What's your Top Trade for next week?
Again, tell us why, what your holding period is and for a "bonus", discuss some of the RISKS, potential downside and what an investor could do to MITIGATE those risks.
Best Answer
381 points
SirCrashton answered one year ago …
I like GE for the dual purpose of realizing a profit from a gain on the stock price over an intermediate to long time frame (6 months to five years) and selling covered calls against it. The company is one of the largest and most diversified industrial corporations in the world, including involvement in alternative energy projects. Moreover, its business is global, mitigating the effect of the dollar’s decline. To that end it recently won a $500 million contract to supply equipment for an aluminum plant in Abu Dhabi. Additionally, the CEO and a Vice Chairman recently bought a substantial number of shares within the last three months.
GE has a ROE of 18.7%, a P/E of 13.1, and a dividend yield of 4.4%. The biggest negative factors are the company’s long term debt/capitalization of 75% and its exposure to consumer loans although it is scaling back its consumer finance operations. The stock is “on sale” now for 25% off its April price of about $38.
Its lowest price within the last 10 years was around $17.50 and that was shortly after a 3 for 1 stock split. It has been trading within a reasonably tight range for the past five years, with low-end support holding at around $26.00. Since it gapped down on April 11 when the market as a whole took a hit, the stock has typically traded in a daily range of just one dollar, making it a viable vehicle for selling short term calls against it.
As a hedge against the stock’s unlikely collapse, the Dec 22P can be had for less than .40.
Answers
123 points
BILLYJ65 answered one year ago …
Ultrashort Oil and Gas ETF - DUG. I bought 100k in this 30 days ago. Oil has dropped $25/barrel and I'm up 30k since then. I knew Oil was overbought and overpriced and still is. A lot of the longs are bailing out. Oil will retreat to < $80/barrel by years end. DUG is trading around $36 now (up from $26.40 when I bought) I expect a dip on Monday morning and will buy more. It will go up $2-$4 a share through thursday and have a slight drop on Friday when some profit taking will occur prior to the weekend because there is still a little anxiousness over potential oil price rises over the weekends. Of sourse there is still the chance of some saber rattling by Iran or maybe another tropical breeze that might make oil jump slightly for a day or two then it will continue it's downtrend.
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3963 points
MNSL answered one year ago …
BillyJ 65 has taken smart move even though I prefer individual stock than these ETFs.
I can remember recently when others try to promote oil futures some bought Airlines. Most of these investors were active commodity investors for the last 07 years. Now they are investing in other sectors that going to recover before others. Whatever said these investors know when to invest and when to sell in the correct time. I think some sectors and companies will have rapid increase in their growth and profit in the next 02 financial years through out the world.
I like to add companies that going to benefit from the change of currency trend and commodity trend in the next 06 months. For example sectors similar to Airlines that going to benefit from falling commodity prices. I will specially look for future earnings changes.
In addition these companies should have following characteristics.
I will look for companies with less debt or no debt with positive cash flow.
I like to invest in companies that going recover rapidly before others
Companies that going generate strong financial results in the next financial year
Strong demand for their product and services
Companies who can generate above average returns
I also like to look for return on equity and earnings per share.
I am not much concern even if profit comes down in next 02 quarters. I like to see rapid profit increase in next financial year.
I will hold from one year to 05 years depend on how they are going to perform in the future. If I find outstanding companies I will keep them at least for next 10 years. In addition I like to trade whenever I get opportunity to do so. There will be lot of trading opportunity due to volatility in the market in next 03 months. Some countries will have bullish sentiments in the near future.
104 points
cpr48 answered one year ago …
TCHH has been in process of a merger with PAVC for months but my guess is that they have not been able to obtain the financing to clinch the deal. If the deal goes through the stock should skyrocket from three cents to ten or twenty cents per share. I own 50000 shares of TCHH and 50000 shares of PAVC.
Hope to make a 1000% profit if I am lucky! My guess is that the merger will eventually happen and it could happen anyday or never, high risk with possibility of great rewards.....
104 points
petehanse answered one year ago …
U keep the 2 points , ya probably need them more than I LOL
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