Rocky’s Weekly Stock Picks
What a week for RIOT! The price jump to the low $40’s may well be here to stay. Especially if the United States passes out more stimulus checks. At this time we’re not actually clear as to whether that would be from funds that are already allocated, or if it’s entirely new spending. In either situation it’s a bad idea for the value of the dollar.
We’re impulsive enough as it is without putting a lot of stock (ha!) into the news and other goings-on. We’re also not making a great deal of intra-day trades. We like to capitalize on opportunities as they arise, while looking forward at what our long-term results will likely be.
Alright, let’s get into it.
ACVF - At $35.16, we might do well to sell our shares. The dividend certainly isn’t a reason to hold. However, we’re going to keep buying up until $40-45, depending on how fast that price comes up. At that point we would recommend a hard “Sell”, unless you are like us and intend to hold for the long term.
Why hold when the dividend is meh? The best reason is that we are almost 100% aligned with the fund’s driving ideology. That is, conservative values. It’s important that you are happy with where your money goes.
While you miss out on some of the largest S&P 500 stocks, you also avoid the inevitable downside that is to come. Not entirely, but you won’t see a price dip as far as some of the other funds tend to during a “correction”.
Also, the dividend will likely increase as time goes on. This isn’t a guarantee, but it pretty much has to happen.LTC - If you’ve followed our picks for even a short time, you’re well aware of our love for REIT’s. At $34.15 a share you’re getting a 6.6% annual return, paid monthly. This might be most or even all of our investment budget for some of us, but we have a couple days to decide. Ex-div is 11/18.
ORC - $4.92/share, this REIT delivers a whopping 15.85% annualized return, delivered over 12 months. You can even write monthly covered calls for a few extra dollars. The price is pretty static, but $5 is $5….probably more like $3 after taxes/commission.
Why is this not our only REIT recommendation, or one that we push every week? While the nearly 16% return is nothing to sneeze at, it’s also a glaring statistical risk. As is the $5 share price. Also possibly the business itself, depending on your feelings towards Florida real estate. It would be irresponsible to pretend these aren’t significant considerations.
We still buy this security on a regular basis, though. It’s certainly not the biggest risk we take, especially when we hedge our bets with preferred stocks paying 7-9%.PHUN - $4.02 a share, this is some software company in Texas. They do things with stuff, idk, can’t remember if it’s fintech or AI or both. Business solutions for electronic payments and digital engagement? Honestly, it’s not worth caring about what cookie cutter Big Brother contribution they’re making to society.
This is because it’s cheap, trades options weekly, and most importantly has had decent volatility for a few weeks now. Even if it slows down, $4 is a nice price point for cash secured puts and credit spreads. We won’t share our specific strategy, for responsibility reasons.(It isn’t a strategy, we’re just throwing out orders for a bunch of spreads with varying expirations and setting orders to close at 50% gain). Don’t throw darts, decide your max risk before opening positions. Also, try to under-bid the bid and over-ask the ask.
UEC - This corporation an energy company involved in uranium. Uranium Energy Corp. They also just acquired some other significant company, which might have contributed to the rise in price. Currently at $5.45 a share, up from an average(-ish) of $3.50. We’re planning on a rise to about $7 sooner than later. Soon™.
Options trade monthly, but are pretty appealing. CSP at $6.00 for 10% return (or just the shares). Or get sneaky and try to get the $0.50 call calendar spread at a $10 cost, with profitability from $0.50 to $13.50 share price.I’m no expert, but the odds of catching that kind of deal on market open (the only way you’ll catch it at all) are not in our favor. You won’t go wrong buying the shares outright and selling calls on them, that you can count on.
