$SUPER MICRO COMPUTER INC(SMCI)$ 60% of my portfolio is in SMCI. Another 20% is in sold SMCI September puts with an average strike between 34 and 36. If it gets there, great. If not, also great. I keep the premium. The remaining 20% is in JD.
Near term, my view on SMCI is neutral. Longer term, I'm still bullish. We already hit my 40 to 45 price target after earnings, so I took some profit just under 43 and sold the puts instead. We've run up from 24 recently, so I'm a bit more cautious now. A major goal right now is preserving my 80%+ yearly portfolio gain.
A big positive for SMCI is the stronger revenue guidance, and I think they're on the right track for longer term improvement. Another plus is that our funds should now be enough even for 20B revenue quarters, which is above their yearly guidance. That should help a lot in preventing any major pullback. On the negative side, margin guidance came in lower than I had hoped. Back to 10.25, which is where Q3 was. That quarter saw a high of 50. With dilution factored in, though, 45 now would be roughly equivalent to where 50 was. So I'm calling for a nearer term range of 40 to 45.
The exception would be if the market decides to reprice this more in line with the sector. That could happen with the near term pressure now off dilution and even the ATM suspension. I also think they'll beat the margin guidance.
With year end approaching, I'm just more conservative given how strong the year has been. Yearly is how I judge my performance, with the clock resetting January 1st.
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