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Top Trade Tuesday – Q2 2020

Another low-volume week, so a good time to review.

Last Tuesday, we went over our Top Trade Ideas from Q1 of last year and we had one loser and 15 winners with a net of $271,087 in profits over the past 18 months (or less).  A few of them are even good for new trades – even now – like Viacom (VIAC), which had another 100% left to gain as of last Tuesday at net $10,100 and now it's $13,800 so up $3,700 (37%) in a week is not bad for a leftover, is it?  

Again, you don't need to make short-term trades in dangerous momentum stocks to make fantastic short-term money.  Using our system, it's just as exciting when a value stock pops – even when we have long-term contracts on them.  

The difference is we aren't taking those huge short-term risks that can damage your portfolio.  When something unforseen happens, we can ride it out.  Remember, Top Trade Alerts are trades we feel have a very strong chance of success.  Generally we pick them because they have both a long-term macro trend in their favor as well as upcoming catalysts and, as alwasy – first and foremost we're looking for VALUE.

Top Trades for Thu, 02 Apr 2020 12:58 – CMCSA

For the LTP:

  • Sell 5 CMCSA 2022 $30 puts for $5 ($2,500) 
  • Buy 15 CMCSA 2022 $30 calls for $8.25 ($12,375) 
  • Sell 15 CMCSA 2022 $40 calls for $3.75 ($5,625)

That's net $4,250 on the $15,000 spread so $10,750 (252%) of upside potential at $40 and we HOPE it goes lower so we can DD on the puts ($3,000) and roll the $30s to the $20s ($7,500) for net $3,000 and then we'd be in the $30,000 spread for $7,250 but, for now, best to start off cautiously and, worst case, it goes up and we "only" make 252% on our original play.  

January 2022 seemed so far away at the time but now it's almost here and, at $58+, we're deep in the money.  The short puts are down to 0.30 ($150) and the $30/40 spread is net $9.60 ($14,400) so net $14,250 overall is a $10,000 gain (235%) in just over a year and this trade is done, of course as we have better things to do with $14,400 than make $600 in 6 more months. 

Top Trades for Fri, 03 Apr 2020 13:30 – STZ

  In the LTP, we can sell 5 STZ 2022 $75 puts for $9 ($4,500) to net in for $66 and that's pretty much free money.  If they go lower, I'd be happy to sell more puts and set up a bull spread but, for now, nothing wrong with selling puts as we cleared out some of the original round already.

Stay at home and watch TV – we adapt to the conditions we observe, right?   We are miles in the money and the $75 puts are down to 0.20 ($100) so $4,400 profit is 98% done.   As I said – free money!

Top Trades for Tue, 07 Apr 2020 10:10 – ALK

Well, you know ALK is my favorite and we can still sell the 2022 $22.50 puts for $6.50 so let's sell 10 of those ($6,500) and pick up 20 of the 2022 $25 ($13.50)/$35 ($9.50) bull call spreads for $4 ($8,000) so that's net $1,500 on the $20,000 spread for the LTP.  

We really underestimated that recovery.  Members will note that ALK has long been our favorite airline so of course it's our go-to when value-hunting as we've already analyzed it to death.  At double our target, the puts have fallen to 0.20 ($200) and the $25/35 spread is net $9.50 ($19,000) so net $18,800 is up $17,300 (1,153%) and there's still $1,200 to gain in the next 6 months so better than the bank if all you are going to do is cash it out.

Top Trades for Mon, 13 Apr 2020 14:13 – CAKE

They only go out to 2021 but, for the LTP, lets:

  • Sell 10 CAKE Jan $15 puts for $2.85 ($2,850)
  • Buy 20 CAKE Jan $12.50 calls for $9 ($18,000) 
  • Sell 20 CAKE Jan $20 calls for $5 ($10,000) 

That's net $5,150 on the $15,000 spread so $9,850 (191%) upside potential at $20 and, if not, this is a position we're very happy to double down on for the long-term.   Ordinary margin requirement on the puts is just $946 and the risk is owning 1,000 shares at $20.15, which is where it is now.

