The market indices ended today mixed after news of an underwhelming jobs report.
The market ended the day with mixed indices. Only the NASDAQ managed to make it into the green.
The job situation in America is getting better, but it has not been without its hiccups. The unsteady growth and the uncertainty that comes with it likely held the markets back today. For example, today’s ADP payroll report is up 330,000 jobs, which is positive, but still short of DOW Jones' estimate of 653,000. This is the smallest monthly growth since February. Lower than expected jobs-related numbers typically hurts the market, as it did today.
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Investors wonder if there is an opportunity for significant growth once again as vaccine stocks begin to rise.
The winners' list on Stock Card today featured some big jumps in vaccine stocks. New monthly COVID cases are outpacing last year’s numbers, highlighting the need for more vaccine development and research.
Novavax Inc (NVAX) was the first company that caught my eye. Novavax stock shot up by over 18% today after announcing that the company had reached an agreement with the European Commission for the advance purchase of 200 million vaccine doses. The company is currently developing a protein-based vaccine that is showing promise in clinical trials. The European Commission stated that it wants to expand the vaccine portfolio available to citizens, which now includes seven different vaccines.
The question we all ponder upon now is whether it's time to rebuy vaccine stocks.
Let me share my story here. Last summer, I bought some Moderna (MRNA) stock when the stock got beaten down after the initial rise. You can see that in my Windmill portfolio, which is a portfolio with a small amount of money for things I'm experimenting with and don't necessarily want to own for a long time. I ended up selling at a loss because I realized I wasn't sure about the company and assumed I had missed the boat. The stock price is much higher than where I sold, and the story taught me two things:
The risk with vaccine stocks is that you never know which one will lead the race.
With vaccine stocks, you need to be both patient and lucky.
One way to deal with such uncertainty is to invest in a vaccine ETF such as GERM. You can research it by typing “GERM” in the search bar on Stock Card and clicking on the suggested ETF. GERM is a passively managed fund focused on the treatment, testing, and advancement of vaccines. The ETF is hitting its 52-week high now, and market sentiment is quite up too. This tells you that vaccine stocks as a whole have a run-up, and if you are investing, you are betting on the continued excitement. You’ll need to be patient and lucky to turn a small amount of money into a lot.
Cardlytics (CDLX) stock takes a steep fall after its earnings report.
Cardlytics (CDLX) stock is down over 27% today after yesterday’s underwhelming earnings report. The stock was also down double-digit yesterday, so it keeps showing up on Stock Card’s losers list.
Let's see why.
Cardlytics is an advertising company that works closely with banks to deliver the most attractive deals it can to their customers. Cardlytics uses purchase data from retailers online and in stores to match promotions with customers already acquired by banks, increasing revenue from their current customer bases. This is a great business model that is surely worth it for these banks, but looking at the company’s Stock Card, I am not too convinced it's a good business model for Cardlytics itself. It's not profitable and it doesn't generate free cash flow. Sales growth has slowed down too. For example, in its latest earnings report, revenue was $58.9 million, an increase of 109% year-over-year, compared to $28.2 million in the second quarter of 2020, yet the results were still short of expectations held by investors and management alike. The CEO blamed supply chain issues and slow economic reopening for the miss.
Scrolling further down, at 11% short interest, it appears many investors are betting against the stock. There is a significant amount of doubt in this company, and possibly for good reason. I don't know the company enough to say it's an opportunity to buy this dip. It seems there is not enough evidence to see whether the company can turn around its growth and start generating cash and profit.
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Check out Wealthy Nurse Janee's portfolios, our featured investor and partner of the week.
Let's wrap up by stopping by Jane Clay's portfolios on Stock Card. Janee is the founder of Wealthy Nurse Janee, and is our featured investor of the week. Janee runs two portfolios on Stock Card: her Dividend and Value as well as her Higher Risk portfolio.
I'm so impressed by her return, but also by her superwoman powers. She is a nurse, as you can guess from her name, a mom, an avid investor, and she is quite active on TikTok.
I'll leave a link to my conversation with Janee. I would highly recommend looking her up on search bar found on the Stock Picks page and following her portfolios to get notified when she adds new stocks to them.
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