This week I bought some options, mostly targeting Inverse S&P 500 & Inverse NASDAQ Index ETNs. This enables me to have a pessimistic view of markets in the near-to-mid term, without taking the risk of playing the Volatility ETN game with long positions.
$9 & $10 SPXS Call Options With A 10/16/2020 Expiration
I purchased some $9 & $10 call options that expire by the 16th of October this year. This enables me to sell SPXS for $9 & $10 based on each contract before that date, regardless of the price.
The best profits will be if it climbs above those levels, as the options are then “in-the-money”, and can be exercised at a discount to the current share price.
Given it’s recent performance & the current state of markets, I can see both price points going into the money within that time period. If they do, selling the options then will be great.
If not, I can sell them prior to that date, still profiting, while giving the rest of the risk from the current price to the $9 & $10 Strike Prices until the expiration date.
$10 SQQQ Call Options With a 6/5/2020 Expiration
Looking to add a little more short term risk, I also bought some $10 SQQQ call options that expire on 6/5/2020. The NASDAQ will likely lose steam the fastest of the indexes, given that it has benefitted the most from speculative long-positions since March.
Given the recent global situations between COVID-19 & civil unrest/uprisings, there should be enough issues plaguing the markets to put these options in the money, and at the bare minimum making them able to be flipped for a profit before the expiration at the end of the week.
Based on the existing plays I had going for SQQQ longs, this complements it well, and risks much less money with more to gain.
Seagate Technologies PLC trades under the ticker STX & is a Technology stock that closed for trading on 5/8/2020 at $51.06/share.
Seagate Technologies PLC. STX Stock Fundamentals Broken Down
STX’s P/E (ttm) is 7.6, with a P/B of 7.33. They offer an attractive Dividend Yield of 5.09% annually, with a supportive Payout Ratio of 53.13%.
They sport a $13.14B Market Cap, with $1.614B in Total Cash (mrq), $4.17B in Total Debt (mrq), & a Total Debt/Equity (ttm) of 222.95.
Their 1.22 Beta & 89.17% Institutional Ownership also make them worth taking an additional look for an investor or trader’s portfolio.
Seagate Technologies PLC STX Stock Fundamentals Vs. The Information Technology Sector
Despite a 28% higher price per share than the average information technology sector stock, STX offers many attractive fundamentals that investors & traders should explore.
STX’s P/E(ttm) is almost 90% less than the average IT stock, despite having a 7.8% higher P/B.
STX’s Dividend Yield is 105% more than the average Information Technology Stock, and while their Payout Ratio is higher than average, it is still at a safe enough level for sustainability.
STX has 43% more Total Cash (mrq) than the average Information Technology Stock, although their Debt/Equity (ttm) is very high at 575% more than the average.
Despite this, they offer a 52% higher level of Institutional Ownership than average.
Seagate Technologies PLC STX Stock Fundamentals Vs. Technology Hardware, Storage & Peripherals Industry Averages
Seagate Stock continues to offer great fundamentals when compared with the Technology Hardware, Storage & Peripherals Industry averages.
STX’s P/E (ttm) is ~77% less than average compared with the Technology Hardware, Storage & Peripherals Industry, and their Dividend Yield is 10% higher than average.
While they are much smaller in Market Cap than average, they still have a 67% higher % Institutional Ownership, showing that major investors find more strength among them than their peers.
Seagate Technologies PLC STX Stock Technicals
STX’s 10-Day Moving Average is 48.72, and their 50-Day Moving Average is 47.97, adding support to their $51.06 share price.
However, their 200-Day Moving Average is 53.26, providing some future downwards pressure on the stock’s price.
Their RSI is 56 when looking at a one year chart.
STX Has Outperformed The S&P 500 Since It Began Trading
STX has gained 326.62%, in addition to it’s Dividend Yield which over time brings the total gains for one share of STX from when it first began trading to ~406%.
In that same time, the S&P 500 has only grown 229.38%, excluding dividends.
Seagate Technologies STX Stock Has However Trailed The NASDAQ Index
STX’s 406% All-Time Gains are less than the 569%+ returns of the NASDAQ index (excluding dividends), but when looking at both charts it still looks like a strong portfolio candidate.
Moody’s rates STX a Baa3, viewing their debt as investment grade. With the impending troublesome times, this combined with their attractive dividend yield & low P/E will attract more & more investors’ attention as they flee to safety.