See how easy investing is?  Especially for our PSW Members as this is simply our favorite restaurant stock.  We know exactly what to buy in a downturn.  Even though we were on a short time-frame, we hit our mark into January and the spread paid the full $15,000 for the full $9,850 (191%) profit - in only 8 months!

Top Trades for Thu, 16 Apr 2020 15:15 – BBBY

Very tempting down here!  I think, for the LTP, we may as well pick up the 50 of the BBBY 2022 $3 ($3.55)/10 ($1.45) bull call spreads at $2.05 ($10,250) and sell 20 of the 2022 $5 puts for $2.62 ($5,240) for a net $5,010 entry on the $35,000 spread so $29,990 (598%) upside potential if BBBY can get back to $10 in 20 months.  

A retail favorite of ours.  Notice how many trades there are in April?  When I see a lot of bargains, I send out more alerts and when I don't see bargains – I don't force trades – NEVER force trades!  We are at 3x goal so all good and I'm going to give us the full $29,990 (598%) upside potential as we'll collect it by January.  

Top Trades for Fri, 17 Apr 2020 10:11 – SQQQ Hedge

Note the TSLA play above and the SQQQ addition for the STP – it might not have been finished when you first viewed the post:

  • Tesla (TSLA) – They are now at the point where I'd rather short them so let's take the money and run on this one.  In fact, someone is willing to pay us $100 for the June $800 calls so let's sell 2 of those for $20,000 and buy 3 Jan $800 ($220)/June 800 ($152) bear put spreads for net $68 ($20,400) so we're in the spread for net $400 if all goes well and, if TSLA is below $800 in June, whatever premium value remains in Jan will be our profit.
  • Nasdaq Ultra-Short (SQQQ) – The Nasdaq has been very strong and this is a 3x ultra-short so, even at $13, a 20% drop bumps us 60% to $21 and that would put our $10 calls $11 in the money for $115,500 and the current net is $10,625 so we have $104,875 of downside protection in this position but we can sell 100 June $25 calls for $1 ($10,000) and buy 100 June $13 calls for $2.25 ($22,500) and that will give us another $120,000 worth of protection and, if SQQQ does spike up, we can cash out the long calls quickly because the short calls will be covered by the 2022 $10s.  Not bad to add net $107,500 worth of protection for $12,500 – I know I will sleep better over the weekend!  

June $13s came in at $2.30 but the $25s are trading at 0.85 and that's not a compromise I'd make – I'd rather sell the $23s (now $1) than pay extra for a spread we hopefully don't need.  So my plan is to wait and see if we get the $1 for the $25s and, if not, then look at alternatives – which can include selling longer months, like 40 Jan $30s for $2.60 (still $10,000).

TSLA June $800s are $108, so no worries there.  The $800 puts are $141 though and the Jan $800 puts are still $222 so yes to selling the short calls but waiting a bit on the others to see if we get better prices.

These were more adjustments to the Short-Term Portfolio (STP) than an actual Top Trade Idea.  TSLA finished at $800.76 on June 19th and SQQQ finished at $8.  There's a lot of moving parts to this so let's call it a draw overall, which is fine for a hedge.

Top Trades for Tue, 28 Apr 2020 13:12 – SPG

In the LTP, we're happy to get 1,000 shares cheaply so we can sell 10 2022 $45 puts for $14 ($14,000) and consider that free money with a net $31 entry.  As they are such a bargain, I think we can add 20 of the 2022 $40 ($30)/65 ($20) bull call spreads for $10 ($20,000) and then we have a net $7,000 entry on the $30,000 spread.  

For our Dividend Portfolio, let's:

  • Buy 500 shares of SPG for $64.44 ($32,220) 
  • Sell 5 2022 $65 calls for $20 ($10,000) 
  • Sell 5 2022 $45 puts for $14 ($7,000) 

That nets us into the stock for $15,220 and the dividend alone is $4,200 (27.5%) annually and, if we get called away at $65, that's $32,500 back for another $17,280 (113%) profit over 2 years.  Not bad for a boring, dividend stock.

