|
Oh, the meme stocks… A media frenzy … Some love it … Others hate it … Regardless, the meme stock is a new phenomenon that has let the world witness the power of retail investors. Retail investors like you and I are using some old wall street tricks to gamble their way to overnight wealth possibly. It all started when social media and the stock market investors met. After that, fellow individual investors found themselves with some free time during the pandemic to talk and trade stocks at a high volume. Starting with GameStop (GME), retail investors saw a possibility to 'short squeeze' the stock and benefit from the proceeds of betting against institutional investors who shorted the stock. It's an old wall street trick but new to individual investors and entertaining enough to create a media frenzy. Not every stock can be a meme stock, though. And, despite the contrary belief, being a meme stock doesn't mean a lousy stock either. Today, we are introducing you to our "Potential Meme Stocks" list of stocks so you can decide whether you can invest in meme stocks but still stay diligent and intelligent about it.  What is a short squeeze?Before we start, let's clarify what a short squeeze is and how it is triggered. Short squeezing a stock means using all means possible to increase the stock price above the price that other investors have bet against. When the stock price surpasses that threshold, those who have previously bet against the stock (shorted it) have to buy the stock at the new price to "cover" their shorts, which means higher demand for the stock and a higher price for the stock. For a stock to rally due to a short squeeze, you'd need an external trigger to creates demand for the stock in the first place. A piece of good news or positive chatter online could be good examples. The online chatter and the appointment of a new Chairman of the Board were some of the reasons that led GameStop’s stock to short squeeze from barely $3 to reach a $420 value. To be a meme stock, you'd need both ingredients: a short squeeze potential and an online chatter driven by retail investors. It's important to note that a stock can be a potential meme stock with the high possibility of a short squeeze, but if there is no external trigger (such as chatter online) to push the stock higher than the short price, the stock may never rally. Now that we clarified the definitions let's get to our methodology to publish the Potential Meme Stock collection. Our methodologyWhat triggers an online chatter about a stock isn't a straightforward answer. The Stock Card analysts team took three weeks to research every possible way to define it.
In the end, we narrowed down the criteria to be a potential meme stock to a few measurable data points that create the largest list of stocks with the potential to become a meme stock. Here are the main criteria:
Final resultsThe result is a list of 295 stocks that meet the basic criteria to become a meme stock. From here, it's up to the social media and retail investor community to trigger a short squeeze. Get the Potential Meme Stock collection Tip: How to invest in meme stocks?Just because a stock is a potential meme stock doesn't mean it's a bad investment. Some potential meme stocks are future-shaping companies with strong operations that you may want to own for the long term. In those cases, you may get a chat to profit from the extreme volatility to buy shares of such companies at a good price. Our CEO just recorded a new Daily Roll episode to talk about one meme stocks she owns despite the volatility. Check it out: RiskWe've all heard meme stocks are risky. They truly are. In a short squeeze event, the problem is the gap between the company's valuation, including its future valuation, and its current stock price widens so much that there is no way to justify the price. By nature, a short squeeze is a short-term event. It's triggered by a sudden surge in demand that will not last. That's why meme stocks are extremely volatile. It's possible that a short squeeze stock to crash and never go back up. We have no control over external market triggers or the percentage of the shorted float for any individual stock. Therefore, sudden volatility and losing all of your money are not unreasonable outcomes of a meme stock investment.
Key Points
Overall Market
The Stock Market Finished The Week with Mixed Results As Inflation Fears and Speculation Over the Possible Fed's Responses Continued
The stock market indices finished the week with mixed results. It turned out to be a good start to the day. However, by the time the market closed, both the Nasdaq index and the S&P 500 index fell into the red zone. Meanwhile, the Dow hovered above zero, but only barely.
The economic indicator we can discuss today is the existing home sales drop for the third straight month, according to the National Home Builders Association. Home prices have hit an all-time high. It seems higher demand by first-time buyers combined with lower mortgage rates and shortages in lumber and other commodities is expected to continue for a while and make the home prices continue to rise as they have done so in the last few months. What's up?
