A Stable Growth-Stock Generating Massive Profits

Today we’re going to have a look at a very interesting company in the healthcare sector, specifically the space focusing on minimally invasive care with the use of medical robots.

One company operating in this space is Intuitive Surgical (Nasdaq: ISRG) that produces and sells so called ‘da Vinci’ and ‘Ion’ surgical robots with strong focus on Artificial Intelligence (AI).

A Stable Growth-Stock Generating Massive Profits 01

The use of surgical robots has steadily been increasing in the last decades as they allow for minimally invasive surgery which leads to fever complications, faster recoveries, shorter hospital stays and thereby lower costs for both hospitals and patients.

Now, why do we like Intuitive Surgical as a potential long-term investment? Here are a few key points that we think creates a strong case for continued and stable growth of the company:

  • The company has already more than 6000 da Vinci robots operating globally with 1.2+ million surgeries being performed annually using their machines which accounts for 79% of the robotic surgery market.
  • Annual revenue has climbed to more than $4 billion in the last decade which is a 148% increase.
  • It’s continuously introducing new robotic platforms such as the recent addition of the Ion platform which allows for minimally invasive lung surgeries.
  • Each robotic platforms continuously needs accessories and service which creates strong recurring revenue annually.

These key points alone should get most investors interest.

Now, on top of this, also add the fact the company is pushing heavily into the field of AI and being a market leader in the field the amount of data they will be able to collect for machine learning is massive, adding further value to potential investors in the stock/company.

Thus, not only does Intuitive Surgical have a very strong core business in place, if they play their cards right, there’s a lot of untapped potential available for the company which is why we think ISRG is a great potential candidate for any long-term portfolio.

Technical Analysis

A Stable Growth-Stock Generating Massive Profits 02

This stock has been a one-way-train pretty much since 2009 and current price action does not hint about any major pullbacks manifesting soon. Thus, investors looking to acquire this stock might have to settle for minor pullbacks in the strong long-term trend.

Looking at the weekly chart above, we do think that potential pullbacks towards the $875 and $825 support zone would be good opportunities to look for long-term entries in this stock.

Option Positioning

Currently there are about 28K calls and 25K puts, so a relative balance between the two. Option traders have about 12% of the gamma rolling off for the September Op-Ex, so not a gangster amount, thus no option expiry pressure at the moment.

The key gamma positioning is around $1,000, so we expect pullbacks here to be the first layer of support.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in ISRG. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

Is Apple Still A Buy At Current Levels?

As an investor, before taking on a long-term position, you should always ask yourself “Is there enough upside available or room for the company to grow?“.

After all, investing in a stock means that you’re looking to make money on a directional move, which can only happen if the company grows its market cap.

Is Apple Still A Buy At Current Levels 01

Now, looking at Apple, which has been in an uninterrupted bull run since early 2000’s, it’s easy to think that there is no more upside available at this point. If that’s you, I challenge you to reconsider. Why?

One word: 5G

Apple has a massive and super loyal crowd of customers. Despite raising their average selling price substantially in recent years, most customers choose to stay and gobble up any new product the company throws at them.

Recent quarterly results confirm this, showing a massive increase in iPhone revenue, at this point accounting for 48.5% of Apple’s total revenue (source: Apple).

Now, the next big transition in the cell phone industry is the move from 4G to 5G. It’s still in the early phases of growth, but Apple’s customers are known to be fans of the latest tech.

Thus, it’s very likely that the majority of customers are wanting to upgrade to 5G in the upcoming years, which means they’ll likely upgrade to a 5G compatible iPhone even if there are cheaper options available on the market.

Apple continuously raising prices on their flagship models over time doesn’t seem to scare away their loyal client base, so the shift towards 5G likely won’t be any different. That’s why we think the next round of sales for Apple is not only ‘secured’, but likely will continue to strengthen further in the years to come.

As a small ‘cherry on top’, in 2012, after 16 years of halting its original dividend, Apple started paying dividends again. It’s only a meager 0.6%, but better than nothing.

In conclusion, despite Apple trading at all-time highs, we do think the company and stock have more to give and thus rate it a solid buy and investment opportunity long-term.

Technical Analysis

Is Apple Still A Buy At Current Levels 02After holding for almost a year, the key resistance between $135.50 to $139 ultimately folded to the bullish pressure after a successful breakout in June this year.