Miles over our target so we'll be getting the full $17,280 (113%) profit on this trade.  

Top Trades for Mon, 04 May 2020 13:46 – BRK.B

For the LTP, we're going to assume we're making an entry too early so the plan is to take a high spread now (in case we're wrong and it pops) and wait until they drop to sell more puts and, if they never drop – we can live with just this position.

  • Sell 5 BRK.B June 2022 $150 puts for $18.50 ($9,250) 
  • Buy 10 BRK.B June 2022 $150 calls for $48.50 ($48,500) 
  • Sell 10 BRK.B June 2022 $200 calls for $21 ($21,000) 

That's net $18,250 on the $50,000 spread so there's $31,750 (173%) upside potential at $200 but, as I said, we actually would prefer it go lower and sell 5 more puts for $20 ($10,000) and then spend $25,000 (net $15,000) to roll the $150 calls to the $100 calls (now $87 or $87,000).  That would put us into the $100,000 spread for net $33,250 and we could also sell some short calls while we wait to bring that down to under $25,000.  See, we'll be disappointed if Berkshire goes straight up and all we make is 173%!

How does Berkshire Hathaway just lay around on sale like that?  50% over goal already has the puts down to 0.52 ($260) and the $150/200 spread is net $45 ($45,000) so net net $44,740 is up $26,490 (145%) even if you did make the other adjustments. 

Top Trades for Tue, 19 May 2020 15:55 – FL

For the LTP: 

  • Sell 10 FL 2022 $25 puts for $7.50 ($7,500) 
  • Buy 30 FL 2022 $25 calls for $9.40 ($28,200) 
  • Sell 30 FL 2022 $37.50 calls for $5.40 ($16,200) 

That's net $4,500 on the $37,500 spread so that's 733% upside potential in 18 months if FL can get back to $37.50.  Ordinary margin on the $25 puts is just $1,539 so it's a very efficient play as well

Usually too boring to play but everything is exciting when it's on sale.  Way over target and the puts are down to 0.15 ($150) and the $25/37.50 spread is net $11.50 ($34,500) which is net $34,350 for a $29,850 (663%) profit.  This will still make $3,150 more by January, so not worth closing unless you have something better to do with the money than make 10% more.  

Top Trades for Wed, 20 May 2020 15:49 – MU

Webinar Trade Idea on MU (from Batman) for the Butterfly Portfolio:

  • Sell 10 MU 2022 $40 puts for $8 ($8,000)
  • Buy 20 MU 2022 $40 calls for $14.75 ($29,500)
  • Sell 20 MU 2022 $55 calls for $8.25 ($16,500) 
  • Sell 10 MU July $50 calls for $2.20 ($2,200) 
  • Sell 10 MU July $42 puts for $2.10 ($2,100) 

That's net $700 on the $30,000 spread that's $12,000 in the money to start and we're doing a 1/2 sale to generate income which, in the first 2 months out of 18, is a $4,300 return on our $700 investment.  The put sale is aggressive but only net $2,197 in margin and MU is a fantastic company to own for the long-term

MU hit $49.47 on July 17th so both the short calls and short puts expired worthless.  Of course the goal was to keep doing that for income along the way but just the straight-up trade is miles in the money and we'll get our whole $30,000 for a $29,300 (4,185%) profit – even without the additional selling.  

Top Trades for Thu, 21 May 2020 14:13 – MMM

Sell 5 MMM 2022 $130 puts for $18 ($9,000) 

Buy 15 MMM 2022 $130 calls for $29 ($43,500) 

Sell 15 MMM 2022 $160 calls for $14.50 ($21,750) 

Sell 5 MMM July $150 calls for $5.40 ($2,700)

That's net $10,050 on the $45,000 spread and we'll sell more premium along the way but the upside is about $35,000 (350%) as it stands so a great way to get started on a Blue Chip industrial.    

