How to Make a Double in Pinterest Stock

Pinterest (NYSE:PINS) has been called a visual discovery platform. But for bulls caught buying the hype, PINS stock has been an eyesore of an investment over the past year.

Smart phone with the Pinterest logo in front of blurred out pinterest post pictures
Source: DANIEL CONSTANTE / Shutterstock

Today though, is it time for bulls to make a more fashionable statement in PINS? Let’s look off and on the price chart for clues and look at what a stronger, risk-adjusted determination might look like.

A challenging year just got a bit more so Monday for many investors. The large-cap, blue-chip Dow Jones Industrial Average slid 2.37%, spitting distance of February’s corrective low.

At the same time, the large-cap, broad-based S&P 500 fell 2.95% within a similar striking position of its weakest prices.

But it has been large-cap technology companies with a less-promising elixir of growth in a rising interest rate environment that have continued to hemorrhage the most.

Led by slightly larger losses from heavyweights like Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Tesla (NASDAQ:TSLA), the Nasdaq lost 3.62% on the session. The index also re-entered bear market territory with its corrective move, cutting back below 20%, near last month’s low.

Though it is not officially a Nasdaq constituent, $15 billion large-cap tech play PINS stock was no exception to the fearful risk-off trade. The market’s undisputed platform for people to visually share cool, clever and simply beautiful DIY ideas that span the fabric of our lives also stumbled Monday by a modestly larger 4.51%.

Similarly to AMZN, GOOG and TSLA stocks, the pressure on PINS stock put it in close proximity to February’s low. But the buck stops there when comparing those tech giants to Pinterest shares.

While 2022 hasn’t been a picnic for those other market heavyweights, most have enjoyed a rather fun-filled Roaring ’20s redux since the Covid-19 pandemic put Wall Street into a brief but epic bear market, which finished two years ago.

The same can’t be said for PINS stock. It is down almost 75% in just over a year since February’s peak of $89.90.

Of course, Pinterest’s slightly more demure large-cap valuation and early-stage, growth stock status helped make it a certain casualty during this past year’s rotation out of growth and higher-multiple plays.

Not unlike 2020 ‘stay-at-home’ winners Peloton (NASDAQ:PTON), Zoom Video (NASDAQ:ZM), Teladoc (NYSE:TDOC) and others, PINS stock has been slammed even harder.

Pinterest shares have been collateral damage of lockdown orders disappearing and people spending less time on brilliant projecting and more time on fantastical trips to The Walt Disney Company’s  (NYSE:DIS) parks and the likes.

But nearing the other side of the pandemic, many more people globally are “Pinteresting” and benefitting from the platform’s ideas based on this past month’s earnings report as InvestorPlace’s Will Ashworth smartly breaks down.

And today, sporting profitability and a blackeye beating rather than nosebleed metrics courtesy of investor momentum, buying PINS looks more promising as a smart play where growth intersects with value.

PINS Stock Weekly Price Chart

Pinterest (PINS) monthly chart not yet showing signs of a bottom in PINS stock
Click to Enlarge

Could $50,000 invested in PINS stock today be the next $1 million holding in your portfolio? Maybe. But how many stocks are worth a $50,000 commitment in relation to most investors’ portfolios?

That was a rhetorical question. Most aren’t. Sadly though, those kind of propositions and worse are pitched all the time.

But for most investors that might be bullish on Pinterest, leveraging today’s out-of-favor positioning with a long call or bull call spread strategy are two strategies that might be used more successfully for double or even a triple-bagger within the next six to twelve months.

And for PINS stock investors considering a long-hauler position despite no signs of its bloodied ways congealing just yet on the monthly price chart, an actively-managed stock collar is an attractive alternative.

One such and slightly unorthodox combination which looks interesting as a stronger risk-adjusted position in today’s market, both off and on the price chart, is a June $22.50 put / $30 call combination.

On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.

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