Booking Big Option Gains, a New Mid-Cap Stock and Three Option Plays

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

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.

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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.

Recommendation

Buy CDK Global, Inc. (CDK) at market today. Place your initial stop at $47.

Options

With the stock technically overbought on the short term, I am holding off on recommending options this week.

Portfolio Update

There is lots to do on the option front this week.

Exclusive  A Lithium Momentum Play and Booking a Pair of Triple-Digit-Percentage Option Gains

Sell

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.

Buy

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.

Sincerely,
Nicholas Vardy

Nicholas A. Vardy

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