Pacific Ethanol, Inc. trades under the ticker PEIX & has recently had very strong technical performance. I’m looking at their options, and am interested in either buying the in-the-money $6 calls as they are currently set to open <$7/share due to today’s volatility, or I may set up a straddle using the $7 PEIX calls & puts with the October 16th expiration.
PEIX Price (per 9/18/20 Close): $7.10
10 Day Moving-Average: $5.13
50 Day Moving-Average: $3.19
200 Day Moving-Average: $1.20
RSI: 77
While today I will likely be selling SPXS & SQQQ calls, this is a play that I am going to be looking to make within the coming days to take advantage of their recent strength.
*** I DO NOT OWN ANY SHARES IN PEIX AS ON PUBLISHING THIS POST ***
Digital Turbine Inc. trades under the ticker APPS & has recently exhibited a lot of technical strength. I’m looking at their October calls, at the moment favoring the slightly in-the-money $30 calls to the $35’s for some added protection from volatility.
APPS Price: $32.35
10 Day Moving-Average: $25.79
50 Day Moving-Average: $20.13
200 Day Moving-Average: $10.23
RSI: 74
While I am looking at the calls now, they may offer an opportunity for longer-term investment in time once we achieve more market clarity & less volatility.
Giga Metals Corp. trades under the ticker HNCKF, and has recently shown technical strength making it worth looking closer at from a trading perspective. This is especially true, given that at the moment futures are pointing lower across the board & they focus on mining & are an OTC stock.
HNCKF Price: $1.27
10 Day Moving-Average: $0.73
50 Day Moving-Average: $0.34
200 Day Moving-Average: $0.22
RSI: 83
I’ll be taking a look at them today & potentially making a few trades depending on how they perform, but their recent gap up a few days ago has them in a position of strength that may be able to be built upon further.
Yesterday I picked up some shares of Lifeway Foods, Inc., which trades under the ticker LWAY. LWAY has presented strong technical performance recently, so after reviewing their chart I decided to buy some shares. I don’t plan to hold them long, but do still see some room for them to run to add to yesterday’s profits.
LWAY stock closed for trading at $7.45/share on 9/15/2020.
LWAY Price: $7.45
10 Day Moving-Average: $5.22
50 Day Moving-Average: $3.82
200 Day Moving-Average: $2.63
RSI: 68
While I intend to just trade this for now, there may be a move to invest for the longterm in the business upon a market pullback.
Trillium Therapeutics Inc. trades under the ticker TRIL & has exhibited strength, after gapping up on 9/9/2020. I’ll be looking at their options this week, both TRIL Calls & Puts, as it looks to establish a new range after the gap. As of the pre-market they’re currently trading at $15, so the $15 calls are at-the-money, will be trading around the at-the-money options in either direction.
TRIL Price: $14.89 (per 9/14 close)
10 Day Moving-Average: $11.34
50 Day Moving-Average: $8.84
200 Day Moving-Average: $5.44
RSI: 75
*** I DO NOT OWN ANY TRIL SHARES OR OPTIONS AS OF WRITING THIS ***
Workhorse Group Inc. has been showing up as a very strong technical performer for the last week, and I have been trading in & out of call options for them recently. Currently holding some $23 calls that expire this upcoming Friday, and may trade some additional ones this week.
With a price of $23.69, they still show room to climb with the following moving averages:
10 Day Moving-Average – $20.21
50 Day Moving-Average – $17.13
200 Day Moving-Average – $6.77
RSI – 68
Given the nature of their industry & their fundamentals, I’m not interested in it as an investment, but am seeing the value in trading around WKHS.
*** I Currently Hold $23 WKHS Calls Expiring 9/18 ***
Last week had a lot of interesting earnings reports, and a bit of an unwinding of the NASDAQ & S&P 500. This was overdue, as the NASDAQ had far outpaced the S&P based on vaccine optimism, and people looking to trade tech as they deemed it the best work-from-home market option. I didn’t make too many trades, but did pick up some PTON calls, as well as WKHS calls. Some of the WKHS calls I am carrying over the weekend, although I sold many of them last week.
