Headquartered in Hoffman Estates, Illinois, CDK Global, Inc. (CDK) provides integrated information technology and digital marketing/advertising solutions to the automotive retail industry worldwide. The company serves approximately 27,000 automotive manufacturers, retailers and original equipment manufacturers. CDK recently announced a comprehensive streamlining of its organization that will enable it to implement a major transformation plan.
CDK Global Inc. vs. the S&P 500 YTD
Six Top Investment Strategies Betting on CDK Global Inc. (CDK)
1. IPO Index
Strategy tracks a market-cap-weighted index of the 100 largest U.S. initial public offerings (IPOs) over the first 1,000 trading days of each stock. Stocks must pass additional quantitative screens as well.
2. Spin Offs
The company has spun away from its parent firm in the last four years. Spin offs have a solid history of outperforming the broader market.
3. Insider Buying
Corporate officers, directors and shareholders who own more than 5% of each company’s stock are accumulating shares.
4. Float Shrink
Companies that shrink their float while growing free cash flow and not increasing their leverage.
5. Hedge Fund Gurus
One of the top U.S.-listed equity positions reported on Form 13F by a select hedge fund with concentrated holdings.
6. Mid-Cap Dividend Aristocrats
A mid-cap company that has increased its dividends for at least 15 consecutive years.
Buy CDK Global, Inc. (CDK) at market today. Place your initial stop at $47.
With the stock technically overbought on the short term, I am holding off on recommending options this week.
There is lots to do on the option front this week.
Sell one half of your remaining STZ July $140 calls for a 114.37% gain.
Sell one half of your LOW July $75 calls for a 53.42% gain.
With some of your major blue-chip holdings pulling back over the past three weeks, several of them have become technically oversold and now are ripe for option recommendations.
Nicholas A. Vardy