a number of sectors hard. Investors are now learning that fast food may still be fast, but with soaring food prices it may not be cheap.
However, there remain some opportunities in the restaurant industry. Particularly for companies that can keep costs down, consumers happy, and already have a reputation for beating the market.
Pizza giant Domino’s (DPZ) just beat on earnings and revenues. The pizza chain’s focus on quality in the 2010s made it one of the market’s best-performing stocks. Shares are up over 60% in the past year.
That trend is still underway today, and strong orders, both carryout and delivery, indicate that they’re still priced right for the dining experience they provide.
While shares look pricey at 30 times earnings, the company’s growing earnings are closing in on that rate.
Action to take: Investors may like shares here, or on any down day for shares. Besides strong earnings and sales right now, Domino’s has been rewarding investors with a growing dividend. Shares now yield 1.2%.
For traders, the uptrend is likely to continue. The June $550 calls, last trading for about $8.50, could see mid-double-digit returns on a further rally in Dominos shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Jared Wolff, President and CEO of Banc of California (BANC), recently added 7,130 shares. The buy increased his position by 2%, and came to a total cost of $99,677.
The buy comes a month after a company director bought 7,500 shares, paying just over $108,500. And another company director was a buyer in February. The last insider sale occurred in late January at a slightly higher price for shares.
Overall, Banc of California insiders own 1.1% of shares.
The regional bank is up nearly 29% over the past year, slightly beating the market’s overall return. That’s in spite of some fears in the banking space following a series of high-profile bank failures last March.
Banc of California shares trade at 10 times forward earnings, and the stock trades at a nearly 20% discount to its book value.
The bank sector is still shaky, following another bank failure last Friday. However, most banks have made changes to their holdings to adjust to today’s interest rates.
Action to take: Shares are a speculative buy here. Investors may want to buy a partial position and use any big down day as an opportunity to buy in at a lower cost average.
Banc of California pays a 2.8% dividend at current prices.
For traders, the bank is gradually trending higher. The July $15 calls, last trading for about $0.65, could see mid-double-digit returns in the weeks ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Commercial truck designer and manufacturer PACCAR (PCAR) is up nearly 50% over the past year. One trader sees shares pulling back in the coming weeks.
That’s based on the June $100 puts. With 51 days until expiration, 10,327 contracts traded compared to a prior open interest of 198, for a 52-fold rise in volume on the trade. The buyer of the puts paid $0.96 to make the bearish bet.
PACCAR shares recently traded for about $114, so the stock would need to drop about 13% in the coming weeks for the option trade to move in-the-money.
Shares are pulling back after hitting a 52-week high of $125.50 a month ago.
Operationally, the company is having a strong year. Earnings are up 54%, and PACCAR has a 13% profit margin, on the high end for manufacturing.
Action to take: Shares are trending lower in the short term, so interested investors should wait for that trend to reverse before investing. PACCAR pays a 1% dividend, and a further price drop may push that yield up higher.
For traders, the June $100 puts likely have some more upside to them as shares trend lower in the coming weeks. Traders can likely see mid-double-digit returns, and should also look for shares to show signs of reversing higher to take profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
While inflation is nowhere near its highs from the past few years, it’s still stuck at a higher level. That could weigh on company profitability, particularly for companies that can’t pass off higher prices to customers.
However, companies with strong brands and low-priced items can typically raise their prices above and beyond inflation. That means that even as prices rise, they can continue to earn a solid return. These companies may be worth a closer look as inflation stays high.
One such company with leading brands is Colgate-Palmolive (CL). The manufacturer of household brands such as toothpaste and soaps just reported a beat on earnings and increased guidance.
Consumers continue to buy the company’s products, and they can continue to raise prices higher than any increase in manufacturing those products.
Meanwhile, shares are up 11% over the past year, underperforming the overall market. There may be further upsides for shares as a hedge against inflation.
Action to take: Long-term investors and traders alike may like shares here, given their trend higher. Colgate is also a dividend growth stock with a current yield of 2.2%.
For traders, the uptrend hasn’t fully played out yet. The August $95 calls, last trading for about $1.60, could see mid-to-high double-digit returns on the uptrend playing out in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Henry Fernandez, CEO at MSCI (MSCI), recently bought 13,000 shares. The buy increased his holdings by 6%, and came to a total cost of $6.06 million.
He was joined by the company COO, who bought 7,500 shares for about $3.4 million on the same day. This marks a shift from last year, when company insiders were sellers of shares, including the company CFO. The sales mostly occurred at higher prices from where MSCI trades today.
Overall, MSCI insiders own 3.2% of shares.
The financial data company is down 3% over the past year. That’s in spite of a 14% increase in revenues, a 7% rise in earnings, and a massive 45% profit margin that the company sports.
Even with those strong financials, shares trade at about 30 times forward earnings, a slight premium to the overall market.
Action to take: Shares have been rangebound over the past year, and now trade near the lowest end of their range.
It’s possible that shares are due for a rally from here, and will start trending towards the higher end of their range, making for a reasonable buy now. MSCI shares also pay a 1.4% dividend.
For traders, the September $550 calls, last trading for about $8.00, could see mid-to-high double-digit returns on a trend higher in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Gold prices have been trending higher this year, and so have gold miners. One trader is betting that major gold miner Barrick Gold (GOLD) will see massive gains in the months ahead.
That’s based on the November $25 calls. With 199 days until expiration, 3,082 contracts traded compared to a prior open interest of 175, for an 18-fold rise in volume on the trade. The buyer of the calls paid $0.25 to make the bullish bet.
Barrick shares recently traded for about $17, so they would need to rise $8.00, or 47%, for the option to move in-the-money. The strike price is well over the stock’s 52-week high of $20.75.
The gold miner still hasn’t seen the full impact of the recent rally in gold. Revenues are up 10% in the past 12 months, and the company is just flipping to profitability.
Typically, gold mining companies see profit margins improve as gold prices move up. With a current margin of 11%, Barrick is slightly above average for a commodity company.
Action to take: Investors who expect gold to continue higher may want to own shares of gold mining companies, as they can see higher percentage returns during a rally.
At current prices, Barrick also pays a 2.3% dividend.
For traders, the November calls are inexpensive and could see triple-digit returns on a strong rally for gold and gold mining stocks. However, traders should keep an eye out and look to take profits if it looks like shares won’t move in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Investors can make great returns with the right blue-chip stocks, provided they’re bought at the right time. Many companies go in and out of favor with the market for various reasons, and earnings season can lead to quick drops.
However, for sectors that have bullish longer-term trends behind them, a drop following earnings can be a great investment opportunity. It can allow investors to buy in and get a reasonable price on a company likely to outperform for years.
Right now, the United States is undergoing a construction boom. It’s related to a housing shortage, as well as industrial demand for facilities such as semiconductor manufacturing plants.
That’s a trend that should be a multi-year boom for companies related to construction, including equipment producer Caterpillar (CAT).
Shares recently fell after earnings, even though the company reported a beat and better-than-expected revenues.
This industry leader is now down over 10% from its recent highs. That’s pushed the valuation down to 17 times earnings.
Action to take: Shares look oversold following their post-earnings drop. Interested investors can likely see double-digit returns from shares in the coming months. At current prices, Caterpillar also pays a 1.4% dividend.
For traders, the July $370 calls, last trading for about $6.70, could see high double-digit returns on a rebound in shares from oversold levels in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
William Rhodes, a director at Regions Financial (RF), just picked up 50,000 shares. The buy increased his holdings by over 1,000%, and came to a total cost of $968,500.
This marks the first insider buy since last May, when another director bought 11,926 shares at a cost of $200,134. In the past year, there have been two insider sales from company executives, with the largest sale coming to a cost of just under $500,000.
Overall, Regions insiders own 0.3% of shares.
The regional bank is up about 10% over the past year, lagging the overall market, but performing much better than many regional and small banks, which have had concerns over their loan quality as interest rates have soared.
Operationally, Regions has held up well, with earnings up 23% and revenues rose by 16%. The bank also sports a 27% profit margin.
These metrics make the bank a possible acquisition target by an even larger bank.
Action to take: Investors may like shares here. They’re trending higher, and are still inexpensive at 10 times forward earnings. Plus, Regions pays a hefty 4.9% dividend at current prices.
For traders, the current uptrend in shares is likely to continue. The July $20 calls, last trading for about $0.80, could see mid-double-digit returns or better in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Student lending service company SLM Corporation (SLM) is up 44% over the past year, roughly double the return of the S&P 500. One trader sees a potential pullback in the coming months.
That’s based on the July $20 puts. With 80 days until expiration, 6,008 contracts traded compared to a prior open interest of 107, for a 56-fold rise in volume on the trade. The buyer of the puts paid $0.46 to make the bearish bet.
SLM shares recently traded for just under $22, so they would need to drop by about 10% in the next few months for the option to move in-the-money. That’s still well over SLM’s 52-week low of $12.26 per share.
Shares have been in a strong uptrend for months, but the lender is still valued at just 8 times forward earnings.
The company is a bit pricey measured by its assets. Shares are trading at nearly 3 times its book value, or the rough value of SLM’s book of loans.
Action to take: With a strong uptrend in place, any pullback may likely be short-lived for now. Investors may want to use a pullback to buy shares as a speculation on further price appreciation in the months ahead.
For traders, the July $20 puts may pay out mid-double-digit gains on any pullback in the next few days. After that, it’s likely that the stock will move back to its long-term uptrend.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
The commodity market moves to the beat of its own drum, usually reflecting specific supply and demand dynamics. A number of commodities have seen either a supply shock or rising demand in recent years. Those tend to be good for prices.
Sometimes, however, commodities fall out of favor. For instance, declining demand for EVs has led to a big drop in lithium prices. Lithium is a key component for rechargeable battery technologies, and EVs are a big chunk of that demand.
However, the market is now stabilizing. Lithium producers like Albemarle (ALB) have scaled back new production from mines planned to come online. The reduced supplies to market are helping lithium prices stabilize.
That could be a boon for Albemarle shares, which have dropped 67% from their 2022 peak.
With lithium prices up 15% so far this year, the commodity is faring better than the stock market. Yet Albemarle shares are still inexpensive at less than 9 times earnings.
Action to take: Commodity rebounds take time to play out and can lead to big returns. That’s good news for investors today. At current prices, Albemarle also pays a 1.4% dividend.
For traders, the September $130 calls, last trading for about $9.00, could see mid-to-high double-digit returns on a further rally higher for the lithium miner.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Coliseum Capital Management LLC, a major holder of Mastercraft Boat Holdings (MCFT), recently bought over 200,000 shares in two transactions. The buy came to over $4.2 million.
The fund was an active buyer of shares in March, buying $3.25 million. And last September, the fund bought nearly 280,000 shares for just over $6 million. Over that time, there has been only one insider sale, with a director selling less than $140,000 of shares.
In total, Mastercraft insiders own 3.6% of shares, but institutional investors own nearly all of the rest of the float.
Mastercraft shares have dropped by 26% in the past year. Operationally, the recreational powerboat manufacturer has done even worse, with revenues off by 37% and earnings have collapsed by 70%.
The big drop in shares has taken the stock to 6 times earnings, and the company trades at about two-thirds its price to sales.
Action to take: Mastercraft shares look oversold at current levels, and the company’s valuation could mean a trend higher in the coming months.
As a smaller cap company, investors should start with a smaller position to reflect the higher speculative risk. Plus, Mastercraft does not pay a dividend.
For traders, the September $25 calls, last trading for about $1.30, could see mid-to-high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Big data analytics company Palantir Technologies (PLTR) has had a strong year, with shares up 180%. One trader sees shares trending higher in the coming weeks.
That’s based on the May 17 $26.50 calls. The trade has 21 days until expiration, and 7,619 contracts just traded compared to a prior open interest of 147, for a 52-fold rise in volume on the trade. The buyer of the calls paid $0.40 to make the bullish bet.
Palantir shares just traded for about $21.00, meaning the stock would need to rise $5.50, or a massive 26%, for the options to move in-the-money.
Since mid-March, shares have been trending lower from their 52-week high of $27.50.
Palantir has had a strong year operationally, with earnings up 202% and revenues rising by nearly 20%. The profit margin is a little low for a data company at just under 10%, but further earnings improvements could drive profitability higher.
Action to take: Investors may like shares now that they’ve pulled back to the low $20 range, with an eye towards further growth in the years ahead.
For traders, the May $26.50 calls are aggressive given how little time they have left before expiration.
Traders may want to look to make a quick mid-double-digit return on the option and then use the proceeds to make a trade with more time to play out.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
With rising geopolitical tensions, investors have been pushing defensive names higher. That includes gold, which has hit new all-time highs. Oil has had some small spikes higher, but nothing major yet.
One big winner from this rising trend is defense contractors. Military spending is likely to increase, both domestically and abroad, and major U.S. contractors will likely reap the largest benefits, especially those companies that also help supply American allies.
In the defense space, aerospace contractor Lockheed Martin (LMT) could see further gains. Lockheed just reported a beat on earnings and sales.
Shares haven’t been caught up in the recent market rally, and are down 3% over the past year. However, with earnings and sales on the mend, shares could see some growth from here.
At current prices, Lockheed trades at 17 times earnings, a slight discount to the overall market.
Action to take: Investors may want to buy a partial stake now, and use any drop to add to that position. Lockheed is also a dividend growth stock, with a current payout of 2.7%.
For traders, shares are trending higher and may be on the cusp of a breakout.
The September $515 calls, last trading for about $5.50, could see mid-double-digit returns on a break higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
William Campbell, a director at FNB Corp (FNB), recently bought 2,500 shares. The buy increased his position by 2%, and came to a total cost of $33,713.
Campbell was the last insider buyer, with three buys in February, totaling 4,350 shares at the cost of over $125,000. Going further back, insider activity has been more mixed, although buyers have continued to outnumber sellers. The last insider sale occurred in February 2023.
Overall, FNB insiders own 1.2% of shares.
The Pittsburgh-based regional bank is up 19% over the past year, slightly lagging the overall market.
Operations have been mixed, with a 2% drop in revenues. However, the bank has a 31% profit margin, indicating that they’re making reasonable loans rather than sacrificing quality for short-term income.
On the valuation front, shares still trade inexpensively at 9 times forward earnings. And the bank trades at about a 20% discount to its book value, offering some more upside potential going forward.
Action to take: Investors may like shares here or on any market drop. The bank has some upside potential, and given its smaller size could be a good buyout candidate from a bigger bank.
FNB also pays a 3.6% dividend.
For traders, shares are likely to keep trending higher. The August $12.50 calls, last trading for about $1.50, are already $1.20 in-the-money and could see mid-to-high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Candy and confection producer The Hershey Company (HSY) is down 30% over the past year. One trader sees the potential for further downside in the weeks ahead.
That’s based on the June $195 puts. With 57 days until expiration, 6,675 contracts traded compared to a prior open interest of 166, for a 40-fold rise in volume on the trade. The buyer of the puts paid $12.25 to make the bearish bet.
Hershey shares recently traded for about $187, meaning the options are about $8 in-the-money. The stock is coming off its most recent 52-week low of $178.82.
While Hershey managed to see its revenue rise less than 1% in the past year, overall earnings fell by 12%. Adding in fears about the impact of new weight loss drugs and soaring cocoa prices, and it’s easy to see why shares have fallen on hard times.
Action to take: Long-term investors may want to build a partial stake here, and use any further weakness to add to that position. Hershey is an industry leader facing some significant, but temporary, challenges.
Plus, at current prices, Hershey pays a 2.9% dividend.
For traders, the June puts may deliver a quick mid-double-digit profit in the short-term. If shares retest the low and start trending higher, it may be a sign to go long shares or to buy call options further out.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Some companies make their profits because they benefit from a network effect. Simply put, the more users there are on a network, the more valuable that network is. Companies that advertise to that network or support that network benefit from large or growing networks.
Investors who buy companies that can benefit from the network effect when they’re trading lower can earn above-average returns over time thanks to this powerful effect.
One example of a network is the network of smartphones. Companies that provide access to cell networks tend to earn steady, and above-average returns over time.
In this space, Verizon (VZ) looks like a reasonable buying opportunity now. Shares dropped following their latest earnings, even as their consumer business showed signs of improvement.
Today, Verizon shares trade at 9 times forward earnings. And with revenues improving, the company could be on the verge of growing its earnings over the next few quarters.
Action to take: Investors may like shares here, as the stock has some upside potential following its latest earnings report and selloff. Verizon is also a big dividend payer, with a 6.5% current yield.
For traders, the July $40 calls, last trading for about $1.08, could see high double-digit returns on a bounce higher for shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
David Skidmore, a director at Sunoco LP (SUN), recently bought 1,500 shares. The buy increased his stake by 11%, and came to a total cost of $78,144.
This is the first insider buy since mid-2022, when the company’s President and CEO bought 5,000 shares, paying $177,475 to do so. Insiders are generally not active in trading shares, as there has been one insider sale last December, from the company’s General Council.
Overall, Sunoco insiders own 34.4% of shares.
The oil and gas refiner and distributer is up about 21% over the past year, performing about in-line with the overall stock market.
The company’s operations have been slightly off in the past year, with revenues down by nearly 5%.
However, shares are still inexpensive at about 9 times forward earnings, indicating more upside ahead as energy prices continue to trend higher.
Action to take: Investors may like shares given the further upside potential in energy in the months ahead.
As an LP, Sunoco is structured for a high current income. At current prices, shares pay a 6.1% dividend. There likely won’t be much dividend growth, but a rising share price can still lead to overall good returns.
For traders, shares are in a long-term uptrend. The September $60 calls, last trading for about $1.25, could see mid-to-high double-digit gains on a further long-term increase in Sunoco’s share price.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Industrial conglomerate Honeywell (HON) has been trading in a range over the past year. One trader is betting that shares will trend to the lower end of that range in the coming weeks.
That’s based on the May 17 $185 puts. With 23 days until expiration, 10,018 contracts traded compared to a prior open interest of 175, for a 57-fold rise in volume on the trade. The buyer of the puts paid $1.45 to make the bearish bet.
Honeywell shares recently traded for about $196, meaning shares would need to drop $11, or just over 5%, for the option to move in-the-money. Honeywell has traded between $175 and $210 over the past year.
While Honeywell shares have been flat over the past year, earnings are up 24% on top of a 3% increase in revenues. Plus, the company sports a 15% profit margin, a relatively high level for an industrial company.
Action to take: Honeywell provides long-term investors with excellent returns, and interested investors should look to buy shares in the lower end of its range around $185.
Honeywell is a dividend growth company currently paying a 2.2% yield.
For traders, the very short-term trend suggests a move lower in the coming weeks, which makes the May $185 puts attractive. The options can likely see a mid-double-digit return.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Streaming stocks have gone in and out of favor with the market over the past few years. Today, Wall Street analysts have conditioned investors to focus on metrics like total subscriber count.
The past year has seen the major streaming platforms find ways to crack down on password sharing. And that’s created more account users. However, that’s not always the best way to maximize earnings.
Despite beating on subscriber count and earnings, Netflix (NFLX) saw shares drop off. Part of the reason is the current market correction.
But Wall Street also doesn’t like that the company will stop reporting its subscriber data after 2025.
To some extent, that data does give a sign of total customers. But it doesn’t get to the company’s revenues or profits per customer, which may be a better metric for determining the success of a streaming company going forward.
Action to take: Investors may want to look to buy Netflix in the coming weeks. Shares may still trend lower for a bit, and the market’s current weakness suggests a bit more downside ahead.
For traders, the July $500 puts, last trading for about $15.00, likely have some low-double-digit upside in the coming weeks on any further weakness for Netflix shares.
After that, traders will likely want to flip to call options to play the rebound.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.
Investors can often get caught up in tech trends before they move past the drawing board. That can lead to some stocks getting overvalued, and others getting undervalued. In the chipmaking space, companies developing AI chips have seen all the attention. But existing chipmakers that can still deliver critical chips outside the AI realm can […]
Mary Dillon, President and CEO at Foot Locker (FL), recently added 5,510 shares. The buy increased her stake by 4 percent, and came to a total cost of $100,117. Dillion previously bought over 22,000 shares back in March, paying just under $751,000 to do so. Since then, there have been no other insider transactions. Back […]
Shares of stock exchange owner Intercontinental Exchange (ICE), are up about 10 percent over the past year, just slightly edging out the overall stock market. One trader is betting on a further rally into next year. That’s based on the January 2024 $180 calls. With 128 days until expiration, 2,807 contracts traded compared to a […]
Investors don’t like uncertainty. They tend to give a company a lower valuation when its future outlook appears grim. That could occur for a variety of reasons, such as a series of poor earnings reports. Or there could be some kind of tax or legal overhang on shares. Resolving those issues could benefit shares. Besides […]
Felicia Hendrix, CFO at Penn Entertainment (PENN), recently bought 11,162 shares. The buy increased her stake by 66 percent, and came to a total cost of $250,140. The buy comes a few weeks after a director bought 20,000 shares in August, paying just over $453,000 to do so. Otherwise, two directors sold shares earlier in […]
Beverage and snack food giant PepsiCo (PEP) is slightly up over the past year, although shares have been sliding in recent sessions. One trader is betting on a continued decline in the next two months. That’s based on the November $170 puts. With 66 days until expiration, 11,152 contracts traded compared to a prior open […]
With stocks showing some seasonal weakness, investors may want to turn from volatile big-name companies near their highs. Instead, it may be time to look at stocks that are well off their highs, and could be set up for a strong year-end rally.
Some companies in tech fit the bill. With the market’s interest in artificial intelligence-related stocks, the big winners could come from other tech trends that are still unfolding.
For instance, this could be the first year that over half of all new electricity generation comes from solar power. Yet many companies developing and rolling out solar technology are unloved and oversold by the market right now.
That includes Enphase Energy (ENPH). Shares are at a 52-week low, and are down over 60 percent in the past year… even as revenues are up 34 percent and earnings doubled.
Action to take: Shares are still in a downtrend, but the rate of decline is slowing. That suggests the low may be in soon. Investors could see market-beating returns on a rebound once that turnaround happens.
For traders, the November $115 puts, last going for about $8.70, could see mid-double-digit returns on a further drop lower. Once shares start to flip, traders should look at call options expiring in 2024 to play the rebound.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Stephen Donaghy, CEO at Universal Insurance Holdings (UVE), recently added 5,000 shares. The buy increased his stake by 1 percent, and came to a total cost of $60,350.
This marks the first insider but since last October, when a director bought 3,000 shares at a price 20 percent lower than where the stock trades today. Since then, company insiders have been sellers, at prices 30 to 40 percent higher than where shares currently trade.
Overall, company insiders own 10.1 percent of shares.
The property insurer is up about 2 percent over the past year. Shares have fared better, but the company has a large exposure to hurricane coverage and are selling off amid the peak of hurricane season.
Revenues are up 16 percent over the past year, and earnings are up 288 percent.
Action to take: Investors should see shares move higher after hurricane season, at the end of November. Until then, shares may be volatile depending on weather conditions.
At present, shares yield 5.3 percent, but that could go away if there’s a major hurricane and substantial losses.
For traders, the current trend is down. The November $10 puts, last going for about $0.30, could see high-double-digit returns or higher if there’s a major storm impacting the U.S. in the coming months.
As the hurricane season ends, look to buy call options and play the upside in the months following the end of season.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Texas-based utility CenterPoint Energy (CNP) has shed 16 percent over the past year. One trader sees a further decline ahead for the stock.
That’s based on the January 2024 $30 puts. With 129 days until expiration, 4,000 contracts traded compared to a prior open interest of 105, for a 40-fold rise in volume on the trade. The buyer of the puts paid $2.41 to make the bearish bet.
CenterPoint recently went for about $28, meaning the option is already about $2.00 in the money. Shares have a 52-week low of $25.03.
The utility has been a poor performer operationally, with revenues dropping 4 percent over the past year. Earnings are down by nearly 38 percent as well.
The company’s performance suggests more downside ahead. Shares last traded for about 24 times earnings, which isn’t a bargain, even for a utility stock.
Action to take: Investors may like shares closer to a retest of the $25 lows. At current prices, shares pay a 2.8 percent yield, which is on the low end historically for a utility stock.
For traders, the January puts should see mid-to-high double-digit gains in the months ahead, as shares look likely to decline further. That makes them a reasonable option trade now, and one that could also fare even better in a strong market selloff.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Most investors playing a tech trend tend to look for the companies that most directly play to that trend. For tech stocks, that may mean owning chip companies or software companies.
However, a powerful trend can impact multiple industries. And investing in industries implementing new technologies before they see a benefit can lead to great returns. The trick is to look at the adoption of these disruptive technologies when the market is still focused elsewhere.
For instance, self-driving cars are still a concept largely on the drawing board. While that sounds like something out of Silicon Valley, self-driving vehicles are starting to improve the bottom line of companies globally.
Tyson Foods (TSN) has started using self-driving trucks. That’s a real-world application of self-driving technology, combining artificial intelligence (AI) software with other hardware.
But it will also lower the cost of shipping, and reduce the time to ship, as self-driving trucks don’t need to stop for rest breaks.
That could help Tyson reverse some of its losses over the past year.
Action to take: Tyson trades at about 17 times earnings, a slight discount to the overall market right now. Investors can likely see a rally ahead as the company improves its profitability. Plus, at current prices, shares yield about 3.7 percent.
For traders, the January $55 calls, last going for about $1.85, could see mid-to-high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Marshall McCrea, Co-CEO at Energy Transfer (ET), recently added 50,000 shares. The buy increased his holdings by 1 percent, and came to a total cost of $682,000.
The buy comes a week after an EVP bought 10,000 shares for $130,000. And two weeks after the company’s Chairman of the Board bought 3,000,000 shares for $38.9 million. Over the past two years, there have been over two dozen insider buys, with zero insider sales.
Overall, Energy Transfer insiders own 17.2 percent of shares.
The stock has had a boost in recent weeks as oil prices have broken higher. Typically, oil prices pull back a bit after the summer driving season.
While Energy Transfer is up 20 percent over the past year, shares are still coming off the weakness in the space, with a 30 percent drop in revenues and earnings. However, shares of the pipeline company look cheap at 8 times forward earnings.
Action to take: Investors interested in the latest boom in energy prices looking for income would fare well here. The limited partnership pays out 9.2 percent, although the payout is considered a distribution that comes with a K-1 tax form each year.
For traders, shares are in an uptrend that looks ready to continue. The January 2024 $14.00 calls, last going for about $0.42, could see mid-to-high double-digit returns in the months ahead on a further rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Industrial conglomerate Honeywell (HON) has rallied and then faded out over the past year, leaving shares flat. One trader sees the current downtrend continuing in the coming months.
That’s based on the December $170 puts. With 98 days until expiration, 10,028 contracts traded compared to a prior open interest of 199, for a 50-fold rise in volume on the trade. The buyer of the puts paid $2.30 to make the bearish bet.
Shares recently traded for about $185, so they would need to drop $15, or just over 8 percent, for the option to move in-the-money. That would also be near Honeywell’s 52-week low of $166.63.
While shares have been flat over the past year, revenue is up 2 percent, and earnings are up nearly 18 percent. That’s pushed the company’s valuation to under 19 times forward earnings, a two-year low.
The stock has traded in a range over the past two years, with a low in the $150 range and a high over $220. That leaves shares near the lower end of their range, meaning long-term investors may want to start buying on a move lower.
Action to take: Investors may like shares, as soon as the current downtrend plays out. Honeywell currently yields 2.2 percent, but on a move closer to the $170 range would offer a higher payout.
For traders, the December $170 puts play well to the current downtrend. The option can likely deliver mid-double-digit returns before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
When a trend is hot, owning any company related to that trend can lead to big gains quickly. But when the trend shifts, a company can fall out of favor as well. Some trends occur just once. Others are more cyclical.
Targeting cyclical trends when they’re out of favor can lead to great returns. When the cycle turns, it can lead to life-changing profits. Especially when they relate to tech-related trends.
For instance, electric vehicles are a top trend. But stocks related to them can shift in and out of favor depending on other trends. That gives investors a chance to buy into this growth trend cheaply.
For instance, right now lithium producer Albemarle (ALB) is near its 52-week lows. Shares are off 25 percent over the past year, while the overall market has risen higher.
Yet they’re developing partnerships to be the leading lithium supplier to automakers. And with automakers increasing their EV production rapidly, demand will only soar in the years to come.
Action to take: Right now, Albemarle shares trade at less than 10 times forward earnings. And revenues and earnings are still growing at nearly 60 percent annualized. Shares look undervalued here. At current prices, shares yield about 0.8 percent here.
For traders, shares look ready to move higher off their 52-week lows. The January 2024 $230 calls, last going for about $8.40, could see high double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Eric Etchart, a director at Alamo Group (ALG) recently bought 500 shares. The buy increased his stake by 5 percent, and came to a total purchase price of $88,295.
This marks the first buy at the company since March 2022, when another director bought 500 shares. Since then, there have been about 10 sales, including sales from the company’s CFO and CEO. However, some of those sales were driven by the exercise of stock options.
Overall, company insiders own 2.4 percent of shares.
The mower and tractor manufacturer is up 37 percent over the past year, more than doubling the return of the S&P 500.
Revenues rose 11 percent last year, and earnings grew by nearly 30 percent.
Shares trade at 17 times earnings, a slight discount to the overall market, suggesting there could be more upside ahead. Plus, vegetation management tends to be a recession-resistant industry, so the company can likely perform steady even in an economic downturn.
Action to take: The company is well positioned for further upside, given its reasonable growth and valuation here. Investors can buy shares and grab a 0.5 percent dividend yield at today’s prices.
For traders, the current upside in shares is likely to continue. The December $200 calls, last going for about $1.75, could see mid-to-high double-digit returns from here, even if shares don’t move in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Entertainment and sports company Endeavor Group Holdings (EDR) is slightly up over the past year, but shares have been getting hit hard in recent sessions. One trader sees a further decline in the weeks ahead.
That’s based on the November $20 puts. With 70 days until expiration, 24,309 contracts traded compared to a prior open interest of 144, for a 169-fold jump higher in trading volume. The buyer of the puts paid $0.85 to make the bearish bet.
Endeavor shares recently traded close to $21.50, so the stock would need to drop about $1.50, or about 7 percent, for the option to move in-the-money.
Shares are also down about 18 percent since early August when they hit a 52-week high of $26.26.
The company’s entertainment and sports content is being impacted by the Hollywood strike, as with other media companies.
While Endeavor is coming off a strong year, with earnings up over 1,460 percent, looking forward a big drop in revenue and earnings looks likely.
Action to take: Interested investors should wait for either a retest of the 52-week low near $18.58, or look for a resolution to the Hollywood strike before getting into shares. At present, the company does not pay a dividend.
For traders, the November $20 puts are an inexpensive way to play to the stock’s current downtrend in the coming weeks. Traders should also look to take quick profits, especially on any news about the strike ending.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The financial sector is dominated largely by banks, but there are other niches in the space that can be a better place for investors. That’s because bank stocks can see massive declines during credit events. Or if a bank goes under, the stock can become worthless.
That’s why other parts of the financial sector look reasonable. Many tout the insurance space. But asset managers are often an overlooked play.
Asset manager Blackstone (BX) is one such player, although it may be better known now that it’s being added to the S&P 500.
Asset management companies tend to grow massively during economic booms, but tend to pull back as assets are valued lower during a poorly-performing economy.
At present, Blackstone is valued at 17 times earnings, a slight discount to the overall market. But revenues are soaring with the market rally this year, up 578 percent.
Action to take: Investors may like shares here or on any market drop lower. Asset managers tend to outperform the market over time with less risk than a bank stock. Plus, Blackstone yields about 3.3 percent at current prices, a better payout than many banks.
For traders, the January 2024 $125 calls, last going for about $2.50, could see mid-to-high double-digit gains from here. That will still leave shares well under their late-2021 all-time peak of about $140 per share.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Sang Lee, a director at PCB Bancorp (PCB), recently bought 3,000 shares. The buy increased the director’s stake by less than 1 percent, and came to a total cost of $47,100.
The director has been a recurring buyer over the past 18 months, picking up over 50,000 in shares in total and paying over $1 million. The last insider sale occurred in March, when a director sold 11,000 shares.
Overall, company insiders own 25.2 percent of shares.
The California-based bank is down about 10 percent over the past year, lagging the S&P 500 by about 25 percent in total. Despite the fears in the banking sector, PCB has held up well, with revenues declining less than 4 percent.
The bank currently trades at a slight discount to its book value, goes for about 7 times earnings, and sports a hefty 33 percent profit margin.
Action to take: Shares likely have more upside from here as the banking sector is still lower even as nearly six months have passed since the bank failures in the spring. At current prices, PCB also yields 4.3 percent.
For traders, PCB stock has been trending higher since the spring, but is still below the crisis high. The January 2024 $17.50 calls, last going for about $0.75, could see mid-double-digit growth in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Media giant Warner Bros. Discovery (WBD) sank over 10 percent last week, as the ongoing Hollywood strike impacted the sector. One trader is betting on further weakness ahead.
That’s based on the April 2024 $10 puts. With 225 days until expiration, 10,265 contracts traded compared to a prior open interest of 129, for an 80-fold rise in volume on the trade. The buyer of the puts paid $0.95 to make the bearish bet.
Warner Bros. Discovery stock recently traded for about $11.50. So shares would need to drop about $1.50, or about 13 percent, for the option to move in-the-money. The stock has a 52-week low of $8.82, so there could be more downside ahead from last week’s drop.
Overall, the company has been unprofitable over the past year, although revenues rose by about 5 percent.
Investors remain concerned about the impact of the Hollywood strike, which has shut down production. That could mean a big drop in cash flows, which would impact the company’s ability to service its debt.
Action to take: Shares could be a buy in the low $10 range, where they’d trade at a reasonable value relative to the company’s intellectual properties. At current prices, there may be more downside, and it will take time for the company to fully recover from the strike.
For traders, there could be some sizeable downside in the months ahead. The April $10 puts are reasonably positioned for that downside, and could see mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Markets tend to move in trends. Since bottoming out late last year, the trend has been higher, even with a few hiccups along the way like the drop in early August.
With stocks trending higher, last year’s big losers have gained more ground than average. That trend will likely continue as well. That’s good news for investors looking to catch up this year who may have missed out on the first part of the market rally.
The best-performing stock this year in the Dow has been Salesforce (CRM). The sales software management company has been performing strongly, and looks likely to continue, even though its overall growth may have slowed.
With shares up 40 percent over the past year, but earnings growth up over 600 percent, Salesforce looks undervalued relative to its recent operational performance. That could mean that shares will continue to lead the Dow higher in the months ahead.
Action to take: Investors may like shares at current prices. While near one-year highs, they’re still down about 30 percent from their 2021 peak, and will likely reach new all-time highs in the years ahead. At the moment, shares don’t pay a dividend.
For traders, play the current uptrend. The January 2024 $250 calls, last going for about $7.50, could see mid-to-high double-digit returns on a year-end rally for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Lawrence Cunningham, a director at Markel Group (MKL), recently bought 25 shares. The buy increased his holdings by 6 percent, and came to a total cost of $36,500.
The buy came a few weeks after the company CEO bought 100 shares, paying about $148,000 to do the same. Over the past six months, there have been nine insider buys, and two small sales from company directors, following a similar trend from 2022.
Overall, company insiders own 2.1 percent of shares.
The property and casualty insurance company is up about 23 percent over the past year, nearly double the returns of the S&P 500. Insurance has held up strongly as investors have been able to raise premium rates above and beyond inflation.
Markel shares trade at about 10 times earnings, and profit margins are near 13 percent, on the higher end for the highly regulated insurance industry.
Action to take: Investors may like shares at current prices or on any market drop, as insurance companies tend to be solid long-term performers. Merkel is a bit expensive in terms of price, and shares don’t pay a dividend.
For traders, shares have been trending higher all year, and that looks likely to continue. The January 2024 $1,700 calls, last going for about $7.50, could see mid-double-digit returns on a further rally in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Oil and gas exploration company Comstock Resources (CRK) is down by nearly a third over the past year, amid a decline in energy prices. One trader sees shares rallying higher in the coming weeks.
That’s based on the October $13 calls. With 44 days until expiration, 18,969 contracts traded compared to a prior open interest 585, for a 32-fold rise in volume on the trade. The buyer of the calls paid $0.55 to make the bullish bet.
Shares recently traded just over $12, so they’d need to rise about 6 percent for the option to move in-the-money. Comstock has a 52-week high just under $22, so there’s plenty of room for a run higher.
Comstock has seen revenues drop nearly 70 percent over the past year, although shares aren’t hugely expensive at 14 times forward earnings.
Action to take: Investors betting on oil and gas going into the latter part of the year will likely be rewarded given the drop this year. Oil prices have been trending back over $80 per barrel in recent sessions. Natural gas tends to rise in the winter months.
Investors can also get a 4.2 percent dividend at today’s prices.
For traders, the October calls could play out well in the coming weeks, and are inexpensive enough to deliver mid-double-digit gains on a move higher in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investors tend to suffer from a “home country” bias. They tend to overweight positions in assets located in their own country, and fail to sufficiently diversify internationally.
There are plenty of markets that offer better values than the U.S. market, even adjusting for political and currency risks. And in those markets are plenty of industry-leading companies that can provide great returns for patient investors. Especially those who buy unloved sectors.
One simple place to start internationally is with UBS Group (UBS). The Swiss-based international bank just reported a record profit, even after dealing with the costs of integrating the assets of troubled Credit Suisse.
While shares have rebounded 64 percent in the past year, there’s more upside as shares trade for less than 15 times earnings. Profitability has slowed over the last year, and will likely be weighed down by the Credit Suisse transaction, but over time, the buy will allow the bank to reach new highs.
Action to take: Investors may like shares at current prices or on any future drop as an international holding. Shares currently yield about 2.2 percent.
For traders, shares are in a strong uptrend. The January 2024 $27.50 calls, last going for about $1.50, could leverage further upside into high-double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
David Daniel, a director at Domo (DOMO), recently bought 137,000 shares. The buy increased his stake by 84 percent, and came to a total purchase price just under $1.5 million.
That follows up on a 26,400 share buy the director made back in July, and two other buys earlier this year. The company’s CFO and CEO have also been buyers this year, with the CEO picking up 429,810 shares for just over $6 million in late March.
Overall, insiders own about 6 percent of shares.
Shares of the business intelligence software platform have shed over 40 percent in the past year.
Revenues have been flat, but the company is still a long way from making a profit, and billings have declined in the most recent quarter, which could signal further trouble ahead.
Action to take: Shares may have more downside here, but could be a contrarian buy with the big insider buying from officers and directors.
Plus, the company is expanding its partnership with Google for cloud services, which could indicate a turnaround is underway. Investors may want to build a speculative stake here. At present, shares do not pay a dividend.
For traders, shares are in a downtrend, but have been prone to pops higher. The November $12 calls, last going for about $0.90, could see mid-double-digit returns on a jump higher in shares before expiration.
Disclosure: The author of this article has no position in the company mentioned here, and does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Video game retailer GameStop (GME) has struggled over the past year, with shares down by over a third. One trader sees further weakness in the months ahead.
That’s based on the November $18 puts. With 73 days until expiration, 10,504 contracts traded compared to a prior open interest of 174, for a 60-fold rise in volume on the trade. The buyer of the puts paid $2.60 to make the bearish bet.
Shares recently traded for about $18.50, so the stock would only need to drop about 3 percent for the option to move in-the-money. Shares recently dropped to the $16.50 range before bouncing higher, so a re-test of that recent low looks possible in the coming weeks.
The retailer has struggled with profitability over the past year, and revenues are down about 10 percent, even as sales have generally held up.
On the plus side, the company is cash rich and has low debt.
Action to take: Investors interested in shares may be able to buy shares at a slightly lower price in the months ahead, likely the $15-16 range, before getting a bounce higher.
For traders, the November puts play well to the weakness in shares this year. Traders could likely see mid-double-digit returns on any drop in GameStop in the next few months.
Disclosure: The author of this article has a position in the company mentioned here, and does not intend to further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
While markets have been excited about artificial intelligence this year, other tech trends haven’t gotten as much interest. That’s led to better valuations, particularly for companies that are rolling out new technologies of their own.
One company in particular is putting out a new gadget that will likely significantly boost its bottom line. Even better? It looks like the company won’t be raising prices, a much-needed relief given the recent inflation.
That company is Apple (AAPL), and the new gadget is the iPhone 15. The product launch is in a few weeks, but it already looks like the new model won’t be much more expensive than the iPhone 14.
That could help Apple move higher – revenues and earnings have been flat over the past year. A push higher there could send shares to new all-time highs in the span of just a few months.
Action to take: Investors should use any market drop to add a stake in Apple, given its massive cash flows and dividend growth potential. Shares currently yield 0.5 percent.
For traders, shares are likely to trend higher in the coming months. The December $195 calls, last going for about $6.40, could see mid-double-digit returns, if not more, given how markets react to the iPhone 15 rollout.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Robert McKee, President and CEO at Kodiak Gas Services (KGS), recently added 16,180 shares. The buy increased his holdings by 17 percent, and came to a total cost of $292,033.
The buy came a week after the company’s Chief Accounting Officer picked up 500 shares for $9,865, and a director bought 5,000 shares for just under $96,000. Over the past two years, there have been over a dozen insider buys and no sales.
Overall, insiders own 79 percent of the oil and gas infrastructure supplier.
Shares are up about in-line with the S&P 500 since the company went public earlier this year.
Energy prices have come well off their 2022 peak, but demand remains strong for energy sources, particularly in the United States, which should keep demand strong.
Over the last year, earnings have grown by 97 percent, and revenues are up by 15 percent.
Action to take: Investors may like shares at current prices or on any drop from here. Shares don’t currently pay a dividend, but could start doing so in the future.
For traders, shares have been trending up since their IPO… but no options trade on the company yet. Traders may want to look elsewhere in the energy space, however, as it’s starting to trend higher after being a laggard so far in 2023.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Database software company Oracle (ORCL) has been trading in a range since June. One trader sees shares sliding lower in the next six months.
That’s based on the March 2024 $95 put option. With 196 days until expiration, 3,631 contracts traded compared to a prior open interest of 103, for a 35-fold rise in volume on the trade. The buyer of the puts paid $2.04 to make the bearish bet.
Shares recently traded for just over $120, so they would need to drop about $25, or just over 20 percent, for the option to move in-the-money.
That would put shares right around their current 200-day moving average, but still well off their 52-week lows of $60.78.
Oracle has grown its earnings by just 4 percent over the past year, and the stock’s 60 percent rally has taken it from 13 times earnings to 20 times earnings. That jump in valuation makes a pause look reasonable in the months ahead, and even potentially a slight pullback.
Action to take: Investors interested in the company should look for a drop lower before buying, as the stock looks overvalued here. Shares also yield about 1.4 percent, but patient investors could get a higher starting yield.
For traders, the March puts give a pullback in shares plenty of time to play out. Traders could buy the puts and close the position much earlier on another market drop.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Earnings season can see some wild, and often counterintuitive, swings. A company can beat on earnings, but can still sell off. Or a company can miss, but provide forward guidance that causes shares to soar.
Amid this earnings season shuffle, investors can often get an opportunity to buy a high-flying stock once it’s had some of the wind knocked out of it. By buying at a lower price, investors can get better returns moving forward.
The latest such opportunity is in aerospace supplier Heico (HEI). The company beat on earnings, but expectations were so high going in that shares sold off.
Given the steady state of the defense industry, that pullback may prove a buying opportunity.
Heico has now posted both revenue and earnings growth of 28 and 24 percent over the past year. Such growth is likely to continue, given current geopolitical tensions that look unlikely to ease anytime soon.
Action to take: Long-term investors may like shares at current prices or on any drop lower. Shares pay a modest 0.2 percent dividend, a bit lower than the bigger aerospace and defense stocks.
For traders, shares are likely to trend higher from their current selloff. The November $180 calls, last going for about $1.30, could see high double-digit returns on a bounce higher in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Sandeep Mathrani, a director at Dick’s Sporting Goods (DKS), recently added 1,300 shares. The buy increased his stake by 16 percent, and came to a total cost of $147,602.
This marks the first insider buy at the company since May 2022. Insiders, including the company CEO and the CFO, have been regular sellers of shares, at prices both above and below the current price.
Overall, company insiders own 3.4 percent of shares.
The sports equipment retailer is up 7 percent over the past year, slightly lagging the overall market.
Retail has been a challenging industry over the past year, amid a rise in retail thefts.
Dick’s has seen earnings drop nearly 25 percent. However, shares trade at just 9 times forward earnings, and overall revenues increased last year. That indicates the company is performing well as a business, even in today’s challenging environment.
Action to take: Shares could outperform the market in the months ahead. Shares are inexpensive, and the end of the year is typically the strongest time for retail stocks. Today’s investors can also get a 3.6 percent dividend yield at today’s prices.
For traders, shares recently dropped after their latest earnings report and now look oversold. The December $130 calls, last going for about $3.60, could see mid-to-high double-digit growth in the months ahead before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Construction equipment manufacturer Caterpillar (CAT) has been on a tear, with shares hitting a new all-time high in recent sessions. One trader sees the rally continuing in the coming months.
That’s based on the November $310 calls. With 77 days until expiration, 25,633 contracts traded compared to a prior open interest of 415, for a 62-fold rise in volume on the trade. The buyer of the calls paid $4.25 to make the bullish bet.
Shares recently traded around $280, so they would need to rally $30, or about 11 percent, for the options to move in-the-money.
Even with a strong rally over the past year, Caterpillar looks reasonably valued, if not undervalued, at about 15 times earnings. And revenues grew at 22 percent compared to the prior year’s most recent quarter, leaving shares priced under the company’s growth.
Action to take: Long term investors interested in shares may want to buy a stake now, and use any future pullback as a buying opportunity. Caterpillar also yields about 1.8 percent at current prices, and has a history of dividend growth. Caterpillar tends to move steadily higher over time, making for a great long-term holding.
