+100% in just days? Here’s how

Jul 31, 2021

Logitech (LOGI) stock has been a big winner for LikeFolio members over the past couple of years, gaining more than 280% in value since our May 2019 Opportunity Alert on the company.

So, when we see shifts in consumer demand on LOGI… we listen!

And that’s exactly what happened this past week.

The Setup

Look above at the LikeFolio Consumer Demand chart for Logitech as we headed into the company’s earnings report for the quarter that ended June 30, 2021.

For the first time in several years, we were seeing Consumer Demand levels (green line) dropping.

To make things even more enticing, this waning of Consumer Demand was happening as the stock traded near all-time highs.

That’s what we call a divergence opportunity.

We knew, based on our proprietary Consumer Demand data, that Logitech was going to have a difficult time painting a positive outlook for revenues and profits when it released its earnings report on Monday afternoon.

So, we set out to make an earnings trade to take advantage of this opportunity…

The Trade

When our Earnings Season Pass members got their Weekly Earnings Sheet last Sunday, one of the first names to pop out was Logitech. Here’s what it looked like on the sheet:

As you can see, the LikeFolio Earnings Sheet spelled things out really clearly:

  • The Earnings Score was -46, a bearish score for LOGI. The Earnings Score can be anywhere from -100 (most bearish) to +100 (most bullish).

 

  • Consumer Buzz Growth was down, indicating that people just weren’t as excited about Logitech products as they have been in the past.

 

  • Consumer Demand Growth was down, indicating that people were talking less and less about actually buying Logitech products.

 

  • Additionally, the gold star indicates that metric has been highly predictive of LOGI’s earnings reactions in the past – giving us even more confidence in making a bearish bet.

Most people, when looking to take a bearish position on a company, will simply short sell the stock.

I don’t really like short selling. The risk is unlimited, and the impact on the buying power of my portfolio is too high – especially for shorter-term opportunities like an earnings report.

That’s why LikeFolio Earnings Season Pass members get access to our full library of 13 specific trading strategies designed to strictly define risk while providing huge profit opportunity in a short time frame – all while minimizing the buying power necessary for each trade.

In the case of LOGI, our Earnings system trade was a “Bearish Coin Flip” – a powerful strategy that allows us to profit 100% or more in a short time frame, all while risking as little as $50.

By implementing this strategy on LOGI, we were able to lock in a trade that would make 100% profit if the stock were to end up below $115/share.

So we got in.

The Result

Logitech reported earnings almost exactly in line with what LikeFolio Consumer Data had predicted:

Logitech’s forward-looking guidance disappointed Wall Street.

LikeFolio’s data was right… Consumer Demand was dropping.

And the stock followed suit…

The stock dropped more than 10% by Thursday, trading comfortably below the $115/share that our members needed to make a 100% profit on the trade!

The LikeFolio Way

For most investors, earnings season is a minefield, a scary time as they just sit there, hoping that none of their portfolio companies puts out a disappointing report like Logitech did.

But at LikeFolio, we see the earnings season as opportunity season. Because trades like the LOGI trade described above are coming at us in multiples, every single week.

But it’s not just about the trading. It’s also about protecting our portfolios.

Take another look at the LOGI chart at the top of this email.

We were able to lock in huge gains on our LOGI multi-year investment, before the stock tanked this week, because of the data contained in the Earnings Season Pass weekly scorecard.

What an incredible advantage for both traders and investors.

Andy Swan
Founder, LikeFolio