Editors Note:

Two new tech positions to capture the strength in the Nasdaq. Autodesk and Netgear are both great companies but on opposite ends of the chart.

 

New positions are only added on Wednesday and Saturday except in special circumstances.


NEW DIRECTIONAL CALL PLAYS

ADSK - Autodesk - Company Profile

Autodesk, Inc. operates as a design software and services company worldwide. The company offers AutoCAD, a professional design, drafting, detailing, and visualization software; AutoCAD Civil 3D, a surveying, design, analysis, and documentation solution for civil engineering, including land development, transportation, and environmental projects; AutoCAD LT, a professional drafting and detailing software; BIM 360, a construction management cloud-based software; computer-aided manufacturing (CAM) software for computer numeric control machining, inspection, and modelling for manufacturing; Fusion 360, a 3D CAD, CAM, and computer-aided engineering tool; and Industry Collections software products for professionals in architecture, engineering and construction, product design and manufacturing, and media and entertainment industries. It also provides Inventor tools for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation; Maya and 3ds Max software products that offer 3D modeling, animation, effects, rendering, and compositing solutions; and PlanGrid, a cloud-based field collaboration software, which provides general contractors, subcontractors, owners, and architects access to construction information in real-time. In addition, the company offers Revit software for building information modeling; and Shotgun, a cloud-based software for review and production tracking in the media and entertainment industry. Autodesk, Inc. sells its products and services to customers directly, as well as through distributors and resellers. The company was founded in 1982 and is headquartered in San Rafael, California. Company description from FinViz.com.

Analysts are positive on Autodesk saying they are well positioned in the growing sector and bookings are strong. Autodesk has around two million legacy users and about 12 million "noncompliant" users, which should be relatively easy to monetize. Noncompliant means they are on previously purchased software that has expired. In order to upgrade they will need to subscribe to the new subscription-based software, which provides ongoing revenue for Autodesk.

Keybanc just gave Autodesk a buy rating and $196 price target.

Earnings May 30th.

Shares have overcome a mid-April market related dip and closed at a new high on Friday but not yet a breakout.

Buy June $185 call, currently $6.45, stop loss $168.85.
Optional: Sell short June $200 call, currently $2.29, stop loss $168.85.


NTGR - Netgear Inc - Company Profile

NETGEAR, Inc. designs, develops, and markets networking and Internet connected products for consumers, businesses, and service providers. It operates in two segments, Connected Home, and Small and Medium Business. The company offers smart home/connected home/broadband access products, such as broadband modems, WiFi gateways, WiFi hotspots, WiFi routers and home WiFi systems, WiFi range extenders, Powerline adapters and bridges, WiFi network adapters, and digital canvasses; and value added service offerings, including technical support, parental controls, and cybersecurity protection. It also provides Ethernet switches, wireless controllers and access points, unified storage products, and Internet security appliances for small and medium-sized businesses. The company markets and sells its products through traditional retailers, online retailers, wholesale distributors, direct market resellers, value-added resellers, and broadband service providers in the Americas, Europe, the Middle-East, Africa, and the Asia Pacific. NETGEAR, Inc. was founded in 1996 and is headquartered in San Jose, California. Company description from FinViz.com.

Netgear reported adjusted earnings of 60 cents that more than doubled the 26 cents in the year ago quarter and beat estimates. Revenue rose only slightly from $245 to $249 million. However, they guided lower for Q2 because of a slight decline in shipments to "service-provider" customers. Gross margins will decline from 9% to 4.5% in Q2.

While that is negative there are positives. They have been very successful in rolling out their Orbi WiFi mesh systems and Nighthawk Gaming products to end users. Their paid subscription services offering now has more than 10.4 million subscribers.

They are also rolling out their new WiFi 6 routers in May to coincide with the launch of smartphones and laptops with the WiFi 6 protocols. Part of their lowered gross margin is additional marketing spend on these new products.

Shares fell nearly $6 on the earnings but I believe the drop was overdone and a rebound will appear to capture the new product cycle.

Earnings July 24th.

Buy June $32 call, currently $1.10, stop loss $29.35.


NEW DIRECTIONAL PUT PLAYS

No New Bearish Plays