For traders, the current uptrend looks likely to continue. That plays well with the November $310 calls, which could see high-double-digit returns or better before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Retail stocks have been an out of favor sector with the market this year. Consumer spending on goods has dropped. And there’s been a rise in retail theft leading to higher levels of inventory loss, known in the industry as shrinkage. However, some companies could fare better than others going forward, and those that can […]
Chris Ruble, COO at Forward Air Corp (FRWD), recently bought 1,433 shares The buy increased his stake by 5 percent, and came to a total price just under $100,000. The buy came about a week after five different company directors bought shares in the 500 to 5,000 share range, with the largest buy coming to […]
Mobile security system developer BlackBerry (BB) surged higher last week on a rumor that the company was going to be bought out. One trader is betting that the rumor is false and shares will trend lower in the coming weeks. That’s based on the September 22 $5 puts. With 23 days until expiration, 8,407 contracts […]
While most stocks have pulled back in the past month, they still look strong relative to last year’s lows. However, some companies have specific issues at play that are keeping them from being near their highs. Understanding why a company can be out of favor with the market can lead to a great investment opportunity, […]
William Nettles, a director at Overstock.com (OSTK), recently bought 10,385 shares. The buy increased his stake by 25 percent, and came to a total cost of $50,644. This marks the first insider buy at the company since last November, when Overstock’s CEO bought 4,000 shares. Two company directors have sold shares following the exercise of […]
Fuel cell developer Plug Power (PLUG) is down over 70 percent in the past year as EV related stocks have fallen out of favor. One trader sees a further decline in the next six months. That’s based on the March 2024 $5 puts. With 199 days until expiration, 5,003 contracts traded compared to a prior […]
Great stocks tend to only look great over time. Over shorter periods, stocks can trade lower, or even sideways for prolonged periods of time. While that can be frustrating at first, taking advantage of that trend over time can lead to massive, market-beating gains. That’s especially true for industry-leading stocks, which may sometimes stay out […]
George Johnson, a director at Helca Mining (HL), recently bought 8,500 shares. The buy increased his stake by 49 percent, and came to a total cost of $34,585. This buy marks the only insider activity at the company over the past two years. Company officers have been granted shares of stock repeatedly over the past […]
Media conglomerate The Walt Disney Company (DIS) hit a new 52-week low last week. One trader sees shares declining further over the next month. That’s based on the September 29 $75 puts. With 32 days until expiration, 10,330 contracts traded compared to a prior open interest of 134, for a 77-fold rise in volume on […]
Companies that build out a successful leadership role tend to keep it over time. They don’t necessarily keep competitors at bay. Rather, they look at trends and adapt to them as needed. And given their existing size and cash flows, doing so allows them to roll with market changes. For instance, the rise of cryptocurrencies […]
Charles Ruffel, a director at Charles Schwab Corp (SCHW), recently added 833 shares. The buy increased his holdings by 3 percent, and came to a total cost of $50,440. This is the first insider sale since March, when a different director bought 5,000 shares. Other company insiders were active buyers in March as well, including […]
Online gaming company Roblox (RBLX) has lost over a third of its value in the past year, and shares are near a 52-week low. One trader sees a bounce ahead in the coming months. That’s based on the January 2024 $37.50 calls. With 147 days until expiration, 19,708 contracts traded compared to a prior open […]
The retail sector has been a laggard this year. The headline data suggests a bit of a slowdown, particularly compared to the pandemic era. However, behind the headlines, things are more nuanced. Customers can’t cut back completely on necessities like food or clothing. So even with a pullback, it may be seen more with luxury […]
Kelcy Warren, Chairman at Energy Transfer (ET), recently bought 3,000,000 shares. The buy increased his holdings by about 1 percent, and came to a total cost of $38.89 million. The Chairman was also a buyer for several days back in May, and before that in February. A company EVP also picked up 10,000 shares at […]
Financial services company Capital One Financial (COF) is down about 10 percent in the past year, as rising interest rates have weighed on the financial services provider. One trader sees a rally ahead for shares in the coming weeks. That’s based on the October $120 calls. With 56 days until expiration, 15,475 contracts traded compared […]
Investors have a number of tech trends that they can play. This year, AI stocks have been all the rage. But other parts of the tech space are big and steady winners, even if they don’t get the headline attention. One such area is in cybersecurity plays. Data breaches are on the rise. And companies […]
Douglas Treff, a director at Crocx (CROX), recently bought 2,114 shares. The buy increased his holdings by 2 percent, and came to a total cost just over $200,000. The buy comes a week after the company CFO bought 1,950 shares, paying just over $198,000 to do so. There have been a few other buys from […]
Petroleo Brasileiro (PBR), also known as Petrobras, is flat over the past year as energy prices have been volatile, but well off of 2022’s highs. One trader is betting on a move higher in the coming weeks. That’s based on the October $11 calls. With 58 days until expiration, 6,553 contracts traded compared to a […]
The stock market is made up of sectors. Some of them are in favor at any given moment. Others are out of favor. Buying out of favor sectors can lead to big gains when the trend shifts. Investors can also sour on a sector that has performed well recently, on the logic that it may […]
Matthew De Soto, a director at Mid Penn Bancorp (MPB), recently bought 2,355 shares. The buy increased his holdings by 4 percent, and came to a total cost of $50,001. The director was also a buyer in late June, buying 362 shares for just under $8,000. Another company director was a buyer at the same […]
Tech giant Microsoft (MSFT) has been a strong performer this year, but shares have been hit in recent weeks. One trader sees shares bouncing higher in the months ahead. That’s based on the November $280 calls. With 87 days until expiration, 22,514 contracts traded compared to a prior open interest of 391, for a 58-fold […]
The market’s rally higher this year has been driven largely by tech stocks. While the market has pulled back a bit overall, many companies and sectors have been laggards. There’s still some residual concerns that are now creating a value today. One sector is the media space. Fears of a slowing economy and declining ad […]
Amy Banse, a director at Lennar (LEN), recently bought 820 shares. The buy increased her stake by 11 percent, and came to a total cost of $100,909. The director was the last insider buyer, with a 790 share pickup in July and a 165 share buy in June. Overall, that adds another $110,000 in purchases […]
American Airlines (AAL) is up 6 percent over the past year, about double the return of the S&P 500. One trader sees shares declining in the months ahead. That’s based on the February 2024 $11 puts. With 178 days until expiration, 7,010 contracts traded compared to a prior open interest of 167, for a 42-fold […]
The latest Fed meeting minutes suggest the central bank may continue to raise interest rates. However, the steady increases of the past year are over. With interest rates likely near, if not at, their cycle peak, some investments look better than others. Fixed income could perform well here, as prices on assets like bonds will […]
John Risher, CEO at Lyft (LYFT), recently bought 100,000 shares. The buy increased his stake by 1 percent, and came to a total cost of $1.15 million. He was joined by a company director who bought 8,826 shares, increasing his stake by 28 percent, and paying just under $100,000. These are the only insider buys […]
Oil and gas exploration and production company Suncor Energy (SU) is slightly down over the past year as energy prices have moderated. One trader sees shares trending higher into the end of the year. That’s based on the December $34 calls. With 119 days until expiration, 45,164 contracts traded compared to a prior open interest […]
The past few months have seen retail stocks underperform on concern that consumers have been slowing their spending. The latest retail sales data indicates that consumers are fine overall. If anything, they’re just cutting back on spending unless they can get a big bargain. Investors looking at the retail space should focus either on companies […]
Devina Rankin, a director at Keycorp (KEY), recently bought 10,000 shares. The buy is an initial stake for the director. The total cost for the stake came to $114,900. This marks the first insider buy since the company’s institutional bank head bought 75,000 shares in May. He paid $733,500 to do so. Company insiders have […]
Singapore-based e-commerce and digital finance platform Sea Limited (SE) dropped nearly 30 percent on Tuesday. One trader expects shares to decline further in the next month. That’s based on the September $35 puts. With 28 days until expiration, 15,097 contracts traded compared to a prior open interest of 376, for a 40-fold rise in volume […]
Value investors can have a tough time when it comes to investing. They can recognize that a company is trading at a discount to its value. But short of taking it private, it’s hard to get that value unlocked. It takes time and patience. Recently, a proposed merger agreement led to a rejection by the […]
Michael Gerdin, CEO at Heartland Express (HTLD), recently bought 5,841 shares. The buy increased his position by less than 1 percent, and came to a total cost of $89,367. Gerdin was also an active buyer back in May, and six other buys in the past 12 months. This marks the first insider activity since May, […]
Office and retail-oriented real estate investment trust Vornado Realty Trust (VNO) has lost about one quarter of its value over the past year. One trader sees shares trending even lower in the coming months. That’s based on the October $15 puts. With 65 days until expiration, 4,003 contracts traded compared to a prior open interest […]
The market may not like the fact that inflation’s decline this year has started to stall out. While inflation does look likely to start showing signs of staying in the 3-4 percent range, some investments fare better than others in an inflationary environment. The best investment for this scenario is for a company that offers […]
John Geller, President and CEO at Marriott Vacations Worldwide (VAC) recently bought 5,000 shares. The buy increased his holdings by 5 percent, and came to a total cost of $564,200. He was joined by the company CFO, who bought 1,800 shares at a cost just under $205,000, and who increased his stake by 16 percent. […]
Marine shipping company Nordic American Tankers Limited (NAT) is up over 65 percent in the past year. One trader sees the potential for a pullback in the weeks ahead. That’s based on the September 15 $4.50 puts. With 31 days until expiration, 9,620 contracts traded compared to a prior open interest of 224, for a […]
While stocks can trend higher or lower for long periods of time, they will occasionally take a breather. That can provide a buying opportunity for investors, particularly for great companies pulling back. Over the long haul, buying a great company on a drop can lead to better returns than buying high and hoping to sell […]
Ruth Porat, a director at Blackstone (BX), recently bought 298 shares. The buy increased her holdings by 1 percent, and came to a total cost of $30,817. This marks the first insider buy in three months, following a similarly-sized buy from the director. She has made similar buys going into the last year as well. […]
Major Wall Street bank Citigroup (C) has lost nearly 20 percent over the past year. One trader sees the bank bucking its downtrend and moving higher in the months ahead. That’s based on the December $44 calls. With 122 days until expiration, 5,731 contracts traded compared to a prior open interest of 229, for a […]
Companies that succeed over the long term continue to find new ways to offer value to their customers. Some of that value can come from providing new products and services that compliment existing ones. Other companies offer better value with a higher quality user experience, with better service and interest. No matter what the specifics […]
William Sanders, a director at Mid-America Apartment Communities (MAA), recently bought 5,000 shares across two transactions. The purchases increased his holdings by 13 percent, and came to a total cost of about $740,000. These mark the first insider buys over the past two years. Otherwise, there have been regular and steady sales by company insiders, […]
Energy giant ConocoPhillips (COP) is up over 20 percent in the past year, nearly triple the return of the S&P 500. One trader sees shares trending higher in the months ahead. That’s based on the October $135 calls. With 70 days until expiration, 8,312 contracts traded compared to a prior open interest of 140, for […]
Some sectors of the market are cyclical, moving in and out of favor with investors. Typically, a stock that gets overbought will see a big correction. And stocks that get oversold will come roaring back. In today’s market, looking for oversold opportunities looks like a good way to buck a possible market pullback after a […]
William Montgomery, a director at Enterprise Products Partners (EPD), recently bought 50,000 shares. The buy increased his holdings by 77 percent, and came to a total cost of $1.33 million. This marks the first insider buy since March, when one of the company’s co-CEOs bought 15,835 shares for just under $401,000. There have been nearly […]
E-commerce platform company Shopify (SHOP) has soared nearly 60 percent in the past year. One trader sees a further rally ahead for shares in the next seven months. That’s based on the March 2024 $70 calls. With 217 days until expiration, 11,583 contracts traded compared to a prior open interest of 171, for a 68-fold […]
Investing is a marathon, although with all the day-to-day news and quarterly earnings report, it may not always feel like that. A handful of companies get their focus right, looking at the long haul versus short-term moves. Those companies may not always please investors during their quarterly earnings reports. But all companies will have a […]
Julie Southern, Chair of NXP Semiconductors (NXPI), recently added 203 shares. The buy increased her stake by 2 percent, and came to a total cost just over $44,260. This is the first insider buy since Southern bought in March 2022, buying 135 shares and paying just over $24,000. Since then, there have been four insider […]
Payment systems company Block (SQ) dropped following its earnings report last week. One trader sees shares rebounding in the coming months. That’s based on the December $50 calls. With 128 days until expiration, 16,004 contracts traded compared to a prior open interest of 193, for an 83-fold rise in volume on the trade. The buyer […]
Every few years, if less, investors find a new tech story to love. The past few years has seen interest shift to artificial intelligence, following an interest in the growth of electric vehicles, as well as blockchain and cryptocurrency technology. One trend is a bit older, having been around for nearly 10 years. And as […]
Steven Mollenkopf, a director at Boeing (BA), recently added 850 shares. The buy increased his holdings by 29 percent, and came to a total cost of $201,450. This marks the first insider buy at the airplane manufacturer this year. Last year saw Mollenkopf buy on two occasions, picking up nearly 1,800 shares. Another director bought […]
Semiconductor manufacturer Intel (INTC) has been rallying this year, after investors wrote off the company last year for hotter plays in the chip market. One trader is betting that shares will continue higher through next spring. That’s based on the March 2024 $41 calls. With 220 days until expiration, 7,143 contracts traded compared to a […]
Stocks that lead the market in one year will likely lag the next. The reverse is also true. Even during a bull market, some stocks and sectors soar higher, while others underperform. But they tend to win out when the trend shifts. This year’s market rally has been driven by tech stocks. And fears of […]
Jeffrey Ubben, a director at Exxon Mobil (XOM), recently added 458,000 shares. The buy increased his stake by 19 percent, and came to a total cost of $48.97 million. The director was the last insider to buy shares, with a purchase in August 2022 of 1 million shares, coming to $88.45 million. Otherwise, company insiders […]
Information technology consulting company DXC Technology (DXC) sank nearly 30 percent last Thursday, as the company missed on earnings and cut guidance. One trader is betting on a further drop in the months ahead. That’s based on the January $15 puts. With 164 days until expiration, 4,710 contracts traded compared to a prior open interest […]
The past few months have shown a big slowdown in inflation. It’s also shown that consumers are willing to ditch their favorite brands to find less expensive substitutes. However, that trend likely won’t last forever. As prices in general rise, even substitute brands may not entice consumers as they once did. That could bode well […]
Thomas Smach, a director at Crocs (CROX), recently added 1,435 shares. The buy increased his holdings by 1 percent, and came to a total cost of $150,001. The director was the last buyer of shares with a 3,000 share pickup in March at a slightly higher price. Since then, company insiders, including the Crocs’ CEO […]
Coal producer Peabody Energy Corporation (BTU) has traded in a narrow range over the past year. While shares hit a low in May and have trended higher, one trader sees shares declining going into next year. That’s based on the January 2024 $16 puts. With 168 days until expiration, 14,242 contracts traded compared to a […]
Many sectors condense over time into just a few players. An oligopoly can be great for investors, as companies tend to look for ways to improve their profitability, rather than spend considerable money on expansion once there’s a small and stable number of players in the market. That can lead to good investment returns. The […]
Mark Sheahan, President and CEO at Graco (GGG), recently added 1,263 shares. The buy increased his holdings by 2 percent, and came to a total cost of $99,828. This marks the first insider buy at the company in the past two years. Graco has had about two dozen insider sales in that timeframe, all following […]
Mortgage REIT AGNC Investment Corp (AGNC) has dropped slightly so far this year, as interest rates continue to rise. One trader expects shares to decline even further into next year. That’s based on the March 2024 $9 puts. With 225 days until expiration, 22,050 contracts traded compared to a prior open interest of 232, for […]
So far, this year has been kind to semiconductor companies. That’s because most of them can benefit from the exploding interest in AI technology. However, the hardware companies may have run up a bit too quickly. The software companies behind AI likely have more room to run. There’s a good amount of competition, both in […]
Scott Watson, CIO at Northwest Bancshares (NWBI), recently bought 5,000 shares. The buy increased his stake by 20 percent, and came to a total cost just over $61,000. This marks the first buy since a company director bought 1,675 shares back in June. And a cluster of directors bought back in May, and the company […]
Artificial intelligence software company C3.ai (AI) has nearly quadrupled since the start of the year. one trader sees a short-term pullback in the coming weeks. That’s based on the September 15 $42.50 puts. With 44 days until expiration, 5,021 contracts traded compared to a prior open interest of 123, for a 33-fold rise in volume […]
The last year has seen consumers slow down in some parts of the market, but gain in others. The biggest gains have come from travel, leisure, and hospitality services, rather than the sale of goods. For a world that was largely locked down for a considerable amount of time, that trend makes sense. It’s also […]
Robert Robotti, a director at Tidewater (TDW) recently added 1,135 shares. The buy increased his holdings by less than 1 percent, and came to a total price of $64,763. The director has been the only active insider over the past year, with eight total buys and one sale. The sale totaled less than $4,500, but […]
Chinese internet retailer Alibaba Group Holding (BABA) has been in an uptrend the past few months. One trader sees further upside in the weeks ahead. That’s based on the September 1 $115 calls. With 31 days until expiration, 13,146 contracts traded compared to a prior open interest of 106, for a massive 124-fold rise in […]
In many industries, several companies will compete for leadership. It can change over time, particularly if market conditions provide unusual opportunities. The past few years has seen wild swings in a number of sectors. Tech stocks soared during the pandemic amid the rise for remote work and contactless payments. Then tech stocks came back down, […]
Lecil Cole, CEO at Calavo Growers (CVGW) recently added 75,000 shares. The buy increased the CEO’s stake by 17 percent, and came to a total cost of $2.275 million. The CEO Was joined by a director two days later, who bought 2,000 shares, increasing his stake by 6 percent. Over the past year, one director […]
Data center operator Applied Digital Corporation (APLD) has moved up nearly five-fold from its 52-week lows. One trader is betting shares will continue to rise through the end of the year. That’s based on the January 2024 $11 calls. With 172 days until expiration, 6,902 contracts traded compared to a prior open interest of 127, […]
Earnings season is in full swing. And investors can once again see good companies falter on less-than-perfect quarterly news. For investors looking beyond the quarterly sprint, however, it may open up some reasonable buying opportunities. That’s true for industry-leading firms. They tend to have higher expectations, and any market disappointment could lead to a buy, […]
Bryant Riley, Co-CEO and major holder at B. Riley Financial (RILY), recently added 72,727 shares. The buy increased his stake by 1 percent, and came to a total cost just shy of $4 million. He was joined by the other CEO, who bought 5,000 shares, at a cost of $275,000. A company director also bought […]
Media giant The Walt Disney Company (DIS) has been declining this year, amid dropping theme park attendance and a strike impacting production in Hollywood. One trader sees a further decline in the weeks ahead. That’s based on the August $82 puts. With 21 days until expiration, 4,679 contracts traded compared to a prior open interest […]
Companies are impacted by any number of uncertainties. Investors who wait for completely clear skies often miss out on the opportunity. But buying when things are starting to turn around can offer the best returns relative to the risk. That’s especially true when buying shares of industry leaders. Taking advantage of a short-term fear can […]
Amy Banse, a director at Lennar (LEN), recently bought 790 shares. The buy increased her stake by 12 percent, and came to a total cost of $99,872. The buy comes a month after she picked up 165 shares, paying just over $20,000 to do so. Over the past two years, a few company officers have […]
Automobile manufacturer General Motors (GM) has been rangebound over the past year, and shares appear to be trending down once again. One trader is betting shares will further decline from here in the coming weeks. That’s based on the August 18 $35.50 puts. With 22 days until expiration, 5,802 contracts traded compared to a prior […]
This year’s market returns have been heavily driven by companies working on artificial intelligence (AI). That includes big tech companies in the hardware and software space, as well as smaller companies with a hyperfocus on the new technology. While that trend is playing out, the market has picked the top players in the space, even […]
Srb Corp, a major holder of Safety Insurance Group (SAFT), recently added 32,384 shares. The buy came to a total of $2.17 million, and increased the fund’s position by 2 percent. Srb has been a regular and consistent buyer of shares since May, with eight buys in the past three months. Going back further, last […]
Social media provider Meta Platforms (META) has more than tripled off of last year’s lows. One trader sees the rally continuing into 2025. That’s based on the January 2025 $550 calls. With 541 days until expiration, 5,032 contracts traded compared to a prior open interest of 167, for a 30-fold rise in volume on the […]
One of the truisms about investing is that holding shares of companies with steady, but low growth over time can lead to good results. While it may lack the excitement of getting into a top tech trend, having a few stocks of boring companies can round out a portfolio. These companies can include any good […]
Michael Volkema, a director at Millerknoll (MLKN) recently added 13,584 shares. The buy increased his position by 7 percent, and came to a total cost of $230,426. He was joined by 3 other directors, who bought on the same day at different prices. The smallest insider buy came to just under $21,000. Company executives have […]
Nevada-based bank Axos Financial (AX) is now up for the year, as shares have recovered following the bank stock selloff in the spring. One trader sees shares trending lower in the weeks ahead. That’s based on the August $40 puts. With 24 days until expiration, 5,056 contracts traded compared to a prior open interest of […]
The threat of a big lawsuit can cause a company’s valuation to tank. In an extreme case, like the tobacco companies in the 1990s, it can create an exceptional value, even at the risk of a further potential loss. Likewise, even companies that have made positive moves towards resolving big litigation can get a reasonable […]
Michael Ancius, a director at Fastenal (FAST), recently bought 500 shares. The buy increased his holdings by 1 percent, and came to a total cost of $28,765. This is the first insider buy of the year. Several insiders were buyers last year, including multiple directors, an EVP, and the company CEO. This year has seen […]
Oil and gas midstream firm EnLink Midstream (ENLC) have risen over 30 percent since their May lows. One trader sees shares continuing higher in the coming weeks. That’s based on the September $12 calls. With 52 days until expiration, 13,412 contracts traded compared to a prior open interest of 579, for a 23-fold rise in […]
Some sectors of the market are competitive with a number of companies working hard for market share. More mature industries often have fewer competitors, but can increase their business by improving the experience for customers. That’s especially true when it can do so without significantly raising prices or otherwise having a trade-off. By improving customer […]
John Donovan, a director at Lockheed Martin (LMT), recently added 548 shares. The buy increased his holdings by 19 percent, and came to a total cost of $250,476. The director bought 508 shares in April, also valued at about $250,000, and twice more over the prior two quarters before that. Otherwise, company insiders have largely […]
Iron ore producer Rio Tinto Group (RIO) has seen shares drop nearly 10 percent since the start of the year. One trader sees shares moving higher in the coming months. That’s based on the October $60 calls. With 91 days until expiration, 10,844 contracts traded compared to a prior open interest of 125, for an […]
Market trends change over time. The market often gets hyped over tech stocks. But that’s changed over the years in everything from lasers and personal computers to internet stocks to today’s interest in artificial intelligence. Many trends continue to play out, even after there’s been major adoption. And playing to that trend could lead to […]
Jim Lewis, a director at Landmark Bancorp (LARK), recently bought 2,723 shares. The buy increased his holdings by 2 percent, and came to a total cost of $58,662. He was joined by another director, who bought 1,566 shares, paying just under $34,000. Company directors have been regular buyers of shares so far this year, and […]
Graphics processing unit manufacturer Nivida (NVDA) has been on a tear this year, with shares more than doubling. One trader sees a pullback in the coming weeks. That’s based on the August 25 $460 puts. With 35 days until expiration, 9,870 contracts traded compared to a prior open interest of 157, for a 63-fold rise […]
Last year’s big market losers have been this year’s winners, at least so far. However, once a trend is underway, it’s unlikely to change unless there’s a big reason for doing so. That’s why a number of big tech companies look attractive going into earnings. That’s particularly true of companies that haven’t been associated with […]
Scott Slater, CEO at Cadiz (CDZI), recently bought 14,000 shares. The buy increased his stake by 13 percent, and came to a total cost of $49,000. He was joined by two directors. One also bought 14,000 shares, increasing her stake by 25 percent. The other bought 100,000 shares, laying out $350,000 to increase her stake […]
Semiconductor firm Advanced Micro Devices (AMD) has nearly doubled so far this year. One trader sees shares pulling back in the coming weeks. That’s based on the August 25 $115 puts. With 37 days until expiration, 11,158 contracts traded compared to a prior interest of 101, for a 101-fold rise in volume on the trade. […]
Companies face uncertainties all the time. But when a big new fear comes out, prices drop first, and take time to recover. That can cause dividend companies to see their yields soar. Investors who take advantage of that opportunity can buy high yields. With a high dividend yield, investors get paid to wait for shares […]
Jeffrey Brown, a director at Upbound Group (UPBD), recently added 877 shares. The buy increased his holdings by 1 percent, and came to a total cost of $27,000. The director was the most recent buyer of shares with a 1,143 share pickup in April. That buy represented a 1 percent increase, and also came to […]
Payment management company BILL Holdings (BILL) is up about 14 percent so far this year. However, one trader sees a pullback in the months ahead. That’s based on the November $120 puts. With 122 days until expiration, 22,046 contracts traded compared to a prior open interest of 101, for a 218-fold rise in volume on […]
In a bull market, investors want what’s going up. But fast-moving stocks can also quickly move down in a bear market. However, companies that have built strong brands tend to mostly just go up over time, even if the gains are more slow-and-steady. That’s why investors should consider strong brands as part of their portfolios. […]
Dustin Moskovitz, President and CEO at Asana (ASAN), recently bought 160,000 shares. The buy came to a total price of $3.475 million, and increased his stake by less than 1 percent. This is the fourth purchase of 160,000 share lots in the past four weeks. And he has been a buyer of shares on 30 […]
Megabank JPMorgan Chase (JPM) is up about 10 percent so far this year, as regional banks have plunged into turmoil. One trader sees shares moving even higher in the coming days. That’s based on the July 28 $157.50 calls. With 10 days until expiration, 22,806 contracts traded compared to a prior open interest of 104, […]
Companies regularly announce all sorts of partnerships . Most are fairly humdrum affairs, and are hardly worth the ink spilled in a press release. But a big partnership that has the potential to create billions of dollars in value is rarer. When that happens, it may be prudent to look at that partnership, and determine […]
David Daniel, a director at Domo (DOMO), recently bought 26,400 shares. The buy increased his holdings by 19 percent, and came to a total cost of $357,580. This is the director’s third buy of the year, followed by a buy in May and April. The company CFO picked up 5,000 shares, paying about $70,000 back […]
Digital asset company Marathon Digital Holdings (MARA) has risen nearly 70 percent in recent weeks on news that the SEC may approve a bitcoin ETF. One trader is betting shares will give back some of their recent gains in the coming weeks. That’s based on the August $18 puts. With 36 days until expiration, 8,144 […]
13 Today’s regulation heavy world means that companies are often in the spotlight. That can include for actual wrongdoing or perceived wrongdoing. Big companies tend to get hit with seemingly large fines. But for companies that are large enough, even a big fine amounts to little more than a slap on the wrist. Investors in […]
Neil Gagnon, a major holder at SecureWorks Corp (SCWX), recently bought 6,725 shares. The buy increased his holdings by less than 1 percent, and came to a total cost of $45,967. Gagnon has been a regular and steady buyer of shares going back to June 2022. Going further back, several company insiders have also been […]
Shares of cryptocurrency brokerage firm Coinbase (COIN) have surged over 60 percent in recent weeks amid talk of a bitcoin ETF being approved by the SEC. One trader sees a pullback in the weeks ahead. That’s based on the August $85 puts. With 35 days until expiration, 14,081 contracts traded compared to a prior open […]
While most investors are focused on big tech names right now, conventional companies also benefit from today’s tech trends. Companies that can integrate new technologies can provide better service, and potentially even keep costs down. A company that has the lowest costs in the industry tends to have low profit margins. But it also has […]
Jane Elfers, President and CEO at The Children’s Place (PLCE), recently bought 43,000 shares. The buy increased her stake by 13 percent, and came to a total cost of $1.01 million. The buy came a week after a director bought 1,500 shares, paying $57,750. Over the past two years, insider activity has been a bit […]
Shares of weight management company WW International (WW) have more than doubled since the start of the year. One trader sees a further rally ahead for the stock in the coming weeks. That’s based on the August $10 calls. With 37 days until expiration, 5,398 contracts traded compared a to a prior open interest of […]
Each industry is different. Some have many players. Others have just a few. Most industries should consolidate over time. When there are just a handful of players, competition becomes less fierce, as the remaining companies look to maintain their market share. That can create companies that remain consistently profitable over time. And when the market […]
Raghavendran Sivaraman, a portfolio manager at Tri-Continental (TY), recently added 3,000 shares. The buy represents an initial stake for the manager, and came out to a total cost of $81,211. This is the first insider activity at the company since March 2022, when another portfolio manger bought 2,000 shares, also a first-time stake. There have […]
Ecommerce platform Shopify (SHOP) has rebounded strongly from last year’s selloff so far this year. One trader sees shares giving back some of their gains in the coming weeks. That’s based on the August 18 $45 puts. With 38 days until expiration, 9,502 contracts traded compared to a prior open interest of 282, for a […]
Investors looking for opportunities now may want to let hot stocks cool off a bit. And they may want to look for stocks that are coming off a bottom and ready to move higher. This shift away from what’s done well to what’s likely to perform well ahead is a crucial part of investing. And […]
Patrick Driscoll, an EVP at Walgreens Boots Alliance (WBA), recently bought 5,172 shares. The buy increased his stake by 10 percent, and came to a total cost of $146,984. That’s the first insider activity since March, when the company CEO bought 10,000 shares, at a price of $339,510. Otherwise, a company director sold shares last […]
Regional bank PacWest Bancorp (PACW) has been trading in a range over the past few months. One trader sees shares trending to the higher end of that range in the weeks ahead. That’s based on the August $8 calls. With 41 days until expiration, 7,114 contracts traded compared to a prior open interest of 283, […]
While big tech stocks have had a strong start to the year, and may trade flat or lower in the coming months, many can move higher over time. That’s because these companies have the size and scope to roll out AI technologies and best improve their performance. And a small improvement in a big company […]
Reuben Leibowitz, a director at Simon Property Group (SPG), recently added 536 shares. The buy increased his holdings by 1 percent, and came to a total cost of $61,100. He was among 11 company directors who picked up shares in the past week, and bought the largest amount. The smallest amount for a mere 28 […]
Financial institution technology provider Fidelity National Information Services (FIS) has been cut in half over the past year. One trader sees the potential for a big rally in the coming months. That’s based on the September $70 calls. With 70 days until expiration, 20,825 contracts traded compared to a prior open interest of 512, for […]
When a company is out of favor with the market, it has to prove itself. That can mean successfully undertaking a turnaround, or selling off part of the company. Most of the time, it means streamlining the business and moving towards profitability. For companies that aren’t profitable right now, those that can embrace new trends […]
White Mountains Insurance Group, a major holder of MediaAlpha (MAX) has acquired an additional 5,916,816 shares. The buy came to over $35 million, and is a 35 percent increase in the insurance company’s position in shares. This marks the first insider buy this year. Some company insiders have been sellers of shares this year, mostly […]
Video game developer Activision Blizzard (ATVI) is up about 10 percent over the past year, with shares recovering from the drop on news that their potential buyout from Microsoft (MSFT) wouldn’t meet with regulatory scrutiny. One trader sees a further rally ahead. That’s based on the November $100 calls. With 133 days until expiration, 7,013 […]
Investors have a tech flavor of the year, and it’s artificial intelligence (AI). That’s in contrast to past years, when investors have been enamored with cloud services, cryptocurrency mining, electric vehicles, or any other number of trends. Those trends have staying power too. And since they’re now not the market’s favorite, it’s possible to buy […]
William Shepard, a director at CME Group (CME), recently bought 322 shares. The buy came to a total cost just under $58,000, and the buy increased the director’s stake by less than 1 percent. The director has been a regular buyer since last November, with no insider sales in that time. This is his sixth […]
App software company Digital Turbine (APPS) has lost over half its share price in the past year. One trader sees a rebound in the weeks ahead. That’s based on the August $12.50 calls. With 44 days until expiration, 4,387 contracts traded compared to a prior open interest of 115, for a 38-fold rise in volume […]
When it comes to investing, investors are often their own worst enemy. A falling market may lead to fear, and cause someone to sell when it’s a great time to buy. Likewise, a one-time earnings report may not mean much in the long haul, but it could create a buying opportunity. That’s particularly true with […]
Berkshire Hathaway (BRK-A), a major holder of Occidental Petroleum (OXY), continues to accumulate shares. Last week saw a 2,137,250 share buy, valued at $122.1 million. That’s the first buy in nearly a month, following multiple buys in May. Berkshire, run by Warren Buffett, now owns over 25 percent of the oil company, and has permission […]
Chinese internet retailer JD.com (JD) has seen its shares get cut nearly in half over the past year. One trader is betting on a further decline in the coming weeks. That’s based on the August $50 puts. With 45 days until expiration, 27,488 contracts traded compared to a prior open interest of 137, for a […]
The past few months have been great for AI stocks, particularly those working on generative AI software. That’s led to the rise of several prompts that can make work easier, particularly in industries that rely on intellectual capital rather than labor. However, the trend will move toward labor too. That’s because AI is a key […]
Brian Derksen, a director at Oneok (OKE), recently bought 4,900 shares. The buy increased his holdings by 36 percent, and came to a total cost just under $292,000. This marks the first buy at the company in over a year, when Oneok’s President and CEO bought 8,975 shares, paying about $1 million to do so. […]
Oil and gas refining company PBF Energy (PBF) has risen over 32 percent in the past two months. One trader sees a further rally in the weeks ahead. That’s based on the August $45 calls. With 45 days until expiration, 2,065 contracts traded compared to a prior open interest of 104, for a 20-fold rise […]
Markets were skeptical when Netflix (NFLX) started to crack down on users who shared their account information. The company even tried the policy last year and failed. But this time around, it’s clear that more users will sign up for the service. Other companies with a membership model are taking note. Only those who pay […]
David Dobson, a director at John Wiley & Sons (WLY), recently bought 3,000 shares. The buy increased his stake by 61 percent, and came to a total cost just under $95,000. This marks the first insider buy since 2021. Otherwise, company executives have been sellers of shares, largely last year, with two sales so far […]
3D software company Unity Software (U) has moved higher in the past few weeks, on AI speculation. One trader is betting the rally will continue. That’s based on the July $51 calls. With 21 days until expiration, 12,096 contracts traded compared to a prior open interest of 186, for a 65-fold rise in volume on […]
The corporate world is full of mergers and acquisitions. But a partnership, which can allow companies to share their respective strengths, can often get overlooked. Investors who can find successful partnerships often have two potential companies to invest in. Even better, a great partnership may lead to an acquisition, which could mean a bigger return […]
Carl Icahn, a major owner at Southwest Gas Holdings (SWX), recently added 9,652 shares. The buy came to a total price of $559,700, and increased his holdings by less than one percent. Icahn has been increasing his position since March, buying over 3 million shares in total across a number of transactions. Company insiders were […]
Airliner Delta Air Lines (DAL) is up over 40 percent in the past year, as flight demand has remained strong and energy prices have declined. One trader sees shares giving back some of those gains in the coming weeks. That’s based on the August $45 puts. With 50 days until expiration, 4,324 contracts traded compared […]
Sometimes the market gets fearful of some sectors. When that happens, prices plummet in a short period of time. However, the market is cyclical. And there will always be a new sector that grabs the market’s fear. As that happens, sectors where the fear is leaving will often see some big players move in to […]
Julie Lagacy, a director at Vistra Corp (VST), recently bought 10,000 shares. The buy increased her stake by 143 percent, and came to a total cost just over $248,000. This marks the first insider buy in the past three months. The company President and CEO bought 5,000 shares back in March, and a director bought […]
Energy storage solution company Eos Energy Enterprises (EOSE) have been trending higher in recent sessions. One trader sees that trend continuing in the coming few weeks. That’s based on the August $4.50 calls. With 51 days until expiration, 12,101 contracts traded compared to a prior open interest of 112, for a 108-fold rise in volume […]
Investors don’t like uncertainty. That tends to lead prices lower, which can create a good buying opportunity. Ideally, the time to buy is when uncertainties that represent a major threat to a business start to go fade away. That may not mean an immediate move higher, but it will likely mean the end of a […]
Deborah Diaz, a director at Archer Aviation (ACHR), recently bought 12,000 shares. The buy increased her stake by 54 percent, and came to a total cost of $53,640. This marks the first insider buy at the company since January, when a cluster of insiders, including the CEO and CFO, bought shares. Since then, a major […]
Consumer goods manufacturer Newell Brands (NWL) has lost over 60 percent of its value over the past year. One trader sees a rebound ahead in the coming months. That’s based on the August $9 calls. With 52 days until expiration, 7,119 contracts traded compared to a prior open interest of 157, for a 45-fold rise […]
Investors often follow big trends. And by investing in those trends when they’re out of favor, they stand to make a fortune. That’s especially true when the big trend involves support from the government, whether in the form of tax credits, direct payments, or loans. For instance, Tesla Motors (TSLA) grew in part due to […]
Jason Stabell, CEO at Epsilon Energy (EPSN), recently bought 11,300 shares. The buy increased his stake by 14 percent, and came to a total cost of $57,856. This is the third buy from the CEO in recent months. In early June, he bought 18,000 shares, paying just over $90,100. And in May, he bought an […]
Media conglomerate Warner Bros. Discovery (WBD) is down about 12 percent over the past year. One trader sees the potential for a rebound in the next two months. That’s based on the August $17.50 calls. With 53 days until expiration, 9,264 contracts traded compared to a prior open interest of 116, for an 80-fold rise […]
One of the biggest trends of the past 15 years has been the growth of apps, particularly smartphone apps. However, investing in that trend has been a challenge. Outside of owning a smartphone manufacturer or developer like Apple (AAPL), there hasn’t been one specific way to play that trend. For the next generation of apps, […]
Steven Black, a director at Nasdaq (NDAQ), recently picked up 4,000 shares. The buy increased his holdings by 3 percent, and came to a total cost of $205,840. This is the first insider buy at the company in over two years. Rather, company insiders have been regular and steady sellers of shares in low-six-digit amounts […]
Telecom provider Altice USA (ATUS) is down 70 percent over the past year, amid a substantial drop in the company’s earnings. One trader sees a rebound in the second half of the year. That’s based on the January 2024 $3 calls. With 210 days until expiration, 10,061 contracts traded compared to a prior open interest […]
There are many ways for a company to deliver value to shareholders. Once a company reaches a certain size, growth becomes more difficult without coming up with new and potentially expensive initiatives. That’s why many large companies start paying a dividend. Companies have another trick up their sleeve too. That trick is the share buyback […]
Scott Kinney, a vice president at Avista Corp (AVA), recently bought 1,250 shares. The buy increased his holdings by 21 percent, and came to a total cost just under $50,400. This marks the first insider buy since September 2021, when a director made a small purchase of shares. Otherwise, company insiders have generally been sellers […]
Cryptocurrency miner Marathon Digital Holdings (MARA) has performed well in the past year, with a 38 percent move higher. One trader sees a continued move higher in the coming months. That’s based on the December $12 calls. With 175 days until expiration, 7,471 contracts traded compared to a prior open interest of 138, for a […]
It’s likely that the AI trend has staying power. But many AI stocks have gone nearly vertical in recent weeks. That suggests the space is ripe for a pullback that could bring down valuations quickly, and set up a further run later in the year. Such a move already occurred after a short rally in […]
John Ketchum, President and CEO at NextEra Energy (NEE), recently bought 13,600 shares. The buy increased his stake by 8 percent, and came to a total cost just over $1 million. This marks the first insider activity since March, when a company director bought 10,000 shares, paying about $700,000 to do so. And another major […]
Oil and gas exploration and development firm EQT Corporation (EQT) is up about 5 percent over the past year, underperforming the overall market. One trader sees shares trending down going into the fall. That’s based on the September $37 puts. With 86 days until expiration, 7,007 contracts traded compared to a prior open interest of […]
Sometimes, it seems like a company can do no wrong. That’s when it’s a dangerous time to invest. That’s because good news pushes prices higher. But once buyers are exhausted, even more good news is unlikely to move prices higher. The reverse also holds true. When a company has had a series of poor earnings […]
Jorge Gonzalez, President and CEO at St. Joe Co (JOE) recently bought 1,200 shares. The buy increased his holdings by 3 percent, and came to a total price of $54,588. This is the first insider buy in about a year. Gonzalez was also the most recent buyer in June 2022, picking up 1,200 shares at […]
IT services company Kyndryl Holdings (KD) is up 47 percent over the past year, about triple the move higher in the overall stock market. One trader sees a pullback in the coming weeks. That’s based on the July 21 $13 puts. With 31 days until expiration, 3,957 contracts traded compared to a prior open interest […]
Traders are starting to bet more on a soft landing for the economy, rather than a heavy recession. That’s good news. It also means that some sectors should perform better than expected in the months ahead. One area is construction. From increased infrastructure spending to a housing boom, there are plenty of ways to play […]
Bryant Riley, Co-CEO of B. Riley Financial (RILY), recently bought 6,199 shares. The buy increased his holdings by less than 1 percent, and came to a total cost just under $235,000. This follows up on several other purchases from the co-CEO, including 3 buys in May for 65,000 shares, valued at over $2.1 million. A […]
Tech conglomerate Microsoft (MSFT) has been trending higher in recent sessions, even as it looks like the company’s potential merger with Activision Blizzard (ATVI) will face sufficient regulatory scrutiny to be scrapped. One trader sees shares reversing lower. That’s based on the July 21 $345 puts. With 31 days until expiration, 8,788 contracts traded compared […]
With tech stocks largely back in fashion, there are a few laggards out there. They may be the better opportunity going forward. That’s because laggards have better valuations, having not run up as much. And they may surprise investors with strong operational performance. That’s especially true when contrasting some of the biggest players year-to-date, and […]
Michael Manley, CEO and director at AutoNation (AN) recently bought 7,000 shares. The buy increased his holdings by 46 percent, and came to a total cost of $1.014 million. This is the first insider activity since last May, when the company’s COO bought 2,342 shares at a cost just under $259,000. Otherwise, executives and directors […]
Bioplastics producer Danimer Scientific (DNMR) is down about 25 percent over the past year. One trader sees a potential rebound in next two months. That’s based on the August $4 calls. With 63 days until expiration, 10,001 contracts traded compared to a prior open interest of 116, for an 86-fold rise in volume on the […]
The latest inflation data continues to slow. Prices are now rising at their lowest rate in two years. But they’re still rising. And inflation is cumulative. So chances are, we’ll still have to deal with rising costs for everyday goods. Many consumers are shifting their spending from brand-name products to store-brands. The price is a […]
Gary Mick, CFO at Six Flags Entertainment (SIX), recently bought 5,812 shares. The buy increased his stake by 7 percent, and came to a total cost just under $157,000. The buy came just a few weeks after he bought 2,500 shares. And the CFO has made 5 other buys since last December, now totaling nearly […]
Uranium producer Cameco (CCJ) just broke through to a new 52-week high. One trader is betting the rally will continue in the coming months. That’s based on the September $37 calls. With 91 days until expiration, 20,433 contracts traded compared to a prior open interest of 151, for a 135-fold jump higher in trading volume. […]
Every day brings several reports about companies embracing artificial intelligence (AI) technologies. Some may see a genuine long-term opportunity. Others may see an opportunity to turn their share price around as the market loves this current tech trend. While big-name tech stocks have largely moved higher, there’s now some potential pockets of overvaluation with the […]
Four directors at Advance Auto Parts (AAP) recently bought shares. Director Eugene Lee led the group with a 7,635 share buy. That increased his holdings by 41 percent, and came to a total stake of $500,160. The smallest buy was for 500 shares valued at just under $33,000. This marks the first insider activity since […]
Regional bank Keycorp (KEY) is down nearly 40 percent over the past year, as banking stocks have been out of favor with the market. One trader sees the potential for another big drop by the end of the year. That’s based on the December $6 puts. With 184 days until expiration, 5,128 contracts traded compared […]
The past few weeks has seen an explosion of interest in artificial intelligence (AI) and chipmaker stocks. That’s allowed a few big-cap tech names to lead the overall market higher. And since the stock market is weighted by market cap, it may have even kept stocks from dropping so far this year. With the move […]
Joseph Rice, a director at Banc of California (BANC), recently bought 7,500 shares. The buy increased his holdings by 85 percent, and came to a total cost of $84,375. This is the first insider activity in a month, when another director bought 3,200 shares in early May for about $35,000. Company insiders have been buyers […]
Building product and systems manufacturer Johnson Controls International (JCI) has moved 22 percent higher in the past year. One trader sees further upside ahead for shares in the next three months. That’s based on the October $67.50 calls. With 129 days until expiration, 11,121 contracts traded compared to a prior open interest of 114, for […]
Most investment analysis tries to put a company into either a growth category, or a value category. Fortunately, some stocks offer both at the same time. With some sectors of the market rallying strongly and value out of reach, being able to buy value while also seeing a move higher is huge. And with a […]
Tami Erwin, a director at Deere & Co (DE), recently bought 675 shares. The buy increased her stake by 29 percent, and came to a total cost just under $250,500. This marks the only insider buy at the company over the past two years. Company executives have otherwise exclusively been sellers over the past two […]
Retail game store GameStop (GME) dropped following the announcement that the company CEO was departing. One trader sees shares rebounding from that drop in the coming days. That’s based on the June 30 $22 calls. With 17 days until expiration, 10,388 contracts traded compared to a prior open interest of 250, for a 42-fold rise […]
Companies often fall quickly on bad news. Sometimes, the news is terminal for the company, like a bank being seized and closed down. But most of the time, bad news hits a share price harder than it needs to. That creates a buying opportunity. It’s just important to separate permanent bad news from temporary bad […]
Johan Hart, President and CEO at Red Robin Gourmet Burgers (RRBG), recently bought 15,000 shares. The buy increased his stake by 4 percent, and came to a total cost just over $193,000. He was joined by a company director, who bought 4,340 shares valued at $55,300. Over the past two years, insiders have been buyers […]
Metaverse gaming company Roblox (RBLX) has been a solid performer, with shares up 26 percent over the past year. One trader is betting on shares giving up some of their gains in the coming weeks. That’s based on the June 30 $36 puts. With 21 days until expiration, 3,063 contracts traded compared to a prior […]
While the market has held up well thanks to the strong performance of tech stocks, that trend won’t last. It’s possible the overall market could decline as tech stocks shift lower. But we could also see a rotation out of tech and into other sectors. That’s why several parts of the market look attractive now. […]
Daryle Bible, CFO at M&T Bank Corp (MTP), recently bought 10,000 shares. This marks an initial stake for the CFO. The buy came to a total cost just over $1.2 million. This is the largest insider activity since last year, when a company director exercised their stock options and sold over 22,700 shares. Insiders have […]
Database firm Oracle (ORCL) has been a strong tech performer, with shares up 47 percent over the past year. One trader sees that trend continuing in the short term. That’s based on the June 30th $115 calls. With 21 days until expiration, 9,417 contracts traded compared to a prior open interest of 197, for a […]
While stocks have trended higher this year overall, investors have been unpleasantly surprised by a series of bank failures. While it’s been largely quiet in the past few weeks, many small and regional banks remain beaten down. That’s creating an opportunity for investors. Why? While there may still be more bank failures ahead, many names […]
Douglas Crocker, a director at Acadia Realty Trust (AKR), recently bought 28,250 shares. The buy increased his stake by 34 percent, and came to a total cost of $364,425. This marks the first insider purchase at the company in over two years. Otherwise, company insiders have generally been sellers of shares. One director was a […]
Cybersecurity company Rapid7 (RPD) has had a 30 percent drop over the past year. One trader sees a strong rebound in the coming weeks. That’s based on the July $60 calls. With 40 days until expiration, 10,579 contracts traded compared to a prior open interest of 111, for a 95-fold rise in volume on the […]
While the stock market has rewarded companies moving into the artificial intelligence (AI) space this year, the ride hasn’t been a smooth one. That’s actually a good thing for investors. Pullbacks create buying opportunities.
And the important thing for investors is to buy smaller AI companies that can see big growth – and share price appreciation – over time. That means looking for companies that have small market caps – under $100 billion – which takes a lot of household tech names off the table.
But that still leaves plenty of AI plays. One such play is C3.ai (AI). Shares have had a great run so far this year, nearly tripling. But with a market cap still under $4 billion, this play on AI has room to run. And that’s even after the company’s CEO has “declared victory” in AI.
As an early stage company, C3.ai still isn’t profitable. However, there’s no debt on the company’s balance sheet, and over $700 million in cash, or about 20 percent of the market cap. So even with revenue still ramping up, it’s an early-stage company that won’t need more capital.
Action to take: Shares hit over $44 in the AI spike higher last week. Since then, they’ve dropped following earnings to the low $30 range. That’s a reasonable long-term entry point for patient investors.
For traders, last week’s drop took some steam out of high-priced option premiums. The October $45 calls, last going for about $4.50, are still a bit pricey, but could see triple-digit gains on the next boom in shares in the coming months.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Bruce Thorn, President and CEO at Big Lots (BIG), recently bought 51,000 shares. The buy increased his holdings by 8 percent, and came to a total cost just over $247,000.
This marks the only insider buy at the company over the past two years. One company Executive Bice President was a regular seller of shares in 2021 and into early 2022, but insiders have been inactive for the past 14 months.
Overall, company insiders own 3.3 percent of shares.
The discount retailer has seen shares drop nearly 80 percent over the past year. The company has lost money and revenues have declined as discounters have been hit hard by high inflation.
Despite that drop, shares are priced at less than 0.05 times their price-to-sales, and at less than 0.3 times their book value. That’s a sign that the drop in shares may have gone too far, too fast, and that the stock is due for a rebound in the months ahead.
Action to take: Shares look oversold here, given the hit that discount retailers have taken in recent weeks.
Lower consumer spending overall and the drop in inflation should help these companies improve their operations in the years ahead. That makes shares a speculative buy, although Big Lots recently suspended its dividend.
For traders, the September $7.50 calls, last going for about $0.75, could see high-double-digit gains or better in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Chemical manufacturer Dow (DOW) is down over 25 percent in the past year. One trader sees a rebound ahead in the coming weeks.
That’s based on the June 30th $53 calls. With 24 days until expiration, 18,807 contracts traded compared to a prior open interest of 111, for a 169-fold jump in volume on the trade. The buyer of the calls paid $0.70 to make the bullish bet.
Shares recently traded for just over $51.50, so the stock would need to rise less than $1.50, or about 3 percent, for the option to move in-the-money. The stock did hit a 52-week low of $42.91 recently before starting to rebound.
Going for 12 times earnings, the chemical manufacturer is cheap compared to the overall stock market, although revenues are down about 22 percent over the past year. That trend may continue as long as the global economy continues to weaken.
Action to take: Investors may like shares here near the low end of their range. The drop in price over the past year has pushed the dividend yield up to 5.7 percent.
For traders, the June calls don’t have much time to play out. But with an uptrend likely underway now, the option could move in-the-money and deliver high-double-digit returns or better in the weeks ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Economic data remains confusing. While the economy is slowing by several measures, we’re still seeing signs of a strong economy, such as the labor market. One trend that’s becoming more clear is that spending is declining on goods, but not necessarily on services.
That’s leading to a drop in retail-related stocks. And while a slowing economy will mean a further slowdown in the sale of goods, it won’t drop to zero.
Consumers still need to consume, if only for basics such as food and personal products. So many names taking a hit recently could be winners going forward.
One candidate is Dollar General (DG). Shares took a hit last Thursday, as the company noted declining sales and lowered its profit outlook for the year. The big reason? The company’s customer base is more susceptible to inflation.
Shares are now down about 10 percent over the past year, and are going for under 20 times earnings.
Action to take: Investors may like shares here. At current prices, the dividend yield is close to 1.3 percent, and Dollar General has a history of increasing it over time. With inflation coming down, the current concerns over customer spending will likely wane, leading to a move higher for shares.
For traders, a rebound from the earnings selloff is likely in the weeks ahead. The September $180 calls, last going for about $4.50, could see mid-double-digit returns on a rebound.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Bernard Kim, CEO at Match Group (MTCH), recently bought 31,439 shares. The buy increased his stake by 184 percent, and came to a total cost just over $1.08 million.
The last insider buy also came from the CEO last August, with a 16,000 share pickup. Otherwise, one company executive sold following the exercise of stock options, and a company director sold a small position back in March.
Overall, insiders own about 0.7 percent of shares.
The dating product company has seen shares drop about 60 percent over the past year. That’s more than twice the 33 percent drop in earnings in the same period, and as revenues dipped by just 2 percent.
As a result, shares now trade for about 15 times forward earnings, compared to 117 times earnings early last year.
Action to take: Shares are coming off of 52-week lows in the low-$30 range, and could be in for a further long-term rally ahead. Match Group will need to work on increasing its profit margins, as a 9 percent margin for an app business is low for the industry.
For traders, the rebound underway is likely to continue. The September $45 calls, last going for about $1.65, could see high double-digit returns in the coming months on a further move higher for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Semiconductor company Micron Technology (MU) has seen shares rally 40 percent from their December lows, and are on track to erase the last 10 percent drop they’ve seen over the past year. One trader is betting on such a continued move higher.
That’s based on the August $72.50 calls. With 74 days until expiration, 8,564 contracts traded compared to a prior open interest of 184, for a 47-fold rise in volume on the trade. The buyer of the calls paid $3.95.
Shares recently went for about $69 per share, so the option is just slightly out-of-the-money. Shares have a 52-week high of $75.41. Although that was nearly a year ago, the stock looks on track to retest that price.
Micron has been hit by the slowdown in the semiconductor space over the past year. The company has lost money in recent quarters, and revenues have dropped by 52 percent.
However, improving trends and robust demand for semiconductors have helped fuel a rally in shares so far this year.
Action to take: Investors may like shares at current prices under $70. Micron does pay a slight dividend of 0.7 percent, but it hasn’t grown recently.
For traders, the August calls could see high double-digit gains if the current rally in shares continues in the coming months. Traders may want to take some profits going into the end of June, when Micron is set to report earnings next.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investors looking to consistently outperform the market should follow market rotation. That simply means avoiding sectors that have recently performed well, instead opting to buy sectors that have been out of favor.
For the month of May, tech stocks dominated. Software-related tech plays saw a nearly 10 percent rise. On the other end of the spectrum, the energy sector was the loser, with about a 10 percent decline.
Since energy prices tend to fluctuate over time, investors interested in the space should look at a diversified long-term play when oil drops under $70 per barrel. One name in the space that looks attractive is Chevron (CVX).
The oil giant was recently upgraded by analysts, and as a big oil play still trading at a solid value, it’s easy to see why. Shares go for about 9 times earnings right now, making it cheap among the major oil and gas stocks.
Action to take: Investors can also get a 3.9 percent dividend at current prices. That’s on the higher end, although not the highest, for the sector. Chevron has a history of steady dividend growth as well, which works out great for long-term investors.
For traders, the recent pullback in the stock should end soon with a rebound. The September $165 calls, last going for about $3.25, should see mid-double-digit gains from such a move.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Gunnar Wiedenfels, CFO at Warner Brothers Discovery (WBD), recently added 15,000 shares. The buy increased his holdings by 2 percent, and came to a total cost just over $168,300.
This is the first insider activity since last August, when the company’s international division president bought 20,000 shares at a price about 25 percent higher than where the stock trades today. The last insider sale occurred in November 2021.
Overall, company insiders own 9.2 percent of shares.
The media conglomerate is down 36 percent over the past year, as earnings and profits have declined. While WBD lost money overall, it did manage to increase revenues by nearly 239 percent.
At present, like many media companies, the prospect of a slowing economy and less spending on advertising could weigh on shares. But the stock has been knocked down to about two-thirds of its book value, a proxy for the value of its intellectual property.
Action to take: Investors may like shares at current prices or on any drop as a contrarian play right now. Shares can likely recover in time, particularly if the company can keep expenses low and continue to build out alternatives to an advertising model.
For traders, the October $12.50 calls, last going for about $1.05, offer mid-double-digit returns or better on a move higher in shares in the coming months. The stock has been in a downtrend recently, but is starting to look oversold.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Brazilian iron ore producer Vale (VALE) is down about 30 percent over the past year, and shares are near their 52-week lows. One trader is betting on a rebound in the coming weeks.
That’s based on the July $13 calls. With 49 days until expiration, 24,955 contracts traded compared to a prior open interest of 414, for a 60-fold rise in volume on the trade. The buyer of the calls paid $0.67 to make the bullish bet.
With a current price near $12.50, the option is near-the-money, and well under the stock’s 52-week high of $19.31.
Shares have dropped with the company’s profitability in the last year. Revenues slid 22 percent, and earnings are off over 60 percent.
Yet shares are still relatively inexpensive, trading at less than 5 times forward earnings. Plus, Vale has a hefty 38 percent profit margin.
Action to take: Shares do look oversold here and could potentially move higher in the coming months. Shares pay a dividend of about 5.2 percent at current prices, but that does tend to fluctuate with the company’s earnings and foreign exchange valuations.
For traders, the call option looks like a reasonably cheap way to bet on a pop higher in commodities in the coming months. The option can likely deliver mid-double-digit gains before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
While the stock market tends to rise over time, within that cycle there can be different moves. Recently, tech stocks have been the big winners.
That’s left other sectors underperforming. However, that will likely change in time. And when that happens, companies in overlooked or disliked sectors can become the big winners moving forward. A number of sectors look oversold and potentially ready to move higher in the weeks and months ahead.
One area is casino stocks. While they’ve largely rallied so far this year, they’ve also been held back by fears of a slowing economy.
We’re seeing signs that travel and tourism continues to remain strong, with a cutback largely occurring more on goods rather than services.
That could bode well for buyers of Wynn Resorts (WYNN). The casino operator has started to pullback, and could be a buy in the coming weeks.
Even with fears of a slowing economy, the casino saw revenues jump nearly 50 percent last year. And it looks attractive relative to peers, as it looks to expand in Macau.
Action to take: Investors should use the current pullback to build a stake under $100 per share, and use any further drops lower to add to it.
For traders, the September $110 calls, last going for about $5.20, could turn a move higher in shares into a mid-double-digit win or better in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Dirk Debbink, a director at Cincinnati Financial Corp (CINF), recently bought 1,000 shares. The buy increased his stake by 2 percent, and came to a total price of $98,390.
This is the first insider buy at the company since last December, when the director bought 1,000 shares. Since then, another director has sold a small amount of their holdings. Over the past 3 years, there have only been two insider sales compared to ten buys.
In total, insiders at the property and casualty insurer own 1.6 percent of shares.
Cincinnati Financial has lost about 23 percent over the past year, as higher interest rates have weighed on asset valuation on the insurance company’s operations. As a result, the insurer lost money in the two most recent quarters.
However, revenues from insurance premiums are up, and interest rates are likely nearing their peak for this cycle, which could spur a turnaround for shares.
Action to take: Investors may want to consider shares at current prices or on any drop lower. At 20 times earnings, the company is fairly priced. Cincinnati Financial has been a dividend growth player for decades, and the current yield of 3 percent is slightly higher than its historical average.
For traders, the September $110 calls, last going for about $1.75, could see mid-double-digit returns in the coming months on a rally in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Big box retailer Target (TGT) has seen shares sink to new 52-week lows over the past week. While shares look oversold in the short-term, one trader is betting on a further move lower.
That’s based on the September $110 puts. With 106 days until expiration, 10,144 contracts traded compared to a prior open interest of 428, for a 24-fold rise in volume on the trade. The buyer of the puts paid $2.50 to make the bearish bet.
Shares recently traded for about $134, so Target would need to drop about $24, or another 18 percent, for the options to move in-the-money. It would also mean shares moving to a low last seen in early 2020.
The retailer has seen a slowdown in spending, with revenues rising just under 1 percent last year. And overall earnings dropped by 6 percent. So any further decline in shares could happen if the company reports worse-than-expected revenues in the coming quarters.
Action to take: With shares still falling, interested investors may want to hold off on buying for now. Or buy a small stake and use a further drop in price to add to that position. The recent selloff has taken Target’s dividend to 3.1 percent.
For traders, with shares now in a downtrend, the September puts could see high returns from here. Traders should use an up day in Target shares to buy the puts more cheaply.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
When stocks are rallying and interest rates are low, it’s easy for companies to expand by either selling more shares or taking on debt.
But selling too many shares dilutes existing shareholders and may spark a backlash. And when debt comes due and has to be refinanced, markets may balk. So companies that are improving their balance sheet now could be big winners down the line.
One area where balance sheet improvement could help boost shares are with big media companies. There’s been a slowdown in advertising revenue, and competition for streaming services has kept profitability low.
Paramount Global (PARA) is moving to improve its balance sheet. The company just received a cash infusion, which is being used to pay down debt.
While the media giant still has more debt than stock market equity following a 60 percent loss in shares right now, getting the debt level under control could help fuel a move higher for the media giant.
Action to take: Shares are fairly valued on an earnings basis, but the company trades for about half the book value of its intellectual properties. And while shareholders just took a hit with a reduced dividend, today’s buyers are more likely to see increases in the future, making the stock a buy today.
For traders, shares are still near a 52-week low, but could see a move higher from here. The September $17.50 calls, last going for about $0.98, offer mid-double-digit returns on a move higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
SRB Corp, a major holder of Safety Insurance Group (SAFT), recently bought 39,000 shares across two transactions. The buy increased the company’s holdings by 3 percent, and came to a total price of about $2.8 million.
This marks the first insider buying activity in the company in over two years. Company directors and executives have been regular and steady sellers of shares over the past two years, with no sale larger than $268,000.
Overall, company insiders own about 4.2 percent of shares, and institutions such as SRB own 82 percent.
The property and casualty insurance provider has seen shares lose a quarter of their price over the past year. While earnings were flat, revenues rose by nearly 10 percent. Insurance companies tend to hold a fixed-income portfolio, which will have dropped in value as interest rates have risen in the past year.
Action to take: Shares are a bit expensive at 22 times their most recent earnings. But shares also trade at 1.3 times their book value, their cheapest valuation in nearly two years. Plus, buyers at today’s prices can get a 5 percent starting dividend yield.
For traders, shares have been trending down, but appear to be flattening out, and may be capable of moving higher. The August $75 calls, which last carried a bid/ask spread of about $4.25, offer mid-double-digit returns on a move higher in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Regional bank PacWest Bancorp (PACW) has seen shares drop 80 percent over the past year as a banking crisis has unfolded. Shares are volatile on a daily basis, and one trader sees the stock moving lower in the weeks ahead.
That’s based on the July 21 $4 puts. With 51 days until expiration, 18,843 contracts traded compared to a prior open interest of 246, for a 77-fold rise in volume on the trade. The buyer of the puts paid $0.70.
Shares recently traded just over $7, so they would need to fall by $3, or about 42 percent, for the option to move in-the-money. During the initial bank crisis, shares hit a low of $2.48, so such a move is possible.
The recent drop has taken PacWest to a quarter of its book value, or the measure of the loan portfolio on its books. The question bothering investors in the banking space right now is the duration risk of the bank’s investment portfolio.
Action to take: Shares are probably undervalued, but could be susceptible to a larger percentage drop on any market fear in the coming weeks. That bodes well for trades against shares right now, and long-term investors should look at larger banks that haven’t sold off as much as PacWest.
For traders, the July puts are inexpensive, and could be a triple-digit winner, particularly on any bank fears in the coming weeks. The puts may also be a reasonable market hedge here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The market has been excited about AI stocks for six months now, since the release of ChatGPT. Dozens of companies have announced plans to integrate AI hardware and software into their businesses. And it’s one part of the market where investors have been more than happy to send cash now.
That’s led to a big rally in tech, that’s helped unwind most of 2022’s bear market. At this point, it’s time investors looked for AI stocks with a smaller market cap.
That’s because big tech companies already have the headlines and story out. But smaller companies can still see a bigger percentage move higher in shares from here. One example is Marvell Technology (MRVL). The semiconductor company reported and earnings beat and raised guidance thanks to its work in the AI space.
With a market cap under $50 billion, it’s only abut 5 percent the size of Nvidia (NVDA), the GPU manufacturer that set off the latest AI rally last week when it reported a massive earnings beat.
Still, Marvell is down slightly over the past year and hasn’t been profitable. But it’s trading at 25 times forward earnings, less than half of Nvidia’s forward earnings estimates.
Action to take: Investors can buy a small stake now and add to it on any drops, as the volatility in tech prices goes both ways.
For traders, the short-term trend is still up, which bodes well for the September $70 calls. Last going for about $1.20, they could see high-double-digit returns from here on a further rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Douglas Bentham, a director at American Homes 4 Rent (AMH), recently bought 3,946 shares. The buy increased his holdings by about 12 percent, and came to a total cost of $95,181.
The director was also the last buyer of shares in March, for about $190,000 in two transactions. In the intervening time, several company executives have been sellers of shares, including the company’s CFO and COO.
Overall, company insiders own about 7.9 percent of shares.
The single family home rental company is down about 11 percent in the past year.
However, thanks to rising rents, revenues and earnings are both up, with earnings up nearly 96 percent. The downside is that higher home prices and higher interest rates make future acquisitions less likely right now, and could weigh on the valuation of the company’s existing homes.
Action to take: Given the strong demand for rental properties, investors may be interested in shares at a price closer to $30 per share. That said, income investors may want to look elsewhere. Shares pay a 2.6 percent dividend, which is on the low side for a real estate investment trust (REIT).
For traders, shares have been rangebound over the past year, and are trending down. The September $30 puts, last going for about $0.60, could see mid-to-high double-digit returns on a further decline.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Department store Macy’s (M) has struggled in recent years, and the stock is down by about one-third over the past year. One trader sees a further decline in the months ahead.
That’s based on the July $13 puts. With 51 days until expiration, 20,077 contracts traded compared to a prior open interest of 181, for a 111-fold jump in volume on the trade. The buyer of the puts paid $1.40 to make the bearish bet.
Macy’s shares traded just over $14, making this an at-the-money trade. It’s also right at the stock’s 52-week low.
Earnings dropped by 31 percent over the past year, and revenue slid by about 5 percent.
The retailer is likely to continue to struggle as department stores are squeezed by lower-cost retail offerings across their various brands, and as traffic in physical stores has largely moved to big-box chains.
Action to take: While shares certainly look inexpensive at 4 times forward earnings, the company is priced for business to continue declining in the years ahead.
Plus, the company’s debt levels, at about 150 percent of its equity, make the company tough to buy on balance sheet concerns.
For traders, there’s likely more downside for department store chains ahead. The July puts are inexpensive for being at-the-money, and can likely give traders a mid-double-digit gain by expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Most industries tend to consolidate over time. Retail is no exception, as many stores have gone by the wayside. Today, most big box stores compete with online retailers in some capacity, and those that run a niche tend to have the brick-and-mortar business to themselves.
That’s allowed these companies to continue growing, which can benefit shareholders. It’s an even better benefit when they’re also generous with ever-increasing dividend payouts.
Among the big box retailers, electronics chain Best Buy (BBY) offers the highest dividend yield, at 5.3 percent. That helps takes some of the sting out of shares, which are down 15 percent over the past year.
While investors are concerned that the pandemic-era burst of electronic buying is over, Best Buy did managed to post better-than-expected profits.
That could help stem the company’s revenue drop of 10 percent last year, and lead to a higher share price as profitability improves. The market’s pessimism has already taken shares down to about 12 times earnings.
Action to take: Investors may like shares here for the high and growing dividend. The current payout ratio is just over half of earnings, so there’s room for more income growth over time, particularly as the company’s earnings improve.
For traders, the earnings beat may reverse the current downtrend and lead to a rally in the months ahead. The August $75 calls, last going for about $2.55, offer mid-double-digit gains in the coming months on a summer rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Kelcy Warren, Chairman of the Board at Energy Transfer (ET) has bought 1,500,000 shares in 3 separate transactions over the past week. In total, those buys have added up to over $19 million.
And that doesn’t include a series of buys earlier in May, or even back in February. Warren has been the sole active insider this year with massive buys, but other company executives were buyers last year at similar prices to where shares trade today.
Even with the massive pace of buying recently, insiders own 17.2 percent of shares.
The oil and gas midstream company is up about 10 percent over the past year. Energy prices have fluctuated in that time, and revenues are down 7 percent, and earnings are down over 12 percent.
However, the company is still cheap, with shares trading at just 6 times forward earnings.
Action to take: Income investors may like shares at current prices or on a drop lower, as it’s a high-yielding limited partnership structure. Energy Transfer currently pays a 9.6 percent dividend, and has room for further increase with energy prices.
For traders, shares have been trending gradually higher over the past year. The July $13 calls, last going for about $0.31, offer mid-double-digit returns in the coming months should this trend continue.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Chipmaker Taiwan Semiconductor Manufacturing (TSM) recently jumped 12 percent and is back near its 52-week high. One trader sees a further rally ahead.
That’s based on the August $105 calls. With 81 days until expiration, 8,187 contracts traded compared to a prior open interest of 155, for a 53-fold rise in volume on the trade. The buyer of the calls paid $5.45 to make the bullish bet.
TSM shares recently closed near $101, so shares only need to rise another $3 for the option to move in-the-money. The 52-week high is $102.37, so traders are betting on a breakout to new highs from here.
Shares are now flat over the past year, but the company’s positioning as the world’s leading semiconductor manufacturer leaves it as a strong contender for a continued move higher.
Amid a slow year for the industry, TSM managed to grow revenues and earnings by low-single-digit levels, but still posted a profit margin of 44 percent.
Action to take: Investors may want to buy some shares now, and use a future drop to add to that position. TSM also pays a dividend just under 2 percent at current prices.
For traders, betting on a move higher plays to the rally underway in shares. While it will stop at some point, the trade could be good for a few weeks or even before expiration, and stands a good chance of moving in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
One of the most valuable things a company can do is become a key provider of products or services to the point where they can raise prices without losing much, if any, market share.
This pricing power can be crucial for beating inflation. And it can also mean a good investment for shareholders, as being able to raise prices ensures that profit margins stay high.
One industry leader with pricing power is Corning (GLW). The specialty glassmaker just raised prices by 20 percent, citing higher costs. And as a key supplier for displays such as smartphones and televisions, Corning is unlikely to lose any market share as a result.
That move should help offset the company’s 13 percent drop in revenues last year. Meanwhile, the stock is down 8 percent over the past year. However, shares look fairly valued at 15 times forward earnings.
Action to take: Investors should look to buy shares at current prices or on any pullback. Currently, the stock yields about 3.5 percent, with a history of growing the dividend over time.
For traders, shares have been in a downtrend that could start to reverse now that Corning has raised prices. The August $33 calls, last going for about $1.00, could see high double-digit gains in the coming months on a rebound in share prices.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Andrew Nace, an executive vice president at Kronos Worldwide (KRO), recently picked up 4,000 shares. The buy increased his stake by 46 percent, and came to a total cost just over $33,200.
This marks the first insider buy of the year. Two company executives were buyers of shares last year, but the largest buy then was for a 2,000 share stake valued at just over $16,000. Overall, insiders haven’t been too active in buying or selling their shares.
Overall, company insiders own 81.1 percent of the company.
The titanium dioxide pigment manufacturer has seen shares get cut in half over the past year. Fears of a slowing economy have weighed on the firm, whose products are used across a variety of industries.
However, revenues are down only 25 percent in the past year, and shares now trade at about 10 times earnings, indicating that the market may have overreacted to the impact of a slowing economy.
Action to take: Shares pay a hefty dividend of about 8.7 percent here. However, that’s far in excess of the company’s earnings, so it’s possible that the dividend will have to be cut in the future if the company’s revenues don’t reverse higher.
For traders, shares appear to be trying to break out of a downtrend. The November $10 calls, last going for about $0.35, could see high-double-digit gains or better on a further jump higher in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Automaker General Motors (GM) is down about 7 percent over the past year, and shares appear to be at the low end of a trading range before the stock pops higher. One trader is betting on such a rally in the coming months.
That’s based on the August $42 calls. With 84 days until expiration, 9,011 contracts traded compared to a prior open interest of 150, for a 60-fold rise in volume. The buyer paid $0.15 to make the trade.
Shares recently traded for just over $32, so they’d need to rise $10, or by nearly one-third, for the option to move in-the-money. With a 52-week high of $43.63, such a move is possible, but just barely.
The automaker has had a mixed year. Revenues are up 11 percent, but higher costs led to a 19 percent drop in earnings. Shares trade at just two-thirds of their book value, and at about 5 times earnings.
Action to take: Shares look inexpensive here, and are at a price point where they’ve tended to rally strongly over the past year before coming back down again. Interested long-term investors should look to buy a stake at current prices and take some profits on any quick jump higher.
For traders, the August calls are unlikely to move in-the-money, but are inexpensive enough to deliver triple-digit gains on a pop higher in the next few months. Traders should look to take quick profits on a big move higher for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Many companies were caught during the pandemic as borders shut down. Without reliable just-in-time delivery systems operating, they’ve been working to diversify their manufacturing operations.
For higher-level goods such as semiconductors, this means reversing a multi-decade trend to once again make goods in America. Signs of this trend have just started to pop up, and they’ll likely increase in the years ahead. While there may be higher labor costs to manufacture stateside, most businesses see the development as a positive one.
For instance, Apple (AAPL) just announced that it will shift its 5G chip acquisition to Broadcom (AVGO). That coincides with Broadcom’s manufacturing expansion to the U.S.
Shares of the chipmaker are already up 30 percent over the past year. But they’re also still inexpensive at 16 times forward earnings. And the manufacturer still sports an impressive 37 percent profit margin.
Action to take: Although shares are at a 52-week high, they likely still have more upside ahead. Investors may want to buy a small stake now, and add to it on any subsequent decline in shares. At present, Broadcom yields 2.7 percent.
For traders, the September $740 calls play well to the current uptrend in shares. Last trading at about $24.40, the option can likely see a mid-double-digit-gain or better.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Richard Johnson, a director at H&R Block (HRB), recently picked up 10,000 shares. The buy increased his stake by 17 percent, and came to a total cost just over $395,000.
The buy came about a week after a different director picked up 500 shares, paying just over $16,000. Company insiders were largely sellers of shares in 2022, when the share price was closer to the $50 range rather than the $30 range today.
Overall, company insiders own about 0.9 percent of shares.
The tax preparation services company is down 15 percent over the past year.
Shares have been under pressure recently on news that the IRS is working on software to allow taxpayers to file online, which could disrupt a major source of H&R Block’s business.
Despite that recent slide, shares look attractive at less than 8 times forward earnings, although the company’s business is highly cyclical around tax season.
Action to take: Shares are currently trending lower, so there’s no rush to buy. Even with the stock now paying a dividend yield near 4 percent, there’s a potential for a move lower in the coming months before there’s clarity on a new tax filing software and alternatives to H&R’s business model.
For traders, playing the current downtrend should prove profitable. The October $25 puts, last going for about $1.00, can likely see mid-double-digit gains before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of big data analysis company Palantir Technologies (PLTR) have soared over 50 percent in the past month. One trader is betting that shares will give up some of that gain in the coming weeks.
That’s based on the June 16th $12.50 puts. With 21 days until expiration, 3,924 contracts traded compared to a prior open interest of 122, for a 32-fold rise in volume on the trade. The buyer of the puts paid $0.77 to make the bearish bet.
Palantir last traded at about $12.60, so this is an at-the-money trade. Shares have a 52-week high of $13.42, but a low under $6, so they’re near the high end of their range.
The company is moving towards profitability, but the real pop in shares over the past few weeks has come as the company has mentioned plans to increase its use of artificial intelligence. Given that interest that investors have shown in shares, it’s possible that the stock pulls back in the coming weeks.
Action to take: Interested investors could fare well in the long run, but shares have popped higher and pulled back before. Patience should allow investors to buy at or under $10 per share.
For traders, the June puts could deliver mid-double-digit returns or better in the coming weeks, depending on whether or not shares drop.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
It’s easy to say that there’s a lot of market uncertainty right now. But no matter what happens, there will always be uncertainty. And investors who wait for a clearer picture on how things develop don’t get great prices when buying assets.
That’s why value investors start to buy during market panics, even if it’s not near the bottom. Today, investors can find companies that are making big investments now, even amid all the uncertainties facing markets today.
While the economy looks like it’s slowing overall, there’s also a lot of spending coming from the government to support the domestic production of semiconductors. And companies are responding to incentives to move operations back to the United States.
One such company is Applied Materials (AMAT). They’re spending up to $4 billion to build out a new research and development center in Silicon Valley.
That could help the company improve its market share and industry position over time. While shares are already up 15 percent over the past year, there’s still room for shares to head higher in the months ahead.
Action to take: Investors may like shares here, given their inexpensive valuation at 17 times earnings. Applied Materials even has a dividend of about 1 percent, thanks to its recent increase which more than doubled the payout.
For traders, the August $140 calls, last going for about $3.70, could see mid-double-digit returns on a further move higher in AMAT shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Francis Saul, CEO and major holder at Saul Centers Inc (BFS), recently added 750 shares. The buy increased his stake by less than 1 percent, and came to a total cost of $26,384.
The buy came less than two weeks after the CEO bought 10,000 shares, at a cost just under $334,000. And the company President and COO also picked up 3,500 shares at a cost of $115,500 earlier this month.
Overall, company insiders own 46.2 percent of shares.
The mixed-use retail-oriented REIT has lost about 25 percent of its value in the past year.
While valuations have dropped thanks to rising interest rates, Saul Centers managed to make a small gain of about 1 percent in both its revenue and earnings growth. The REIT also sports a profit margin of about 20 percent.
Action to take: With slow growth and a dividend yield now pushing 6.8 percent, the market may be betting on a further drop in shares from here, even with shares in a short-term uptrend. Investors should be patient and look for a better value before getting into a real estate play right now.
For traders, options are limited, with only the June $35 calls actively trading right now. Last going for about $2.25, the at-the-money trade may be worth a buy as a play on the current uptrend. But traders should look for a quick gain, given the longer-term downtrend in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Casino operator Las Vegas Sands (LVS) has had a great year, with shares up over 80 percent. One trader is betting the good times will continue to roll.
That’s based on the September $45 calls. With 114 days until expiration, 76,065 contracts traded compared to a prior open interest of 363, for a staggering 210-fold rise in volume on the trade. The buyer of the calls paid $16.15.
