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KEY POINTS
OVERALL MARKET
The DOW and S&P hit record highs as the indices ended the week in the green.
Stock market indices finished the week in the green.
The 10-year Treasury yield rose slightly, showing signs that inflation concerns are more short-term. This eases some of the tension from the yield dropping days ago. Moreover, this earning’s season has been an optimistic one. Investors are pleased with the recent performance of the stocks, especially in the S&P 500, where 90% of companies are reporting a positive surprise in revenue year-over-year this quarter. GET THE DAILY MARKET RECAP
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The Olympics kicked off Roku (ROKU) stock’s gains today as shares near an all-time high.
Roku (ROKU) stock ended the week with a bang, coming just shy of it’s all time high with more than a 12% jump today. This jump earned it a spot on Stock Card’s list of winning stocks today. The opening ceremony of the Olympics was held earlier in the day, and kickstarted a great trading session for the streaming service company. Roku landed the right deal at the right time when it came to an agreement with NBCUniversal to be the home of the network’s Olympic coverage.
Viewer count is bound to grow over the course of the two-week event. But, it's not all about the Olympics! Roku has been hot this year already. The company’s first quarter earnings report this year boasted a 35% growth in accounts registered on the streaming service, and that’s not to mention the 101% growth in revenue from the platform year-over-year. Roku is doing great, even as shutdowns are phased out and people return to events outside their homes. If you head to it’s Stock Card, you can see that it is killing the game in Profitability, Sales Growth, and Cash Availability. Scrolling down a little further, you can see that investors have had great returns over the past few years compared to the S&P 500. Roku was once an underdog that no one believed had a fighting chance in the streaming war, and now it is leading the market. If you invest in a well-managed company and ignore the volatility, you’ll find a more dependable way to grow your investment. WHAT'S DOWN?
Chinese education stocks (TAL and EDU) suffer from regulatory uncertainties as the government explores turning the sector into not-for-profit.
If you remember, we covered TAL Education Group (TAL) andNew Oriental Education & Technology Group (EDU) in a daily recap a little over a month ago. Chinese regulators were beginning to reassess the tutoring and private education industry, and the future of these companies was suddenly up in the air. In that episode, I recommended that you stay away from the dip, as attractive as it looked. Throughout the rest of June, both TAL and EDU regained some ground. Naturally, some fellow Stock Cardians were asking questions! How come they went up?
Fast forward to today. Both TAL and New Oriental Education stocks took a nosedive. On today’s loser list on Stock Card, TAL was down over 70% by close, and EDU followed closely behind with a 54% drop. Sources informed Bloomberg that Chinese regulators are considering turning million-dollar tutoring businesses into non-profits and binding them from being publicly listed, among other possible legislative changes. This is an example of how you should approach companies that are dealing with regulation changes. The stock may have seemed like a great opportunity to enter at a low price and may have even shown some growth. Still, the regulatory changes are completely out of the control of investors and even the company themselves. You want to avoid betting on such uncertain situations. There’s no guarantee that the government cares for the profitability of any given company, no matter how much analysis you’ve been doing on the fundamental or technical aspect of the stock. For now, even if I lose a chance for significant gain, I don't think the uncertainty is worth the potential upside. To me, once again, this is not a buy-the-dip opportunity. STOCK PICKS
Portfolio Update by The Next 10X Portfolio
This week, Alex Koh, Stock Card partner and the YouTuber behind "Family Investment YouTube" and The Next 10X Stock portfolio on the Stock Picks page, updated his portfolio and added his next 10X stock pick. He also published a video talking about his stock analysis.
Make sure to watch his latest Best Buy Now video: WANT TO RECIEVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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KEY POINTS
OVERALL MARKET
Despite an increase in new jobless claims, the market remained in the green even if it was barely up.
Today’s market indices ended the day in the green, but just barely.
The new jobless claims released by the Department of Labor were up 51,000. That's one reason to dampen investors' mood today. However, it was not quite successful at outpacing the bulls. Tech stocks are back up lately, as investors become more cynical of the stocks that are tied to the economy's re-opening, like banks and transportation companies. Overall, the negative and positive forces balanced each other out to an almost flat day in the markets. GET THE DAILY MARKET RECAP
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Social media stocks Twitter (TWTR), Facebook (FB), and Snapchat (SNAP) are growing as fast as ever.
