Snap Inc (NYSE:SNAP) looks primed for a rally in our opinion. We originally picked this one last December 2019 near $6 a share. Obviously at $16 the company has performed very, very well.
This time around the story is a little different. Snapchat isn’t out of favor and hated, but rather in a nice growth and monetization phase.
Last quarter, Snapchat grew their Daily Active User base by 13% to 210M. They increased their revenue 50% year over year to $446M! Their cash flow also improved 43% year-over-year.
In other words, they hit a turning point. They are partnering with big name brands, monetizing their customers, all while growing their base.
I know, I know….you’re probably reading this saying, “nobody uses Snapchat anymore.”
And that’s because their user base is more of the younger generation, not those investors who are 18-100. If you have younger kids, you probably know what I’m talking about.
The company has a unique platform, growing user base…and most importantly hit a transition year to start monetizing and growing.
The biggest “if” I have right now is just market conditions. We are at all time highs and very overextended. So what I’m going to do is take a HALF position and then buy another have a bit later when and if the market dips.
The next big market moving event for SNAP will be their earnings call on February 4th, 2020 at 4:10 PM Eastern.
My Action: I bought 50 SNAP July 17 2020 $19 Calls at $1.63 with intentions to add another 50 on stock and market weakness.