Here’s your trade on Microstrategy ($MSTR) – July 26, 2024
Dan Fitzpatrick here at StockMarketMentor.com, and I want to look at MicroStrategy ( NASDAQ: MSTR ) today.
The main reason this has my attention is because Bitcoin is starting to run higher again. It’s not near its highs, old highs, or anything like that, but you can definitely see this starting to perk up. There are green skyscrapers here, which we like.
Here’s the thing with MicroStrategy ( NASDAQ: MSTR ), this is basically a leveraged Bitcoin play. The reason is, that Michael Saylor uses the stock, and uses convertibles to raise money and buy Bitcoin. So the enterprise software business that has been the core of MicroStrategy’s ( NASDAQ: MSTR ) company really isn’t that great.
It really doesn’t grow that much, and you can see that on the chart here. I’m using MarketSmith here, and you can see their gross margin, okay, that’s great. But their earnings are really, really sloppy. Their revenues, this has absolutely sucked a couple of quarters ago. And then this one ending in March, the same thing.
This is not the kind of action, on the fundamentals, that you want to see. What’s the three to five-year growth rate? I know, nothing. What’s their PE? Nothing. What’s their projected EPS for this year? It’s down 120 percent from 2778.00 last year. I don’t even know that math, it seems like it would be a heck of a lot more than that, but I’m not a mathematician.
You compare the fundamentals, which frankly, they suck with an RS rating of 99. That’s a pretty good reading here. We ultimately make money on the technicals. Now, I’ve done a little bit of research, it took a quick online search of about 12 seconds to see that the date that MicroStrategy ( NASDAQ: MSTR ) first trades on a 10-for-1 split is on August 1st.
That means that a current price of $1757.00 will actually be trading at $175.70, which makes it a lot more buyable for people. I will also make the options easier to trade because the spread between the bid and the ask will be narrower. So I think the stock is going to calm down and give people an opportunity to really trade this in the traditional manner.
As opposed to just buying the stock, closing your eyes, crossing your fingers, and hoping that, God willing, things will work out. So watch this stock, and if it breaks through 1800.00 or $180.00 post-split, I think you are going to see this stock run really, really nicely, as long as Bitcoin cooperates.
By the way, with respect to Bitcoin, after the halving, it takes a few months for us to really see the big move in Bitcoin. And those months are ticking by, so we’re getting pretty close to where Bitcoin should be taking off again. That’s just something to keep in mind.
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