Virgin Galactic (SPCE) Stock Jumped More Than 7% After The Company Resumed Its Previously Delayed Test Flights Plan
Shares of Virgin Galactic (SPCE) were up more than 7% today after another green day yesterday. The company announced it would resume its test flight which has been delayed a few times in the last couple of months.
The stock price is quite far from its all-time high of $62.80 shares. But, if it manages to continue with test flights and ultimately launch its commercial flights, the stock price could rally quite drastically. I own a few shares, and I'm glad I held them despite the recent drops. Let me know in the comments if you end up selling your shares. What's New?
Introducing The New Telemedicine List of Stocks
We just released a new list of stocks on Stock Card. This new collection gives you a list of 61 companies that are shaping the future of Telemedicine.
After the COVID-19 pandemic hit, it was clear that medical services would have to transform the way they do business. To overcome the challenges, health care companies started to shift their business processes to allow servicing their patients. In a way, the tragedy of the COVID-19 pandemic gave birth to and accelerated the adoption of a new industry, the Telemedicine industry. Now that they have invested in the infrastructure required for telemedicine, it is a lot more efficient to continue with virtual visits when an in-person visit isn't essential. Take CVS (CVS) as an example. The company offers a whole spectrum of telehealth services to patients and physicians. If you choose to stay in the comfort of your home, you can schedule appointments with licensed doctors. Virtual visits are available at an affordable price for those who decide to stay in. Its services also include telephone-only consultations with providers, evaluation, diagnosis, treatment, and data communication between all parties. According to Fortune Business Insights, the Telemedicine industry is expected to grow by 25% per year and shape a $400 billion market. There is one more reason to invest in telemedicine stocks now: The market has a negative sentiment toward such companies in light of the reopening. However, many market participants miss seeing the financial incentives for health care providers to encourage virtual services now that they have invested in the infrastructure and know how efficient their daily processes could be. One study has estimated "diverting patients from emergency departments with telemedicine can save more than $1,500 per visit" for the hospital. Health care is a for-profit industry in the U.S. and many other countries, and no one can argue with saving money, especially in healthcare. To get the list of telemedicine stocks, type in telemedicine in the search bar the next time you log in to your Stock Card account. Want to receive this daily stock market recap report in your mailbox?Today, we are introducing you to the Non-Fungible Token (NFT) list of stocks on Stock Card platform. The stuff we all buy and trade are broadly divided into fungible and non-fungible. Fungible things are easily interchangeable. A $10 dollar bill is a $10 dollar bill regardless of how many times it exchanges hands. It's not unique. All $10 bills are similar in value. In contrast, the Mona Lisa painting is quite unique. You can copy it but the original copy is still the original copy. The Mona Lisa is a non-fungible asset whereas a $10 bill is fungible. So far, so good. We put the Mona Lisa in a Musume and guard it with proper security cameras and locks and it maintains its uniqueness. But, what if the Mona Lisa could have been a downloadable art by anyone around the world and became a part of another painting? What if the Mona Lisa was a piece of digital art online? In that case, however unique it is, it would have been difficult to distinguish a copy from the original if anyone could have created a copy of the Mona Lisa and claimed it to be the original. Now think about all the digital things we own. A piece of music, a good article, a great game, or even an interesting video. How can those things stay unique and be valued based on their uniqueness at every corner of the Internet?  The world we live in gets more digital by the day. Take the example of how we purchase and listen to a piece of music. It all started from live performances. Then humans found a way to store the music on cassette tapes, CDs, DVDs. Then came the era of digital downloading the music we like, and now we stream everything. Our favorite YouTubers may use parts of the music and create a new show or a podcast episode. The original piece of music is now exchanging hands and evolving at an unprecedented speed. The world has embraced a new technology named Non-Fungible Token (NFT) to address that specific challenge. The NFT technology associates the identity of the original creator of a piece of digital content with the content itself, which is non-fungible regardless of how many times it gets reused by other people. In a way, the NTF technology protects the uniqueness and the ownership of digital things in an easy and