Social media stocks took the market by storm today, led by major growth coming out of the pandemic. Digital ad spending has barely been stunted by COVID and is still on track for great growth this year. While tech stocks across the board were making moves, let's look at three big names that showed up on the winners' list.
Twitter (TWTR) made headlines today announcing earnings, with a 74% increase in revenue year-over-year. This is the company’s fastest revenue growth over a quarter since 2014. Facebook (FB) stock also shot up today as it rolled out its eCommerce Shop feature to WhatsApp and Facebook Marketplace. Originally this was only available on Instagram. The company is also developing an AI-assisted “Visual Search” feature for its Shop. Over 1 billion people use Facebook Marketplace, making it a lucrative spot for eCommerce brands. Snapchat (SNAP) is the last of our trio. Share prices began to climb today as hype surrounded its earnings report. Like other social media companies, it was expected to post great numbers. As of 5:30 ET, after-hours, investors loved what they heard and the stock is up over 15%. The earnings report showed a crazy 116% growth in revenue year-over-year! Snapchat is a great example of a social media application that has been able to evolve and adapt to the culture over time. If you look at the company's Stock Card, you see it belongs to several market themes, including augmented reality, digital ad, and so many others. It's a quite diverse business despite what many assume. WHAT'S ALSO UP?
ImmunoPrecise (IPA) releases positive trial results for COVID antibody treatment and shares jump 136%
As soon as I clicked into today’s winner list on Stock Card, I noticed ImmunoPrecise (IPA) at the top with a whopping 136% gain! What's causing all the stock commotion? I say commotion because the 88 million-plus trades of IPA stock that happened today is much higher than the norm of 50,000 or so.
ImmunoPrecise is a technology company that has developed advanced ways to isolate antibodies and research them. This is invaluable to companies developing vaccines and other therapies. Clients of ImmunoPrecise can have antibodies screened from any animal or tissue provided. The company’s PolyTope antibody cocktail trials were proven to be effective in treating COVID viruses in animal tests, as well as in the lab. An “antibody cocktail” treatment is an injection of antibodies from immune cells that mark and attack viruses in the bloodstream. Even better, this is already designed to handle variants of COVID like the Delta strain that is on the news lately. While you could take the huge jump today at face value, the Stock Card presents some cautionary ratings. Like all pharma stocks in clinical trials, the success of the stock is dependent on trials' success. You can see on the company's Stock Card, it's not a top holding of any ETF. If it continues to lead the antibody development for the COVID variants, then we may see a surge in ETF purchases and that may push the price up further. Nevertheless, it's a risky bet, as is the case for the majority of clinical trial stocks. WANT TO RECEIVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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OVERALL MARKET
The stock market indices continue growth thanks to upbeat earnings reports despite COVID fears.
The market ended the day in the green once again, with all 3 indices adding nearly 1% by the end of the session.
The COVID delta variant news and case numbers continue to dampen investors’ hopes of a smooth transition back to a normal economy. However, upbeat earnings reports and slow but steady growth is keeping the gains alive across industries. GET THE DAILY MARKET RECAP
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Chipotle (CMG) smashed expectations with its earnings report, and share prices jumped over 11%.
I saw a familiar and favorite name of mine on today’s Stock Card winner’s list. Chipotle Mexican Grill (CMG) shares jumped 11.5% by closing time. This is due to an impressive earning’s report released yesterday evening. Revenue was up 38.7% year-over-year, and according to the report, comparable restaurants saw a 31.2% growth. The company particularly killed it with online orders during shutdowns, accounting for 48.5% of sales!
A strong indicator I noticed in the earnings was Chipotle’s margins. Generally speaking, restaurants operate on thin margins, many within 2-6%. While being a large and established corporation can help ease that, it’s worth noting that Chipotle managed to pull its margins from -0.4% last year, to +13%! Sounds like management has been focusing on the effectiveness of its operations. The company’s Stock Card boasts impressively strong operations to prove it, practically green across the board on all sections of operations. While the restaurant industry isn’t expected to boom in the near future, the sales growth and profitability sections on Chipotle’s Stock Card are solid. Remember when Chipotle shares dipped due to the E-Coli outbreak? Since then, the stock has tripled in value. The lesson is when a well-managed company with cash is beaten down, for patient investors, there is nothing better to do than doubling down and owning the shares. WHAT'S DOWN?
