One Stock: 30 Trades, 30 Winners

Michael Shulman

How would you like to trade the same one stock over and over … and book a winner each time?

In the last 15 months, I have recommended 30 trades on this one stock to Options Income Blueprint members, and every single one was profitable.

  • Average cash per trade: $75 per contract
  • Average cash return per trade: 1.1%
  • Average holding period: 10 days
  • Average annualized return: 50.4%

The average cash return per trade was 1.1%, which may not sound all that exciting.

But when you factor in that those trades were open for an average of just 10 days giving an average annualized return of 50.4%.

So, let’s turn to the stock itself, which is extremely volatile…

Since peaking a little over a year ago just over $101, this stock is off more than 30% from it’s high.

As you can see in the chart above, shares gapped down in early August following an earnings announcement. And they have basically traded sideways for the past four months.

Granted, this is not great news for buy-and-hold investors, but this stock’s volatility is a big part of its appeal for us.

But, this above-average volatility presents plenty of opportunities to generate cash by selling options.

And I don’t expect this win streak to end anytime soon. This one stock is riding one of the biggest technology waves for the next few years.

 

The Biggest Trend for Investors Right Now… and for Years to Come

The digital payments trend is growing in intensity and it’s impossible to ignore the shift toward cashless transactions, and this trend shows no signs of slowing.

A report from Grand View Research put the size of the global real-time payments market at $6.9 billion in 2018 and estimates it will grow at a compound annual rate of nearly 30% from 2019 to 2025.

The easiest way for investors to take advantage of this trend is with the one stock that is the fastest-growing digital payments processer in the United States: Square Inc. (NYSE: SQ).

 

The Company Behind Our 30-Trade Win Streak

Launched in 2009 by Twitter, Inc. (NYSE: TWTR) co-founder and CEO Jack Dorsey, Square’s debut product was a small, white square that can be attached to mobile devices such as smartphones and tablets to process credit and debit card payments from anywhere in the world.

And I do mean anywhere. My first experience having my card read by one of Square’s devices was on an archaeological dig in the Orkney Islands, north of Scotland. I went to purchase some souvenirs at a little trailer there that served as a store. This experience gave me a first-hand look at the enormous opportunity that lay before the company.

Returning home from that trip, I decided to take a closer look at Square.

In addition to its original magstripe reader, the company now offers readers for chip and contactless mobile payments, which work even without an internet connection. And all of its hardware works with the company’s payment processing and point-of-sale software.

 

More Then Payment Processing

But Square has a lot more to offer its business customers than just payment processing. Everything from customer booking, email marketing software, an online payroll service and Square Capital, which makes small-business loans.

The combination of these services with Square’s easy-to-use front-end devices and powerful point-of-sale software should continue to translate into rapidly growing market share, especially among larger businesses.

While Square built its business on small sellers, large sellers (and, thus, more profitable for Square) now account for more than half of transaction-based revenue and volume.

I see the company’s business model as similar to that of one of the most successful companies on the planet – Apple Inc. (NASDAQ: AAPL). That is, Square hooks people on the simplicity and accessibility of its devices and gets them so immersed in the product and software ecosystem that they never want to leave.

 

The Killer App

And this brings me to where one of the company’s biggest opportunities lies — Square’s Cash App.

The Cash App is a peer-to-peer (P2P) money-transferring service similar to PayPal Holdings’ (PYPL) Venmo, Zelle and others.

While Venmo is a pioneer in P2P payments and the perceived leader in the space, the Cash App has surpassed Venmo in number of downloads. A recent analysis of third-party data by an Instinet analyst showed 59.8 million Cash App downloads since its inception versus 52.7 million for Venmo. Plus, a number of techies laud Square for having the superior app.

The Cash App is more than just a P2P payment system. It offers prepaid debit cards, direct deposits and free in-app stock trading, including the ability to buy fractions of a shares. It even allows users to deposit and trade bitcoin.

You see what I’m saying about creating an ecosystem? And this shrewd business positioning is paying off.

 

Growth in the Stock

Following its most recent earnings report, management increased adjusted revenue projections for the full year to $2.24 million to $2.25 million — a more than 40% increase over 2018 revenue.

This estimate includes the sale of food ordering and delivery service Caviar, which Square sold to DoorDash for $410 million — a move that shows management is willing to cut underperforming businesses loose.

Square is a company that Wall Street values on revenue growth as opposed to earnings. And given that it boasts the best long-term business model of any payment processor, I don’t think it should have any problem living up to growth expectations.

If you’re an active trader looking to generate income, Square is your chance to trade one stock and make between 100% and 200% a year.

Join us for winning Square Trade Number 31!

 

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