Thu. Nov 26th, 2020
GPRO

GoPro Inc (NASDAQ: GPRO) is not a Wall Street favorite. But, that is exactly why I’m giving it a shot through earnings. It’s been thrown into the garbage can and absolutely nobody likes it.

First off, holding anything through earnings is of course an inherent big gamble. So make sure your risk tolerance is something you can handle if you are playing ANYTHING through earnings.

Ok, so a few reasons why I like this trade:

  1. GPRO is hated. Nobody likes it and nobody expects anything good. We are contrarians, which leads to huge pops when correct.
  2. There is a large short interest of 26% and the options are really cheap to hold through earnings at .36 a contract. Good news and GPRO can easily double in valuation in my opinion.
  3. In part of the China trade deal, China is set to enforce laws that prevent “knock offs” of intellectual property. That’s one of GPRO’s biggest problems. They have no protection for their product. If pushed through, this change in policy would allow that. I expect GPRO to talk about that on their call.
  4. They just came out with a new 360 degree camera that is quite honestly the best product I’ve seen out there if you are into action filming. I think people are going to be surprised with the holiday sales numbers there.
  5. And, the chart is technically sound for a breakout. Bull flag and relative strength after the Las Vegas CES conference earlier this month.

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