Shares recently traded for just under $60, meaning the options are about $15 in-the-money, and carry very little premium for how much time the trade has to play out. The stock has come off of a 52-week high of $65.58 in the past month.
While revenues have grown thanks to stronger travel demand, the casino has still lost money over the past year. And fears of a slowing economy, while not yet showing up in travel and tourism, could hit the casino industry in time if they play out.
Action to take: Investors interested in shares should wait for the current pullback to end, likely in the mid- or low-$50 range. Las Vegas Sands cut its dividend in early 2020, and hasn’t yet reinstated it, so investors won’t get paid to wait.
For traders, the September $45 calls look attractive given their low premium. They’re deep in-the-money, so returns may not be huge, but they can still deliver low-to-mid double-digit gains in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Sometimes a company makes a misstep that can cost it customers in the short term. Other times, a misstep can be more permanent in nature. The question is how each specific opportunity plays out.
Since each situation is different, it helps to look at the strength of the market reaction. And how competitors are faring as well. If a company faces trouble in a bear market, it may get overlooked. But it may also shine a favorable light on a competitor.
Recently, Anheuser-Busch InBev (BUD) saw sales of Bud Light drop due to a recent advertising controversy. While shares have slid, they’re down just 10 percent from recent highs. That’s a sign the market sees events as more of a political or culture war issue than a financial one.
Plus, shares of Molson Coors (TAP), a similar competitor, have about the same valuation right now, as both stocks are trading at about 16 times forward earnings.
Action to take: Investors interested in the space may want to consider where their favorite brand is and go shopping from there, as both companies are inexpensive. For income investors, Molson Coors, with a 2.6 percent yield, offers a much higher dividend than Anheuser-Busch InBev.
Traders can bet on either company continuing higher over time. Molson Coors does have better momentum at present, however. The October $65 calls, last going for about $3.10, offer mid-double-digit returns from a further rally here.
Disclosure: The author of this article has no position in the companies mentioned here, and does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
While earnings are the most important part of earnings season, they’re simply a yardstick that considers different accounting measures across different sectors. A different measure, cash flow, can give a sense as to a company’s ability to start and grow a dividend, buy back shares, or otherwise reward shareholders.
That cash flow may not always pass down to earnings. But for a poor investment, it’s often true that earnings will look higher than cash flow indicates.
With a slowing economy and slow sales environment for smartphones, Apple (AAPL) was looking dicey going into earnings. Yet the company beat on earnings, and brought in revenue of $94.8 billion. That’s some cash flow! It’s going partly to a $90 billion buyback and a dividend hike of 4.3 percent.
Those earnings numbers are a modest reversal from last year’s 6 percent drop in revenue growth and 13 percent drop in earnings growth. The company’s cash flow continues to remain strong.
Action to take: Investors may like shares on any drop under the $165 range. Shares aren’t an income play, with a 0.5 percent yield right now, but that ongoing growth could be huge over time. Plus, the buyback may help prevent shares from getting hit too hard in a market selloff.
For traders, Apple shares have trended higher since the start of the year. That’s likely to continue. The July $175 calls, last going for about $4.50, offer mid-double-digit returns on a further move higher.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Kevin Stephens, a director at Crown Castle Inc (CCI), recently added 1,000 shares. The buy increased his holdings by 7 percent, and came to a total cost of $117,996.
The director was also the most recent buyer of shares, with a 2,000 share pickup in October 2022 that cost $247,000. One other director has been a buyer in the past year. Two company insiders were sizeable sellers of shares in April.
Overall, company insiders own 0.4 percent of the cell tower real estate investment trust.
The company has lost about one-third of its price over the past year, amid the stock market selloff and rising interest rates impacting real estate-related trades. Plus, revenue and earnings have been flat overall.
Nevertheless, the company has a 24 percent profit margin, and shares are trading at half the price to earnings ratio of a year ago at 35 times.
Action to take: Investors may like shares for the long term at current prices, as shares are near their 52-week lows. The REIT just raised its dividend payout, and yields about 5.3 percent at current prices.
For traders, shares are trading close to a 52-week low and have been in a downtrend. The October $105 puts, last going for about $4.40, offer mid-double-digit returns on a further move lower in the coming months. If interest rates start to move lower, look to buy calls to play an upside boost in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Biotech company Gilead Sciences (GILD) has had a strong year, with shares up 30 percent. However, shares have started to trend lower in recent sessions, and one trader sees a further drop ahead.
That’s based on the November $60 puts. With 193 days until expiration, 3,922 contracts traded compared to a prior open interest of 100, for a 39-fold rise in volume on the trade. The buyer of the puts paid $1.09 to make the bearish bet.
Shares recently went for about $78.50, so they would need to drop $18.50, or about 25 percent, for the option to move in-the-money. That price would also be close to the stock’s 52-week low of $57.17.
Despite the strong price performance in the last year, revenues are down 3 percent. Shares also trade at about 12 times forward earnings, about where they traded a year ago.
While shares could drop lower and retest their prior lows, the company is cash rich and debt free, and can potentially weather any economic concerns right now.
Action to take: Interested investors may like shares in the low $70 range or under. That would push the dividend yield on shares over 4 percent from their current 3.7 percent, and pay well for investing in the risks of a biotech company.
For traders, the put options play well to the stock’s current short-term trend. The options can likely deliver mid-double-digit gains in the coming weeks. But traders may want to take profits early given the volatility in biotech stocks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
A company can have a great product. Or a great marketing team. But if management isn’t good… the company will falter. Even a manager who knows to step aside for the team is better than an executive who makes the wrong decisions and ignores what the staff has to say.
This can translate into great stock returns… or poor ones. So all said and done, company management is a key factor, even though it doesn’t show up on the balance sheet.
Investing with management teams that support shareholders – and are big shareholders themselves – can be crucial for investment success.
And in today’s market, that makes a strong case for Berkshire Hathaway (BRK-B). The insurance and conglomerate company is aptly managed by Warren Buffett.
More interestingly, the company hasn’t yet moved to take advantage of fears in the banking industry. Once they do, they’ll likely get top dollar on their returns. Buffett employed a similar strategy to buy preferred shares yielding 10 percent from several banks, getting returns unavailable to anyone else.
Action to take: Although Berkshire somewhat famously doesn’t pay a dividend, shares are worth accumulating for the long haul.
For traders, the B shares offer options trading. The July $330 calls, last going for about $9.60, offer mid-double-digit returns on a continued move higher in shares.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Michael Marberry, a director at American Water Works Company (AWK), recently bought 825 shares. The buy increased his holdings by 200 percent, and came to a total cost of $120,541.
This marks the first insider buy at American Water Works over the past two years. Otherwise, a few company executives have been sellers of shares, largely after exercising stock options with the firm.
Overall, insiders own 0.2 percent of shares.
The regulated water utility is down about 4 percent in the past year, about on par with the overall stock market. Operationally, AWK has performed better, with revenues rising by 11 percent and earnings rising by 8 percent. Plus, the utility sports a healthy 21 percent profit margin.
Action to take: Shares are a little pricey here at 31 times forward earnings. And the yield is 1.9 percent, a bit low for a utility. But it’s been a great dividend grower over time, so investors may want to watch for a pullback under $140 before building a stake in this utility company.
For traders, shares have been rangebound in the past year and appear to be heading lower in the coming months. The September $130 puts, last carrying a bid/ask spread of about $2.60, offer mid-double-digit returns at best on a further drop lower in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Oil and gas midstream company MPLX LP (MPLX) is up 2 percent over the past year, slightly trending higher even as energy prices have been moving lower. One trader sees possible upside in the weeks ahead.
That’s based on the June 16 $32 calls. With 42 days until expiration, 59,400 contracts traded compared to a prior open interest of 260, for a staggering 248-fold surge in volume on the trade. The buyer of the calls paid $2.65 to make the bullish bet.
Shares recently traded for about $35, so the option is already about $3.00 in-the-money. That suggests that the buyer of the calls took advantage of the lack of time premium attacked to MPLX options.
As an LP, the company is structured to pay out nearly all of its earnings as income to shareholders. At present, there’s an 8.9 percent yield on shares. That high yield may likely lead to a cap in how high shares can move in the coming weeks.
Action to take: Investors looking for high income now can find it with LP and MLPs. However, if energy prices continue lower from here, the payouts may be lowered in the future.
For traders, the option buy looks like an attempt to profit from option mispricing. Traders who are nimble enough may be able to join in, and pocket a small gain, likely under double-digits, in the weeks ahead. Traders interested in playing the big swings in energy prices right now have better plays with conventional energy names.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Earnings season can create a tremendous amount of short-term noise. Companies tend to focus on 90-day sprints, rather than the long run, to keep Wall Street happy. But even with that short-term focus, a company can be working towards long-term goals and get hung up in the short run.
That’s especially true when a company plays to long-term trends but hasn’t seen the cycle turn favorable for those trends yet.
In the tech space, chipmaker Advanced Micro Devices (AMD) took a hit after earnings. Specifically, the company provided weak guidance for the personal computer market in the quarter ahead.
Amid a slow economy, that makes sense. But long-term trends suggest that chipmakers will continue to become more valuable as technologies like AI.
Currently, AMD’s earnings have collapsed, down nearly 98 percent compared to a year ago. However, revenues have grown 16 percent. And any improvement in consumer demand could cause prices to soar higher.
Action to take: AMD is worth buying for the long haul, especially after a drop in price. Under $90 per share, the stock trades at a reasonable value for the chipmaker space.
For traders, shares are likely to recover from their guidance-report drop in the coming weeks. The June 16 $90 calls, last going for about $3.50, offer mid-double-digit returns on a bounce in shares from here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Lynne Puckett, a director at Markel Corporation (MKL), recently bought 75 shares. The buy increased her holdings by 8 percent, and came to a total cost of $100,550.
Other insiders have been buyers this year, including two directors in February, as well as the company CEO. Insiders have generally been buyers over the past year, but were more likely to be sellers two years ago.
Overall, insiders own 2.1 percent of shares.
The property and casualty insurance company is up just 2 percent over the past year. As with other insurance companies, shares have been impacted over the past year as rising interest rates have taken a toll on asset valuations.
At the moment, Markel has been able to offset those losses by increasing its premium growth. That trend can likely continue over time.
Action to take: Long-term investors may fare well with insurance companies right now, as their operations tend to be steady. Plus, when interest rates head lower, portfolio returns can improve, leading to a boost in shares.
Markel doesn’t currently pay a dividend, so income investors may want to look elsewhere.
For traders, the July $1,560 calls, last going for about $4.50, offer mid-double-digit returns on a bounce higher in shares in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Healthcare services company Cardinal Health (CAH) has been trending higher in the past few months, and even recently set a new 52-week high. One trader sees shares pulling back by the start of next year.
That’s based on the January 2024 $55 puts. With 260 days until expiration, 4,000 contracts traded compared to a prior open interest of 135, for a 30-fold rise in volume on the trade. The buyer of the puts paid $0.68 to make the bearish bet.
Shares recently traded just over $82. So shares would need to lose $27, or fall by about one-third, by the end of the year for the options to move in-the-money. The move would also take shares close to their 52-week low of $49.70.
The stock’s 40 percent rally in the past year has outpaced the company’s operating strength. Revenue rose just 13 percent, and Cardinal Health lost money overall on a net earnings basis. Shares look inexpensive at 13 times forward earnings, but those earnings may not materialize.
Action to take: Investors interested in the space can look elsewhere for a long-term investment, at least until a pullback. Shares pay a 2.4 percent dividend at current prices, but the company hasn’t increased the dividend lately, and it could be at risk for a cut if Cardinal continues to lose money.
For traders, the January puts offer downside protection against the company after its big move higher, and in case of an overall market selloff as well.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The stock market is an index of a number of companies. And it’s largely weighted by market cap. That index can change all the time, and for any number of reasons. One reason may involve the bankruptcy of an index member company.
That’s the case with the S&P 500. First Republic Bank is no more, having been seized by regulators and having its deposits sold off. But it’s the S&P 500, not the S&P 499. The index needs a new member.
Traders are betting that Blackstone (BX) may fit the bill. It’s also a financial company of significant size. But it’s an asset manager, not a bank. Blackstone’s biggest issue is that its assets have taken a hit over the past year as interest rates have been moving higher.
With shares down 15 percent compared to the past year, buying ahead of the end of the interest rate hike cycle could be a solid play. And that play could be juiced by the billions in buying pressure if Blackstone is added to the S&P 500.
Action to take: Investors may like shares here. The company is a leader in its space. It’s also a dividend growing play, with a 4.9 percent yield at present.
For traders, any inclusion in the S&P 500 and fund buying will likely take place in a few months. The August $90 calls, last going for about $6.80, offer mid-double-digit returns on a move higher in Blackstone shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
CD&R Investment Associates, a major holder of Beacon Roofing Supply Inc (BECN), recently added 99,880 shares to their holdings. The buy increased the fund’s stake by 1 percent, and came to a total cost of $6 million.
This is the second buy from this fund so far this year. A company President bought 3,850 shares in March, paying just over $250,000 to increase their holdings by 43 percent. Overall, insider buying has been far greater than sales over the past two years.
In total, company insiders own 0.5 percent of shares. And nearly the entire float is owned by institutional investors such as CD&R.
The roofing materials supply company has traded flat over the past year, and earnings are down by nearly a quarter amid flat revenues. However, shares are inexpensive at 10 times earnings, and the spring and summer seasons tend to be busier for the roofing industry, followed by hurricane season into the fall.
Action to take: Investors may like shares now ahead of a seasonal trend higher. The stock doesn’t pay a dividend, so investors won’t be paid to wait for a move higher.
For traders, shares have been somewhat rangebound over the past year, and are moving higher. Shares can likely trend towards $65 before the rally starts to slow down. The July $65 calls, last going for $2.05, can likely deliver mid-double-digit returns in the weeks ahead on a further push higher in BECN shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Hotel alternative Airbnb (ABNB) has slid about 22 percent over the past year, but the stock is up over 50 percent from its lows in 2022. One trader sees a further decline ahead for the company.
That’s based on the May 12 $115 puts. With 9 days until expiration, 5,369 contracts traded compared to a prior open interest of 112, for a 48-fold rise in volume on the trade. The buyer of the puts paid $2.89 to make the bearish bet.
Airbnb next reports earnings on May 9, so this is likely a bet that shares will take a hit then. The stock recently traded for about $122, so Airbnb would need to drop about 6 percent for the option to move in-the-money.
Despite some big moves lower in shares over the past year, revenue grew by 24 percent last year as travel trends improved. And earnings soared by 485 percent, as the company worked to increase profitability after it went public during the pandemic.
Action to take: Shares are likely to remain volatile for some time. And they’re certainly not cheap at 40 times earnings. But on a big enough drop, speculators could pick up shares for a rebound.
For traders, the puts could deliver triple-digit returns, especially if the company tanks after its earnings report for any reason. But if earnings go well, the option could lose all its value quickly.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
During a gold rush, most prospectors won’t find much, if any, gold. The real winners are those who supply prospectors with tools that they need, such as picks and shovels. Today, these suppliers don’t even need to provide a physical tool. And they can profit from selling a service with a recurring revenue.
That’s where cloud service companies come into play. Spending is slowing, even as it’s grown 19 percent over the past year.
Pick and shovel plays in this market are taking a hit. It likely won’t last.
One name in the space is Cloudflare (NET). Shares dropped over 20 percent on Friday as the company cut its guidance. Analysts expect more cuts.
But the company’s core business is intact, and even in a slow-growing environment, it can still grow at a double-digit rate. Friday’s drop overlooked the fact that the company beat on its earnings expectations by 100 percent, and revenue came in just slightly higher than expected.
Action to take: Investors should look to buy shares under $50, and take advantage of any market selloff to add to that stake.
For traders, shares are trending lower in the short-term, but may hit long-term resistance soon. The June $40 puts, last going for about $1.45, can potentially deliver mid-double-digit returns. From a bottom in the low $40 range, traders can flip to buying a call option to play a rebound rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Lourenco Goncalves, President and CEO at Cleveland-Cliffs (CLF), recently bought 100,000 shares. The buy increased his holdings by 2 percent, and came to a total cost of $1,496,350.
He was joined by an EVP who bought 7,300 shares. The buy increased his holdings by 2 percent, and came to a total price of $108,548. And a director bought 1,500 shares a day later, for $22,703. Insiders have been more active as buyers than sellers over the past year.
Overall, insiders own 1.6 percent of shares.
The steelmaker is down about 40 percent over the past year, as fears of a slowing economy have hit the commodities market. Even with the drop, shares trade for just 9 times forward earnings, and the company just beat on its earnings and revenue expectations.
Plus, the company just reached a four-year labor agreement, which can keep its facilities open.
Action to take: Shares are trending down, but long-term investors may want to start building a stake after a drop under $15. That will be near the low end of the stock’s 52-week range. At present, Cleveland-Cliffs does not pay a dividend.
For traders, shares will likely set up for a rebound in the coming sessions. The July $18 calls, last going for about $0.53, offer mid-double-digit returns or better on such a move higher in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Regional bank PacWest Bancorp (PACW) was hit hard in March’s banking crisis. Shares are now down 67 percent over the past year. But one trader sees a long-term rebound ahead.
That’s based on the January 2025 $10 calls. With 626 days until expiration, 5,135 contracts traded compared to a prior open interest of 100, for a 51-fold rise in volume on the trade. The buyer of the calls paid $4.05 to make the bullish bet.
Shares recently traded slightly over $10, making this an at-the-money trade. With a 52-week high of $35, a move to that level by expiration would cause the options to rise in value to $25, or more than 6 times higher.
The drop in shares has taken PacWest to just 3 times earnings, and it trades for about one-third of its book value. As long as it doesn’t face an exodus of depositors, it should move higher from here in time.
Action to take: Shares are a speculative bet here, but possibly one that could pay out with more upside than downside. The company’s most recent dividend also suggests a 9 percent yield here, although that may change in time.
For traders, the calls are an inexpensive bet that will likely expire well after the current fears in the banking sector play out. Traders can potentially nab low triple-digit gains in a few weeks given the wild swings in small bank shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Analysts spent the first few months of 2023 warning about an earnings recession. And so far, the data suggests that it’s here. Companies are slowing down overall. The good news? Analysts may have been too dour, so many companies have beaten the low expectations going into their earnings report.
Nevertheless, the next few months may see the market trade sideways and see a selloff as this latest earnings season starts to slow down.
Investors can use such a pullback to buy industry leaders at a reasonable price ahead of the next move higher. In this market, leadership is less about stock valuation and more about market share.
One leader is Amazon (AMZN). Best known for its online retail operations, the company is a diversified tech play with some fantastic growth in the cloud space – although that’s been the source of a big slowdown.
That may cause shares to give up some of their recent gains, and even potentially fall down to the low $90 range that marked the low for shares in the first quarter of the year.
Action to take: Patient investors should look to start buying shares under $100 to take advantage of any dip.
For traders, the September $95 puts, last going for about $4.50, offer mid-to-high double-digit returns on a short-term drop lower for Amazon shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Thurman Rodgers, a director at Enphase Energy (ENPH), recently bought 27,900 shares. The buy increased his holdings by 2 percent, and came to a total cost just over $4.56 million.
The buy came right after the director bought 32,900 shares, paying $5.41 million, to increase his holdings by 3 percent. They’re the first insider buys at the company in over two years, as insiders have exclusively been sellers until these buys.
Overall, insiders at the solar panel development company own 2.5 percent of shares.
The stock has now traded flat over the past year, following a steep dive as the company reported that higher interest rates were weighing on solar panel sales.
The pullback comes as the company remains on a growth kick, with both earnings and sales up double-digits over the last year.
Action to take: Shares have gone from nearly 198 times earnings last year to 41 times forward earnings in the most recent quarter. While not cheap, the company has strong growth potential as consumers and companies continue to develop solar energy solutions.
For traders, look oversold following the recent drop, and are likely to rebound in the coming weeks. The July $180 calls, last going for about $11.15, offer mid-double-digit returns or better depending on how quickly and strongly the stock rebounds in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Ride share company Uber (UBER) is down about 5 percent over the past year. One trader sees a further move higher for shares in the coming months.
That’s based on the August $42.50 calls. With 108 days until expiration, 3,540 contracts traded compared to a prior open interest of 108, for a 32-fold rise in volume on the trade. The buyer of the calls paid $0.28 to make the bullish bet.
Shares recently went for about $30, so they’d need to rise about $12.50, or about 41 percent, for the option to move in-the-money.
That’s a big move for shares, and would exceed the stock’s 52-week high of $37.58. Such a move may be extreme, but we could see some move higher as Uber next reports earnings tomorrow, May 2.
Earnings slid by one-third last year, but revenues rose by nearly 50 percent for the industry leader in ride-sharing services.
Action to take: Shares look oversold going into earnings tomorrow, and may see some rise higher. That could be good for a short-term boost in shares.
For traders, the August $42.50 calls may not move in-the-money, but they have plenty of time to move in the right direction. And given the low cost of the calls, they could easily deliver mid-to-high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Many technologies and economies function best due to a network effect. The larger the number of users in a network, the stronger and more robust it is. It’s less likely to have a single point of failure.
For investors, finding companies with a strong network effect can earn great returns. Especially when investors take advantage of a weak market to buy companies with a strong network.
One type of network is in shipping and logistics. A small company may only be able to serve a small town. But dominant players that can operate globally are likely to continue to be able to do so indefinitely.
That’s what makes the recent selloff in United Parcel Service (UPS) so compelling. Shares slid following earnings in-line with expectations, as the company noted the year was trending towards the lower end of its annual guidance.
Action to take: The leader in global shipping and logistics now goes for about 13 times earnings, a solid discount to the overall stock market. And shares yield about 3.7 percent right now, with room for more potential growth over time.
That makes shares worth buying at or under current prices.
For traders, shares look likely to rebound in the coming weeks after their recent slide.
The July $180 calls, last going for about $4.50, offer mid-double-digit returns in the coming weeks as shares stabilize and trend higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Victor Alexander, Head of Consumer Bank at KeyCorp (KEY), recently bought 8,500 shares. The buy increased his holdings by 7 percent, and came to a total cost just over $100,555.
This marks the second insider buy of the year, following the 2,000 share buy from a director back in March. Going further bank, insiders have largely been steady sellers of KeyCorp shares, with a mix of direct sales and stock option exercises.
Overall, insiders own 0.3 percent of the regional bank.
Shares have been cut nearly in half over the past year, amid rising interest rates and a banking crisis that’s hit regional players hard.
That’s taken KeyCorp shares down to just under their book value, and shares trade for less than 7 times forward earnings. Plus, the stock yields 7.8 percent, and there’s been a slight dividend increase over the past year.
Action to take: Investors may want to look at accumulating shares at or under current prices.
The stock is in a downtrend, but with the yield so high and shares now under book value, a strategy of buying on down days could play out well for patient investors over time.
For traders, the immediate downtrend may not be fully played out yet. The June $10 puts, last going for about $1.00, offers mid-to-high double-digit returns on a further slide in the coming weeks.
Traders may want to take quick profits on any big down day for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investment brokerage firm The Charles Schwab Corporation (SCHW) has lost about a quarter of its value in the past year, as slowing trading has reduced revenues. One trader sees the potential for a further decline in shares in the weeks ahead.
That’s based on the June 2 $40 puts. With 35 days until expiration, 12,066 contracts traded compared to a prior open interest of 216, for a 56-fold rise in volume on the trade. The buyer of the puts paid $0.32.
Shares recently traded just around $50, so the stock would need to fall $10, or about 20 percent in just a few weeks. And they would need to drop under their 52-week low of $45 per share.
Such a move is possible. Shares were trading over $75 before fears hit the banking sector, causing the drop to the $50 range. Any renewed fears could lead to another big swing lower.
Action to take: Shares trade at 14 times earnings, and the stock yields about 2 percent. But we don’t have an all-clear for the space yet, and the brokerage won’t report its next earnings until July.
Investors may not know how the company’s deposit levels are holding out for months. So for now, it’s a stock to avoid.
For traders, the June $40 puts are aggressive. But they’re inexpensive.
If they don’t pan out, traders won’t lose out on much. But if there’s a big drop lower in financial stocks in the coming weeks, the trade could make a great hedge with high-double-digit return potential or better.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
As an investment, companies with few competitors are better than companies with many competitors. That’s because competition tends to keep prices low and innovation high. That’s good for consumers, but not healthy for companies – or their shareholders.
That’s why companies with a handful of competitors tend to be more consistently profitable. That can keep share prices generally rising over time, and with lower volatility. These companies also tend to make for attractive income plays.
When it comes to the oligopoly space, it’s tough to beat out the credit card providers. In that space, the industry leader is Visa (V).
Even with a slowdown in consumer spending, the company managed to see revenues rise 11 percent compared to the first quarter of 2022.
That helped boost shares slightly, which are still near 52-week highs, but under their mid-2021 peak.
Action to take: Visa’s profit margin is just over 50 percent, and with revenues continuing to rise, there’s more cash available for investors via dividends and share buybacks. Right now, the yield is low at just under 0.8 percent, but Visa has been growing it over the past few years.
For traders, shares look likely to take a crack at another all-time high in the coming months. The September $245 calls, last going for about $8.70, offer mid-double-digit returns on such a move higher by the autumn.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Alan Colberg, a director at US Bancorp (USB), recently bought 10,000 shares. The buy increased his position by over 1,000 percent, and came to a total cost of $341,380.
This marks the first insider buy at the regional bank in over two years. Otherwise, company executives, including the company CEO and CFO, have been regular and steady sellers of shares, largely after stock options have vested.
Overall, insiders own 0.2 percent of shares.
The regional bank has lost about one-third of its value over the past year, as rising interest rates have weighed on stocks. Plus, the bank trades at about 1.2 times its book value, at a time when other banks trade at a discount.
US Bancorp is one of the larger regional plays out there, with a market cap of $55 billion. It could be a takeover target, but potential buyers are few. It’s more likely the bank itself will continue to grow and acquire smaller banks in the years ahead.
Action to take: US Bancorp is inexpensive at less than 8 times forward earnings. And the most recent dividend payout works out to a 5.7 percent yield. That’s a fair reward relative to the potential swings amid a weak economy and rising interest rates, but investors should wait for the drop in shares to stop first.
For traders, the current trend is down. The September $30 puts, last going for about $2.55, offer mid-double-digit gains on a further decline in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Cruise line operator Carnival Cruise Lines (CCL) has been rangebound for several months after a big drop nearly a year ago. One trader sees shares trending lower in the coming weeks.
That’s based on the May $8.50 puts. With 22 days until expiration, 5,310 contracts traded compared to a prior open interest of 100, for a 53-fold rise in volume on the trade. The buyer of the puts paid $0.31 to make the bearish bet.
Shares recently traded for about $9, so they would need to fall about $0.50, or just under 5 percent, for the option to move in-the-money.
Such a move could continue the current downtrend that’s started over the past few weeks. Shares may even retest their 52-week low of $6.11.
Although revenues have exploded higher by 173 percent in the past year, the company is still losing money. Rapidly fluctuating energy prices and slowing consumer spending are likely to take their toll.
Action to take: Given the company’s current losses and stresses on consumer spending right now, investors interested in the stock should wait for a downswing to play out before buying.
For traders, the May puts are inexpensive and could deliver mid-to-high double-digit returns in just a few weeks. They work well to hedge against the overall market right now, or to play to the current weakness in Carnival shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
A great company can overcome any economic challenge. To be a great company, it’s necessary to have pricing power. That means avoiding having to cut prices during a slow period. And it means when inflation is running hot, prices can be raised over and above.
Such companies are few and far between. But harnessing the power of a brand during a slow or sideways market can help lead to great returns over time, both from capital gains, and from growing dividend income.
It’s no surprise that Coca-Cola (KO) has been able to hike prices on consumers yet again. That helped the company’s earnings rise 5 percent year-over-year, beating expectations by 3 cents.
While shares have been flat over the past year, improved earnings have taken the beverage brand giant from 28 times earnings to 24 times forward earnings. The company’s annual dividend payout was likewise bumped up by about 4.5 percent over the past year also.
Action to take: Shares aren’t exceptionally cheap. But for one of the world’s leading brands, with pricing power to keep up with inflation, they’re in a good spot relative to where shares have been valued at times in the past.
Investors can start with a 2.8 percent dividend now, and let it compound over time.
For traders, shares are likely to continue to trend higher. The August $65 calls, last going for about $1.75, could see mid-double-digit gains on a further rally in the next four months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Gerald Libin, a major holder of Riley Exploration Permian (REPX), recently added 3,000 shares. The buy increased his stake by less than 1 percent, and came to a total cost of $131,370.
This marks the first insider buy since last October, when Libin was also a buyer of just over $273,000 in shares. Over the past few months, several company insiders have sold, including the company President and the company CEO.
Overall, insiders own 40.2 percent of shares.
The oil and gas exploration company has doubled over the past year thanks to strong energy prices and rising investor interest in the space. That’s true even as Riley has seen revenue slide 22 percent, and earnings drop 81 percent.
Exploration and development companies benefit from consistently higher prices, and wild swings in energy prices can make for an operational challenge. But even with the lower revenue and earnings over the past year, the company has a 37 percent profit margin, high for a commodity producing company.
Action to take: Despite the big drop in earnings, the company trades at just 5 times froward earnings. Shares also yield about 2.9 percent at current prices, with room for future growth as profitability returns.
For traders, shares have been trending higher over the past few weeks. The September $50 calls, last going for about $5.90, offer mid-double-digit returns on a further move higher for Riley shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Brazilian iron ore producer Vale (VALE) is down 12 percent over the past year and 25 percent off its peak. One trader is betting that prices will fall further in the months ahead.
That’s based on the July $14 puts. With 86 days until expiration, 6,721 contracts traded compared to a prior open interest of 211, for a 32-fold rise in volume on the trade. The buyer of the puts paid $0.88 to make the bearish bet.
Shares recently traded for about $14.20, making this an at-the-money trade. The stock is down from its 52-week high of $19.31.
The company’s operations have likewise slowed with the global economy in the past year. Earnings have dropped by over one-third, and revenue is down 15 percent. Plus, the company’s dividend was slashed, although the current yield is still fairly high at 4.6 percent.
Action to take: Given the challenges investing in emerging market economies with interest rates rising and global growth slowing, investors should give this part of the commodity space a breather right now. It’s likely that prices will continue to trend down until they can form a long-term base for a bigger move higher.
For traders, the July $14 puts are an inexpensive short-term trade that could deliver mid-double-digit returns in the coming months before expiration. Traders may want to take quick profits to move on to other trades.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
While we’re coming up on the next Fed meeting, which could give a sign that the central bank’s interest rate hikes are finally over, we’re not out of the woods yet. Inflation has slowed over the past year, but it’s still running at 5 percent.
That’s one of its highest levels in decades, and more than twice the central bank’s inflation target. Investors should still look for companies that can handle inflation by passing on the costs to their customers via higher prices.
One place offering safety in that regard is consumer goods companies. We’ve seen that in the past week, with the earnings beat and raised sales growth outlook by Procter & Gamble (PG) last week.
The announcement gave shares a boost, but they’re still a bit off their 52-week highs. More importantly, the company’s profit margin is near 18 percent, a high level for a company that has to manufacture and distribute physical goods.
Action to take: Shares are fairly valued at 24 times forward earnings. But the company is an industry leader in a number of consumer goods products, and will likely always carry a premium. Shares are worth buying at current prices or on any future market drop lower.
For traders, shares are likely to trend higher. The October $165 calls, last going for about $4.55, offer mid-double-digit returns from a move higher in P&G in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Bradford Phillips, a director at American Realty Investors (ARL), recently bought 2,000 shares. The buy increased his holdings by 46 percent, and came to a total cost of $40,000.
This is the third time the director has bought shares in the past year, following two buys in the $35,000 range in the fall. There have been no other insider buys, or insider sales, over the past two years.
Even with that lack of activity, company insiders own about 91 percent of shares.
The multifamily developer and operator has seen shares drop about 12 percent in the past year, as rising interest rates have weighed on the real estate market. Revenues have dropped 5 percent, and the company didn’t earn a profit in the most recent quarter.
However, shares trade at about 1 times forward earnings, and at over a 40 percent discount to their book value.
Action to take: Shares look like an overlooked small cap value play here, with room for more upside ahead as interest rates peak and the real estate market moderates. Those looking for income may want to look elsewhere, however, as ARL doesn’t pay a dividend.
For traders, options aren’t available on this play. But a larger REIT such as Mid-America Apartment Communities (MAA) has also been in a downtrend. Their June $140 puts, last going for about $2.50, could deliver mid-double-digit returns on a further decline in the weeks ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Business development company Hercules Technology Growth Capital (HTGC) has slid nearly 30 percent over the past year. One trader sees a similar drop occurring over the next few months.
That’s based on the October $10 puts. With 178 days until expiration, 7,622 contracts traded compared to a prior open interest of 170, for a 45-fold rise in volume on the trade. The buyer of the puts paid $0.60 to make the bearish bet.
Shares last went for about $13, so the stock would need to drop by $3, or about 25 percent, for the options to move in-the-money. That would also be below Hercules’ 52-week low of $10.94, set during the banking crisis in March.
The company is in the business of providing capital to high-growth startup companies, taking both equity and fixed income stakes. Given the drop in value of high growth startups in the past year, there’s a possibility that the company’s book of business remains overvalued.
Action to take: Investors should look for a different business development company for their current income needs. The 12.2 percent dividend on shares currently could be at risk if a significant amount of assets become impaired.
For traders, the October $10 puts are aggressive in terms of a possible drop, but have plenty of time to play out. They could deliver high-double digit returns or better in the months before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investors often take a current trend and extrapolate it to extremes. That’s why the end of a bull market has a lot of valuations that seem ridiculous in hindsight. And why there are many bargains at the end of a bear market.
That trend can also play out with quarterly earnings. A company’s growth may slow or stall out in a quarter, but markets may try and extend that trend out indefinitely. That can create short and long-term opportunities.
For instance, last week telecom giant AT&T (T) reported a slowdown in the rate of subscriber growth compared to the same quarter last year.
That sent shares down over 10 percent in a day. But there’s still growth, and such a slowdown is no guarantee of a future trend. And if the company can increase its profitability, a slowing rate of growth can be more than offset by improved profits.
The telecom now trades at about 8 times earnings, a reasonable valuation for a telecom. And shares pay 5.6 percent here, a high yield more than supported by the current rate of company earnings.
Action to take: Investors may like shares here. Despite the drop, shares are still well off of last year’s lows, and this could be a reasonable entry price for long-term dividend investors to buy into.
For traders, a rebound from the earnings drop is likely in the months ahead. The July $19 calls, last going for about $0.30, could deliver high double-digit returns or better in the weeks ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
John Donovan, a director at Lockheed Martin (LMT), recently bought 506 shares. The buy increased his holdings by 22 percent, and came to a total purchase price of $250,556.
This adds to the 556 shares the director bought back in January… and on 4 other occasions over the past year. These mark the only buys at the company. A number of insiders have been moderate sellers of shares over the past year, including Lockheed’s Treasurer and the company COO.
Overall, insiders own just under 0.1 percent of shares.
Lockheed is up over 12 percent in the past year, thanks to a strong demand for defense contractors and geopolitical fears following Russia’s invasion of Ukraine.
Shares are still reasonably valued at 18 times forward earnings. Defense spending looks set to continue to grow at a steady pace, and the aerospace defense contractor is a leader in the sector.
Action to take: Investors may like Lockheed shares at current prices or on any dip. At present, shares yield 2.4 percent, and Lockheed has a history of raising its dividends over time.
For traders, shares have been somewhat rangebound over the past few months. There could be a short-term pullback if that range-trade holds.
The September $450 calls, last going for about $11.40, could deliver mid-double-digit returns on a decline in shares in the coming months. Traders should look to take a quick profit rather than hold the puts until expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Drug manufacturer Pfizer (PFE) has seen shares slide nearly 20 percent to 52-week lows in the past few months. One trader sees a longer-term rebound for shares ahead.
That’s based on the December 2025 $40 calls. With 970 days until expiration, 2,009 contracts traded compared to a prior open interest of 116, for a 17-fold rise in volume on the trade. The buyer of the calls paid $5.58 to make the bullish bet.
Shares traded just under $40, making this an at-the-money trade. If shares were to rally to their 52-week high near $55 per share, the $40 calls would be $15 in-the-money, or nearly a triple.
While Pfizer shares are trending down, shares look reasonably valued at 12 times forward earnings. The company’s pipeline of drugs remains robust, and profit margins are a healthy 31 percent.
Action to take: Long-term investors may be interested in shares in the under-$40 range. Pfizer yields nearly 4 percent at current prices, and it’s been a modest dividend growth play over time.
For traders, shares are getting oversold but haven’t flipped yet. But these long-dated, at-the-money 2025 calls have more than two and a half years to play out, and could deliver triple-digit terms in that timeframe. Even long-term investors may want to get into these long-dated options instead of shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Consumer spending may be slowing… but it’s also a huge chunk of the economy. And no matter how bad things slow down, there are still many goods that people will need to buy.
That may be bad news for those who make higher-end goods. Ultra-wealthy consumer unaffected by the economy can only buy so much for themselves. That leaves companies that offer the best bargains for consumers as the top way to play current economic trends.
For the apparel space, off-price retailers offering quality fashions at a discount could continue to increase market share. That’s good news for companies like TJX (TJX), owner of T.J. Maxx and Marshalls, among others.
The stock is already up 16 percent over the past year. Revenues and earnings are rising, and the company has a healthy balance sheet with enough cash to weather any short-term economic slowdown. That’s a good sign the company can continue to thrive, even in a slowing economy.
Action to take: Investors may like shares at current prices or on any drop lower. TJX has raised its dividend, and shares now yield 1.7 percent, with room for further growth higher over time.
For traders, the July $80 calls, last going for about $2.70, offer mid-double-digit returns in the coming months on a rally higher for TJX shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
David Taylor, a director at Delta Air Lines (DAL), recently bought 5,000 shares. The buy increased his holdings by 9 percent, and came to a total cost of $167,805.
This marks the first insider buy since January, when another director bought 12,880 shares at a cost of just over $496,000. A few company executives have been sellers of shares so far this year, including the company’s President, on two separate occasions.
Overall, insiders own 0.3 percent of the airline’s shares.
Delta shares have slid nearly 20 percent over the past year, performing nearly twice as poorly as the S&P 500 over the same time frame. While revenues are up nearly 37 percent, reflecting a return to pre-pandemic travel levels, higher costs, particularly fuel, have weighed on profitability.
Even though the company’s profit margin has barely hit 3 percent, the drop in shares has taken the stock to 6 times forward earnings. Even if the economy continues to slow, that still makes the airline a value play at today’s prices.
Action to take: Despite some rallies and drops, shares appear to have hit a low back in October and are trending higher. Shares don’t pay a dividend, but they could move higher than the S&P 500 going forward thanks to stronger travel trends or lower energy prices.
For traders, both the short and medium-term trend is higher. The June $38 calls, last going for about $1.04, offer mid-double-digit returns in the next few weeks as that trend continues.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Document management company Xerox Holdings Corporation (XRX) have been trading in a range for most of the past year. One trader sees shares continuing to trend toward the lower end of that range in the weeks ahead.
That’s based on the May $14 puts. With 28 days until expiration, 4,247 contracts traded compared to a prior open interest of 119, for a 36-fold rise in volume on the trade. The buyer of the puts paid $0.60 to make the bearish bet.
Shares recently went for about $14.30, so the stock would need to decline about 2 percent for shares to move in-the-money. The stock still has a ways to trend lower before testing its 52-week low of $11.80.
Xerox has dropped by about 25 percent in the past year. The stock looks reasonably valued, going for about 10 times forward earnings and trading at a 30 percent discount to its book value. However, the company hasn’t been profitable in the past year.
That suggests shares will remain rangebound, and will likely continue to trend lower in the short-term.
Action to take: Investors may want to wait for a further drop in shares before buying. At the moment, Xerox yields 6.8 percent. But that dividend is unsustainably high based on current earnings. A dividend cut could lead to a fast drop for Xerox stock.
For traders, the May puts can likely deliver mid-double-digit gains in the coming weeks as shares trend lower. Shares could drop as early as next week, when Xerox reports earnings.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
There are many ways to earn a great return in the stock market. One way is to look at special situations, such as a merger announcement. There’s also a less-well-known way to profit by buying up a company about to split into multiple companies.
Such moves happen with less fanfare than an acquisition. But it can be a way for a company to unlock the value of a line of business that may not fit into the stock market’s perception of the company.
For instance, Johnson & Johnson (JNJ) is looking to spin off its consumer health division as a separately-traded company. The move will take the core company back to its original roots as a pharmaceutical play, and allow for the more service-oriented business to be valued by the market separately on its own.
Typically, companies make this spinoff play when they feel the market isn’t valuing that business fairly. Buying ahead of such a move can be profitable as that value is realized over time.
Action to take: Today’s investors can get a starting dividend yield of 2.7 percent, with room for growth over time. And a spinoff could allow for one of the companies to see higher growth, which could lead to higher total returns for long-term holders of both stocks.
For traders, shares will likely trade sideways until the spinoff is complete. Then, shares will trade lower based on the value of the spinoff. So for now, options traders may want to look elsewhere.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Fund 1 Investments LLC, a major holder at Tilly’s Inc (TLYS), recently added 177,930 shares. The buy increased the fund’s holdings by 3 percent, and came to a total cost of $1.36 million.
The fund has been a steady buyer of shares over the past year. The fund also sold shares back in December, possibly for tax loss purposes. There have been a few small sales by company insiders over the past year.
Overall, company insiders own about 2.3 percent of shares, and institutions own nearly the rest of the float.
The apparel retailer is down 15 percent over the past year. The company didn’t have positive earnings in the most recent quarter, and overall revenues have dropped 11 percent over the past four quarters.
Despite that decline, the company has over $110 million in cash, or nearly half of its market cap. As long as Tilly’s can continue to generate cash, it can potentially rebound and move higher.
Action to take: Fashion can be a cyclical business, and consumer spending may start to slow in the months ahead. Given the company’s valuation right now, investors may want to shy away from shares, and look for a turnaround and buying from corporate insiders, not just big fund players.
For traders, the October $5 puts, last going for about $0.20, could fare well if shares continue their long-term trend lower in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Megabank JPMorgan Chase & Co (JPM) has been moving higher since the recent fears in the banking sector. One trader is betting that trend will continue.
That’s based on the November $175 calls. With 211 days until expiration, 4,870 contracts traded compared to a prior open interest of 109, for a 45-fold rise in volume on the trade. The buyer of the calls paid $1.06 to make the bullish bet.
Shares last traded just over $140, so they would need to rise about $35, or about 23 percent, for the option to move in-the-money. JPMorgan shares are already close to their 52-week high of $144.34, so this would represent a big move higher.
Given that the bank’s deposits have swelled amid a crisis with smaller banks, a move higher is possible. But while the most recent crisis helped JPMorgan in terms of deposits, it led to a drop in the share price.
Action to take: As a mega-bank in the “too big to fail” category, and with double-digit earnings and revenue growth before the banking crisis, shares are likely to trend higher. Investors can get shares at about 10 times forward earnings and a 2.8 percent dividend yield here.
For traders, the November calls are aggressive in terms of moving in-the-money. But they’re also low-priced. That could lead to mid-to-high double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Following the market’s big drop last year and bounce so far this year, it’s likely that markets will continue to bounce around as economic data points a mixed picture. That’s a good trading environment—and it can also be a good one for long-term investors.
The way to take advantage is to look for stocks that are cheap, ignored or even hated by the market in general, and capable of moving higher thanks to strong financial performance.
The life insurance industry is cheap right now, as insurance stocks have dropped following the increase in interest rates over the past year. And the market doesn’t see too much upside, which tends to mean there’s a lot, especially as these companies have improved their risk management.
With a number of choices to pick from, Jackson Financial (JXN) looks attractive. Its most recent earnings report showed over $60 per share in earnings, leading to a 0.6 PE ratio. And the stock trades at about one-third of its book value, even while sporting a 39 percent profit margin.
Action to take: Investors can get a growing dividend yield that starts at about 6.7 percent right now. The company should offer slow and steady returns over time, and the possibility of interest rates peaking this year could help fuel a rally in the months ahead.
For traders, shares are in a slow-and-steady uptrend right now, and just gave back a bit of a rally. The June $45 calls, last going for about $0.45, could see high-double-digit returns or better on a continued move higher for the stock.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Steven Brass, President and CEO at WD 40 Co (WDFC), recently bought 558 shares. The buy increased his holdings by 3 percent, and came to a total purchase price just under $100,000.
He was joined by several other company insiders. The company CFO bought 168 shares, increasing her stake by 12 percent at a cost just over $30,000. And two company vice presidents also bought the stock on the same day.
Overall, insiders own 1.5 percent of the company.
The specialty chemical company has seen shares drop about 5 percent over the past year, about in-line with the overall stock market. Revenues were flat, and earnings dropped about 15 percent overall due to higher costs.
The company is best known for the product it’s named for, a specialty chemical solvent that leads in its market niche.
Action to take: Shares last went for about 40 times earnings. That’s considerably expensive for investors, especially compared to other chemical or cleaning supply companies, which tend to trade closer to 20 times earnings.
Even though WDFC has been a solid dividend growth stock, it’s best worth buying on a market pullback.
For traders, shares have been somewhat rangebound over the past year, and are trending toward the higher end of their range. The August $160 puts, last going for about $3.50, could deliver mid-double-digit gains or better if the trend flips in the coming weeks and shares start heading lower.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Metals mining company Teck Resources (TECK) is closing in on 52-week highs following a strong rally. One trader sees a pullback for the company in the months ahead.
That’s based on the January 2024 $42 puts. With 275 days until expiration, 10,013 contracts traded compared to a prior open interest of 440, for a 23-fold rise in volume on the trade. The buyer of the puts paid $3.16 to make the bearish bet.
Teck shares recently traded for just under $49 after hitting a 52-week high of $49.34, so they’d need to drop about $7, or about 16 percent, for the option to move in-the-money.
Although shares are at a 52-week high, they’ve now essentially traded flat over the past year, with a gain of about 2 percent.
Action to take: Operationally, the company is performing well, and shares may be worth a buy here or on a pullback.
Teck trades for less than 10 times forward earnings, and the company just more than tripled its dividend payout for a yield of about 4.1 percent. That yield may drop when commodities cycle out of favor, but that could be a few years away.
For traders, the short-term trend is up, not down. The July $50 calls, last going for about $3.55, offer mid-double-digit returns or better on a continued rally in the months ahead. Longer-dated puts could be a buy once the current rally runs out of steam, but that may take a few more months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Most economic activity is driven by consumer spending. That’s why changes in consumer spending can cause stocks to rise or fall. Some areas can hold up well, particularly those consumer goods or services that offer reasonable quality at a reasonable price.
That’s because a slowing economy will cause consumers to shift to lower-price options rather than stop spending entirely. That may not be good news for upscale brands or services, but for some companies, it may indicate higher share prices ahead.
Darden Restaurants (DRI) fits the bill for this phenomenon. The owner of Olive Garden, Capital Grille, and Bahama Breeze, among others, offers a quality restaurant experience for those looking to dine out without a massive budget.
That may be why shares have been trending higher for nearly a year, and why the stock is still near its all-time high. Plus, shares aren’t overly expensive right now, trading for about 17 times earnings.
Action to take: Darden’s brands are likely to hold up well in a slowing economy, and are reasonably priced as a buy today. Investors may also like shares here thanks to the 3.1 percent dividend, which also has a history of growing.
For traders, the July $155 calls, last going for about $6.70, are near-the-money and can see a mid-double-digit move higher in the coming months on a further rally for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Laura O’Shaughnessy, a director at Acuity Brands Inc (AYI) recently added 632 shares. The buy increased her stake by 43 percent, and came to a total cost of just under $100,000.
The director was also the most recent buyer, with a 575 share pickup last July. Otherwise, there have been two insider sales at the company, one of which came from the exercise of a stock option.
Overall, insiders at the electrical equipment and parts manufacturer own 0.2 percent of shares.
Acuity Brands shares have performed about in-line with the overall stock market in the past year. Earnings have been flat, but shares look attractively valued at less than 12 times forward earnings.
Lighting and electrical equipment are a steady industry. However, a slowdown in the housing market or commercial construction could slow demand for lighting needs, which may explain the lackluster performance in the past year.
Action to take: Shares look reasonably valued here, and are still about 25 percent off their 52-week highs. Shares pay a 0.3 percent dividend, which has room for further growth with earnings over time. Shares could be a worthwhile buy at current or lower prices.
For traders, shares seem to move in waves, and currently they are near the bottom of a wave. The August $200 calls, last going for about $3.00, offer mid-double-digit returns as the next wave plays out in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
E-commerce logistics firm GXO Logistics (GXO) has seen shares move in an uptrend over the past few months. One trader is betting that trend will play out over the next month.
That’s based on the May $55 calls. With 31 days until expiration, 4,528 contracts traded compared to a prior open interest of 108, for a 41-fold rise in volume on the trade. The buyer of the calls paid $1.53 to make the bullish bet.
GXO shares recently traded for about $52, so they’d need to rise by $3, or about 6 percent, in the next month for the option to move in-the-money. That’s still well under the stock’s 52-week high of $66 per share.
Revenues are up 9 percent for the company over the past year, but earnings are down as costs have risen. However, e-commerce and logistics trends have slowed but remain well above their pre-pandemic levels. That points to continued earnings power for GXO.
Action to take: Shares don’t pay a dividend, and are about in-line with the stock market’s average valuation at 22 times forward earnings. But that’s down from 54 times earnings last year. That makes shares a worthwhile buy at current prices or on a market dip.
For traders, the May calls play to the short-term uptrend in shares, which is likely to continue. The option can likely deliver mid-to-high double-digit returns in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Many things in life have a first-mover advantage. However, in investing, the first company to come to the marketplace with a product isn’t always the winner. A company that follows up with a better product or a far lower price point can end up grabbing the most market share.
That’s particularly true in the tech space. Today’s successful tech companies prefer to either buy a company on its way to winning, or wait until they can overtake the early movers.
That makes Amazon’s (AMZN) move into artificial intelligence (AI) so compelling. The company has managed to become a tech conglomerate by moving into other areas in the past, such as web hosting, after learning the lessons provided by others.
The move could also improve the company’s market share in areas such as web hosting, thanks to the ability to integrate AI into its existing product suite.
Action to take: With shares still down a third over the past year, now may be the time to build or add to a stake in shares. And look to add further on any drop under $100, at least for investors with the long-term in mind.
For traders, shares have been gradually moving up since the end of last year. The September $110 calls, last going for about $7.30, offer mid-double-digit gains in the months ahead on a further rally in Amazon shares.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Christopher Hilger, a director at Donaldson Company (DCI), recently added 3,186 shares. The buy increased his holdings by 68 percent, and came to a total cost just under $200,000.
This marks the first insider buy at the company over the past two years. Generally, insiders have been sellers of shares after exercising stock options. There have been a few outright sales a well, including one from the company President for 4,500 shares back in January.
Insiders own 0.4 percent of the specialty machinery and filtration equipment company.
Shares have already rallied 25 percent in the past year. Earnings are up by nearly 20 percent, and shares trade at about 19 times forward earnings, slightly better than the overall S&P 500.
The company’s products are useful for construction, mining, agriculture and aerospace needs, which make them somewhat recession resistant. That’s likely a reason why shares have been trending higher in a weak economy, and why they’re likely to continue to trend higher.
Action to take: shares pay a 1.5 percent dividend here, on top of any further capital gains. Plus, with a market cap under $10 billion, a bigger industrial company may consider the company a takeout target in the future.
For traders, the August $70 calls, last going for about $2.30, could deliver mid-double-digit gains on a further rally in shares in the next four months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Electronics retailer Best Buy (BBY) has been trending down in recent weeks. One trader sees shares continuing lower in the next two months.
That’s based on the June $67.50 puts. With 60 days until expiration, 10,078 contracts traded compared to a prior open interest of 410, for a 25-fold rise in volume on the trade. The buyer of the puts paid $2.30 to make the bearish bet.
Shares recently traded for about $73, so they would need to fall about $6.50, or nearly 10 percent in the next two months for the option to move in-the-money. With a 52-week low of $60.78, it’s possible that the trade moves in-the-money, especially as Best Buy next reports earnings in late May.
Best Buy looks like a reasonable value here, with shares down 22 percent over the past year. The company trades at 11 times earnings, and the recently-raised dividend yields about 5 percent here.
Action to take: With shares in a downtrend, investors should wait for a lower price before buying shares, likely in the high $60 range. That will provide a higher starting dividend yield, and better returns on the upside.
For traders, the short-term trend is down, and the June puts are well positioned for mid-double-digit gains on a continuation of that trend over the coming weeks. Traders may want to consider taking profits before the next earnings report.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
In a bull market, traders can profit by buying companies with an exciting story behind them. Those stocks tend to be runaway winners. But when the market is trading flat or down, the slow-and-steady, boring businesses can be the better winners.
That’s because these companies can be more recession resistant. And they tend not to get as overvalued on the way up. That makes for a solid value play, and often one that pays out a solid source of growing income.
One such boring company is Ferguson (FERG). The U.K.-based industrial manufacturer for plumbing and HVAC products is a slow-and-steady player trading at just 13 times earnings right now.
And shares may soon enter the S&P 500, which could create some buying demand and push shares higher. Add in the recession-resistant power of HVAC and plumbing needs, and it’s clear that the company could be a long-term winner for buyers now.
Action to take: Ferguson has rewarded shareholders with dividend growth, and the current yield is at a solid 3.4 percent. With a payout ratio of about one-third of earnings, the company can reinvest in the business or buy back shares and keep the dividend growth coming in the years ahead.
For traders, the September $145 calls, last trading for about $3.70, offer mid-double-digit returns in the months ahead. Look to take profits on any bounce from an official announcement on the S&P 500 entry for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Totalenergies Se, a major holder of Clearway Energy (CWEN), recently added 71,980 shares. The buy increased the fund’s position by $2.42 million on top of its existing position.
The fund last bought shares in mid-2021. Otherwise, trading has been relatively quiet, with 2 buys from a company director, and a sale from the company President and CEO back in November.
Overall, insiders own about 1.1 percent of the renewable energy utility.
Shares are down about in-line with the overall stock market in the past year. Revenues have declined about 16 percent in the past year, but Clearway has been profitable, with shares going for about 6 times earnings right now.
Action to take: Shares may be under some pressure in a slowing economy, as conventional energy prices drop which makes alternatives look less attractive.
However, there’s a long-term growth trend underway in the use of alternatives, and Clearway stands to benefit. Plus, the utility pays investors a 4.6 percent dividend at current prices. That makes for an attractive long-term buy now.
For traders, shares have started to trend up in recent sessions off of their 52-week low. The August $35 calls, last going for about $0.75, have a relatively high open interest, and could benefit from a further rally in the coming weeks. The option can likely deliver mid-double-digit returns on a move higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Airline carrier Delta Air Lines (DAL) has pulled back in recent weeks, as fears of a slowing economy may soften demand for air travel. One trader sees a further downside in the weeks ahead.
That’s based on the May $29 puts. With 35 days until expiration, 5,772 contracts traded compared to a prior open interest of 114, for a 51-fold rise in volume on the trade. The buyer of the puts paid $0.38 to make the bearish bet.
Shares recently traded just under $34, so they would need to fall about $5, or about 16 percent, for the option to move in-the-money. While Delta has a 52-week low of $27.20, it’s still a steep move for a trade with a month to play out.
The airline is still benefiting from the recovery in travel and tourism demand. Revenues jumped 42 percent over the past year.
However, profit margins have been low, and a weaker economy could mean a weaker share price going forward.
Action to take: Investors interested in the airline space may want to wait for a lower price, around the $30 range, before buying.
That will ensure investors aren’t overpaying, and can take advantage of today’s volatile market. At present, Delta does not pay a dividend.
For traders, the May puts can potentially deliver mid-double-digit returns, but look for a quick profit.
Traders may want to look at the June $30 puts. Going for about $0.80, they have a bit more time for a downswing in Delta shares to play out.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
When an industry starts out, there may be dozens, if not hundreds of competitors. But, much like the automotive industry, eventually the space will consolidate into a few big players.
Sometimes, that consolidation will occur through acquisitions. Other times, an economic crisis or two will also help to shake out weaker competitors.
And consumer tastes and preferences may make it easy for a big player to stay big, even if newer companies try and grab market share.
The shakeout in the cryptocurrency broker market over the past year has seen several companies go bankrupt. Others have been acquired by bigger players.
One company is starting to look like the long-term winner for the space: Coinbase (COIN).
The crypto broker is moving higher as Bitcoin and other cryptos have rallied hard so far this year. And it may be a big beneficiary from the latest upgrade to the Ethereum blockchain.
Action to take: Things look ugly for the company. Revenues slid 76 percent last year thanks to the crypto winter. But this year is looking up already, thanks to rising crypto prices and reduced competition.
This could be a long-term buy, especially with Bitcoin’s next halving now about a year away.
For traders, shares look likely to keep trending up. The June $90 calls, last going for about $5.65, can deliver high-double-digit gains in the months ahead if the current rally continues at the rate it’s going.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Jeffrey Gould, President and CEO at BRT Apartments Corp (BRT), recently added 4,858 shares. The buy increased his holdings by less than 1 percent, and came to a total cost of $90,721.
He was joined by a senior vice president who bought the same quantity on the same day. Over the past year, members of the Gould family have been steady and consistent buyers, with one insider sale from the company COO this year.
Overall, company insiders own 20.2 percent of shares.
The multifamily property developer is down 16 percent over the past year, as investors have shied away from real estate amid rising interest rates.
However, BRT shares trade at 7 times the most recent earnings, and BRT has a 68 percent profit margin, thanks to strong demand for multifamily housing units amid rising mortgage rates.
Action to take: Investors may like shares here, near the stock’s 52-week low. As a REIT, earnings are paid out as dividends, and shares yield about 5.3 percent here. Add in the capital return potential, and investors could fare well at current prices.
For traders, shares have formed a strong base over the past few weeks, and look set for a pop higher. The July $20 calls, last going for about $0.90, offer mid-double-digit returns in the coming months before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Construction machinery manufacturer Caterpillar (CAT) has traded flat over the past year, following a sizeable drop and rally over the past few months. One trader sees shares moving higher into the summer.
That’s based on the August $260 calls. With 127 days until expiration, 35,041 contracts traded compared to a prior open interest of 560, for a 63-fold rise in volume on the trade. The buyer of the calls paid $3.83 to make the bullish bet.
Share recently went for about $220, so the stock would need to rise $40, or about 18 percent, for the option to move in-the-money. That would put Caterpillar in the vicinity of its 52-week high of $266.04.
Such a move is possible given the current long-term rally in shares. The industry leader is reasonably valued at 13 times forward earnings, and grew revenues by 20 percent over the last year.
Action to take: Investors may like shares as a long-term buy here. Caterpillar is a dividend growth stock, with a current yield of about 2.2 percent right now.
Traders may like the August calls, as they play well to a multi-month move higher for shares. The option can likely deliver mid-double-digit returns before expiration. Traders may want to look to take profits following a jump higher. Such a move could occur around the end of April when Caterpillar next reports earnings.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
When a growth trend is underway, nearly every company that plays to that trend will rally. At least, at first. However, weaker companies will get squeezed out by competition, leading to only a few big players.
Of those players, a few will win based on quality. Others will cater to a lower-end market. When a sector is still new, chances are the higher-end product will perform better than the lower-end one until a few iterations of the technology are worked out.
Right now, the market’s current interest in artificial intelligence (AI) is leading to a number of companies moving higher. But those that already work in the space, and related areas such as deep learning, can be the winners here, especially if they grab big corporate or government contracts.
Palantir Technologies (PLTR)’s announcement that it’s adding AI to its data analytics software is a sign that the company is moving to grab market share in this space.
The company is nearing profitability, and an AI rollout could lead to a big jump higher in revenues in the years ahead.
Action to take: Shares have gone from 72 times forward earnings last year to 38 times this year. Shares have been knocked down by over one-third, but rising revenues and a cash-rich balance sheet will likely allow Palantir to make deep inroads into the AI space. That makes shares a worthwhile long-term buy here.
For traders, shares have been somewhat rangebound for nearly a year. The July $10 calls, last going for about $0.52, can likely deliver mid-to-high double-digit gains on a move to the higher end of that range.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Edgar Smith, a director at Business First Bancshares (BFST), recently reported the purchase of 17,109 shares. The buy increased his holdings by 1 percent, and came to a total cost of $400,220.
He was joined by another director who bought 3,664 shares, paying just over $80,100. Other company directors have been buyers of shares over the past two years, with just one insider sale from a director over the same time period.
Overall, insiders at the regional bank own about 6.3 percent of shares.
The bank has slid nearly 28 percent in the past year, with the recent banking crisis taking a toll on the share price. However, Business First has grown both revenues and earnings by mid-double-digits in the past year, and the bank now trades at about a 20 percent discount to its book value.
Action to take: Smaller banks trading at a discount to their book tend to be buyout targets. Investors may want to use any uncertainty in the banking sector over the next few months to buy shares of such banks. Business First also pays out a 2.9 percent dividend at today’s prices.
For traders, the July $17.50 calls, last going for about $0.80, offer mid-to-high double-digit returns on a bounce higher in BFST shares in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Precious metals explorer and producer Silvercorp Metals (SVM) has rallied in recent weeks as gold and silver have jumped higher. One trader sees that trend continuing in the months ahead.
That’s based on the October $7.50 calls. With 191 days until expiration, 20,109 contracts traded compared to a prior open interest of 127, for a staggering 158-fold jump in volume on the trade. The buyer of the calls paid $0.18 to make the bullish bet.
Shares recently traded for just under $4, close to the 52-week high of $4.05, so they’d need to rally another $3.50, or about 88 percent, for the option to move in-the-money.
The metals company is performing well. Revenues dipped 1 percent in the past year, but earnings more than doubled with a 135 percent gain. And shares trade at about 16 times forward earnings.
