Cathie Wood of ARK Investments, a major holder in Palantir Technologies (PLTR), picked up more shares of the company after its earnings report last week. The total buys across a number of funds came to nearly $140 million, or 5.2 million shares.
That contrasts some modest sales made by ARK in late June. Overall, institutions like ARK Investments own just 25 percent of shares, and company insiders themselves own about 12.8 percent of company shares.
The data analytics company just reported that is revenue rose 49 percent year-over-year, and raised its full-year cash flow outlook to over $300 million from $150 million.
Shares are up 162 percent over the past year, since about the time shares first went public. While the company is still unprofitable, its rapid growth suggests potential profitability within the next year.
Action to take: Shares look attractive based on the company’s fundamentals, and trade at nearly a 50 percent discount to where they traded about six months ago when shares got caught up in a popular meme trade. Shares do not currently pay a dividend.
For traders, the company’s strong performance gave rise to a rally in shares. With institutional investors also buying in here, that trend is likely to continue. The January $28 calls, last going for about $2.25, could likely lead to high double-digit returns by expiration.
Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.