While the markets test new all-time highs and pull back, several companies have seen bigger jumps over the past few months. That includes a resurgence in meme stocks, some of which have seen triple-digit gains at times.
Some stocks have also jumped on meme-like news. With markets still in a bullish mood, it’s best to separate the strong performers from the hopefuls at current prices.
This week, trader Keith Gill of GameStop (GME) fame, disclosed a 6.6% stake in pet supply retailer Chewy (CHWY). The retailer has struggled in the past year, with shares down 30%.
However, earnings have been popping, up 193% in the last 12 months as revenues inched higher just 3%.
Chewy shares aren’t as shorted as GameStop has been, so this doesn’t look like a squeeze play. But the fundamentals suggest shares could see a higher return from here.
Action to take: Investors may want to use any down days to build a position here. Chewy has grown a significant presence online, yet only sports a market cap under $12 billion. Shares could be worth substantially more in the years ahead.
For traders, the September $30 calls, last trading for about $3.55, could see mid-double-digit returns or better. Traders can look to take quick profits, as shares may jump around in the coming weeks on any further news about potential investors.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any company mentioned in this article.