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Kevin Curran [00:00:00]
Real Money is always picking stocks and 2019 has been no different. And one of the big winners so far has been Roku and here we have the man who picked it himself, Bob Lang. So Bob what did you see in Roku at the start of the year, and is there still time to play it?
Bob Lang [00:00:17]
Hey good it's good to be with you Kevin. So you know Roku was one of those high beta, high growth names that just got absolutely just pasted in December along with a lot of other names that the market took a lot of stocks down with it. This stock I think barely had one uptick between December 1st and Christmas Eve. But it really came back in a big way. Had some heavy volume down there at the bottom which is kind of what we'd like to see when the stock bottoms out. Just a couple of days after after Christmas that it actually exploded higher with much of the market on December 26 and it kind of consolidated for about four or five days. And what we'd like to see happen Kevin is with the stock to bust out past the high of the first breakout date within about four to seven days. So this actually occurred on day number 7 which was last Friday. So that Friday if it broke out and closed near the highs of the day actually over the 20 day moving average too. I mean it really made a huge thrust last Friday which was the fourth of January. The news came out on Monday and the stock yapped higher into into the opening of the day. Just about 36, 37 dollars. And it didn't stop from there. and it took off and it closed near the highs of the day. Well over 40 bucks. The stock ran up almost 27 percent on that day. And I think it was due to some news that came out early in the morning.
Kevin Curran [00:01:50]
And the stock has fallen a little bit back since then. Corrected maybe reverting to the mean a bit. What do you make of that, and is there still room to play the stock for the rest of the year after such a rapid rise recently?
Bob Lang [00:02:02]
Well such a big move from the beginning of the year is about 30 dollars. It went up to about 42, 43 bucks on Tuesday, when I think a short seller came out with a negative note on the company. I mean listen, stock goes up about 33, 34 percent in about four or five days. It's not surprising to see people taking money off the table and that's probably what's happening right now. What we don't really want to see though is that big giant bar from Monday fading away totally. It's been taken in down a couple of days here for the past two or three days it's been down. It was up nicely on Wednesday. But it's a little bit yesterday and today. But interestingly enough on lower volume. That's what you'd like to see when a start comes down. You want to see the institutions who bought into the name when the stock started rising or even actually bottomed out towards the end of December, you want to see those people staying with the name. The hot money goes out, that's fine. But we want to see the big institutional names stay with the company.
Kevin Curran [00:03:08]
So this is one of your best ideas for 2019. And what I'm wondering is when should people take their money. What type of target are you setting for 2019 on Roku?
Bob Lang [00:03:17]
Well the chart that I set out when I put it up this past weekend is much more of a stair step pattern. We're kind of doing that right now. We jumped out that we're coming back, we're going to probably jump up again if we get above the Tuesday high. We can approach that 200 day moving average. Now the 200 day moving average looms large at around 46 bucks. But you know Kevin the stock was a high of near 75 bucks and it hit a low Christmas Eve around 25, 26 dollars. So that's an enormous drop. 67 to 70 percent. Listen you know, just to be conservative I mean I wouldn't be, I would not be surprised to see the stock make it up back into the 50s. There's an enormous gap around the 57 dollar level from early November when they reported earnings. I think they reported a shortfall. And you know back in the in the fall and late and early winter or October, November, December, if you were not making numbers or if you were cutting numbers for the your estimates for the following quarter or two, your stock was getting smoked and the stock got hammered and it got down to the below the 200 day moving average and it just kept going from there. So as a target I mean listen I mean I would say stay with the stock for the whole year. If we get up to 50 - 60 dollar range, that would probably be a good spot to start taking some profits. And again that's pretty far here. We're 40 dollars right now. But I mean I'm thinking long term for me is a year, you know that's really extra long term for me. But I mean for people who are buying the shares I think it's cheap here. They did come out with some positive news on Monday about the business and you know look Netflix comes out with earnings next week. And that tends to be a name that lifts all boats. And overall it seems to rise with Netflix right.
Kevin Curran [00:05:13]
Gotcha Bob. Well you've been right so far so it will certainly be taking your advice for the rest of the year as well and seeing what other picture you have coming up. So I really appreciate your time.
Bob Lang [00:05:22]
Thanks Kevin. Great to be with you.

Be patient. 

Or so says Bob Lang, a contributor for TheStreet's sister site, Real Money.

Lang talked to TheStreet about all things Roku (ROKU) and why investors need to bide their time with this company. 

"So you know Roku was one of those high beta, high growth names that just got absolutely just pasted in December along with a lot of other names that the market took a lot of stocks down with it. This stock I think barely had one uptick between December 1st and Christmas Eve. But it really came back in a big way. Had some heavy volume down there at the bottom which is kind of what we'd like to see when the stock bottoms out. Just a couple of days after after Christmas that it actually exploded higher with much of the market on December 26 and it kind of consolidated for about four or five days," said Lang.

Check out what they're saying about Roku over on Real Money. Not a member? Sign up here.

He continued, "And what we'd like to see happen Kevin is with the stock to bust out past the high of the first breakout date within about four to seven days. So this actually occurred on day number 7 which was last Friday. So that Friday if it broke out and closed near the highs of the day actually over the 20 day moving average too. I mean it really made a huge thrust last Friday which was the fourth of January. The news came out on Monday and the stock yapped higher into into the opening of the day. Just about 36, 37 dollars. And it didn't stop from there. and it took off and it closed near the highs of the day. Well over 40 bucks. The stock ran up almost 27 percent on that day. And I think it was due to some news that came out early in the morning."

Watch the full interview for Lang's insight on Roku.

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