The make the masks!  That was easy.  $154.61 on July 17th was a gain of $395 and the puts are now $1.10 ($1,650) and the $130/160 spread is $29.50 ($44,250) for net $42,600 and a $32,550 profit (323%) so far.  

Top Trades for Fri, 22 May 2020 12:27 – ARNC

So, ARNC is a great addition for our Future is Now Portfolio and we can start with:

  • Sell 10 ARNC Jan $10 puts for $1.55 ($1,550)
  • Buy 20 ARNC Jan $8 calls for $5 ($10,000) 
  • Sell 20 ARNC Jan $12 calls for $2.60 ($5,200)

That's net $3,250 on the $8,000 spread that's currently 100% in the money with a $4,750 (146%) potential gain in 8 months if ARNC simply stays above $12. 

ARNC was $33.50 in Jan so we collected the full $8,000 for the full $4,750 (146%) profit on the shorter-term trade.  

Top Trades for Fri, 29 May 2020 13:12 – HMY

There is a great strategy review for our Members in this Alert, so I'll reprint that first:

Hedges (from the morning post):

So this is all part of a LONG-TERM (see above for what I mean by LONG term) investing strategy meant to, in an emergency, give you the buying power you need to make adjustments during a prolonged crisis.  If it's a short-term crisis – we don't need to adjust much but what we really need to guard against is a 2008-9 situation, where the market goes down and stays down for close to a year.  

There are also, of course, adjustments we make along the way and you'll see, at some point, how we unwind our hedges during a crisis or you can go back and review our Workshop series of articles or just read the last two week's of March's posts and comments.  

That last one was May 12th and, since then, we've added more longs and today we added more hedges – that's the usual cycle we go through.  Generally, the hedges cost us about 25-30% of our upside but then we hedge the hedges in the STP with fun trades that often mitigate those damages but the primary goal is to steer our LTP and other long portfolios towards a double (in two years or less) while protecting those positions with the STP.

As to the Trade Idea:

I think HMY is an interesting gamble.  They were on a good path pre-virus and were expecting to make 0.40/share going forward.  Let's add them to the LTP and see how they play out.

  • Sell 50 HMY 2022 $3 puts at $1 ($5,000) 
  • Buy 100 HMY 2022 $1 calls for $2.45 ($24,500) 
  • Sell 100 HMY Jan ('21) $3 calls for $1 ($10,000) 

That's net $9,500 on the $20,000 spread but the short Jan $3 calls can be rolled to the 2022 $7 calls, now 0.85, if all goes well and then it's a $60,000 spread for $9,500.  Meanwhile, if the stock fails to move, we just sell 2022 $3 calls, now $1.40 for $1 and then we have a net $0 trade and only the obligation to own 5,000 shares at $3 ($15,000) so very little risk with a potential $50,000 gain.

This has been a roller coaster and we're back to $3.74.  We took the money and ran ages ago in our LTP (learn to take trades off the table when they are over the target) but, even if you didn't, the $3 puts are down to 0.30 ($1,500) and the $1/3 spread is right on target at net $1.75 ($17,500) so net $16,000 is up $6,500 (68%) not counting a little more we made on the roll (not much).  

Top Trades for Wed, 03 Jun 2020 12:04 – IMAX

For the LTP:

  • Sell 20 IMAX Dec $15 puts for $3.40 ($6,800) 
  • Buy 40 IMAX Dec $10 calls for $4.90 ($19,600) 
  • Sell 40 IMAX Dec $15 calls for $2 ($8,000) 

That's net $4,800 on the $20,000 spread so $14,200 (295%) of upside potential in less than 200 days is pretty good and we're already $14,000 in the money!   Even though they are aggressive, the ordinary margin on the puts is only $2,232 so a very efficient trade!  

$15.73 on December 18th was right on the money for the full $14,200 (295%) proft on the 7-month trade.  

Oddly, that was the last Top Trade Idea in June.  After a prolific April and May, we just didn't like the prices in June so we held off on new picks.  Still above we have another 13 trade ideas for another $232,460 in profits (so far) for Q2.  Added to our 14 out of 15 winners in Q1 ($271,087 in profits), we're totaling 27 out of 28 winners (96%) with $503,547 in profits on our Top Trade Alerts for the first half of 2020 – not bad!  