Action to take: Investors who expect a further rally in precious metals will likely see a bigger percentage win with silver than with gold. And with mining stocks versus the metals themselves. That makes Silvercorp a worthwhile play for such a trend, and shares even yield 0.6 percent here.
For traders, the October $7.50 calls are aggressive, but inexpensive enough to deliver triple-digit gains even on a modest rally higher for precious metals from here. However, if the current rally stalls out, the position will likely be a losing one. So traders should look to take quick profits well before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Some market sectors are cyclical. Others tend to be slow and steady. The financial sector has characteristics of both. It tends to be slow and steady most of the time, but fears hitting the financial sector can lead to big losses quickly.
Investors who can sort through real dangers and find undervalued companies capable of growing their market share can win when the sector shifts back to slow and steady.
One niche of the financial service space is asset management. This space can fare well during trouble in the banking sector. In the space, Morgan Stanley (MS) has fared well, having pivoted away from investment banking and trading.
The asset manager has traded flat over the last year, and large acquisitions have weighed on earnings, while revenues have dropped as the banking sector has slowed amid rising interest rates. Yet shares trade at just 12 times earnings.
Action to take: Investors may like shares at current prices. The stock pays 4.7 percent, and Morgan Stanley will likely gain market share as investors move towards more established banking firms. Plus, shares have been hit in the short-term by banking fears.
For traders, the September $90 calls, last going for about $4.10, offer mid-to-high double-digit returns in the coming months as shares move past the banking sector.
Disclosure: The author of this article has no position in the company mentioned here, and does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Amy Lane, a director at Fedex Corp (FDX), recently bought 830 shares. The buy came to a total cost of $193,289, and increased the director’s stake by 54 percent.
This is the first insider buy at the company since January, when the same director made a 280 share buy. Generally, insiders have been sellers, following the exercise of stock options. That includes directors and executives, including the company CEO.
Overall, insiders own 7.9 percent of the company.
Fedex shares have climbed 14 percent over the past year, shaking off a loss when fears of an economic slowdown first hit the shipping and logistics company.
Even with the gain, earnings have slid 30 percent in the past year, and revenues are down 6 percent.
Action to take: The company is a global leader for shipping and logistics, and a worthwhile buy at the right price.
Shares are currently going for about 13 times forward earnings, a sizeable discount to the overall stock market, and a still a buy even after their recent performance. Plus, Fedex yields about 2.2 percent here.
For traders, shares have been trending up since September, and the trend looks set to continue. The July $250 calls, last going for about $8.00, offer mid-double-digit returns on a continued rally in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, and does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Resort and casino operator Wynn Resorts (WNN) has rallied 53 percent in the past year. One trader sees a reversal playing out at some point by 2025.
That’s based on the January 2025 $47.50 puts. With 646 days until expiration, 3,000 contracts traded compared to a prior open interest of 166, for an 18-fold rise in volume on the trade. The buyer of the puts paid $2.46 to make the bearish bet.
Shares recently traded for just over $109, so the stock would need to be cut in half for the option to move in-the-money. And shares would need to move below their 52-week low of $50.20 per share.
Despite the strong move higher in shares, Wynn Resorts hasn’t earned a profit over the past year, and revenues have dropped by 4 percent. The casino space is highly cyclical, and a slowing economy could weigh on shares moving forward.
Action to take: With shares trading at 73 times forward earnings, the stock is overpriced right now. Interested investors should wait for a drop lower.
For traders, the puts are an inexpensive and long-term play. They could perform well on a slowing economy and any weakness in the casino and travel and tourism space between now and 2025. Traders can likely see high-double-digit gains on a big drop in casino names before the option expires.
Disclosure: The author of this article has no position in the company mentioned here, and does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Markets will likely remain uncertain for some time. That means daily swings will occur, punctuated with moments of extreme fear or greed. Traders can take advantage of the swings in both directions. And investors can use drops to buy great companies at a fair price.
A great company, such as one with a strong brand and a history of consistent dividend growth, will rarely trade at a great price.
But they’re also usually overpriced, and it takes market fear to knock it down to a fair one.
A combination of a falling share price amid a slight rise in revenues has taken Constellation Brands (STZ) into a fair price range of under 20 times forward earnings.
The winery and distillery giant has a number of well-known brands under its umbrella, and business in the spirits sector tends to hold up well during economic uncertainty. It’s no surprise that the company just beat on its latest earnings report, and hiked its quarterly dividend payment.
Action to take: Shares don’t have a massive yield with a 1.5 percent starting payout. However, dividend growth over time tends to lead to a rising share price over time, which may make for a worthwhile long-term buy at current prices.
For traders, shares have been trending higher in recent weeks, but the trading has been choppy. The July $235 calls, last going for about $6.90, offer mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, and does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Kevin Weil, President of Product and Business at Planet Labs (PL), recently bought 274,000 shares. The buy increased his stake by 16 percent, and came to a total cost just over $997,000.
This marks the first insider activity in nearly a year and a half. The company’s CEO bought 19,230 shares in December 2021, as did Weil and another director. There have been no insider sales since the company went public.
Overall, insiders own 2.9 percent of the company.
The early-stage satellite data company has seen shares slide by one-third over the past year.
While the company grew revenues by nearly 43 percent, Planet Labs operates at a steep loss right now, a trend likely to continue for some time as the firm expands operations.
Satellites are expensive to design and get into orbit. But Planet Labs is able to monetize the data collected with long-term service contracts that could make it a highly profitable company in time.
Action to take: Investors may like shares as a speculative play here. The company is well positioned in its niche, and has enough cash on the balance sheet to outlast competitors and move higher as PL can move past its losses and towards profitability.
For traders, the July $5 calls, last going for about $0.30, offer mid-double-digit returns or better in the months ahead on a move higher for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Offshore oil and gas drilling supplier Transocean (RIG) is up nearly 50 percent over the past year. However, one trader sees shares declining in the next 15 months.
That’s based on the July 2024 $7.00 puts. With 466 days until expiration, 5,326 contracts traded compared to a prior open interest of 133, for a 40-fold rise in volume on the trade. The buyer of the puts paid $2.05 to make the bearish bet.
Transocean shares recently traded just under $6.50, leaving this option already slightly in-the-money. At its 52-week low, shares traded at just $2.32. At that price, the $7 puts would be worth nearly $4.70.
While shares should generally move with the price of oil, the costs of offshore oil projects requires high sustained oil prices for Transocean shares to move higher. That may not happen, even with the recent announcement of production cuts from OPEC countries.
Action to take: Investors should avoid shares. Given the volatility in the energy space, it may be better to focus on a number of income-producing energy stocks instead of Transocean.
For traders, the July 2024 puts are an inexpensive bet on a big drop in oil prices in the next 15 months. That could be a worthwhile bet, and one that could play out in the span of a few months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Wall Street is fond of saying that investors shouldn’t look to catch a falling knife. However, once a stock has had a big drop, fears of a further decline tend to leave investors on the sidelines.
That can mean missing out on the early part of a rally off extreme lows, which can be a big part of a total bull rally. That means it’s often ideal to buy when there’s still some lingering fear.
Right now, the regional banks are teetering. However, it’s been a few weeks since any bank failures. And it’s clear that big banks are willing to store excess deposits with smaller institutions to avoid any collapse there.
That could make now one of the better times to buy small bank stocks, before the all-clear is sounded.
With that in mind, Western Alliance Bancorp (WAL) looks interesting now. Shares recently took a drop as the bank updated on its total deposits. And given the selloff in shares over the past month, the stock now trades at less than 70 percent of its book value, and at less than 9 times forward earnings.
Action to take: Shares are a speculative buy here. WAL yields 4.1 percent at current prices, although it may lower its dividend to improve its cash situation over the next few quarters.
For traders, the June $35 calls, last going for about $3.05, offer a quick mid-double-digit return in the coming months on any short-term bounce in shares from here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Blackstone Holdings III LP, a major holder at Cheniere Energy Partners LP (CQP), recently added 96,470 shares to their holdings. The buy increased the fund’s position by about 1 percent, and came to a total cost just over $4.5 million.
The fund later added another 27,706 shares, at a cost of just over $1.3 million. The fund has been a notable buyer of shares over the past two years. Otherwise, one director made a minor sale last year.
Overall, insiders own 49.6 percent of shares, and institutions own another 26 percent.
The liquefied natural gas infrastructure company is down about 12 percent over the past year, underperforming the overall stock market. However, a strong year for energy prices led to a 395 percent jump in earnings, and a 45 percent rise in revenues.
That’s taken the partnership to about 9 times forward earnings. And with the latest OPEC production cuts, chances are the high profits can continue.
Action to take: As a partnership, shares are designed to pay out a high yield, making this a better stock to own than to trade. At present, CQP pays out a 9 percent yield.
For traders, shares are still near a multi-month low, but may have started a new run higher. The September $50 calls, last going for about $2.20, offer mid-to-high double-digit returns on a rally higher in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Gold mining and exploration company Gold Fields Limited (GFI) has soared 40 percent in recent weeks as gold prices have once again topped $2,000 per ounce. One trader sees a further rally ahead.
That’s based on the January 2024 $25 calls. With 287 days until expiration, 12,751 contracts traded compared to a prior open interest of 130, for a massive 98-fold jump in volume on the trade. The buyer of the calls paid $0.58.
Shares recently traded for about $14.50. Shares would need to rally another 72 percent this year for the option to move in-the-money. GFI is still under its 52-week high just under $17, set nearly a year ago.
Gold mining stocks tend to fare well when the price of gold is rising. That’s because mining companies have relatively fixed short-term costs, so higher gold prices translate into higher profits.
Action to take: Inflation remains high, and it’s likely that interest rates can’t move much higher without hurting the banking sector some more. That’s a recipe for higher inflation, which tends to keep gold prices strong. That makes gold stocks a potentially worthwhile buy today. Gold Fields also pays a 3.1 percent dividend right now.
For traders, the January 2024 calls are an inexpensive bet on gold prices moving higher this year. If the trade doesn’t play out, the downside is limited. It’s likely that the options could deliver mid-double-digit gains on a further rally for the metal.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
There’s a common strategy for a company to take a short position in a company, then issue a research report explaining why. Typically, such reports will take company statements and claim that they’re embellished in some fashion.
Often, these reports aren’t true, or have an element of truth to them that are grossly exaggerated, even if allowed under accounting standards. But in the short term, shares can get knocked down, allowing the short seller to profit quickly.
The most recent short seller attack has come for C3.ai (AI). The artificial intelligence company has now shed 30 percent in a matter of days, although the stock has still more than doubled this year.
The short report suggests that C3.ai has been overstating its revenues and margins.
While shares may have some short-term downside thanks to this report, investors who feel that they’ve missed out on the AI trend now have another crack at buying into the AI story without paying all-time-high prices.
Action to take: Investors interested in AI may want to use a drop to the low $20 range to buy shares. C3.ai is still in its early stages, and isn’t profitable. But the company is valued under $3 billion, and likely has substantial upside for long-term investors who can hold through the volatility.
For traders, the July $30 calls, last going for about $3.35, offer mid-to-high double-digit returns on a rebound in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Rosalind Brewer, CEO at Walgreens Boots Alliance (WBA), recently bought 10,000 shares. The buy increased her stake by 3 percent, and came to a total cost of $339,510.
This marks the first insider buy at the company in the past two years. The company’s Chief Medical Officer exercised stock options and sold shares late last year, as did a director. The sales slightly exceed the amount of this recent CEO buy.
Overall, insiders own 17.2 percent of shares.
The drugstore chain has seen shares drop by nearly 20 percent in the past year. Revenues rose by just 3 percent, and earnings slid by 20 percent.
Despite the recent drop in shares, the stock is reasonably valued. At current prices, shares are going for less than 8 times forward earnings. And Walgreens Boots Alliance trades at just 0.2 times its price to sales.
Action to take: Shares have started to trend higher in recent sessions, which may be the start of a new bull market. Plus, shares yield about 5.5 percent at current prices. The dividend can likely move higher over time, provided the company returns to profitability soon.
For traders, the July $40 calls, last going for about $0.55, could deliver high-double-digit returns in the coming weeks on a further rally in Walgreens shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Search engine giant Google (GOOGL) has been trending higher in the past few weeks following a massive decline last year. One trader sees a further move higher in the weeks ahead.
That’s based on the April 28 $114 calls. With 21 days until expiration, 5,362 contracts traded compared to a prior open interest of 124, for a 43-fold rise in volume on the trade. The buyer of the calls paid $1.33 to make the bullish bet.
Shares recently traded for about $105, so they’d need to rise about $10, or about 9 percent, for the option to move in-the-money. That’s a steep move higher for shares, but Google does next report earnings the last week of April.
Google is down 25 percent over the past year, and earnings have slid by 34 percent. However, the company still leads in the online search engine space, and other services that makes for a solid market rebound play.
Action to take: Long-term investors may want to use a pullback under $100 to buy shares and can be patient in doing so.
For traders, the April calls could see mid-double-digit gains in the coming weeks, but the returns will likely come down to how the shares trade at following earnings. Traders who want more certainty about the trade may want to buy calls farther out following earnings later this month.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Many companies hire as they need to when growing like gangbusters. But when things go down, it’s a time to assess the size of a company and its needs, no matter what sector it’s in.
For some companies, the worst bloat can come from its executive offices. The growth of middle management can cause a big payroll expense to build up, and take away capital from lower-level workers that make a company’s success possible.
That’s why a number of big-name, labor-intensive companies have announced cuts in the past few months. One of the latest, McDonald’s (MCD), even temporarily closed corporate offices so that it could communicate decisions remotely.
These are the kinds of layoffs that can save big on expenses, and they won’t impact the fast-food giant at the store level. Shares hit an all-time high on the news. While a bit pricey at 25 times earnings, the company has held up well in a slowing economy, and even gained 13 percent in the past year.
Action to take: Investors may want to buy shares on any pullback from their all-time highs and build a long-term position in the industry leader. At present, shares yield about 2.2 percent, but on a selloff the payout can be much higher.
For traders, shares are likely to continue to trend higher. The June $295 calls, last going for about $3.95, offer mid-double-digit returns in the coming months.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Lawrence Cheng, a director at GameStop Corp. (GME), recently bought 5,000 shares. The buy increased his holdings by 13 percent, and came to a total cost of $113,900.
The buy came a year after another director bought 1,500 shares, paying just under $195,000. Over the past two years, insider buys have far exceeded insider sales, including a 100,000 share buy from the company’s chairman just over a year ago.
Overall, insiders own 15.5 percent of shares.
The video game retailer has slid by about 46 percent in the past year, but shares are still significantly higher on a split-adjusted basis from its short squeeze in 2021.
GameStop just reported a profitable quarter, and the company issued shares at a far higher price to clear debt off its balance sheet over a year ago.
Action to take: Shares look oversold over the long term, and short interest has increased in recent months, which could lead to another squeeze higher at some point, especially as the company’s operations have improved. At the moment, the stock does not pay a dividend.
For traders, the July $30 calls, last going for about $1.70, offer mid-double-digit gains on a pop higher in shares in the coming months. Traders should look for a quick profit, as shares are volatile in either direction.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Major oil and gas producer ConocoPhillips (COP) jumped over 9 percent on Monday as oil prices rallied on news of OPEC cuts. One trader sees shares continuing higher in the coming weeks.
That’s based on the April 28 $107 calls. With 23 days until expiration, 11,135 contracts traded compared to a prior open interest of 109, for a 102-fold jump in volume on the trade. The buyer of the calls paid $4.55 to make the bullish bet.
Shares last went for just over $108, meaning the option is already just over $1.00 in-the-money. Shares are still well off their 52-week high of $138.49.
While shares are now flat over the past year, higher oil prices in general have been good for the company. Revenues and earnings both grew by about 24 percent, and profit margins hit 23 percent, a high level for a commodity-producing company.
Action to take: With shares trading just over 8 times forward earnings, there’s likely more upside ahead for shares in the months ahead. Conoco currently yields about 2.3 percent.
For traders, the April calls have just a few weeks to play out, but traders can likely nab mid-double-digit gains from further upside in the stock in the coming days as a quick trade playing to the current trend higher in oil.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The end of the first quarter of the year saw the Nasdaq rebound more than 20 percent off of its lows from last year. Technically, that means the index is in a new bull market.
And that’s no surprise when looking at some of last year’s hardest-hit tech stocks. A few have managed to nearly double off their lows. And they could move higher, as the flood of money hasn’t hit this space yet.
One company that’s benefited from this trend is streaming giant Netflix (NFLX). Shares are nearly double off of last year’s lows. Plus, the company’s bond rating was just upgraded to investment grade. That’s a sign that the company is doing well operationally – not just seeing its stock price move higher.
While earnings still remain off, Netflix’s focus on improving customer retention in the post-pandemic era are faring well so far. And profit margins have improved to 14 percent in the most recent year, as the valuation has also trended down to 28 times earnings.
Action to take: Shares likely have some more upside ahead, particularly as smaller investors move back into the stock as it continues higher. At present, shares don’t pay a dividend.
For traders, the September $425 calls, last going for about $15.75, offer mid-double-digit returns in the months ahead on a continued rally in Netflix shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Earl Jackson, a director at Main Street Capital Corp (MAIN), recently added 3,000 shares. The buy increased his holdings by 5 percent, and came to a total cost of $117,600.
The director was also the last buyer of shares nearly a year ago, again picking up 3,000 shares. Over the past two years, there have been more insider sales than purchases, including a 100,010 sale by the company CEO in early 2022.
Overall, insiders own 4.4 percent of the company.
The business development company (BDC) provides funding for small businesses, typically in a mix of equity ownership or fixed income bonds or notes.
Main Street leans more towards fixed-income investments, and has fared well with rising interest rates. Revenues are up nearly 40 percent over the past year, and the company has a 64 percent profit margin.
Action to take: As a BDC, Main Street is set up to pay out high levels of income. At present, shares yield about 6.9 percent, with the dividend payout recently increased from $2.60 annually to $2.70 annually. Those seeking current income may want to buy shares now, and use any market fears to acquire more at lower prices.
For traders, shares were slightly hit with last month’s banking sector fears, but are in a long-term uptrend. The June $40 calls, last going for about $1.40, offer mid-double-digit returns in the months ahead on a further rally for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Regional bank Valley National Bancorp (VLY) has seen shares slide 25 percent in the past few weeks amid fears in the banking sector. One trader sees further downside ahead for the stock.
That’s based on the September $5 puts. With 163 days until expiration, 9,954 contracts traded compared to a prior open interest of 265, for a 38-fold jump in volume on the trade. The buyer of the puts paid $0.48 to make the bearish bet.
Shares recently traded just over $9, so they would need to lose over $4, or nearly half their value, for the option to move in-the-money. It would also mean breaking under the recent 52-week low of $8.80.
Valley National now trades at a 25 percent discount to its book value, and shares are going for about 7 times forward earnings. If the banking crisis is over, the stock looks undervalued at current prices.
Action to take: Investors may want to make a small bet here. The drop in price has pushed the bank’s dividend up to 4.7 percent.
For traders, the short-term trend is down. Buying the September puts and flipping them for a quick mid-double-digit profit may be a good short-term bet. And it could be combined with buying shares following a drop to capture a longer-term rebound.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Some companies tend to be growth plays. Others can be steady. A few are more cyclical, having obvious booms and busts. Tech companies that fall out of favor can become cyclical companies, provided they manage to find new products to invest in to get back on the growth track, even if it’s just for a few years.
Playing this cycle can lead to bigger returns than buying and holding, particularly if buying near the start of a new cycle higher.
Chipmakers tend to be long-term growth plays with deep cuts when the cycle isn’t in boom mode. But companies that adapt can perform well.
Intel (INTC) may finally be back on the boom cycle. The company reported that its next-generation data center semiconductor chips may be ready earlier than expected. That news has given shares a shot in the arm, with March 2023 being their best-performing month since 2001.
Shares are still down by a third over the past year. Revenues are down, as is profitability. But opening up its new line earlier could bring in more revenues and profits sooner.
Action to take: Investors may like shares here as more of a growth play. Intel shares took a dive when it cut its dividend earlier this year, but shares still yield a respectable 1.6 percent.
For traders, the June $35 calls, last going for about $1.17, offer mid-double-digit returns in the span of just a few months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Paul Donahue, CEO at Genuine Parts Company (GPC), recently bought 1,600 shares. The buy increased his holdings by 1 percent, and came to a total cost of $249,728.
This is the first buy at the company in over a year. Last year, one director bought over 1,600 shares, paying just over $200,000, on two separate occasions. Over the past two years, there has been only one insider sale.
All told, insiders at the auto parts retailer own 0.3 percent of shares.
A slowing market for new car sales has led to longer road life for existing cars, which has fared well for GPC. Shares are up nearly 30 percent over the past year, even with earnings dipping by nearly 2 percent.
Shares trade at about 19 times forward earnings, and at about 1.1 times their sales, indicating that there could be more upside potential if conditions continue to favor the auto parts industry.
Action to take: Shares yield about 2.4 percent here, slightly better than the S&P 500’s return. The stock has pulled back in the past few months, but appears to be trending higher once again.
For traders, the August $180 calls, last going for about $4.35, offer mid-double-digit gains on a rebound in shares in the coming months, which would likely coincide with the start of the summer driving season.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Precious metals producer Alamos Gold (AGI) has fared well over the past year, with a 44 percent gain. One trader sees a further rally in the months ahead.
That’s based on the June $17.50 calls. With 74 days until expiration, 10,512 contracts traded compared to a prior open interest of 159, for a 66-fold rise in volume on the trade. The buyer of the calls paid $0.10 to make the bullish bet.
Shares recently traded for just under $12.50, so they would need to rise over $5, or nearly 43 percent, for the option to move in-the-money.
Such a move would likely occur if gold prices solidly broke over $2,000 per ounce. The metal has neared that price in recent weeks as inflation appears likely to stay higher for longer, and with the prospect of interest rates peaking in the near future.
Alamos has grown revenues 14 percent and earnings by nearly 38 percent over the past year, and a continued move higher for gold prices would likely see those numbers move even higher.
Action to take: Investors may like shares here as a way to play gold prices higher, as gold mining stocks tend to perform better than the metal itself during a rally. Alamos also yields 0.8 percent right now.
For traders, the June $17.50 calls are inexpensive, and could potentially deliver triple-digit returns. Coming from a low price, there’s also limited downside. That makes this an inexpensive bet on gold prices moving higher in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Ultimately, companies exist to provide a product or service that satisfy the needs of their customers. Sometimes, that need is simply to find a way to do more with the same… or less.
That’s why companies that drive innovations can be big winners over time. Customers flock towards services that can provide cost savings. And that can translate into big profits for the companies that are providing that innovation. Following where the investments in money-saving ideas go can lead to those profits.
While some companies may start a new initiative, chances are a big company will look to increase its earnings power through acquisitions or strategic investments.
That’s the case with Honeywell (HON), which has bought a stake in Redaptive. Redaptive offers energy-as-a-service technologies that can improve energy efficiency and save customers money. It’s the perfect way to build on Honeywell’s existing place in the industrial conglomerate space.
Action to take: Shares are reasonable valued at about 20 times earnings, down from 27 times last year. Honeywell pays shareholders a growing dividend, with a current yield near 2.2 percent. Given current market conditions, buy a small stake now and use any further downside to add to that position.
For traders, shares have been trending down in recent weeks but now look oversold. The June $200 calls, last going for about $3.50, offer mid-double-digit returns in the weeks ahead on a bounce higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Ron Coughlin, CEO at Petco Health & Wellness Company (WOOF), recently bought 61,040 shares. The buy increased his stake by 11 percent, and came to a total purchase price of $504,800.
This marks the first insider buy in over 14 months. Insiders have generally been buyers of shares over the past two years, although largely between 2021 and January 2022. There have been two small sales by one insider over the past year.
Overall, company insiders own 65.1 percent of shares.
The pet retailer and pet healthcare company has been a poor performer in the past year, with shares down 57 percent. That’s an extreme move, given that earnings have increased by 12 percent and revenues are up by 4 percent.
That’s taken shares from 38 times earnings last year to just under 14 times forward earnings, a reasonable valuation. Plus, the company’s expansion into healthcare services plays well into increased spending on pets and pet services in the economy in general.
Action to take: Shares look reasonably attractive for long-term investors here. The stock doesn’t pay a dividend, so investors may want to buy a small stake now and use any market dip to add to that position.
For traders, shares have been trending down over the past few months but look oversold. If that’s the case, the June $9 calls, last going for about $0.80, could deliver mid-to-high double-digit gains in the weeks ahead on a move higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Insurance giant MetLife (MET) is down 22 percent over the past year, lagging the S&P 500. One trader sees the company continuing to slide even lower.
That’s based on the September $42.50 puts. With 168 days until expiration, 3,004 contracts traded compared to a prior open interest of 109, for a 28-fold rise in volume on the trade. The buyer of the puts paid $1.18 to make the downside bet.
With shares trading at about $56.50, the stock is still within 10 percent of its 52-week low of $52.83. A drop to $42.50 would mean breaking to a new low.
That’s certainly possible. Insurance companies rely heavily on investments in safe assets such as bonds. But the valuation of bonds has been hit hard in the past year as interest rates have risen.
The drop in shares, even with an 11 percent rise in earnings last year, has taken the stock to less than 7 times forward earnings.
Action to take: Long-term investors may be interested in the company given its current valuation. However, it would be prudent to buy part of a position now to take advantage of any further market fears in the coming months. At present, shares yield 3.6 percent.
For traders, shares just dropped to their 52-week lows. Barring any further pain in the financial markets, shares should trade higher.
But the puts are an inexpensive form of, well, insurance against a further drop for financial stocks. That makes them a reasonable hedge trade now, with high-double-digit potential or better in a panic.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The market drop that started over a year ago has morphed into fears into specific sectors, such as banking. But other industries have likewise dropped to the point where investors can buy $1.00 in assets for less than $1.00.
One measure of a company’s assets is its book value, or the value of its assets per share. Investors may be able to buy up bank shares for far less than book value right now – but that book may include non-performing loans.
In other sectors, the story is different. Media companies have been hit by a slowing economy, which tends to mean fewer advertisers and lower advertising rates. However, some of these companies trade at a fraction of their book value.
For example, Paramount Global (PARA), now trades just under 0.6 times its book value, reflecting a deep discount on its intellectual properties. That bargain likely won’t last.
The media giant has seen shares nearly cut in half over the past year. And while growth has slowed, the company is still creating new media content that can be monetized in time.
Action to take: Investors may like shares here for their upside potential to book value or higher. Plus, Paramount yields 4.6 percent at current prices, a high cash return while waiting.
For traders, shares bottomed out back in December and have been moving higher in choppy trading. The September $25 calls, last going for about $1.70, offer mid-to-high double-digit returns on a continued move higher.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Timothy McGuire, a director at Dollar General (DG), recently bought 3,550 shares. The buy increased his holdings by 47 percent, and came to a total cost just over $717,000.
This marks the first insider buy at the retail chain in over two years. Company insiders have been sellers of shares otherwise, nearly entirely after the exercise of stock options. That includes the company CEO and CFO, among others.
Overall, Dollar General insiders own about 0.5 percent of shares.
The retailer is down about 10 percent in the past year, slightly outperforming the overall stock market. Earnings rose by 10 percent, and revenues increased by 18 percent.
Many retailers have been under pressure due to higher costs, as shown in this mismatch, but Dollar General’s focus on low-priced items could pay off in a slowing economy and a rising price environment.
Action to take: Shares are reasonably valued at about 18 times forward earnings. Those earnings could increase if the company sees a gain in market share. In the meantime, the company yields about 1.2 percent, and has a history of dividend growth over time.
For traders, shares have been trending down the past few months, but have turned higher in recent sessions. The June $230 calls, last going or about $2.80, look like a reasonable way to play the current move higher playing out in the weeks ahead. Look for mid-double-digit gains.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Chinese tech giant Alibaba (BABA) soared on Tuesday, amid news that the company would break into six separate companies. One trader sees further upside ahead as those plans move forward.
That’s based on the August $125 calls. With 140 days until expiration, 9,704 contracts traded compared to a prior open interest of 262, for a 37-fold rise in volume on the trade. The buyer of the calls paid $4.75 to get in.
Shares recently traded for about $99, so the stock would need to rally another 25 percent for the options to move in-the-money. That’s also right at the stock’s current 52-week high of $125.84.
Even with a 15 percent jump on the breakup news, shares are still down about 15 percent over the past year. Revenues have been flat, but earnings grew by nearly 70 percent.
Action to take: It’s possible that the company is worth more than the current sum of its parts. It’s also likely that some companies may be worth less trading on their own.
Given the valuation here at about 9 times forward earnings, there’s still upside either way, which makes shares a worthwhile speculation here.
For traders, the August calls may see further upside in the days ahead, but if the breakup process is going to take time, the pop in shares may quiet back down. Look for a quick, mid-double-digit profit, rather than holding the calls until expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
During a market pullback, investors tend to gravitate towards well-known companies with strong brands. Many of those companies, in turn, do what they do thanks to a strong network of suppliers. That can include anything from providing raw commodities to nearly-finished goods.
Since these companies aren’t as well known, they tend to sell off during a market downturn, and then can benefit proportionately from the market rebound. So it’s no surprise that some analysts may be targeting them for big returns now.
One supplier seeing an analyst upgrade is glassmaker Corning (GLW). The company’s specialty products are particularly useful for the production of smartphones, which continue to see strong demand from replacements and upgrades by users.
Shares are down 13 percent, in-line with the S&P 500 over the past year. Yet the company is inexpensive at 15 times earnings, which stand to improve with the economy in the months and years ahead.
Action to take: Investors may like shares at current prices or on a pullback. Shares yield 3.4 percent at current prices, and the dividend has been increased over time.
For traders, shares have gotten oversold in the short term, and look set for a quick move higher. The June $36 calls, last going for about $0.80, offer mid-double-digit returns or better on an oversold bounce in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Roland Burns, CFO at Comstock Resources (CRK), recently bought 20,000 shares. The buy increased his holdings by 2 percent, and came to a total cost just under $199,000.
The buy comes about a week after the company’s VP of Financial Reporting bought 5,000 shares, paying $50,400. And Comstock’s VP of Operations bought 20,000 shares for $201,000. That’s on top of other insider buys going back to last August. There have been no insider sales in the past year.
Overall, insiders own 55 percent of the oil and gas exploration company.
Shares have slid 18 percent over the past year, as oil has come off of last year’s highs. However, Comstock grew earnings and revenues by over 40 percent, and the company sports a 31 percent profit margin, on the higher end of the commodity space.
That’s moved shares to about 5 times forward earnings.
Action to take: Investors may like shares here. Comstock pays a dividend, which yields about 5 percent at current prices, although the payout may be variable depending on energy prices.
For traders, shares have been trending down in recent months, but are oversold and look likely to pop higher.
The June $12 puts, last going for about $0.75, offer mid-double-digit returns in the coming months on such a pop higher for Comstock shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Server and computer company International Business Machines (IBM) have dropped 4 percent in the past year, outperforming the overall stock market by about 9 points. One trader sees a further decline for shares in the weeks ahead.
That’s based on the April 21 $116 puts. With 23 days until expiration, 3,949 contracts traded compared to a prior open interest of 199, for a 33-fold rise in volume on the trade. The buyer of the puts paid $0.56 to make the bearish bet.
The company next reports earnings on April 19, so this is likely a bet on a miss for the company. Shares currently trade for about $130, so shares would need to drop about 11 percent for the option to move in-the-money. The strike price is also right near the stock’s 52-week low of $115.54.
IBM has been a slow performer, with flat revenues over the past year, and a profit margin under 3 percent.
Action to take: Investors interested in tech should look for stronger growth plays. For now, it’s likely shares will continue to trade lower.
For traders, the April puts are inexpensive ahead of earnings, and could deliver mid-to-high double-digit returns. But there’s also little time on the options following earnings, to look for a quick mid-double-digit gain on shares in the weeks ahead to take profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investors are shying away from tech investments as interest rates rise. However, there are many ways to profit in tech in the years ahead, and finding reasonably-priced companies that can grow market share at today’s prices should fare well.
While the market has flirted with artificial intelligence (AI) stocks so far this year, that space is far from proven. A more proven space is cloud storage, which continues to grow, even as tech firms slow down and announce layoffs.
The cloud division at Oracle (ORCL) makes the database software company look compelling now. One analyst even upgraded the stock based on the potential earnings power of its cloud unit.
Oracle has been a relatively strong performer in the tech space, with shares up 7 percent over the past year, amid a sea of red for most other tech names. And revenues are up 18 percent, with room for more growth as the company builds out its cloud division.
Action to take: Shares are reasonably valued at 15 times forward earnings. Plus, Oracle is a dividend growth company, with the stock yielding 1.8 percent right now. It’s a tech name worth accumulating at or near current prices.
For traders, the June $95 calls, last going for about $2.10, offer mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Amir Adnani, President and CEO at Uranium Energy Corp (UEC), recently bought 60,000 shares. The buy increased his stake by 3 percent, and came to a total cost of $214,200.
A company director also picked up 38,500 shares, paying just over $100,000 on the same day. And an executive vice president also recently bought 21,000 shares, at a price just over $52,000. Insiders were generally last active in late 2021, when they were sellers.
Overall, company insiders own 1.7 percent of shares.
Shares of the uranium exploration and production company have slid 44 percent over the past year. The firm hasn’t had a fully profitable year yet, but revenues jumped 263 percent as uranium prices rose last year. However, that trend will likely slow down moving forward.
The company is now trading near its 52-week lows, after trading in a range for most of the past year.
Action to take: Investors interested in uranium may want to hold off for now, with prices trending down and the economy slowing. Uranium prices will likely drop in the coming months, which will put more pressure on shares.
For traders, the August $2.50 puts are near-the-money. Last going for about $0.35, they could deliver high double-digit returns in the months ahead on a further drop in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Hotel and casino operator MGM Resorts International (MGM) are down just 2 percent over the past year, outperforming the overall stock market by about 10 percent. One trader sees shares declining in the coming weeks.
That’s based on the May $40 puts. With 51 days until expiration, 5,137 contracts traded compared to a prior open interest of 163, for a 32-fold rise in volume on the trade. The buyer of the puts paid $2.01 to make the trade.
Shares last went for about $41, so they’d need to drop less than 5 percent for the option to move in-the-money.
Shares hit a 52-week high earlier in the month, and have already started to decline in the past few weeks. MGM still remains well over its 52-week low of $26.41.
The casino operator is coming off a solid year, with earnings up 116 percent, and revenues up about 17 percent. However, casinos tend to be sensitive to the economy, and a slowing economy could lead to reduced casino revenues in the quarters ahead.
Action to take: MGM shares trade at a valuation of 73 times forward earnings, so interested investors should wait for a better valuation.
For traders, the trend is down, and that’s likely to continue in the months ahead. The May puts are reasonably priced for a short-term move lower, and traders should target mid-to-high double-digit trades.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The market’s bearishness is reflected in the tendency to sell shares of a company first, and ask questions later… if at all. However, many companies selling off right now are still fine operationally. A few may even benefit from the current slowing economy, as competitors change their business or even go bankrupt.
That makes this a stockpicker’s market. And the way to profit from that is to find companies that have been hit hard from specific fears that can abate in time.
A case could be made for payment company Block (SQ). Shares took a 15 percent dive last week on news of a hedge fund going short the company. Typically, a short-seller will build a short position and then talk up their book, to drive prices down further.
While the short seller is alleging that the company has inflated user metrics, Block has already started to counter the research that went into the report.
Block shares are down about 46 percent over the past year, and have struggled in this slowing economy already. The payment processing company hasn’t been profitable, but revenues are up 14 percent.
Action to take: Shares are likely oversold here, and due for a short-term move higher. On a longer-term basis, the company’s continued growth and move to profitability could increase the value of shares substantially over time.
For traders, the June $75 shares, last going for about $390, can deliver mid-to-high double-digit returns on a rebound in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Daniel Landy, an EVP at UMH Properties (UMH), recently bought 1,900 shares. The buy increased his stake by 1 percent, and came to a total price of $33,089.
That’s on top of a number of smaller buys from other company insiders, including two directors, and the company President and CEO in recent weeks. Insiders have only been buyers of shares in the past year, with some director sales going back further.
Overall, insiders own 6.9 percent of the manufactured home community real estate investment trust.
Shares have dropped 40 percent in the past year, amid a slowdown in real estate activity and as mortgage rates have more than doubled, decreasing home affordability. UMH lost over $36 million last year, even after revenues rose by 5 percent.
Action to take: While shares look potentially attractive with a 5.9 percent dividend yield right now, that payout could be under pressure if current conditions continue. Investors are better off looking elsewhere in the real estate space right now.
For traders, the current trend is down, and shares are trending to new lows. The June $15 puts, which are already about $1 in-the-money, are currently priced at about $1.95. Traders could potentially see mid-to-high double-digit returns on further weakness in shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Major international money center bank Deutsche Bank (DB) has been under pressure, and shares are down 20 percent over the past year. One trader sees further weakness in the coming months.
That’s based on the May $8 puts. With 53 days until expiration, 13,388 contracts traded compared to a prior open interest of 369, for a 36-fold rise in volume on the trade. The buyer of the puts paid $0.80 to make the bearish bet.
Deutsche Bank shares recently went for about $9.50, so the stock would need to decline $1.50, or nearly 20 percent, for the options to move in-the-money. A steep collapse like that at Credit Suisse could cause such a move, above and beyond any banking fears in general right now.
Given that DB shares have traded as low as $7.24 in the past year, this could be a good way to profit from any more fears in the banking sector over the next few months.
Action to take: There are other banks that investors can focus on right now with a better prospective return. And many also offer higher dividend yields than the 3.3 percent payout on DB shares right now.
For traders, the May puts are an inexpensive bet to play a further drop in bank stocks in the coming months. The options can likely deliver mid-to-high double-digit returns, and potentially even higher on a further crisis.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
With all the ups and downs of the stock market, it’s sometimes easy to forget that a stock is an ownership stake in a company. And that shareholders, not company management, are the owners.
Some company management teams may use that to their advantage, by awarding themselves substantial amounts of stock options, which then dilute existing shareholders. However, other companies may encourage executives to buy shares outright, and take an ownership stake in the company that’s also paying them a salary.
That’s the case with Berkshire Hathaway (BRK-B). Greg Abel, the head of non-insurance operations, and potential successor should Warren Buffett step down, now owns over $105 million in shares, following a $24.6 million share buy last week.
Berkshire is essentially a major insurance company, a portfolio of privately-held businesses, and a stock portfolio rolled into one. That diversification tends to hold up well in a slow economy, and has made Berkshire a solid player for a slow-and-steady investment environment like today’s.
Action to take: The B shares are affordable in small amounts for investors at around $300 each, and are off highs of about $370. Today’s buyers will fare well over time, as the economy rebounds. Berkshire famously doesn’t pay a dividend, but may in the future under different management.
For traders, the June $325 calls, last going for about $10.00, offer mid-double-digit returns on a swing higher in shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Gregory Maffei, President and CEO at Liberty Media Corp (LSXMA), recently bought 50,000 shares. The buy increased his holdings by 1 percent, and came to a total cost just over $1.33 million.
The buy was offset by the CEO’s sale of shares that went through option exercise. Year-to-date, company insiders have mostly been sellers of shares, but last year saw a more even mix of buyers and sellers.
Overall, company insiders own 3.9 percent of shares.
The media conglomerate is down about 40 percent in the past year. The company has been unprofitable, and revenues only rose a scant 0.1 percent. A slowing economy will likely continue to weigh on advertising spending, which will further impact media companies.
Nevertheless, shares have gone from 26 times earnings last year to under 10 times forward earnings now, and look like they’re worth watching as a rebound play.
Action to take: For now, interested investors should wait for better pricing. Shares have had a steep slide in recent weeks, and may not have bottomed out quite yet. Once they do, there will be plenty of time to buy shares.
For traders, the October $25 puts, last going for about $2.00, offer mid-to-high double-digit gains in the coming weeks as shares continue to decline.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Oil and gas exploration company Enerplus Corporation (ERF) has slid in recent weeks as oil prices have trended lower. One trader sees a further decline in the weeks ahead.
That’s based on the April $14 puts. With 28 days until expiration, 2,723 contracts traded compared to a prior open interest of 113, for a 24-fold rise in volume on the trade. The buyer of the puts paid $0.58 to make the bearish bet.
Shares recently traded for about $14.15, so the stock would only need to drop about 1 percent for the options to move in-the-money. That’s still well over the stock’s current 52-week low of $11 per share.
Enerplus looks reasonably attractive now, with shares trading at less than 5 times forward earnings. Plus, the company has a fat 42 percent profit margin right now. But that will likely shrink if a slowing economy keeps a check on energy prices from moving higher.
Action to take: Shares yield a mere 1.6 percent, so there are better places to go long and grab a decent income in the energy space right now. Interested investors can wait to buy at a lower price.
For traders, the April $14 puts are a solid short-term play for today’s volatile markets. Traders can look to grab some quick mid-double-digit gains on a down day for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Typically, growth stocks are a tough investment when economic growth has become slow and uncertain. The lofty valuations and predictions that look attractive in a bull market don’t look as good when the economy is likely to contract.
However, some growth companies are able to position themselves for winning trends, even in a slowing economy. And those that can deliver could be the first stocks to make new all-time highs when things look rosy again.
Right now, one bright spot in the growth space is in artificial intelligence (AI). From big tech giants to software companies, investments in the technology seem to be paying off.
Now, graphics processing company Nvidia (NVDA) is making a bet on it too, with the announcement of a series of partnerships and products to enable the latest version of AI tech.
The announcement moved shares higher. And over the past few months, the company has erased most of its losses, with shares now down less than the S&P 500.
Action to take: We’ve liked shares at lower prices. But Nvidia is starting to become the dominant hardware player for a number of up and coming technologies. That makes shares a buy at current prices, or on any meaningful dip for the foreseeable future.
For traders, it’s likely that the current uptrend will continue. The June $290 calls, last going for about $15.75, offer mid-double-digit returns in the coming months on a further rally in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Christopher Conoscenti, CEO at Sitio Royalties Corp (STR), recently bought 2,500 shares. The buy increased his stake by 1 percent, and came to a total cost of $50,475.
The buy came a few days after the CEO made a 10,000 share buy, which came to a cost just over $221,000. Those two buys have been the only insider filings since the oil and gas royalty company went public.
Overall, company insiders own 2.2 percent of shares.
The royalty company is down about 18 percent over the past year, as energy prices have slid from last year’s highs. However, Sitio has a 50 percent profit margin. That’s because the royalty business allows the company to benefit from the cash flows at resource sites without the costs of developing those sites.
Action to take: Investors looking for current income can grab a nearly 12 percent yield at current prices. And that dividend was recently raised. However, that payout will likely be variable over time, and declining energy prices now may mean a lower payout later.
For traders, Sitio shares are near a 52-week low, but have started to move higher in recent sessions. The July $25 calls, last going for about $0.75, offer mid-to-high double-digit returns if shares move back toward the higher end of their trading range.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Social media company Snap Inc (SNAP) has seen shares drop 70 percent in the past year. One trader is betting that shares have further to fall in the next six months.
That’s based on the September $6 puts. With 176 days until expiration, 11,418 contracts traded compared to a prior open interest of 246, for a 46-fold rise in volume on the trade. The buyer of the puts paid $0.27 to make the bearish bet.
Shares recently went for about $11.50, so they’d need to drop nearly in half for the put option to move in-the-money. And shares would need to see a new 52-week low, moving past the prior low of $7.33 per share.
Such a move looks possible in the coming months. Snap has seen revenue growth of a scant 0.1 percent over the past year. And the company lost over $1.4 billion last year in total, which continues to eat away at Snap’s balance sheet.
Action to take: Investors who expect the economy to get better in the near future could fare well with Snap shares. But given their move off the low and the current economic climate, it’s better to sell shares or go short here.
For traders, and those who want to go short, the September puts have ample time to play out. While the options may not move in-the-money, their low price could allow them to see high double-digit gains or better in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
While the next market-moving news may not be positive, over time, investing in the stock market is more rewarding than betting against it.
And with so many companies knocked down last year and into the current banking fears, investors who start buying shares of companies with strong brands could see big profits ahead. Best of all, brands can include a variety of industries. And chances are that brand is a household name, which brings familiarity in uncertain times.
One of the world’s best-known brands is Starbucks (SBUX). The coffee chain has created a “third place” between the home and office. But there’s some uncertainty, as CEO Howard Schultz has left the role for a third time.
That short-term uncertainty from the changeover could be a long-term gain for Starbucks investors. The company is working to simplify its operations, and shares have done better than the S&P 500 in the past year, gaining nearly 13 percent.
Action to take: Starbucks shares are a reasonable long-term buy at current prices or on a drop lower. The stock yields 2.1 percent, and the company has done well with growing that dividend over time, even as they suspended share buybacks last year. Over time, increased cash flows can likely drive both those ways of rewarding shareholders higher.
For traders, the recent pullback in shares will likely reverse now that the changeover is complete. The June $105 calls, last going for about $3.45, offer mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Randall Stephenson, a director at Walmart (WMT), recently purchased 7,245 shares. The buy increased his holdings by 58 percent, and came to a cost of $1,000,168.
This marks the first insider buy at the company in the past two years. Otherwise, insiders have been regular sellers of shares. Those sales have been dominated by members of the Walton family, who are still major holders of the stock, but a few company executives have sold as well.
Overall, Walmart insiders still own 48 percent of the company.
The discount retailer’s shares are down about 3 percent over the past year, far outperforming the S&P 500 in general. Earnings have jumped 76 percent, and revenues are up 7 percent.
With that strong relative performance, shares are trading for about 23 times forward earnings, about in-line with how shares have historically been priced by the market.
Action to take: Walmart is likely to pick up market share for consumer spending in a slowing economy. Shares fared well last year, and also in the crisis year of 2008.
Shares yield about 1.6 percent right now, with regular dividend increases, which make for a reasonable buy at today’s prices – just look for a sale on shares to buy more.
For traders, the June $145 calls, last going for about $4.35, offer mid-double-digit returns in the coming months on a move higher in Walmart stock.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Semiconductor company Analog Devices (ADI) have been a strong performer in the past year, with a 13 percent gain, amid overall losses for the sector. One trader is betting on a reversion taking shares down in the coming days.
That’s based on the March 31 $175 puts. With 9 days until expiration, 2,232 contracts traded compared to a prior open interest of 115, for a 19-fold rise in volume on the trade. The buyer of the puts paid $0.77.
Shares recently traded for about $187, so they would need to drop $12, or about 6.5 percent, for the option to move in-the-money. Given the market’s recent volatility, such a move is possible, although traders should likely expect a smaller move.
ADI has generally been moving higher over the past few months, but that trade has stalled out in recent weeks. On a technical basis, shares look like they could be set for a quick move lower.
Action to take: Investors should hold off on buying shares for now, as they can likely get a lower price in the coming weeks. The stock has a 52-week low of $133.48, but a move to the mid-$160 range would be reasonable enough to make a buy.
For traders, the March 31 puts could see high double-digit moves, but don’t have much time to play out. Those who make the trade should be prepared for a quick, and possibly small, profit.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
While the stock market has been down over the past year, some sectors look set for a move higher. One such space is in commodities. Inflation remains sticky, which tends to keep prices of hard assets from declining too much.
Plus, for many commodities, the fundamentals look strong today. There’s high demand and potentially lower supply for a number of resources. A second year of the Russia/Ukraine conflict looks likely to keep the wheat market tight in particular.
One estimate is that wheat prices could rise as much as 20 percent as we get into the end of the spring. And that’s to say nothing of other crops.
This trend may lead to higher food prices later this year. But it could also be a boon for food producers.
A leading player in the space is Archer Daniels Midland (ADM). The grain processor and producer was a strong player the last time food prices popped higher. But shares have been sliding for months, and the potential for higher food prices again may lead a turnaround for shares.
Action to take: Shares are now going for about 14 times earnings, a reasonable value for an industry leader in a commodity-heavy space. Shares also yield about 2.3 percent right now, and the company has done well growing that payout in recent years.
For traders, the September $80 calls, last going for about $3.65, offer enough time to benefit from a rally in shares. The option can likely see mid double-digit gains or higher in the months ahead.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Kristin Van Dask, CFO at Prospect Capital Corp (PSEC) recently bought 6,000 shares. The buy increased her stake by 10 percent, and came to a total cost just over $41,200.
She was also the most recent insider to buy, with a 4,250 share pickup back in November, paying nearly $32,000 . A company director has also been active over the past two years. There have been no insider sales over the past two years either.
Overall, insiders at the business development company (BDC) own about 27.5 percent of shares.
The company’s business model of providing capital to early-stage companies can come in the form of both equity and fixed-income securities.
Prospect has held up reasonably well for the environment it’s in. Shares are down about 17 percent in the past year, or about 7 percent overall when accounting for the dividend.
Action to take: Investors looking for current income may like Prospect or other BDC firms, as they’re required to pay out most of their income as distributions. The dividend has been steady, with a current yield of about 10.8 percent.
For traders, shares have been trending down overall in this market, but have been prone to sharp rallies. Given the most recent pullback, one could happen soon. The August $7 calls, last going for about $0.20, offer mid-double-digit returns on such a move higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Video game design studio Electronic Arts (EA) dropped about 10 percent over the past year. One trader sees shares rebounding in the months ahead.
That’s based on the September $125 calls. With 178 days until expiration, 1,307 contracts traded compared to a prior open interest of 106, for a 12-fold rise in volume on the trade. The buyer of the calls paid $4.65 to make the bullish bet.
Shares recently traded for about $113, so the stock would need to rise $12, or about 11 percent, for the option to move in-the-money. EA has traded as high as $142.79 in the past year, so such a move is conceivable.
EA stock gapped lower earlier this year, and shares have been forming a base to move higher. And the company has been faring well operationally, thanks to ongoing demand for video games.
Action to take: Investors may like shares here near a 52-week low. At current prices, shares yield about 0.7 percent. While not a large yield, there’s room for future growth.
For traders, the September calls have enough time for the current fears in the market to play out and for shares to move higher. The trade can potentially deliver high double-digit returns during the next rally in EA shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Many industries consolidate over time into just a handful of players. These oligopolies can jockey for market share. Chances are one of the players will move towards higher-end consumers to differentiate, and others may shift to the lower end.
Either way, the company that can sport the highest profit margin will typically be the best performer for shareholders over time. Higher profit margins provide more capital for reinvestment in the business, or for dividends or share buybacks for investors.
In the credit card industry, American Express (AXP) has carved out a higher-end niche than competitors. And that’s allowed the company to be a top performer for investors over time.
Amid a slowing economy, American Express has managed to grow revenues by 8 percent over the past year. And the company’s CEO sees the business firing on all cylinders as Gen Z members start to embrace the brand.
Action to take: Shares are reasonably priced at 18 times earnings. Plus, the company is a dividend growth play. While the current yield is low at about 1.5 percent, it’s got room for further growth over time.
For traders, shares recently dropped amid the latest bank fears, and will likely regain some of that lost ground in the coming weeks. The June $180 calls, last going for about $3.35, offer mid-double-digit returns on such a bounce higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Pershing Square Capital Management, a major owner of Howard Hughes Corp (HHC) has been adding shares in recent days. The fund bought 62,474 more shares, shelling out over $4.6 million, a buy that increased the fund’s holdings by just under 1 percent.
This marks the first insider buy of the year. Last year, Pershing Square bought shares on 4 separate occasions, at prices close to where the stock trades today. There was only one insider sale from a company division president.
Overall, company insiders own 0.9 percent of shares. Pershing Square owns about 32 percent of Howard Hughes.
The real estate development company has lost about a quarter of its value in the past year. Earnings have slid further, with a 50 percent decline, and revenues are down 40 percent. However, the company owns a diversified mix of real estate assets, and should be able to grow over time.
Action to take: Shares are a reasonable buy at current prices or below. Investors may want to buy shares now, and look to buy more on a drop to around $70.50 or lower, the approximate book value of Howard Hughes shares at the moment. The stock does not pay a dividend.
For traders, shares have pulled back in recent weeks, but may start to trend higher. The October $90 calls, last going for about $4.00, could potentially see high double-digit gains in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Brazilian iron ore producer Vale (VALE) is down 17 percent in the past year, with most of that decline occurring in just the past few weeks. One trader sees a potential rebound in the coming weeks.
That’s based on the April $15 calls. With 32 days until expiration, 62,023 contracts traded compared to a prior open interest of 1,004, for a 62-fold rise in volume on the trade. The buyer of the calls paid $1.12 to make the bullish bet.
Vale shares recently went for about $15.50, so the options are already about $0.50 in-the-money. The strike price is well under the 52-week high of $21.29 per share, and the stock’s recent high over $18 per share before ethe recent pullback.
The global economic slowdown has impacted the company’s operations, with a 14 percent drop in revenue over the past year, and a 35 percent drop in earnings.
Action to take: Investors may still like shares here despite the short-term fears. Vale trades at just 7 times forward earnings, and sports a 42 percent profit margin, a hefty level for a commodity-oriented company. Plus, shares yield about 4.4 percent at current levels.
For traders, the April calls look reasonable given how shares have dropped to the point of looking oversold over the short-term. The trade can likely deliver mid-double-digit gains in the coming weeks before expiration.
Disclosure: The author of this article has no position in the company mentioned here, and does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investors are more than willing to place trades outside their comfort zone in a bull market. But in a slowing economy, they tend to gravitate towards the tried and true. That explains the relative outperformance of value stocks in a flat or sideways market.
Investors do the same thing as consumers. They cut back on new products and services, and stick with what’s tried and true. That’s why there are so many brands out there – including those at a reasonable price.
The most recent economic data shows a slowdown in restaurant spending. But even in a slow economy, going out to dine can be a small luxury. But that trend tends to benefit reasonably priced and well-known restaurants over flashy concept places – especially expensive ones.
That’s why some analysts see restaurant chain Darden Restaurants (DRI) performing well from here. The owner of Olive Garden, LongHorn Steakhouse, and Capital Grille, among others, offers a fine experience without high-end prices.
Shares are likewise reasonably valued, at 16 times forward earnings. And revenues grew by 9 percent last year, as the chain was able to raise prices to offset higher food costs. That may explain why Darden rose 14 percent over the past year, while the S&P 500 shed 10 percent.
Action to take: Shares are a reasonable buy at today’s prices. And with a current dividend yield of 3.3 percent, investors are getting paid well to own a series of popular chains.
For traders, the July $160 calls, last going for about $4.35, offer mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Walter Bettinger, CEO at Charles Schwab (SCHW), recently bought 50,000 shares. The buy increased his holdings by 8 percent, and came to a total cost of $2.965 million.
He was joined by a number of other company officers and directors. The company’s CFO bought 5,000 shares, at a cost of just under $297,000. One director bought 10,000 shares, paying just under $568,000. The buys come just a few weeks after the last insider sales at the company.
Overall, company insiders own 6.1 percent of shares.
The recent spate of buys comes as fears about the solvency of the banking system caused shares to go from $80 to the mid-$50 range in just a few days.
At current prices, the investment brokerage firm trades at 17 times forward earnings, down from 24 times last year. And shares have lost a third of their value, even as revenues and earnings grew by double-digits in the last year.
Schwab’s growth at a time of slowing retail trading is a sign of the company’s astute execution, which can also be seen by the company’s 35 percent profit margin.
Action to take: Shares may be worth a speculative buy now, with the potential to add to that stake on any more selloffs related to fears about the banking system. At current prices, shares also yield about 1.5 percent, with a low payout ratio that could see further growth.
For traders, the June $70 calls, last going for about $3.35, offer mid-to-high double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Airliner United Airlines Holdings (UAL) has held up well over the past year, with a 12 percent gain amid the market’s overall 10 percent drop. One trader sees that outperformance continuing in the months ahead.
That’s based on the January 2025 $45 calls. With 672 days until expiration, 5,497 contracts traded compared to a prior open interest of 143, for a 38-fold rise in volume on the trade. The buyer of the calls paid $11.13 to make the bullish bet.
United shares recently went for about $43, so shares would need to rise just $2.00 for the option to move in-the-money. That’s still well under the stock’s 52-week high of $55, which it hit in February.
The airline may also benefit from a slowing economy, as lower fuel costs could lower one of the airline’s biggest expenses.
United continues to move towards full capacity following the travel disruptions that occurred during the pandemic, so there’s still room for the airline to perform well, even in a slowing economy.
Action to take: Shares still look inexpensive at 5 times forward earnings. If United can lower costs or boost revenues, it can increase its profitability from here, which the market should love. While shares don’t pay a dividend, they may still have market-beating upside from here.
For traders, the January 2025 options have over a year and a half to play out. Chances are shares will rebound from the most recent selloff, which could lead to mid-double-digit gains on the option in just a few months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Market volatility is back. That means that companies can expect their share price to see sizeable swings by the day. As markets get turbulent, investors should look for companies that can continue to grow no matter what the economy does.
Many gravitate towards income stocks. But a high payout along isn’t enough. Stability, rather than the potential for big growth, may win out in the market in the months ahead.
That’s where a company like Honeywell International (HON) comes into play. As an industrial conglomerate, Honeywell has a number of businesses that tend to be slow and steady. Shares have pulled back slightly as the company looks to replace its CEO.
The manufacturing firm has been a steady player, with revenues rising about 6 percent in the past year. And over time, it’s been a slow and steady player that’s performed well for shareholders, with the stock up nearly ten-fold in the past decade.
Action to take: Given the pullback since the start of the year, shares now yield 2.1 percent. Honeywell has been a dividend grower, paying out about half of its earnings to shareholders.
For traders, the June $200 calls last going for about $6.70, offer mid-double-digit returns in the months ahead as shares shake off the recent slump and move higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Christopher Blake, President and CEO at PacWest Bancorp (PACW), recently bought 6,660 shares. The buy increased his holdings by 3 percent, and came to a total cost just over $118,000.
He was joined by the company’s COO, who bought 3,148 shares for the price of $48,000. And a company director bought 25,000 shares, at a cost of $383,250. Other company insiders have been buyers in the past week as well, as shares of the regional bank have taken a big dive.
Overall, insiders own 1.8 percent of the company.
The bank’s shares have been hit hard in recent days, and the stock is down nearly 78 percent over the past year. Rising interest rates have impacted the bank’s profitability as well, with revenues down nearly 20 percent over the past year, and earnings down by nearly two-thirds.
The recent selloff has taken the bank to less than 0.5 times its book value, or the measure of all its outstanding loans.
Action to take: Investors may find some opportunities in the banking space over the next few weeks, given the steep discounts that these stocks now trade at. However, investors should tread lightly, and look to take quick profits, given how volatile the sector has been.
For traders, the June $20 calls, last going for about $1.60, could potentially give more than triple-digit gains in the months ahead or expire worthless. Chances are shares will partially rebound in the coming months, making this a reasonable trade for this beaten-down sector.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Office real estate investment trust SL Green Realty (SLG) has seen shares slide by nearly two-thirds in the past year. One trader sees a further decline in the weeks ahead.
That’s based on the May $22.50 puts. With 64 days until expiration, 9,147 contracts traded compared to a prior open interest of 22, for a 41-fold rise in volume on the trade. The buyer of the puts paid $1.45 to make the downside bet.
Shares recently went for about $28, so the stock would need to drop about 20 percent in the next two months for the option to move in-the-money. It would also entail SL Green dropping well below its prior 52-week low of $27.28.
Investors may be concerned as the REIT is focused on office space, with an emphasis on the Manhattan market. The post-Covid office environment hasn’t been strong, but SL Green has fared well, with revenues rising 30 percent in the past year.
Action to take: Investors may want to wait for now, given the possibility of further downside. The current drop in shares has pushed the REIT’s yield to 9.8 percent, but the REIT has also cut its total payout in the past year.
For traders, the put may be an inexpensive way to hedge today’s market and other long positions. On a further drop, the option can potentially offer buyer high-double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Market sentiment has turned on a dime, as fears about the solvency of several banks has surged. In this flight to quality, investors are moving into assets such as Treasury bonds and gold. However, some stocks could be a better option here.
That’s because some companies will continue to grow their income. And that can be used to buy back shares, pay out a growing dividend, or otherwise reward those with the willingness to buy in a fearful market.
One of the top cash-generating stocks is Microsoft (MSFT). The company is a tech conglomerate, operating software services, web hosting, and video game hardware and software, and even a social media site (LinkedIn).
The company’s diversity is its strength here, and Microsoft is no stranger to putting cash to work to reward shareholders with dividends and buybacks. That’s why it could weather the storm, and even why analysts see the company as a top buy now.
Action to take: Shares pay a 1.1 percent dividend here, with plenty of historic growth and a low payout ratio for more income growth ahead. And shares are reasonably valued at about 24 times earnings, down from 38 a year ago.
For traders, the August $285 calls, last going for about $9.60, offer mid-double-digit returns on a move higher in shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Richard Dreiling, CEO at Dollar Tree (DLTR), recently added 7,100 shares to his holdings. The buy increased his stake from just 18 shares, and came to a total cost of just over $1 million.
This marks the first insider buy in nearly a year, when a director bought 425 shares at a cost of just over $66,000. Otherwise, there has been one insider sale over the past year, by the company’s chief strategy officer.
Overall, insiders own 1.3 percent of the company.
The discount retailer is down about 7 percent over the past year, in line with the returns on the S&P 500. Revenues have increased by 9 percent, but earnings have been flat as inflation has raised costs.
Even with the slow growth recently, shares are fairly valued at about 20 times earnings. And the company will likely continue to benefit from customers moving to lower-priced retailers in a slowing economy.
Action to take: Shares have been somewhat rangebound over the past year. Buying in the low $140 range or under, and selling when shares move over $160 could make for a good medium-term trade in the months ahead.
For traders, with shares near the low end of their range, a rally may be in the cards in the coming weeks. The June $155 calls, last going for about $5.00, offer mid-double-digit returns on a move higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Transaction processing services company Marqeta (MQ) has seen shares get cut in half over the past year. One trader sees further downside in the months ahead.
That’s based on the June $3.50 puts. With 93 days until expiration, 67,259 contracts traded compared to a prior open interest of 100, for a staggering 673-fold jump in volume on the trade. The buyer of the puts paid $0.23 to make the downside bet.
