Here’s what i think about DexCom ($DXCM) (April 28, 2020)
DXCM
I want to look at DexCom ( NASDAQ: DXCM ) and here’s why: This was a growth stock holding. We got in this at a really, really good price; we sold the stock somewhere around here right when it broke out. And then sold some of the stock on the way up, just really kind of took profits. And then got stopped out of the rest on the way back down. This was a really good trade for us.
The reason I want to show you this is, this is the way the stock is trading right now after hours. This is all of today’s price including after-hours trading; this is a new feature on TC2000. You can see that during the day here the stock really traded down. It stopped us out of the last of our position at 320.00. We had planned on holding it over earnings but a stop is a stop and we got taken out. All in all, it was a really, really solid profit.
Again, we have had it for a couple of weeks and it was a really nice trade. But you don’t want to sit there and say, “Well, I’m going to hold it over earnings because I THINK the stock is going to go higher.” You don’t know and you don’t get paid for thinking, you really don’t. You get paid for managing your risk. So we took it off the table and I am happy we did. Now the company reports earnings and here it is, it’s trading up after hours.
Now, the options market implied a $50.00 move in the stock and the stock is not doing that at all right now; it is not a big mover after hours. I certainly don’t look at that as a negative. I don’t necessarily look at that as a positive but I will just tell you this: The company suspended guidance and so there is no real edge to be gleaned from the earnings.
If a company is saying we don’t know what we are doing then don’t listen to some stupid analyst who is telling you that they do. They don’t. They don’t. The company actually has the best window into the future better than any analyst does. And so I don’t really care what any of them say now on this. When the company suspends guidance it’s for a reason. So instead you just have to say, all right, what’s the stock doing?
Again, I don’t look at this as bearish because the stock isn’t making a big move. I would actually say this is a stock that is highly likely to go higher; it is not a real COVID stock, it is diabetic stuff. I don’t know all of the details in it and don’t care; it doesn’t make me any money. But the way this stock is trading now as we are looking at the news unfold, this is a stock that can go higher. In fact, there, I just bought some. It literally is, I think, a stock that is going to move higher tomorrow.
If you are long I would stay long, just stay long. We could see a nice move to the upside but just make sure you have a stop in place. In this market, in my view, you should never be taking more than a 5 percent loss on any stock. If a stock is down like 5 percent below where your entry is, personally, I think that is a stock that you should not be long. You just can’t give this market any opportunity to take your dough away.
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