efficient way. Why Now?Why the world is suddenly interested in NFT technology. Digital files, music, and other types of digital content are not new. What is the driver of the global interest in NFTs and how come we have never had NFT technology until now? In order to associate a digital asset with its original creator and trace the people who have owned that asset since it was created, we need a technology that can trace that chain of ownership in an efficient and cost-effective way. Blockchain infrastructure is the answer. The same blockchain technology that powers cryptocurrencies can be used to create non-fungible tokens and identify the owners and value of a digital asset. That's, of course, a very simplistic and idealistic answer but you get the gist. Since we have blockchain technology we now can have NFT technology too. Imagine the implications of such a technology for investors like you and us. Anything and everything digital has an original owner that can be traded in exchange for money. As investors, everything that has monetary potential is an exciting investment. We can invest in tokenized digital assets. For example, we can buy a memorable video of a unique basketball shot on the NBA's Toshot marketplace. We can also invest in the companies that enable the NBA's Topshot website to offer its digital assets to NBA fans. As stock market investors, we prefer the latter. That's why we are excited to introduce our most recent list of stocks to our fellow Stock Cardians: the Non-Fungible Token (NFT) list of stocks that allows all of them to participate in the future of digital assets. Our methodologyBecause the NTF technology is in its infancy phase, the landscape is still evolving and growing across a few dimensions. We started our research by identifying markets that can take advantage of this revolutionary way of exchanging things digitally. Music, games, and collectible things, such as unique tweets from a celebrity, are examples of such markets. Then, there are digital marketplaces where people can exchange those unique digital content. Of course, we need the actual software infrastructure that enables such transactions. Those are broadly the subsegments of the NFT landscape as the industry evolves and grows.
One thing you would notice is that the number of publicly traded companies playing in the NTF market isn't too big. As is the case with all other emerging technologies, the innovation starts with smaller, more agile startups. As publicly traded stock market investors, we are at a disadvantage of not having access to those smaller private companies. However, there are still more prominent and established public companies with a lot of cash and an appetite for experimentation taking the lead in moving the NTF technology forward. Those are the companies we have added to the NFT list of stock and we would refresh the list in the weeks and months to come. A digital pair of shoesTake Nike (Ticker: NKE). The company already knows that its die-hard customers are interested in creating, owning, and trading uniquely designed limited-edition sneakers. We have spoken about the market for second-hand sneakers in the previous episode of the Daily Roll with our CEO. The savvy folks at Nike HQ have asked themselves if their sneakerheads (a way to call a person interested in owning and collecting several limited-edition sneakers) are interested in the actual sneakers, would they also be interested in a digitized limited-edition sneaker design? If you are not a sneakerhead, you are rolling your eyes and laughing at that notion. But, just like how you and we like to invest and trade stocks, it shouldn't be hard to imagine other people may be interested in buying and trading unique sneakers. Of all people, stock market investors should understand how it feels to buy, hold or exchange a highly desirable item. So, let's not judge?! Okay?! Going back to Nike, the company is experimenting with the idea of tokenizing its sneaker designs and that's how a digital pair of shoes is born.  Final resultsJust like the Nike example, we looked for other companies that have already dipped their toes into the emerging NFT landscape, and we found and published a list of 36 companies across five subsegments of the NFT market. Have a look at the list and dip your toes in this rapidly evolving and new market. RisksAs is the case with investing in most emerging technologies, we face a few risks. The most important is the "hype" risk. When a new technology emerges, the media, social media, and the participants in the market are excited about the future potential and possibilities. The excitement typically creates unrealistic expectations and disregards the challenges that are in the way of developing commercially viable use-cases of the technology. As a result, the stock prices surge exuberantly, and we run the risk of overpaying for a commercially nonviable business opportunity. Make sure you are aware and consider such risk in your investment plan as you learn about the Non-Fungible Tokens and invest in companies leading or playing a part in shaping its future.
