Just a quick note on Nvidia, a leading semiconductor chip maker that is growing rapidly thanks to its powerful graphics processing units (GPU) / chips. More specifically, Nvidia continues to grow rapidly thanks to its leadership position in gaming (+55% sales growth yoy), data centers (+100% sales growth yoy), and its many other uses, as will be discussed.
Newly Public Data Analytics Company: Keep It High On Your Watchlist
This data analytics software company recently began trading publicly, and it is known for its highly secretive work with the US government. It has also recently experienced strong revenue growth, and it has a large (and growing) total addressable market (although a fiercely competitive one). In this report, we analyze the company’s business model, growth prospects, valuation, risks, and finally conclude with our opinion on whether this stock offers an attractive risk-versus-reward investment opportunity.
New Options Trade: Very High Upfront Income, Big Sell-Off Creates Opportunity
Highly encouraging Covid-19 vaccine news was released on Monday, and the market reacted in dramatic fashion. For example, popular brick-and-mortar REITs that had been beaten down by the virus (such as SPG and WELL) gained (+27% and +21%, respectively), while social distancing tech stocks (such as ZM and DOCU) lost (-17% and -15%, respectively). However, some names have continued to sell off when they should not have, and we highlight one in particular in this report for an attractive income-generating options trade opportunity. We already own some shares of this name (we purchased them recently), but if you don’t own it (or you wouldn’t mind picking up more shares), you may want to consider this trade opportunity because it generates very high upfront premium income for you to keep, and it gives you a shot at owning shares of this attractive business at an even lower price.
New Options Trade: Very High Upfront Income, Bullish Vertical Put Spread, Chinese Internet Juggernaut
Just three weeks ago we wrote about the attractiveness of this stock, but warned of near-term volatility events at the start of November. One of those events has played out, drawing the share price lower. However, we believe the shares are now trading too low, and they could be driven even lower in the days ahead (as fearful investors panic). These conditions have given rise to this attractive options trade. The trade sounds complex (i.e. “bullish vertical put spread”), but it’s not. It puts attractive upfront premium in your pocket today, it gives you a chance to pick up shares of this attractive stock at a lower price, and it gives you a little insurance on the downside (i.e. your max loss is limited). We believe this is an attractive trade to place today—and potentially over the next few trading sessions—as long as the price doesn’t move too dramatically before then.
Top 10 Growth Stocks: Attractive Long-Term Buys, Ranked
The Vix (VIX), also know as “The Market Fear Index,” is elevated, thereby suggesting it could be a bumpy ride for stocks in the weeks ahead. However, despite the potential volatility, one thing that has worked well throughout history is to simply buy good stocks and then hang on—for the long-term. That may seem easier said than done, but in this report we attempt to help. There are certain themes and companies that are poised to grow dramatically in the years ahead—no matter what happens with near-term volatility. And in this report, we rank our top 10 growth stocks for you to consider.
Snowflake: An Enormous Opportunity for Long-Term Growth
Snowflake provides a cloud-based data platform, addressing the rising data management needs of enterprises. The company went public recently and has delivered staggering listing gains to its investors. In this report, we analyze Snowflake’s business model, competitive strength, financial position, and finally conclude with our opinion on the stock’s risk-reward investment opportunity versus its current valuation.
Chinese E-Commerce Small Cap: High Growth, Attractive Valuation
Shares of this Chinese, small-cap, “brand-focused,” e-commerce company trade in the US (on the Nasdaq) as an ADR (American Depositary Receipt), and they are currently priced attractively after the recent sell-off, especially considering the continuing powerful growth expectations for online commerce and for the company in particular. In this article, we review the solutions offered by the company, its growth prospects, valuation, risks and conclude with our view on why the shares are worth considering if you are a long-term investor.
