4 Big 2024 Profit Turnarounds With a Common Thread

Subscribers to Chart of the Week received this commentary on Sunday, March 10.

Here at Schaeffer’s, we pride ourselves on offering a vast book of subscription options covering every type of trader looking to invest in the market: long term, short term, neutral, directional, or a little bit of everything. In 2024, subscribers to several products have already raked in impressive gains, and within the last few weeks alone, some weekend plays are worth a closer look. Plus, we’ll dive into our monthly pick from our Option Advisor newsletter, which more than doubled investor’s money in less than two weeks.

Our Weekend Trader subscribers have enjoyed a particularly quick run of doubled profits, with both American Express (AXP) and Toast (TOST) pocketing +100% and +102%, respectively. The former turned in a surge of consecutive winning sessions following our call recommendation, while an unwinding of short interest from the latter guided the software giant higher.

Another weekend product that saw an impressive 2.5x return was Weekend Player. Denmark-based pharmaceutical giant Novo Nordisk (NVO) rewarded subscribers in less than two months, our June 105 call surpassing the $105 mark almost immediately upon entry, and then promptly marching up the charts. At the time of Senior Market Analyst Chris Prybal’s recommendation, NVO was sporting a two-year gain of 95% and six of the top 12 open interest (OI) positions were puts. Prybal also suggested a round of price-target hikes could be on the way. This came to fruition in droves, with the stock’s average 12-month price target now representing a 3.2% upside to current trading levels. On Wednesday, March 6, subscribers were told to close their position, as in gap situations like we had that morning on NVO, we take the volume weighted adjusted price (VWAP) over the first hour of trading. The closing level of this option is $32.29, which resulted in a +268% profit for Weekend Player subscribers.

Our monthly newsletter Option Advisor – the prodigal child of Schaeffer’s Research -- is also scoring wins for investors. At the time of our Palantir Technologies (PLTR) March 22 call recommendation on Friday, Feb. 23, a strong 2024 profit forecast had recently taken software name PLTR above its 2023 highs. Despite a recent pullback, the stock recently crossed above the $50 billion valuation, an additional layer of support to monitor that could help pad its 182% year-over-year lead. The shares also had an implied volatility (IV) that was lower than 83% of the readings from the past year, indicating premium was affordably priced.

Analysts remained skeptical despite this technical outperformance, with 11 of the 14 firms in coverage carrying a tepid "hold" or worse rating, while the 12-month consensus target price of $18.71 was a 20.7% discount to current levels. This left the door wide open for upgrades and/or price-target hikes. Plus, short interest had increased 13.2% in the last two reporting periods, and the 114.72 million shares sold short made up 6% of PLTR’s available float. In other words, the stock looked ripe for a short squeeze.

A news blast kickstarted the contrarian gap higher. On Wednesday, Palantir inked a $178.4 million deal with the U.S. Army for its Tactical Intelligence Targeting Access Node, or TITAN, project, to develop 10 artificial intelligence (AI)-powered ground stations. Upon our recommended close on the 6th, subscribers we able to walk away with a +100% profit, doubling their original investment in only a week and a half.

This is all to say, a common theme runs rampant throughout each of these big winners: everyday life through a contrarian lens. Be it software or technology services, medicinal focuses with weight loss or pharmaceutical concerns, or the use of a credit card to render all these services useful in the first place. In other words, casting a wide net with a contrarian angle, combined with the best picks from Schaeffer’s trading team, looks to be one of the best weapons to have in your Wall Street arsenal.