I also sold some CYDY after 45%+ gains, and rolled the profits into AGNC, whose 12.67% Dividend Yield is paid out monthly, adding a nice 1% of my principle back to my portfolio each month. I also hold PSEC which is a similar type of company, but recently began diversifying by holding both.
As the summer has been a bit nuts between losing a close friend (and avid reader of my site, he used to text on Sunday nights asking when posts were coming out if one wasn’t up yet) in July & some trips taken recently, I have not been updating the site as often as I normally would. With that said, a couple of weeks ago I picked up DHT for the quick Dividend Play as they were paying out $0.48/share, it was a quick hold for 8%. Depending on what their next announced dividend is I may do it again as well.
What I’m Watching This Week
Well the Patriots of course…
We’ve got some interesting earnings calls coming up that may give us more color into the true shape of the economy this week. That will pair perfectly with the US Industrial Production numbers (Tuesday), Retail numbers (Wednesday), Business Inventories (Wednesday), NAHB Housing Market Index (Wednesday), & FOMC Economic Projections & Fed’s Rate Decision (Wednesday).
Thursday we will get a look into Jobless claims & employment figures, Housing Starts & Permits data, before Friday we hear about the Michigan Consumer Sentiment numbers & accompanying Inflation Expectations.
This has the potential to throw a little more volatility our way, especially when you look at the current 1 year NASDAQ chart, and see that the current level has intercepted the 50 Day Moving-Average.
This to me shows that we may have a little more volatility coming our way in the near future. This would be healthy for markets, and also be appealing for some new stock entry points.
Final Thought – My CNBC Fast Money Appearance Last Week
Last week I was on CNBC’s Fast Money, with my post-Covid haircut & handlebar mustache, had to share it here!
This weekend I took a look at FBL Financial Group Inc., which trades under the ticker FFG. FFG closed for trading on 9/11 at $49.75/share & offers many interesting advantages for investors & traders alike, as it has great fundamentals, as well as technicals too.
Breaking Down FBL Financial Group Inc. FFG’s Fundamentals
FBL Financial Group Inc.’s P/E (ttm) is 14.8, with a P/B of 0.78 and a low Beta of 0.22
FFG offers a 4.02% annual Dividend, with a 47.2% Payout Ratio, showing that it has the strength to be sustained in the coming years.
While their Market Cap is only $1.22B (small compared to their peers), they have a Debt/Equity (ttm) of 7.51, which is very low, and $142.62M in Total Cash (mrq).
Due to their small cap status, they have a 28.2% % Institutional Ownership.
They also scored a high Technical Rating of 131.9, which is mostly attributed to strength from their recent gap up from $37.25 to $48.87 on 9/4/2020.
FBL Financial Group Inc. FFG’s Technical Strength Analyzed
FFG is currently showing a lot of technical strength, with their 10 Day Moving-Average at 42.45, 20 Day Moving-Average at 37.35 & their 200 Day Moving-Average is 43.84.
As mentioned prior, their recent gap up on 9/4 is the primary reason for their high RSI of 80, which will become a more normal level once they establish a new range.
FFG’s Technical Rating is 131.9, which is much higher than the Financials Sector’s (-33.3) and the Insurance Industry’s (-6.3).
This makes them very attractive from an active trader’s standpoint.
FBL Financial Group Inc. FFG’s Fundamentals Vs. The Financials Sector
FBL Financial Group Inc.’s stock fundamentals outperform their Financials Sector peers, making them appealing to investors.
FFG’s P/E (ttm) is 27.5% lower than average, and their P/B is 80.7% less than average. with a 78.8% lower Beta than their sector peers.
FFG’s Dividend Yield trails the average Financial Sector stock by 10.9%, but their Payout Ratio is 30% more sustainable than the sector average, another good sign to investors.
FFG’s Market Cap is 80.5% lower than the Financials Sector average, leading to their 99% less Total Cash (mrq) & 39.3% lower % Institutional Ownership.
Their impressive Debt/Equity (ttm) is 95.4% lower than average, and their Technical Rating of 131.9 is much higher & advantageous to the sector average of -33.3.