Shares recently went for about $4.25, so the stock would need to drop about 75 cents, or about 20 percent, for the trade to move in-the-money. Marqeta shares would need to set a new 52-week low under their prior low of $4.14 for the option to play out.
The company has struggled with losses in the past year, losing over $200 million despite bringing in nearly $750 million in revenue. While the company has been bringing in more money, the steep losses could cause the company to burn through its cash.
Action to take: Current fears in the financial sector suggest more downside here. Investors interested in shares should hold off until there’s more clarity in the space, even if it means missing out on the start of a new rally in shares.
For traders, the June puts are perfect for today’s environment, and can deliver high-double-digit gains or better in the months ahead before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Most companies tend to find that they have their best profitability in a narrow niche. But over time, competition or changing consumer tastes can eat away at that niche. Many firms have found that expanding into other roles can be a long-term winner.
Big tech companies in particular have been good about expanding beyond just one piece of hardware or software, and into creating a suite of experiences that can bring back customers time and time again.
One company could become the next to make a similar move: Roblox (RBLX). Best known as a video game platform, it has the potential to move into a broader role in the internet as virtual worlds rise over time.
Roblox is still in its early stages as a company, and profitability has been elusive. However, revenues continue to rise.
Plus, Roblox has nearly $3 billion in cash on its balance sheet, and can continue to build out its position as a leader in the metaverse while other players trying to get into the space struggle to gain traction.
Action to take: Investors may like Roblox shares at current prices with a long-term view in mind. Roblox still trades at less than half its peak market cap, and continued growth for the platform can lead to further returns in time.
For traders, the July $50 calls, last going for about $3.35, can deliver mid-double-digit gains in the months ahead on a jump higher in shares. Traders may want to consider taking quick profits on a rally given the current market volatility.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Michael Bless, a director at Piedmont Lithium (PLL), recently bought 1,750 shares. The buy is an initial stake for the director, and came to a total cost of $105,250.
This is the first insider buy since last July, when the company CFO bought 2,700 shares, paying just over $101,000, at a price of about $37.50 for the stock. Since then, multiple insiders have been sellers of shares, including the company CEO and CFO.
Overall, insiders own about 9 percent of the company.
The lithium producer has been volatile, and shares are now down about 12 percent over the past year. Piedmont is an early-stage company, still developing a commercial mining operation, so there have been no meaningful revenues or earnings.
However, the company is on track to become one of the largest producers in North America, and stands to become a key supplier to the rapidly-growing electric vehicle market.
Action to take: Shares have been somewhat rangebound, and are around the middle of their range. Investors interested in the long-term prospects can start buying under $55 per share to get a reasonable valuation for the company’s future growth potential.
For traders, shares are trending down, and are around the middle of their trading range. They’re likely to move lower in the weeks ahead before moving higher. The May $45 puts, last going for about $2.70, offer mid-double-digit returns on a further decline in shares from here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Money center bank U.S. Bancorp (USB) has seen shares drop about 25 percent in the past year. One trader sees a further drop for shares in the coming months.
That’s based on the June 16 $30 puts. With 94 days until expiration, 5,377 contracts traded compared to a prior open interest of 100, for a 54-fold rise in volume on the trade. The buyer of the puts paid $0.53 to make the bearish bet.
The bank recently traded for just over $37, so it would need to lose another 20 percent, or $7, for the option to move in-the-money. That’s also well under USB’s 52-week low of $38.39.
USB has seen a slowdown in the past year as interest rates have risen. Revenues are off 9 percent, and earnings have slid by 44 percent. While the bank sports a solid 26 percent profit margin, declining revenues are the main driver lower for shares
Action to take: Given the weakness in the banking sector underway, shares are likely to trend lower for some time. There will be some strong moves higher, and overall the stock will be volatile. But traders interested in big banks should look to buy closer to a retest of their 52-week lows now.
For traders, the June $30 puts are an inexpensive way to profit from continued weakness in bank stocks in the coming weeks. Traders can likely nab high-double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
There are many things that companies can control. But they can’t control how the market will react to one of their quarterly earnings reports. A company may have great earnings, but see shares sell off on a lower outlook, or because revenues are off.
However, a company isn’t just one quarterly report. And a company that can continue to improve its earnings over time will see its share prices rise, even if that process takes time to play out.
Database software company Oracle (ORCL) reported better-than-expected earnings, with per-share earnings hitting $1.22, above expectations of $1.20.
But revenues came in lower than expected, which led to a decline in shares, even as Oracle raised its dividend by 25 percent. The company has been making strong strides towards becoming a recurring-revenue software company, rather than selling one-time software.
Action to take: shares trade at 15 times forward earnings, a reasonable price for the company’s growth prospects in the years ahead. Plus, the forward dividend gives the stock a 1.6 percent dividend yield at current prices, with room for more growth in time.
For traders, the June $90 calls, last going for about $4.50, can likely deliver mid-double-digit returns in the months ahead as shares rebound off their earnings report drop.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Norman Wright, a director at First Solar (FSLR), recently bought 465 shares. The buy increased his holdings by 40 percent, and came to a total cost just over $99,900.
The buy marks the first insider purchase since last August, when two officers picked up just over $1 million in shares. Otherwise, company insiders have generally been selling shares of stock, including both directors and officers.
Overall, insiders own 5.2 percent of shares.
The manufacturer of solar panels has seen share soar 180 percent over the past year. That’s far in excess of the company’s revenue growth of 11 percent, even as the company operates at a loss.
Solar technology has improved in recent years, but benefits from higher energy prices as well as incentives such as tax rebates, which have fluctuated in recent years. As long as First Solar can continue to grow its revenues, it should be able to navigate the challenges of the solar panel market.
Action to take: Investors may like shares, given the massive uptrend that the stock has seen over the past year. Chances are further growth is likely in the months ahead, even if the rate of growth slows.
For traders, the September $250 calls, last going for about $16.90, offer mid-double-digit returns in the months ahead on a further rally for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Industrial and manufacturing conglomerate 3M Company (MMM), has seen shares lose nearly a quarter of their value over the past year. One trader sees a further decline in the weeks ahead.
That’s based on the March 31 $30 puts. With 18 days until expiration, 7,134 contracts traded compared to a prior open interest of 112, for a 64-fold rise in volume on the trade. The buyer of the puts paid $2.60 to make the bearish bet.
Shares recently traded for about $105.50, making this an at-the-money trade. Given that shares have just hit a new 52-week low, a drop to $105 would mark a further drop lower.
3M has had a rough year, with revenues down 6 percent, and earnings down 60 percent. Plus, the company is facing a number of lawsuits related to discontinued products, which could impact future earnings by billions of dollars.
Action to take: Shares are reasonably valued at 13 times forward earnings, but may get cheaper in the months ahead given the legal overhang. That said, shares now yield 5.6 percent thanks to the drop in the stock over the past years. With a payout ratio under 60 percent, there’s room for more dividend increases ahead.
For traders, a rebound is possible as shares are heavily oversold. But for the short-term, the trend is down. The March 31 puts could deliver mid-double-digit gains in the days ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Tech layoffs have dominated headlines since the start of the year. However, many of these companies vastly increased their hiring during the pandemic, and may have overshot to the upside. So while layoffs and workforce reductions now sound painful, it may allow companies to lower their spending and lead to bigger profits.
That could be a boon to investors now, especially given how much share prices have declined for big-name tech stocks.
That advantage could be even further compounded by companies buying back shares at a steep discount to their old highs.
One such company is Meta Platforms (META). The owner of Facebook and Instagram has laid off about 13 percent of its workforce in the past year, and may be planning another round now. Yet, thanks to its recently-announced buyback, shares could prosper in the months ahead.
Meta share shave rapidly closed their underperformance in the past few weeks, and have now returned about as much as the stock market on average in the past year.
Action to take: While the company has struggled with losses lately, cutting costs could lead to a return to profitability. Revenues only dropped about 5 percent in the past year, and the share buyback could still make the company look attractive as it grows earnings per share.
For traders, the September $240 calls, last going for about $9.55, offer investors mid-double-digit returns on a continued rally higher for Meta shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Joshua Wilson, general counsel at Red Robin Gourmet Burgers (RRBG), recently added 10,000 shares. The buy increased his holdings by 22 percent, and came to a total cost of $112,250.
He was joined by the company’s Chief People Officer, who bought 1,751 shares for just under $20,000 a few days before, increasing his holdings by 11 percent. Overall, company insiders have been steady buyers of shares over the past 18 months, with the last insider sale occurring in May 2021.
Overall, insiders own 4.8 percent of the burger chain.
Shares of RRBG have been knocked down 11 percent in the past year, about in-line with the overall stock market. A challenging environment for the restaurant industry has led to a rise of just 2.4 percent in revenues, while the company reported a decline in earnings.
While shares look inexpensive at 0.14 times their price to sales, it’s uncertain when Red Robin will return to profitability.
Action to take: With only modest insider buying here, and without the company paying a dividend, investors may want to stick with bigger, dividend-paying companies in the industry. For now, shares are likely to continue to underperform the overall market.
For traders, the June $10 puts, last going for about $0.90, can likely deliver mid-double-digit returns on a continued move lower for shares. Traders should look to take quick profits given the current market volatility.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Oil and gas operator Occidental Petroleum Corporation (OXY) has seen shares rise 7 precent in the past year. More importantly, Berkshire Hathaway (BRK-A) has been buying up shares as they drop to the low $60 range.
One trader sees a bullish move ahead for the stock following the latest drop. That’s based on the March 31 $63 calls. With 21 days until expiration, 4,625 contracts traded compared to a prior open interest of 229, for a 20-fold rise in volume.
The buyer of the calls paid $1.82 Shares recently traded just over $62, to shares need to rise less than $1, or about 1.5 percent, for the option to move in-the-money. Such a move is easily possible in the next few weeks. The strike price is also well under the stock’s 52-week high of $77.13.
Operationally, the company has been performing better than the share price. Earnings jumped 25 percent in the past year, thanks to strong energy prices. And Occidental sports a hefty 36 percent profit margin.
Action to take: Investors may like shares here. While the dividend yield is on the low end for the industry at 1.2 percent, it’s a growing one. And the shares continue to get acquired by Berkshire Hathaway, which will likely end up buying the entire company at a premium at some point.
For traders, the options are a reasonable short-term trade, that can potentially deliver mid-double-digit returns in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Dividend-paying companies have a few ways of delivering cash to shareholders. They can borrow the money, which increases debt and debt payments. They can issue shares, which dilutes shareholders. Neither of those strategies can be done for long.
The best way is to grow their earnings and cash flow. This allows for companies to pay out a growing amount of that cash flow to the owners of the company – the shareholders. It’s why investors should look for dividend-growing companies.
One company just doubled its dividend thanks to strong earnings growth and rising profit margins. It’s Dick’s Sporting Goods (DKS), a retailer that’s performing well in today’s slowing economy. The company has been working to tighten up its inventory too, which will reduce the need for money-losing clearance sales.
The latest news has helped shares jump 11 percent, and over the past year shares are up 30 percent. But with Dick’s still trading at about 11 times forward earnings, it’s still cheap compared to other retailers and the overall market.
Action to take: With shares now yielding about $4 annually, the stock’s forward yield is about 2.7 percent, up from about 1.4 percent right now. And with a payout ratio still under 50 percent, there’s room for more income growth in the future.
For traders, shares popped higher on the news, and will likely come back down in the coming days. That would be an ideal time to buy the September $180 calls. Last going for about $5.90, traders can look to buy under $5 and ride the longer-term trend higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
James DeFranco, a director at Dish Network Corporation (DISH), recently bought 1,450,000 shares. The buy increased his holdings by 20 percent, and came to a total cost of over $15.7 million.
The director was the last buyer of shares, picking up 110,000 of them back in September for a mere $1.84 million. All told, the director has been the sole buyer of shares since last May with 8 buys overall. The last insider sale occurred in September 2021.
Overall, insiders own 14.1 percent of shares.
The pay TV services provider has lost two-thirds of its value over the past year, as concerns over customers “cutting the cord” continues. That drop seems extreme, given that earnings rose by nearly 70 percent, even as revenues dipped by only 9 percent in the same timeframe.
Action to take: Dish looks like a value play at 11 times forward earnings – and 4 times current earnings. But shares have continued to trend down in recent months, so investors may want to exercise patience and look to get shares closer to the 52-week low near $10.64.
For traders, the May $10 puts, last going for about $0.88, could deliver mid-double-digit returns on a further slide in Dish shares in the coming weeks. Look to take quick profits if the stock retests its old lows, as it may bounce there.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Gold mining operator Barrick Gold Corporation (GOLD) has seen shares slide by just over one-third in the past year. One trader is betting on a rebound in shares over the coming months.
That’s based on the September $21 calls. With 190 days until expiration, 9,668 contracts traded compared to a prior open interest of 375, for a 26-fold rise in volume on the trade. The buyer of the calls paid $0.30 to make the bullish bet.
Shares recently traded just under $16, so they’d need to rise over $5, or about 33 percent, for the option to move in-the-money. That would still be a bit under the stock’s 52-week high of $26.07.
Barrick is one of the largest companies in the mining space, and could see investor interest if inflation continues to run higher for longer. Gold mining companies tend to move in sympathy with short-term moves in the price of gold, even as many miners, including Barrick, hedge their production.
Action to take: After sliding in recent weeks, shares are fairly close to their November lows, and look poised to rebound in the coming months. Investors can also get a 3.4 percent dividend yield at today’s prices.
For traders, the September calls are inexpensive, but could deliver triple-digit gains on a massive rally in gold and gold mining stocks. It’s more likely that a rebound in shares in the coming months will deliver high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Some industries are cyclical, with big booms and busts. Other industries tend to be steadier. Which wins out over time? It depends on whether you get in at a good price – or wait to jump in once a trade idea has already gotten hot.
Investors can trade while also using bear markets to build up positions in steady players. This helps take advantage of the market’s long-term returns, without being beholden to short-term trades succeeding 100 percent of the time.
One of the top places to invest with the long-term in mind is the insurance industry. It’s a sector that usually doesn’t lead the market. But it tends to perform well over time.
One of the biggest players in the property and casualty insurance space, Chubb (CB), is a leader in covering more valuable residential properties in the U.S. That positioning is more recession-resistant than insuring lower-income homes, which may cut back along with the economy.
Action to take: Shares are flat over the past year, even as revenues have risen by 14 percent. The company is also a solid dividend-growth player, with a 1.6 percent starting yield right now. This is one insurer that could fare well for long-term buyers today.
For traders, shares have been trending higher since October, but have pulled back in recent weeks. The uptrend looks likely to resume. The August $230 calls, last going for about $4.25, offer mid-double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Russell Weiner, CEO at Domino’s Pizza (DPZ), recently bought 3,333 shares. The buy increased his holdings by 13 percent, and came to a total price just over $1.01 million.
This marks the first insider buy at the company in over two years. The past few years have seen both company directors and executives sell shares on a regular and steady basis, with only a handful of those sales coming from the exercise of stock options.
Overall, company insiders own 0.6 percent of shares.
The pizza chain has dropped about 25 percent in the past year. Even with slowing consumer spending, revenues rose by about 4 percent, but higher costs bit into earnings, which rose by just 2 percent.
Shares are now fairly valued at about 24 times earnings, which is also similar to the valuation of the S&P 500.
Action to take: Domino’s shares are attractive at or under current prices. The company pays a growing dividend, although the current yield is just 1.6 percent. The company’s strong branding should allow it to see a return to faster growth in time, which could also lead to a rally in shares.
For traders, shares are coming off of their 52-week low, set just at the end of February. Chances are the stock will continue to trade higher in the weeks ahead.
The June $350 calls, last going for about $9.20, can potentially deliver mid-double-digit returns or higher in the coming weeks on a continued rally in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Airliner Spirit Airlines (SAVE) dropped nearly 9 percent on Monday on a report that its potential acquisition would likely face an antitrust lawsuit from the Department of Justice. One trader sees a further decline for shares ahead.
That’s based on the April $17.50 puts. With 44 days until expiration, 22,833 contracts traded compared to a prior interest of 330, for a 69-fold rise in volume on the trade. The buyer of the puts paid $2.01 to make the bearish bet.
Shares recently traded for about $16.50, making the option about $1.00 in-the-money. That’s about half the price of the proposed buyout offer for $33.50 per share.
Spirit has been courted by a number of airlines, but following years of industry consolidation, it’s possible that any buyer would face antitrust litigation. While the share price has been knocked around, the stock now goes for about 11 times earnings, and 0.4 times its price to sales.
Action to take: Shares are potentially undervalued here, but could go lower if a buyout deal completely falls through given today’s volatile markets. Interested investors may want to wait on the sidelines for now.
For traders, official news of an antitrust suit would likely give the stock a reason to make another leg lower. That makes the April puts an interesting trade, although one that will likely only deliver mid-double-digits given that it’s already in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
While a share of stock is a fraction of a company, its valuation can vary wildly. Intense fear or greed can lead to big swings in valuation, often quickly. Over time, however, growing earnings and revenue tend to be a reliable indicator of a company’s performance.
But if you combine a company with improving operational results that’s also seeing interest in its shares exploding higher, you may be on track to profit from a big trend.
That’s how investors feel about C3.ai (AI). The artificial intelligence software provider has been a big winner this year, more than doubling. And the stock’s recent pullback was averted by better-than-expected earnings.
As one of the pure-plays on the growth of AI, to say nothing of the company’s hot product, ChatGPT, it’s likely that the company will be valued far more than tits current market cap of about $2.3 billion as it continues to grow.
Action to take: Shares are volatile, so interested long-term investors should look to buy on down days, and be willing to take short-term profits after a big run higher.
And even with some moves toward the $30 range, C3.ai shares have been pulling back for now, so investors can be patient about investing in a long-term trend getting a lot of short-term media attention right now.
For traders, the July $40 calls, last going for about $2.80, can likely be bought substantially cheaper on a down day for shares, then flipped in the coming weeks on the stock’s next move higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Kirk Hachigain, a director at NextEra Energy (NEE), recently added 10,000 shares. The buy increased his holdings by 25 percent, and came to a total cost of $700,000.
Insiders have been notable buyers of shares so far this year, with 8 total buys. That includes both company executives, including the CFO, as well as directors. The last sale occurred from an option exercise back in December.
Even with the recent buys, company insiders own just 0.2 percent of shares.
NextEra has performed about in-line with the overall stock market, dropping about 10 percent in the last year.
However, the utility has some population growth trends behind it, which led to a 22 percent rise in revenue in the past year. Plus, NextEra sports a 20 percent profit margin, even as it’s aggressively expanded into green energy sources such as solar.
That makes it well positioned for defensive investors, with some solid income along the way.
Action to take: Investors looking for steady growth and income may like shares at current prices. NextEra currently yields about 2.7 percent, and the company has done well raising its dividend payments over time.
For traders, shares are near the lower end of their trading range of the past year, and look set to move higher. The June $85 calls, last going for about $0.62, offer mid-to-high double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Consumer tech giant Apple (AAPL) dropped about in-line with the overall stock market last year. Shares look ready to move higher, however, and one trader is betting on a sizeable move in the coming weeks.
That’s based on the April 14 $160 calls. With 37 days until expiration, 3,871 contracts traded compared to a prior open interest of 110, for a 35-fold rise in volume on the trade. The buyer of the calls paid $1.89 to make the bullish bet.
Apple shares recently went for about $151, so the stock would need to rise $9, or about 6 percent, for the option to move in-the-money. The strike price is still well under the stock’s 52-week high of $179.61.
While shares lost about 10 percent over the past year, revenues dropped by just 5 percent. Add in the company’s healthy profit margin of 25 percent, as well as hefty cash flow supporting a growing dividend and share buybacks, and it’s likely that shares will recover in time.
Action to take: Investors may like shares here in the low $150 range. The stock yields 0.6 percent, which isn’t huge, but Apple has been consistent about growing its dividend, while focusing its cash flow on share buybacks.
For traders, the April calls are aggressive, but can potentially deliver mid-double-digit gains in the coming weeks on a move higher in shares.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The economy continues to send mixed signals. By most conventional measures, things have slowed considerably. That’s seen in everything from housing to the job market. But things were also running red hot before, so the full picture still looks strong.
At the corporate level, companies are largely cutting back. But in some areas, they’re continuing to invest now. One space where that’s happening is in IT spending. That’s a boon for companies that cater to that need.
Companies that provide IT services should continue to thrive right now, as the digitization trends of the past few years continue.
One company showing strong results from IT spending is Dell Technologies (DELL). While the company saw continued weakness in its better-known personal computer manufacturing business, growing IT spending can provide a source of steady revenue for years to come.
Shares of the computing giant trade for under 7 times forward earnings. With Dell shares down by nearly a quarter in the past year, investors may be overlooking a strong rebound bargain here.
Action to take: Investors may like shares at current prices. The recently-raised dividend will give investors a 3.2 percent dividend yield while they’re paid to wait for a rebound.
For traders, the July $45 calls, last going for about $1.50, offer mid-double-digit returns on a move higher for shares in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shekhar Priyadarshi, CFO at Keurig Dr Pepper (KDP), recently added 20,000 shares. The buy increased the CFO’s position by 200 percent, and came to a total cost just over $711,000.
The CFO was the last insider to buy, with a 10,000 share pickup in January valued at $35,000. The company’s Chief Supply Chain Officer was a sizeable buyer last year. Other company insiders, including major holder Mondelez International, have been sellers of shares in recent months.
Even with the recent institutional sale, insiders own 37.7 percent of the beverage company.
Shares of KDP are down about 12 percent over the past year, performing slightly worse than the S&P 500. Earnings have slid 46 percent, even as revenue shave risen by 12 percent, in part due to higher costs and a slower pace of sales.
Nevertheless, KDP owns a number of strong brands in the beverage space, and shares are reasonably valued at 14 times forward earnings.
Action to take: Long term investors may like shares at or under $35. The stock yields 2.3 percent right now, with a recent bump higher in the dividend.
For traders, shares have been somewhat range-bound over the past year, and are near their lows right now. The July $36 calls, last going for about $1.00, could deliver mid-double-digit returns or better in the coming months if shares start moving off the lower end of their range.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
3D printing company Desktop Metals (DM) have fallen on hard times in the past year, with shares losing over 60 percent of their value. One trader sees a further decline for shares in the months ahead.
That’s based on the August $2.50 puts. With 165 days until expiration, 14,163 contracts traded compared to a prior open interest of 305, for a 46-fold rise in volume on the trade. The buyer of the puts paid $0.75 to make the bearish bet.
Desktop Metals shares recently traded for about $2.05, making the option about $0.45 in-the-money. The strike price is still well over the stock’s 52-week low of $1.13.
The early-stage company is ramping up production, and is losing money in the process, with nearly $500 million in losses over the past year. however, revenues rose 85 percent to over $200 million, and the company has enough cash on hand to weather another year without having to issue more shares.
Action to take: Shares already jumped higher on their most recent earnings report thanks to better-than-expected revenues. It’s possible that shares may continue to trend higher from here, although there will likely be some more pullbacks along the way. Investors can likely buy again under $2.00 per share.
For traders, after the earnings beat and stock price jump, a partial pullback from that move higher is likely. That makes the August puts an attractive play. Traders can likely nab mid-double-digit gains, given that the option is already in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investors have had a challenging year, and face the prospect of continued challenges as inflation stays higher than expected. Growth stocks tend to fare poorly in a slow economy gripped with high inflation. Yet today’s problems will get fixed in time.
Those who find opportunities can find plenty right now. Many companies still have big growth potential in the years ahead. And returns will be better for companies that can improve their profit margins in today’s uncertain times.
One space riddled with uncertainty are the chipmakers. After a burst of popularity, they’ve been out of favor with the markets. Yet many of the tech trends playing out in the years ahead will require an increased number of semiconductor chips to power that world.
That’s why companies like Broadcom (AVGO) are well positioned to improve their profit margins, and even grow now. And it’s why shares can likely move higher, and continue to outperform the chip space as a whole.
Broadcom sports a hefty 35 percent profit margin, and has managed to grow earnings 21 percent in a slowing year for the sector – with earnings jumping by nearly 70 percent. While those trends may slow, they’re still likely to keep trending up.
Action to take: Investors may like shares here. Shares are reasonably valued at about 16 times forward earnings. Plus, Broadcom pays a 3.1 percent dividend.
For traders, the September $660 calls, last going for about $27.50, offer mid-double-digit returns on a continued uptrend for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Donal Mulligan, a director at Herbalife Nutrition (HLF), recently bought 15,000 shares. The buy increased his holdings by 64 percent, and came to a total cost just under $290,000.
The buy came a day after a different director bought 8,500 shares, paying just under $166,000. Overall, company insiders and directors have been regular and steady buyers of Herbalife stock, with only two small sales over the past two years, amid nearly two dozen insider buys.
Overall, insiders own 2 percent of the nutritional supplement company.
Shares have been knocked down by nearly half over the past year. Revenues are also down 10 percent, but earnings are up 42 percent. That’s resulted in a company that trades like a value investment right now, with a price to sales ratio just under 0.4, and with shares trading at just 6 times forward earnings.
Action to take: Long-term investors may like shares here for their appreciation potential. Shares have been trending up steadily from last year’s lows, and are still heavily beaten-down. However, with no dividend, investors won’t get paid to wait for shares to move higher.
For traders, the June $22.50 calls, last going for about $1.20, offer mid-double-digit returns in the coming months if Herbalife shares can continue their long-term rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
American Airlines Group (AAL) stock has been trading in a range over the past year. One trader sees shares breaking out and moving higher in the months ahead.
That’s based on the September $21 calls. With 196 days until expiration, 32,532 contracts traded compared to a prior open interest of 490, for a 66-fold rise in volume on the trade. The buyer of the calls paid $0.54.
The airliner recently traded for about $16, so shares would need to rise by $5, or about 31 percent, for the options to move in-the-money. That would also see shares move close to their 52-week high of $21.42.
American Airlines has been impacted by the slowing economy. Despite revenues rising by 40 percent over the past year as travel demand has risen, the airliner didn’t turn a profit. And factors such as a decline in demand and higher fuel costs could weigh on profitability this year.
Action to take: Investors should be wary of shares, even though they’ve been in an uptrend here. It’s most likely that shares will bounce back and forth, rather than find a strong direction this year.
For traders, the September calls could be a worthwhile trade given their low price and the fact that shares are in an uptrend right now. But traders will likely want to take a quick, mid-double-digit profit, and move on to the next trade.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
It’s a time for corporate executives to be honest. With a slowing economy, having a realistic outlook matters. But companies that report caution in their forward-looking statements tend to get punished by the market… at least in the short-term.
That means investors should position themselves to buy these companies, especially if they’re performing well now. When the economy improves, these companies are likely to see big benefits from being overly cautious now.
A number of companies have been careful about looking forward now. But retailer Target (TGT) seems to be turning a corner.
The company’s sales improved in its most recent earnings report, and overall earnings rose, even if the company’s forward guidance disappointed.
Target shares still remain down about 25 percent from a year ago, and the company’s earnings have taken a dive overall. But shares trade at a reasonable 17 times earnings, and the retailer is likely to come back stronger, as it has in other economic cycles.
Action to take: Investors may like shares at or under current prices for long-term accumulation. Target yields 2.6 percent right now, and they’ve done a good job of raising the dividend over time.
For traders, there’s been a modest uptrend in shares since the start of the year, and the solid earnings numbers should help that trend continue. The June $185 calls, last going for about $5.50, could deliver mid-double-digit gains in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Kelcy Warren, an executive at Energy Transfer LP (ET), recently bought 1,660,602 shares. The buy increased his stake by 1 percent, and came to total cost just over $21.67 million. The buy came on the heels of another purchase from the same insider, for 1,339,398 shares.
Company executives and directors have been buyers over the past year, with a number of buys ranging from 5,000 shares to over 2,428,000 shares. There have been no insider sales in the past two years.
Overall, ET insiders own 19.8 percent of the company.
Those insiders have enjoyed a 22 percent rally in the past year for the oil and gas midstream company. Earnings are up 25 percent, and revenues are up about 10 percent. While the profit margin is a bit low right now, shares still trade inexpensively at about 9 times forward earnings.
Action to take: As a limited partnership (LP) most of the company’s earnings pass through as income to shareholders. Currently, shares yield 9.6 percent, with room for more hikes in the payout over time.
For traders, shares have come down in recent sessions but are likely to continue their long-term uptrend. The July $14 calls, last going for about $0.25, offer mid-to-high double-digit gains in the months ahead, especially on any short-term jump higher in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Car manufacturer Ford Motor Company (F) has seen shares lose over a quarter of their value in the past year. One trader is betting that the stock will see a further slide in the months ahead.
That’s based on the June $12 puts. With 106 days until expiration, 20,868 contracts traded compared to a prior open interest of 269, for a 78-fold rise in volume on the trade. The buyer of the puts paid $0.98.
Ford shares recently traded for about $12, making this an at-the-money trade. The $12 strike price is also well above the stock’s 52-week low of $10.61, hit late last year before a strong rebound.
The automaker’s earnings collapsed 90 percent last year, even as revenues rose by 17 percent.
Rising interest rates and a slowing economy are likely to weigh heavily on a cyclical company such as the automotive industry, more than offsetting the excitement the company has seen in recent years over its electric vehicle offerings.
Action to take: Shares likely have more downside ahead. Investors interested in shares for the long haul may want to wait until the stock gets closer to $10 per share.
For traders, the June puts are well positioned for further downside in shares, with a low cost in the event that the stock jumps higher. The puts can likely deliver mid-double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The past few weeks have shown that inflation still remains a problem, and that consumers may be close to tapping out. That’s slowed down the move higher in retail stocks, many of which had started moving higher in the autumn ahead of the holiday season.
However, the market selloff over the past year has already created a number of values. With fear dominating some sectors today, buying industry leaders may prove ideal for finding market-beating returns in the months and years ahead.
For instance, electronics retailer Best Buy (BBY) just received a downgrade ahead of its next earnings report.
That’s too little, too late for the company, which already saw earnings slide 44 percent over the past year. However, shares have already reached value territory, with the stock trading for 0.4 times its price to sales ratio, and about 12 times its price to earnings ratio.
If Best Buy simply maintains its sales from here, it should fare well. When earnings improve, shares should be able to move far higher thanks to today’s lower valuation.
Action to take: Investors may like shares here, as Best Buy now yields about 4.2 percent at current prices. That will pay investors well to wait for a rebound in shares.
For traders, the June $90 calls, last going for about $3.75, offer mid-double-digit returns on a continued long-term trend higher in shares over the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Richard Ledgett, a director at M&T Bancorp (MTB) recently bought 390 shares. The buy increased his holdings by 11 percent, and came to a total cost of $61,000.
This marks the first insider buy at the bank since last July. Over the past two years, company directors and executives have been regular sellers of shares since then, largely through the exercise of stock options.
Company insiders own 0.5 percent of shares.
The regional bank is down 14 percent over the past year, as rising interest rates have weighed on asset valuations and slowed lending activity.
However, M&T is still coming off a strong year, with earnings up 67 percent from a 58 percent jump in revenues. The bank also goes for 1.1 times its book value, which is a reasonable valuation for where other bank stocks trade at present.
Action to take: Investors may like shares for the long haul. The bank spots a 26 percent profit margin, and trades for less than 10 times earnings. Plus, the recently-raised dividend gives today’s buyers a 3.3 percent yield.
For traders, the July $170 calls, last going for about $4.15, offer mid-double-digit returns from here. M&T shares have been trending up since last fall, and have pulled back in the past few weeks, which should set up a run higher from here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of oil and gas equipment and services company Schlumberger Limited (SLB) have gained 37 percent in the past year. One trader sees the stock continuing to rally in the coming weeks.
That’s based on the April $65 call. With 51 days until expiration, 35,216 contracts traded compared to a prior open interest of 234, for a 151-fold rise in volume on the trade. The buyer of the calls paid $0.36 to make the bullish bet.
Schlumberger shares recently went for about $54.50, so the stock would need to rise over $10, or over 19 percent, for the option to move in-the-money. That would also require shares to break past their 52-week high of $62.78 in the next month.
The company is performing well in today’s strong energy market. Revenues are up 27 percent over the past year, and Schlumberger has done even better with earnings growth of 77 percent.
It’s certainly likely that shares will move higher in the coming weeks, although perhaps not far enough to move the option trade in-the-money.
Action to take: Long-term investors may like shares here. The oil markets have years for the current boom to play out. Shares also yield about 1.9 percent, and the company recently raised its dividend.
For traders, the April calls will likely expire worthless. But they could still jump in the coming weeks, most likely on a short-term market rebound that pushes oil prices higher. Look for a quick pop to take profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Usually, Wall Street loves companies that have recurring revenue. That means they get to charge customers on a regular basis, rather than during a single sale. Many tech companies have embraced the model, as it means a steadier source of revenue.
However, shifting to a recurring revenue model can cause some trouble. That’s because some companies have built up other successful models, such as one-time sales or as multi-year contracts that are billed up front.
That latter category applies to Autodesk (ADSK). The software design company may see its free cash flow drop in fiscal 2025 as it shifts to annual billing cycles from up-front contracts.
That short-term concern has sent shares down. They’re not trading at 30 times forward earnings compare to trading as high as 98 times earnings last year.
Earnings are growing rapidly, and revenue is up 9 percent in the past year. When and how the company records a transaction isn’t as important as those overall numbers improving over time.
Action to take: The software company should fare better on a recurring revenue model, as with many other software companies. That should make for steadier returns over time, which the market should reward. Investors should look to accumulate shares at or under current prices.
For traders, Autodesk shares had a sharp reaction to the news. They’re likely to see a quick bounce higher in the coming weeks. The April $210 calls, last going for about $4.30, can see mid-to-high double-digit returns on a strong recovery in shares in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Patrick Gelsinger, CEO at Intel (INTC), recently bought 9,700 shares. The buy increased his stake by 2 percent, and came to a total cost just over $249,000.
That’s the first buy in nearly a month, following a 9,050 share pickup from the company CFO, which came to a cost of about $251,400 when it was made. Overall, company insiders have been steady and active buyers in the past year, with only one small insider sale.
Overall, insiders at the chipmaker own 0.1 percent of shares.
The stock was volatile last week as the dividend was cut by about two thirds. However, shares held up fairly well, likely due to the fact that the previous payout was seen as unsustainable.
Shares have been cut in half over the past year, and revenues is down over 30 percent. The chipmaker has struggled relative to other players in the market.
Action to take: Shares may end up moving a big higher from here in the coming weeks, as the stock was likely pricing in a dividend cut in recent weeks.
Intel’s new dividend works out to about 2 percent, which is still reasonable for a tech stock. If Intel can grow from here or buy back shares with the cash flow, the share price should trend higher.
For traders, the July $30 calls, last going for about $0.70, can likely deliver mid-double-digit returns in the months ahead.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of Norwegian oil and gas company Equinor ASA (EQNR) have traded flat over the past year, underperforming the energy sector. One trader sees shares closing that gap by the end of 2023.
That’s based on the January 2024 $38.99 calls. With 325 days until expiration, 10,200 options traded compared to a prior open interest of 134, for a 76-fold rise in volume on the trade. The buyer of the calls paid $1.60 to make the bullish bet.
Shares recently traded for about $31.50, so Equinor would need to rally about 24 percent for the options to move in-the-money. The company has a 52-week high of $42.53, so such a move in the coming months is possible.
Earnings have jumped 134 percent over the past year, and revenues are on the rise. And the company has more cash than debt on the books.
Action to take: Investors may like shares at current prices or lower. Equinor yields 2.6 percent at current prices, and has a low payout ratio of under 10 percent of earnings. The downside is that Equinor’s operational performance is based on the Norwegian kroner, so there may be currency impacts that weigh on shares.
For traders, the January calls are inexpensive, and can likely deliver mid-double-digit returns well before the options expire. Traders may want to take a quick profit rather than let the trade play out.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
When it comes to tech, it’s easy for investors to get burned. That’s because any one tech company may only play to a trend that goes in and out of fashion. Investors who jumped into alternative energy, cryptocurrencies, or anything related to electric vehicles may agree.
However, a tech company that can play to multiple trends can fare well for investors over time. That’s because it can continue to grow, even as some trends go out of favor with the market.
That’s why we’re fans of Nvidia (NVDA). The graphics card processing company has had some ups and downs with the crypto market, as its hardware can be used for mining operations. But they’re also critical for EV technology, and now the company is embracing the growth of AI.
That news gave the company a boost in shares. However, the stock is still down 12 percent over the past year, and looks undervalued relative to its growth potential. As the tech outlook turns around, Nivida could resume the massive rallies that it’s had in the past.
Action to take: Investors should accumulate shares at or under current prices. The stock pays a dividend just under 0.1 percent, so don’t rely on that for income.
For traders, the January 2024 $300 calls last going for about $25.00, offer a way to leverage the stock’s likely move higher over the rest of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
David MacLennan, a director at Caterpillar (CAT), recently bought 400 shares. The buy increased his holdings by 12 percent, and came to a total cost of $99,716.
The director was the last buyer of Caterpillar shares back in May. Otherwise, company insiders have been sellers of shares, mostly from the exercise of stock options. The sales have included both directors and executives.
Overall, company insiders own 0.15 percent of shares.
The farm machinery company is up 28 percent in the past year, as revenues jumped 20 percent. Higher agricultural commodity and food prices kept demand strong for Caterpillar’s products.
Even with the strong performance, shares trade at about 15 times forward earnings. That’s a moderate discount to the overall market, and makes shares look like a bargain given the company’s brand power in the farm equipment space.
Action to take: Investors may like shares for the long run at current or lower prices. Caterpillar shares offer a 2 percent dividend yield, and the company has worked to consistently grow it over time.
For traders, shares have pulled back slightly over the past few weeks before this latest insider buy. A potential rebound could be about to start. The June $260 calls, last going for about $6.40, offer mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of coffee store chain Starbucks (SUBX) are up 15 percent over the past year, bucking the market downtrend. However, one trader sees a pullback in the coming weeks.
That’s based on the March $102 puts. With 18 days until expiration, 4,092 contracts traded compared to a prior open interest of 164, for a 25-fold rise in volume. The buyer of the puts paid $1.67.
Shares recently traded around $103.50, so the stock would need to drop about $1.50 for the option to move in-the-money. That’s a reasonable move, even in the span of a few weeks. And that strike price is still well over Starbuck’s 52-week low of $68.39.
Besides the strong share performance, revenues rose 8 percent in a challenging year, and earnings grew by 5 percent. While not huge numbers, compared to many other companies and sectors facing a slowdown, Starbucks fared well.
Action to take: Shares are worth buying on a pullback, as shares are a bit richly valued here at 30 times earnings. A drop to $90 or so would also give investors a higher yield than the current 2 percent on shares.
For traders, shares have been trending down over the past few weeks, so the March puts play to the current short-term trend. Traders can likely nab mid-double-digit gains before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The information age has rewarded those who can package data in digestible ways. That’s rewarded companies like social media firms, which have allowed for users to share content with those in their networks.
And it’s allowed bigger tech companies to consolidate data that can make analytical predictions about consumer tastes and behavior. In short, content is king – and only a few companies are able to consistently profit from it.
In China, Baidu (BIDU) has a similar role to the one that Google (GOOG) plays in the United States. It’s an information technology company. And it’s performing well.
Besides beating on revenues in its fourth quarter, the company is launching a $5 billion buyback program. With a current market cap of about $48 billion, that’s just over 10 percent of shares that could be retired in just a few years.
Action to take: Besides a big buyback, the company’s industry lead in China makes it a reasonable long-term holding. While not profitable I the most recent quarter, shares trade at about 16 times earnings, a discount relative to peers such as Google.
For traders, Baidu shares have been trending higher since November, and are likely to continue to do so as the company improves operationally. The May $150 calls, last going for about $9.10, can potentially deliver mid-double-digit returns in the coming months on a further move higher in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Daniel Schulman, President and CEO at PayPal Holdings (PYPL), recently bought 26,065 shares. The buy increased his holdings by 7 percent, and came to a total cost of $1.99 million.
This marks the first insider buy since last May, when the company’s Chief Product Officer bought 7,370 shares, at a cost of $597,000. There have been three small sales since. Going back further, insider buying and selling has been more mixed, even when shares traded far higher than today.
Overall, company insiders own 0.2 percent of shares.
The payment processing company is down about 25 percent over the past year, as tech names have been hit harder than the overall market. However, shares now trade at about 15 times forward earnings, and PayPal managed to grow its earnings 15 percent last year in a slowing economy.
Action to take: As an industry leader in the payments space, PayPal can likely continue to grow its earnings and revenues. Shares are attractive to accumulate at current prices or lower. At the moment, the company does not pay a dividend.
For traders, shares have been somewhat rangebound over the past few months, and are now near the lower end of their range. The July $85 calls, last going for about $4.70, offer mid-double-digit returns in the months ahead from a bounce off the recent lows.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of pharmaceutical drug manufacturer Eli Lilly and Company (LLY) are up 37 percent in the past year. However, the share price has started to sag – and one trader sees the potential for a further decline in the months ahead.
That’s based on the May 2023 $310 puts. With 84 days until expiration, 4,464 contracts traded compared to a prior open interest of 159, for a 28-fold rise in volume on the trade. The buyer of the puts paid $10.25.
Eli Lilly shares recently traded for about $330, so the stock would need to drop about $20, or about 6 percent, for the option to move in-the-money. Shares have a 52-week low of $234, so the strike price is reasonable.
Despite the strong share performance last year, Eli Lilly saw revenues decline 9 percent. That’s helped to push the stock’s valuation up to nearly 50 times earnings, more than twice the valuation of the stock market as a whole.
Action to take: Investors may like shares, provided they wait until after a pullback. The low $210 range would be more reasonable for an entry point. The stock yields about 1.4 percent right now, but at a lower valuation would have a higher starting yield for buyers.
For traders, the May puts are well positioned for a further decline in shares. Traders can likely see mid-double-digit returns on the May $210 puts.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
While the market has had a strong start to the year, stocks are turning down again. That’s not a problem for investors who focus on value. That includes companies with strong brands, as well as on companies that can offer steady and growing dividend payouts.
These companies may not always be big winners, but they tend to hold their own in down markets. And that can lead to winning performance over time.
That’s particularly true for companies that can pass on higher costs to consumers. One winner is General Mills (GIS). The food producer just raised its forecasts for its fiscal year, expecting earnings to rise by 7 to 8 percent, up from 4 to 6 percent in December.
The owner of brands such as Betty Croker and Nature Valley is already up 14 percent in the past year, even as the rest of the market has taken a hit. Yet shares are still well priced at 18 times forward earnings.
Action to take: Long term investors may like shares at current prices or on a pullback. The stock yields about 2.8 percent here, and the dividend was just raised.
For traders, the July $85 calls, last going for about $2.50, play to the stock’s long-term uptrend. The option can likely deliver mid-double-digit gains in the coming months before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
R.A. Walker, a director at ConocoPhillips (COP), recently added 6,000 shares. The buy increased the director’s holdings by 27 percent, and came to a total cost of $627,000.
The same director was the last buyer of shares back in August 2021, with an initial stake of 22,500 shares, which cost just over $1.24 million. Otherwise, company directors and executives alike have largely been steady sellers of the stock, mostly on the exercise of stock options.
Overall, insiders own a scant 0.14 percent of shares.
ConocoPhillips is up 19 percent over the past year, amid a general market decline. Strong energy prices have been good for the company operationally. Both income and revenue have risen by about 25 percent in the same period.
Action to take: Despite the rally, shares are still inexpensive at 9 times forward earnings. That makes the stock worth accumulating at current prices or on a dip. Shares yield about 2.2 percent at current prices.
For traders, the August $120 calls, last going for about $5.15, offer mid-double-digit returns in the months ahead. The stock has been somewhat range-bound over the past few months, and is now near the lower end of its range. Plus, shares will likely trend up going into the summer driving season.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of Home Depot (HD) slid nearly 7 percent on Tuesday following the company’s latest earnings report and outlook. One trader sees shares trending lower in the coming months.
That’s based on the April $270 puts. With 57 days until expiration, 5,766 contracts traded compared to a prior open interest of 131, for a 44-fold rise in volume on the trade. The buyer of the puts paid $4.58 to make the bearish bet.
Shares slid to about $296 following the earnings report, so Home Depot would need to drop another $26, or just under 10 percent, for the options to move in-the-money. The strike price is also close to the stock’s 52-week low of $264.51.
The home improvement retailer is a large-cap play with low, but fairly steady, growth ahead of it. While the company’s outlook was poor, it beat on earnings and just upped its dividend – so any short term drop in the stock from here is likely temporary.
Action to take: Interested investors have their best entry point in three months, and shares could get a bit cheaper in the coming sessions. Thanks to the recent drop, shares now yield about 2.4 percent.
For traders, the puts are a reasonable bet in the next few weeks as shares settle, with a mid-double-digit profit potential. However, traders will likely want to take a quick profit and bet on a rebound after that.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Companies exist to provide a product or service. The best and most profitable companies do so in a way that solves a problem – real or perceived – for consumers. Creating new and simplified ways of doing business, for instance, can create a great investment opportunity.
That’s because improving a process means that a company can profit from every transaction, even if it’s to such a small degree. This is the way that credit card companies have become a fantastic investment for long-term investors.
The payment process has gotten even simpler. Companies like Toast (TOST) have created a way to make payments at restaurants without having to engage in a process of handing over a credit card and waiting for it to be returned. This simplified process is labor and time saving.
Toast’s operations accelerated during the pandemic, given that the improved process reduces the need to physically hand over and back a credit card. That strength continues to this day, with revenues up 49 percent for the company in the past year.
It’s still in its high growth stages, so it’s not profitable yet. However, Toast is rapidly becoming the leading player in the restaurant payment processing space.
Action to take: Shares have started to come down from overbought levels in recent days. Investors should look to accumulate shares under $20.
For traders, the September $25 calls, last going for about $1.90, may get a bit cheaper in the next few days. However, in the months ahead, the trade can likely deliver high-double-digit returns on a rebound.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Gary Kelly, a director at Lincoln National Corp (LNC), recently bought 7,169 shares. The buy came to a total cost of just over $200,000, and increased the director’s stake by 239 percent.
Another director made a 3,000 share buy in November, paying about $10 more per share, and paying just over $112,000. Otherwise, company insiders have been modest sellers of shares over the past three years, including the company CEO and CFO.
Overall, insiders own about 0.6 percent of the life insurance company’s shares.
Shares have been cut in half in the past year as LNC has reported some losses. And revenues are down 11 percent overall. Rising interest rates will benefit the company’s investments going forward, but will continue to impact the value of their investment portfolio.
However, shares also trade at 4 times forward earnings. And the company is inexpensive on a number of other metrics, including its price to sales and enterprise value.
Action to take: Investors may like shares here. LNC shares yield about 5.2 percent, and the company should have sufficient cash flow to cover the dividend, even if rising interest rates impact portfolio valuation.
For traders, shares have been trending higher since late September. The July $27.50 calls, last going for about $1.90, offer mid-double-digit returns on the continued gradual rally in shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of Carnival Cruise Lines (CCL) have been cut nearly in half over the past year. One trader sees a decline in shares continuing in the coming months.
That’s based on the September $12 puts. With 205 days until expiration, 5,672 contracts traded compared to a prior open interest of 181, for a 31-fold rise in volume on the trade. The buyer of the puts paid $2.14 to make the bearish bet.
Shares recently traded for about $11.30, so the option is already about $0.70 in-the-money. Shares have strongly rebounded in recent weeks from their 52-week low of $6.11.
The cruise line is still weathering the effects of the pandemic. Revenues rose 198 percent in the last year, however, that still didn’t lead to a profit. In fact, CCL lost about $6.1 billion.
Action to take: With the economy slowing down, and with fuel prices high, cruise lines may be susceptible to a recession. Interested investors can likely buy at a far lower price in the months ahead, potentially even close to the stock’s 52-week low.
For traders, the September puts have plenty of time to play out. And they’re already in-the-money. Traders can likely nab high double-digit returns with the September puts if there’s any downtrend in shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Utility companies tend to offer steady returns, but at a cost. Growth is limited, thanks to regulatory concerns. However, some utilities can fare better than others, either because they’re in growing markets, or because they face less regulatory scrutiny.
One such area is in waste management, aka, garbage hauling. This service is often provided to municipalities by an oligopoly of companies. These companies are able to earn reasonable returns, particularly for patient investors.
The biggest player in the space is Waste Management (WM). It’s up 7 percent over the past year. Compared to the market’s losses, it’s faring quite well.
And like other companies in the industry, it’s growing its revenues over time. Part of that is thanks to long-term contracts that adjust higher for inflation.
Action to take: Shares are fairly valued around 25 times earnings, however, that’s down from 40 times earnings a year ago. The company’s positioning will allow it to earn steadily growing income indefinitely. Plus, shares yield about 1.8 percent here, and WM has a history of growing its dividend.
For traders, the stock has been somewhat rangebound, but is closer to the lower point of its range. The April $165 calls, last going for about $1.00, are a bet on a bounce higher in the coming months.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Denise Morrison, a director at Visa (V), recently added 455 shares. The buy increased her holdings by 8 percent, and came to a total cost of $84,096.
This marks the first insider buy at the company in the past three years. Generally, company executives have been regular sellers of Visa shares as their stock options have vested. A few directors have been modest sellers of shares at times as well.
Overall, insiders own about 0.2 percent of shares.
The credit card provider has seen shares trade higher by just 2 percent over the past year. While not a fantastic return, it’s still better than the loss in the overall stock market.
Revenues rose 12 percent, and earnings are up about 6 percent. Rising credit card balances could help profitability, however, there could also be a rise in losses if consumers become unable to pay their credit card balances.
Action to take: Generally, credit card companies have fared well over time. Visa is fairly valued at current prices, and is worth buying on a drop under $215. Shares yield about 0.8 percent at present.
For traders, shares have been trending higher since October, although that trade has flattened out in recent weeks. The April $200 puts, last going for about $1.65, offer mid-double-digit returns on a drop in shares in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of railroad Union Pacific Corporation (UNP) are down about 20 percent over the past year. One trader sees a rebound, although it may take two years to play out.
That’s based on the January 2025 $220 calls. With 696 days until expiration, 4,100 contracts traded compared to a prior open interest of 192, for a 21-fold rise in volume on the trade. The buyer of the calls paid $22.80 to make the bullish bet.
Shares recently traded for just over $200, so the stock would need to rise about 10 percent for the option to move in-the-money. The stock has a 52-week high just under $279.
The railroad trades for about 18 times earnings. Revenue rose 8 percent in the last year, but total earnings slid about 4 percent. Rail traffic can be tied to the strength of the economy, as more goods are shipped during expansions.
Action to take: The railroad is part of an oligopoly, and is well-managed, earning a 28 percent profit margin, which is strong for a capital-intensive operation like a railroad. Shares look like a worthwhile buy in the $200 range, and the stock yields about 2.6 percent at current prices.
For traders, the calls are well positioned for a move higher in shares, potentially as soon as the next few months. Railroad stocks have been slammed in recent sessions following a series of derailments, largely from competitors of UNP. Look for high double-digit returns on the options to take profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Stocks and sectors tend to ebb and flow. The unusual economy of the past few years has caused some sectors to get overly bullish, and now with the market pullback over the past year, overly pessimistic.
That’s creating some reasonable values for long-term investors, particularly those who are patient waiting for growth trends to play out. That’s especially true with many tech stocks, which got hit hard in last year’s market selloff.
In the tech space, chip manufacturers have a bright few years ahead. However, the outlook now is still murky amid a slowing economy. That hasn’t stopped some companies, like Applied Materials (AMAT) from reporting strong earnings.
The company recently beat on both earnings and revenue, and the forecast is starting to look better than expected after taking a hit last year. Meanwhile, shares trade at about 16 times forward earnings, a discount to the overall stock market and the company’s growth potential.
Action to take: Patient investors may like shares here. Besides a reasonable valuation and growth prospects, shares yield about 0.9 percent at current levels, with room for plenty of capital gains in the years ahead.
For traders, the April $130 calls, last going for about $3.00, offer mid-double-digit returns going forward from here. Shares have been in an uptrend, and look set to continue following the stock’s earnings beat.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Ruth Porat, a director at Blackstone (BX), recently bought 336 shares. The buy increased her stake by 1 percent, and came to a total cost just over $32,300.
The director was also the most recent buyer of shares with a 20,000 share buy in December, shelling out just over $1.67 million. One company director exercised options since, and one company insider sold some shares earlier this month, but generally insiders haven’t been too active at the company.
Overall, company insiders own 0.7 percent of shares.
The asset management company is down about 25 percent over the past year, as rising interest rates have impacted asset values. Revenue is down even worse, with a 67 percent decline.
Despite those negatives, the company has ample cash on its balance sheet, and is still earning a solid 22 percent profit margin right now. Should the market continue to move higher, Blackstone will likely see the mirror image of its 2022 operational performance.
Action to take: Shares will likely rebound in time along with asset values, which makes the company a reasonable long-term holding at current prices. Plus, shares yield about 4.6 percent at current prices.
For traders, the April $105 calls, last going for about $2.25, offer mid-double-digit gains in the weeks ahead if shares continue their current short-term uptrend.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of biopharmaceutical company Gilead Sciences (GILD) have rallied about 37 percent in the past year. One trader sees a pullback for shares in the weeks ahead.
That’s based on the March $86.50 puts. With 25 days until expiration, 6,508 contracts traded compared to a prior open interest of 236, for a 27-fold rise in volume on the trade. The buyer of the puts paid about $5.00 to make the bearish bet.
Shares recently traded close to $83.50, making the options about $4.00 in-the-money. Gilead is closer to its 52-week high of $89.74, but has started to decline in recent sessions.
Operationally, the company has fared reasonably well. Revenues have been flat over the past year, but earnings have jumped over 320 percent. However, that kind of move isn’t sustainable, and shares are richly valued in terms of earnings, sales, and book value compared to the past two years.
Action to take: Shares pay a 3.5 percent dividend here, but the payout ratio is high, and a drop in earnings could put that dividend at risk. Investors interested in the company can fare better by waiting for a pullback in shares.
For traders, the put options play well to the company’s recent slide. If it continues, the option can deliver mid-double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investors have plenty of trends that they can follow to profits. One of the easiest – or at least biggest source—of profits to follow is the massive amount of government spending. That’s led to some people investing in highly regulated utilities, or even in aerospace and defense contractors for steady profits.
However, times are changing. And the battlefields of the 21st century may not even have a physical location. There’s a tech-themed way to invest in this growing area of government spending.
That area is in artificial intelligence and big data. And companies like Palantir Technologies (PLTR) are leading the way. More importantly, the company finally reported its first-ever profitable quarter, and that the company may be attracting a potential acquirer.
Either way, that suggests some good upside for investors at or near today’s prices.
Action to take: Investors may like shares here, as the company’s move towards profitability will make it easier to value and analyze compared to a company that’s not yet profitable. And any acquisition offer will come in at a premium to the current share price.
For traders, the August $11 calls, last going for about $1.55, are a near-the-money trade. On a buyout announcement the options will be good for a big move higher. So if that happens in the next six months, this option could deliver high double-digit returns or better.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Alberto Paracchini, a director at Kemper Corp (KMPR), recently bought 500 shares. The buy increased his holdings by 88 percent, and came to a total cost just under $32,000.
This marks the first insider buy since last August, when two directors picked up 5,000 shares and 3,000 shares respectively. Otherwise, there have been some modest sales by other company directors. The last executive insider activity occurred in late 2021.
Overall, insiders own about 4.6 percent of the property and casualty insurance company.
Shares have been a strong performer, with a 27 percent rally in the past year. That’s in spite of some recent losses. Revenue slid 7 percent in the last year, and the company had negative earnings overall.
While trading at a one-year high, the stock is still under its average price over the past five years.
Action to take: Shares look reasonably valued moving forward, even with their recent move higher.
Insurance companies tend to average out to strong performance over time, even amid some years of good operational performance and some years of poor ones. At present, the stock yields just under 2 percent.
For traders, the April $70 calls, last going for about $2.05, offer mid-double-digit returns on a continuation of the stock’s current uptrend in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of oil and gas company Devon Energy (DVN) got knocked down nearly 11 percent following their latest earnings report earlier this week. One trader sees shares bouncing higher in the coming weeks.
That’s based on the March $55 calls. With 28 days until expiration, 6,162 contracts traded compared to a prior open interest of 120, for a 51-fold rise in volume on the trade. The buyer of the calls paid $3.60 to make the bullish bet.
Share recently traded for about $57 following their big drop, so the option is just over $2.00 in-the-money. Over the past year, shares have traded between $48.86 and $79.40, so they’re at the lower end of their range.
The company reported that production dropped 2 percent compared to same quarter in 2021, and that 2023 output will be slightly lower due to a fire. While the market dropped on that news, they overlooked the fact that the company’s production costs fell.
Action to take: While there’s some uncertainty over production, that’s creating a reasonable buying point for investors. Plus, at the current price, shares yield about 8.5 percent.
For traders, the March calls are a reasonable bet on a rebound in the coming weeks. While the move won’t be huge since the option is already in-the-money, traders can likely see mid-double-digit returns on the options before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Travel still remains below its pandemic levels, however, that could change this year. Companies in the travel and tourism space report robust demand, even with other parts of the economy showing a decline.
One area with reasonable upside here is in hotel-related companies. That’s because booking trends have proven strong, even going into the new year and past the holiday season.
Among the hotel stocks, Marriott (MAR) looks well-positioned here. The hotel chain just beat on earnings, and the stock is fairly valued at 21 times forward earnings, down from 30 times last year.
With bookings on the rise, Marriott will likely be able to extend its 39 percent jump in revenues from last year. Earnings soared 186 percent last year – a level that likely won’t be beat this year, but should still trend higher.
Action to take: Investors may like shares under $185. At current prices, the stock yields about 0.9 percent. The company just upped its dividend payment from $0.60 annually to $1.60 – a big jump that may moderate in the years ahead, but still has room to grow.
For traders, shares are likely to continue trending higher in the coming weeks. The April $190 calls, last going for about $4.50, offer mid-double-digit returns to leverage that move.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Gary Greenfield, a director at Diebold Nixdorf (DBD), recently picked up 17,500 shares. The buy increased his holdings by 11 percent, and came to a total cost of $50,358.
The buy comes a day after the company’s President and CEO picked up 30,000 shares, shelling out $68,300. Company insiders were last active back in May, when the company CFO and a number of directors bought shares. The last insider sale occurred in 2021.
Overall, company insiders own 9.8 percent of shares.
The banking software company has sees a 75 percent drop in price over the past year. Revenues are down nearly 10 percent, and the company has been unprofitable.
Despite that poor performance, shares have been trending higher in recent weeks, and are nearly double off of their lows. The stock even continued higher after the company reported that it missed on its earnings expectations for the year.
Action to take: As a stock that’s taken a big hit, shares may be poised for a continued move higher from here. They may not go back to their old 52-week highs anytime soon, but with the company down far worse than its operational performance, it stands likely to continue to move higher.
For traders, the May $3.00 calls, last going for about $0.53, offer mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of beverage behemoth The Coca-Cola Company (KO) dropped earlier this week on missed earnings. One trader is betting on a quick rebound in the weeks ahead.
That’s based on the March 24th $61 calls. With 36 days until expiration, 5,133 contracts traded compared to a prior open interest of 11, for a 46-fold rise in volume on the trade. The buyer of the calls paid $0.62 to make the bullish bet.
Shares recently traded for about $59.50, so the stock would need to rise about $1.50, or about 2.5 percent for the option to move in-the-money. The strike price is still well under the stock’s 52-week high of $67.20.
Coca-Cola shares have traded flat over the past year, offering a slightly better return than the S&P 500. Revenues rose 10 percent, a bigger increase than inflation over the same time. And the company sports a solid 23 percent profit margin.
Action to take: Long-term investors may like shares at or under $60. Shares yield just under 3 percent here, and the company has a history of increasing its dividend payout over time.
For traders, the March calls are well positioned for a rebound in shares. That can leverage a small move in the stock into mid-double-digit gains as the company comes off of its latest earnings report.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
It can be tough to decide what to buy in any market. Following last year’s bear market, which seems to be fading, one strategy might be to buy heavily shorted stocks. In the short-term, that may work. For longer-term investments, however, it may be prudent to invest in companies with solid growth and tremendous cash flow.
That’s because cash flow can be used to grow the business, buy a competitor, or even reward shareholders with dividends or buybacks.
Many large-cap energy companies have been using their cash flow to reward shareholders, rather than potentially overpay to reinvest in marginal energy finds or smaller companies right now. That’s been a boon to many shareholders, and the trend looks set to continue.
One winner is Chevron (CVX), which is even looking to extend the tenure of its CEO based on the company’s success.
Despite a 25 percent jump in shares last year, Chevron is still reasonably priced at 11 times forward earnings. That’s about in-line with the company’s earnings and revenue growth, which can continue as long as energy prices remain elevated.
Action to take: Shares are a reasonable buy at or under current prices, where the stock also yields about 3.5 percent. Chevron has been good at raising its dividend in recent years, on top of the announcement of a big share buyback.
For traders, the June $200 calls, last going for about $1.80, offer mid-double-digit returns on a continued move higher in Chevron stock in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Leung Chan, a director at Super Micro Computer (SMCI), recently bought 3,000 shares. The buy increased the director’s holdings by 12 percent, and came to a total cost of $256,440.
The director was the last buyer of shares in November, picking up 1,525 shares for $127,338. Generally, company insiders have been sellers of shares, particularly a director and the company CEO, who both own substantial holdings.
Overall, insiders own 13.3 percent of shares.
The computer server and storage producer has seen shares soar 136 percent in the past year. That’s thanks to revenues rising 54 percent and earnings expanding by 320 percent. The growth has been fueled in part by higher-margin products like the company’s security software.
Shares currently trade at under 10 times earnings. And while that growth may slow, SMCI’s low market cap still leaves it with ample room for growth in the years ahead.
Action to take: Investors may like shares for the long haul at or under current prices. The company is still in its early growth stages, so it doesn’t pay a dividend yet.