High Growth Software Company: Tremendously Popular Solution, High Options Market Premium Income
This young high-growth software company has become a solution-of-choice for developers and organizations alike within a relatively short span of time. The company has achieved a five-year annual revenue growth rate of ~59% through a proven “Land-and-Expand” business model, an endeavor to fill the platform’s functionality gaps, a rapidly expanding market, and a solid management team. The company’s stock lost about half of its value in the COVID-19 induced market turmoil earlier this year, but has strongly recovered since then and is currently trading at almost 28x Price-to-Sales multiple. The valuation certainly looks rich (considering the company is not yet profitable and is burning a lot of cash), but the platform is immensely popular among developers and it has a very long runway for continuing high growth in the years ahead. The shares also offer very high premium income in the options market. This article reviews the health of the business, growth prospects, valuation, risks, and concludes with our opinion about why it may be worth considering (and how to play it with put options) if you are a long-term growth-oriented investor.
New Options Trade: Very High Upfront Income, Huge Upside Potential
The world continues to change, and uncertainty and fear are currently high. These two broad factors have combined to create a very specific attractive opportunity to generate high upfront income and very large price appreciation potential. This small digital advertising company ($1 billion market cap) is in the right place at the right time (the intersection of disruption and volatility) thereby creating this very attractive option trade opportunity (plus, the $9 share price makes the “cash secured” part of this trade more palatable for some). In our view, this is an attractive trade to place today, tomorrow and potentially into early week (so long as the share price doesn’t move too dramatically before then). You get to keep the attractive upfront premium income this trade generates (no matter what), and you may end up owning shares of an extremely attractive, long-term, small cap, disruptive-growth stock at a very compelling low price.
Alibaba: Despite Big Risks, Cloud Growth Makes Valuation Interesting
Alibaba (BABA), often referred to as “the Amazon (AMZN) of China,” is the country’s largest e-commerce, cloud, and digital advertising company. Its e-commerce business has been the growth and profit engine for years, but cloud computing is positioned to increasingly contribute meaningfully to high-margin growth in the future. The perception of weak corporate governance, combined with geopolitical tensions, are major risks, and November could be a big month considering the US election, the company’s upcoming earnings announcement, and Singles’ Day. In this article, we analyze Alibaba’s business model, its market opportunities, fundamentals, valuation, risks, and finally conclude with our opinion on whether the stock offers an attractive balance between risks and rewards.
Why This Fast Grower Fell 28%, And What Comes Next
During afterhours on Wednesday, shares of this fast growing company fell dramatically as it released preliminary third quarter revenue numbers that were below expectations. This particular business provides an “edge cloud platform” designed for the “modern internet” thereby allowing digital applications to process quickly, reliably and safely—on the edge of the internet. This report reviews the business, its massive long-term growth opportunity, its newly revised rapid growth trajectory, valuation, risks, and concludes with our opinion on why the shares are worth considering.
Know Your Goals: Overcome Fear & Greed, Especially Now!
Fear and greed are very real psychological hazards when it comes to investing. And lately (with everything going on), it seems growth stocks have taken on the role of greed (considering their performance has been so strong!). Rather than worrying about keeping up with the Joneses, a better strategy right now (and always) is to know your own investment goals, avoid those common mistakes caused by fear and greed, and pick really good stocks! This article provides some perspective on current market conditions and opportunities, it highlights a handful of our recent top investment ideas, shares performance, and hopefully provides a little meaningful perspective as you manage your portfolios in light of everything going on right now (e.g. low interest rates, the upcoming US election, Covid and the acceleration of technology in the global economy).
Top 10 Growth Stocks: Options Trading Edition
Let’s face it, stocks are likely to be volatile in the weeks ahead. The market fear index (VIX) has been jittery, arguments can be made that social-distancing stocks have rallied too far (and not far enough), and there is this little thing in the United States called the upcoming presidential election on November 3rd. My investment philosophy is to always buy good businesses and then hang on (despite potential volatility) the for long term. And in this article, I will rank my top 10 growth stocks. However, I’ll also share specific options trading strategies that I believe are particularly compelling (based on current market conditions), potentially very lucrative and also consistent with my long-term philosophy. But before we start counting down the Top 10, it’s worth considering the tremendous and wide-ranging recent performance, valuation and expected revenue growth for top growth stocks.