Regardless of who we are and where we live and come from, we all must have looked at the sky at least once and wondered:
 What is Space Travel and Exploration?Space travel and exploration is not a new endeavor. Our parents and grandparents saw a huge step for humankind when we landed on the Moon decades ago. However, there is renewed interest in the last few years and a focus on pushing the space travel frontier and becoming a multi-planetary species. Numerous startups have emerged in the private market, and many public companies have focused on space travel. A new industry has been born from creating reusable rockets to making space travel more affordable and enabling unmanned exploration vehicles to prepare for humans' arrival. Our MethodologyWe started our research by identifying direct exploration and space travel companies. Such companies manufacture probes, rockets, and unmanned robots to use on other planets. From there, we extended our research to space travel enablers who create the necessary tools, hardware, and software for such exploration. Solutions such as ground-based operations to support the interstellar missions, highly advanced materials for outer space usage are excellent examples of space travel and exploration enablers. In the end, we summarized the world of Space Travel and Exploration into four subsegments:
Final ResultsThe result of our research is now available to you on Stock Card's Featured tab. You will find 49 companies in this collection pushing humanity for its next leap, working in areas where most investors have never assumed possible. RisksAs always, you are investing in future-shaping companies that come with an inherent risk. Many smaller companies focused on space exploration, and travel are unprofitable. Some haven't yet turned a single dollar in revenue, and the larger ones would still need billions of dollars in investment before making money from space travel and exploration. Should you choose to invest in stocks from Space Travel and Exploration, make sure to go for cash-rich companies with substantial competitive advantages. Those are some of the criteria that would protect your investment even if the sector goes through the typical stock market ebbs and flows.
Investing in biotechnology companies that focus on the fight against COVID-19 involves understanding four main components: diagnostics, cure, vaccine, and distribution. More than 100 companies are competing in the vaccine development race, and several others are already getting ready to produce and distribute it. However, to contain the spread, diagnostic testing is an important frontier as the vaccine development is. As always, what becomes a society's priority tends to become a noteworthy investment too. This week, we turn our focus on COVID-19 Testing Kit stocks to give StockCardians and our broader community a starting point for their fight against COVID-19, investing-style.  Research methodologyThe overall process of diagnostic testing depends on several different products such as swabs, glass vials, RT-PCR testing machines, a laboratory apparatus most commonly in DNA segmenting via the polymerase chain reaction (PCR), electronic or disposable pipettes, filter tips, and refrigerated microcentrifuges. To those products, one can add services such as test sample transportation and imaging centers. To build a robust list of companies involved in manufacturing testing kits and distribute diagnostic testing, we first referred to Stock Card’s proprietary market database to look for diagnostic testing companies. We then validated the list with holdings of exchange-traded funds such as the GERM ETF, which seeks to track the Prime Treatments, Testing, and Advancements Index. Main challengeBecause of the priority and popularity of the COVID-19- related topics, almost every pharmaceutical, and healthcare company associate its operations with developing a testing kit, vaccine, or cure. However, the tricky part of the research was to screen for companies that are much more committed to finding the cure, assisting with diagnostics, and producing materials needed for various efforts in the COVID-19 ecosystem and are achieving early success. Our analyst team spent more than two weeks evaluating the list qualitatively, and the result has turned out to be a reliable yet robust list of companies worthy of your attention. Risk and opportunityAs always, when you invest in companies without a proven track record of product and financial success, it involves risk. The risk is exacerbated when dealing with biotechnology companies in the COVID-19 ecosystem of vaccine and testing kits developments and has no other revenue sources. Your investment success would have two possible extreme outcomes. Either the company succeeds, and you win with it. Or, despite all the efforts and stock price volatility, the investment loses all its value. A binary result is the most typical risk you'd need to be ready to face, should you choose to invest in the COVID-19 testing kit stocks. The evidence of such binary outcome is visible in the rapid decline of the stock prices of testing kit frontrunners such as Quidel, Hologic, and Quest Diagnostics, since the launch of the low-cost testing kit by Abbot. While that's a substantial risk, it may also mean an opportunity. It is worth evaluating some of the beaten-down testing kits stocks to find well-managed companies that are not purely reliant on a testing kit's success and can recover into more reasonable valuation in the future. ResultsAfter the thorough research and curation of the list, we identified more than 80 companies involved in producing the COVID-19 testing kits and providing diagnostic testing services. You can access them directly by clicking on the below button. Alternatively, type in "COVID-19 testing kit" in the search bar, and you get the list.
|
Archives
October 2021
Categories
All
|
RSS Feed