The Investor’s Holy Trinity – EVs, Bio-Tech, and Gaming
Stagflation fears came to a head last week only to ease up going into the start of today’s trading session – and I am not surprised.
Just as I noted in last week’s stagflation piece: we are seeing inflation, but the economy certainly isn’t stagnating.
In fact, the first company I’m watching this week is a great example of the U.S.’s continued growth. Ford Motor Company (NYSE:F) has sold 9,150 electric vehicles over the month of September, which is a 91.6% increase when compared to last September.
The company also reported the pre-orders for the highly anticipated electric F-150, the latest Ford truck model, surpassed 150,000 reservations. Ford is selling EVs at a higher rate than the rest of its portfolio.
And that news pushed shares up more than 8% during last Thursday and Friday’s trading session.
Ford’s commitment to EV has really caught my eye. I’m expecting good things for Ford, considering the immense excitement for the F-150. But that 8% move was a little too much too fast for my liking.
I’m watching Ford to see if shares come down, just a little, before buying in at any amount.
Here’s what I’m looking for: if shares of Ford come down $14.80 by the end of this week, I’d buy F January 21, 2022 $15 Call (F220121C00015000) for $1 or less. If you get in, plan on selling F220121C00015000 at a 100% profit.
But that’s not the only thing I’m watching this week. Bio-tech is a popular industry with investors, and with good reason. Biotech stocks can see aggressive gains in a short amount of time – shares of Moderna (MRNA), for instance, more than doubled in the last six months.
Picking out the good ones, however, can be tricky. So, I’m keeping Quidel Corp. (Nasdaq:QDEL) under the microscope.
The company develops, manufactures, and markets diagnostic solutions that quickly diagnose infectious diseases, as well as cardiovascular and metabolic conditions.
Its revenue grew a whopping 498% in the last four years, recently reporting revenue of $1.84 billion. During those same four years, it also managed to swing from yearly losses to profiting over $800 million.
With numbers like that, you’d think the stock would be soaring – but the opposite is true.
Shares of QDEL peaked at $288.70 last November only to drop to $103.31 this June. Since then, the stock has gained back some of that lost ground, but its rise has not been a straight line. Every successive move higher, the stock drops off to lows higher than its previous dip. The stock is now trading off one of those “higher lows,” which makes it look very attractive as a set up for another leg even higher.
If QDEL closes above $149.00 any time this week, let’s buy the QDEL December 17, 2021 $150/$155 Call Spread for $2.00 or less.
Close out the trade for a 100% profit, or if shares of QDEL trade up to $165.00, whichever comes first.
The only other thing as popular among modern investors as biotech is plan old tech. Corsair Gaming Inc. (Nasdaq:CRSR) is the tech company on my radar this week.
It markets and distributes peripherals, components, and systems for gaming and streaming globally. It provides a lot of the “stuff” that gamers need to enhance their gaming experience or streamers looking to better perform for their audience. They produce everything from keyboards and mice to capture cards and stream decks.
Which isn’t revolutionary tech, but their financials have grabbed my attention. Its revenue grew 81% during the pandemic, reaching $2.06 billion over the last 12 months. Over the same period, it emerged from a $13.72 million loss to raking in a net income of $103.22 million in 2020.
Just like QDEL, the company has great numbers, but the stock is taking it on the chin. Shares traded as high as $51.37 last November only to drop back down to $25.04 this August.
Since then, the stock has tried to make a rally only to give up its gains and find support, once again just above $25.00.
But here’s where things get interesting for us.
There’s a high percentage of short float. By mid-September, 37.22% of the shares sold short are floating – that’s a lot for a company that has really good numbers. I think this makes CRSR a great candidate for a Reddit-inspired short squeeze.
Given that shares are trading just above support near $25.00, let’s buy CRSR January 21, 2022 $27.50/$30 Call Spread for $1 or less. Plan on exiting this trade for a 100% (or more) profit.
And that’s what I’m looking for going into this week. What about you? Please drop me a line at firstname.lastname@example.org and tell me about stocks you’re watching. Every submission has the chance to be featured in my weekly Buy, Sell, or Hold on Friday mornings.
I hope to hear from you.