Match Group (MTCH): 2019 Top Picks' Mid-Year Update

07/19/2019 5:00 am EST

Focus: TECHNOLOGY

Jim Woods

Editor, Successful Investing and Intelligence Report

Jim Woods, editor of Bullseye Stock Trader, chose Match Group (MTCH) as his top speculative idea for 2019. The stock has since risen 57%. Here's his latest update on this leader in the online dating market.

Although I still feel like a 20 something, I’m a couple of decades past those years. And when you’re in the “middle age” stage of life, you start to more easily recognize the trends affecting many of your similarly aged peers. One such trends is a whole lot of marital dissolutions.

Many people in the their 40s, 50s and 60s now find themselves single after multi-decade relationships. And though many in this demographic now are trying to navigate the next stage of life, there are a plethora of new tools used to help these individuals seek out new companionship.

Today, asking someone out on a date is as easy as “swiping right.” That’s the parlance used by the online dating app Tinder. And while Tinder’s demographic is more in the 20 something group, there are plenty of online dating sites that cater to an older demographic, and/or some specific demographic that appeals to specific interests.

The company that created Tinder, along with its namesake Match.com, is Match Group. The company also operates high-profile dating sites such as Plenty Of Fish, Meetic, Ok Cupid, Pairs, Twoo, and OurTime.

Year to date through June 27, MTCH is up nearly 60%. That’s a big move, and it’s been powered by big earnings growth, as well as growth in the company’s app downloads.

In fact, the latest check of the download metrics gives us early hints of just how robust earnings may continue to be, and we know that via a recent report from Jeffries analyst Brent Thill, who wrote, “Our data checks for Tinder continue to look strong. With less than a week remaining in the quarter, Q2 U.S. app rankings have come in above both Q1 2019 and 2018 quarterly levels.”

In my Bullseye Stock Trader service, MTCH has been a big winner. We originally bought the stock on Dec. 20, 2018 and sold it on Jan. 24 for a gain of 26.19% in just 35 days. Moreover, our options position in the MTCH June 42.00 calls scored us a big win of 81.43%.

A couple of months later we saw that MTCH shares were setting up for another good buy point, so on March 21 we bought the stock again. We sold it on May 30, 70 days later, for a gain of 17.81%. In our options position, we banked a gain of 95.71% in the MTCH Sept. 60.00 calls.

Then on June 27, we again recommended MTCH, along with a slightly out-of-the-money call option, as I suspect the online dating site will continue to move higher in front of its second-quarter earnings report slated for early August. (Disclosure: At the time of this writing, Jim Woods was long ABT in his Bullseye Stock Trader advisory service.)

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