Since then, bulls have been able to hold price above this key resistance zone, which now should act as support on pullbacks, which in our opinion is a good area to look for entry locations.

Option Positioning

Currently there are 4.7M calls and 3.6M puts with about 29% of those options expiring this Friday. We feel this should put some mild pressure on AAPL hence would like to buy closer to $140.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in AAPL, but he does have pending orders on AAPL. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

Is This Company The Next PayPal?

Wise (LSE: WISE), formerly known as TransferWise, offers a global money-transfer service with an aggressive marketing strategy which reminds us of how PayPal started off 20 years ago.

Not only does the company offer customers the ability to send and receive funds globally whilst charging a fraction of what banks or other transfer services do, they also offer clients to hold funds in 50 different currencies.

Is This Company The Next PayPal 01

 

On top of that, WISE has partnered with banks and is now offering their clients a VISA debit card that can be used to make purchases with the funds held in the digital wallet.

This is a strong combination which should ensure a strong influx of clients, plus it hints about that the company will continue to add more services along the way, strengthening the growth potential of the company.

WISE also has a very transparent pricing model and like most money-transferring services, they earn their revenue through fees, so attracting more clients is crucial for future growth.

Financials also look solid with a 70% revenue growth between 2019-2020 and 39% between 2020-2021.

With the company continuing to aggressively push into new geographic regions, we think that WISE could be a very interesting candidate for investors looking for growth stocks that are ‘still in the making’.

Technical Analysis

 

Is This Company The Next PayPal 02

Since the company IPO’ed in late July, there is not a lot of price action available, but the price action that is available suggests bullish pressure is steadily building towards a 1000-1050.

A successful breakout above 1050 would further strengthen the bullish context and could offer investors a clear zone to look for entry locations.

Option Positioning

Since WISE is transacted through the LSE (London Stock Exchange) we do not have any options data on this stock, hence nothing to report.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in WISE, but he does have pending orders on WISE. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

Is It Time To Invest In This Cyber-Security Company?

With many stocks trading at all-time highs at massive valuations, it can be hard to find stocks that are trading at decent values with promising fundamentals. But Splunk (Nasdaq: SPLK) is such a stock which is trading at <8x next year’s revenue.

In the early days, Splunk’s primary focus was on data analytics & machine data, collecting data within organizations, giving enterprises added insight into security and operations which they primarily used to flag security anomalies within corporate systems.

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However, the company is now increasingly focused on moving towards cloud-computing. With the demand for cyber security demand increasing exponentially globally, there’s a lot of market shares for the company to grab going forward.

The recent earnings report already shows that Splunk’s transition is working well for them, with their cloud ARR revenue in Q4 being up 83% year-over-year.

Also, Splunk has a usage-based pricing model which means that the price increases proportionally to the customer’s usage of their products. As data globally continues to explode with more and more companies realizing the power and insight data can yield, Splunk is very well positioned to take advantage of this in the upcoming years.

It also seems investors feel confident about the company’s direction with Silver Lake recently announcing a $1 billion investment in the company via convertible notes. Based on all this, if you are looking for long-term investment opportunities, we think Splunk is worth keeping on your radar.

Technical Analysis

 

 

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The stock underperformed last year and even this year it’s down -14.8%. But recent price action is suggesting that the tide might be turning as the order flow clearly has shifted from bearish to bullish mid-term with price currently trading correctively above a key support zone.

Based on this price action, we think that weak pullbacks towards $131-$135 can offer good opportunities to initialize bullish positions in Splunk.

Option Positioning

Currently there are about 175K calls and 92K puts, so the market is call heavy with a put:call ratio of .52. There are a fair number of options expiring this Friday (~38%) so we expect a little bit of a pullback this week. Option positioning supports looking for long opportunities around the $130-$140 price range.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in SPLK. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

This Real Estate Company Refuses To Let The Pandemic Stop Its Growth

The ongoing pandemic has put a lot of pressure on REITs (Real Estate Investment Trusts) as many tenants were not able to pay their rent. However, this is not the case for VICI (NYSE: VICI) which during the pandemic was able to collect 100% of its rents on time.

In case you don’t know, REITs are companies that own or finance income-producing real estate across a range of property sectors. VICI Properties is such a company and focuses primarily on gaming and resort real estates. Now, with that being clarified, let’s get back to VICI.

