Why I sold Clover Health even though I like long-term stocks
RRecently, Fool.com contributor Matt Frankel, CFP, decided to press the “sell” button on Medicare Advantage Company. Health Clover (NASDAQ: CLOV). But unlike most stocks, he didn’t sell this one because of the company’s long-term potential. In this Motley fool live Video clip, recorded on July 2, Frankel discusses his reasons for selling Clover with Anand Chokkavelu, Director of Growth for The Motley Fool.
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Matt Frankel: Before I move on from those two, I wanted to touch on what JK just said about memes stocks. He says, “Matt, can you explain a little more why you don’t like memes stocks? If you like to trade, can handle wild swings, why wouldn’t you? I’m asking mainly because I hold Clover. ” First of all, most of the same stocks are not from large companies. It’s number one. I am categorically opposed to anyone who buys AMC (NYSE: AMC) or GameStop (NYSE: GME), for example. But if I like the job, it will come back to earth. If he’s trading at a valuation that doesn’t make sense. Mainly I bought Clover at around $ 6 a share, I sold it at around $ 18 two months later. I’m going to pocket a triple and move on. I think Anand was in the same camp where it’s like a borderline store of conviction for them. If this is anything, I will cite one of my most convinced actions, Pinterest (NYSE: PINS). If Pinterest were to pull up to $ 200 a share tomorrow because it was on a Reddit board, I would own the stock. I wouldn’t sell it because it’s one of my most convinced names. It really depends on how high my conviction level is in the stock and I haven’t felt the average stock where it was above a loaded if the valuation is right.
Anand Chokkavelu: I think Clover is one, except there is enough upside potential where I’m like no. But it’s that dream for me, I love that it’s a meme stock because there might be a price that I can sell where I’m happy to just say, well, you know what? Say $ 40. I don’t know what the price is exactly. I should work closely together. But, hey, yeah, I’m gonna take that and if I’m wrong and it goes up to $ 200, well, maybe I can live with that. But on low conviction stocks, there’s nothing I like better than zooming in and at least giving myself the opportunity.
Anand Chokkavelu, CFA owns shares of Clover Health Investments and Pinterest. Matthew Frankel, CFP owns shares of Pinterest and has the following options: $ 85 long calls in August 2021 to AMC Entertainment Holdings and $ 65 short calls in August 2021 to AMC Entertainment Holdings. The Motley Fool owns stocks and recommends Pinterest. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.