A number of high-growth opportunities exist today. Many look attractive for the long-term, but short-term tailwinds are preventing the market from moving the value meaningfully higher right now.
That’s especially true for any growth story that’s dependent on a resolution to supply chain issues, which appear to still be a source of frustration for short-term investors in hot growth areas. That’s especially true for anything related to the automotive sector, as numerous factories have seen shutdowns.
One company hurting in the short run is BlackBerry (BB). The cybersecurity play has seen its best returns in providing secure data for the automotive market.
The slowdown in that market has caused the company to just miss revenue estimates, which have now been flat over the past year. Even with that revenue miss, the company did manage to report a surprise profit.
Action to take: Shares are down about 20 percent over the past year, even with some periodic spikes higher as the stock sometimes trades with the “meme” plays of retail traders. If the company can just barely miss on estimates when the automotive industry is struggling, shares look set for a far bigger move higher in the coming months when production resumes.
Traders should consider the September $9 calls. Last trading for about $0.90, they’re an inexpensive bet that shares will move higher in the coming weeks following the stock’s post-earnings drop.
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.