This week’s Alpha Algorithm returns you to a tech “fallen angel” — a stock that had dropped out of favor, but has now returned to investors’ good graces.
With the stock resuming its upward momentum over the past three weeks, the Alpha Algorithm strategies are piling in, clearly expecting the stock to rally into the New Year.
The Priceline Group, Inc. (PCLN) provides online travel, restaurant reservation and related services. The company operates Booking.com, which provides online accommodation reservation services, and Priceline.com, which offers hotel, rental car and airline ticket reservation services, as well as vacation packages and cruises through its Name Your Own Price and Express Deals travel services.
The Priceline Group (PCLN) vs. the S&P 500 year to date.
Nine Top Investment Strategies Betting on The Priceline Group (PCLN)
1. High-Quality Stock
It is a U.S. stock that exhibits positive fundamentals, including high return on equity, stable year-over-year earnings growth and low financial leverage.
2. Momentum Model
The stock is among the top approximately 100 U.S.-listed companies to demonstrate powerful strength characteristics relative to the 3,000 largest U.S.-listed companies.
3. Large-Cap Momentum
The stock is part of a major hedge fund’s systematic strategy that invests in large- and mid-cap U.S. companies with positive momentum and that rank in the top third of total return over the prior 12 months, excluding the last month.
4. Large-Cap Growth
The stock is among the top 50 large-capitalization U.S. growth stocks generated through a rigorous 10-factor fundamental screening process.
5. Pure Growth
The company is part of a strategy that selects companies from the S&P 500 Index, based on three growth factors: current internal growth rate, historical earnings per share (EPS) growth and historical sales/share growth.
6. Hedge Fund Alpha
Based on publicly available disclosures, successful hedge fund managers are investing in the stock.
7. Goldman Sachs Hedge Fund Index
The stock is part of the Goldman Sachs Hedge Industry Index, which tracks an equal-weighted index of the 50 most-frequently held U.S. companies selected from the portfolios of hedge funds.
8. Capital Strength
The stock is part of a strategy that seeks to outperform the market by selecting companies based on the strength of their balance sheets, long-term debt ratios and return on assets (ROA).
9. Billionaire Bet
The stock is one of 30 U.S. companies tracked in an equal-weighted index selected from the portfolios of 10 asset managers with a personal net worth of at least $1 billion.
Buy The Priceline Group, Inc. (PCLN) at market today and set your stop at $1,805.
If you want to play the options, I recommend the PCLN January $1,940 calls (PCLN180119C01940000), which last traded at $97.70 and expire on Jan. 19.
Sell one-half of your ABBV January $92.50 calls, which you bought last week at $4.05, for a 55.56% gain.
Raise your stop in NVIDIA Corporation (NVDA) to $191.50 to lock in a 15% gain.
Raise your stop in Lam Research Corporation (LRCX) to $196.50 to lock in a 15% gain.
Raise your stop in Applied Materials, Inc. (AMAT) to $54.65 to lock in a 15% gain.
Raise your stop in United Health Group (UNH) to $199.95 to lock in a 10% gain.
Raise your stop in Bank of America (BAC) to $26 to lock in a 10% gain.
Nicholas A. Vardy