4 Stocks to Watch This Quarter — and How to Play Them with Smart Options Strategies
Sideways markets reward patient investors. Here’s how I’m thinking about HIMS, SoFi, TSM & Mercado Libre—and the options tactics that fit each setup.
Since the calendar flipped to October, the S&P 500 has moved mostly sideways. For option-savvy investors, that’s not a bug—it’s a feature. Below are four companies I’m watching closely and the specific options approaches that can improve entry prices, add income, or both.
Quick Thesis Table
| Company | Sector | Core Thesis | Preferred Tactic |
|---|---|---|---|
| Hims & Hers (HIMS) | Digital Health | Recurring DTC subscriptions, strong revenue ramp, balance-sheet strength | Sell cash-secured put near $40 |
| SoFi Technologies (SOFI) | Fintech / Banking | Member growth, 29% EBITDA margins, improving profitability | Sell cash-secured put near $25 |
| Taiwan Semi (TSM) | Semiconductors | Pick-and-shovel to AI; scale & pricing power | Sell cash-secured put near $260 |
| Mercado Libre (MELI) | E-commerce + Fintech (LATAM) | Marketplace + payments flywheel; recent pullback | Buy shares outright |
1) Hims & Hers Health (HIMS) — Telehealth’s Quiet Disruptor
Founded in 2017, Hims & Hers connects consumers to licensed providers across sexual health, hair loss, skincare, weight management, and mental health—built on recurring subscriptions. Revenue has scaled from roughly $527M (2022) to over $2B TTM, with operating profitability turning positive and improving in 2025. The balance sheet remains a bright spot: more cash than debt.
Valuation Take
At a forward P/E near 62.8× and a two-year EPS growth average of ~31%, HIMS screens as quality growth at a premium. It’s compelling, but price-sensitive investors may prefer a pullback.
2) SoFi Technologies (SOFI) — A Full-Stack Digital Bank
SoFi evolved from student loans into a full financial ecosystem—banking, credit cards, investing, and lending—designed as a one-stop money app. Members climbed from 3.4M (2021) to 11.7M (Q2 2025). Margins are expanding (EBITDA ~29%) as scale improves.
Valuation Take
With a forward P/E near 52× and a two-year growth run-rate around 55%, the PEG under 1 argues the premium is backed by growth—rare among fintechs this hot.
3) Taiwan Semiconductor (TSM) — The Pick-and-Shovel of AI
TSMC manufactures the world’s most advanced chips for leaders like Nvidia, AMD, Apple, and Qualcomm. In effect, it’s a royalty on AI infrastructure. Despite a strong run, valuation is reasonable relative to durable advantages and scale.
Valuation Take
With two-year average EPS growth near 20% and a forward P/E around 26×, TSM sits in the “quality at fair price” zone—especially as AI demand compounds.
4) Mercado Libre (MELI) — Latin America’s Commerce + Payments Flywheel
Think Amazon + Shopify + PayPal, tailored to Latin America. Marketplace leadership and the rapidly scaling Mercado Pago create a powerful network effect. Revenue has expanded from ~$2.3B pre-2020 to over $24B TTM, with operating profit approaching $3B. Shares recently pulled back more than 15%, opening a potential window.
Valuation Take
A forward P/E near 31.5× with ~42% two-year average growth implies a PEG well under 1. For investors seeking non-US exposure to secular growth, MELI remains a high-quality candidate.
Why Sideways Markets Favor Option Sellers
Consolidations after big rallies are normal. When direction is unclear but implied volatility stays decent, selling options on quality names can generate steady cash flow and enforce price discipline.
Bottom Line
Different businesses, one through-line: profitable growth with secular tailwinds. Use options where they add edge (HIMS, SOFI, TSM), and own outright where liquidity and structure suggest it (MELI). In a market catching its breath, patience plus process often outperforms prediction.
Disclaimer: Educational content only, not financial advice. Options involve risk and are not suitable for all investors. Do your own research and consider consulting a licensed advisor.
4 Stocks to Watch This Quarter — and How to Play Them with Smart Options Strategies
Since the calendar flipped to October, the S&P 500 has been trading mostly sideways. Momentum traders may find that frustrating, but for investors who understand the full toolbox of market strategies, sideways isn’t necessarily bad news.
As every experienced options trader knows, there are ways to profit whether markets are trending up, down, or flat. This is what makes options so powerful — they allow investors to generate income, lower entry prices, or hedge existing positions.
In today’s market environment — with volatility simmering and valuations uneven — blending stock selection with options discipline is one of the smartest approaches. Here’s a look at four companies worth watching this quarter, and how to use options to make the most of each setup.