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Not only has VICI been able to withstand the pandemic, but the company also managed to continue generate growth via strategic investments, which is quite impressive considering the circumstances.

We won’t be able to go through every detail as to why VICI’s business model is superior to others in the space, but here are a few key points that should make it clear why you as an investor should monitor this stock and company closely and do your own due diligence.

  • The company owns premiere one-of-a-kind properties such as the Caesars Palace and Venetian Resort in Las Vegas with top-tier tenants. These properties are famous and cannot be easily replaced and their tenants are in a strong position and face little competition.
  • VICI recently announced the acquisition of MGM Growth Properties adding even more premiere properties to their portfolio.
  • On top of the rent that tenants are paying to VICI, they must also cover expenses such as maintenance and insurance which is a very clever move by VICI to reduce costs and risk.
  • Built-in annual rent increase ensures that VICI has less exposure in terms of inflation.

If all of this has not convinced you yet, VICI also pays a juicy 4.83% dividend.

Now, in contrast, the major risks we see for VICI are obviously the growing exposure towards the Las Vegas strip in combination with a potential re-surge of the Covid-19 Delta variant. However, Las Vegas is Las Vegas, and things have to become really bad for people to stop gambling.

Based on all this, we do feel that VICI has one of the strongest business models in the REIT space and has a very reliable and strong business model.

Technical Analysis

 

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The price action is currently pulling back correctively after topping out at around $33 in June this year. Whilst $29.50 looks like a decent support area that can offer short-term swing trading opportunities, our analysis predicts a potential deeper pullback as there is a larger reversal pattern at play.

In case we do get a bearish continuation that takes this stock -10% lower, our preferred buying location would be the key support zone around $26.50-$27.00.

Option Positioning

While the options universe for VICI is small at around 35K options, 26K are calls and 4.5K puts, so call/long heavy. There are a lot of options expiring this Friday, so may see a pullback, but we feel support is coming in below.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in VICI, but he does have pending orders in VICI. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

Is It Time To Buy This Chinese Tech Giant?

Owning the country’s largest search engine, the Chinese tech giant Baidu (Nasdaq: BIDU) put in a massive +166% bull run between November and February. However, despite posting Q1 numbers that exceeded analysts´ expectations, Baidu is currently trading -53% below it’s all-time highs from February.

Why is that? Well, the primary reason for this is the regulatory clampdown by China’s State Administration for Market Regulations trying to curb internet monopolies, which has hit Chinese tech company stocks hard across the board.

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Whilst Baidu is mostly known to be the ‘Google’ of China, its search engine business has started to lose market shares and many analysts claim this will continue. That’s one reason the company is heavily pushing into the AI space which is to be expected to be the main focus and growth factor for Baidu going forward.

Overall, the fundamentals of the business are still sound with a net income of $3.2 billion in 2020. This, in combination with the fact that Baidu already is the AI leader in China by a wide margin and continues to push further into this field, makes it an interesting potential long-term investment opportunity that’s worth keeping on your radar.

Based on these two facts alone, it might be tempting to jump the gun, wanting to buy the stock at current levels. But for now, we simply do not know if there will be more repercussions because of regulations imposed by the Chinese government, which can further increase the bearish pressure on the stock. Therefore, we do think it’s best to stand aside until the full impacts become clearer.

Technical Analysis

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Following the strong bull run, price reversed sharply, creating a false break setup at a wide multi-year resistance zone. When you see strong false breaks like this, at the extremes of a larger range, followed by strong follow through into the direction of the false break, it’s very common for price to reverse all the way and re-test the opposite side of that range.

Looking at the monthly chart above, price action has been selling off 4 out of the last 5 months, clearly communicating that the order flow is heavily skewed towards the sell side. Based on this price action, unless we do see a sign of transition in the order flow, which currently isn’t the case, we do expect further downside in the next couple of months.

There is a minor area of support coming in at $146, but should price make it all the way down to the multi-year support zone between $81-$99 we do think that would be an ideal price range to start acquiring stocks of Baidu at a discount.

Option Positioning

Currently there are about 390K calls and 365K puts but the majority of the option trades aren’t expiring till September this year, so no short dated pressure on the stock up or down. We still look for overhead resistance around $175-180 hence will wait for lower levels.