4-greener stock Sleep Number (SNBR) dropped -12% despite good earnings. Is this dip worth buying?
A 4-greener Stock Card made it to today’s losers list. I investigated Sleep Number Corp’s (SNBR) -12% drop today, after what seemed to be a positive earning’s report. Sleep Number’s stock had risen more than double in the past year, so it appears investors were expecting great numbers to back it up. While the company did post good numbers, analysts were expecting even more. For example, the $0.80 earnings per share were alright, but not quite the expected $1.11. The company mentioned that year-to-date demand was up 40%, but with earnings per share not reaching expectations, investors may be less sure of the company’s ability to make the most out of the demand. The CEO blamed supply chain issues in June and July for hurting its numbers. Despite this, sales were still up 70%.
The Stock Card is a 4-greener, and the company shows strong operations and a great return on investment for shareholders. The only slightly concerning factor is a poor debt-to-equity ratio, which is the amount of debt used to finance compared to investor equity used to finance. If the company can take advantage of the demand and slim down its margins, it could be on a better track financially. Clearly, the company doesn’t have any big issues plaguing it at the moment, but of course, it could always be more profitable. If you scroll down, investor sentiment is still calm, and the company is undervalued. At a 1.4 price-to-sales ratio, the stock isn't priced too high. The supply challenges, however, may take a while to get sorted. If you invest in it, go slow not to get shocked if the stock continues to drop. I used to own shares, and I may buy back some again. WANT TO RECIEVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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OVERALL MARKET
The stock market indices recovered from the recent dips.
All the market indices reversed direction and finished nicely in the green.
It seems investors were buying the dip of the last few days as the COVID variant hasn't gone anywhere. The economic indicator that may have helped the market is a more than 6% jump in the US Housing Starts, compared to 2.11% last month. This is higher than the long-term average of 0.34%. It may have been a signal to investors that the economy is still chugging along. WHAT'S UP
At a 0.3 price-to-sales ratio, Bed, Bath and Beyond (BBBY) could be a cigar butt stock.
Today's winner stock of the day reminds me of the cigar butt term. Cigar butt, as some of you may know, is the name that value investors give to a company that may have one last poke left before it is totally run out.
That company is Bed, Bath and Beyond (BBBY). Today, the stock was up more than 7% today after the news that it has started a partnership with Casper (CSPR) to sell mattresses and create an in-store experience for Casper customers. Now, why is it a cigar butt? Let's head to the stock's fair share price and valuation multiples on its Stock Card. At 0.3 times price to sales ratio, investors expect the stock to be worth one-third of its current sales value. Let's look at BBBY's performance in the last year. If we ignore the comparable sales between 2020 and 2021, due to store shut-downs in 2020, the company's same-store sales were up 3% in 2021 Q1 vs. the same time in 2019. It's also taking a page out of Target's (TGT) playbook and has launched a few store brands to boost its margin. So, the company can grow its sales and is certainly worth more than ⅓ of its current sales. Let's go to the cash availability section on Stock Card, and it is a free cash flow generating company. So, I'm not saying BBBY is the next Tesla (TSLA), but the current valuation doesn't seem to be jiving with its performance. There is so much to hate about Bed, Bath, and Beyond, including its store experience and appetite to buy back shares, but if I were a cigar butt investor, I would have taken one last poke. GET THE MARKET RECAP
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If Netflix's (NFLX) new bet on gaming pays off, the stock is a good bet at the current price.
Shares of Netflix (NFLX) were flat today after the company missed earnings expectations. Interestingly, the company still managed to add almost 2 million new global subscribers.
The company confirmed that it is entering into gaming, as it sees video games as a new kind of content. One way to interpret this is Netflix hitting its ceiling and feeling the pain of competitors such as The Walt Disney (DIS) and Disney+. This is the first interpretation I had when I heard about gaming aspirations a few days ago. However, another way to interpret this is as a sign of business evolution and applaud Netflix for racing to new content segments. On Netflix's Stock Card, I can see that using the 5-year price-to-earnings ratio, 3-year price-to-sales ratio, and average analyst target, the stock is undervalued or fairly priced. So, it's not a bad idea to consider buying some shares to see what would happen to Netflix's new bets. STOCK CARD TIP
Have you seen the Portfolio Update section?