For traders, shares are likely to continue their long-term uptrend. The May $100 calls, last going for about $7.85, offer mid-double-digit returns in the months ahead on a further rally for SMCI shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of international bank Canadian Imperial Bank of Commerce (CM) have slid over 25 percent in the past year. One trader sees a further decline for the stock in the months ahead.
That’s based on the September $35 puts. With 212 days until expiration, 5,500 contracts traded compared to a prior open interest of 158, for a 35-fold rise in volume on the trade. The buyer of the puts paid $0.45 to make the bearish bet.
Shares last traded for about $46.50, so the stock would need to fall about $11.50, or about 25 percent, for the options to move in-the-money. CM shares would also need to drop below their prior 52-week low of $39.40.
Operationally, the company has been performing better than shares. Revenues dropped by about 1 percent last year, and earnings slid 18 percent. That’s not too bad considering the rapid rise in interest rates and slowdown in banking activity.
Going forward, however, that trend will likely continue for the foreseeable future.
Action to take: While shares look inexpensive at just over 9 times earnings, the bank still trades at a premium to others based on its book value. Patient investors may want to wait for a drop under $40 before buying, where the bank’s dividend yield will be closer to 6 percent.
For traders, the September puts are inexpensive enough to deliver high-double-digit returns, or even triple-digit returns, in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
This earnings season has been a mixed bag. Companies are reporting big layoffs and warning on an economic slowdown and the impact of inflation. Yet what sounds like bad news now could be bullish later on.
That’s because companies laying off staff are finding that they can do as much – if not more – with a reduced headcount. Lower staffing costs could lead to a further cost savings that increases profitability – which could be a boon for shareholders.
Of the many companies laying off and warning on inflation now is PayPal (PYPL). The company warned on inflation and has laid off staff. But they’ve beaten on earnings for the fourth-quarter by being early to adjust to the current economic reality.
Even with shares slightly up on the earnings beat, shares are down a third over the past year. Shares of the payment processing company trade at 17 times forward earnings, and both revenue and earnings growth are up double-digits over the last year.
Action to take: Investors may like shares at or under current prices, given the company’s leading position in the online payments space should continue to remain strong. At the moment, shares do not pay a dividend.
For traders, the April $85 calls, last going for about $4.10, offer mid-double-digit returns on a continued move higher in shares in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Jonathan Foster, a director at Lear Corp (LEA), recently added 231 shares. The buy increased his holdings by 2 percent, and came to a total cost of $32,153.
This marks the first insider buy at the company in the past two years. Otherwise, company insiders, particularly the company President and CEO, as well as the company treasurer, have been sellers of shares, largely from exercising options.
Overall, insiders own 0.2 percent of the company.
The automotive component manufacturer is down 14 percent over the past year. That’s in spite of a 10 percent increase in revenues and a 440 percent jump in earnings.
While shares may be down in sympathy with the overall market and concerns over a slowing economy, shares trade at 10 times forward earnings. That’s inexpensive enough that shares could be set for a market-beating move higher when the economy starts to rally again.
Action to take: The automotive space can be highly cyclical, so investors may want to look to buy shares on a drop closer to the stock’s 52-week low around $115. Shares currently yield 2.2 percent, but patient investors can get a higher starting yield.
For traders, shares have been somewhat rangebound over the past year, and are coming off their peak. The March $130 puts, last going for about $3.00, offer investors mid-double-digit gains in the coming weeks on a further decline in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of department store chain Kohl’s Corporation (KSS) are down 44 percent over the past year. One trader sees a potential rebound in the next few weeks.
That’s based on the March $30 calls. With 31 days until expiration, 5,143 contracts traded compared to a prior open interest of 116, for a 44-fold rise in volume on the trade. The buyer of the calls paid $3.40 to make the bullish bet.
The stock recently traded for about $32, so shares are already $2.00 in-the-money. The stock is also well off its 52-week lows of $23.38.
Earnings dropped 60 percent over the past year, even as revenues dipped by just 7 percent. A slowdown in consumer spending could further weigh on shares over the long term. But on a technical basis Kohl’s looks oversold in the short-term.
Action to take: Shares have been beaten down heavily enough that the stock yields 6 percent. And even with the slowdown, shares trade at about 9 times current and forward earnings. That could make the stock a worthwhile buy as a value play.
For traders, the March calls could deliver mid-double-digit returns, as they’re already an in-the-money trade. That’s true even if shares don’t move too much higher in the months ahead, given the economic headwinds the company faces.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Markets are cyclical, and often so are companies. A great product or service won’t last forever. Once the market has been saturated, new products or features are needed to keep revenues growing at a company.
For tech companies, this constant iteration is fantastic. It’s inexpensive to develop new ideas and roll them out. And for many tech services, new features can be added while keeping customers on a monthly payment plan.
So it’s no surprise that a number of activist investors are targeting Salesforce (CRM). The software-as-a-service giant has been a poor performer, but it’s attracting billionaire investors who see plenty of ways to unlock value.
Even with shares bouncing solidly off their lows, the stock is down 22 percent in the past year. Earnings slid 55 percent, even on a 14 percent increase in revenues.
Action to take: Shares are one of the more interesting buys in the tech space at current prices. If a successful turnaround plan takes place, the company can vastly increase its profitability – currently a scant 1 percent, while bringing earnings higher.
For traders, the May $195 calls, last going for about $6.75, offer mid-to-high double-digit returns on a move higher in shares from a turnaround plan in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
William Hosler, a director at PacWest Bancorp (PACW), recently bought 3,750 shares. The buy increased his stake by 7 percent, and came to a total cost of $99,300.
The director was the last buyer as well, with an 8,000 share pickup for $200,000 last June. The company’s CEO has sold shares twice since then, but still owns over 1 million shares of the company in total.
Company insiders own 1.8 percent of shares.
The California-based bank is down about 43 percent in the past year, amid rising interest rates and a slowdown in lending activity.
Yet the bank maintains a strong 32 percent profit margin, and revenue declined only 20 percent last year, less than the drop in share price. PacWest now trades at 0.9 times its book value, indicating that the bank is discounted by about 10 percent of its total loan value.
Action to take: Regional banks trading below book value tend to be solid investments over time. Traders who buy at or under today’s prices should fare well. The bank pays a 3.5 percent dividend at current prices, a solid payout for getting paid to wait.
For traders, shares have started to trend higher in the past few weeks. The June $30 calls, last going for about $1.55, offer a mid-to-high double-digit return in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of apparel manufacturing company V.F. Corporation (VFC) are down about 55 percent over the past year. One trader sees further downside in the next three months.
That’s based on the May $22.50 puts. With 95 days until expiration, 20,019 contracts traded compared to a prior open interest of 245, for an 82-fold rise in volume on the trade. The buyer of the puts paid $0.98 to make the bearish bet.
Shares recently traded for about $26, so the stock would need to decline about $4.50, or 15 percent, for the options to move in-the-money. The $22.50 strike price would be a new low for VFC, as the stock currently has a 52-week low of $25.05.
The company only saw a slight drop in revenues and earnings last year – about 3 percent and 2 percent, respectively. However, apparel designs can become outdated quickly. And in a slowing economy, consumers may not spend as much on apparel.
Action to take: The company slashed its dividend payout nearly in half last year, but shares still yield about 4.2 percent. The payout is nearly twice the level of the company’s earnings, so further cuts could be ahead. Investors should look to avoid shares for now.
For traders, the options are inexpensive, and a reasonable bet on the direction of shares in the coming months. Traders should look for mid-to-high double-digit gains for a chance to take profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Customers will pay more for a brand-name product that they know and love. That’s true with everything from home goods to restaurants, and even to choices of entertainment. A company that invests in building a strong brand can create excess returns for shareholders over time.
But even great companies will see setbacks. That can create reasonable buying opportunities to get in on the long-term wealth-creation benefits of owning great companies.
That may be the case with Activision Blizzard (ATVI). The company owns a number of popular video game titles, each of which is a brand with a loyal customer base. Shares have been whipsawed given the focus on the company’s potential acquisition by Microsoft (MSFT).
While the deal may not pan out, Activision’s appeal as a standalone company remains strong. It’s trading at about 20 times earnings, carries a 20 percent profit margin, and grew revenues 8 percent in a challenging year – and a slow one for new video game releases.
Looking at upcoming title launches, shares may be poised to move higher – with or without an acquisition.
Action to take: Investors may like shares here in the low $70 range. The company started a dividend, and pays about a 0.6 percent yield here.
For traders, as long as the acquisition offer is pending, shares will likely remain range-bound. Traders can buy shares and sell covered calls for income. Or they could sell a put option at the low end of the range. The April $70 puts, last going for about $2.15, can be sold to open for income.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Peter Henry, a director at Nike (NKE), recently bought 557 shares. The buy increased his holdings by 16 percent, and came to a total cost of about $70,000.
This is the first buy at the company since last June, when another director picked up 10,000 shares for $1.03 million. Those mark the only insider buys over the past two years. Otherwise, a few company executives have been slight sellers of shares, mostly as stock options are exercised.
Overall, company insiders own 1.3 percent of shares.
The athletic shoe and apparel company is down about 14 percent in the past year, underperforming the S&P 500. That’s despite a 17 percent rise in revenues.
Even with that performance, shares have gone from 48 times earnings last year to about 31 times today, a level still elevated to the overall market.
Action to take: Nike is a powerful brand, and one worth buying on a pullback. To get a reasonable price, traders would do best to wait for a price at or under $95. The stock is a dividend payer with a 1.1 percent yield at today’s prices.
For traders, shares have been rallying since September, but have been starting to turn over in recent sessions. The April $115 put, last going for about $3.85, offers a potential to earn high-double-digit returns on a steeper decline in shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of lithium mining company Sigma Lithium (SGML) are up 174 percent over the past year, thanks to a view by investors that rising electric vehicle production will require more of the metal. One trader sees the stock cooling off in the months ahead.
That’s based on the July $22.50 puts. With 161 days until expiration, 3,100 contracts traded compared to a prior interest of 113, for a 27-fold rise in volume. The buyer of the puts paid $1.78.
Shares recently traded for about $29.50, so they’d need to lose $7, or about 24 percent of their value for the option to move in-the-money.
The company is in the early stages of developing out its lithium mining operations in Brazil. So there are no notable earnings yet. Shares are a bet that the company can become one of the largest, and lowest-cost, lithium mining operations in the world.
Action to take: Investors may have gotten ahead of themselves a bit with lithium stocks. Given the slowdown in consumer spending, electric vehicle sales may continue to grow, but at a slower-than-expected pace. That suggests a better buying opportunity for going long on lithium stocks.
For traders, the July puts are well positioned for a drop in shares in the coming months. Shares have already been trending down gradually since October, so if the trend continues, the options could deliver at least mid-double-digit gains.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The past few years has seen investors shift interest first towards alternative and green energy plays, and then away from them. That’s due to a view that the technology could be scaled up quickly. But that may not be the reality.
That’s led to a strong performance in the energy sector, and one that’s likely to continue. It’s being aided by companies announcing that they’re scaling back their alternative energy investments.
The latest company to scale back its alternative energy plans is BP (BP). The company sees the potential for a new energy supercycle, which could benefit oil and natural gas for years.
While a bigger player in the industry, BP has been a relative underperformer in the market, with a 6 percent gain over the past year. Yet revenues are up 52 percent over the past year, and the company expects that trend to continue.
Action to take: Shares trade at 5 times forward earnings, and the company just bumped its dividend to a 3.8 percent yield. That makes it attractive, especially as it hasn’t run as much higher as other major oil players.
For traders, shares are in a strong uptrend. The June $40 calls, last going for about $1.30, offer mid-to-high double-digit gains in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Terrell Crews, CFO at NextEra Energy (NEE), recently bought 2,672 shares. The buy increased his holdings by 8 percent, and came to a total cost of $200,000.
He was joined by two directors, one picked up 4,000 shares for just under $300,000 and more than doubled his stake. Another bought 1,000 shares for just under $75,000. Overall, insiders have been more active as buyers than sellers over the past few years.
Overall, company insiders own 0.2 percent of shares.
The utility company has traded flat over the past year, which has outperformed the overall stock market. Plus, the company grew revenues and earnings by mid-20-percent levels over the past year.
The utility trades at 24 times forward earnings, a bit steep for the utility space. But with large population growth in the company’s operating area of Florida, NextEra has better growth prospects than other players in the industry.
Action to take: Long-term investors may like shares here or on any pullback in the coming weeks or months. The stock yields about 2.3 percent, and the payout tends to increase over time.
For traders, shares will likely continue to trend higher over time. The June $80 calls, last going for about $2.85, can likely leverage a modest move higher in shares into mid-double-digit gains.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of cybersecurity company Palo Alto Networks (PANW) are down about 9 percent over the past year following a strong rally in the past few weeks. One trader sees further downside for shares ahead.
That’s based on the January 2025 $135 puts. With 708 days until expiration, 10,502 contracts traded compared to a prior open interest of 322, for a 33-fold rise in volume on the trade. The buyer of the puts paid $15.10 to make the bearish bet.
Palo Alto shares recently traded for about $165, so the stock would need to drop about $30, or about 20 percent, for the option to move in-the-money. With a 52-week low of about $132, such a move in the next two years looks possible.
While the company has seen revenues rise 25 percent to nearly $6 billion over the last year, the firm is not yet profitable, with an estimated value of 49 times forward earnings.
Action to take: Shares have had a strong rally in the past few weeks, but could be prone to a pullback as tech stocks tend to get hit hard on market drops. Investors interested in the stock should wait for a re-test of the prior low before buying in.
For traders, the puts are well priced, especially as they have nearly two years to play out. Traders can likely leverage a downturn into mid-double-digit gains.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investors have gone crazy for artificial intelligence (AI) stocks since the start of the year. That’s thanks to the popularity of chatbot ChatGPT. While the money flowing into AI stocks specifically will likely peter out in the coming weeks, AI as an investment concept isn’t going away.
Rather than speculate on a small startup company, it may make more sense to invest in a large, big tech company that’s working on the space.
One company that will likely end up being a big winner is Alphabet (GOOG). The parent company of search engine Google is already working on its own chat service dubbed Bard, which will be released in the coming weeks.
If successful, this could open up a new way for Google to provide search information and better deliver results to customers. Google shares have been knocked down by a quarter over the past year. They’re reasonably priced at around 18 times earnings.
Action to take: The company’s growth has slowed over the years as the internet has grown, and an investment in AI could lead to an improved surge in growth. Investors should look to add shares under $110.
For traders, the June $115 calls, last going for about $3.95, offer mid-double-digit gains on a move higher in Google in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Yehuda Shmidman, a director at Express Inc (EXPR) recently started an initial stake with 5,424,783 shares. The cost came to just over $25 million.
Generally, company insiders haven’t been very active at the firm. This buy marks the first insider transaction over the past two years. Otherwise, company insiders were last active in mid-2021, when the company President and CFO were both modest sellers of shares.
Overall, insiders own 12.2 percent of the company.
Shares of the apparel retailer have been knocked down 70 percent over the past year. The company hasn’t turned a profit in that timeframe, and revenues declined by 8 percent.
The company also has a lopsided balance sheet, with over $860 million in debt compared to equity of about $70 million.
Action to take: Investors may want to wait on the sidelines here. Shares popped higher on the big insider buy. But without a turnaround or buyout offer, it’s likely that shares of the company will continue their long-term downtrend. That’s especially true with slower consumer spending.
For traders, the July $1.00 put, last going for about $0.20, can likely deliver mid-double-digit gains, as shares resume their move lower. Traders may want to gradually build a position, and use down days for the stock to take profits off the table.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of healthcare diagnostics company Sotera Health Company (SHC) have slid 15 percent over the past year, performing worse than the S&P 500. One trader sees a further decline ahead.
That’s based on the August $17.50 put. With 191 days until expiration, 3,955 contracts traded compared to a prior open interest of 151, for a 26-fold rise in volume on the trade. The buyer of the puts paid $2.35 to make the bearish bet.
Shares recently traded for about $18, so Sotera shares would only need to drop about 3 percent for the option to move in-the-money.
The stock has been on a wild ride over the past year. Shares dropped on a class action lawsuit alleging pollution at one of the company’s facilities. And shares soared on news of a settlement in January. But shares are not yet back to their pre-lawsuit announcement levels.
Action to take: Shares trade at about 18 times forward earnings. Revenues are up 10 percent over the past year.
However, there may be some lingering concerns over using the company’s products in light of the lawsuit, which may impact future profitability. Investors may want to consider shares too complicated to go long on at this time.
Given how quickly shares have bounced back, a move lower looks likely. That makes the August puts well priced. The options will also likely fare well in a general market decline.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
While the market has had a strong start to the year, plenty of companies are still well off their highs. For the right companies, this can create an opportunity to build substantial wealth and a growing stream of income.
That’s especially true in parts of the market that tend to get overlooked. In a bull market, the focus tends to be on tech stocks. So far this bear market, investors have flocked to energy and utilities.
That’s why other areas like industrial stocks still shine. Especially when those companies are pushing for future growth.
That’s where Linde (LIN) comes in. The industrial gas company is expanding investments into hydrogen, which could be a major source of energy in the years ahead.
Linde grew earnings by 30 percent last year, and revenues rose by 15 percent, even in a slowing economy. It’s a big player in a field with only a few players, which will likely allow the company to see its growth plans play out over the next few years.
Action to take: Investors may like shares at current prices or on a pullback. It’s not a huge dividend payer with a 1.4 percent yield. But the company does have a history of increasing that payout over time.
For traders, the stock has pulled back slightly in recent weeks, but looks set to move higher in the months ahead. The July $350 calls, last going for about $12.60, offer mid-double-digit returns on a move higher for the industrial giant.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Gregory Hayes, a director at Phillips 66 (PSX), recently bought 10,250 shares. The buy came to a total cost just over $1.1 million, and increased the director’s stake by a massive 253 percent.
This is the first purchase at the company in two years, following another buy from a director for 77 shares valued at just under $5,900. A number of company executives have been sellers of shares over the past two years, largely by exercising options.
Overall, company insiders own just under 0.5 percent of the company.
The oil and gas midstream company is up 11 percent over the past year, thanks to strong energy prices. Phillips 66 grew earnings by 48 percent, and revenue by nearly 24 percent. That operational growth in excess of the share price has dropped the company’s valuation to just 7 times forward earnings.
Action to take: Investors may like shares here. The stock yields 3.9 percent at today’s prices, and that payout has increased in recent years. It’s also only about 15 percent of earnings, so there’s plenty of room for more dividend increases.
For traders, shares have come down a bit in the past few days, and look set for a short-term rebound. The May $105 calls, last going for about $1.60, offer mid-to-high double-digit returns on a bounce higher in Phillips 66 stock in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of footwear and accessory company Sketchers U.S.A. (SKX) are up about 11 percent over the past year. One trader sees a decline in the months ahead.
That’s based on the April $39 put options. With 74 days until expiration, 2,003 contracts traded compared to a prior open interest of 104, for a 19-fold rise in volume on the trade. The buyer of the puts paid $0.75 to make the downside bet.
The stock last traded just under $45, so shares would need to drop about $6, or nearly 15 percent, for the options to move in-the-money. The strike price is still well under the stock’s 52-week low of $31.28.
Shares have been trending higher since November, but shares saw a 9 percent drop on Friday, as the company reported earnings. While there was a beat on overall revenue and earnings, the company did see a 23 percent drop in sales to China.
Action to take: Shares are reasonably valued at about 10 times earnings. But following their recent runup, they’ll likely take a breather in the next few weeks. Patient traders should look to buy near $40 per share. At present, Sketchers doesn’t pay a dividend.
For traders, the April $39 puts look well positioned for a bigger drop in shares in the weeks ahead. With a low price, traders can likely nab high-double-digit profits before the options expire.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
In a bull market, all sorts of investment ideas come into play. When there’s a bear market, investors can stay safe but also make money by focusing on companies that provide products and services that customers need.
Defensive stocks don’t have to just be utilities and telecoms. There are a number of other sectors that fit the bill, such as industrial stocks. That space tends to get overlooked.
One such player is conglomerate Honeywell (HON). The manufacturer of power units, avionics, and advanced systems and software has become a major conglomerate servicing many key technologies behind the scenes.
Unsurprisingly, the company has fared well over the past year, with the stock up 8 percent amid a market decline. Revenues are up about 6 percent, but earnings are up about 24 percent, a move that the market hasn’t been a huge fan of based on the latest quarterly results. Shares look reasonably priced at about 22 times earnings.
Action to take: Investors may like shares at or under current prices. Honeywell shares pay a 2 percent dividend right now, and they’ve moved to increase that payout in recent years.
For traders, the June $220 calls, last going for about $5.60, can likely deliver mid-double-digit gains in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Douglas Lebda, CEO at LendingTree (TREE), recently added 18,268 shares. The buy increased his holdings by just over 1 percent, and came to a total cost just over $705,000.
The purchase comes a week after the CEO bought 65,062 shares, paying just over $2.08 million. Going further back, some insiders have been sellers over the past year, and a company director has been a repeat buyer of LendingTree stock.
Overall, insiders own 14.9 percent of the company.
Shares of the lending platform have lost about two-thirds of their price over the past year. A slowing economy and rising interest rates have cut into lending activity, the company’s core business. That’s reflected by a 20 percent drop in revenue and a lack of earnings.
Action to take: Shares have started to trend up in recent weeks, and are more than double off of their lows. A further move higher could still lead to big returns, given that the stock traded for over $100 a year ago. At the moment, the stock doesn’t pay a dividend.
For traders, the April $50 calls, last going for about $4.00, can likely deliver mid-to-high double-digit returns in the coming months. The option is about 10 percent out-of-the-money right now, so it plays well to the current uptrend in shares underway.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of cryptocurrency mining company Riot Platforms (RIOT) have been cut in half over the past year, even with shares more than double off their recent low. One trader sees the current rally continuing.
That’s based on the September $8 calls. With 221 days until expiration, 7,034 contracts traded compared to a prior open interest of 195, for a 36-fold rise in volume on the trade. The buyer of the calls paid $1.96 to make the bullish bet.
Shares recently went for about $7.50, making this an at-the-money trade. Shares have a 52-week low of $3.25, set just at the end of last year. The strong rally has been better for Riot shares than the move higher in big cryptocurrencies like bitcoin, which the company mines.
Riot has struggled operationally in the past year thanks to the big drop in cryptocurrency prices. Revenues were down nearly 30 percent compared to the prior year. The one bright spot is that the company has a strong balance sheet, with over $200 million in net cash.
Action to take: It’s possible that there’s a short-term pullback in cryptocurrencies and related stocks in the coming weeks, following the strong rally. That could create a buying opportunity for investors, rather than chasing the stock higher now.
For traders, the calls are an attractive bet, but they may get cheaper in the coming days following the big rally of the past few weeks. Rather than pay close to $2.00, traders may want to wait to get in at a more reasonable price for the calls, say $1.50 or less.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
There are many ways that a company’s stock can rise over time. Its earnings can grow over time, indicating a more valuable company. Or the multiple that investors are willing to pay for a company can rise as well.
In today’s economic uncertainty, companies that can grab increased market share are capable seeing their multiples rise over time. And chances are when the economy recovers, so too will earnings and profit margins.
One company that’s faring well on the market share front is Advanced Micro Devices (AMD). The tough market for chipmakers has hit all players. AMD reported a 98 percent drop in its quarterly net profit. Yet shares surged as the company is looking to gain market share in data centers and other processors.
Shares are well off of their 52-week lows, but are still down 40 percent over the past year. That suggests a reasonable long-term return for investors who add shares today.
Action to take: Shares are a buy under $90, where the stock’s valuation is reasonable for today’s market. While the stock doesn’t pay a dividend, AMD is looking to increase its market share substantially during the next chip boom over the next few years.
For short-term traders, the stock is trending up. The next few days may give a bit of a pullback, which would lead to a solid entry point for the June $90 calls. Last going for about $7.50, patient traders can likely get in at $6.50 or under in the coming days and ride the longer-term trend higher for mid-to-high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
CD&R Investment Associates, a major holder of Beacon Roofing Supply Inc (BECN), recently added 107,185 shares. The buy came to a total cost just under $6 million, and increased the fund’s sake by about 1 percent.
The fund last made a buy, also for about $6 million, back in October. Since then, one company division president started a 9,009 share stake, paying about $500,000. And one company EVP was a seller of shares back in November.
Overall, company insiders own 0.4 percent of shares, and institutions own nearly all of the remaining outstanding shares, indicating a tight supply available for retail investors.
The roofing supply company’s shares have traded flat over the past year, significantly outperforming the overall stock market. That was assisted by a 29 percent rise in revenues over the past year, and by a 48 percent rise in earnings.
Action to take: The stock is still reasonably valued at about 10 times earnings. Shares are well positioned for a rebound in real estate activity following last year’s slowdown. Investors may like shares at current prices or on a drop, although the stock does not pay a dividend.
For traders, the April $60 calls are an at-the-money trade. Last going for about $3.00, traders can likely see mid-double-digit gains in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of internet retailer Wayfair (W) are down 60 percent over the past year. One trader sees that trend continuing over the next few months.
That’s based on the May $50 puts. With 105 days until expiration, 14,221 contracts traded compared to a prior open interest of 416, for a 34-fold rise in volume on the trade. The buyer of the puts paid $5.05 to make the bearish bet.
Shares recently traded for about $66, so they’d need to fall about 25 percent in the coming months for the option to move in the money. That’s a possible move, given that the stock has a 52-week low just over $28.
Wayfair has lost money over the past year, and has seen revenues drop by 10 percent. Despite earning revenues over $12 billion, the company managed to lose over $1 billion.
Action to take: Investors interested in the retail space have a pick of better options, such as big box stores that have fairly consistent profitability. Shares of Wayfair have jumped higher in recent weeks, but look poised for a drop ahead.
For traders, the May $50 puts look attractive. The stock gapped higher at the $50 mark in mid-January, so that’s a strong price point for shares to move back to in the coming months. Traders can likely nab high double-digit returns, depending on the speed and severity of the pullback.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Wealthy investors tend to see inflation as a friend, not an enemy. Rising prices tend to benefit assets like stocks and real estate over time.
Owning companies that can pass on all, or nearly all, of inflation’s higher costs can fare even better over time. When inflation subsides, higher prices remain in place, leading to better profits for investors. While there may be some headwinds now, great companies can be had for a reasonable value.
One such company is McDonald’s (MCD). The fast-food giant beat on its most recent earnings, thanks to the higher prices that customers are paying. While there’s still some concern over inflation, that fear led to shares dropping following their earnings beat, not rising.
Action to take: Shares are a bit pricey at 25 times earnings, but are worth picking up on any pullback. McDonald’s managed to post a rally in 2022 while most stocks fell. Plus, shares pay a 2.2 percent dividend right now, with a long history of growth.
For traders, the June $280 calls last going or about $6.60, offer mid-double-digit returns in the weeks ahead as the stock shakes off the small drop from its latest earnings report. Traders should look for a quick bounce to take profits, as shares tend to be slow moving.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Yasir Al-Rumayyan, a director at Uber Technologies Inc (UBER), recently bought 250,000 shares. The buy increased his holdings by 181 percent, and came to a total cost of $5.145 million.
This is the first insider buy since the company CEO bought 200,000 shares last May. Two insiders have been slight sellers of shares over the past year, but overall there has been little activity since the company went public.
Insiders own 0.2 percent of the ride-sharing company.
Shares have lost a quarter of their price over the past year, as the company continued to lose money. However, revenues did rise by 72 percent, and new initiatives appear to be keeping the momentum moving towards higher cash flows.
Action to take: Shares are about 50 percent higher than their 52-week lows, and some pullback may be likely in the weeks ahead. Investors interested in buying shares for the long haul may want to wait to buy in the mid-$20 range.
For traders, shares have tended to pull back from the low $30 range each time there’s been a rally going back to August. That suggests that a put option may be the best trade right now.
The June $27.50 puts, last going for about $2.05, offer mid-double-digit gains or higher on a pullback in the coming months. Traders should look to take quick profits as a downtrend emerges, given the market volatility we’ve seen in recent months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of department store chain Macy’s (M) are down about in-line with the overall stock market over the last year. One trader sees a further decline ahead.
That’s based on the May $19 puts. With 105 days until expiration, 20,012 contracts traded compared to a prior open interest of 346, for a 58-fold jump in volume on the trade. The buyer of the puts paid $0.77 to make the bearish bet.
Shares recently traded for about $23.50, so they’d need to fall about $4.50, or nearly 25 percent, for the option to move in-the-money. The strike price is still well over the stock’s 52-week low of $15.10.
Revenues slid 4 percent over the past year, and earnings dropped by more than half, far in excess of the company’s stock performance. While shares still look cheap at 6 times forward earnings, a slowdown in consumer spending could lead to further declines in these key metrics.
Action to take: Investors interested in shares can likely get a better price by waiting for the next pullback. A drop under $20 would put the stock’s dividend yield north of 3 percent, which would be a reasonable amount of income for the uncertainty of investing in a retailer in a slowing economy.
For traders, the puts are well positioned to benefit from a drop in shares, given their low cost and medium timeframe. Traders can likely see high double-digit returns or better on a drop in shares before the option expires.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Inflation rates are coming down off of a 40-year high. But they’re still far higher than average. The process will take time to fully play out. When it does, prices will remain higher than they are now overall.
Companies that can raise prices and still maintain market share and their customer base will be just fine as this trend fully plays out. Some companies keep customers thanks to popular, low-priced products.
Others are able to raise prices as there are few, if any, alternatives to the goods or services they provide.
One such example is in railroads, as each rail company operates a regional monopoly for moving around goods. Union Pacific (UNP) recently revealed in its earnings that increased prices helped revenues jump 8 percent.
The company did miss on its overall earnings as the economic slowdown has led to lower goods and services being shipped right now. But when the upcycle resumes, UNP will benefit from today’s higher prices and a higher volume of goods shipped.
Action to take: Investors may like shares here, as the company trades at about 17 times earnings, its best valuation in the past two years. Plus, the company has a 2.6 percent dividend, which, like the prices charged for shipping, tends to rise over time.
For traders, the May $220 calls, last going for about $3.60, offer mid-double-digit returns on a move higher in shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
John Morikis, CEO at Sherwin Williams (SHW) recently added 2,207 shares. The buy increased his holdings by just over 1 percent, and came to a total cost of $500,327.
The CEO was the last buyer of shares at the company nearly a year ago, with a 2,000 share pickup for about $519,000. One division president sold shares in the past year. Going back further, a number of company executives were sellers of the stock.
Overall, insiders own about 8.5 percent of the paint manufacturer and retailer.
Shares have been knocked down about 20 percent in the past year, even with revenues up nearly 10 percent and earnings up 27 percent. That’s taken shares from 48 times earnings to about 21 times earnings today.
Action to take: As a leading producer of paint and holding a strong brand of products, shares are reasonably valued for long-term investors. Shares yield about 1.1 percent at today’s prices, and the stock has a low payout ratio with room for future growth.
For traders, shares are likely to recover from the loss over the last year, and move back to trading at more of a premium to the markets. The June $270 calls, last going for about $3.70, offer mid-double-digit returns in the coming months on such a move higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of package delivery company United Parcel Service (UPS) are down about 10 percent over the past year. One trader sees a move higher for shares in the months ahead.
That’s based on the March $195 calls. With 43 days until expiration, 33,836 contracts traded compared to a prior open interest of 130, for a staggering 261-fold rise in volume on the option. The buyer of the calls paid $1.45 to make the bullish bet.
UPS shares recently traded for about $177, so shares would need to rise $13, or about 7.3 percent, for the potion to move in-the-money. That’s still well above the stock’s 52-week high of $233.
The surge in options volume comes as the company reports earnings, so it’s likely that traders expect shares to trend higher post-earnings. UPS has held up reasonably well operationally, with earnings rising by 11 percent amid a slowing economy in the past year.
Action to take: UPS is a global leader in logistics, and can likely trend higher following its drop over the last year. Investors can get a 3.3 percent dividend from here, which the company has recently bumped up from about 3.1 percent. There’s room for more growth in that income given the stock’s low payout ratio.
For traders, the March calls are a reasonable trade, which can likely deliver mid-double-digit gains. Traders may do better by waiting for a down day in shares to buy the calls, rather than buy in so close to earnings.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Many industries tend to have a few big players. There will likely be a single player that dominates the industry. But things can change. And underdog companies looking to catchup to the big dog can potentially deliver better returns while doing so.
That can come about from a better product or service mix, better customer service, or a way to improve profitability during an economic downturn.
In the home improvement retailer space, Lowe’s (LOW) is down more than the overall market in the past year. It doesn’t help that the housing market has slowed down.
However, Lowe’s could better capitalize on a slower housing market, as existing homeowners look at taking on home projects. Competitor Home Depot (HD) tends to get more sales from workers in the housing construction space. That makes Lowe’s look like a better deal going forward.
Action to take: Both Home Depot and Lowe’s trade at about 19 times earnings, and offer dividends in the 2-2.5 percent range. Lowe’s looks a bit cheaper in terms of its price to sales and growth. And both retailers should fare fine, even with a continued consumer spending slowdown.
For traders, the Lowe’s April $220 calls, last going for about $4.75, offer mid-double-digit gains in the coming months on a continued rally higher in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Andrew Barker, a director at the Banc of California (BANC), recently bought 48,435 shares. The buy increased his holdings by 50 percent, and came to a total cost just over $800,800.
This insider was also the most recent buyer with a 12,900 share pickup back in February 2022. The company President and CEO also picked up about $100,000 worth of BANC shares at the time as well. There have been no insider sales over the past three years.
Overall, company insiders own 1.6 percent of shares.
The regional bank sank 13 percent in the past year, as rising interest rates weighed on stocks. But BANC performed well operationally, with a 15 percent rise in revenues while also making a 33 percent profit margin. That performance can likely continue, even with a slowing economy right now.
Action to take: The bank trades right at book value, making it a buy at or under the current price. The bank’s market cap of about $1 billion is large enough to make it a buyout candidate in the future. The bank also pays a 1.4 percent dividend at the moment.
For traders, shares look likely to continue their short-term uptrend. The July $20 calls, last going for about $0.55, could potentially deliver mid-double-digit gains in the months ahead should the bank shares continue to rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of battery technology company QuantumScape (QS) have lost over 40 percent of their value in the past year, although shares have recently bounced more than 50 percent higher off their lows. One trader sees a further decline ahead.
That’s based on the March $9 puts. With 44 days until expiration, 13,951 contracts traded compared to a prior open interest of 259, for a 54-fold rise in volume on the trade. The buyer of the puts paid $1.42.
Shares recently traded for about $8.70, making the option about $0.30 in-the-money already. Shares have a 52-week low of $5.11, so a drop from here could lead to a big move higher for the put options.
QuantumScape went public a few years back to capitalize on the interest in electric vehicles and the increased need for rechargeable batteries. The early stage company has yet to reach commercial production, and has been burning through cash at a rapid rate.
Action to take: Shares have jumped higher in recent weeks with the rest of the overall market, and may be prone to a large decline on the next market leg downward. Interested investors can likely get a better price on shares on a pullback in the coming months.
For traders, the March puts look like an inexpensive way to play the oversold bounce in QS shares, as well as profit from a potential market decline in the coming weeks. Traders can likely log mid-double-digit gains.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Economies change over time. The U.S. economy is largely driven by consumer spending. Most of the goods that consumers spend money on are made overseas, where labor is cheaper.
But that’s starting to change. A big reason why is automation. Rather than employ factory workers, technology allows for goods to be made with minimal human interaction. That’s making it easier for manufacturers to operate in the high-cost United States.
Companies that play to that trend have years of growth ahead. In the shorter-term, they’re holding up well in a slowing economy.
One such example is Rockwell Automation (ROK). The company just beat on its latest earnings report, thanks to demand for automated technology in the US.
Shares are flat over the past year, but with revenue growing by 18 percent and with earnings up over 300 percent in the past year, the stock could be on track for market-beating returns in the year ahead.
Action to take: Investors may like shares here, and on any pullback. The stock yields 1.7 percent at current prices, and the dividend has a history of being increased over time.
For traders, the April $300 calls can take advantage of the current uptrend in shares. Last going for about $7.50, traders can likely catch a mid-double-digit gain from in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
John Donovan, a director at Lockheed Martin (LMT), recently added 556 shares to his holdings. That increased his stake by 31 percent, and came to a total cost just under $251,000.
The director was responsible for the last insider activity, with a 568 share buy back in October. Over the past year, the director has made four purchases. And one company vice president has been a seller of shares.
Overall, company insiders own 0.1 percent of shares.
The defense contractor is up 16 percent over the past year, handily beating the decline in the stock market over the same time. Shares surged following Russia’s invasion of Ukraine.
Revenues are up about 7 percent over the past year, and those revenues largely come from a steady flow of government contracts. Overall earnings have dropped in the last year, as the company has had to contend with rising costs.
Over the longer term, shares have been a steady outperformer for the overall market, making shares a buy for long-term investors on any big pullback.
Action to take: Shares are fairly valued at about 16 times earnings. Plus, the company has been a dividend growth player, with a starting yield of 2.6 percent at current prices.
For traders, shares will likely continue to trend higher. The June $500 calls, last going for about $9.30, can leverage a modest move higher into mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Gold mining company AngloGold Ashanti (AU) has fared well in the past year, with a 20 percent gain. One trader sees a pullback in the coming months.
That’s based on the April $20 puts. With 80 days until expiration, 5,002 contracts traded compared to a prior open interest of 115, for a 44-fold rise in volume on the trade. The buyer of the puts paid $0.90 to make the bearish bet.
Shares currently trade just under $22, so they’d need to drop nearly 10 percent for the option to move in-the-money. Given the volatility in the gold space, such a move is possible before expiration. AngloGold shares have a 52-week low of $12.
Revenues have risen by 9 percent at the miner over the past year. Shares largely trend higher or lower based on the price of gold. With the metal back over $1,900, investor interest has risen, but a decline in gold prices from here could easily weigh on shares.
Action to take: Shares are fairly priced right now, with the stock going for about 18 times earnings. Interested investors can wait for a pullback in the coming months to get a better price, even though shares yield almost 2 percent right now.
Traders may like the April puts, as they offer a leveraged return on a drop in the coming months. A pullback in gold prices could lead to the options delivering mid-double-digit returns or better.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
When markets are running scared, it may be prudent to look at companies making new highs. Chances are there’s something going on with the underlying business that explains why they’re bucking the trend. And chances are that trend will continue.
There are always a few companies making new 52-week highs, even in a challenging market. The past few months have also seen a rotation towards more value-oriented and defensive stocks moving higher.
One such play is telecom AT&T (T). The company hasn’t had much respect in recent years, as management looked to diversify the company’s operations – and then spun off those assets instead.
Today, however, the core telecom business is faring well. Earnings have beat expectations. And shares are even up over the past year, during the market’s worst year since 2008.
Action to take: While shares are trending up, they’re still fairly close to book value. And the stock is trading for about 8 times earnings, a reasonable price for the slow-growth telecom business. Chances are the company can continue to keep moving higher from here. Plus, at current prices, shares yield about 5.8 percent.
For traders, the April $20 calls are an at-the-money trade. Last going for about $1.10, a continued move higher in shares could leverage that move into a mid-double-digit return in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Michael Kennedy, a director at Old Republic Insurance (ORI), has been a buyer of 2,950 shares. The buy increased his holdings by 40 percent, and came to a total cost just under $68,500.
Insiders have generally been buyers over the past year, with company directors picking up small sums of shares. One company executive sold 11,000 shares over the past year, receiving just over a quarter million dollars.
Overall, company insiders own 7.6 percent of shares.
The property and casualty insurance company is down about 3 percent over the past year, slightly outperforming the overall market. Revenues dropped nearly 15 percent over the same time. Shares still trade for a reasonable 9 times earnings, although that is up from 5 times earnings last year.
Action to take: The insurance business tends to be fairly steady and profitable for long-term buyers. Old Republic has used that consistency to pay a growing dividend payment over time. At present, that dividend comes to a 3.8 percent starting yield, which may be enticing for long-term investors.
For traders, shares have been in an uptrend since September, and are likely to continue trending higher. The July $25 calls are an at-the-money trade, going for about $1.20, and can potentially see mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Retail apparel company Abercrombie & Fitch (ANF) have seen shares drop by over 20 percent in the past year. One trader is betting on more long-term pain for the company in the year ahead.
That’s based on the January 2024 $15 put options. With 357 days until expiration, 5,000 contracts traded compared to a prior open interest of 112, for a 44-fold rise in volume on the trade. The buyer of the puts paid $0.88 to bet on a further drop in shares.
The stock recently traded for about $28, so the stock would need to lose nearly half its value in the next year for the option to move in-the-money. A move to $15 is possible, given that shares hit a 52-week low of $14.02 last summer.
The retailer has posted a loss recently, and revenues dipped 3 percent last year. The slowdown in earnings has taken shares to about 70 times earnings, compared to under 10 times earnings a year ago.
Action to take: Investors may want to avoid shares of retailers now, given the slowdown in consumer spending, which will likely impact specialty retailers more than big box stores. Abercrombie & Fitch also stopped their dividend in 2020, so there’s no way to get paid to wait for sentiment to improve.
For traders, the long-term put option against shares looks like a reasonable bet that could pay off on any market decline in the next year. That would give investors an inexpensive way to profit from any downside, and the option is cheap enough to potentially be a triple-digit winner.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Wall Street treats stocks like they’re sprinting. Each quarter, beating or missing investment results can lead to a big move higher or lower.
But investing is like a marathon. Companies that consistently grow over time are rewarded over the long haul, no matter what the market is doing in the short-term. Investors can take advantage of short-term market fears to capitalize on great companies by buying them at a discount, and then letting the long-term take care of itself.
One such slow and steady player is Microsoft (MSFT). The tech giant kicked off tech earnings with an earnings beat. Plus, the company’s cloud services division grew faster than expected, even if there was an overall slowdown.
With a diverse lineup of products and services, the company has a 34 percent profit margin, higher than many businesses. Plus, revenue continues to grow, even if earnings have been impacted by short-term headwinds.
Action to take: Long-term investors can pick up shares at or under $250 and perform reasonably well. Shares yield about 1.1 percent at current prices, and Microsoft has fared well at growing the dividend over time.
For traders, the April $260 calls, last going for about $6.25, can deliver mid-double-digit returns in the coming weeks on a continued uptrend in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Francis Blake, a director at Delta Air Lines (DAL), recently bought 12,880 shares. That came to a total cost just under $497,000, and increased the director’s holdings by 16 percent.
This marks the first buy at the airliner since another director bought $293,000 in shares back in July. A third director also rounded out the total insider buying over the past year. Otherwise, company executives have been modest sellers of shares in the ensuing months.
Overall, company insiders own 0.3 percent of shares.
Shares of the airline company are flat over the past year. Earnings jumped 42 percent as travel trended higher, even as higher fuel costs may have weighed on the stock.
The stock trades at under 5 times earnings, down form 90 times earnings last year. Shares may trend higher as airliners have been focused on keeping costs low and running fewer flights.
Action to take: Investors can consider shares to buy at or below current prices. While the stock doesn’t buy a dividend, Delta is one of the better operated airlines and has a high return on equity of 25 percent.
For traders, shares are in an uptrend. The June $40 calls, last going for about $3.00, are a near-the-money trade that can likely deliver mid-double-digit gains in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of media giant Paramount Global (PARA) have shed one-third of their value in the past year. One trader sees shares moving higher in the weeks ahead.
That’s based on the February 17 $21.50 call. With 22 days until expiration, 3,066 contracts traded compared to a prior open interest of 114, for a 27-fold rise in volume on the trade. The buyer of the calls paid $0.97 to make the trade.
Shares recently traded just under $21, so they’d need to rise about 3 percent in order for the option to move in-the-money. The option strike price is still well under the stock’s 52-week high of $39.21 per share.
Although the stock took a dive, revenues rose by about 5 percent last year. Plus, Paramount trades for just under 5 times earnings, and shares trade for about 0.6 times their price-to-book value. That suggests that shares are undervalued here.
Action to take: Investors interested in a media play may like shares at current prices. In addition to being a value play, the stock offers buyers a 4.5 percent dividend yield, with a low payout ratio.
For traders, shares have been in a short-term uptrend in the past few weeks. That suggests that the February calls may deliver mid-to-high double-digit gains before expiration. Traders may want to take quick profits on a jump higher in shares in the coming days.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investors pay a high price for certainty. By the time they pile into a “sure thing” investment, the price is already sky high. Meanwhile, when there’s a lot of fear in the market, great companies and opportunities can be had for a relative bargain.
Today, investors have far more bargain picks than at any time in the past few years. And buying companies moving to streamline costs today will play out doubly well from higher profits and higher share prices.
While tech layoffs have captured the headlines, many other companies are looking to cut high staff costs too. One is Newell Brands (NWL), which is looking to reduce 13 percent of its office staff as part of an effort to cut $250 million in costs.
The company is a consumer goods conglomerate, owning such brands as Sharpie markers and Rubbermaid containers. Shares have slid by one-third in the past year as earnings have dropped by over 80 percent.
Action to take: If the company can lower costs, it can improve its earnings picture even without selling any additional products. That makes shares attractive now at 10 times forward earnings. Plus, the stock pays a 6.1 percent dividend.
For traders, the June $18 calls, last going for about $0.60, can likely see high double-digit returns in the coming months. Shares have been in an uptrend for the past few weeks, even before the cost-cutting measure was announced.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Mellody Hobson, a director at JPMorgan Chase (JPM), recently added 375 shares. The purchase cost the director $50,448, and increased her stake by less than 1 percent.
Hobson was the last buyer of shares at the company one year prior, with a 670 shares pickup for just over $100,000. In the past year, company insiders have largely been sellers of shares, both from existing holdings and from the exercise of options.
Overall, company insiders own 0.9 percent of shares.
The money center bank is down about 7 percent over the past year, performing slightly better than the overall stock market. That’s even as earnings and revenue grew just under 6 percent each last year.
Even with that slow earnings growth, given high inflation and lower loan demand due to higher interest rates, it shows the bank is well managed for today’s environment. That’s also demonstrated by the bank’s 30 percent profit margin.
Action to take: Investors may like shares for the long term at or under current prices. The bank yields about 3 percent right now. While that dividend hasn’t grown over the past year, the low payout ratio leaves room for future income growth.
For traders, the stock has trended higher since October. The March $145 calls, last going for about $1.75, offer mid-to-high double-digit gains in the coming weeks on a further move higher for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
One simple investment strategy is to follow a successful investor’s coattails. Many will follow billionaire investors such as Warren Buffett or Carl Icahn as they enter into a new stock position. A few will even own the stocks that are owned or managed by the investors.
Another way is to look at asset management companies. They may not have a well-known billionaire running the helm, but they tend to grow their assets over time — with big profit margins along the way.
One of the biggest players is Blackstone (BX). The asset manager is valued at over $100 billion, and manages assets over $1 trillion. And while the company’s real estate holdings came under fire last year, the company’s exposure to growth areas such as apartments and warehouses has played out well.
With so much exposure to financial assets, it’s no surprise shares are down 26 percent over the past year. Earnings and revenues turned negative. But the cycle will change, and Blackstone will likely ride bargains to new highs.
Action to take: Investors may like shares here for the long haul, and up to $90 per share. The stock yields 6.1 percent at present. While the company hasn’t grown the dividend recently, it’s a sizeable return that pays well while waiting for a recovery.
For traders, the June $90 calls, last going for about $6.30, offer traders mid-double-digit returns on a rebound in the first half of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shekhar Priyadarshi, CFO at Keurig Dr Pepper (KDP), recently added 10,000 shares. The buy set the CFO back $350,000 and is an initial stake for this particular insider.
This is the first buy at the beverage company since the Chief Supply Chain Officer made a number of buys back in August and September. Since then, the company CEO has been a seller of shares, as well as a company director.
Overall, company insiders own 37.4 percent of shares.
The beverage company has seen share slide 10 percent in the past year, even as revenues have risen by 11 percent. Overall earnings have been down, but shares are now valued at just under 20 times forward earnings compared to 30 times last year.
Action to take: As the owner of several popular beverage brands, the company enjoys pricing power over inflation. Shares are likely to trend higher in time. Today’s investors can get a 2.2 percent dividend yield, and the company recently raised its dividend payout.
For traders, shares are near their 52-week low, but have trended higher in recent sessions. The July $35 calls are an at-the-money trade. Last going for about $2.05, the options can likely deliver mid-double-digit returns on a move higher in shares in the first half of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of offshore oil and gas services company Transocean (RIG) are up 83 percent over the past year. One trader sees a pullback in the next two months.
That’s based on the March $5 puts. With 51 days until expiration, 13,472 contracts traded compared to a prior open interest of 108, for a 91-fold jump in volume on the trade. The buyer of the puts paid $0.22 to make the bearish bet.
Shares recently traded for $6, so the stock would need to drop $1, or about 17 percent over the next two months. That would still leave shares well over their 52-week low of $2.32.
Transocean has benefited from rising energy prices over the past year. Revenues rose 10 percent, even as the company failed to be profitable on an earnings basis. However, oil prices have calmed down considerably from last year’s highs, and offshore oil tends to be the most expensive to produce.
Action to take: Shares have had a sizeable jump in the past few weeks, and may give back some of those gains. Shares are also susceptible to the company’s high debt load and negative earnings right now. Interested investors can likely get a far better entry price for shares.
For those looking for a short trade candidate, the March $5 puts are aggressive, but could play out well. Given how inexpensive the trade is, a big drop in Transocean shares in the coming weeks could lead to high-double-digit gains, or potentially even triple-digit gains.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Some stocks tend to hold up well in any market. One area is consumer goods companies. These firms may make humdrum products like prepackaged food, soap, shampoo or toilet paper, but those products never fall out of demand.
When markets turn lower, these companies may sag as well. And that can provide patient, long-term investors with a decent entry point that they otherwise might not have made. Such opportunities are appearing today…
That’s especially true as companies are being hit with higher costs from inflation, which is finally on the decline. In its most recent quarterly report, Procter & Gamble (PG) reported just such a temporary situation.
Shares of the consumer goods leader are now down about 10 percent over the past year, just a hair better than the overall stock market. However, the company is holding up well, with flat revenue and earnings performance over the past year.
Action to take: Investors may like shares for the long haul at or just under current prices. And the stock is a reasonable dividend growth play, with a starting yield of 2.5 percent right now.
For traders, shares are likely to trend higher over time. The July $150 calls, last going for about $5.45, offer mid-double-digit returns in the months ahead. The calls may get a bit cheaper in the coming sessions if stocks continue lower, so look for a chance to buy at an even better price.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Ecor1 Capital, a major holder at Zymeworks (ZYME), recently bought 985,100 shares. The buy increased the fund’s holdings by 11 percent, and came to a total cost just under $9.7 million.
The buy comes a few days after the company bought 1,026,300 shares, paying about $7.8 million for that stake. Another major holder at the company bought shares back in October. Otherwise, company insiders have largely been sellers of modest amounts of shares.
Overall, company insiders own 5.1 percent of shares, and institutions own nearly all of the remaining float.
Shares of the biotherapy company are down about 13 percent in the last year, about in-line with the S&P 500. As an early stage company developing new treatments, the firm is not profitable, although they did earn nearly $30 million in revenues in the last year.
Action to take: The company has ample cash to continue operations for some time, and a breakthrough could be a boon for shares. Shares have been trending higher since September, and will likely continue.
For traders, the July $10 calls are an at-the-money trade. Last going for about $2.30, they’re a cheaper way to be on the current trend continuing. Traders can likely see mid-double-digit gains on a move higher – or better on a spike higher in the first half of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of chipmaker Intel (INTC) are down 44 percent over the past year, about three times worse than the slide in the S&P 500. One trader sees the stock continuing lower over the next two years.
That’s based on the January 2025 $13.00 put. With 725 days until expiration, 10,004 contracts traded compared to a prior open interest of 312, for a 32-fold jump in volume on the trade. The buyer of the puts paid $0.60 to make the bearish bet.
Shares currently go for just over $28, or more than twice the strike price of the options, and shares have a 52-week low of $24.59.
However, any further weakness in the chip industry, or with Intel specifically, could lead to a move lower and a jump higher in these low-priced options.
Action to take: Intel stock has turned lower in recent sessions. Interested investors can likely get shares under $25 in the coming months. The stock yields about 5.1 percent today, but patient buyers can get a higher starting yield.
For traders, the 2025 puts have a long time to play out and they’re cheap. A quick downturn in the coming months could lead to high-double-digit returns or better, with plenty of time to exit the trade before expiration – or a turnaround in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The economy ebbs and flows. Today’s slowdown will eventually give way to the next recovery and move stocks higher. The stock market tends to start moving higher before the economic data shows such a recovery.
That’s why investors should focus on companies that will benefit from the next boom during a bust. Such a move ensures that investors and traders alike can capture the biggest part of the move as it happens.
When the economy slows, so does the flow of goods and services. That causes these companies to take a hit. But they recover, as the flow of goods and services tends to rise over time.
One play for this space is J.B. Hunt Transport Services (JBHT), a big player in trucking and logistics. Every good needs to be shipped by truck at some point, even if it’s just a few miles to its final point of sale.
The company recently reported a disappointing quarter, with revenues down 3 percent year-over-year.
Action to take: Shares are reasonably valued at 18 times forward earnings, down from over 32 times earnings a year ago. JBHT shares yield about 0.9 percent at today’s prices, but the company has a history of raising its dividend, even amid tough times like today’s.
For traders, shares recently popped higher on the latest quarterly report, and may give up some of those gains in the coming days. The February $180 puts, last going for about $4.25, could deliver quick mid-double-digit returns on a short-term drop in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Michael Kerr, a director at EOG Resources (EOG), recently bought 20,000 shares. The buy increased his holdings by 12 percent, and came to a total cost of just under $2.61 million.
The director also logged the last buy at the company in November 2021, with a 50,000 share buy for about $4.3 million. Since then, company insiders have been sellers of shares, mostly after exercising stock options.
Overall, EOG insiders own about 0.5 percent of shares.
The oil and gas exploration company is up about 24 percent over the past year, thanks to a strong energy market. Earnings have surged 160 percent, and revenues are up 45 percent.
Plus, profit margins have hit 26 percent, a high level for a commodity-related business. Those numbers may slow if energy prices stop trending higher, but will still lead to an above-average operational year for the company.
Action to take: Investors may like shares here, as the stock trades for about 9 times forward earnings.
Shares also yield about 2.5 percent here, with the dividend recently getting a 10 percent annual increase. The company’s low payout ratio could lead to further big dividend hikes in the coming years.
For traders, the July $140 calls, last going for about $9.40, offer a mid-double-digit return from a continued move higher in shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of chipmaker Micron Technology (MU) are down nearly one-third over the last year. One trader sees a further decline ahead for shares in the coming weeks.
That’s based on the March 3 $48 puts. With 42 days until expiration, 2,658 contracts traded compared to a prior open interest of 103, for a 26-fold rise in volume on the trade. The buyer of the puts paid $0.52 to make the bearish bet.
Shares recently traded for just over $56, so they would need to fall $8, or about 15 percent in the coming weeks for the options to move in-the-money. A price of $48 would also be right at Micron’s 52-week low, set back in December.
Micron has been hurt by the economic slowdown of the past year. Revenues are down 47 percent, and the company has been haphazardly profitable in recent quarters.
That said, shares most recently went for about 10 times earnings, and trade at their lowest valuation in years on an earnings and sales basis.
Action to take: Investors may want to pick up shares at a price near $50. That would be close to the recent lows and a solid valuation for a long-term recovery in the chipmaking space. That would also give shares a dividend yield just under 1 percent for starters.
For traders, the March puts are well positioned for a short-term market pullback in the coming weeks. Traders can likely nab mid-to-high double-digit returns.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Some traders look for pure growth. Or pure value. Others may look for companies capable of big swings, depending on where they are in their industry cycle. Those looking to target cyclical companies need to start buying when things look down and out, not when things are going well.
By buying at the low point of the cycle, traders and investors alike can catch big swings in traditionally more stodgy companies – and even beat the market doing so.
Right now, industrial stocks look out of favor with a slowing economy. That can translate into a number of companies, including those that manufacture consumer appliances. That’s why a company like Whirlpool (WHR), which just sold its overseas business, could be a surprise winner here.
Besides the immediate value from selling part of its business, the company can refocus on its more successful North American market. That may help shares recover from their 25 percent drop last year.
In the meantime, with the stock trading at 10 times forward earnings, any positive change in the economy could lead to a sizeable move higher for shares.
Action to take: Investors may like shares at or near current levels. Besides being well off their highs, shares yield about 4.5 percent at current levels, and can likely grow more in time.
For traders, the June $170 calls, last going for about $7.30, offer mid-double-digit returns on a further move higher in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Thomson Leighton, CEO at Akamai Technologies (AKAM), recently added 282 shares. The buy increased the CEO’s holdings by less than 1 percent, and came to a total price just over $25,000. The buy comes a week after the CEO bought 850 shares, paying just over $75,000 to do so.
This follows on a pattern of buys going back to December. Over the past year, company insiders have largely been sellers of shares, including both officers and directors.
Overall, company insiders own 1.5 percent of shares.
The cloud service content application provider is down about 20 percent over the past year. While revenues rose about 3 percent in the past year, total earnings slid nearly 40 percent.
Uncertainty over the economy and a slowdown in ad spending online may contribute to further weakness for the company operationally. However, the stock is now reasonably valued at about 15 times forward earnings.
Action to take: Investors may want to use a pullback in shares to the low $80 range as a long-term buying opportunity. The company has a reasonable long-term growth profile, despite the short-term economic headwinds right now.
For traders, the August $100 calls, last trading for about $5.05, offer mid-double-digit returns on a further move higher. Traders should look to buy calls on a down day for shares, and potentially look to take quick profits on a quick jump higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of residential construction company PulteGroup (PHM) are down 7 percent over the past year, about half as much as the S&P 500. One trader sees a further drop ahead for shares.
That’s based on the April $50 puts. With 91 days until expiration, 8,437 contracts traded compared to a prior open interest of 182, for a 46-fold rise in volume on the trade. The buyer of the puts paid $2.78 to make the downside bet.
Shares recently traded for about $51, so the stock would need to drop about 2 percent for the option to move in-the-money. PulteGroup shares have significantly rallied off their 52-week low of $35 set back in June.
Homebuilding data suggests that the slowdown that started last year will continue in earnest this year. Higher construction costs will likely squeeze profitability on new homes sold, and higher interest rates will reduce the potential supply of buyers.
Action to take: Investors interested in homebuilders should look for a chance to buy shares at a lower price, possibly in the low $40 range. That would be a fair price for the current housing market, and would allow investors to obtain a dividend yield higher than the current rate of 1.3 percent.
For traders, the put options are reasonably priced, especially if there’s a sharp downturn in shares in the coming months. Traders can likely see mid-to-high double-digit gains on the puts in such a scenario.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Typically, a new industry will start dozens if not hundreds of companies before consolidating over time. Although many industries tend to consolidate into just a few companies, those remaining firms will then start to compete with each other based on how they keep customers happy in a fully developed market.
Having a choice can ensure that quality doesn’t slip, and that businesses find ways to deliver better results at lower prices for their customers over time.
For instance, the US airline industry often has low fares to keep customers coming back. But there are other ways to compete as well.
Delta Air Lines (DAL) is adding free wi-fi services on their US flights starting next month. The company has spent over $1 billion on the efforts, but expects to see higher customer retention.
The airline is still coming back to pre-pandemic air travel levels, and revenues surged 52 percent last year. The company has just barely been profitable, however. But with more features designed to retain customers, it can compete against other domestic US airlines.
Action to take: Shares are still inexpensive thanks to high energy prices last year and economic uncertainty. At 7 times earnings, shares look undervalued and capable of moving higher from here.
For traders, the September $45 calls, last going for about $2.55, offer a mid-to-high double-digit return on a rally in shares in the coming months, which should get past the short-term uncertainties weighing on shares now.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Richard Bingham, a director at Midland States Bancorp (MSBI), recently added 4,000 shares. The buy increased his holdings by 22 percent, and came to a total cost of $100,000.
The company’s corporate council bought 2,000 shares, for just under $51,000, latest last year. Generally, Midland States Bancorp insiders have been regular and modest sellers of shares following option exercises over the past few years.
Insiders at the regional bank still own about 5 percent of shares.
The bank has traded flat over the past year, compared with an overall drop in large bank stocks. Midland saw a 20 percent jump in earnings, and a 5 percent increase in revenues.
The bank trades for about 7 times earnings, and shares go for just under book value. That’s a sign that the bank could be in for a bump if a larger bank company makes an acquisition offer.
Action to take: Besides being a value play with some growth behind it, today’s buyers can also get a 4.3 percent dividend yield. That’s an attractive payout while waiting for the sector to trend higher or for the bank to get bought out.
For traders, the July $30 calls, last carrying a bid/ask spread of about $1.95, offer mid-to-high double-digit returns on a continued rally in shares. Traders should use tight limit orders given the small size of option trading on this small-cap bank stock.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of drugstore and healthcare planning company CVS Health Corporation (CVS) are down about in-line with the overall market in the past year. One trader sees shares moving higher in the coming month.
That’s based on the February $87.50 calls. With 31 days until expiration, 15,089 contracts traded compared to a prior open interest of 360, for a 42-fold rise in volume on the trade. The buyer of the calls paid $3.95 to make the bullish bet.
CVS shares trade close to $90, so the options are slightly in-the-money. Shares are still well off their 52-week high of $111.25.
The healthcare company grew revenues by 10 percent over the past year, but earnings growth has been low. That’s taken shares a big high on the valuation side in the short-term.
Action to take: In a market rally, shares will likely trend higher. Following the past few weeks, there may a slight pullback, which could give long-term investors a better buying point, perhaps near the mid-$80 range.
That would give investors the chance to buy shares with a starting dividend closer to 3 percent from the current 2.7 percent.
For traders, the calls play to the current momentum, and can likely deliver mid-double-digit growth. But look for signs of the market sinking after its recent rally to take quick – and potentially small—profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
While stocks have had a strong start to the year, corporate earnings show a slowdown. And interest rates are still on track to rise. Investors should generally be cautious about long-side ideas right now. One way to find the best opportunities is to look at where big-name players are going.
