Shares of Airgain (NSDQ: AIRG), a leading provider of embedded premium high-performance antennas for electronic devices, rallied after it reported well-above expected earnings for its quarter ending on September 30, 2016. The company reported $12.4 million in sales, an 87% improvement over the prior year while delivering 16 cents per share in earnings compared to a loss of $1.05 in the prior year. Estimates were for revenues of $9.65 million and a loss of $0.01.

I recommended the stock in the Breakthrough Tech Profits October issue noting: “Airgain has all the characteristics of a shiny diamond in the rough. The company, which is currently flying under the radar, is offering a rare opportunity for long term investors to get in on the ground floor of what seems to be a long term growth story based both on macro and company specific factors.  The combination of rapid macro growth and its niche in high end products at a time when demand for this sector of the market is rising puts Airgain in the center of what is yet an unappreciated and potentially very lucrative long term trend.”

And so far, so good; the company has delivered significant growth in its three most important metrics. First, there was a robust 93% growth in total customer devices from 8 million to 16.6 million units. Second, the average selling price per device decreased 5% to $0.72. Third, and most important, the key growth metric – the average number of antennas per device – showed a healthy growth rate of 15% to 2.84. Along with its steady and expected continued growth in the set-top antenna segment of the market, the company is seeing expanding growth potential in its Smart TV segment. The company has steadily solidified its balance sheet and currently has nearly $17 million in cash and over $28 million in total assets vs. only $10.9 million in total liabilities.

Buy Airgain (NSDQ: AIRG) up to $17.   Dr. Duarte owns shares in AIRG.

Seres Therapeutics Remains a Question Mark

I am reiterating a HOLD rating on shares of Seres Therapeutics (NSDQ: MCRB), a leading researcher and developer of human microbiome related antibiotics to treat gut-related illnesses. The company’s shares took a tumble in July when its leading product’s (SER-109) clinical trial failed to meet expectations. The stock fell as low as $8.05 from its high above $33, but has rebounded above $12 over the last few weeks. The company recently reported a loss of $0.46 per share versus expectations of $0.50 per share but beat on revenues, delivering $13.02 million in sales versus expectations $10.38 million.

Seres CEO Roger Pomerantz, on the company’s post-earnings conference call, noted that the company continues to gather data on SER-109 and the failed study, expecting a full report in early 2017 along with discussions with the FDA on what the next step on the drug might be.

HOLD Seres Therapeutics, with a stop-loss at $7. Dr. Duarte owns shares in MCRB.

Portfolio Update

The first few post-election trading days have clearly changed the short-term trend of the market.  As a result, I’ve closed out several trades and put on two new trades. The current status of these positions is listed below. I have elected to keep the Gilead and SPY option straddles open for a few more days to see if they finally blossom one way or another. But I won’t keep them open much longer, as time premium is starting to erode the price of the options. 

Changes this week:

New Positions/Updates

BUY- Aetna April 17 120 Call Option (AET_042117C120) up to $9. Bought on 11/10/16 at $7.70; closing price on 11/11/16 was $8.73.

HOLD – Seres Therapeutics (MCRB). Recommended on 7/22/23. Bought on 7/22/16 at $33.90; closing price on 11/11/16 was $12.28. Sell Stop at $7. Dr. Duarte owns shares in MCRB.

SOLD – Opko Health Inc. (OPK). Bought on 1/29/16 at $8.04. Sold on 11/11/16 at $9.45. Total return + 17.53%.

SOLD – Johnson & Johnson December 16, 2016 115 Put Option (JNJ_121616P115). Bought on 10/21/16 at $3.20. Sold on 11/10/16 at 0.85. Total return (-) 73%.

Special Situation Trade

SOLD – ProShares Ultrashort ETF (NYSE Arca: BIS). Bought on 8/25/16 at $33.44; closing price on 11/7/16 was $31.40. Total return (-) 6.11%.

Anthem Straddle

SOLD – Anthem December 16, $120 Put Option (ATNM121616P120). Bought on 8/29/16 at $5.15; closing price on 11/11/16 was $0.74. 

SOLD – Anthem December 16, $120 Call Option (ANTM_121616P120). Bought on 10/31/16 at $6; closing price on 11/11/16 was $13.82.

Initial Straddle Premium: $11.15.  Closing value 11/11/16: $14.56. Total Return + 28%.

No Changes in the following positions:

Options

GILD December 2016 Straddle

Buy to open Gilead December 2016 $72.50 Call Option (GILD_121616C72.5) up to $5. Bought on 10/31/16 at $4.15; closing price on 11/11/16 was $3.25.

Buy to open Gilead December 2016 $72.50 Put Option (GILD_121616C72.5) up to $4. Bought on 10/31/16 at $2.25; closing price on 11/11/16 was $1.09.

GILD Straddle Purchase Premium: $6.40. 11/11/16 Straddle Value: $4.34.

SPY December 2016 Straddle

Buy to Open SPY December 16, 2016 $210 Call Option up to $7. Bought on 10/31/16 at $6.31; closing price on 11/11/16 was $8.21

Buy to Open SPY December 16, 2016 $210 Put Option up to $5. Bought on 10/31/16 at $3.79; closing price on 11/4/16 was $1.85.

SPY Straddle Purchase Premium: $10.10; straddle value on 11/11/16 was $10.06.

Diebold February 2017 Straddle

Diebold February 2017 $22.50 Put Option (DBD_021717P22.5) Buy up to $2. Bought on 9/23/16 at $1.15; closing value on 11/11/16 was $ 1.20.

Diebold February 2017 $30 Call Option (DBD_021717C30):  Buy up to $2. Bought on 8/19/2016 at $1.40; closing price on 11/11/2016 was $0.28. Dr. Duarte has a position in this options contract.

DBD Straddle Purchase Premium: $2.55; straddle value on 11/11/16 was $1.48.

Texas Instruments January 70 Call Option (TXN_012017C70) – Buy up to $4. Bought on 8/29/16 at $3.49; closing value on 11/11/16 was $2.60.

Stocks/ETFs

Ambarella (NSDQ: AMBA) – Hold. Bought on 6/16/16 at $52.77; closing price on 11/4/16 was $59.66. Sell Stop at $63. Dr. Duarte owns shares in AMBA.

Airgain (Nasdaq: AIRG) – Buy up to $17. Recommended on 10/20/16. Bought on 10/20/16 at $14.15; closing price on 11/4/16 was $11.98.  Dr. Duarte owns shares in AIRG

Cerus Corp. (CERS) – Buy up to $9. Bought on 11/16/15 at $5; closing price on 11/11/16 was $5.76. Dr. Duarte owns shares in CERS.

Diebold Inc. (NYSE: DBD) – Buy up to $32. Bought on 8/19/2016 at $28.05; closing price on  11/11/2016 was $24. Dr. Duarte owns shares in DBD. Sell stop $21.

Rollins Inc. (ROL) – Buy up to $30. Bought on 2/22/16 at $27.38; closing price on 11/11/16 was $30.97. Sell Stop at $26. Dr. Duarte owns shares in ROL.

Seres Therapeutics (MCRB) – Bought on 7/22/16 at $33.90; closing price on 11/11/16 was $12.28. Sell Stop $7. Dr. Duarte owns shares in MCRB.

Texas Instruments (Nasdaq: TXN) –Bought on 9/12/16 at $67.18; closing price on 11/11/16 was $69.85. Dr. Duarte owns shares in TXN.