Booking 65% Option Gains, Unveiling a Lower-Profile Tech Play and a New Option Recommendation

Technology has been one of the hottest areas in the U.S. stock market so far in 2017.

No wonder the Alpha Algorithm portfolio includes all but one of the leading FANG stocks that have come to dominate the U.S. tech sector. This week’s Alpha Algorithm recommendation expands that universe of tech stocks with a less-well-known semiconductor play.

Founded in 1978 and headquartered in Boise, Idaho, Micron Technology, Inc. (MU) is one of the leading worldwide providers of semiconductor memory solutions. The company’s memory solutions serve customers in computer and computer-peripheral manufacturing, consumer electronics, CAD/CAM, telecommunications, office automation, network and data processing and graphics display.

Micron Technology Inc. (MU) versus the S&P 500 over the last six months.

Eight Top Investment Strategies Betting on Micron Technology Inc. (MU)

1. Exponential Technologies

The stock is part of a strategy that invests in nine different fields deemed to be vast growth “exponential technologies”: big data and analytics, nanotechnology, medicine, networks, energy and environmental systems, robotics, 3-D printing, bioinformatics and financial services.

2. Large-Cap Momentum

The stock is part of a major hedge fund’s systematic strategy that invests in large- and mid-cap U.S. companies with positive momentum and that rank in the top third of total return over the prior 12 months, excluding the last month.

3. Goldman Sachs Hedge Fund Index

The stock is part of the Goldman Sachs Hedge Industry Index, which tracks an equal-weighted index of the 50 most frequently held U.S. companies selected from the portfolios of hedge funds.

4. Billionaire Bet

The stock is one of 30 U.S. companies tracked in an equal-weighted index selected from the portfolios of 10 asset managers with a personal net worth of at least $1 billion.

5. Insider Sentiment

It is one of 100 equally weighted U.S.-listed large- and mid-cap stocks chosen based on trading in company stock by corporate insiders, price momentum and trailing 12-month volatility. Specifically, this strategy looks at the increase in insider holding.

6. Large-Cap Alpha Growth

The company has been chosen as part of an alpha-seeking index that selects and weights growth stocks from the S&P 500 Growth Index. The proprietary methodology uses price appreciation — among more traditional factors — and weights the constituents based on their respective growth scores.

7. Pure Growth

The company is part of a strategy that selects companies from the S&P 500 Index, based on three growth factors: current internal growth rate, historical earnings per share (EPS) growth and historical sales/share growth.

8. Large-Cap Alpha Core

The stock is one of a tiered equal-weighted index of large-cap stocks selected from the S&P 500 and is expected to outperform the broader large-cap space based on an intricate methodology of ranking stocks according to their recent performance.

Recommendation

Buy Micron Technology Inc. (MU) at market today. Place your initial stop at $24.50.

Options

If you want to play the options, I recommend the MU July $29 calls (MU170721C00029000), which last traded at $1.89 and expire on July 21.

Portfolio Update

With your Visa (V) June $90.00 call options (V170616C00090000) up 65%, sell half of those options here. Hold on to the rest for now for potentially bigger gains ahead.

With your holding in The Priceline Group Inc. (PCLN) technically oversold, this is a good time to enter into an option position.

So today I am recommending that you buy the Priceline Group (PCLN) July $1,830 calls (PCLN170721C01830000), which last traded at $63.48 and expire on July 21.

Sincerely,

Nicholas A. Vardy