Besides making large purchases of shares, which can help the price rise, some companies may attract interest from activist investors. These investors can help management make more profitable decisions.
Currently, activist investors have shown an interest in The Walt Disney Company (DIS). Billionaire Nelson Peltz is the latest such investor, who unveiled a 35-page presentation on the company’s costs.
The entertainment giant lost just over a third of its price in the past year. And while revenues rose 9 percent, profit margins have shrunk to under 4 percent. An improved focus on costs could help boost profitability, even if the overall business remains slow this year due to a slowing economy.
Action to take: Shares are fairly valued at 25 times forward earnings, down from 140 times earnings at the end of 2021. If the company can improve its profitability, shares should get back to their long-term track record of consistent low-double-digit growth. Shares look like a buy in the $100 range.
For traders, the July $120 calls would benefit from any announced changes that lead to a jump in shares in the first half of the year. Last going for about $3.05, traders can likely see mid-to-high double-digit gains.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Jeffrey Brown, a director at Rent-A-Center (RCII), recently bought 1,084 shares. The buy increased his holdings by just over 1 percent, and came to a total cost of $26,233.
The director has been a quarterly buyer of shares going back to 2021. Other company insiders have been slight buyers, with a CEO buy of 40,000 shares for $1.08 million last March. The last insider sale occurred in December 2021.
Overall, Rent-A-Center insiders own 11 percent of shares.
The rental and leasing service company has dropped 44 percent in the past year on fears of a slowing economy. Revenues are off 13 percent, and earnings have slid in the past year as well.
However, shares trade at 6 times forward earnings, and the company now trades for 0.35 times its price-to-sales. While the economy is slowing, the company’s rental purchase business can benefit from higher interest rates, even if overall volume drops, as profit margins can expand.
Action to take: Shares have started to trend higher in recent months, and can likely continue to do so. Shares yield about 5.3 percent at current prices, offering a high payout for patient investors.
For traders, the June $30 calls, last going for about $1.65, can offer mid-to-high double-digit returns on a further rally higher for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of travel services company Sabre Corporation (SABR) have shed about one-third of their price over the past year. One trader sees shares trending lower in the first half of this year.
That’s based on the July $7.00 put. With 184 days until expiration, 42,714 contracts traded compared to a prior open interest of 110, for a 388-fold jump in volume on the trade. The buyer of the puts paid $1.22 to make the bearish bet.
Shares last traded for just under $7, leaving these options slightly in-the-money. Shares have traded as low as $4.46 in the past year, and a move closer to that low could lead to high-double-digit returns for the option.
Despite a 50 percent jump in revenues in the past year, Sabre remains unprofitable, losing nearly $500 million in the past year.
Plus, the company has nearly $4 billion in net debt on the balance sheet, nearly twice the value of the company’s equity. That’s a high enough level to indicate trouble if things don’t turn around quickly.
Action to take: Investors should avoid shares right now, as they look overpriced considering the company’s losses. If that starts to narrow, shares may start to move higher from a lower price compared to today.
For traders, the July puts are attractive for an at-the-money trade. Traders can likely grab mid-double-digit profits quickly well before the options expire.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The stock market is not the economy. However, many trends can play out with exaggerated moves both up and down in the stock market. That’s especially true with tech trends. While technology continues to transform, how investors view the investment opportunities can rapidly change.
That can create times when it’s wise to step aside, as values are too high. At other times, it may make sense to buy, even when things look ugly. That latter case may be playing out today…
The top play for most tech trends comes down to semiconductors. These chips power all of today’s technological tools, and key software trends can’t run without chips either.
Taiwan Semiconductor Manufacturing (TSM) recently came out with the view that the sector will turn around in the second half of 2023. That may be a bit early, but the manufacturer of semiconductors is in the best spot to know.
It also doesn’t hurt that the company reported better-than-expected earnings in its most recent quarter.
Action to take: Shares of TSM are inexpensive at 13 times earnings, a 48 percent growth rate, and a 43 percent profit margin. They’re a global leader in the actual manufacturing of semiconductors, and are expanding their global locations. Shares also yield 2.3 percent.
For traders, the June $100 calls, last going for about $2.90, offer mid-to-high double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Randall Paulson, a director at B. Riley Financial (RILY), recently added 20,000 shares. The buy increased his holdings by 8 percent, and came to a total cost of just over $744,000.
That adds to other insider buys over the past year, including the company Co-CEO, who last bought over 26,500 shares in late December. Overall, insiders have been substantial buyers over the past two years, with the last insider sale occurring back in May 2022.
Overall, company insiders own 46.5 percent of shares.
The financial services company has seen shares get cut in half over the last year, as slowing economic activity has led to a slowdown in earnings.
Revenues are off 17 percent in the past year, but earnings are down just 5 percent in the same period. That’s not bad considering the bigger slowdown in areas such as merger and acquisition activity.
Action to take: Investors may like shares for the long haul here. Besides the high insider ownership, shares yield about 11.6 percent at current prices, paying investors well to wait for a rebound.
For traders, shares have been in an uptrend in recent weeks. The April $40 calls are an at-the-money trade. Last going for about $3.75, they offer mid-double-digit returns on a further rally from current prices.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of consumer goods company Colgate-Palmolive Company (CL) lost 7 percent over the past year, declining about half as much as the S&P 500. One trader sees a further decline in the months ahead.
That’s based on the May $62.50 puts. With 122 days until expiration, 8,317 contracts traded compared to a prior open interest of 257, for a 32-fold rise in volume on the trade. The buyer of the puts paid $0.33 to make the bearish bet.
Shares recently traded close to $77, so they’d need to lose more than $15, or nearly 18 percent, for the option to move in-the-money. Plus, shares would need to drop under their prior 52-week low of $67.84.
A quick drop in shares could cause the put options to deliver big percentage gains quickly, however.
Colgate-Palmolive trades at a bit of a premium of 35 times earnings. Revenues rose a scant 1 percent in the past year, and earnings dropped by 3 percent.
Action to take: With a high valuation and big move higher in recent months, shares could potentially pull back from here. Investors who are patient can do far better than the company’s 2.44 percent dividend yield at current prices.
For traders, the put options are cheap and likely to expire worthless. But on a selloff in shares, they could still deliver high-double-digit returns or better. That makes for an inexpensive hedge on an overpriced stock now.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Many companies expanded during the past few years, amid unprecedented government stimulus checks and easy money policies. Now, many companies have found that rapid growth is a bit more elusive over the long haul. They’re cutting back on employees.
That trend is right-sizing companies that may have over-expanded on employees in recent years. That’s been seen primarily with big tech. But the current slowdown is also starting to be seen with financial companies as well.
The latest is asset manager BlackRock (BLK). They’re looking to lay off about 500 employees, or 3 percent of staff. The company saw a 15 percent drop in both revenue and earnings last year, as the stock and bond markets declined.
However, the company sports a 30 percent profit margin, and has been the long-term winner in the asset management space. With shares trading at their best valuation in two years, the stock is starting to look attractive before the company lowers its staff costs.
Action to take: Long-term investors can buy shares with a 2.8 percent starting dividend now, up from a 2.4 percent average over the past 5 years. The company pays out about half its earnings as dividends, and has grown them over time.
For traders, shares look likely to move higher in the coming months, continuing the current trend higher since October. While not cheap in dollar terms, the July $800 calls, last going for about $52.50, offer mid-double-digit returns in the coming months on a further move higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Augusta Investments Inc., a major owner of Augusta Gold Corp (AUGG), recently purchased 20,000 additional shares. The fund owns over 22 million shares, and the latest buy increased their holdings by less than 1 percent at a cost of just over $28,500.
The fund last bought shares in August, picking up 10,000 shares for just under $11,000. The fund bought shares on over two dozen occasions in the last year. Going further back, company insiders were buyers of shares in early 2021.
Overall, insiders own 47 percent of shares.
The small cap gold exploration company is up over 50 percent in the past year, thanks to a jump in gold prices in recent weeks.
The company has lost money overall, as it has been working to acquire a project, which closed last year. It will take time to develop, extract, and sell the gold. In the meantime, shares will likely trade up and down with the price of the metal itself.
Action to take: Gold prices have been rising in recent weeks. Investors may like shares as an alternative, as they’ve fared better than the returns in the metal itself in the past year.
Traders may also like shares, given the volatility in the space. As a small player, the company has no options, but shares are priced under $1.50. That makes them cheaper than options without having to deal with the potential for expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of cryptocurrency miner Riot Blockchain (RIOT) have lost nearly three-quarters of their value in the past year, but have risen in recent sessions as cryptos have trended higher. One trader sees shares moving lower in the next month.
That’s based on the February $5 puts. With 35 days until expiration, 10,021 contracts traded compared to a prior open interest of 195, for a 51-fold rise in volume on the trade. The buyer of the puts paid $1.15.
Shares recently traded just under $5.50, so the option is already about $0.50 in-the-money. With a 52-week low of $3.25, set just in December, a pullback in the next month could lead to a big move higher for the put options.
The mining company has had to sell most of the crypto it’s been producing to cover its cash costs, and revenue is down 30 percent over the past year.
Action to take: Investors should hold off on buying shares until the outlook for crypto mining improves. That will happen when prices start to rise, which will likely be in the latter half of this year or even going into next year.
For traders, the February puts are attractive, as they can deliver high-double-digit returns or better in the coming weeks on a drop in shares. Traders looking for a riskier speculation may want to look at put options on Riot going out to June, such as the June $5 puts going for about $1.28.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
It’s clear the market won’t hit new highs anytime soon. But before investors throw in the towel, it may be prudent to instead look at how great companies are acting today. Many are starting to invest with the future in mind.
Some of these investments may be relatively small, but over time, they could prove transformative to the companies making them today. They could even ensure big growth for companies that already lead in their respective industries.
Case in point? Microsoft (MSFT). The tech giant has a number of different businesses today. And now it’s working to integrate artificial intelligence (AI) with its investment in ChatGPT. That could even allow the company to make headwinds against search engine dominator Alphabet (GOOG).
While making these future investments, Microsoft has seen shares drop 28 percent in the past year, even as revenues have jumped by 10 percent. Plus, the company sports an above-average 34 percent profit margin.
Action to take: Investors should continue to accumulate shares under $250. At current prices, investors can also get a 1.2 percent dividend.
For traders, a long-term rally in the stock is likely. The July $280 calls, last going for about $4.75, offer mid-to-high double-digit returns in the months ahead on a move higher in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Matt McGraner, Chief Investment Officer at Nexpoint Real Estate Finance (NREF), recently added 5,000 shares. The buy increased his holdings by 5 percent, and came to a total cost of just over $84,000.
Insiders have been regular and steady buyers of shares over the past two years, with no insider sales over the same time. The buyers also include the company General Council, and the company President as well as directors.
Overall, insiders own about 4.9 percent of the mortgage lender REIT.
The stock is down about in-line with the overall market in the past year. There may be further price pressure as interest rates continue to rise.
However, shares already trade at a 30 percent discount to their book value, and the stock goes for about 10 times earnings, in addition to having a fat 48 percent profit margin.
Action to take: Investors may like shares for the long haul. As a REIT, the company pays out a high dividend of 12 percent at current prices. Investors may want to look for an opportunity to buy at a lower price as interest rates continue to rise this year.
For traders, the May $15 puts play well to the downtrend under way in shares. Last going for about $0.85, the trade can likely deliver mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of natural gas producer Chesapeake Energy (CHK) are up 27 percent in the past year amid a strong energy market. One trader sees a further rally in shares in 2023.
That’s based on the January 2024 $100 calls. With 372 days until expiration, 6,499 contracts traded compared to a prior open interest of 229, for a 28-fold rise in volume on the trade. The buyer of the calls paid $9.70 to make the bullish bet.
Shares recently traded around $88, so they would need to rise about $12, or over 10 percent, for the options to move in-the-money. Chesapeake has traded as high as $107 in the past year, so such a move is likely, even in the coming months as the winter heating season plays out.
Even with the move higher in shares, the stock trades at 5 times forward earnings, thanks to a 133 percent jump in revenues in the past year.
Action to take: Investors may like shares here, as energy stocks still have room to run. Plus, shares yield over 10 percent at current prices, offering a high yield for income investors today.
For traders, the options are well positioned, as they could lead to big moves in the coming weeks on any surprise cold weather, or for a longer-term trade as energy prices continue to trend higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The market selloff last year has led to a significant drop in prices for technology firms. While many of these companies have traded at high valuations in expectations of high growth, the selloff last year may have pushed a few companies with promising technologies into value territory.
Investors who look at the top tech trends of the next decade can likely find some solid pockets of value today, even among large, established players.
One trend is in artificial intelligence (AI). The concept is still in its early stages, but early AI programming is being used already to find opportunities for companies to improve their operations.
Advanced Micro Devices (AMD) is working on chips that play to a future heavily influenced by AI programming. That puts the semiconductor company in a place to benefit from this growth trend in the years ahead.
Shares have been cut in half in the past year, even as revenue grew by nearly 30 percent. And shares look fairly priced at 17 times forward earnings.
Action to take: Investors may want to accumulate shares at today’s or lower prices with a multi-year outlook in mind. AMD has been at the forefront of the chip space for several years, and its AI Push could increase that lead.
For traders, a long-dated rebound play, like the September $95 calls, last going for about $3.45, look reasonable here. Traders can likely grab high-double-digit returns or higher in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Matthew Hirsch, a director at UMH Properties Inc (UMH), recently added 1,750 shares. The buy increased his holdings by 4 percent, and came to a total cost of just under $28,000.
This is one of the larger insider buys at the company over the past few months. Company directors have been small buyers of shares on a regular basis, as well as the company President and CEO. The last insider sale occurred last April.
Overall, company insiders own about 7.3 percent of shares.
The manufactured home community REIT is down about one third over the past year, amid rising interest rates and a slowing real estate market.
Revenues are up 8 percent over the past year, although the REIT has not ben profitable in its most recent quarter.
Action to take: With housing still in a shortage and new unit construction slowing, existing home communities can likely see rents continue to trend higher. UMH yields about 4.9 percent at current prices, and the REIT has recently raised its dividend.
Traders may like the June $15 calls, as shares look ready to trend higher after trading in a tight range for several months. Last going for about $2.25, the option is about $1.50 in-the-money and could see mid-double-digit gains on a move higher in shares in the first half of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of defense contractor Lockheed Martin (LMT) are up about 30 percent over the past year as traders have moved into defensive stocks. One trader sees a pullback in shares in the coming weeks.
That’s based on the March $410 puts. With 64 days until expiration, 5,029 contracts traded compared to a prior open interest of 160, for a 31-fold rise in volume on the trade. The buyer of the puts paid $4.90 to make the bearish bet.
Shares recently traded for about $460, so the stock would need to drop about $50, or just over 10 percent, for the option to move in-the-money. Shares have come slightly down from a 52-week high just shy of $500 in recent sessions.
The stock’s move higher was largely driven by sentiment last year, as revenues rose by just 4 percent. The company relies on government contracts, and some spending bills passed in 2022 give the company some certainty over the next few months.
Action to take: Shares are priced at the higher end of their historical range at 22 times forward earnings. While Lockheed yields 2.5 percent right now, patient investors who buy on a drop can likely get an even higher starting yield.
For traders, a short-term pullback appears to have started. The March puts can likely deliver mid-to-high double-digit returns in the coming weeks, depending on how strong shares pull back.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
When one part of the market is hot, some names can soar far higher. But some companies may not go along for the ride. That can create a valuation mismatch, which may allow investors to earn a decent profit as overpriced companies in the sector see a relative decline.
In the past year, only one sector has seen a strong move higher. That space is the energy sector. And it’s not entirely played out yet.
Many energy stocks saw high-double or low-triple-digit gains in 2022. However, many big European oil majors did not. That’s created a relative value play for investors. For instance, Shell (SHEL) is up just 17 percent over the past year, even with revenues up 60 percent.
That’s created an opportunity, as shares trade for about 5 times earnings. That’s notably less expensive than US oil majors, which trade closer to 8-10 times earnings at present.
Action to take: Investors may like shares right now on further upside potential in the year ahead. Plus, the company yields 3.5 percent right now, and shares are still a bit off their recent highs.
For traders, the July $60 calls are a near-the-money trade. Last going for about $3.60, they can likely deliver mid-double-digit growth on a further move higher in shares in the first half of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
William Nash, President and CEO at Carmax (KMX), recently added 8,220 shares. The buy increased his holdings by just over 5 percent, and came to a total cost of $501,256.
This is the first insider activity at the company since July. It’s also the first insider buy at the company over the past two years. Overall, company executives have been regular sellers of shares following the exercise of stock options.
All told, company insiders own 0.3 percent of shares.
The used car dealership is down 48 percent over the past year, as sales have slowed. That’s led to an 86 percent drop in earnings and revenues are down by 22 percent.
Carmax also has a high level of debt, with roughly $2 in debt for every $1 in equity, a situation that could worsen as the share price falls.
Action to take: Investors may want to stay away from the company for now, as the slowing economy will likely continue to fare poorly for used car sales. It’s likely shares will retest their prior lows near $52 per share.
Traders can likely benefit from the long-term downtrend in shares. The April $50 puts, last going for about $4.50, can likely deliver mid-double-digit returns in the coming months on another downward shift in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of graphics processing unit manufacturer Nvidia (NVDA) have lost nearly half their value in the past year. One trader sees a further decline in the weeks ahead.
That’s based on the February 3 $150 put. With 24 days until expiration, 7,958 contracts traded compared to a prior open interest of 327, for a 24-fold rise in volume on the trade. The buyer of the puts paid $8.75.
Shares recently traded for about $150, making this an at-the-money trade. The stock is off a 52-week high over $289 per share, with a 52-week low of $108 per share.
Earnings have slid 72 percent in the past year and revenues are down 17 percent. With the market in an overall downtrend, it’s possible that this trade could play out in the coming weeks, especially after Friday’s jump higher in shares.
Action to take: While the company is an industry leader, in today’s markets, those interested in buying can likely get into shares at a lower price, with $125 as a reasonable price to start buying shares.
For traders, these at-the-money puts can likely deliver mid-double-digit returns in the coming weeks. Traders should look for a big down day for the stock to take a quick profit, no matter the size, given the ongoing market volatility.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
One way for investors and traders alike to make consistent profits is to simply follow trends. If a stock is going up, it may be worth buying for further gains. As long as you’re out by the time the trend ends, you can lock in some gains.
Many see energy as a continued winner, given how energy stocks fared last year. But oil prices peaked last spring, and could fall with a slowing economy. Yet one commodity continues to quietly rise…
That commodity is gold. The yellow metal is at a seven month high. And it only posted a slight loss for 2022, beating out stocks and bonds as an asset class.
Concerns over lingering inflation could cause demand to rise for gold. Or fears that central banks will cut too early, and inflation will come roaring back.
That bodes well for several potential plays in the gold space. The best way to play a price spike higher is with gold mining stocks. The VanEck Gold Miners ETF (GDX) lost nearly 9 percent last year. But it’s trending up now.
The fund owns positions in the largest gold miners, so it doesn’t have the political or operational risk of any single gold mining play.
Action to take: Those who see a further rise in gold prices may want to consider adding shares of the fund.
For traders, the June $35 calls, last going for about $1.85, offer a leveraged exposure to a jump higher in in gold in the first half of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Albert Smith, a director at Simon Property Group (SPG), recently bought 639 shares. The buy increased his holdings by 1 percent ,and came to a total cost of just over $74,000. He was joined by another director, who bought 326 shares, paying just under $38,000.
Other directors have made modest purchases in the past few days as well, with another cluster of director buying in the last quarter. Over the past two years, there have been no insider sales.
Overall, company insiders own 0.5 percent of shares.
The shopping mall REIT is down 25 percent in the past year. Revenues rose 2 percent, but earnings slid by 21 percent amid high inflation and other costs.
Nevertheless, the REIT is reasonably valued relative to its revenue, and it sports a 37 percent profit margin.
Action to take: Income investors may be interested in shares here, as they yield about 6.1 percent. SPG has managed to raise the dividend in the past year as well, although improving earnings will likely be needed for meaningful dividend increases down the line.
For traders, shares have started moving slightly higher over the past few months. The April $120 calls, last going for about $6.70, are an at-the-money trade that could turn a continued rise in shares into a mid-double-digit gain.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares oil and gas exploration company Diamondback Energy (FANG) are up about 5 percent over the last year, significantly lagging others in the energy space. One trader sees a decline for the stock in the weeks ahead.
That’s based on the March $135 puts. With 66 days until expiration, 7,643 contracts traded compared to a prior open interest of 110, for a 70-fold rise in volume on the trade. The buyer of the puts paid $10.30 to make the trade.
Shares recently traded for about $134, meaning the option is already about $1.00 in-the-money. Shares have a 52-week low of about $104, so there’s room for more downside on the options should the stock trend lower.
Operationally, the company is doing fine. Earnings rose 82 percent last year and revenues rose by over 30 percent. However, energy prices tend to move with sentiment in the energy space, and a slowing economy has been weighing on oil prices.
Action to take: Investors may like shares on a further pullback, when they can get a dividend yield closer to 7 percent from the current 6.5 percent.
Traders may like the puts as a short-term bet against oil following its strong performance last year and amid the broader picture of a slowing economy. Traders can likely nab mid-double-digit gains with this March $135 put trade.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
There are many ways to play consumer trends. When the market pulls back and the economy slows, it may make sense to focus on companies that can offer users the best price available.
However, companies that cater to luxury markets tend to face less of a slowdown. Even better, these companies tend to see their profit margins hold up, even as lower markets are in decline.
A slow economy and a down market tends to make for a good time to invest in companies catering to higher-end consumers. That can even play out in the housing market. Toll Brothers (TOL), a homebuilder focusing on the luxury market, may stand up better than its peers.
That’s because about 20 percent of Toll customers pay cash, rather than deal with a mortgage. And their homes sell for an average of about $1 million, making it the top luxury home builder.
Shares are own about 30 percent in the last year with the slowing housing market. But Toll Brothers grew revenues by 22 percent and earnings by 71 percent.
Action to take: Investors may like shares as a long-term play on the recovering real estate market. Investors should look to accumulate over the next few months and buy on down days for the stock. Shares yield about 1.6 percent at present.
For traders, a rebound is likely in the coming months. The June $60 calls, last going for about $2.45, offer mid-to-high double-digit gains. Traders could also look to take smaller profits more quickly.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Amy Lane, a director at FedEx Corp (FDX), recently added 280 shares. The buy increased her holdings by 22 percent, and came to a total price of just over $49,000.
This marks the first insider buy at the company since September, when another director bought 1,500 shares, paying just over $215,000. Otherwise, company executives have largely been sellers of shares as options have been exercised, as directors continue to buy.
Overall, company insiders own 7.9 percent of shares.
The freight and logistics company has lost a third of its value in the past year. Revenues are own about 3 percent, but earnings have dropped by a quarter on fears of a slowing global economy. Nevertheless,
FedEx trades at about 13 times forward earnings, about in line with where shares have traded over the past year. As a major player in its industry, FedEx will move with the economy, but will likely gain market share as smaller players contract.
Action to take: Investors may like shares near today’s prices as a long-term buy. At current prices, the stock yields about 2.7 percent, above its historical average. Plus, the company has raised its dividend, but still has a low payout ratio for further increases.
For traders, shares have started to come off their recent lows. The June $200 calls plays to the continuation of this trend. Last going for about $9.65, the options can likely deliver mid-to-high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of healthcare product producer Bausch Health Companies (BHC) have lost three quarters of their value in the past year. One trader sees a rebound in the weeks ahead.
That’s based on the February $8 calls. With 42 days until expiration, 26,688 contracts traded compared to a prior open interest of 665, for a 40-fold rise in volume on the trade. The buyer of the calls paid $0.37 to make the bullish bet.
Shares recently traded just under $7, so the stock would need to rise $1.15, or about 17 percent for the option to move in-the-money. That’s still well under the stock’s 52-week high of $28.08 per share.
Bausch saw flat revenues over the past year, but earnings soared by 112 percent. Shares trade at under 9 times current earnings, and for less than 2 times forward earnings. However, the company has a sizeable debt load to contend with which may hold back shares.
Action to take: Speculators may like shares here. The stock is somewhat off its lows, and may bounce around up to the $10 range before potentially pulling back. With the company’s current balance sheet however, it’s not quite worthwhile for investors.
For trader, the February calls play to a modest move higher in shares in the coming weeks. That could play out, and the low cost of the option could lead to high double-digit returns or better.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
In a volatile market, it may seem that no sector is safe. That’s especially true as both stocks and bonds sold off by double-digits last year. But other asset classes are more mixed. Commodities held up fairly well last year, and some specific plays look set to fare well into 2023 and possibly beyond.
That’s because the rules of the commodity space can come down to supply and demand. Any change in those factors can lead to big prices swings.
While investor focus in the commodity space is often on gold or oil, some of the best winning plays could come from elsewhere. One such place is lithium. The soaring demand for the metal for use in lithium-ion batteries remains large – and growing.
One such play is Piedmont Lithium (PLL). They’re a startup mining operation that’s contracted to deliver 125,000 metric tons of spodumene concentrate to EV giant Tesla Motors (TSLA).
With EV sales rising, lithium demand and prices should continue to trend higher. That bodes well for a commodity play like Piedmont.
Action to take: Investors looking for the best winner in the EV race going forward will likely find it in a commodity player, given the high valuation of Tesla, and the lower profit margins of traditional automakers shifting to EVs.
For traders, the May $50 call, last going for about $5.25, could deliver mid-to-high double-digit returns in the coming months on a move higher in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Craig Erlich, COO at Agree Realty Corp (ADC), recently added 4,898 shares. The buy increased his holdings by 19 percent, and came to a total cost just under $80,000.
The buy came a week after a company director bought 11,000 shares, paying just over $785,000. Otherwise, company insiders haven’t made any changes in their holdings in nearly a year. Going back over the past three years, insiders have been consistent buyers.
Overall, insiders own 1.6 percent of company shares.
The real estate investment trust has traded flat over the past year, amid a general market decline. The REIT’s focus on triple-net leases mean that they haven’t had to absorb higher costs due to inflation, leaving that to tenants to handle.
Revenues also rose 26 percent in the past year, and the company sports a 36 percent profit margin.
Action to take: Interested investors can get a 4.1 percent dividend yield at today’s prices. That’s slightly higher than the company’s average yield, and Agree has raised its dividend payout in the past year.
For traders, the REIT will likely continue to slowly trend higher. The July $70 calls are an at-the-money trade. Last going for about $5.40, investors can likely see mid-double-digit gains on a further move higher in shares from here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of electric truck manufacturer Nikola Corporation (NKLA) are down 80 percent over the past year. One trader sees a further decline ahead.
That’s based on the January 2024 $2 puts. With 379 days until expiration, 40,037 contracts traded compared to a prior open interest of 967, for a 41-fold rise in volume on the trade. The buyer of the puts paid $1.08 to make the bearish bet.
Shares recently traded for about $2.20, so the stock would need to drop about 10 percent for the options to move in-the-money. That would also take shares just under the most recent 52-week low of $2.01 per share.
The early-stage company went public just over a year ago and has seen share sink since. The company’s designs are still in their early stages. And there’s been some setbacks as partnerships for manufacturing electric vehicles have failed to pan out. At the rate the company is losing money, it could be in for a rough year ahead.
Action to take: Shares are still trending down, so interested investors should wait. More importantly, there could be a rising risk of bankruptcy by the end of the year at the rate Nikola is currently burning through its cash.
For traders, a short bet will likely pay off. But even in bankruptcy, the most the January $2 puts can be worth is $2, or not quite double what the option is going for. Still, traders can use an up day for shares to buy puts, and look to flip some smaller and quicker profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Last year’s bear market likely isn’t quite over yet. However, many stocks that were fairly valued are now bargains. And they could start moving higher in the months ahead as the bear market reaches its peak.
In that kind of environment, there will be a quick jump higher for nearly all stocks. But the best performers will come from those companies that are industry leaders, and will be more sustainable than just a jump higher.
For instance, right now investors are skeptical about financial stocks. With less trading activity and higher interest rates, that’s a sensible concern. But many companies are poised to perform well. One such name is industry leader for the big-bank space, Bank of America (BAC).
The company has one of the highest quality loan portfolios in the market. Bank of America even managed to grow revenues 1 percent last year as the economy slowed. And shares trade near book value, with an earnings multiple of less than 9 times forward earnings.
Action to take: Shares should shake off last year’s 25 percent decline in the year ahead. And at today’s prices, investors can get a 2.6 percent yield.
For traders, the July $40 calls, last going for about $0.80, offer high double-digit returns in the coming months. Traders can even use short-term moves higher for a quicker, if smaller, gain in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Pershing Square Capital Management, a major owner of Howard Hughes Corp (HHC), recently added 6,154 shares. The buy increased the fund’s holdings by under 1 percent, and came to a total cost of just under $460,000.
That was the fund’s fourth buy in the span of a month, following large purchases including a 1,560,205 share but and a 657,160 share buy. Overall, the fund has increased its stake by over 15 percent in the past month.
Overall, Pershing Square owns about 32 percent of Howard Hughes, and company insiders own just under 1 percent of shares.
The real estate owner and developer dropped 25 percent in the last year, slightly more than the overall market. While conditions have tightened over the past year, Howard Hughes saw a strong operational year with a 192 percent rise in revenues, and a 2,567 percent growth in earnings.
Those trends will likely slow over the next year. However, shares still trade near their book value, and continued growth makes the stock look inexpensive at 16 times earnings.
Action to take: Investors may like shares here. With a large fund ownership, there may be some buyout play that could lead to a rise in the share price in the next year. At present, the stock doesn’t pay a dividend.
For traders, the July $75 calls are an at-the-money trade. Last going for about $10.50, traders can likely see high double-digit returns at some point in the first half of the year before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of drug manufacturer Novartis (NVS) are slightly up over the past year. One trader sees a further rally occurring in the first half of the year.
That’s based on the July $85 calls. With 197 days until expiration, 3,071 contracts traded compared to a prior open interest of 119, for a 26-fold rise in volume on the trade. The buyer of the calls paid $8.30 to make the bullish bet.
Shares recently traded just under $91, meaning the options are more than $5 in-the-money already. That makes the premium on the options far lower than stated.
It also means on a further rally that the options will likely see mid-double-digit gains, especially as shares would likely need to break over their prior 52-week high of $94.26.
The drugmaker could continue to deliver gains. Shares are inexpensive at 9 times forward earnings. While revenues dipped 4 percent last year, that’s held up better than many other parts of the market. And the company has a hefty 42 percent profit margin.
Action to take: Long-term investors may want to consider buying on a dip. Shares yield 3.7 percent, offering income on top of likely slow and steady long-term gains over time.
For traders, the in-the-money calls are a bet that the stock will continue with its longer-term uptrend currently underway, even amid a bear market. Investors can likely get mid-double-digit gains from the option.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
There are many ways to value a company. For an industry with only a few players, one key metric is market share. That’s because when there are just a few companies in an industry, it’s growth is largely over. So what matters most is being able to grow by getting consumers to switch.
In a slowing economy, companies focusing on growing their market share could be solid winners… and could also show investors which companies to avoid right now.
For instance, dating apps have slowed in popularity following a pandemic-era bump. But Bumble (BMBL) is faring well, with a growing market share at the expense of competitors.
Shares are down over a third in the past year. And sales haven’t fared as well as expected. However, revenues rose 17 percent in the past year. And the stock trades for a valuation of just $2.6 billion.
Action to take: Investors may like accumulating shares at current prices, as shares have shown a strong propensity to rally when the price gets near the current level of $20. Shares can likely see a mid-double-digit rally in the next few months.
For traders, the July $25 calls, last going for about $3.15, offer high-double-digit returns on a pop higher in the stock in the first half of the year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Roxanne Austin, a director at CrowdStrike Holdings (CRWD), recently added 25,000 shares. The buy increased her holdings by 62 percent, and came to a total cost of just under $2.5 million.
This marks the first insider buy since back in June, when another director picked up a mere 81 shares. Otherwise, company officers and directors have largely been sellers of shares, following the exercise of options.
Overall, company insiders own 1.3 percent of shares.
Shares of the cloud services protection company have been cut in half in the past year. While CrowdStrike lost money overall, revenue still rose by nearly 53 percent. And the company still has a strong balance sheet, with nearly $2 billion in net cash on the books.
Action to take: Shares look attractive at their current valuation, and long-term investors may want to start buying here. With the current volatile markets, additional buys can be made on down days for the stock. At present, shares do not pay a dividend.
For traders, the short-term trend remains down. That makes a put option trade, like the March $95 puts, attractive. Last going for about $6.75, traders can likely see a mid-double-digit gain on a continued slide in shares. Just watch out for a market turnaround, as it may send shares jumping higher.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of oil and gas major Occidental Petroleum Corporation (OXY) are up 112 percent over the past year. One trader sees a pullback coming in the next 18 months.
That’s based on the June 2024 $50 puts. With 534 days until expiration, 5,001 contracts traded compared to a prior open interest of 101, for a 50-fold rise in volume on the trade. The buyer of the puts paid $6.45 to make the bet.
Occidental shares recently traded for about $62, so the stock would need to decline $12, or about 20 percent, for the options to move in-the-money.
That’s a reasonable range, given how volatile energy stocks have been in the past year. The only wild card is if more shares will be bought at a lower price by investor Warren Buffett, which may provide a price floor.
Action to take: Shares have been coming down off their recent highs, so interested investors might want to look at buying shares in the low $50 range. The stock has a dividend yield of 0.8 percent, but a lower buy price would push that up to 1 percent.
For traders, a continuation of the current short-term downtrend seems likely. And oil could fall further if the economy goes into a recession this year. That makes these puts a reasonable hedge against uncertainty, while also providing a potential mid-double-digit return for traders in the next few months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Any successful company will eventually struggle with slowing demand. Those that are successful are able to turn around a declining situation. But many “turnaround” stories are just that – stories.
It’s crucial for investors to be able to separate true turnarounds from talk of improvement. That’s why investors should wait for trends such as improving profit margins or improved earnings before waiting to invest in such a story.
One surprising story from 2022 has been that of Netflix (NFLX). The company struggled in recent years as other streaming services increased competition. Netflix even saw a real decline in user growth for the first time in its history.
But things are improving, and even those who have been bearish have started to notice. Subscriber numbers have stabilized, and with the stock price cut in half last year, shares look reasonably valued relative to the company’s cash flows. With earnings up 6 percent in a slowing economy,
Action to take: Investors can consider shares at today’s prices as reasonably valued, and can use any drop in shares to add to that position.
For traders, shares will likely keep trending higher off their June lows. The July $260 calls, last going for about $24.75, offer mid-double-digit returns on a continued move higher in the stock in the first half of this year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Marcy Barth, a director at Enterprise Products Partners (EPD), recently added 5,000 shares. The buy increased her stake by 6 percent, and came to a total cost of just under $120,000.
The buy came as the company Co-CEO bought 25,000 shares on two separate days, paying nearly $600,000 to increase his holdings by about 15 percent. Other company insiders have been buyers in recent months, with the last insider sale occurring in March 2021.
Overall, company insiders own 27.2 percent of the company.
Shares of the oil and natural gas pipeline company are up about 10 percent over the past year, in addition to paying out a 7.9 percent dividend.
EPD is still inexpensive at 10 times forward earnings, and shares are about halfway between their 52-week high and low. Even with the rise in energy prices this year, the stock’s price to sales ratio of just under 1.0 makes for an inexpensive trade in the energy space now.
Action to take: The company’s partnership structure provides for a high dividend, which is attractive for income investors. With a market cap of nearly $53 billion, the company is unlikely to be a buyout candidate, but can still spin off considerable income.
For traders, shares are likely trending back towards their 52-week high. The March $26 calls, last going for about $0.24, offer high-double-digit returns on a continued rally in shares from here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of analytics software company MicroStrategy (MSTR) are down 75 percent over the past year, largely due to the company’s decision to leverage up its balance sheet to buy Bitcoin. One trader sees a modest rebound in the coming weeks.
That’s based on the January $160 calls. With 18 days until expiration, 4,737 contracts traded compared to a prior open interest of 199, for a 24-fold rise in trading volume. The buyer of the calls paid $3.65 to make the bet.
Shares recently traded for about $130, so the stock would need to jump over 20 percent in under a month for the option to move in-the-money. MicroStrategy has ticked lower in the past month even as the price of Bitcoin has stabilized in the high $16,000 range.
The underlying company has performed flat over the past year, and the selloff has taken shares from 80 times estimated earnings to 45. That’s still a bit pricey, but the company’s earnings are wildly impacted by mark-to-market changes in the value of its crypto holdings each quarter.
Action to take: Investors expecting Bitcoin to move higher over time could consider buying shares at today’s prices.
The current stock price underrepresents the amount of Bitcoin per share. As long as MicroStrategy doesn’t face a margin call and prices recover, the share price could soar again, although that will take time.
For short-term traders, the January $150 calls could be good for mid-double-digit gains in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
It’s no surprise that when it comes to investing, larger players can have some advantages. One advantage smaller investors have, however, is the ability to see what the big players are doing and follow along. In a bear market, they may even get a better deal.
By following investors with a strong track record, it’s possible to beat the market over time. And to do so with less volatility than other market strategies.
One move investors can make now is to follow a $1 billion investment by Saudi Arabia’s sovereign wealth fun into Lucid Group (LCID). The manufacturer of electric cars is about to launch in Europe. However, shares are at an all-time low since going public in July 2021.
The EV manufacturer now has a staggering 83 percent drop over the last year. Despite that, and the company’s losses, it’s starting to see sales, unlike some other EV companies that have gone public recently.
Revenues have soared 84,149 percent over the past year. That number will slow, even with the European market open for business. But shares are still trading at 6 times some very rapidly-growing earnings.
Action to take: Investors may like a speculative position in shares here. With a $10 billion market cap, it’s going for a fraction compared to other automakers, and just ahead of a big surge in growth.
For traders, a long-dated call like the August 2023 $10 call looks attractive here. That option recently traded for about $0.75. It could be a big winner on a move higher in shares in the next 8 months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Lawrence Hilsheimer, CFO at Greif (GEF), recently added 4,050 shares. The buy increased his holdings by 2 percent, and came to a total cost of just under $320,000.
The CFO last bought shares a week ago, picking up 2,180 shares for just over $167,000. Looking further back, a major owner has been a sizeable seller of shares over the past year, and company executives have been overall slight buyers.
Overall, company insiders own 3.7 percent of shares.
The specialty packaging company has had a strong year, with shares rallying by 14 percent. That’s even as earnings and revenue slid by about 5 percent each. Yet thanks to a low valuation, shares still trade for about 10 times forward earnings, and just 0.5 times its price to sales.
Action to take: Investors may like shares here. Besides the relatively low valuation, the stock yields about 2.9 percent right now, and Greif has increased its dividend in the last year. With a payout ratio of 30 percent, there’s room for further increases down the line.
For traders, the July 2023 $80 calls, last going for about $4.40, offer mid-double-digit upside on a further move higher in shares. However, traders should be cautious, as there’s low open interest on the trade at the moment.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of consumer tech giant Apple (AAPL) hit a new 52-week low this week. One trader sees shares rebounding in the coming weeks.
That’s based on the January 20 $127 calls. With 21 days until expiration, 10,526 contracts traded compared to the prior open interest of 253, for a 42-fold jump in volume on the trade. The buyer of the calls paid $4.78 to make the trade.
Apple shares recently traded for just over $126, making this an at-the-money trade. A sizeable rally in the coming weeks could lead to a big move higher for the options, although Apple will likely take a long time to get back to its old high of $183.
Despite revenues rising 8 percent in the past year and earnings moving up about 1 percent, Apple has now lost 27 percent of its value. While shares may trend lower, they’ll likely see a snap higher first in the coming weeks.
Action to take: Long-term investors can consider shares under $130. The stock pays a growing dividend, although the starting yield is a bit low at 0.7 percent. Plus, the company has done a fantastic job of buying back shares and reducing the float of stock over the years, a trend likely to continue.
For traders, the January $127 calls could deliver mid-double-digit returns in the coming weeks. They’re unlikely to be a runaway winner, but are close enough to where shares trade that downside will also be limited.
Disclosure: The author of this article has a position in the company mentioned here, but does not intend to trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
In bear markets, investors and traders alike tend to sell first and ask questions later. That can create opportunities, provided you know how to weed through them. One opportunity occurs when there’s a clear short-term issue that will be resolved in time.
When that occurs, investors can profit from the rebound, although it will take patience… especially in a market that isn’t moving along in a bullish manner. Yet these opportunities occur all the time.
One opportunity that’s come up just this week is with Southwest Airlines (LUV). The winter storm caused the cancellation of thousands of flights, and Southwest was the worst hit. That caused shares to take a 6 percent dive on Tuesday, sending them close to their 52-week low.
Yet the company is faring well, with revenues up 33 percent in the past year. And despite slow economic growth and high energy prices, the airline is in a relatively strong position for when the weather improves.
Action to take: Investors may like shares at today’s prices with the long-term in mind. Southwest has been an industry leader for keeping costs low. The company even recently reinstated a 2 percent dividend.
For traders, the June $37.50 calls, last going for about $2.15, offer high double-digit return potential as weather normalizes and air traffic moves back towards its pre-adverse weather normal.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Jim Turner, a director at Comstock Resources (CRK), recently added 15,000 shares. The buy increased his holdings by 6 percent, and came to a total cost just under $208,700.
That follows up on a 14,025 share buy made from another director earlier in the month. So far this year, insiders have bought shares on 8 occasions, with zero insider sales. That includes both directors, and executives including the company CEO.
Overall, company insiders own 55 percent of shares.
The oil and gas exploration company is up 65 percent in the past year. Revenues are up a more robust 133 percent. And while not profitable overall in the past year, the company has a 27 percent profit margin, a high amount for a commodity-producing company.
Action to take: Despite being a smaller player, Comstock pays a 3.6 percent dividend yield.
And with shares trading under 7 times earnings, shares have more room to rise, especially if oil prices stay higher for longer. The company could even become a buyout candidate for a larger energy company at its current size.
For traders, shares are likely to continue trending higher. The June 2023 $15 calls, last going for about $2.50, offer mid-to-high double-digit returns in the months ahead. The call is an at-the-money play, so stands a good chance of gaining in value with a lower chance of losing in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of payment company Bill.com Holdings (BILL) are down nearly 60 percent over the past year amid a slowdown in online payment processing. One trader sees a further decline ahead.
That’s based on the February $120 puts. With 50 days until expiration, 10,116 contracts traded compared to a prior open interest of 194, for a 52-fold rise in volume on the trade. The buyer of the puts paid $23.65 to make the bearish bet.
Shares recently traded for about $103, leaving the option about $17 in-the-money already. The stock hit a 52-week low just under $90 per share back in May before moving higher, although that rally has petered out in the past few months.
Action to take: Shares are clearly in a downtrend, which favors avoiding shares for now. With the company losing money and trading at 189 times forward estimated earnings, more downside looks likely in the months ahead. So the stock should be avoided for now.
For traders, any put option trade looks attractive based on the company’s fundamentals and price action right now. The February $120 puts can likely deliver mid-double-digit gains in the coming weeks.
Traders with less capital can consider a less expensive trade like the February $75 puts for about $3.30, which can likely deliver bigger gains, but may not move in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
For years, Netflix (NFLX) dominated the streaming space. That allowed the company to grow quickly, and gain a massive market cap relative to its earnings. But competitors from across the media spectrum have come in with their own services.
One of the early streaming players hasn’t been seen as a competitor to the media streamers. But that appears to be changing, and this company may end up becoming a surprising winner in this space thanks to more visibility and even profitability.
The company is Alphabet (GOOG). Best known as the parent company of Google, the company also owns YouTube, the most valuable video streaming site in the world. And Google just earned the right to stream NFL football games for about $2 billion annually.
While that’s a hefty cost, the company can make up for it on advertising, especially if it’s getting more eyeballs on its site for longer. That bodes well for the tech giant.
Action to take: With a big streaming deal under its belt and shares down nearly 40 percent in the past year, the stock is starting to look attractive.
It’s even looking fairly valued, trading at 17 times earnings, down from 27 times last year. And even in a tough advertising environment, the company still sports a hefty 24 percent profit margin.
That makes shares look like a reasonable long-term buy at current prices.
For traders, the June $100 calls, last going for about $5.40, offer mid-double-digit returns on a move higher in shares in the first half of 2023.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Christopher Hamm, a director at Amplify Energy Corporation (AMPY), recently bought 17,000 shares. The buy increased his holdings by 29 percent, and came to a total cost of just over $130,000.
This marks the first insider activity since August 2021, when two directors bought 10,000 and 15,000 shares respectively, at a price just under half of where shares trade today. The last insider sales also occurred in 2021.
Overall, company insiders own 1 percent of shares.
The oil and gas exploration company has soared 153 percent in the past year, on the back of strong energy prices.
Amplify saw revenues rise by 30 percent, and while the company didn’t hit full profitability, its gross profit margins came in at 14 percent.
Action to take: Investors may like shares even after their big rally, as the energy sector continues to look like a bright spot in the overall market. As a smaller play, shares don’t pay a dividend, but the company can potentially grow faster an get bought out by a bigger player in time.
For traders, the July 2023 $10 calls, last going for about $1.20, offer mid-double-digit gains on a further rally in shares from here. Traders can likely buy the options more cheaply on a down day for energy prices, and make a quick turnaround on a small rally in energy.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of silver mining company Pan American Silver Corp (PAAS) have shed one-third of their value over the past year. One trader sees the stock moving higher in the next few weeks.
That’s based on the February $20 calls. With 51 days until expiration, 5,297 contracts traded compared to a prior open interest of 135, for a 39-fold increase in volume on the trade. The buyer of the calls paid $0.38 to bet on a rally.
The stock recently traded for just under $17, so shares would need to rise at least $3, or about 18 percent, for the option to move in-the-money. The stock is closer to its 52-week low of $13.40 than its high of $30.56.
Silver prices are up about 5 percent over the past year, however, much of that change has occurred thanks to a recent rally in the metal. Pan American shares are likely to move based on how the price of silver changes.
Action to take: The current rally in silver has been stronger than the one for gold. So it’s likely that it could continue to move higher on a percentage basis in the months ahead. Traders can likely fare well with the metal going into 2023.
For options traders, the February calls are aggressive, but could deliver triple-digit returns.
Pan American shares would need to continue their rally of the past few months at a strong rate. Even if that doesn’t happen, traders could likely leverage this move into a mid-double-digit profit in just a few trading days.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
For long-term investors, there’s no better place to be than in industry leaders. Every industry has one. The company that has better products and profit margins than competitors. In a bull market, they’re correspondingly more expensive. In a bear market, that may be true… but the company’s valuation may be better.
That’s why patient investors can pick up great companies at a far more reasonable value during a bear market. Doing so can lead to market-beating profits on a rebound.
One company we see as an industry leader is Costco Wholesale (COST). They’ve mastered the business of being a warehouse retailer. They offer low prices on goods, typically provided they’re bought in bulk. And the business model is to run the retail operation at cost, while making profits by selling membership fees.
Costco is down about in-line with the overall market in the past year. But revenues are up 8 percent, and earnings are up 3 percent amid a slowing economy. So it’s no surprise that the company is looking reasonably valued for long-term investors today.
Action to take: Shares are high-priced, but the company will likely thrive in any market condition. Plus, the company is a dividend grower, with a starting yield of about 0.8 percent right now.
Traders should look for a snap higher in the coming months. The April $500 calls, last going for about $14.00, offer mid-double-digit returns on such a move.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Lutke Tobias, a director at Coinbase Global (COIN), recently bought 10,520 shares. The buy increased his holdings by 7 percent, and came to a total cost of just over $365,000.
The director has been a regular buyer of shares, with over a dozen purchases since August. Other company executives have exercised options or sold shares over the same time, even as the stock has been declining heavily in recent months.
Overall, company insiders own 1.8 percent of the cryptocurrency brokerage.
Coinbase shares have declined along with transactions in the cryptocurrency space this year, with shares down a whopping 87 percent.
With fewer transactions, the brokerage business has seen a big drop, with overall revenues dropping by 56 percent. If the crypto market recovers in the years ahead, however, this may be on par with the revenue drops seen in stock brokerages.
Action to take: Investors interested in the stock may want to wait for the crypto market to stop declining. As things level out, shares should be able to regain their profitability. And in the next crypto bull market, the company can potentially move far higher from here… but we’re not at that point yet.
For traders, the current downtrend is likely to continue in the months ahead. The March $25 puts, last going for about $2.65, offer mid-to-high double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of theater chain AMC Entertainment Holdings (AMC) have shed 80 percent of their price over the past year as the company has lost its luster as a “meme stock.” One trader sees a further decline ahead for shares.
That’s based on the April $3 puts. With 114 days until expiration, 15,957 contracts traded compared to a prior open interest of 104, for a staggering 153-fold rise in volume on the trade. The buyer of the puts paid $1.43 to make the bearish bet.
Shares recently traded for just under $5, and the stock has 52-week low of just $4.11 per share, so there could be some immediate downside ahead on the retest of the recent low. Shares seem unlikely to rally anywhere near their 52-week high of $34.33 in the foreseeable future, given the current volume of business at movie theaters in general.
In the meantime, there may be further pressure on shares as AMC looks to sell more shares to pay down debt. Currently, the company has about $6 in debt for every $1 in equity.
Action to take: Shares are fundamentally weak, and could get weaker amid new share issuance. That points to a lot of continued downside pressure for shares. It doesn’t make sense to go long now, or at any point until the company’s fundamentals substantially improve.
For traders, the April $3 puts are a big aggressive, as they would require shares breaking to new lows to move in-the-money. But the trade can likely deliver mid-to-high double-digit returns even if the trade doesn’t move in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The holiday season has been challenging. Overall spending is up, but not enough to cover the change in inflation over the past year. Consumer savings are down, and credit card spending is on the rise. That could push consumer spending lower. As a major part of the economy, that’s not good.
However, there’s a niche for retail spending that’s been growing tremendously in recent years. And a few companies behind that trend stand to benefit.
That trend is the rise of the resale market. Many are increasing their spending on secondhand gifts, using several companies to help make a market bringing together buyers and sellers.
One such player is Poshmark (POSH), which is focused on the gently used clothing market. Shares have performed about 10 percent better than the S&P 500, even in a slowing economy. And Poshmark grew revenues by 11 percent as more consumers have turned to spending on pre-owned goods.
Action to take: While not currently profitable, Poshmark has far more cash than debt on the balance sheet. And they don’t have to worry about inventories, as they’re bringing together buyers and sellers.
That could make them a surprising winner in an economy that continues to slow down, and makes shares worth buying for farsighted investors today.
For traders, the May $17.50 call, last going for about $0.70, offers mid-double-digit returns on a move higher in shares in the first half of the year. The trade is already slightly in-the-money.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Hill Path Capital Partners, a major holder of Dave & Busters Entertainment (PLAY), recently added 535,000 shares. The buy increased the fund’s holdings by 9 percent, and came to a total cost just over $17.9 million.
That’s on top of a 353,500 share buy made by the fund earlier in the month. That came to a $12.1 million buy that increased the fund’s position by 6 percent. Company insiders have generally been buyers this year, with the last sale occurring in May.
Overall, company insiders own 2.7 percent of the company, and institutions own most of the remaining shares.
The entertainment venue has seen shares drop about 15 percent in the past year, returning just slightly better than the overall stock market. Revenues have jumped 51 percent this year, but earnings have slid.
Overall, that’s taken the company’s valuation from 73 times earnings to 13 times earnings. And shares now trade at just under 1x book value compared to 2x last year.
Action to take: The company could be a solid winner when the market stops falling. The company’s relatively high debt could be leading to some market fear which could change in time. Patient investors can likely acquire shares under $30, should the stock re-test its 52-week lows.
For traders, shares have been somewhat range-bound, and could pop higher before moving to retest he lows. The April $35 calls are an at-the-money trade. Last going for about $4.15, they could deliver mid-double-digit results in the coming weeks, but watch out for a potential swing lower in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of electronics retailer Best Buy Company (BBY) are down about 18 percent over the past year. One trader sees a bigger drop ahead.
That’s based on the March $55 puts. With 80 days until expiration, 6,003 contracts traded compared to a prior open interest of 132, for a 46-fold rise in volume on the trade. The buyer of the puts paid $0.62 to get into the bearish trade.
Shares recently traded for about $80, so they would need to drop a full $25, or 30 percent in the first quarter of 2023. And break to a new 52-week low, given the prior one of $60.78.
The retailer has struggled this year, as electronics demand came down from a covid-era bump higher. Revenue has dropped by 11 percent, and earnings are down by a full 44 percent.
Action to take: Interested investors may be tempted by the company’s 4.4 percent dividend yield right now, as it’s one of the highest for retail companies. But that yield can likely rise on a further drop in shares. Long-term investors can potentially grab shares closer to the mid-$60 range in the weeks ahead.
For traders, the put option looks well priced for a big drop lower. Chances are it won’t move in-the-money. But it’s also an inexpensive options trade that could offer triple-digit returns… and inexpensive downside protection in today’s still-volatile markets.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
In a rough market, even great companies will miss on earnings. But how they miss can be illustrative of their potential future returns. For instance, with inflation data coming down, companies dealing with high costs could see that factor fade away.
With Wall Street looking at each quarter’s numbers compared to the year before, declining costs could lead to a big move higher for any company with something positive to report.
For instance, Carnival Cruise Lines (CCL) reported a narrower loss in its most recent quarter. The biggest issue was rising food and fuel costs, which weighed on the bottom line. However, those costs have started to decline on a year-over-year basis.
Shares of the cruise line are still down 62 percent over the past year. However, the stock now trades at 1 times its price to sales, and shares recently had a price-to-earnings ratio of just 6.
Action to take: Investors may like Carnival here. The cruise industry has a high cost of capital to get started, and there are few players. Plus, high costs in fuel and food tend to get passed on to passengers, and prices tend to remain higher after inflation. That could result in a solid long-term returning play from here.
For traders, a long-dated call like the September $12 call, last going for about $0.95, could return high-double-digit returns if operations continue to improve and shares rally from here.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Chubb Caldecot, a director at Flowers Foods (FLO), recently added 2,000 shares. The buy increased his holdings by 8.7 percent, and came to a total cost just under $57,000.
This is the first insider buy since the director last bought shares in August, picking up 3,000 shares for just over $82,000. Over the past year, there have been a number of large insider sales, including a 75,400 share sale by the company CEO.
Even with the sizeable sales lately, insiders own about 7.5 percent of the company.
The packaged baked goods producer has seen shares rise 5 percent over the past year, and revenues are up 13 percent.
That’s moved shares to about 28 times their most recent earnings, but the company’s brands in the baked goods space can likely continue providing a premium.
Action to take: The company is a defensive play, so it may continue to outperform the market in the coming months. Investors can also get a 3.1 percent dividend yield at today’s prices, although the payout ratio is a bit high, so growth may be slow.
For traders, shares are likely to continue gradually moving higher. The July $30 calls, last going for about $1.55, offer mid-to-high double-digit gains in the coming months. Consider using any spike higher in shares to take a quick profit.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of wireless communications equipment company BlackBerry (BB) have shed more than half their value in the last year amid a big drop in tech stocks. One trader sees a further decline.
That’s based on the June $4.00 puts. With 174 days until expiration, 4,255 contracts traded compared to a prior open interest of 151, for a 28-fold rise in volume on the trade. The buyer of the puts paid $0.82 to make the bet.
The stock recently traded at a new 52-week low just under $4, making this an at-the-money trade. That also puts shares down over two-thirds from their 52-week high of $9.67.
The company hasn’t made money in the past year, and revenues are down 8 percent as well, which could continue to weigh on the company’s share price in the quarters ahead.
Action to take: Patient investors might be able to buy shares a bit lower in the coming months. For now, it’s best to let the downtrend continue to play out. The company’s patents and placement in wireless communication technology for self-driving cars could lead to a bigger value in the years ahead, even if shares aren’t a buy right away.
For traders, the put options are well positioned. As an at-the-money trade, a triple-digit return isn’t likely, but traders can likely nab mid-double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
In a bull market, investors can buy just about any stock and make money. While it’s tougher in a bear market, there are several stocks that can hold their own and even gain. That’s true of every bear market. 28 of the 30 Dow stocks dropped in 2008, but 2 of them managed to move higher.
In this current market, with rising interest rates and a slow economy, it’s no surprise investors are turning to defensive stocks once again.
One defensive stock – which closed higher in 2008 – was Walmart (WMT). The retailer is likely best-positioned for a slowdown in retail spending going into 2023. Shares are up about 2 percent so far in 2022.
Meanwhile, the stock goes for 22 times earnings. That’s a bit pricey, but lower than over 40 times earnings last year amid the peak of the bull market. And revenue is up nearly 9 percent in the past year, a level higher than inflation.
Action to take: Long-term investors may want to consider shares here, and to buy in any bear market in general. The stock is a dividend grower, although the starting yield is a bit low right now at 1.6 percent.
For traders, a moderate move higher looks likely in 2023. The September 2023 $160 calls, last going for about $6.00, offer mid-double-digit returns even if the stock only moves slightly higher in the coming year. Traders can look for a quick move higher in the stock to take profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Christopher Blunt, President and CEO at F&G Annuities & Life Insurance (FG), recently added 10,000 shares. The buy increased his holdings by 2.6 percent, and came to a total cost just over $195,000.
This is the 7th buy from Blunt so far this month. These trades constitute the only insider activity at the company. F&G was recently made public via a spinoff from parent company Fidelity National Financial (FNF). Consequently, initial insider data is not yet finalized.
Overall, early data indicates insiders own about 0.1 percent of the company.
Shares are essentially flat since their spinoff. As a spinoff, there’s some operational history, showing that revenues for the finance company are flat over the past year, but the company sports a solid 20 percent profit margin.
Action to take: Shares may see a long-term move higher from here. Rising interest rates are weighing on financial stocks of all stripes, but annuities and life insurance tend to be fairly steady, long-term growers.
Shares currently yield about 4 percent at current prices, and the stock has a spinoff valuation of about 5 times earnings.
For traders, the small size of the company has prevented options trades at the moment. However, traders could play FNF options as a way to bet on a move higher in the financial sector in the past year.
The June 2023 $40 calls, last going for about $0.20, offer high double-digit returns or better in the first half of next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of global money center bank Deutsche Bank (DB) are down about 15 percent over the past year. One trader sees a further decline in the months ahead.
That’s based on the February 2023 $10 puts. With 57 days until expiration, 9,298 contracts traded compared to a prior open interest of 149, for a 62-fold rise in volume on the trade. The buyer of the puts paid $0.32 to make the downside bet.
Shares recently traded for just over $11, so the stock would need to drop over 10 percent for the options to move in-the-money. The $10 strike price is till well under the 52-week low of $7.24 per share.
Revenues have been flat at the bank over the past year, but earnings are up about 122 percent this year. However, liquidity concerns and a slowing economy in Europe have led to some big move in the bank’s shares up and down.
Action to take: Shares recently had a large move higher, and look on track to give back some of those recent gains.
However, with so much skepticism about the bank’s prospects, shares are attractively valued at just over 5 times earnings and at less than one-third their book value. Investors might want to look at a short-term dip as a buying opportunity.
For traders, a short-term downtrend looks likely. That could cause these put options to rise by high double-digits in the weeks ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investors tend to gravitate towards great companies. Those companies tend to dominate their industry, and tend to grow massive. That makes it easier for investors to justify owning. While we’re fans of big-name tech companies thanks to their high profit margins and industry positioning, many more off-the-radar companies can be big winners too.
That’s especially true getting out of well-known tech and consumer brand name companies and into infrastructure and industrial stocks.
These companies manufacture many of the products needed for other companies to succeed. One such company is Regal Rexnord Corporation (RRX), a producer of motors and powertrain equipment. Those tools are critical for factories.
Shares have underperformed other industrial stocks recently. That trend may reverse with the stock market next year. Despite a 50 percent rise in earnings and revenue, shares are down 27 percent. That’s created a relative value, with the stock trading for about 10 times forward earnings.
Action to take: Besides being inexpensive during a slowing economy, shares pay a 1.2 percent dividend. The company has a low payout ratio and has been growing the dividend.
For traders, the May 2023 $135 calls, last going for about $3.00, could offer mid-to-high double-digit returns in the months ahead on a catch-up rally in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Elisabeth Donohue, a director at NRG Energy (NRG), recently added 2,500 shares. The buy increased her holdings by 16 percent, and came to a total cost of $78,300. She was joined by another director who bought 3,500 shares, paying just under $108,000 to increase his holdings by about 4 percent.
A third director also bought 1,571 shares, paying just over $49,000. That’s on top of a further series of insider buys recently, including a 15,000 share pickup from the President and CEO.
Going back further, the track record is a bit more mixed. Company insiders own about 0.9 percent of shares.
The Texas based utility is down about 22 percent over the past year, performing just slightly worse than the overall stock market. Earnings have slid in the most recent quarter, although revenues are up 29 percent compared to the prior year.
Action to take: Investors may like shares going forward. High energy prices have weighed on costs, but revenues are now rising to compensate for those rising costs. And shares yield about 4.5 percent at today’s prices, with a low payout ratio leaving plenty of room for future growth.
For traders, shares have slid to 52-week lows in recent sessions. That can likely recover in time. The January 2024 $35 calls, last going for about $3.40, have a year to play out. They offer high-double-digit returns, especially on a share price rebound next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of hard drive manufacturer Seagate Technology (STX) have been cut in half over the past year amid slowing demand for computer and computer parts. One trader sees a further decline over the next two years.
That’s based on the January 2025 $55 puts. With 758 days until expiration, 5,000 contracts traded compared to the prior open interest of 117, for a 28-fold rise in volume on the trade. The buyer of the puts paid $14.48 to make the trade.
Shares recently traded near $50, meaning the options are already about $5.00 in-the-money. That could give them a further boost in the months ahead if shares retest their 52-week lows of $47.47 per share.
Earnings have dropped 94 percent in the past year, and revenues are down 35 percent. That slowdown is likely to continue as the pandemic-era surge in demand for computers continues to move back to its long-term slowing trend.
