TR PRO Ultra Growth and Ultra Income Portfolio Updates
Dear Subscriber,
While we let our short term hedges play out, we wanted to update our Ultra Income portfolio and SPACS.
PS--remember our 3X short the QQQ expires this Friday 7/31--we will set a trailing sell stop 10% after the open tomorrow on our managed accounts--and I promise to never add short positions on Friday anymore--the down Monday pattern is broken.
The QQQ and NASDAQ index have followed the 21-day exponential moving average since we called the bottom of the coronavirus meltdown on March 24. Futures are up slightly in after-hours trading--and if that 21-day MVA holds tomorrow we will be out of the QQQ trade.
We will give the SKYY put option more time to play out since it is August 21 but not surprisingly, the top digital platformity stocks mirror the QQQ since THEY are the largest value-creating enterprises on earth.
FMCI & FMCI Warrants
When Tattooed Chef announced second-quarter revenues growth of 96% year-over-year, investors cheered because their
y-o-y growth accelerated not only year-over=year but 1st quarter 2020 (95%) to the second quarter (96%). Turns out that Boomers and millennials who watch their carbohydrates VERY scrupulously like I do are fighting their "COVID-15 lb" weight gain with TC's great tasting low/no carbohydrate plant-based frozen dishes!
Note: I have already used my celebrity as the first equity research shop to rate TC/FMCI a strong buy to request they start making my favorite Cauliflower Risotto!
But this serious growth is coming from the big box stores including Costco and Walmart where they currently are in just 7% of their stores but adding quickly. They also produce (pardon the pun) private label plant-based frozen brands for grocery stores like Whole Foods and Sprouts. But the giant ramp of growth for TC is Walmart (now introducing Walmart+ which will be a major Amazon competitor in the $100k+ income households) and Costco. Both Costco/Walmart/Whole Foods now have one-day delivery and Walmart and Whole Foods is same day in many regions.
Buy Under $15: FMCI $14.50-$15 is the key support until the merger is complete & name change
5-year Target: We updated our model 5-year CAGR at 65% with $72 terminal value/target
Buy Under FMCIW Warrants--$3.30 is key support/21-day EMA is $3.75 --and dip under the 21-day MVA is a buying opportunity. Pre-merger, SPACs trade on investor sentiment which is stoked with news like 96% year-over-year sales growth that is slowly but sure accelerating as new big-box grocery stores expand their plant-based frozen food sections.
SPAQ Merger with Fisker Automotive-Update
What we know for sure about SPACS (with no exceptions--even NKLA) is that after the initial merger disclosure hoopla, when the news goes dry before the merger + PIPE financing ("private investment in public equity") closes, the volatility will be a rollercoaster within a 30-40% top and bottom range. The main idea in this period (if you just trading these SPACS) is to 1) buy the warrants on a dip on a news drought and 2) sell the warrants on the rips up that come with the splashy headlines. SEE FMCI warrants on the 96% y-over-y sales increase!
SPAQ is in the doldrums because the news flow post-VW production deal has gone cold so the pre-merger equity and warrants will trade in a range. I'm sure some of who are more the trading types "sold the rip" in SQAQ on July 13--good on ya!
SPAQ/Fisker Inc. Buy $13 or Better (near to $12 = better!) $42 target
SPAQ/WS Warrants: Buy Under $4 or Better (and close to $3.50 is better!)
Next Up: Charts and Buy Unders Targets TR Ultra Income Portfolio
Shauna just finished our new portfolio tracker--we will load up the Ultra Income portfolio tomorrow
Remember, the role of our Ultra Income portfolio is to capture 15-22% annual yields and 25%+ appreciation from the over punished energy transportation, preferred stocks, and mortgage REITS that were priced for bankruptcy. We still have 25-50% upside to this portfolio in addition to 20%+ yields that take our cost basis to ZERO in 5 years (or you double or triple the value of your Ultra INCOME portfolio by reinvesting the dividends in the highest yielding plays or ones that have cut their dividend 50% or more but WILL return to paying fully post-coronavirus.
Have a great night--we will be watching the fireworks in DC with Amazon, Facebook, Amazon, and Google!.