Tying It All Together
STX stock offers a lot of strong fundamentals that are attractive to investors & traders alike. Overall, they offer a unique place for your money, as they are a tech company that has decent fundamentals & yield, more like a value play.
I don’t currently hold any, although I may begin to consider buying some if it were to return to the $47-range, pending a further technical review at that point.
As I contend that there will be another NASDAQ correction coming up, buying shares at around $47 would offer a ~8% discount from the current price, with a 5% cushion for future fall via their dividend yield.
For longer-term focused investors this may not matter as much, but when I consider their Beta & then discount a market drop, this seems like a good buy-in level.
Regardless, it is certainly worth consideration for investors & traders alike upon further research!
*** I do not own shares of Seagate Technologies Plc, STX Stock***
This week I had a look at Weis Markets, Inc., which trades under the ticker $WMK.
Weis Markets, Inc WMK Stock Fundamentals
At the close of trading on 5/1/2020 it traded for $50.39/share, with a P/E (ttm) of 19.9 & a P/B of 1.28
WMK offers a 2.46% Dividend Yield for it’s investors, with a 44% Payout Ratio, making it able to continue to be competitive with other players who also raise their yields annually, and they provide some defense during market downturns & times of uncertainty.
Their -0.15 Beta means they don’t tend to move with the market, making them especially appealing in troubled times like we are entering.
With an Estimated Market Cap of $1.36B, WMK currently recently reported having Total Cash (mrq) of $149.344M, with Total Debt (mrq) of $218.77M, & a Debt/Equity (ttm) of 19.71.
Their % Institutional Ownership is 38.8%.
Weis Markets, Inc. WMK’s Stock Fundamentals Vs. The Consumer Staples Sector
WMK costs 16% more than the average consumer staples stock, however they do offer attractive value metrics compared to the sector averages.
WMK’s P/E (ttm) is 30.6% less than the sector average, and their P/B is 98% lower.
Their Dividend Yield is 34% less than the sector average, with an equal Payout Ratio. The Average Market Cap of the Consumer Staples sector is 91% larger than WMK, at $15.45B, leading to WMK having 80% less on hand than the average stock in the sector.
WMK’s Total Debt/Equity (ttm) is 57% better than the sector average, which when combined with their favorable value metrics & their ability to accumulate Total Cash better than competitors gives them an edge in a turbulent market.
WMK Stock Vs The Food & Staples Retailing Industry Averages
WMK also has similar advantages over the other stocks in it’s industry. It is a smaller player with a 93% smaller market cap than average, that has a more faily valued shareprice, and responsible debt compared to its peers.
WMK’s P/E (ttm) is almost 42% better than the Food & Staples Retailing Industry Average, and their P/B is 50% better.
Pair that with their 120% cooler Beta, and their 84.7% lower Total Debt/Equity (ttm) than average, and you’ll notice that this small company offers a lot of standout strengths vs. it’s peers.
Breaking Down Weis Markets, Inc.’s Technicals
Over the last year, WMK has traded relatively flat, until the COVID-19 virus impact stunned markets. This strength should continue while we remain in these uncertain times.
WMK’s current price of $50.39 is above its 10-Day M/A: 48.75, it’s 50-Day M/A: 41.44 & its 200-Day M/A: 39.31, with an RSI of 71.
This strength should continue to climb as investors seek yield from companies with lower levels of debt.
Weis Markets, Inc WMK’s Stock Growth Story
Weis Markets, Inc was under $5 when it first began trading in the 1980’s, and is now 10x that amount. They have also offered a stable dividend that has increased just about annually since 1985.
While the broader indexes are filled with faster growing names, this is still nothing to be ignored. Buying one share of their stock when it opened at ~$4.80 would’ve resulted in over $36 in dividend yield collection alone 35 years later.
It is difficult to compare WMK against the S&P 500 or the NASDAQ given the nature of their negative Beta, but one thing is for certain, consistent income via the dividend & growth.
Tying It All Together
All-in-all, WMK is worth further investigation. As a means of collecting yield from a safer stock, as well as having a negative Beta, it makes it more advantageous in a time where markets are in turmoil. There is always a need for groceries & food, and those businesses continue to operate throughout this pandemic.
Factor in the fact that it is a much smaller player than most of it’s competitors, and it appears even more defensive for times like these.
