Speculation Tuesday: 2 Call Options and 1 Penny Stock to Consider

Typically, your financial advisor will take the Warren Buffett approach to investing: buying blue-chip companies with established businesses that you can trust through thick and thin. However, the main issue with such predictability is that it comes at a cost: looking at the list of Oracle of Omaha-approved securities, the individual ideas are rather – dare I say it – boring.

Don’t get me wrong. One of the beautiful aspects of betting on the stalwarts is that they serve the foundation of your portfolio. When the smelly stuff hits the proverbial fan, you’ll be glad you had exposure to the names everybody else loves. Unfortunately, history doesn’t tend to remember the player that bunted the runner on second to third base. Instead, it glamorizes the big blast in the bottom of the ninth.

In other words, with the ideas I have for you below, it’s all about trying to launch one into the upper deck. You’re going to have a lot of failures – but man! If these ideas click, they’re poised to skyrocket.

NuScale Power (SMR)

Before we begin, you should note that I have a position in all of the securities mentioned in this article. Therefore, keep that in mind while you conduct your due diligence. With that out of the way, I’m going to start this list with NuScale Power (SMR). Specializing in small modular reactors or SMRs, NuScale could potentially change the paradigm of the nuclear energy ecosystem. However, the suits aren’t giving it a chance.

Conspicuously, the Barchart Technical Opinion indicator rates SMR stock a 64% Sell, noting a weakening short-term outlook. I believe this is an inaccurate reading. Based on an assessment of SMR’s point-and-figure (P&F) chart, the supply and demand profile suggests that the stock has a clear shot to $3.75, where it may encounter resistance from the bears. Depending on how aggressive you want to be with your expiration date, a $4 call option on SMR is in play.

Fundamentally, I have doubts that the market is appreciating the goldmine at hand. According to the Office of Nuclear Energy, “SMRs can be coupled with other energy sources, including renewables and fossil energy, to leverage resources and produce higher efficiencies and multiple energy end-products while increasing grid stability and security.”

In other words, SMRs are scalable and “stackable” with complementary capabilities. And what’s going on with Kazakhstan? A uranium supply shortage that only accelerates the need for – you guessed it – efficiencies.

SMR stock as a sell? Please. With a short interest of 29.44% of its float and compelling fundamentals to boot, it’s the bears that should be worried.

PLBY Group (PLBY)

If at first glance you balk at the idea of PLBY Group (PLBY) not because of its investment potential but because of its moral undertones, then you’re partially confirming why I believe so strongly in PLBY stock. If you haven’t figured it out by now, PLBY is the house that Hugh Hefner built. And because of its “intimacy wellness” (we’ll just stick with that so I don’t get penalized by the algorithm overlords) business, it attracts controversy.

But controversy from whom? Listen, it wasn’t that long ago that folks who practiced alternative beliefs and lifestyles were treated like second-class citizens. Now, the full range of human experiences is out in the open and we’re slowly evolving sociologically. I’m not saying that investors need to actively endorse every movement. However, denying that such movements exist may lead to missed opportunities.

Besides, intimacy happens across the full range of personal, political and religious beliefs. So, you might as well profit from it.

On a quantifiable basis, Grand View Research notes that the global intimacy products market size reached a valuation of $32.7 billion in 2022. Further, analysts project that the segment could expand at a compound annual growth rate (CAGR) of 8.5% to 2030. If so, we’re talking about sector revenue of $62.3 billion.

Looking at PLBY’s P&F chart, supply demand dynamics suggest a possible return to $2.75. Therefore, a further out $2.50 call option could be in play, undergirded by the very real possibility of a short squeeze materializing.

Vivos (RDGL)

An extremely high-risk entity in the biotech space, oncology specialist Vivos (RDGL) is only appropriate for the portion of your portfolio earmarked for speculation. Indeed, depending on what trading platform you use, if you attempt to buy RDGL stock, you may receive a warning. Here’s the deal. Vivos isn’t listed on an exchange. Rather, it trades over the counter (OTC) via broker-dealer networks.

With OTC stocks, you must face the reality of certain administrative risks that you normally wouldn’t think about with established blue chips. For example, you can’t place a market order but rather a limit order. Further, the bid-ask spreads can be incredibly wide, warranting caution. As well, trading volume could be thin. So, even if you’re profitable “on paper,” it only matters what you can ultimately get out of it (see wide bid-ask spreads).

If you can accept the risk, the underlying therapeutic – which involves injecting Yttrium-90 (a radioactive material) directly into cancerous tumors – could become a gamechanger. Yes, the idea of deliberately putting radiation into a patient’s body seems dangerous. However, context matters. Under the traditional approach of cancer care, the whole patient could end up irradiated just to get at cancerous cells. With Vivos, the narrative is flipped through its selective internal radiation therapy (SIRT) or brachytherapy.

In addition, Vivos represents a component of the broader personalized medicine approach. Per Grand View Research, this segment could be worth $922.72 billion by 2030. Combined with the company’s encouraging preclinical safety data, there’s a non-zero probability that Vivos could advance to Phase 1 clinical trials and ultimately yield positive results.

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