In conclusion

We do not recommend buying the stock at current levels for the above-mentioned reasons unless price action clearly shows a strong transition from bearish to bullish. However, if price continues to sell off all the way to the bottom of the multi-year range, we do think Baidu is a good buy between $81-$99.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in BIDU. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

The Tide Might Be Turning For This Stock

The timing of the Coinbase (Nasdaq: COIN) IPO couldn’t have been worse, as that period marked the turning point for most cryptos, which ‘topped out’ and sold off heavily, dragging the stock of the leading crypto-trading exchange with it. In some sense, the IPO was more a direct listing, which is really just a way for executives to cash out.

However, the position that Coinbase holds should not be underestimated. The market leading exchange for crypto currencies now has 56 million verified users, and is operating in more than 100 countries with a quarterly volume traded of $335 billion.

It’s no surprise that the stock price will be affected by strong trends in the pricing of crypto currencies. But it’s important to remember that the company’s revenue comes from trading fees and crypto traders which tend to be very active.

Thus, high volatility in the crypto market, which it is well-know for, translates into increased trading activity and fees paid by traders adjusting their positions.

Just looking at the growth of verified users and growth of net revenue alone should spark your interest in this stock.

The company saw verified users increase by 64% in Q1 on a YoY basis and net revenue exploded by a massive 792.18% in Q1 compared to Q1 2020!

(Source: Coinbase)

It’s no wonder that most analysts remain heavily bullish on Coinbase with 15 buy recommendations, 4 hold and only 1 sell, with an average price target of $360 (source: WSJ Markets).

Whilst it is true that the company is and will be heavily affected by the future of the crypto market itself, which has proven to be a very volatile journey, we think that the recent financial report speaks for itself, making Coinbase an attractive growth stock for investors looking for above-average returns.

Technical Analysis

After dropping by 50% post-IPO, the stock stabilized in a range between $208-$260, a range which price now has broken out of to the upside following the recent bullish order flow in the crypto space.

We think that the broken resistance zone and top of this previous range between $250-$260 provides an attractive area for bulls looking to long this stock, whilst the all-time-lows between $208-$216 undeniably would be an even more attractive location.

Option Positioning

Currently there are about 200K calls and 150K puts with 15% of the options rolling off this August op-ex. There is a fair amount of options positioned around 250 with it being one of the top gamma strikes out there. Hence this aligns with the recent zone the stock broke out of for at least a partial long and having more size below in our lower price range.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in COIN. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

A Fintech Stock That Should Be On Your Radar

Square (NYSE: SQ) is growing at lightning speed and shows little to no signs of slowing down.

The company started out solving a problem in 2009 by introducing a mobile card reader, allowing merchants to use their smartphone to accept payments, which turned into a massive success.

The business has since expanded into other segments such as e-commerce solutions helping merchants to create online stores. The application has seen strong adoption since launch and is used by nearly 4.5 million customers today, three times as much compared to 1 year ago.

On August 2nd, Square also announced that they’ll acquire the Australian company Afterpay for $29 billion, a monster deal that allows Square to expand into the increasingly popular buy-now pay-later space.

Financially, the company has been delivering impressive results in recent years as well with a Q2 YoY growth of 91% and a net income of $204M.

 

(source: Square)

Overall, we think that Square, with its fast-growing ecosystem of payment solutions is well-positioned to continue to grab market shares globally, making it a very attractive growth stock in the fintech sector.

Technical Analysis

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Price is currently trading inside a larger range between $191 and $283 and the recent earnings announcement has pushed price to the top of this range which also is the stock’s all-time-high.

However, the buying overall looks slower, and more corrective compared to previous bullish moves from the bottom of the range. This makes us believe that there’s a good probability of another move lower and re-test of the key support zone between $191-$201, which in our opinion would be a good location for longs.

Option Positioning

Currently there are about 450K calls and 500K puts, so relatively balanced with some extra puts, but we suspect some of those are cash secured puts to take advantage of the premium. Option traders are well positioning for support to come in around $240-260, so the lower end of that range becomes an interesting location to buy.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in SQ, but he does have a pending limit order to buy. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

Should You Buy Shares In This Highly Profitable Company?