1. Hims & Hers Health (NYSE: HIMS) — Telehealth’s Quiet Disruptor
Hims & Hers Health has become one of the more fascinating small-cap growth stories in the U.S. market. Founded in 2017, the San Francisco-based company built a direct-to-consumer digital health platform that connects users with licensed healthcare professionals for personalized care.
Its offerings span multiple wellness verticals — from sexual health and skincare to hair loss, weight management, and mental health. What differentiates Hims is its subscription-based model. Customers don’t just make one-off purchases; they sign up for recurring shipments and ongoing provider support.
That recurring revenue engine has translated into impressive top-line growth. In 2022, Hims generated roughly $527 million in revenue. Fast forward to the trailing twelve months, and sales have soared past $2 billion, representing an 89% year-over-year increase.
Even more encouraging, the company turned an operating profit for the first time in 2024, and that profitability has doubled so far in 2025. For a young firm in a competitive industry, that’s a major milestone.
Financial Strength and Valuation Check
Despite being relatively new, Hims has kept its balance sheet pristine. The company holds more cash than debt, an advantage that gives management room to invest in marketing and product expansion without financial strain.
At today’s market cap of about $11 billion, the stock is up roughly 130% over the past 12 months, and more than 100% year-to-date. Those returns might tempt investors to take profits, but the long-term picture remains strong.
Analysts project 2026 EPS of $0.81 (38% growth) and 2027 EPS of $1.00 (24% growth), giving a two-year average growth rate of 31%. Based on those numbers, HIMS trades at a forward P/E of 62.8×, or a PEG ratio of 2.0.
That PEG above 1 suggests the valuation is rich, but not irrational — especially if earnings keep compounding. Still, disciplined investors may prefer to wait for a pullback.
The Smart Play: Selling Cash-Secured Puts
This is where options come in. If you love the business but not the price, you can sell cash-secured puts at your preferred entry level.
For example, selling the November 21 $40 put brings in about $2 per contract ($200 income) at a 17-delta. If the stock dips and gets assigned, you effectively buy shares at $38, lowering your cost basis while earning premium income.
In short, you get paid to wait for the dip.
2. SoFi Technologies (NASDAQ: SOFI) — The Digital Bank Revolution
Next up is SoFi Technologies, one of the most ambitious fintechs in America and arguably the company redefining what a modern bank can be.
SoFi started with student loans but has evolved into a full-stack financial ecosystem — offering banking, credit cards, investing, insurance, and personal loans. The company’s mobile app aims to be the “one-stop shop” for money management.
And customers are buying in. Membership has grown from 3.4 million in 2021 to 11.7 million as of Q2 2025.
Growth with Efficiency
What makes SoFi’s story compelling isn’t just user growth — it’s the improving profitability.
Revenues are climbing sharply, and EBITDA margins now sit around 29%. That’s a rare mix of hyper-growth and financial discipline.
With a market cap near $31 billion, SoFi’s shares are up 170% year-over-year and 86% year-to-date. On the surface, that might seem overheated, but valuation tells a different story.
Analysts expect 2026 EPS of $0.55 (74% growth) and 2027 EPS of $0.76 (37% growth), yielding a two-year average growth rate of roughly 55%. Using the 2026 estimate, SoFi trades at a forward P/E of 52×, giving a PEG ratio under 1 (0.94).
That’s a rare combination — high growth at a justified price.
The Options Angle
Even though SoFi looks attractive, short-term volatility could create better entry points.
By selling the November 21 $25 put, investors can earn around $1.20 per contract ($120 income) while setting up to buy the stock if it dips toward the mid-$20s.
If SoFi keeps trading sideways or drifts lower, the investor pockets the premium or gets in at a more favorable valuation. Either way, the math works in your favor.
SoFi is more than a “bank app.” It’s an early mover in an industry undergoing structural change — where traditional banks are losing millennial and Gen Z customers to digital ecosystems that blend finance, investing, and lifestyle in one tap.
3. Taiwan Semiconductor (NYSE: TSM) — The Beating Heart of the Chip World
You can’t talk about the semiconductor industry without mentioning Taiwan Semiconductor Manufacturing Co. (TSMC) — the world’s most critical chipmaker.
TSMC isn’t just another tech company; it’s the backbone of global computing. Roughly 90% of all advanced chips — used by Nvidia, AMD, Apple, Qualcomm, and others — come from its foundries.
That means owning TSMC is like owning a royalty on the entire semiconductor supply chain.
Performance and Fundamentals
Over the past year, TSM shares are up 40%, and 50% year-to-date, lifting the company’s market cap to around $1.5 trillion. But even after such gains, valuation remains reasonable.
Revenues and operating profits continue to surge, with operating margins near 49% — a sign of immense pricing power and manufacturing scale.
Analysts expect 2026 EPS = $11.49 (+16.6%) and 2027 EPS = $14.13 (+23%), averaging around 20% growth over two years. That gives TSMC a forward P/E of 26× and a PEG ratio of 1.3 — not cheap, but fair for a company of this dominance.