Right now the price is a little high as it just hit a new high last week, but if it looks to continue climbing it may be more appealing if it re-checks out the ~$48 range depending on how the charts look at that point.
As always, please do your own research & due diligence before making any decisions.
*** I Do Not Own Any Shares Of Weis Markets, Inc, WMK***
This week I took a look at United Guardian Inc., a micro-cap stock whose ticker is $UG. UG closed for trading on 4/24/20 at $14.70/share, with a Price/Earnings (ttm) of 14.1.
United Guardian Inc. UG’s Stock Fundamentals
UG’s P/B (ttm) is 6.35, and they offer an attractive 7.48% Dividend Yield. Their Beta is low, at 0.09, which is to be expected as their Market Cap is ~$67.53M, so they most likely move on their own news, with some sector momentum included.
An interesting observation I made here is that they have little-to-no debt, and while they only have $7.92M Total Cash (mrq), their higher-than-average Dividend Payout Ratio of 106% may have more options than other companies who face similarly high Payout Ratios.
They have 26.47% Institutional Ownership, which also makes sense given their small size does not enable larger investors to make as large of a profit based on their limited lot size.
Comparing United Guardian Inc. UG’s Stock With The Consumer Staples Sector
United Guardian Inc.’s Stock Fundamentals are very attractive when compared to the Consumer Staples Sector averages.
UG’s Price/Share is 66% less than the sector average, with a 49.8% lower P/E (ttm) & 92.6% lower P/B than the average for the sector.
Their Dividend Yield is 99.5% higher than the sector average, and although their Payout Ratio is 573% above average, it’s limited debt offer more flexibility in how they can approach fixing this should the problem persist long-term.
As a very small micro-cap stock, their Estimated Market Cap is 99.6% lower than average, and their Total Cash (mrq) is 98.9% lower than the averages.
As a result, UG’s stock % Institutional Ownership is 42% lower than the Consumer Staples Sector average, and their Beta is 87.5% lower than average.
United Guardian Inc. UG’s Stock Fundamentals Compared To The Personal Products Industry
United Guardian Inc. offers many advantageous fundamentals when compared to the Personal Products Industry averages.
Their Price/Share is 15.8% lower than average, with a 20.2% lower P/E (ttm) & 59.2% P/B.
An interesting stat I came across while looking at these numbers was that UG’s EPS Growth for last quarter is +138.46% Y-o-Y, while the rest of the sector declined 26.2%.
UG’s Dividend Yield is 7.94% higher than the Industry average, with their % Institutional Ownership 24.6% lower.
Much like when compared to their sector averages, UG’s Dividend Payout Ratio is 920% higher than the Personal Products Industry average, and their Market Cap is 99% less than average, with a 98% less than average Total Cash amount.
United Guardian Inc. UG’s Technicals & Chart
UG’s stock 10-Day Moving Average is 13.99, with their 50-Day MA at 14.70 & their 200-Day MA at 17.96.
While I’m not involved in the stock, it may become interesting once it gets between $12-12.50/share.
United Guardian Inc.’s Stock Growth Story
Since they became publicly traded on 3/17/1980, UG has grown by 163.77% including dividends collected, but not including the value of their three historic stock splits.
They do not explicitly outperform the S&P 500 or NASDAQ Indexes as they are a much smaller company than most, however, they do offer positive growth & a good return for a small sized position.
They also continue to return value to their shareholders by paying out their dividend twice per year.
Tying It All Together
UG’s stock offers a lot of interesting fundamental growth opportunities. When compared to their sector & industry they are below almost all of the averages that we examined.
Another excellent point that is becoming even more important in economic times like these is their low-level/lack of debt.
This is increasingly rare, and if they’re able to provide a 7%+ cushion via yield, they are strategically ready to weather more storms than most other companies.
As mentioned before, I am not in this name, but would consider building a position once they re-enter the $12-12.50/share range.
United Guardian Inc. Stock may be worth looking at pending additional research.
This week I had a look into Advanced Emissions Solutions Stock, which trades under the ticker $ADES. ADES is a micro-cap stock that offers strong fundamentals & an excellent, safe dividend yield. I conducted my research over the weekend on 4/20/20, when the price was at $6.66, and all numbers in this article are reflective of that date.