Action to take: Investors should hold off here. While Seagate offers a nice 5.4 percent dividend, that payout may be at risk if the business continues to decline in the year ahead.
Patient investors can likely fare better buying after a dividend cut, as that will likely lead to a big drop in shares should it occur.
For traders, the January 2025 are well-positioned for the current market weakness, as well as a further drop in the tech space in the next two years. Traders can likely nab high-double-digit gains on this trade.
But be on the lookout for a market turnaround to cause shares to move higher, even if the company’s fundamentals remain poor.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
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The economy continues to slow. While that’s starting to show up in declining year-over-year inflation rates, the market is warning about a recession in several ways.
Big businesses are one of the places where the alarm has been sounded. That’s because a few companies have announced layoffs, of anywhere from 5 to 30 percent of their workforces. Typically, a company that can do more with less can fare well over time, however.
One of the most recent companies to announce layoffs is Goldman Sachs (GS). The investment bank sees its staff dropping by 8 percent in 2023, although it may not be as much depending on market conditions. Nevertheless, that could be several thousand high-paying finance jobs on the block.
Financial companies have been hit by a slowdown in stock trading, as well as the drying up of mergers and acquisitions, and initial public offerings. Goldman has held up well, much as it ended up thriving after the financial crisis in 2008.
Action to take: Shares are still considerably off their lows from last June, and shares go for 8 times forward earnings. This industry leader looks like a reasonable stock to buy, particularly on any big down day for financial stocks. At present, shares yield 2.8 percent as well.
For traders, the stock has generally been trending higher over the past few months, despite some weakness in the past few weeks. The March $380 calls, last going for about $7.90, offer mid-double-digit returns in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Bryant Riley, Chairman and Co-CEO of B. Riley Financial (RILY), recently added 63,527 shares. The buy increased his holdings by 1 percent, and came to a total purchase price of just over $2.6 million.
The buy comes about 10 days after a $2.2 million buy for just over 51,500 shares. And other company insiders, including both executives and directors, have been sizeable buyers in recent months. The last insider sale, from a major holder, occurred back in May.
Overall, insiders at the financial services company own about 45.5 percent of shares.
Shares are down nearly 50 percent over the past year, amid rising interest rates, and slowing financial service sector needs. That’s significantly more than the 17 percent drop in revenue for the company over the past year.
Action to take: Interested investors may want to hold out until conditions improve for financial markets. Shares are likely to retest their recent lows just under $37 per share. And given the company’s current lack of earnings, the current dividend of 9.3 percent looks so high that it’s likely to be cut if earnings don’t improve quickly.
For traders, the April $35 puts, last going for about $2.50, offer mid-to-high double-digit gains on a decline in shares over the next few months. Traders may want to take quick profits on a big down day for shares, given current market volatility.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of 3D printing hardware and software provider 3D Systems Corporation (DDD) has lost over 62 percent of its value in the past year. One trader sees a further drop ahead.
That’s based on the February $8 puts. With 59 days until expiration, 3,473 contracts traded compared to a prior open interest of 128, for a 27-fold increase in volume on the trade. The buyer of the puts paid $0.75 to make the bearish bet.
The stock recently traded around $8.20, making this an at-the-money trade. That’s down from nearly $10 a few weeks ago, and shares look on track to re-test their 52-week lows of $7.61, set back in November.
The company has lost money in the last year, and revenues have slid 15 percent. While 3D printing has a potential to improve manufacturing times and processes, the technology is still in its early stages, and it will take a few more years for a more comprehensive rollout.
Action to take: Investors may like shares, as 3D Systems is an industry leader in the space. But investors should consider waiting for a re-test of the lows, meaning a chance to buy shares closer to $7.50.
For traders, the February puts play well to the current short-term downtrend in shares. The bet is inexpensive, and can potentially pay off with high-double-digit returns in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
In any sector or trend, a few companies come to dominate. The headline names may attract considerable attention, but the real returns can often be in the companies providing the infrastructure behind it.
These “pick and shovel” plays may lack for an exciting story, but when it comes to investing, a boring idea that’s profitable tends to have a better valuation than going after the exciting story. In the cloud services space, server processors make the most attractive story.
Rather than focus on tech conglomerates or software plays, companies making server chips could be the big winners there. In that space, Advanced Micro Devices (AMD) looks like a potential winner that’s attracting analyst attention.
Like other chipmakers, it’s been a tough year for investors, with the share price getting cut in half. But that’s also taken AMD’s valuation to a more reasonable 18 times earnings from 44 last year. And even with a drop in earnings, growing server chip revenue has helped lead to an overall 29 percent rise in revenues.
Action to take: Investors may want to pick up shares on a down day for the stock, and look to keep accumulating on dips. The company doesn’t pay a dividend at this time, but can be a winner in the next bull market for the chip space.
For traders, a long-dated call after this year’s performance could fare well. The September 2023 $90 calls, last going for about $5.00, are reasonably priced for high-double-digit upside.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
George Maxwell, CEO at VAALCO Energy (EGY), recently bought 5,000 shares. The buy increased his holdings by 3.9 percent, and came to a total cost of $21,650. The CEO last bought shares in November, grabbing 20,000 shares for just over $111,000.
The most recent buy comes about one month after the company CFO bought 4,250 shares as well. Overall, company insiders have been mixed over the past three years, with large holders making big sales while some insiders have been buyers.
Insiders own 2.4 percent of the oil and gas exploration company.
Shares are up 42 percent this past year, thanks to the strength of the energy market. The company has grown its revenues by 40 percent, but overall earnings are off 80 percent compared to the last year.
Action to take: Investors looking for a smaller energy play may like shares here, as the company trades at less than 3 times forward earnings. And its small market cap makes it an attractive buyout candidate for a bigger player. At present, the stock even pays a 3 percent dividend.
For traders, shares are likely to continue to trend higher. The July 2023 $5 calls, last going for about $0.70, offer high-double-digit returns or better on a further rally in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of home improvement retailer The Home Depot (HD) are down about in-line with the market over the past year. One trader sees a further drop in the weeks ahead.
That’s based on the February 2023 $290 put. With 60 days until expiration, 13,502 contracts traded compared to a prior open interest of 311 for a 41-fold jump in volume on the trade. The buyer of the puts paid $4.03 to make the bearish bet.
Home Depot shares recently traded just over $325, so the stock would need to drop about $35, or just over 10 percent, for the trade to move in-the-money. The strike price is still well over the stock’s 52-week low of $265 per share.
Despite a slowing economy and lower consumer spending overall, Home Depot managed to grow revenues and earnings by about 5 percent over the past year.
Action to take: Investors may want to pick up shares on any drop under $300, as the stock tends to bounce strongly.
At a price of $300, shares would yield close to 2.5 percent, and the company has been fairly good about raising its dividend over time, although not as consistently as other dividend-growth stocks.
For traders, the put option is a reasonable short-term bet, especially after last week’s retail numbers. Chances are the sector will see a drop as the holiday season numbers come into clearer picture in the weeks ahead.
The puts can likely deliver high-double-digit returns, and could also serve as an overall market hedge in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investors often see a trade-off between high growth opportunities and income. However, in a market selloff, growth names can go on sale. And when they do, any dividend that they may be paying can become much larger than average.
Striking a balance between the two involves looking at where some of the best bargains lie under current market conditions. But investors looking for growth and income have a growing number of opportunities right now.
One such opportunity is in Qualcomm (QCOM). The manufacturer of wireless chips is a dominator in its niche. And with shares down 35 percent over the past year, a number of factors are lining up for a rebound in the coming year and beyond.
The most attractive factor now is the stock’s valuation, which is cheap at 12 times forward earnings. That’s especially true with the stock’s growth rate of 22 percent over the past year. And with a 29 percent profit margin, Qualcomm has a growing pile of cash it can dedicate to its dividend.
Action to take: Today’s buyers can get a 2.4 percent starting dividend, which is likely to keep increasing over time. That payout is about 25 percent of Qualcomm’s earnings, so it’s safe while also giving the company a lot of cash to continue developing new chips.
For traders, a long-term bet on a recovery next year looks attractive. The September 2023 $150 calls, last going for about $5.15, offer high double-digit returns on a move higher in shares in the first three quarters of next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Matthew Tonn, Chief Commercial Officer at FreightCar America (RAIL), recently picked up 5,700 shares. The buy increased his holdings by 3.5 percent, and came to a total cost just over $20,000.
This is the first insider activity at the company since June, following a 2,550 share pickup from the company CEO. Going back over the past 3 years, executives, directors, and major owners have all been buying up shares, with no insider sales.
Overall, insiders own 31.3 percent of the railcar manufacturer.
Shares are down 12 percent over the past year, just slightly less than the drop in the S&P 500.
FreightCar also managed to lose money, even with a 47 percent increase in revenue. Nevertheless, shares trade at about 10 times forward earnings, and the company trades at a very low 0.27 times its price to sales ratio.
Action to take: Shares look moderately attractive as a value play. However, in a slowing economy, demand for replacement railway parts such as freight cars will drop, which could impact short-term profitability even more. Interested investors should look for a chance to buy closer to the 52-week lows near $3 per share.
For traders, the stock essentially has traded flat in the past year, with a few jumps higher periodically. That suggests a trade like a put sale. The June 2023 $2.50 put, last going for about $1.35, would add instant income now, while potentially leaving an investor on the hook to buy shares at $2.50.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of video game retailer GameStop (GME) are down nearly 45 percent in the past year, nearly triple the amount the S&P 500 has declined. One trader sees a further decline in the coming months.
That’s based on the March $21 puts. With 90 days until expiration, 7,230 contracts traded compared to a prior open interest of 103, for a 70-fold rise in volume on the trade. The buyer of the puts paid $4.58 to get in.
Shares recently traded right around $21, making this an at-the-money options play. The stock has a 52-week low of $19.40.
The video game retailer failed to make a profit in the last year, and revenue growth dipped by about 9 percent. However, there are some signs of life, as the company launched an NFT marketplace and became cash flow positive, adding more cash to its balance sheet.
Action to take: Investors interested in the original “meme stock” may consider adding shares in the low $20 range. However, the core business continues to move slowly, and could continue to be impacted by a slowing economy in 2023, leading to a better long-term entry point.
For traders, the puts are playing to the current downtrend in shares. While the option premium is a little high, traders can potentially make high double-digit returns on the puts on a further decline in the stock between now and March.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
There’s an old Wall Street saying that they don’t ring a bell at the top. That’s also true of the bottom for the stock market, a sector, or individual companies. The best that investors can do is look for companies that are growing during a tough time – and increasing their market share.
These companies will survive, and likely be rewarded for their growth, even if that takes time to play out with a new bull market.
One company we’ve seen play to this trend is Oracle (ORCL). The database giant has made tremendous strides in the cloud services space. And in the most recent quarter, Oracle managed to grow revenues by 9 percent, even adjusting for the headwinds in the currency markets.
Even with an initial jump in shares following the news, the stock calmed down, and still remains down nearly 20 percent this year. But it’s starting to look cheap, at 16 times forward earnings.
Action to take: Investors may like shares here, with an eye towards buying an initial stake now, and adding more on any further drop. Shares yield 1.6 percent at current prices.
For traders, the stock has been trending up since October, and will likely continue to do so, even at a slow rate. The June 2023 $85 calls, last going for about $5.15, can potentially deliver high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
David Smith, a director at Illinois Tool Works (ITW), recently added 1,390 shares. The buy increased his holdings by 0.4 percent, and came to a total cost just over $308,000.
This is the first buy from company insiders in just over a year, when another director bought 10,000 shares. Otherwise, company executives have been regular and steady sellers of the stock going back over the past three years.
Overall, company insiders own 0.3 percent of shares.
The industrial machinery manufacturer has seen shares drop about 7 percent in the past year, outperforming the overall stock market. And the company has performed even better operationally, with revenue and earnings both up about 13 percent.
Action to take: Investors may like shares here, with an eye towards adding to that stake on a down day for markets.
Besides the steady operational performance, the company is a dividend growth stock. The current yield is about 2.4 percent, with room for future growth.
And with a $500 million quarterly stock buyback in place, shares are likely to continue gradually outperforming the stock market over time, even with the considerable amount of exercised stock options by company executives.
For traders, the June 2023 $250 calls, last going for about $7.20, offer mid-double-digit returns on a move higher in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of cosmetic retailer Sally Beauty Holdings (SBH) have lost nearly 42 percent in the last year. One trader sees a further drop in the weeks ahead.
That’s based on the January $10 puts. With 36 days until expiration, 7,502 contracts traded compared to a prior open interest of 349, for a 22-fold rise in volume on the trade. The buyer of the puts paid $0.20 to make the bearish bet.
Shares recently traded for about $12.00, so they’d need to lose about $2, or about 17 percent, for the option to move in-the-money. It would also mean the stock breaking through its recent 52-week low of $10.95 per share.
Sally Beauty appears to be facing a few headwinds right now. Earnings have slid nearly 70 percent in the past year, and revenue is down by 3 percent. The drop in shares has also pushed the stock’s debt-to-equity ratio to about 1:1, and rising interest rates will likely weigh on debt costs.
Action to take: Shares recently jumped off of their 52-week lows, but appear likely to continue their downtrend in the weeks ahead. Interested investors may want to wait until the company has stopped its decline in earnings before buying in.
For traders, the January puts stand a low chance of moving in-the-money. But they’re cheap enough that any downtrend in shares will likely lead to a high double-digit return for the stock or better.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
A great company is one that comes to dominate its market. Some industries may have an oligopoly, with a few big players dividing the space up somewhat evenly. Others may have one or two big players that dominate the market.
Either way, when there’s a bear market, these industry leaders will sell off with other stocks. And short-term hits to profitability can lead to enough fear to make for a compelling value moving forward, particularly for patient investors.
Such a case is unfolding with Alphabet (GOOG), parent company of Google. The company continues to dominate in the search engine space. Yet shares are dropping heavily as rising cost and advertising concerns weigh on the company in the short-term.
That’s helped the company lose about one-third of its price in the past year, even as revenues have dipped by only 6 percent. While earnings growth may slow in the next few quarters, the company is still profitable, and sports a solid 24 percent profit margin.
Action to take: Shares look worth accumulating for long-term investors. The company is such a big dominator that there are few reasonable alternatives for web advertising.
For traders, a rebound is likely in the coming months as inflation concerns fade. The September 2023 $120 calls, last going for about $3.80, can deliver high double-digit gains on a rebound in the stock at any time in the first three quarters of next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Edie Ames, a director at Cheesecake Factory (CAKE), recently added 4,000 shares. The buy increased his holdings by 47 percent, and came to a total cost just over $129,000.
Insiders have previously been buyers going back to last August, all from company directors. Going further back, there have been some insider sales by company executives in 2021, at prices about 50 percent higher than where the stock trade today.
Overall, company insiders own about 7.2 percent of the restaurant chain.
Revenue is up about 4 percent in the past year. Although the company hasn’t been profitable in the most recent quarter, shares are going for about 11 times forward earnings. Cheesecake Factory shares are also trading for about 0.5 times sales, down from 0.8 times a year ago.
Action to take: Shares are valued fairly attractively here, and the company pays a 3.3 percent dividend at current prices. There’s likely more upside as concerns over inflation fade and consumers increase spending at restaurants again.
For traders, shares have been gradually heading higher since the summer. The April 2023 $35 calls, last going for about $3.15 offer high double-digit returns in the coming months on a further move higher for the underlying stock.
The options also stand a strong chance of moving in-the-money, so traders may want to take quick profits on such a move to free up capital for other trades.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of media conglomerate Paramount Global (PARA) have struggled in the past year, with a 37 percent drop in shares. One trader sees a further decline ahead.
That’s based on the February 2023 $20 put. With 65 days until expiration, 12,703 contracts traded compared to a prior open interest of 274, for a 36-fold rise in volume on the trade. The buyer of the puts paid $2.05 to make the bearish bet.
The stock recently traded just under $20, making this an at-the-money trade. The stock has a 52-week low closer to $15, so a further drop lower in the coming weeks is possible.
The media giant has struggled this year, with earnings down 57 percent, even with a 5 percent rise in revenues. Even with that drop, shares trade at about 4 times earnings.
Action to take: Investors may like shares for the long haul, as the company will likely have an earnings turnaround in time. And shares yield about 5.1 percent at current levels, a sizeable dividend payment more than covered by earnings.
For traders, there may be some short-term downside, as the stock seems to be having trouble breaking over $20 in the short-term. That could lead to the February puts to return mid-double-digits in the weeks ahead, especially on any drop in shares.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Investors tend to spend bull markets looking for opportunities in high-growth areas. But the economy isn’t always moving at full blast. For slower times, it may be prudent to focus on businesses that aren’t as cyclical, opting instead for companies more likely to be recession resistant.
There are many sectors that fit the bill. Some are heavily regulated like utilities and telecoms. Others are more open, such as consumer goods.
One niche of the consumer goods space is pet supplies. There’s a growing trend on pet spending overall that could even grow in an economic downturn.
Chewy (CHWY) is one such company. The online pet retailer posted better-than-expected results following earnings last week.
Revenues are up nearly 15 percent in the past year, even as the overall economy has been near flat. While the company has yet to turn a consistent profit, it continues to grow its customer base, including recurring buyers.
Action to take: The retailer is likely poised for continued, long-term growth, which will eventually be reflected in the share price, as soon as the company turns profitable. Long-term buyers may want to start buying now, and use down days in the market to add more shares.
For traders, the May 2023 $45 calls, last going for about $7.80, can likely deliver high double-digit returns in the coming months. That will play to the moderate uptrend shares have seen since October.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Albert Behler, President and CEO at Paramount Group (PGRE), recently added 50,000 shares. The buy increased his stake by 38 percent, an came to a total cost just under $288,000.
He was joined by a director who bought 20,000 shares on the same day, paying just over $114,000. These two buys constitute the only insider trades since late 2020. The last insider sale at the company occurred back in 2019.
Overall, insiders at the office REIT own about 15.5 percent of the company.
The stock has been hit about twice as hard as the overall market, with a 32 percent decline in the past year. Concerns over the future of office space have weighed on valuations in the office real estate market.
Paramount is no exception, with a 1 percent rise in revenues in the past year, yet the REIT has operated at a loss. However, with shares trading at about 0.37 times their book value, shares may be oversold relative to the value of the company’s assets.
Action to take: Investors may like shares here. The REIT yields about 5.4 percent, and on improving earnings should be able to maintain that payout in time. Shares look especially attractive given the high insider ownership an insider buying now.
For traders, the April 2023 $7.50 calls, last going for about $0.35, offer mid-double-digit returns on a move higher in shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of tech giant Microsoft (MSFT) have underperformed the market this year, with a 27 percent drop. One trader sees a rebound in the next month.
That’s based on the January $265 calls. With 31 days until expiration, 4,094 contracts traded compared to a prior open interest of 191, for a 21-fold rise in volume on the trade. The buyer of the calls paid $2.93 to get in.
Shares recently went for about $246, so they would need to rise about $19, or 7.7 percent, for the trade to move in-the-money. The strike price is still well under the stock’s 52-week high of $344 per share.
Despite the drop in shares this year, the company has been a fair performer. Revenues are up 10 percent, although earnings are off by 14 percent overall. Yet the software company has managed to keep profit margins high at 34 percent.
Action to take: Investors may like shares under $250 as a long-term buy. The stock yields about 1.1 percent at current prices, with room for more dividend growth down the line.
For traders, the calls could play out well, delivering mid-double-digit returns in the coming weeks. That’s partially based on the relative value in shares now, as well as how markets are somewhat oversold after last week’s rally.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The stock market’s love of mergers and acquisitions has slowed in the past year, amid rising interest rates and declining stock prices. But there have been a few deals announced. Mergers can make companies bigger overall by providing an immediate and established source of revenue.
Some deals will end up garnering regulatory scrutiny. Regulators want to ensure that a company doesn’t come to dominate the market it’s in via acquisitions.
The FTC has come out against Microsoft’s (MSFT) proposed acquisition of gaming studio Activision Blizzard (ATVI).
Valued at $69 billion, shares of the company never quite reached their buyout price given the possibility of a halt for regulatory purposes.
But shares still look like a fair value. Video game studios are an oligopoly, and shares look reasonably priced at 20 times forward earnings.
Action to take: Another potential buyer for the company may come along, or it may continue as an independent entity. Either way, ATVI can likely still continue to grow its value over time, if not as part of Microsoft. Investors can get shares now for a 0.6 percent dividend and potential upside.
For traders, shares may move higher on a buyout offer from a company that doesn’t already have a huge presence in the gaming space. The March $85 calls, last going for about $3.25, offer mid-double-digit returns from current prices in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Marshall Lux, a director at New York Community Bank (NYCB), recently added 6,000 shares. The buy increased his holdings by 42 percent, and came to a total cost just under $52,000.
The director was also the most recent buyer with the purchase of 6,000 shares in September. Other company directors have been buyers over the past three years. There have been no insider sales at the bank going back over the last five years.
Overall, company insiders own about 1.1 percent of shares.
The regional bank has lost about 30 percent of its price over the past year, even with slight revenue and earnings growth of about 2 percent each.
However, shares trade right at book value a fairly conservative measure of the bank’s book of loans. And the bank sports a fantastic 45 percent profit margin, much larger than money-center and major banks.
Action to take: The bank looks reasonably valued at 8 times forward earnings. Plus, shares yield about 7.9 percent at current levels. That’s a level of income that could make for a worthwhile total return here.
For traders, shares will likely move higher in the coming year. The July 2023 $9 calls, last going for about $0.60, can leverage such a move higher into a high-double-digit return or better.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of 3D world-building company Roblox (RBLX) are down about 75 percent in the past year. One trader sees a further decline in the coming weeks.
That’s based on the January 13th $30 puts. With 32 days until expiration, 5,037 contracts traded compared to a prior interest of 238, for a 21-fold rise in volume on the trade. The buyer of the puts paid $2.19 to make the downside bet.
Shares recently traded for about $32, so the stock would need to drop about 7 percent for the option to move in-the-money. There’s certainly more room for downside, as shares have a 52-week low just under $22.
Revenue has grown by less than 2 percent for the company in the past year, and it’s continued to lose money, with net income showing a $777 million loss over the past year. That’s resulted in a -35 percent profit margin.
Action to take: The company’s valuation is still high given its recent low revenue growth and earnings losses. Shares will likely see a move down, even just as part of the current market weakness. Investors should wait until a retest of the recent lows before considering going long.
For traders, the January put doesn’t have much time to play out. But it can likely deliver mid-double-digit gains, particularly on any further market drop in the coming weeks.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
A company generating cash flow has a number of ways to put that money to work. They can expand the business, whether through internal growth or acquisitions. When a company gets large enough, it may also make sense to reward shareholders with cash dividends.
But a company can also buy back its shares. That also rewards existing shareholders, as it reduces shares outstanding and increases earnings per share without growing the underlying business.
In today’s market, beaten down stocks embracing bigger buybacks may end up strongly rewarding shareholders.
One company that just upped its buyback now is Lowe’s (LOW). The home improvement retailer increased its buyback plan from $6.4 billion to $15 billion.
That sent shares higher, but the stock is still down about 21 percent over the past year. And the buyback amount at current levels equates to about 10 percent of the current share float.
Action to take: As a leader in the home improvement space, the share buyback should help the stock get back to its old highs down the line. And with shares at 14 times earnings, the stock likely has decent upside ahead in the next year. Plus, at current prices, the stock yields about 2.1 percent.
For traders, the March $230 calls, last going for about $6.00, offer mid-to-high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Amal Johnson, a director at Essex Property Trust (ESS), recently added 1,000 shares. The buy increased his holdings by 67 percent, and came to a total cost of just over $218,000.
This marks the first insider buy at the company in at least four years. Otherwise, company insiders have largely been sellers of shares following the exercise of stock options. That includes both directors and company executives.
Overall, insiders own 1.2 percent of the company.
Shares of the residential REIT have dropped about 40 percent in the past year. The real estate market has slowed and prices have started to show a drop as interest rates have rapidly rose from record lows.
Even with that drop, revenues rose over 8 percent for the REIT, and profit margins held at a solid 22 percent.
Action to take: As a REIT, long-term investors may like the company for its above-average dividend. The REIT yields about 4 percent at current prices, although the annual payout did show a slight decrease over the past year.
For traders, a longer-dated trade, like the July 2023 $250 calls, could be a solid winner in the coming months. The option last went for about $5.50, and could deliver mid-to-high double-digit returns for traders in the months ahead on a move higher for shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of money center Bank of America (BAC) are down about 25 percent in the past year, underperforming the S&P 500 by about 9 points. One trader sees a rebound in the first half of 2023.
That’s based on the June $49 calls. With 188 days until expiration, 3,021 contracts traded compared to a prior open interest of 147, for a 21-fold rise in volume on the trade. The buyer of the calls paid $0.11 to make the bullish bet.
The stock recently traded for about $33, so shares would need to rise $17, or 48 percent, for the option to move in-the-money. With a 52-week high of $50 per share, such a move is possible, although it would be a stretch before these options expire.
While revenue has been flat in the past year, earnings are down about 8 percent. Plus, shares trade at about 10 times forward earnings, a reasonable price for a big money-center bank.
Action to take: Investors may like shares here for a rebound in the coming months. Shares yield about 2.7 percent at current prices, a reasonable amount for investors looking to get paid to wait for a move higher.
For traders, the June calls are attractive in the sense that they’re cheap and can deliver triple-digit returns on a jump higher in shares.
Traders looking for a lower but likelier return might consider the June $40 calls, last going for about $0.80. While more expensive, they’re more likely to move in-the-money on a rally in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Typically, the stock market doesn’t mind when a company announces layoffs. In a bull market, it can be a sign that a company is finding ways to do the same (or more) work with fewer people. But in a bear market, it’s often treated as bad news, even as it lowers costs.
That’s particularly true in financial markets, where companies can be quick to hire and quick to right-size when the market changes.
Right now, the market has sold off shares of Morgan Stanley (MS) following its latest layoffs amounting to 2 percent of staff. But the bank has been holding up well. Despite rising interest rates this year, the company has held up well.
Revenues are down 12 percent overall, but the bank has maintained a fat 23 percent profit margin. And shares trade inexpensively at just 12 times forward earnings.
Action to take: Shares of the bank will likely move to make new highs when the bear market ends. Until then, Morgan Stanley offers a 3.4 percent dividend yield with room to grow in the years ahead. That makes shares worth accumulating now, and on any down day for the markets.
For traders, the April 2023 $95 calls, last going for about $3.80, can likely deliver mid-double-digit gains on the next rally day for shares without having to wait months until expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Robert Dixon, a director at Generac Holdings (GNRC), recently added 2,000 shares. The buy increased his holdings by 13 percent, and came to a total cost of just over $194,000.
This marks the first insider buy at the company in the past two years. Otherwise, company insiders have been likely to sell shares. The company CEO in particular has been a seller of shares on a regular basis.
Overall, company insiders own 2.7 percent of shares.
The manufacturer of power generation equipment has lost nearly 75 percent of its value in the past year. That’s in spite of a 15 percent rise in revenue, although overall earnings are down 55 percent over the past year.
With a profit margin of 10 percent, and with a solid balance sheet, the company is likely to move past the current issues that have weighed on shares and trend higher in the months ahead.
Action to take: Shares have gone from 50 times earnings last year to under 14 times forward earnings in the past year. That’s creating a reasonable valuation for the company moving forward, particularly given the steady demand for backup power generation. Shares look attractive here, even though the stock doesn’t pay a dividend.
For traders, the June 2023 $120 calls, last going for about $8.60, look attractive for a potential rally in shares in the first half of next year.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of Chinese entertainment company iQIYI (IQ) are down over 40 percent in the past year. One trader sees rebound ahead for shares.
That’s based on the June 2023 $3.50 calls. With 189 days until expiration, 15,088 contracts traded compared to a prior open interest of 204, for a 74-fold rise in volume on the trade. The buyer of the calls paid $0.89 to make the bullish bet.
Shares recently traded just near $3.50, making this an at-the-money trade. The stock has traded as high as $5.77 in the past year, so the strike price is more than reasonable.
The company saw revenues decline nearly 2 percent in the past year, and the firm has just missed out on profitability. While shares look a bit overpriced at 28 times forward earnings, the stock is most likely to move based on views of the Chinese economy.
Action to take: With a slowing economy in China and a country just starting to end its harsh Covid lockdowns, Chinese stocks like iQIYI may have been unfairly sold off in recent weeks.
Investors can likely see a short-term rebound in shares, in line with the stock’s medium-term rally over the past few months. Look to buy for a quick low-double-digit gain.
For traders, the calls are an inexpensive trade that could deliver high-double-digit returns or better in the months ahead. Look to use any short-term rally in shares to take quick profits, given the current market volatility.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Courtesy of our friends at InvestorPlace
Move Your Money by Dec. 13Dear Reader,
The Federal Reserve has backed itself into a dangerous corner, and it’s now critical for you to make this move before December 13th.
Most people don’t realize this… but the Fed doesn’t exist to protect you or your money.
The Fed is there to protect banks and the government.
Which is why the next decision it makes on Dec. 13th could be disastrous for your retirement.
In short: The Fed has run out of options.
And you’re about to see the “unraveling” of all the disastrous decisions the Fed began making in the mid-90s.
The biggest problem with this?
The people MOST at risk are those of you who spent your life playing by the rules.
So you owe it to yourself to get the full story and find out what you can do TODAY (before Dec. 13th).
Sincerely,
Louis Navellier
Editor, InvestorPlace
Stocks had a pretty strong rally on reports that the Federal Reserve would lower the rate at which it increases interest rates. But that rally ended as traders realized that rates would still rise—and a slower pace would allow the increases to continue for longer.
However, we’re likely closer to the end of the rate hike cycle than the beginning. And for investors looking for year-end buys, it could be time to pick up some beaten-down names, particularly in big tech.
That includes a number of chip-related companies, which have been hit so hard this year that they’re well priced for the current downturn.
One of our favorites still well off its lows is Nvidia (NVDA). The graphics processing unit manufacturer is down over 43 percent in the past year. And while revenues have slid by 17 percent, the company’s valuation has gone from 91 times earnings during the boom to under 40 times today.
That may get a bit cheaper in the coming months, but shares are at some of their best valuations in years.
Action to take: Investors may want to use down days to accumulate shares of Nvidia near here. The stock pays a modest 0.1 percent dividend, but it’s an industry leader poised for big returns on a rebound in the chip space that provides the real value for investors today.
For traders, the September 2023 $250 calls, last going for about $8.25, offer the potential for a high-double-digit return or better on a further move higher in shares anytime between now and next September.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Jeffrey Gould, President and CEO at BRT Apartments (BRT), recently added 4,626 shares. The buy increased his holdings by about 0.1 percent, and came to a total cost of just over $93,000.
The buy came a day after the CEO bought 14,445 shares, paying about $291,000. Overall, company insiders have been large and steady buyers since May, with some modest insider sales last occurring back in January.
Overall, insiders own about 20 percent of the multifamily residential REIT.
Shares are up about 7 percent in the past year, and the stock is attractively valued at about 7 times earnings. However, with rising interest rates and a slowing real estate market, the REIT saw revenue slide nearly 14 percent, with earnings down by nearly 75 percent.
Over the long haul, the company’s ownership of real estate should hold up fine, particularly if interest rates stop rising early next year or even start to come down.
Action to take: The REIT has a low payout ratio, and yields nearly 4.9 percent at current prices. A turnaround in the real estate markets in the next year could allow shares to move significantly higher while also offering some modest dividend growth.
For traders, the June 2023 $22.50 calls, last going for about $1.50, offer mid-to-high double-digit return potential on a further rally in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of coal producer Peabody Energy Corporation (BTU) are up 227 percent over the past year amid a strong energy market. One trader sees a further year-end rally for the stock.
That’s based on the December 30 $32 call. With 23 days until expiration, 4,043 contracts traded compared to a prior open interest of 128, for a 32-fold rise in volume on the trade. The buyer of the calls paid $1.10 to make the bet.
The stock recently traded for just under $30, so shares would need to rise $2, or about 6.5 percent, for the option to move in-the-money.
Peabody shares have pulled back from their 52-week high just over $33 in recent sessions. The company has performed strongly in the past year, with a 98 percent jump in revenues. And even with the big jump in shares, the stock still trades under 4 times earnings.
Action to take: Shares are likely to resume their longer-term uptrend higher in the coming weeks. That could deliver a slightly higher share price for investors. That could bode well for buyers, who could see a low-double-digit gain in the coming weeks.
For traders, the call options could deliver high double-digit gains, particularly on a big jump in shares in the coming days. Traders should look to take quick profits before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
There’s always some technological revolution going on somewhere. The past decade has seen a number of trends, and those growing trends have been great for investors in the right place.
One of the most interesting trends today is the shift by major automakers from conventional gas-powered cars to hybrids and electric vehicles. While some challenges remain, it’s clear that investors like the trend overall, and rising EV sales tend to prove a boost for share prices.
One company seeing its EV sales grow by leaps and bounds is Ford Motors (F), which just doubled its EV sales for November compared to the prior year… the fifth consecutive month for doing so.
Yet with a down market this year, shares are off 26 percent, even with the major automaker seeing a 10 percent rise in revenues.
Action to take: Shares are inexpensive at under 8 times earnings, especially given the company’s portfolio of brands. Investors may like shares for the long run here, as there’s room to rally back to the old 52-week high of $25, nearly double from here, in the years ahead. Plus, at current prices, Ford yields nearly 4.4 percent.
For traders, a long-term call option could be a big winner here. The January 2024 $20 call last traded for about $0.72. With over a year to play out, a return to the $25 range for shares could lead to triple-digit returns for this long-dated option.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Jimmy Iovine, a director at Live Nation Entertainment (LYV), recently added 13,740 shares. The buy increased his holdings by 42 percent, and came to a total cost of just over $1 million.
This is the first insider buy at the company since March, when a director bought shares at a price about 25 percent higher than where the stock trades today. Over the past three years, company insiders have generally been regular and steady sellers of shares.
Despite the massive and regular share sales, insiders still own about 33 percent of Live Nation.
The online ticket seller is down about 27 percent in the past year, even as earnings have more than doubled and revenues have soared by over 670 percent.
The stock is valued at just over 1x its price to sales ratio, down from 15 times last year. And the stock has gone from 139 times earnings last year to 62 times forward earnings today.
Action to take: The company is part of an oligopoly in online event sales, and should continue to benefit from that trend in the years ahead. Investors can pick up shares near their 52-week lows at present and nab a rebound in the next year. The company doesn’t pay a dividend.
For traders, the April 2023 $75 calls, last going for about $8.00, offer mid-double-digit returns on a continued move higher in shares in the coming months.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of telecom company AT&T (T) are up about 8 percent over the past year, thanks in part to a strong rally over the past few weeks. One trader sees a pullback in shares in the month ahead.
That’s based on the January 2023 $19 put. With 31 days until expiration, 9,297 contracts traded compared to a prior open interest of 250, for a 37-fold rise in volume on the trade. The buyer of the puts paid $0.41.
Shares recently traded right around $19, making this an at-the-money trade. The stock set a 52-week low of $14.46 back in late September before making a big move higher.
The telecom has held fairly steady operationally in the past year, with only a 4 percent drop in revenues, and with earnings rising about 1 percent.
Action to take: Shares may be a worthwhile long-term buy on a pullback to the low $18 range or lower, as AT&T trades for just 7 times earnings, a reasonable valuation for a slow-growth company. Plus, in the $18 range, shares would trade closer to a 6 percent yield.
For traders, the put option is a reasonable trade. Besides being inexpensive, shares have had a relatively massive rally in the past few weeks that has since started to flatten out. That could lead to some downside and a high-double-digit profit on the put options.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Some traders are betting the worst is over for markets. That’s based on the view that the Fed will start tapering its interest rate hikes. But as long as interest rates are being hiked, they’ll continue to weigh on stocks.
For investors who don’t want to get whipsawed while this plays out, there are a number of investment strategies to focus on instead. The simplest and arguably best is simply to buy and hold dividend-paying stocks in industry-leading companies.
While such a strategy seems boring in a bull market, in a bear market it plays out well. For instance, beverage giant Coca-Cola (KO) is up nearly 20 percent in the past year alone. The stock has far lower volatility, and it pays a modest dividend of 2.8 percent. But that dividend has been increased annually for decades.
Action to take: With earnings and revenue up by double-digits in the past year, it’s clear that this dividend payer can deliver on some growth as well as income. Investors may want to buy some shares now, and try to buy some on any drop in shares of over 10 percent in the coming months.
For traders, the stock can sometimes be prone to big swings. It’s on an upswing now. The February 2023 $65 calls, last going for about $1.82, can potentially see a swing higher in the mid-double-digit range before expiration.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Pershing Square Capital Management, a major holder at The Howard Hughes Company (HHC), recently added another 1,560,205 shares. The buy increased the fund’s stake by just over $109 million, an increase of 11 percent.
The fund was also the last buyer of shares, picking up about 150,000 shares back in September 2021. Back then, they paid about $13.8 million for a position that’s now down nearly 20 percent. Other company insiders have been fairly quiet this year.
Overall, company insiders own 0.9 percent of shares, and institutions like Pershing Square account for 96 percent of outstanding stock.
Shares of the real estate development company are down 17 percent in the past year, as rising interest rates are leading to a slowdown in activity for the sector, from lending to new construction.
However, the company owns a large mix of land assets and is still coming off a strong year, with revenues up 191 percent, and earnings up over 2,500 percent.
Action to take: Investors may like shares for the long haul, as it may take some time for the real estate market to turn around. At present, the company doesn’t pay a dividend.
For traders, shares have been trending higher over the past few weeks. That move is likely to continue. The April 2023 $85 calls, last carrying a bid/ask spread around $3.50, could deliver mid-to-high double-digit returns in the months ahead.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
Shares of mortgage REIT AGNC Investment Corp (AGNC) have slid 35 percent over the past year. One trader sees a further decline in the months ahead.
That’s based on the June 2023 $7.00 put. With 192 days until expiration, 32,159 contracts traded compared to a prior open interest of 358, for a 90-fold rise in volume on the trade. The buyer of the puts paid $0.26 to make the bet.
AGNC stock recently traded near $10, so the stock would need to fall about $3, or 30 percent, in the next six months for the option to move in-the-money. Such a move is possible, as AGNC shares bottomed out at $7.30 back in October.
It also won’t help shares that the company has lost $1.7 billion in the past year. Despite the drop in shares, however, the stock trades right at the book value of its loans. However, such loans can be written down if their value has subsequently dropped.
Action to take: Investors may be enticed by the stock’s large 14.3 percent dividend. At current prices and the company’s earnings, that payout is unsustainable. It will likely be cut. Those interested in mortgage REITs should wait to buy after a dividend cut instead.
For traders, the puts are well priced for a big drop in shares. That could cause the options to deliver triple-digit gains. However, shares may languish, or even head higher. So traders may want to start building a position now, and use a big down day in the stock to take some quick profits.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.
The past few years have seen a number of companies come to compete for cloud services. Most have focused around providing the hardware itself. That oligopoly looks fairly secure. But there’s still a rich environment for cloud services providers to benefit. Some are new players to the tech space, built up quickly over a few […]
Charles Reeves, CEO at MidWestOne Financial (MOFG), recently bought 24,858 shares. The buy increased his holdings by nearly 350 percent, and came to a total cost just under $857,000. This marks the first insider buy at the company since March, when a director picked up 350 shares, paying just under $11,000 to do so. Other […]
Shares of energy giant ExxonMobil (XOM) have been on a tear this year, with an 85 percent rally. One trader sees a pullback in the months ahead. That’s based on the February 2023 $80 puts. With 77 days until expiration, 4,511 contracts traded compared to a prior open interest of 183, for a 25-fold rise […]
Cyber Monday’s growing influence over retail sales encompasses both the sale of physical goods from retailers online, as well as services that can be made online. The latter category, without storage or shipping costs, can be a higher profit-margin center for companies with such services. With this year’s holiday spending underway, a few early winners […]
Global GP LLC, the general partner of Global Partners LP (GLP), recently added 4,100 shares to their holdings. The buy increased the GP’s stake by nearly 8 percent, and came to a total cost just over $130,000. This is the 8th buy from the general partner this year. A company director has also been a […]
Shares of iron ore producer Vale (VALE) are up 22 percent in the past year, but are still well under the year’s highs. One trader sees shares moving higher through the first half of 2023. That’s based on the June 2023 $18 calls. With 196 days until expiration, 21,539 contracts traded compared to a prior […]
Courtesy of our friends at Investor Alley. Buy This ‘Forever’ Dividend Stock by December 7th To Collect a Special Bonus Dividend December Bonus Dividend Just Announced Deadline to Collect is This Wednesday, December 7th (details below) Collect 2 Monthly Dividend Checks From 1 Stock in December Are you tired of your so-called “safe” income stocks […]
Black Friday and Cyber Monday have come and gone. It’s likely that the biggest bargains in retail for the holiday season have already been made. Sales appear to be higher, but adjusted for inflation, overall volumes may be lower. One way traders can wade through the opportunities in retail in the coming weeks is to […]
Patrick Ryan, CEO and major owner at Ryan Specialty Holdings (RYAN), recently added 285,058 shares. The buy increased his holdings by 2.2 percent, and came to a total cost of just over $11 million. In total, Ryan has bought shares on seven occasions in the past month. A company director also joined in with a […]
Shares of apparel chain Burlington Stores (BURL) are down about 33 percent in the past year. One trader sees a further decline ahead for shares. That’s based on the March 2023 $150 put. With 106 days until expiration, 3,233 contracts traded compared to a prior open interest of 110, for a 29-fold rise in volume […]
The past year has been brutal for tech companies. That’s true of both early-stage small-cap stocks or large-cap established names. But for those who have been patient, this year’s selloff has set the stage for a future rally – meaning it may be time to start buying in tech. Investors can start by buying the […]
Gary Mick, chief financial officer at Six Flags Entertainment (SIX), recently added 7,000 shares. The buy increased his holdings by nearly 21 percent, and came to a total cost just under $155,000. He was joined by a director and a major holder, who both picked up 150,000 shares a day later. The total cost for […]
Shares of packaged food company The Kraft Heinz Company (KHC) are up about 12 percent over the past year. One trader sees a further long-term uptrend for shares playing out through next summer. That’s based on the July 2023 $45 calls. With 233 days until expiration, 3,195 contracts traded compared to a prior open interest […]
Value investors are often ignored or derided during a bull market. That’s because high-growth names tend to take off. But when markets sell off, more value stocks emerge. Those who buy into value names can earn above-average returns, and often do so with less volatility. Investing in such stocks makes it easier to compound wealth […]
Henry Maier, a director at C.H. Robinson Worldwide (CHRW), recently bought 1,000 shares. The buy increased his holdings by 108 percent, and came to a total cost of just over $96,000. The director previously bought 922 shares back in August as an initial stake in the company. Over the past three years, company executives have […]
Shares of investment bank Morgan Stanley (MS) are down about 12 percent in the last year, but have been trending higher in recent weeks. One trader sees the current uptrend continuing in the next few sessions. That’s based on the December $94 call. With 18 days until expiration, 2,907 contracts traded compared to a prior […]
There are many different strategies for beating the stock market. And as long as a trader finds one that works for them and follows it consistently, things can work out well. Some traders swear by momentum, which is simply the name for the idea of buying a stock that’s been trending higher. Those who combine […]
Deirdre Connelly, a director at Lincoln National Corp (LNC), recently bought 3,000 shares. The buy increased the director’s holdings by 300 percent, and came to a total cost just over $112,000. This marks the first insider buy at the company of any sort since May 2020 during the pandemic selloff low. Otherwise, company executives and […]
Shares of consumer goods giant Unilever (UL) are down just 6 percent in the past year, outperforming the S&P 500 by nearly 10 percent. One trader sees shares moving higher to close out the year. That’s based on the December $50 calls. With 20 days until expiration, 8,516 contracts traded compared to a prior open […]
Whether stocks move up or down, a company’s earnings remain fundamental to its long-term share price. A growing company will reflect that in growing earnings, whereas a struggling company may find all sorts of “one time” reasons why they didn’t hit their estimates. For companies that can fare well during a high-inflation, slow-growth economic environment, […]
James Abbott, a Senior Vice President at Zions Bancorp (ZION), recently added 2,500 shares. The buy increased his stake by 3 percent, and came to a total cost of just over $126,000. Abbott was the last company insider to make a buy, with a 10,000 share pickup back in May, at a price about 10 […]
Shares of electric car manufacturer Tesla Motors (TSLA) hit a 52-week low earlier this week. The automaker has been caught up in CEO Elon Musk’s acquisition of Twitter. One trader is betting on a rebound ahead. That’s based on the December $173.33 calls. With 22 days until expiration, 15,158 contracts traded compared to a prior […]
The tenure of a company CEO can be judged in part by the stock price performance. Those who do a great job will see their shares rise well above that of other players in the industry. And when a great CEO announces their retirement, it’s likely that shares will drop on the concern that the […]
Paula Santilli, a director at The Home Depot (HD), recently bought 1,583 shares. The purchase is an initial stake by the director, and came to a total cost of just over $499,900. This is the first buy at the company since May, when another company director bought 1,500 shares, paying just over $400,000 to do […]
Shares of chipmaker Intel Corporation (INTC) have slid 40 percent in the past year. One trader sees a potential rebound in the next 10 months. That’s based on the September 2023 $40 calls. With 295 days until expiration, 5,076 contracts traded compared to a prior open interest of 204, for a 25-fold rise in volume […]
Consumer spending makes up about 70 percent of the US economy. Currently, sales remain strong, but there are some signs that consumers may be increasing their credit card usage to do so. If that continues, it’s likely that spending will start to come down in some parts of the economy. However, some retailers could benefit […]
Jacinto Hernandez, a director at Pioneer Natural Resources (PXD), recently picked up 588 shares. The buy increased the director’s stake by over 37 percent, and came to a total cost just over $148,000. This marks the first insider buy at the energy exploration and production company in nearly a year. Otherwise, company insiders, including both […]
Shares of supplemental insurance company Aflac (AFL) are up 27 percent in the past year, fueled in part by a strong rally in recent weeks. One trader sees a pullback in the coming weeks. That’s based on the December $70 put. With 24 days until expiration, 2,539 contracts traded compared to a prior open interest […]
With the stock market down so heavily, traders may feel hit hard. But looking at the market objectively, a big down year leads to lower valuations. And for income-generating investments like dividend stocks, it can mean higher starting yields. Investors who can buy growing companies with reasonable dividends can likely see both a higher share […]
Gregory Lucier, a director at Dentsply Sirona (XRAY), recently added 6,000 shares. The buy increased his holdings by nearly 20 percent, and came to a total cost just under $189,000. This marks the first insider buy at the company in nearly a year. This year has seen one other insider transaction, with the sale of […]
Shares of Chinese internet retailer Alibaba Group Holding Limited (BABA) are down over 45 percent in the past year. One trader sees a further decline in shares by mid-2024. That’s based on the June 2024 $60 puts. With 577 days until expiration, 3,147 contracts traded compared to a prior open interest of 126, for a […]
Investors are forward-looking. So while the market may be performing poorly this year, those who look further ahead can find bargains today that should be more valuable down the line. One area where this is playing out is in the tech space. A number of companies are providing lower guidance going forward. But given the […]
David Wenner, a director at B&G Foods (BGS), recently added 20,000 shares. The buy increased his holdings by nearly 2.7 percent, and came to a total cost just over $280,000. Insiders aren’t particularly active at the company. This marks the first insider buy at B&G Foods since March 2020. Otherwise, one company director and one […]
Shares of casino operator Las Vegas Sands (LVS) are up nearly 12 percent over the past year, amid a general market decline. However, one trader sees a drop ahead for shares going into the end of the year. That’s based on the December 16th $44 puts. With 29 days until expiration, 7,035 contracts traded compared […]
Many professional investors attract followers. And rightly so. Successful fund managers have to report their holdings to the SEC. That means their activity is updated every 90 days. So it’s easy to follow along someone who’s already shown the capacity to make a market-beating return, no matter what the market condition. And in a bear […]
David Calhoun, President and CEO of Boeing (BA), recently bought 25,000 shares. The buy increased his holdings by nearly 24 percent, and came to a total cost of $3.97 million. He was joined by a company director, who bought 1,285 shares, paying just under $202,000 to do so. This is the last insider activity since […]
Shares of freight logistics platform Full Truck Alliance (YMM) are down nearly 60 percent over the last year. One trader sees a rebound in shares in the next month. That’s based on the December $10 calls. With 29 days until expiration, 13,846 contracts traded compared to a prior open interest of 561, for a 25-fold […]
At the end of the day, companies exist to sell a product or service. When times are tough, some goods are seen as luxuries. But many items are necessities. That’s why investors tend to pile into defensive stocks like consumer goods companies during a bear market. A bear market also helps to bring down valuations […]
Daniel Pietrzak, Co-President at FS KKR Capital Corp (FSK), recently picked up 6,000 shares. The buy increased his holdings by nearly 20 percent, and came to a total cost just over $112,500. He was joined by a company director, who bought 1,175 shares on the same day, paying just over $22,000. Other company directors have […]
Shares of electric vehicle manufacturer Fisker (FSR) have lost 60 percent of their value in the past year. One trader sees a further drop ahead. That’s based on the December 16 $10 puts. With 30 days until expiration, 12,024 contracts traded compared to a prior open interest of 196, for a 61-fold rise in volume […]
Many companies get into trouble overleveraging while times are good. They take on too much debt. That becomes a problem with things slow, and the costs to finance that debt become too much to bear. In contrast, a number of companies have strong balance sheets. Even companies with some debt, but substantial cash, are in […]
Clayton Joseph, a director at American Express (AXP), recently bought 1,000 shares. The purchase came to a total price of just under $150,000, and represents an initial stake for the director. This represents the first insider buy at the company since late 2020. Otherwise, company insiders, mostly executives, have been steady and consistent sellers of […]
Shares of database software company Oracle (ORCL) are up nearly 30 percent in the past month following the stock market’s strong rebound. One trader sees a short-term pullback ahead. That’s based on the December 2 $75 puts. With 17 days until expiration, 2,565 contracts traded compared to a prior open interest of 129, for a […]
Economists are predicting a gloomy holiday season. Real spending will likely be down thanks to slow economic growth and high inflation this year… not to mention the impact of supply chains. But consumers still remain robust, so it’s likely that retailers may be oversold going into the holidays. Investors who buy today can grab a […]
Earnings season can be a tricky time. A company can report great earnings. But if they warn on guidance, shares may sell off big time. Or, if a company has poor earnings, shares may move higher as things weren’t as bad as the market expected. In today’s market, most news is likely to lead to […]
Anne Crawford, a director at Farmers National Bank (FMNB), recently picked up 1,500 shares. The buy increased her holdings by 1.7 percent, and came to a total cost of just under $21,000. This is the first insider buy since August. Company directors have been active buyers all year, mostly for trades in the $20-25,000 range. […]
Shares of semiconductor company Advanced Micro Devices (AMD) have lost more than half their value in the past year. One trader sees a rebound in the months ahead. That’s based on the March 2023 $55 calls. With 133 days until expiration, 20,093 contracts traded compared to a prior open interest of 541, for a 37-fold […]
Price and value aren’t the same thing. A low-priced stock could be wildly overvalued relative to the business’ prospects. And a high-priced stock could still be pennies on the dollar for a great company ahead of a growth kick. In today’s market, the fast drop in price, combined with fear and uncertainty, are creating a […]
John Stone, President and CEO at Allegion PLC (ALLE), recently picked up 12,500 shares. The buy increased his holdings by 24 percent, and came to a total cost just over $1.03 million. This marks the first insider buy at the company in over three years. Otherwise, company insiders, nearly all executives, have been sellers of […]
Shares of social media company Meta Platforms (META) sank to a new 52-week low after earnings last week. One trader sees a further decline over the next year. That’s based on the January 2024 $25 put. With 442 days until expiration, 2,291 contracts traded compared to a prior open interest of 162, for a 14-fold […]
Markets go up more often than they go down. But investors often forget when in the middle of a bear market. One way to break through the fear is to look at companies that are planning for a bright future now. At a time when many firms are scaling back, those looking forward are likely […]
CD&R Investment Associates, a major holder of Beacon Roofing Supply (BECN), recently added another 105,320 shares. The buy increased the fund’s stake by 0.7 percent, and came to a total cost of just over $6 million. Over the past three years, there’s been a mix of insider buys and sells. Insider sales are slightly higher […]
Shares of Chinese semiconductor company Daqo New Energy Corp (DQ) are down nearly 40 percent in the past year. One trader sees a potential rebound ahead. That’s based on the December 16th $50 calls. With 44 days until expiration, 2,849 contracts traded compared to a prior open interest of 113, for a 25-fold rise in […]
Some stocks deliver slow and steady returns over time that can compound out into a phenomenal profit. Others can be volatile – but that volatility allows investors to earn even more over time, provided they don’t get scared out of a trade. Right now, a number of companies have been taking big hits following earnings. […]
Teresa Finley, a director at Union Pacific Corp (UNP), recently added 1,380 shares. The buy represents an initial stake for the director, who paid just under $260,000 for the position. This represents the first insider buy at the railroad since early 2020. Company insiders have been occasional sellers of shares over the past three years, […]
Shares of marine shipping company Star Bulk Carriers (SBLK) are down about 14 percent in the past year, as shipping rates have started to come off extreme highs. One trader sees an even bigger drop for shares ahead. That’s based on the December 16th $16 puts. With 45 days until expiration, 6,761 contracts traded compared […]
Sectors tend to start out with an explosion of activity, then consolidate into a few big names over time. That’s played out in everything from automakers to the media. As this happens, surviving companies tend to settle into making steady profits. And when there are just a handful of players, one will typically stand out […]
Alvin Libin, a major owner at Riley Exploration Permian (REPX), recently added 23,755 shares. The buy increased his stake by 1.2 percent, and came to a total cost just over $641,000. That’s just one of five buys made by the insider in the past few weeks. Other buys have been in the 5,377 to 9,593 […]
Shares of iron ore producer Cleveland-Cliffs (CLF) have lost 40 percent of their value in the past year, more than double the drop in the S&P 500. One trader sees a further decline ahead. That’s based on the March 2023 $9 puts. With 137 days until expiration, 6,374 contracts traded compared to a prior open […]
One trend this earnings season has been a number of companies impacted by the strength of the US dollar in currency markets. As a result, multinational companies are reporting headwinds, as a strong dollar makes them relatively more expensive in local markets. That trend will end in time, and may even shift quickly once monetary […]
It’s likely the stock market won’t end its current downtrend until the Fed stops raising interest rates. But given how bear markets work, we may be closer to the end than the beginning. The best strategy now is to start buying great companies at beaten-down prices, rather than wait for a move higher. That’s because […]
Stephan Eastman, a director at Fastenal Co (FAST), recently picked up 1,000 shares. The buy increased his holdings by over 11 percent, and came to a total cost of just under $44,000. He was joined by another director who picked up 500 shares around the same time, paying about $22,500 to get in. Theis follows […]
Shares of oil giant Petroleo Brasiliero (PBR) are up 48 percent in the past year thanks to strong energy prices. One trader sees a further rally in the coming weeks. That’s based on the November 11 $17 calls. With 18 days until expiration, 19,365 contracts traded compared to a prior open interest of 218, for […]
The only constant in life is change. Even great companies that have consistently rewarded shareholders for years come up with new products or find ways to improve profitability for the work that they do. That’s especially true for companies that are making the switch to the latest digital trends. While the Internet has now been […]
Robert Henkel, a director at Owens & Minor (OMI), recently added 1,000 shares. The buy increased his holdings by 3.7 percent, and came to a total cost of just under $16,000. The director was also the most recent buyer of shares back in July, also picking up 1,000 shares at a price more than double […]
Shares of consumer goods company Procter & Gamble (PG) moved higher earlier this week on earnings, although the company did warn on the effect of a strong dollar. One trader sees that as bearish. That’s based on the January 2024 $80 puts. With 455 days until expiration, 5,002 contracts traded compared to a prior open […]
It’s no surprise that investors who follow company insiders can make above-average returns over time. Company insiders are knowledgeable about their company and its operations. But following big-name investors after they build a stake in a company can make a similar profit. That’s because those who make a big buy can often earn board seats, […]
Ken Lavelle, President at AZZ Inc (AZZ), recently added 2,000 shares. The buy increased his holdings by nearly 9 percent, and came to a total cost just over $69,000. The buy comes a few days after the company COO picked up 3,000 shares, for just over $100,000. And the company CFO has also been a […]
Shares of oil and gas explorer Suncor Energy (SU) are up about 35 percent in the past year. One trader sees a short-term drop ahead for the stock. That’s based on the November $25 puts. With 29 days until expiration, 4,271 contracts traded compared to a prior open interest of 114, for a 37-fold rise […]
Companies can’t control what the stock market is doing. That’s why great companies will sell off in a bear market along with poor ones. It also means that companies facing strong growth may continue to do so, even if the market doesn’t recognize the value in the short haul. Patient investors can use bear markets […]
Right now, the US dollar is rapidly appreciating against other currencies. International investors are moving to the dollar as a safe-haven, which is weakening other currencies. That also makes US exports more expensive on a relative basis, which tends to be bad news for multinational companies headquartered in the United States. However, not all trends […]
R. Brad Martin, a director at FedEx Corp (FDX), recently picked up 1,500 shares. The buy increased his holdings by 2.2 percent, and came to a total price of just over $215,000. This is the first buy at the global logistics provider since the summer, when another company director picked up 900 shares in July […]
Shares of The Coca-Cola Company (KO) are up about 6 percent in the past year, far outperforming the drop in the S&P 500. One trader sees shares continuing to rally in the coming weeks. That’s based on the October 21 $55 calls. With 21 days until expiration, 2,804 contracts traded compared to a prior open […]
The stock market is retesting its June lows. It may head lower, or it may bounce from here. While the data most likely suggests a push lower, we’re starting to see some companies get so oversold that they’re looking like attractive long-term buys amid this latest dip. Investors who buy now may have to deal […]
Tobias Lutke, a director at Coinbase Global (COIN) recently added 5,291 shares. The buy increased his holdings by 9.6 percent, and came to a total cost of just under $361,000. The buy came a week after the director bought 4,482 shares, paying about $338,000, and the week before that spent $365,000 on 5,894 shares. Overall, […]
Shares of Bank of America (BAC) are down 28 percent in the last year as lending activity has slowed amid a rise in interest rates. One trader sees a further decline over the next two years. That’s base on the January 2025 $32 puts. With 841 days until expiration, 15,002 contracts traded compared to a […]
A number of companies are developing new and innovative technologies. While older companies may get overlooked during a bull market, many companies can use proven new technologies to improve their business lines. That’s why, while banking hasn’t fundamentally changed, the rise of ATMs has led to a decrease in tellers. And online banking has further […]
Daniel Durn, CFO and EVP at Adobe (ADBE), recently picked up 3,250 shares. The buy increased his holdings by over 57 percent, and came to a total cost of just over $936,000. This is the first insider buy at the company since a director picked up 973 shares back in January. Otherwise, company insiders have […]
Shares of Yamana Gold (AUY) are up 2 percent over the past year, even as gold prices have slid to a two-year low. One trader sees a potential for shares to trend even higher in the coming weeks. That’s based on the November $4.50 calls. With 51 days until expiration, 4,495 contracts traded compared to […]
The market is a series of sectors. Investors who invest in the right sectors at the right time can capture a big part of the market’s performance. Those who pick the wrong sector risk being on the losing end of the market. And within a sector, there will be times when some companies fare better […]
The stock market trended down in the first half of the year. Then, starting in late June, investors enjoyed a summer rally. Given the continuing strength in the economy and high inflation numbers, it’s likely that stocks will trend down as interest rates continue to rise. However, some assets can see a move higher here. […]
Loews Corp, a major owner of CNA Financial Corp (CNA), recently added 168,099 shares. The buy increased the investment firm’s ownership by 0.1 percent, and came to a total cost just over $6.5 million. This is the first insider activity at the company since May, when one EVP sold some shares, while a company director […]
Shares of uranium producer Cameco (CCJ) have risen 26 percent in the past year, on renewed interest in nuclear power and rising uranium prices. One trader sees that trend continuing through the end of the year. That’s based on the December $37 calls. With 100 days until expiration, 22,667 contracts traded compared to a prior […]
Many companies are coming off of strong earnings reports from the past year. Those numbers were influenced by the prior year, where pandemic shutdowns made things look horrific. Now, with the added challenge of a slowing economy and high inflation, investors need to weed through those companies likely to lose market share amid current market […]
John Stephens, a director at Solid Power Inc (SLDP), recently picked up 30,000 shares. The buy increased his holdings by 42 percent, and came to a total price of $204,000. The director has been buying throughout August, with other buys totaling 60,000 shares overall at a cost of over $600,000. These buys have occurred as […]
Shares of biotech play CTI BioPharma Corp (CTIC) have soared over 100 percent in the past year. One trader sees shares giving up some of those gains in the weeks ahead. That’s based on the October $6.00 put options. With 45 days until expiration, 8,012 contracts traded compared to a prior open interest of 109, […]
There’s an old saying that the Chinese character for “crisis” can also be interpreted as “opportunity.” That’s often the case in the stock market, where a big selloff can lead investors to years of profits relatively quickly when the fears fade and prices rebound. Right now, some tech stocks are getting hit hard on news […]
Ryan Lance, a director at Freeport-McMoRan (FCX), recently added 31,000 shares to his holdings. The buy increased his stake by a staggering 368 percent, and came to a total price of just over $988,000. The move comes as another director bought 3,000 shares back at the start of August. Over the past three years, insiders […]
Shares of oil exploration and production company Ovintiv (OVV) are up 87 percent over the past year thanks to a strong energy market. One trader sees the possibility for a short-term drop in the coming weeks. That’s based on the October $45 puts. With 46 days until expiration, 12,906 contracts traded compared to a prior […]
Some companies lead their sectors to new areas of growth. Others may hold back, to determine where the best prospect for growth is right now. Both can have their merits, if successful. A handful of today’s top tech trends should benefit all companies. That includes the rollout of the 5G network, the ongoing growth of […]