FBL Financial Group Inc. FFG Stock Fundamentals Vs. The Insurance Industry Averages
FBL Financial Group Inc.’s stock also has a leg up on its peers in the Insurance Sector. FFG’s P/E (ttm) is 67.5% lower than the Insurance Industry average, and their P/B is 95.2% less than average.
FFG’s Dividend Yield is 33.1% better than the Insurance Industry average & their Debt/Equity (ttm) is an incredible 90.2% better than average.
Their small Market Cap is 84.7% less than average, resulting in their 52.8% lower than average % Institutional Ownership & their 97% lower than average Total Cash (mrq).
FFG’s Technical Rating of 131.9 is much higher than the Insurance Industry Average of -6.3.
FBL Financial Group Inc. FFG’s Stock Has Outperformed The S&P 500 & Competes With NASDAQ For Total Lifetime Returns
Since FFG IPO’d on 7/19/1996, they have grown by 437.84%, which when collected dividends are included jumps to 763.84%. In that same time period the S&P 500 has only increased by 423.06% excluding dividends.
In that same time, the NASDAQ has grown 888.77%, excluding dividends.
This ability to grow is a great sign for investors.
Tying It All Togeher
Overall, FFG’s stock offers a lot of advantages for both short term traders & long term investors. Their recent success has made their technicals very attractive, which is especially important in a time of minor corrections & pivots that we have seen over the last week.
Their fundamentals look great, especially the appeal of such low debt with a sustainable 4%+ dividend yield, and they have achieved consistent & solid enough growth since they IPO’d to make them worth considering for any investor’s portfolio.
I am going to begin looking at them once they begin to define their new range, as currently it is too early to pick a good entry point.
Another flat week in markets… S&P 500 up narrowly, NASDAQ down narrowly… somewhat fixing the spread between the two that inevitably needs to correct soon. While we cover a lot of smaller cap names with strength, the distance that biotech & the largest tech companies has created has made things a bit more overblown than usual in the NASDAQ index.
Last Weeks Trades – WMT & SPXS Calls, Trimming Gains On STX, TFII, WCLD & SKYY
Last week was a trimming week in the longterm hold category. I purchased CRON shares, and still have outstanding $7 calls with a few months to expiration. I still like the company fundamentals, and am looking to see a boom headline in the space move the overall cannabis segment. CRON offers solid fundamentals compared to their peers, although I am also looking into Aphria Inc. whose ticker is APHA.
I also took profits on STX, TFII, WCLD & SKYY, closing all positions. I will look to reenter after a shakeout of prices, but the current gains warranted a close & re-entry.
On the options front, on Thursday afternoon I purchased WMT calls for $132 with a next day expiration which closed with a solid profit. I also purchased some $6 SPXS calls with a 10/16 expiration, to add to an existing spread of $7-9 calls for the same date, as I expect to see volatility rise before the election & “COVID-19 second wave”.
Market Reports We’re Watching This Week
The beginning of the week is a bit major-news-light, but Wednesday we will be watching the US Building Permits count & Change, as well as the FOMC minutes.
On Thursday, the Initial Jobless Claims & 4 Week Average reports will be released.
Closing the week, on Friday, there will be many PMI Survey Numbers & Existing Homes Sales numbers release.
In these times where it is difficult to gauge exactly where the economy is heading, these numbers may offer us some sobriety from the plethora of earnings reports coming in.
This Week’s Earnings Reports
There are 517+ earnings calls this week, many of which are large cap companies in the tech & consumer spaces. Walmart , Home Depot & Salesforce are among a number of names to be watching for their reports.
It’s beneficial to be watching how these economic numbers pair up with the earnings report numbers, as it will give greater insight into the true spread between the market indexes & the overall real economy, as a lot of highly-saturated large names have been dictating the flow of the macro indexes for the most part recently.
Magic Software Enterprises Ltd. stock trades under the ticker MGIC, and offers many interesting trading & investment opportunities. MGIC stock trades at $14.68 as of the close on 8/14/2020. Their recent movements higher have rated them a 201.2 on our Technical Rating scale, and their fundamentals are also attractive for investors.
Magic Software Enterprises Ltd. MGIC Stock Fundamentals Broken Down
MGIC stock’s P/E (ttm) is 54.4, with a P/B of 2.94. They offer a 1.8% Trailing Dividend Yield, with a Payout Ratio of 57.9%.
