Uncovering HOT Stocks: SuperMicro (SMCI) - Buy The Dip For Big Gains!
The video discusses the recent volatility in the stock of SuperMicro Computer INC (SMCI) due to its low float and expectations from analysts. The speaker suggests buying the dip on SMCI and also mentions ULTA as another low float stock to watch for potential volatility.
[00:00]( • Uncovering HOT Stocks: SuperMicro (SM... ) Super Microcomputer Incorporated (SMCI) stock has dropped more than 35% in the last two days, but there is nothing wrong with the stock, it is just volatile due to a certain property.
SMCI stock has gained more than 700% over the last year.
The stock is up more than 100% since January 29th after a great earnings report.
The lack of expectations for SMCI allowed the stock to take off and go parabolic.
[02:35]( • Uncovering HOT Stocks: SuperMicro (SM... ) The video discusses the volatility and analyst coverage of SMCI stock compared to Nvidia.
SMCI is still in the discovery phase for both Main Street and Wall Street investors.
SMCI has 14 analysts covering it, while Nvidia has 52 analysts.
The buy recommendations for SMCI and Nvidia are similar, but the difference in the number of analysts is significant.
Wall Street is expected to start adding SMCI to their list of recommended stocks.
[05:13]( • Uncovering HOT Stocks: SuperMicro (SM... ) The video discusses the concept of "float" in relation to stock trading and its impact on volatility.
Float refers to the regular shares of a company that are available for investors to trade.
The float for NVIDIA is 2.4 billion shares, while for Super Microcomputer it is 47.5 million shares, indicating a significant difference in availability for trading.
Scarcity of shares creates volatility, similar to scarcity of goods during a pandemic.
Lower float leads to investors fighting for available shares, causing volatility to the upside, while selling causes volatility to the downside.
[07:54]( • Uncovering HOT Stocks: SuperMicro (SM... ) Low float stocks like SMCI can be highly volatile, and trading options on them can be expensive due to the increased volatility.
Float equals more volatility and crescendo volume.
Option prices reflect the low float and come with higher premiums.
SMCI has experienced high volatility and a push in price due to crescendo volume.
Psychological effects of price can cause investors to buy or sell, impacting the stock's movement.
[10:33]( • Uncovering HOT Stocks: SuperMicro (SM... ) The speaker discusses the potential volatility of SMCI stock and mentions adding shares to their position on the pullback.
The speaker looks at the 20-day moving average as a short-term trend line.
They consider $600 as a good price to start buying shares.
The speaker also mentions ULTA as another low float stock with potential for volatility.
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