When investors say “Nvidia is expensive,” they often forget that Nvidia’s long-term success depends on TSMC’s capacity. In that sense, TSMC is the pick-and-shovel play of the AI boom.
The Options Strategy
For long-term investors who want a better entry price, one approach is to sell the November 21 $260 put and collect roughly $3 per contract ($300 income).
If the stock dips to $260, you’ll own shares at an effective cost basis of $257, while getting paid for your patience. If it doesn’t dip, you simply keep the premium.
Either outcome is attractive for those bullish on semiconductors over the next decade.
4. Mercado Libre (NASDAQ: MELI) — Latin America’s E-Commerce Empire
The final name on our list takes us outside the United States — to Mercado Libre, the e-commerce and fintech giant of Latin America.
If you’ve ever wondered what Amazon, PayPal, and Shopify would look like combined in one company, Mercado Libre is your answer.
Headquartered in Argentina, MELI operates the region’s largest online marketplace and complements it with a fast-growing payments arm, Mercado Pago, which handles transactions both online and offline.
Explosive Growth
Before the pandemic, the company’s revenue stood around $2.3 billion. Today, it exceeds $24 billion — a ten-fold increase in just a few years. Operating profits have similarly exploded, from near zero pre-2020 to nearly $3 billion today.
Despite that growth, MELI’s stock has recently pulled back more than 15%, creating a potential entry window.
Analysts forecast 2026 EPS = $66.58 (+50%) and 2027 EPS = $89.30 (+34%), averaging 42% annual growth. Using those figures, MELI trades at a forward P/E of 31.5× and a PEG ratio of 0.75 — indicating it’s actually undervalued relative to its growth trajectory.
The Investment Case
Because of MELI’s high share price and relatively thin options volume, it’s better suited for outright ownership rather than options trading. But for investors seeking international diversification, Mercado Libre checks every box:
- Exposure to high-growth emerging markets
- A dual-engine business (commerce + payments)
- Expanding profitability
- And a stock that just pulled back from highs
It’s a high-quality name that can add both geographic and sector diversification to a U.S.-heavy portfolio.
Pulling It All Together: The Strategy Behind the Picks
Each of these four companies represents a different dimension of modern growth investing:
| Company | Sector | Core Thesis | Ideal Strategy |
|---|---|---|---|
| Hims & Hers Health | Digital Health | High revenue growth, clean balance sheet, early-stage profitability | Sell cash-secured puts for lower entry |
| SoFi Technologies | Fintech / Banking | Rapid member growth, expanding margins, scalable ecosystem | Sell puts near $25; accumulate on dips |
| Taiwan Semiconductor | Semiconductors / AI Infrastructure | Foundational tech supplier with global dominance | Sell puts at $260; long-term compounder |
| Mercado Libre | E-Commerce + Fintech (EM) | Amazon + PayPal + Shopify of Latin America | Buy directly; hold long-term |
In all four cases, the common thread is profitable growth supported by strong secular trends — digital health, fintech, AI hardware, and emerging-market e-commerce.
But there’s also a deeper investing lesson here: valuation discipline still matters.
By using cash-secured puts, investors can:
- Set their desired purchase price.
- Earn premium income while waiting.
- Reduce emotional decision-making.
In essence, options transform passive “hoping for a dip” into an active income-generating strategy.
Why Sideways Markets Are Great for Option Sellers
Markets don’t move in straight lines. After strong rallies like we’ve seen in 2025, it’s normal for indexes to consolidate. While some investors grow impatient, seasoned traders recognize these moments as prime opportunities for premium collection.
When volatility stays elevated but direction is unclear, selling options on quality names — especially cash-secured puts or covered calls — can generate consistent cash flow while keeping risk manageable.
For instance:
- Selling a put on a stock you want to own lets you buy it lower or earn income.
- Selling a covered call on a stock you already own lets you monetize it during consolidation.
Both strategies align perfectly with the kind of sideways action we’ve seen in the S&P 500 lately.
Final Thoughts: Positioning for the Rest of 2025
Whether it’s the digital health revolution (HIMS), fintech innovation (SoFi), the chip super-cycle (TSMC), or emerging-market e-commerce (Mercado Libre), these four names each represent powerful long-term themes.
But the takeaway isn’t just what to buy — it’s how to buy it.
When valuations are stretched and indexes stall, the investor’s edge often comes from patience and process, not prediction. Selling cash-secured puts on strong businesses at prices you’d love to own them turns uncertainty into opportunity.
As Warren Buffett once said, “The stock market is a device for transferring money from the impatient to the patient.” Options just happen to pay you for that patience.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Always conduct your own due diligence or consult a licensed advisor before making investment decisions.