Magic Software Enterprises Ltd. MGIC stock’s Market Cap is $718.4M, making them a small cap stock; with $87M in Total Cash (mrq) & a low Debt/Equity (ttm) of 15. Their small cap status is likely a major factor in why they have a 16% % Institutional Ownership.
Magic Software Enterprises Ltd. $MGIC Stock’s Technicals Broken Down
Magic Software Enterprises Ltd. $MGIC stock’s fundamentals are attractive, and their recent success has made their technicals also very attractive.
MGIC’s price of $14.68 is above its 10-Day Moving Average of 13.3, which is also above their 50-Day Moving Average of 11.72 and their 200-Day Moving Average of 10.12. While their RSI is 81 and considered overbought, recent dramatic movements to the upside are causing this, and it will settle down as more time passes and the stock establishes its range.
MGIC has a Technical Rating of 201.2, which is far superior to the Information Technology Sector average rating of 65.83 & the Software Industry average of 75.6.
This makes them look appealing for trades to both the upside & downside, based on where they establish their new range & how the overall market moves around them. While they’re a low beta small cap, they still will feel the pain of a NASDAQ correction.
Magic Software Enterprises Ltd. $MGIC Stock Fundamentals Vs. The Information Technology Sector
Magic Software Enterprises Ltd. stock’s fundamentals offer many advantages to their average information technology sector peer, despite their small cap status.
MGIC’s P/E (ttm) is 46% less than average for an Information Technology sector stock, with a 71.5% lower than average P/B, and a 52% less Beta.
One of their strongest advantages is their 98.9% lower Debt/Equity (ttm), which is especially important in times of market uncertainty, and their Technical Rating is 205.6% better than average for the sector.
Their Dividend Yield of 1.8% is 22.7% less than average, although their Payout Ratio of 57.9% is sustainable.
Due to small cap size, MGIC has a 95.6% smaller than average Market Cap, and a 93% lower than average Total Cash (mrq).
This leads to their 72% lower than average % Institutional Ownership, despite their many strong qualities listed above.
Magic Software Enterprises Ltd. $MGIC Stock Fundamentals Vs. The Software Industry
MGIC Stock offers many of the same advantages over their peers in the software industry. Their P/E (ttm) is 73% less than average, with an 82.6% less than average P/B compared to the average Software Industry stock.
Their Debt/Equity (ttm) is the most astounding advantage, 99.6% less than average.
While their Dividend Yield is 35% less than average, their sturdy Payout Ratio is almost 47% better than average for the software sector.
Their Technical Rating is 166% higher than average, which should appeal to most short-term traders.
As they’re a small cap stock, MGIC’s Market Cap is 95.6% lower than average for a software industry stock, and their Total Cash (mrq) is 93% less than average.
Their Dividend Yield is 35% lower than average, and their % Institutional Ownership is 73% less than average for the industry.
Magic Software Enterprises Ltd. MGIC Stock Performance Vs. The S&P 500 & NASDAQ Since IPO
Aside from the lower than average dividend yield, one thing that makes me question the long-term investment here is the fact that MGIC has not outperformed the S&P 500 or NASDAQ since it IPO’d on 8/30/1991. While this does not mean that it is not a suitable investment for the properly set up portfolio, it is certainly something an investor needs to be aware of.
MGIC stock has grown 376.11% since their IPO, 464.97% including dividends collected. While it is excellent, it makes me more interested from a long term perspective as used for minimizing risk to a software exposure position, knowing that you’ll collect a dividend & continue to see growth, with limited downside compared to the average peer’s stock.
The S&P 500 has since grown by 752.96%, excluding dividends.
The NASDAQ has grown 1,993.4% over that same time period, excluding dividends collected.
Tying It All Together
Overall, MGIC offers many advantages to a long-term investor and a trader.
Their performance and fundamentals offer a means of reducing risk while having exposure to technology & software, while also collecting some interest on a dividend.
From a trading perspective, their recent performance warrants a closer look, as when smaller stock have high performance days, more people become aware of them & tend to dive into the pile & join the party.
