Stocks ticked lower this morning as the market processed developments around the Russia – Ukraine conflict. Yesterday’s volatile session marked the final trading day of tempestuous February. The Dow sank 3.5% for the month while the S&P 500 and the Nasdaq fell 3.1% and 3.4%, respectively.
If growth investors are learning anything over the past year, it’s that a downturn can happen fast. Challenges like the ones we’ve seen recently – supply chain shortages, rising costs, Fed policy changes, and geopolitical turmoil – threaten to take the wind out of the market’s sails at any time, typically pulling the rug out from under volatile growth names.
Striking up a position in a name that’s recently suffered a significant drop can be intimidating, but a high-risk factor also comes along with great reward potential. However, not all names that have had their prices slashed are great bargains. Discernment and due diligence are key when selecting stocks from the high-risk, high-reward category.
Some stocks will recover more swiftly than others. Today we’re highlighting a semi-conductor name that’s firing on all cylinders with plenty to support their optimistic outlook for Q1. The sell-off in the semiconductor space seems to have delivered a buying opportunity in this name for those with some risk tolerance.
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Specialist semiconductor design corporation Monolithic Power Systems (MPWR) serves a variety of sectors, including automotive, industrial, communications, and consumer goods. A variety of businesses are being impacted by global supply chain disruptions and chip scarcity. The realities of supply and demand, on the other hand, imply that the lesser number of chips will be more expensive, and firms like MPWR will be able to operate at total capacity while still doing so profitably.
MPWR crushed analysts’ expectations on EPS and Revenue for the past four quarters (making for a successful 2021). Also, MPWR currently pays a dividend yield of 0.7%. Their year-over-year numbers are all in the green, and the forecasts indicate growth on both a quarterly and annual basis. The company blew past analyst estimates for Q4, reporting $336.5 million in revenue and EPS of $2.12, where the consensus was expecting $321.9 million and $1.87 EPS.
Monolithic Power sees Q1 revenue in the ballpark of $354 million to $366 million, well above the consensus estimate of $322 million, suggesting the analyst community may be underestimating the stock. We’ll have to wait until next season to find out exactly how well the company is maintaining amid current challenges. MPWR has a consensus 12-month price target of 568.00, with a high of 630.00 and a low of 510.00 among analysts that provide annual price forecasts. The forecast implies an increase of 18.53% over current pricing, and the consensus gives MPWR a solid buy rating.
Should you invest in Monolithic Power right now?
Before you consider buying Monolithic Power, you'll want to see this.
Investing legend, Keith Kohl just revealed his #1 stock for 2022...
And it's not Monolithic Power.
Jeff Bezos, Peter Thiel, and the Rockefellers are betting a colossal nine figures on this tiny company that trades publicly for $5.
Keith say’s he thinks investors will be able to turn a small $50 stake into $150,000.
Find that to be extraordinary?
But you have to act now, because a catalyst coming in a few weeks is set to take this company mainstream... And by then, it could be too late.
Wall Street Legend Warns: “A Strange Day Is Coming to America”
“A massive and surprising new transition could determine the next group of millionaires,” says Chaikin, who predicted the 2020 market crash. “While leaving 99% of the public worse off than before.”
“If you own regular stocks, you’re in for a big surprise,” he adds. [Full Story Here…]