Of course, Top Trade Alerts are only a fraction of what we do in our Live Member Chat room, where hardly a day goes by without an idea or two popping up.  

Like last July, the market is toppy and thinly traded but the S&P was only at 3,200 last July and now 4,200 so up about 33% from the previous top is amazing… and scary… and an opportunity….

 


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  1. Good morning


  2. Good morning


  3. Phil/HMY Given they are back to 3.74 would you recommend them as a new trade?


  4. Good morning! 

    The airline will purchase 200 Boeing 737 MAX jets and 70 larger Airbus A321neos to fuel its post-pandemic growth plans.1 5 min read

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    More Vehicles Are Selling Above Sticker Price

    U.S. car dealers are able to get more than the factory price for some of their vehicles as strong demand and production shortfalls have made for a seller’s market.

    Harvard, MIT Part of $800 Million Deal to Push Access to Online Education 2 min read

    Bangladesh and Malaysia are among the countries scrambling to contain outbreaks as slow vaccination campaigns leave people vulnerable. The W.H.O. is recommending that fully vaccinated people wear masks, in a split with the C.D.C.

     

    Bruce Springsteen reopens Broadway, ushering in theater’s return to New York City.

    2,000 people in a room together – what could possibly go wrong?  

     


  5. Good Morning.


  6. HMY/Stuart – Well, it was $1.50 when we went in and our target was $3.  $3.75 is $2.3Bn in market cap and guess how much money HMY expects to make this year?  $5Bn!  Next year only $4Bn.  The problem with HMY is their production cost is a ridiculous $1,370/oz so those profits can turn to losses if gold collapses.  Still, at $1,700, they are making $330/oz.  In 2018 they lost $4.4Bn and $2.6Bn loss in 2019 but, if you believe inflation will last – then so should the profits.  

    We were gung-ho bullish at $1.50 and you can sell 2023 $3 puts for 0.70 so that's where I'd start and I'd offer $1.50 for the 2023 $3 calls, looking to sell the $5 calls, now 0.92, for $1.25.  That would net you into the $2 spread that's at the money for an 0.45 credit and the plan would be to do a 2x roll to 2024 $2 puts (if you have to) and, if those trigger at net $1.55, then you sell more puts and calls and turn it into a long-term trade for the next cycle.  That means don't sell any puts you don't REALLY want to own 4x the stock of at $1.50ish.  


  7. Phil/HMY Thank you. Common sense prevails, there will be better ideas along the way. I'll give it a miss. I'll stick to GOLD.


  8. Concrete: The material that’s ‘too vast to imagine’





  9. Has anyone looked at Berry Global (BERY)? Forward EPS 5.77 (PE < 12),  and they are projecting 2.25B EBITDA in 2021 at a market cap of 8.84 B… Packaging seems a 'stable' business, and they seem confident of passing rising costs down. 


  10. My CIM shares just got called away @14 from a September contract (bought shares for 13.30) so  at  a profit from the original shares.  Since it was a profit — can I rebuy them today at 14.71 without any tax implications?  Sorry if its a dumb question (and I know the disclaimer about everyone giving tax advice) but now that I have been doing this for a few years I realize I have to pay more attention to my tax situation as I go…



  11. CIM/Jeff – why not sell a few front month puts and have them given back to you at a discount? wink


  12. CIM I even had to buy the Jan23 back as it wqas 100 % ITM


  13. GOLD/Stuart – I agree.  They pull gold out of the ground at $850/oz – so a $500 cost advantage to HMY is nothing to sneeze at.

    BERY/RN – Not too high at $65.68, which is just under $9Bn and they were already getting killed in 2019 as they borrowed $750M to expand but now the expansion is kicking in and looks like it was the right move but loaded with debt is still keeping them down (relatively).