Today, when I logged in to my dashboard on Stock Card, I noticed four of the portfolios I follow on Stock Card have at least one new update. Not sure if you have seen, but if you follow any portfolio on the Stock Picks page, you will get updates in your inbox and your feed when you go to your dashboard page on Stock Card.
Just locate the feed in the bottom-middle of the dashboard page and click on Portfolio updates. GET THE DAILY MARKET RECAP
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OVERALL MARKET
The DOW has its biggest drop since October as COVID variant fears stunt markets worldwide.
All the market indices ended the trading session today in the red.
The delta variant renewed COVID fears and drove the market down today. The DOW Jones, for example, hasn’t dropped this far since October. The bearish sentiment was worldwide, withmarkets across the globe registering losses to kick off the week. Transportation and energy stocks dipped, with the devastating shutdowns still going on. It’s not a huge surprise to see a pullback today. GET THE DAILY MARKET RECAP
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Small cap companies with strong operations that you should consider for your long-term portfolio.
This weekend, I got inspired by a Twitter thread where quite a few experienced investors shared small-cap stock ideas to own for the next 10 years.
Some ideas from that thread that grabbed my attention were Fathom Holdings (FTHM), Vinci Partners (VINP), and Dermtech (DMTK). All interesting companies, especially Dermtech. The thread inspired me to create a watchlist on Stock Card for small cap companies worth buying now. We can call them small hidden gems to buy now. Before jumping into two of my favorite stocks from the new watchlist, here's how I created it: On the screener page, I added a new filter and plugged in these criteria: Small cap, $500 million to $2 billion, Growing market, Growing sales, and No cash concerns. I also focused on NYSE and NASDAQ exchanges to reduce the size of the watchlist. The result is a watchlist of hidden gem stock to buy now. You can take a look at my watchlist by clicking here! HIDDEM GEM #1
MGP Ingredients (MGPI) has built growing operations with strong fundamentals.
One of the more intriguing tickers on the hidden gems watchlist is MGP Ingredients (MGPI). MGP earns most of its revenue from distillery operations. This includes the production and sales of industrial alcohol spirits, for food or otherwise. MGPI also operates warehouses for the company itself, and storage services. Apart from this, it also supplies wheat and starch ingredients. We came across this stock once already when we created the Plant-based food watchlist. So, not only is it benefiting from plant-based trends, it also meets criteria for potential small caps to buy now.
Let’s head to its Stock Card for more info. Off the bat, I can see that its financials are looking great. It has green ratings for every aspect of its operations! This includes Sales Growth, Profitability, Cash Availability, and Management Effectiveness. If you click into any of these sections, the sections are broken down further. Here, it’s still green everywhere. The only exceptions are 3-year compounded growth rate and Quarterly Profit Margin, which are both sitting at fair levels. MGP Ingredients has established solid growth that is setting them up well for the future. In terms of market performance, there were better stocks to have been holding the past 5 years or so, but MGP Ingredients blew the S&P out of the water over the last 10 year period. The agricultural inputs and plant-based food sectors are expecting to see plenty of growth in the coming years. Judging by the factors we just saw on its Stock Card, I’m feeling optimistic about MGPI. Add it to your watchlist to research it more. HIDDEN GEM #2
TechTarget Inc (TTGT) is capitalizing on a growing Internet Content & Information industry.
The second stock I’m covering today from the new watchlist is TechTarget Inc (TTGT). TechTarget is an experienced company that uses browsing data to help companies promote content that influences potential IT buyers and customers. It serves tech businesses to refine marketing and sales pipelines. Its business model is to charge IT and tech sales teams to get access to better and more qualified IT buyers.
Let’s head to the Stock Card. On its “Growth Potential” rating, the Communications Services sector isn’t expected to have much growth, but there is a very optimistic outlook on the Internet Content & Information industry. A possible concern with the stock is its current valuation. The share price has risen 751% in the past five years, partly to blame for the “Overvalued stock” rating it holds on the company’s Stock Card. Despite this, TechTarget is on the new watch list for a reason. The company is doing great in an industry that is growing with each passing day. I recommend you have a look at it when you log in back to your Stock Card account. WANT TO RECEIVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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