Microsoft: New Options Trade, Another High Income Bullish Put Spread
The tech sell off is continuing this week, and cloud stocks continue to be among the very hardest hit. Microsoft has been rapidly growing its cloud business on a massive scale, and the shares have sold off considerably harder than the rest of the market in recent weeks. And this morning’s small news (Microsoft is paying $7.5 billion cash for game developer, Bethesda Softworks) has created more jitter among investors—perfect for this trade because to prevent Microsoft shares from eventually going higher in the long-term has about a snowflake’s chance in Gahenna. In report, we revisit the high-income-generating opportunity that current exists in bullish vertical put spreads on Microsoft (not as scary as it sounds). Our previous implementation of this strategy expired (quite successfully) on Friday, and the opportunity is again very attractive.
This Healthcare Diagnosis Stock: +50% Upside in 6 to 12 months
This particular company is a rapidly growing leader in cancer prevention and diagnosis, with high margins and a large total addressable market. However, the shares have recently sold off based on short-term fear (COVID-19 has temporarily slowed screening, but will ultimately accelerate adoption) and shortsightedness related to profitability. As a result, the valuation is now quite attractive relative to the long-term opportunity. In this article, we review the business, the growth opportunities, recent performance and valuation, risks and conclude with our opinion on investing.
Why This Tiny Digital Advertiser's Shares Could Soar
The COVID-19 pandemic has created tremendous challenges and opportunities. And in the case of this tiny digital advertising firm, the opportunity has been magnified not only by the pandemic, but also by the firm’s own specific challenges and now recent merger. In fact, advertisers have significantly reduced digital ad spend in the short-term (which has magnified pressure on these shares), but as we head into 2021, digital ad spend is expected to resume rapidly, and it could slingshot these shares higher, especially considering the improved long-term business model and enormous market opportunity.
New Options Trade: Very High Upfront Income, Bullish Vertical Put Spread (The Cloud-Tech Sell-Off Continues)
Cloud and technology stocks are selling off hard again this morning, and a lot of investors are fearing there is a lot more selling to come. After all, it is cloud and tech stocks that have rallied so hard this year as their natural “social distancing” qualities have made them the beneficiaries of the dramatic pandemic rebound that has been going on for months.
However, the sell off has been indiscriminate (among cloud and tech), and some very attractive businesses are getting closer to trading at very attractive prices. In this report, we review an attractive cloud-tech juggernaut, and share an attractive options trade that utilizes a “bullish vertical put spread” (not as scary as it sounds). The trade lets you generate attractive upfront income, giving you the chance to pick up shares of this attractive business at an even lower price, while also limiting your downside risk (and limiting the amount of cash you need to set aside to secure the trade as compared to simply selling a naked put option). We believe this is a very attractive trade to place today, and potentially over the next few trading sessions.
Microsoft: Growth, Cash Flow and Perhaps TikTok
Microsoft (MSFT) has experienced an impressive turnaround over the last few years. The company’s top-line growth has been fueled by its cloud computing solutions. Demand for cloud computing has been on the rise and has seen acceleration post COVID-19 due to a global push for business digitalization. More recently, Microsoft has been in the news after announcing that it (along with Walmart (WMT)) is in talks with ByteDance to acquire social media app TikTok’s business in certain countries including the US. In this report, we analyze Microsoft’s business model, its market opportunities including the potential TikTok transaction, competitive positioning, valuations, risks, and finally conclude with whether an investment in the company’s stock offers an attractive balance between risks and rewards.
New Options Trade: Very High Upfront Income, Bullish Vertical Put Spread
A lot has changed since the onset of the pandemic, obviously. And healthcare is one sector that has felt the impacts. This article not only reviews an innovative healthcare leader, but we also share an attractive option trade that utilizes a lessor known (but not complicated) strategy, sometimes referred to as a bullish vertical put spread (not as scary as it sounds). The trade lets you generate attractive upfront income, while limiting your downside risk, limiting the amount of cash you need to set aside to secure the trade, and it also gives you the chance of owning a very attractive stock at a lower price. Given the stock’s recent price move, we believe this is an attractive trade to place today, and potentially over the next few trading sessions.
Portfolio and Tracker Tool Updates
We do not trade often at Blue Harbinger, but we have just made significant updates to both our Income Equity and Disciplined Growth portfolios. This report provides an overview of the changes, as well as details on why we made the changes. We also highlight some updates to the website, such as the new home page and the new portfolio tracker tool (both are designed to be more useful to readers).