ADES Stock Offers Strong Fundamentals
ADES trades at a P/E (ttm) of 3.5 & a P/B of 1.13, with a Beta of 0.9. These are very attractive levels, especially when compared to the averages of their Sector, Industry & Sub-Industry (below).
Their lower than average Beta ensure less volatility, with steady growth coming mostly from company performance, given that it is a Micro-Cap with an Estimated Market Cap of $122.3M.
Given the market fallout from COVID-19, there has been a noticeable shift into stocks that have great fundamentals, good, sustainable dividends & low-levels of debt in comparisson to their cash levels.
ADES’s Total Cash (mrq) is $12.08M, with a Total Debt (mrq) of $49.56M & a Debt/Equity (ttm) of 45.76.
Despite their small size limiting the potential for larger investors, ADES still has a 68.82% Institutional Ownership.
Examining ADES’s Stock Dividend
One of their most appealing fundamentals is their generous 15.01% Dividend Yield, which is paid out quarterly. What is especially appealing about it is that their Payout Rate is 49.99%, showing that they should be able to maintain that high level of interest payments to holders of their stock. In turbulent times this is especially helpful, as it provides a performance cushion if you intend to hold it for the entire year.
How ADES Stock Compared To Other Materials Sector Stocks
ADES stock costs 51% less than the average Materials Sector stock, trading at an 85% lower Price-To-Earnings Ratio (ttm), and 56% less than their Price To Book Value.
Their Dividend Yield is 230%+ better than the average Materials Sector stock, with a 4.15% better Debt/Equity (ttm) Ratio & a 57% higher than average % Institutional Ownership, all very strong metrics.
Their Payout Ratio is higher than the average, but still is maintable, which shouldn’t worry investors, and as mentioned earlier, as they are a Micro-Cap stock their Market Cap is 96% less than average, as is their Total Cash.
How Advanced Emissions Solution Stock Compares To Other Chemical Industry Stocks
When compared to the Chemical Industry average metrics, ADES has a 80% lower price/share, with an 81% lower P/E (ttm), a 48% lower P/B, and a fantastic 193% higher Dividend Yield, paying out 37% higher than average.
Their Beta is 28% less than average, partially because they are 97% smaller by Market Cap than the average Chemical Industry stock.
Despite this, as their Debt/Equity is 37% partnered with the above advantages, they have 21% more Institutional Ownership than the average Chemicals industry stock.
ADES Stock Vs. Specialty Chemicals Sub-Industry Stock Fundamentals
ADES is also a much stronger player than the average Specialty Chemicals Sub-Industry stock. Price/Share is 86% less, with an 83% less P/E(ttm) & a 59% less P/B.
Their Dividend is 362% higher than the average Specialty Chemicals stock, with 14% higher Institutional Ownership & 59% better Debt/Equity (ttm).
Their 31% lower Beta makes these numbers especially appealing in these tough times for the market.
ADES Stock’s Historic Performance Vs. The S&P 500 & NASDAQ
ADES Stock has grown 56.41% since it first started trading on 1/23/04, and for 3 years (12 quarterly payouts) it has yielded a dividend of ~15%, totaling 101.5% in growth.
The S&P 500 has grown 150% over that same period, however when you compare the charts and consider the fundamentals & company type, there is a lot of opportunity to outperform.
The NASDAQ has grown 307% in that time.
Examining ADES Stock’s Technical Metrics & Chart
ADES’s 10-Day Moving Average is $6.42, with its 50-day Moving Average at $8.21 & it’s 200-Day Moving Average of $11.24.
This is weaker than the average across its Sector & Industries, which is why it is a good time to begin looking at an entry-point while it establishes it’s bottom in weakness.
Overall Assessment Of ADES
I like the fundamentals of ADES, especially when compared to it’s peers. While it’s technicals aren’t looking too great, neither are the rest of the markets’, and it appears that this is an opportunity to buy a fundamentally strong company at a great discount.
After finishing my research I placed a Buy order to fill at $6/share, which filled yesterday morning around 11:30 AM.
I plan to hold onto this for a while, as it’s 15%+ dividend yield is a great safety cushion given these volatile times if I hold onto it for the year.
Plus, a micro-cap name like this just needs a couple of big headlines to takeoff running, as typically these companies are lesser known to most traders/investors, which provides extra strength once they make the news for good reason and everyone comes piling in.
*** Please note that as mentioned above I have a long position in this stock, and always conduct your own due-diligence before marking investments & trades ***
