Analysis: CHPT COST URI

After you receive this Alert, we will make the following trades:

  • Sell 960 shares of ChargePoint (CHPT)  at or near $19.40. Following the trade the portfolio will own 8,040 CHPT shares, roughly 4.5% of the portfolio.
  • Buy five shares of Costco Wholesale (COST)  at or near $501.25. Following the trade the portfolio will own 245 COST shares, roughly 3.5% of the portfolio.
  • Buy 30 shares of United Rentals (URI) at or near $290. Following the trade the portfolio will own 360 URI shares, roughly 3.0% of the portfolio.

Over the last few days, we've seen a resurgence in ChargePoint alongside the bullish commentary, including that from President Joe Biden, at the Detroit Auto Show. Not only has that popped CHPT shares within striking distance of our $21 price target (as well as the Wall Street consensus of $22), but the 33% move since the start of September has the position size at 5% of the portfolio.

While we continue to see blue skies ahead for ChargePoint and its business, we're going to remain prudent investors and trim back the position, locking in some of those gains. The portfolio will keep a sizable position in CHPT shares, given that we are only entering the beginning of the EV charging station buildout. We'll review our $21 price target, but for now we'll downgrade the shares to a Two rating. When we see upside to more than $24 or if the shares pull back below $17, we'll reconsider that decision.

We'll take those returned capital and gains and distribute them equally into COST and URI shares. Despite continuing to win consumer wallet share and expand its warehouse footprint, Costco's shares are down more than 10% in the last month. Ahead of the company's earnings report next week, we're adding to portfolio's position. Following the trade, we'll have some additional room with which to round out the position size based on what we learn next week.

Similarly, we are adding to our position in United Rentals, scooping the shares up near the portfolio's cost basis, as we get ready for infrastructure spending to accelerate.

(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)

(Note: This Alert originally had an incorrect number for the CHPT trade. The correct sale is for 960 shares. In addition, the email Alert contained an incorrect ticker. We apologize for the errors.)