Made money last week. Big melt up Friday triggered calls, but I still have the original shares from two weeks ago. Well, I did, but I sold the ZS in after hours–I am thinking that, as Dreamer says, the pops have all faded and I look to buy the shares back in a week or two.
This week? I think I will bias towards the covered calls. Selling puts can be done but at lower than normal strike price differential after the Friday moves. Of course to October AFRM puts are still active but way out of the money. Could roll them out and up, I suppose. I’ll check the cupboard and see what’s there for covered calls. Not anxious to buy new shares just for the calls.
And the CPI…
as Dreamer says, the pops have all faded and I look to buy the shares back in a week or two.
Bert wrote about Nutanix in a SA article this week and seemed to touch on how individual stocks cannot sustain post earning stock price increase. Or at least I was able interpret it in those terms.
While the shares responded significantly in the wake of the earnings release, and wound up gaining 20% last week, the valuation of the company is still at exceptionally modest levels. The shares are still down by 29% since the start of the year, and down by 50% since the high they made at the end of August 2021. Needless to say, the combination of progress in terms of operational performance coupled with the share price implosion has brought the valuation to levels not seen heretofore.
So NTNX got a post earnings pop. Then he compares NTNX to ETF’s:
I last wrote about Nutanix shares and the company for SA more than 2 years ago. The shares have fallen by a bit more than 2.5% since the time of my last article, while the IGV software ETF is essentially unchanged over the same span, and the WCLD ETF has actually fallen about 18% over that period.
And then the money line:
If one thing is clear over the last several years of tracking tech stocks, it is that it is very difficult for valuations to escape their environment. It has been almost impossible since the decline in tech shares started last November for almost any tech shares to substantially outperform the ETFs in the space for any extended period, almost regardless of their operational performance. Investors haven’t been choosing to invest in individual names so much as in groups that they consider more or less risky.
He is talking about longer periods post earnings, but it may impact stocks in the 10 days after the earnings release.