    Year End 26th Sep 2015 2016 2017 2018 2019 2020 TTM 2021E 2022E CAGR / Avg
    Total Revenue
    $m

    4,881 6,489 7,095 7,869 8,878 11,709 12,424 12,980 13,053 19.1%
    Operating Profit
    $m

    314 577 722 761 974 1,179 1,319     30.3%
    Net Profit
    $m

    86.0 236 340 496 404 559 697 790 869 45.4%
    EPS Reported
    $

    0.697 1.89 2.56 2.75 3.00 4.14 5.12     42.8%
    EPS Normalised
    $

    1.31 2.11 2.76 2.96 2.19 4.60 5.66 5.77 6.35 28.6%
    EPS Growth
    %

    +29.1 +61.2 +30.8 +7.28 -25.9 +110 +141 +25.5 +10.1  
    PE Ratio
    x

              14.3 11.6 11.4 10.3  
    PEG
     

              0.558 0.453 1.13 1.02  
     

    Options only go out until Jan so I'd play it carefully and not even sell puts yet but buying 10 Jan $65 calls for $6 ($6,000) and selling 8 of the Aug $65 calls for $3.20 ($2,560) is a good way to start.  If they go lower, you can sell puts and pay for a roll to a lower spread.  If they are flat, you then sell more calls to knock down the basis and, if they go up, you roll the short calls (the Jan $72.50s are $3).  Lots of ways to win, hard to lose.

    CIM/Jeff – If you trade full-time you should get it declared a business, then you only have to worry about P&L like a business.  There's a wash rule but I'm not sure it applies to gains the same way it does to losses.  The "implication" is that you have a profit on the call away and now you are buying more and are in danger of making another profit.  

    George Takei GIFs - Get the best GIF on GIPHY

    It's not so terrible. 


  14. BERY – Thanks Phil. How do you decide the ratios of the short and long options? I ask because for the same strike ($65)  8 short Aug $65 calls seems a lot for 10 long Jan$65 calls… I would have gone for fewer than the 8 short August calls for 10 long Jan calls with both at the same strike


  15. BERY/RN – Depends how confident I am they'll be higher.  In this case, not very over the next 55 days.   Earnings are last week of July and estimations are for 25% more than last year, which is a lot of pressure.  Meanwhile, FOR A FACT, there will be $0 premium on those calls at expiration while the premium on the Jan calls will have dropped by about 25% so call it $65.50 and we sell $65 calls for $3 has $2.50 in premium that will be gone while the $6 Jan $65s have $5.50 in premium and will burn about $1.50 so $4.50 vs 0.50 at this price and otherwise we roll the short calls to… MORE PREMIUM!!!


  16. Phil – what are your thoughts on BMY? It comes up routinely as an undervalued pharma stock. 


  17. Phil / WU – looks like they have pulled back 10% off Theo $26 high. Good for a new entry?  I like their divvy so thinking share purchase with equal put sale (eg: 1000 shares/ 10 2023 $22 puts for $3). What's your thoughts?


  18. Phil,

    Any thoughts on taking up short positions on TTD?

    thanks


  19. Is it time to load up on more NAK?


  20. BMY/Hwtd – They bought CELG and that's their entire growth story and Revlimid is going off-patent and that's 10% of revenues and they lost $9Bn last year but, going forward, they should make $17Bn against their $148Bn market cap and let's say it's $12Bn as the off-patent really hurts – still not terrible and I did like CELG before they got bought….  I'd rather wait and see how their debt-service goes this year and make sure integration is on track but worth watching.  $60 puts can be sold for $5.50 so that's a good start if you want to keep an eye on them.

    WU/Jeddah – WU's strength is their global presence – they are like an emerging market play.  

    Western Union operates a payment network in 200 countries with 20,000 country pairs in a network that makes 25 transfers every single second.

    WU options go out to 2023 and they are not likely to fail $20 so, the trade I'd make there it:  

    • Sell 10 WU 2023 $25 puts for $4.75 ($4,750) 
    • Buy 40 WU 2023 $22 calls for $3 ($12,000)
    • Sell 40 WU 2023 $25 calls for $1.70 ($6,800) 

    That's net $450 on the $12,000 spread with $11,550 (2,566%) upside protection and we're a bit aggressive about owning 1,000 shares at $25.11 if things go wrong but then we Rawhide and turn it into a long-term trade if we have to.  

