Booking Gains of 56.25% and 110% and Betting on Cybersecurity

Nicholas Vardy

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

The results were mixed for global stock markets over the past holiday-shortened week. The Dow Jones and S&P 500 inched up 0.10% and 0.20%, respectively.  Meanwhile, the NASDAQ jumped 1.67% and MCSI Emerging Markets Index fell 2.21%.

Your Bull Market Alert, however, had a rip-roaring week.

Big gainers in your Bull Market Alert portfolio included the ProShares Ultra Nasdaq Biotechnology ETF (BIB), which jumped 7.03%; The Bank of Ireland (IRE), which gained 6.94%; Norwegian Cruise Line Holdings (NCLH), which rose 4.92%; Euronet Worldwide (EEFT), which added 4.29%; and PowerShares DB Commodity Tracking ETF (DBC), which dropped significantly to add another 6.07% to your short position last week.

Several positions hit new 52-week highs. These include ProShares Ultra Nasdaq Biotechnology ETF (BIB), WisdomTree Japan Hedged Equity ETF (DXJ), Euronet Worldwide (EEFT) and Norwegian Cruise Line Holdings (NCLH). The PowerShares DB Commodity Tracking ETF (DBC) dipped to a new 52-week low to generate big gains in your portfolio.

With your EEFT February $55 call options (EEFT150220C00055000up 55%, sell half of your options here to lock in big gains.

With your DBC January $23 put options (DBC150117P00023000up 110%, sell all of your remaining DBC options here to lock in these triple-digit percentage gains.

This week’s Bull Market Alert recommendation is LifeLock Inc. (LOCK), the sole provider of Internet-based identity insurance.

Here’s what LifeLock does:

If someone steals your Social Security number and uses it to purchase a house, normally you’d be responsible for that mortgage, unless and until you could prove fraud. LifeLock will make sure you aren’t responsible for the charges or purchases. LifeLock will even cover you for up to $1 million worth of damages.

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Here’s why I expect LifeLock (LOCK) to soar in the coming weeks.

First, identity theft is rampant. Target lost about 40 million credit card numbers. Last month, Home Depot lost as many as 56 million of them. JPMorgan saw 76 million accounts compromised. eBay was hacked to the tune of 145 million accounts. In 2013, cyber attacks increased 91%, compared with the previous year. Chances are, your information has probably already been stolen from somewhere. No wonder the cybersecurity industry, of which LifeLock is a part, is expected to grow from an estimated $77 billion sector by the end of 2014, to around $700 billion in 2024.

Second, much like car insurance or medical insurance, identity insurance is quickly becoming essential. That’s why LifeLock’s customer retention is a stunning 87% — an impressive number for any insurance company. And, right now, LifeLock is the only company that provides it. Meanwhile, LifeLock has only 3.52 million subscribers. That’s destined to skyrocket.

Third, the industry is booming. The growth is clearly reflected in LifeLock’s numbers. Revenue grew a whopping 29% last quarter, and net income jumped 37%. And with the stock technically oversold, this is a terrific time to enter this position.

So buy LifeLock (LOCK) at market today, and set your stop at $14.00.

If you want to play the options, I recommend the February $17 calls (LOCK150220C00017000), which last traded at $1.25 and expire on Feb. 20.

Portfolio Update

The Bank of Ireland (IRE) jumped 6.94% last week to notch a 13% gain in just the last two weeks. A closer look at IRE’s chart reveals positive indications. Not only did IRE surpass its 50-day moving average (MA) just over a week ago, but it managed to move above its 200-day MA just recently. Couple this with a “double bottom” chart pattern forming over the past six weeks, near its very long-term $14 support level, and this is a strong bullish pattern. IRE is a BUY.

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PowerShares DB Commodity Tracking ETF (DBC) dropped another 6.07% last week, hitting yet another new 52-week low to give us good news for your short position. Once again, the big news leading to last week’s big gain in your position is due primarily to the rout in oil prices. The Organization of the Petroleum Exporting Countries (OPEC) decided to maintain oil production levels recently, all but guaranteeing a further drop in oil prices. DBC remains a SHORT SELL.

ProShares Ultra Nasdaq Biotechnology ETF (BIB) jumped 7.03% last week, hitting a new 52-week high. The biotech bull continued to run last week, adding excellent gains to your portfolio. Hold on for gains likely to continue as we head towards the end of the traditionally strong fourth quarter. BIB is a BUY.

Euronet Worldwide (EEFT) added 4.29% to continue its run higher. The Monness Crespi Hardt firm initiated coverage on EEFT last week by setting a “Buy” rating and a $65.00 price target. This represents a potential 12% upside from Friday’s closing price. EEFT remains a BUY.

Norwegian Cruise Line Holdings (NCLH) added 4.92% last week, spiking significantly on Friday to hit a new 52-week high. OPEC’s decision last week also had a positive effect on this holding as investors factored in the positive financial ramifications of dramatically lowered fuel costs. Fuel is a considerable part of NCLH’s expenses, and any reduction in this expense goes straight to the bottom line. NCLH is a BUY.

HDFC Bank (HDB) gave back 0.58% in its first week in the Bull Market Alert portfolio. HDB hit a new 52-week high early in the holiday-shortened week, only to end the week nearly flat. This banking play has the wind at its back and, if a sustained recovery in emerging markets gains traction, has plenty of room to run higher. HDB is a BUY.

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Nicholas Vardy

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