I've Imported Two Positions Into My Portfolio Amid the Tariff Volatility

Even with a big rally on Friday to close out the trading week, the Dow fell 3.1% last week. This was the worst weekly performance for the venerable market standard in two years. The S&P 500 briefly dipped into official correction territory on Thursday before the rebound on Friday. Nonetheless, both it and the Nasdaq still lost just over 2% on the week.

What can investors do now? After all, the current volatility we have seen over the past few weeks is likely to be with us for a while. The economy seems to be slowing, and tariff policies appear to be changing on a weekly basis. I am continuing to deploy some of my cash holdings into the market incrementally, taking advantage of the lower entry points the recent selloff has provided. I am deploying these funds via covered-call orders for the additional downside mitigation this simple option strategy provides. Specifically, I have two newer positions in my portfolio that I have either established or added to while the market was selling off again last week. Neither company should be hurt in any meaningful way by the unfolding tariff drama. Let's look at both:

First, last week I took an initial position in CareDx, Inc. CDNA. The company offers diagnostic products for transplant patients and has several products on the market. The stock is down 12% so far in 2025 and over a third from its recent highs this summer. The recent news flow around the company, however, has been positive. CareDx posted fourth-quarter results in late February that beat both top- and bottom-line expectations. The company in recent months has also seen several litigation issues being resolved to its benefit.

Revenues rose over 30% on a year-over-year basis during its most recently completed quarter. The company has become nicely profitable and is trading at the lower end of its price to sales ratio valuation in recent years. In addition, CareDx has a rock-solid balance sheet with over $250 million worth of cash and no debt. Finally, only approximately five percent of sales come from overseas.  CareDx should be more than insulated from the current tariff spats that are dominating financial headlines.

Second, I have had a small position in Fulgent Therapeutics FLGT for over a year. I have been profitably rolling the options around that covered-call position over that time. Last week, I added decently to this initial holding as the company appears to be turning a corner. The company both has an established laboratory services business and also offers several testing services. The company’s eventual vision is to become a one-stop shop for oncology diagnostics and testing.

Fulgent saw a huge surge of revenues during the Covid pandemic, which died off to almost nothing as the virus became endemic and faded from the daily headlines. The company managed to build up a huge cash hoard thanks to the pandemic. Cash and marketable securities on the balance sheet stood at nearly $830 million at the close of 2024. That is nearly $300 million more than the company’s current market cap. Fulgent carries no long-term debt. Revenues should grow around 10% annually over the next couple of years and while the company is posting losses, Fulgent did see positive operating cash flow in the fourth quarter. All in all, Fulgent is a good value play that seems to be on the right path and should see no or little impacts from tariff changes, much like CareDx.

At the time of publication, Jensen was long CDNA, FLGT