The only constant in life is change. Even great companies that have consistently rewarded shareholders for years come up with new products or find ways to improve profitability for the work that they do.
That’s especially true for companies that are making the switch to the latest digital trends. While the Internet has now been around for a generation, its use is still growing as more join online networks and conduct tasks there that used to only take place in the real world.
For example, banking is still largely done with older technologies, with online banking still susceptible to the same processing time as writing and cashing a physical check. Some banks are working to speed that up. One such bank is Silvergate Capital (SI).
The bank has been developing a number of projects to increase banking and cryptocurrencies. In the latest bear market for cryptos, shares have been hit hard. Yet even after poor earnings, the company is on track to complete its projects in time. That could lead to a big move higher as the company goes on a growth path.
Action to take: Shares look cheap at less than 7 times forward earnings, down from 54 times last year. While shares don’t pay a dividend, the bank could see a five-fold gain on a return to last year’s highs in time, likely during the next crypto bull market.
For traders, the January 2024 $100 calls, last going for about $7.80, could offer triple-digit returns on a big rally in shares in the next 14+ months.
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 of the companies mentioned in this article.