The Nancy Pelosi Trade on Micron Technology

Micron Technology

Every month, it’s important to look at our monthly F and Z Score rankings. These stocks that are important because of basic reality. They are performing well in THIS economy. I’m talking about an economy that has high inflation. One where Omicron is spreading like wildfire. I’m talking about an economy where consumer confidence is like a yo-yo, housing prices are surging, and oil prices continue to jolt higher. 

This is the ultimate Do-It-Yourself lesson for trading and investing. We look at:

  • The Piotroski F-Score 
  • The Altman Z-Score
  • A valuation rank

With stocks that have a Perfect F-Score of 9 and a Z-Score of 3 or higher, we like to trade covered calls and cash-secured puts on these stocks.  We can also do poor man’s covered calls on these stocks to trade options.

And, low and behold, we have a new entrant on the list. 

A Nancy Pelosi Favorite

Micron Technology (MU). The Boise-based semiconductor company has an F-score of 9, a Z score of 6.3, and an average price target of $108. That’s about a 14.5% upside from today’s price. 

Micron has been a company that faced a significant threat due to increased exposure to China and its international manufacturing capacity. However, it is looking to migrate a lot of work back to the United States with a proposed $40 billion plant. It is currently looking for a potential location, one that could be in Idaho or Texas (where it would benefit from better tax rates than say California). 

So, they’re moving a lot of production here to help meet rising demand in the U.S., and they have a rock-solid balance sheet. It also has institutional investors like Joel Greenblatt, Ken Fisher, and Charles Brandes backing it. 

But there’s another interesting “buyer” of Micron that stands out right now. 

House Speaker Nancy Pelosi and her husband. According to a Congressional disclosure, the Pelosi’s made five large purchases on call options on several U.S. companies in December. Those companies were Micron, Alphabet (GOOG), Roblox (RBLX), Salesforce.com (CRM), and Walt Disney (DIS).

Pelosi – to me – is the ultimate insider because she controls the cards on whether a company sees antitrust regulation and every other bill that hits the floor of the House of Representatives. 

The Pelosi Micron Technology Buy:

  • Date Purchased: Dec. 21
  • Total Cost: $250,001 – $500,000
  • Option Quantity: 100
  • Strike Price: $50
  • Expiration: Sept. 16, 2022

So, September… and why does that date matter? It’s interesting to see this trade because her chamber could very well pass the CHIPS for America Act & FABS Act – a massive bill that would subsidize U.S. production of semiconductors to the tune of about $52 billion. That would benefit Alphabet… Roblox… and – of course – Micron Technology.

As I said… she’s the ultimate insider. If you want to get rich, start a business. If you want to get really rich, go into politics. “Free market” indeed. There’s a good opportunity to go long here, and cash-secured puts would be the best way to do so.

Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.
Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.

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