Updates on Rocket Lab, Small-Cap Names After Price Target Changes
Here is an update on three small-cap holdings after some significant changes.
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Here is an update for recent prices on a few holdings in TheStreet Pro's "Stocks Under $10" portfolio:
1. Owens & Minor (OMI)
On May 5, ahead of earnings later that week (that were mixed at best), I presented the following options-focused trade idea for OMI:
- Purchase one May 16 $8 call for about $0.70
- Sell one May 16 $8 put for roughly $0.65
- Purchase one May 16 $7 put for about $0.30
- Net Debit: $0.35
This trade did not work. Traders must be cognizant, though, that Friday is that expirations day. The stock is trading at $7.12 on Friday morning. The purchased $8 calls will likely expire worthless. The $8 puts will have to be repurchased by the trader unless the trader is cool with purchasing those shares at that strike price.
As of Thursday evening's close, those puts were worth a rough $0.90 to $0.95. Don't forget to cover that options position if you do not want to own the stock. That will have to be done at a small loss.
As for the purchased $7 puts, they'll be worth something, but I would not get out of those until very late in the trading day as that value may grow should the underlying shares sell-off on Friday afternoon.
2. Peloton Interactive (PTON)
I wrote to you on Peloton PTON back on May 8. The shares were testing their 50-day SMA at the time and I reminded readers that this was my "add level." Since that day, the stock has rallied and then sold off. On that day, I gave you this:
- Target Price: $8.25 reiteration
- Pivot: 200-day SMA (currently $6.70)
- Add: Right here at the 50-day SMA
- Panic: On a new post April 21 low
As of Friday morning, I have seen PTON trading close to $6.35. The 50-day line stands at $6.26. Just as a heads up, I will likely add again this day, given a chance to grab a few shares close to that level.
3. Rocket Lab USA (RKLB)
On May 12, which was this past Monday, I wrote to you concerning Rocket Lab USA RKLB, covering the firm's earnings release the week prior. Since then, the firm ran a mission out of southern Australia that exhibited Rocket Lab's re-entry capabilities, and the stock has done well. At the time, I gave you this:
- Target Price: $30 (up from $28)
- Pivot Point: $23.80 (April high) Add: Down to the 50-day SMA ($19.70)
- Panic: Loss of 200-day SMA ($17.20)
- $25.73
Since writing that piece less than four days ago, at Friday morning's early price of $25.73, RKLB is up 25.5%. Not bad for less than a week's work. During that time, the pivot, which was the April high, has been taken out and the stock is trading at its post-February highs.
I would not blame anyone for taking some profits going into the weekend after an intraday run like that. I will continue to hold out for my target, but I am up more than 182% in this name and I have the tolerance for risk. That said, I am also an investor in this stock. Someone who is more of a trader in this name and less of an investor, might want to give a long position a haircut.
At the time of publication, Guilfoyle was long PTON and RKLB equity.
