Buy Alert: August 6, 2014

| August 6, 2014

Buy Alert:  August 6, 2014

 

Trade Details

Buy Rocket Fuel (FUEL) September $20 Calls for $1.25 or better

 

Why?

Investors are ignoring FUEL’s blowout earnings and are instead focusing on the company’s lowered guidance. Okay, lowering guidance is never a good thing. However, the stock’s down 27% as of this writing and revenue guidance was lowered by… 3%. Yep, the stock’s plunging on a whopping 3% reduction of revenue guidance.

Meanwhile, FUEL obviously saw the reasons behind the lower guidance (lower quality inventory, tighter ad spending by customers) long before this week. That’s one of the reasons the company is acquiring x+1, a programmatic ad buying company. The acquisition should open up FUEL’s target markets substantially.

We’re going to buy FUEL calls with strong expectations of a rebound.

 

 Recent Activity

Rocket Fuel

 

Category: OTW Buy Alerts