Bottom Fishing For Value Returned 13.3% On Average
Ambarella’s (AMBA) rebound, ARM Holdings (ARMH) and Twitter (TWTR) bouncing back helped sustain the ROI for the bottom fishing for value strategy. Fears over ARM facing competition from other chip markets were unfounded. Twitter, Ambarella, and laggard Intel (INTC) all benefited from markets moving higher, but they have deep value. Twitter and Ambarella’s valuations are unfavorable for value investors at this time, but there’s hope for upside. The future income potential depends on strong management execution. Ambarella’s a pricey stock but it has a visible product line and plan through 2020.
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The dramatic rebound in stock markets that began in mid-February held up at the start of this month. This hurt the micro-cap value ideas strategy. In particular, Green Dot (GDOT), a $1.1 billion firm continued climbing higher after an analyst, Mark Palmer, set a $23 price target. Fourth quarter earnings and revenue beat estimates. In the biotech sector, markets i still like Inovio Pharmaceuticals (INO) due to its positive pre-clinical data for its vaccine drug for Zika virus.
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On a more favorable note, Advanced Micro Devices (AMD), is a speculative turnaround idea, which buyers found out after the company bundled its AMD 390 GPU with free games and continued to boost GPU performance for 4K games. Its long term goal is lowering its reliance on PC markets and selling more semi-custom chip solutions.
Investors took profit on mobile game maker Glu Mobile (GLUU). The development of a Taylor Swift game will succeed, but time is of the essence. Taylor Swift is hot right now, but the popularity for songs on the 1989 album will eventually fade.
Disclosure: None.
The two strategies are accessible here: www.tradingidea.com/ideas
You mentioned INO as an interesting choice because of the recent global Zika virus. It reminds me of the other global scare we had in the summer/fall of 2014 - Ebola. Canadian biopharma company Tekmira was one of those companies that made a vaccination against ebola and saw its stock skyrocket in the process. Question is can these companies remain profitable even after the virus has gone away? One of your other stock choices was Twitter which has been a rather volatile stock to own and one with a very questionable future. The stock is down almost 60% on the year but is up over 13% this past month-short term rebound, yes, but long term success story, the jury is still out?
Reminds me of countless times there is an outbreak then the stock goes up. How's Tekmira doing now?
"Tekmira changes its name and shuffles away from Ebola"
It now trades as "ABUS" The 52 week range is 2.7-21.3. Obviously was a great stock when there was news of a new outbreak! Earnings come out in a week, March 10. Problem with bottom fishing stocks is trying to catch the bottom, a bit like catching a falling knife.
I saw that. It fell consistently since the outbreak news. I suspect the same for INO.