The pandemic has boosted the shares of this e-commerce payment processor, and analysts expect triple-digit growth from the company next year.
Square, Inc. (SQ)
From FMA Trader Alert
Mark uses Square to process the sales of his books, and Jim is going to employ the platform in his online store at Way of the Renaissance Man.
The reason why Square’s services have become so popular with online sellers is that the software makes it exceedingly easy for anyone to use, be they individuals like us, or major corporations.
The company also has seen big upside from its Cash App, a consumer digital money-transfer service that competes with services such as Venmo and Zelle. Jim uses all of these services, but he has found the Cash App to be the easiest and most convenient to use. Oh, and just so you know, the company isn’t some fly-by-night operation in the digital space. Square’s CEO also happens to be Twitter CEO and founder Jack Dorsey.
SQ has proven itself a winner, both on the earnings front and the technical front. The company boasts a three-year earnings per share annualized growth rate of 75%, a metric that has helped loft the company into the highest rated stock in Investor’s Business Daily’s Finance/Credit Card Payment Services industry group.
Technically, SQ shares have been a juggernaut since the COVID-19 selling in March and have been up some 175% since its March 20 nadir. Over the past 12 months, its shares are up nearly 44%, a performance that’s outpaced some 96% of all other public companies over that same period.
One look at SQ’s chart allows us to note that, despite the big gains, the shares are not overextended at just above $104. In fact, we’ve been looking for a breakout like the one we’ve seen today to jump on this permanent wave. Now is the time to do just that.
So, let’s buy Square, Inc. at market, with a protective stop set at $83.25.
For those who are willing to take a bigger bet, buy the SQ Sept. $110.00 call options (SQ200918C00110000) at market. The call options last traded for $9.05 and expire on Sept. 18.
Mark Skousen & Jim Woods, FMA Trader Alert, markskousen.com, Eagle Financial, 300 New Jersey Ave. NW, Suite 500, Washington, D.C. 20001, June 22, 2020