Rocky’s Weekly Stock Picks

This week we’re sort of locked into some of our positions. Our view is that this is neither good nor bad, it just is. Bad would be losing money, shares, or both. Good would be WKHS not being under $7. RIOT is down to the $27 or so range, and SYY is back up into the mid $70’s where it belongs. PROG has found its way down to $2.50, but premiums on weekly options remain reasonable.

Actually, we’re not really locked into anything. Other than we wanted to sell off our Progenity shares…but we’re okay apparently with holding on to them for a while. Implied volatility is pretty much what we’re looking for in penny stocks.

1. ARR - Ex-div on Tuesday. $11. share $.10 per share monthly dividend. Something like that. We’re fans. In fact, let’s go ahead and check the actual values.
   $10.06 share price, $.10 per share monthly dividend. We should probably check and make sure REIT payouts are indeed dividends and not some other classification. Not today, though.
   

2. QFIN - $23.07/share, ex-div 12/14. $0.28 dividend. This company does something vaguely associated with financial institutions. This is its first dividend. Based on our assessment, this looks like a pretty risky maneuver. That same metric suggests we buy shares.
   
   We’re only rolling one die on this speculative purchase.
   

3. NEWT - $30.88, quarterly dividends, 11.75% annually. We really enjoy this stock. It’s not just a warm safety blanket, it’s also washed with premium detergent and softener.
   

4. BLU - $5.60 a share, potential for a 22% covered call deep ITM. If you’re thinking of a LEAP, you might be disappointed. The furthest out options are July, 2022. That’s not to say that calendar calls aren’t something we can look at.
   
   We buy the Jan 2022 $2.50 call for $3.40. We sell the December 17th $5.00 call for $1.60.
   
   One of two things is going to happen here. We now have a long call deep ITM and our $340 cost-basis is reduced to $180. We most likely then will write the $5 call for January. Or we could sell our long call for something like $330, for $150 profit.
   
   The other scenario is we get assigned at expiration, and then we have paid $5.90 and collected $6.60. We profit $70.
   

   For the price of a covered call, you can get 3 calendar spreads. Or just do the one play and cut your potential loss significantly. Which there is very little potential for.
   

5. HRZN - $16.43, $0.10 monthly dividend. Why would we pay more for this than for ARR? Diversity.
   
   Horizon is a financial tech company. They aren’t leasing apartments. The odds of both of them being interrupted before they can ROI is pretty darn small.