    TTD/Harip – Too scary in this market.  They aren't even back at the highs.

    NAK/Swamp – 0.50 is where we usually buy but we already have it at 0.50 so I would want to see 0.30 before I was motivated to DD (assuming it wasn't for a good reason).  Otherwise, the plan is to sell 1/2 at $1 which then makes it free and THEN we can DD again at 0.50 to average 0.25.

    InvestorPlace – Stock Market News, Stock Advice & Trading Tips

    The case for investing in Northern Dynasty Minerals (NYSEAMERICAN:NAK) stock involves an ongoing court case, burgeoning commodity opportunities, and many other variables. 

    Source: Shutterstock

    There will be no quick, overnight answer to whether NAK stock is an obvious investment or not, but I’m going to make the case that there is a lot of reason for optimism currently. 

    The case hinges upon the company receiving the right to follow through with its mining plans in southwest Alaska.

    If that is successful, then the next hurdle is longer term hope that copper truly returns the projected opportunities it is projected to in the coming years and decades. 

    A Closer Look at NAK Stock

    Investors want to understand Northern Dynasty Minerals’ ongoing case regarding its right to operate a mine in southwest Alaska.

    After all, the project and profits which will flow therefrom won’t get off the ground without the legal right to operate. 

    On June 17 the company released news that the US Court of Appeals has determined that Northern Dynasty Minerals’ Pebble Project may now be judged on its merits.

    Thus, the EPA is now closer to being able to make a determination as to whether it will permit the Pebble Project.

    I won’t attempt to break down the case further than that. It is obviously complex in nature with many parties involved, who each have disparate and conflicting priorities.

    The point here is that the case is moving forward within the court system and that gets Northern Dynasty Minerals a step closer to moving forward with mining. 

    The argument here hinges upon the economic merits of copper mining, and balancing those economic merits against potential environmental effects. 

    Further, the environmental impact of the project has been well-documented. Whether you’re a potential investor or an environmentalist, the findings look favorable.

    Environmental Impact Study

    A comprehensive environmental impact study on the proposed Pebble Project was initiated in 2017. It included eight federal and three state cooperating agencies, federally recognized tribes and other parties.

    The study was published in July 2020. The findings were clear. No impact on subsistence fish and wildlife resources. No long-term impact to the Bristol Bay commercial fishery and no impact on water quality, jobs for people in the region. 

    Now that the case will be judged on its merits in a court of law, there is reason to believe Northern Dynasty Minerals will be able to move forward with its copper mining plans for the Pebble Project. 

    And there’s a massive opportunity there. 

    Copper and the Pebble Project

    There is massive projected demand for copper. It is a strategically important resource which makes NAK stock very interesting.

    There is also a dearth of copper production from within U.S. borders. That of course ties the narrative for the Pebble Project into national security and the U.S. economy at large. 

    Further, there is a bull market for copper right now with a projected supply deficit to occur for copper. 

    The Pebble Project is the second largest undeveloped copper reserve globally. If it moves forward and is developed there will be massive revenues as copper is used in many green energy projects.

    If the Pebble Project isn’t developed the U.S. basically falls behind in copper production. That would put the U.S. in a politically and economically difficult situation given that China is leading production.

    Without the Pebble Project, the U.S. may find that it is increasingly beholden to foreign powers for copper. With the project, the U.S. can decrease its reliance on copper imports by 8%, down to 27% of total supply. 

    Takeaway

    I’m not one for jingoistic rhetoric though it may seem that I am, given what I wrote above. Nor am I a person who thinks economic arguments trump environmental concerns.

    I simply don’t see that either of those are present here given the information presented. What I do see is that NAK stock has a path forward with its case going back to court. The economic and environmental cases are clear.

    That’s why I think there’s a lot of potential for current investors at today’s super low prices.