Traders have been defensive lately. Capital has been rushing into commodity stocks amid high inflation, and companies like telecoms and utilities have been stronger performers rather than risk-on tech names.
However, in this market, even a tech company that’s posting unexpectedly strong growth can be a big winner here. And returns can be even better with shares knocked down so much from their highs.
One clear example is
CrowdStrike (CRWD). The security software provider seems like the perfect play for today’s digitized world and the ongoing geopolitical tensions.
With rumors about hacking being a component for 21st century warfare, it’s no surprise that the company posted better-than-expected results and increased guidance in its latest earnings report.
Yet shares are still trading around $200, down about one-third from their 52-week high set just a few months ago.
Action to take: Shares look attractive as a long-term buy here. Security software spending is likely to continue strong, no matter what the economy does. With revenue up 64 percent in the past year, it’s clear CrowdStrike is on a massive growth swing.
For traders, the July $250 calls, last going for about $6.50, look attractive here. The option offers mid-to-high double-digit upside from here in the next few months on a further rally in shares.
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.