Decades ago most PCs had an “Intel Inside” sticker on them, but AMD (Nasdaq: AMD) was there too. Growing past its underdog status, AMD has grown to become a force to be reckoned with in the global computing hardware market.

For example, per UL industry standards, the AMD Ryzen 9 5950X is considered to be the #1 desktop processor.

Short-term, AMD has benefited from the semiconductor-shortage but compared to its competitors such as Nvidia or Qualcomm, it has a more diversified product portfolio.

The company itself states that its goal is to “Build a best-in-class growth company” and the recent financial results confirm they are living up to this statement.

Q2 saw a massive +99% revenue increase y/y and the positive trend looks promising.

(source: AMD Financial Results)

AMD already is a highly profitable company, and on top of that, there are still potential positive catalysts in the pipeline that could boost the stock price even further.

One example being the deal with Samsung announced back in 2019, indicating that AMD is about to make a major move into the massive cell phone market.

Another one is the launch of their next-generation Zen 4 chip to be released in 2022 which is rumored to increase instructions per cycle (IPC) by over 25% which would make it one of the smallest and highest performing chips available.

Technical Analysis

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After breaking out of a multi-year-range back in 2016, the share price of AMD has soared by an astonishing 1000% in the last 5 years.

Following the Q2 earnings report, price broke out to new all-time highs on strong volume.

With the price action suggesting very little to no downside at the moment, stock investors looking to acquire shares of AMD likely will have to be content with buying on smaller pullbacks.

Based on all the above, we think that investors looking to boost the tech-part of their long-term portfolio should take a closer look at AMD. Pullbacks towards the broken resistance zone between $94-$99, which now should act as support, looks like a good area to start building a long-term position in our opinion.

Option Positioning

Currently there are a robust 1.6M calls and 1.4M puts in the market with 23% of those options rolling off this Friday. Those options traders are likely taking advantage of the recent breakout and should be monetized before Friday. This will likely create a pullback and potential buying opportunity, so stay tuned for updates.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in AMD, but he does have a pending limit order to buy. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.

A ‘No-Brainer’ Investment for Dividend Hungry Investors

In today’s low-interest rate environment, stable investments with good returns are hard to find. Despite months of rising yields, the 10-year treasury (US10Y) is returning a meager 1.28%. This is well below the 2% targeted inflation rate by the FED. This means that after adjusting for inflation, investors are almost guaranteed to lose money.

This leaves them looking for yields in lesser-traveled market areas, such as mortgage REITs.

REIT investments

Mortgage REITs are companies that borrow money cheap at short-term rates and then invest that money into higher-yielding long-term assets. This means that in normal economic times these companies pretty much can ‘print money’. Today’s market environment with a steep yield curve and long-term rates being higher than short-term rates, is the ideal environment for these companies.

One company that we think stands out among those survivors is AGNC Investment (Nasdaq: AGNC) with a current market value of $8.6 billion and a whooping dividend yield of 9.07%.

Now, if you spell out ‘AGNC’ loud, what does it sound like? It sounds like ‘Agency’ and there’s a reason for that.

AGNC is primarily focused on agency mortgage-backed securities, making it one of the safer plays in this space. This is because in the event of a default, these securities are backed by the federal government. This extra protection allows AGNC to take on more risk and leverage compared to their competitors, and thus increase profitability and return for investors.

Technical Analysis

AGNC stock chart 2ndskies

As mentioned above, AGNC also took a massive hit during the pandemic. They quickly recovered on strong volume from the lows at $6.30 to roughly $13 the week thereafter.

Following the strong recovery, price formed a pre-breakout structure, which was followed by a successful breakout higher.

Since early June, sellers have been in control. Based on the short-term price action, it looks like as if there’s potentially more downside to come.

We think that for this stock, the support zone coming in at around $14.25 – $14.75 would be an ideal location for investors to look for potential entries.

Not only do we think that this is a good price range to start building a long-term position in AGNC, but the well-defined support zone also makes it a lot easier to define risk.

Option Positioning

Currently there are about 229K calls and 181K puts in the option market. Option positioning on the put side gets thin around $15/$14. So we think there is little downside option fuel to go below our $14 support zone.

FULL DISCLOSURE: Chris Capre currently has no stock or option position in AGNC. If you’d like to learn more about Chris’s trades and positions, you can get access via the Trading Masterclass where he shares his live trades, further investment ideas and daily market analysis.