Price at Preparation: $67.69 (Jan 26th, 2024)
What they do
TransUnion (TRU:NYSE) is a global information and insights company. The Company operates through the segments: U.S. Markets, International, Consumer Interactive and Corporate. The U.S. Markets segment provides consumer reports, actionable insights, and analytics to businesses, which use its services to acquire customers, assess consumers’ ability to pay for services, identify cross-selling opportunities, measure and manage debt portfolio risk, collect a debt, verify consumer identities, and mitigate fraud risk. The International segment provides services similar to its U.S. Markets segment to businesses in select regions outside the United States. The Consumer Interactive segment offers solutions that help consumers manage their personal finances and take precautions against identity theft. The services offered in the Consumer Interactive segment include credit reports and scores, credit monitoring, identity protection and resolution, and financial management for consumers. The Corporate segment provides support services to each segment, holds investments, and conducts enterprise functions.
At Theta Bandits, where short-term trades usually take the spotlight, today’s focus is another long-term investment strategy centered around decisions that affect our economy.
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If you are already a homeowner, wanting to buy a home or any goods for that matter, one of the top concerns these days is the Federal Funds Rate. During 2020 and the Covid recovery in the market, the government stepped in with stimulus and holding rates low – allowing people to borrow money for less to: purchase homes, luxury, or other goods more easily. In 2022 / 2023 with along with inflation, those rates were hiked up aggressively and only in late 2023 were these rates started to be held by the Federal Reserve and other governments around the world. We are on the cusp of these rates starting to be potentially lowered later this year, so how do we take advantage of these rates being lowered?
One way is through TransUnion (TRU:NYSE), currently at a price of $67.69. Cross-referencing the above opinion to the visual roadmap below, this information maps directly. Looking to the left on the graph, it shows TRU hitting a high of approximately $124.63 in July 2021. For the current year the ranged between $42.09 and $82.75, with a 12-month Price Target (PT) of $74.16 (+9.56%). But IF rates start to get cut, there is a potential to test previous resistance points near the $100 range or higher.
As seen above, TRU has had a $20+ move since it’s low in October 2023. This move is most likely due to the market pricing in the rate cuts coming but have yet to be confirmed. There could potentially be a pull back to the $54.62, which has served as strong support in the past, with levels for profit taking at support/resistance points of $73.70, $82,75, $100.67 and $124.63.
The conservative approach would be to keep this ticker on a watchlist and once the news is confirmed of rate cuts then commence initiating the position.
A more aggressive approach is to choose how many shares you would like to have and buy in 3 lots, with the first one now and the remaining two later averaging the cost basis until the target amount of shares has been purchased.
If you have read previous articles, this could be attacked via Options using a Cash Secured Put, which would provide some income while setting a price that you are willing to pay for the stock (keep in mind each contract equates to 100 shares per contract).
For more content consider our Theta Bandits Discord community, a hub for traders to ask questions, share ideas and strategies for various tickers daily – last week’s top trades:
Given this trade is dependent on decisions from the government, this has a high probability of being a long-term trade while the Federal Reserve acts on rate reductions. Make sure to give the trade the time it needs to be successful, while setting limits to mitigate risks and exit points for the position if necessary.
Disclaimer: This article is for informational and educational purposes only, not investment advice. We recommend researching and consulting with a financial advisor before making investment decisions. All actions based on this information are at your own risk.