• The market ended the day in the red, but all three indices continue their overall positive 6-month streak.
• Atlassian (TEAM) stock rose over 20% today after a great earnings report with a good forecast for the coming year.
• Pinterest’s (PINS) earnings report shows growth, but a recent decline in users caused investors to doubt.

The market ended the day in the red, but all three indices continue their overall positive 6-month streak.

The market indices ended the day in the red.

Despite the day ending in the red, this month marks a 6-month streak of positive growth in all three indices. While the new COVID delta variant and inflation create challenges, investors are continuing to push the markets further. The GDP report released yesterday wasn’t quite as good as hoped, but the 6.5% growth is still a great sign for the economy, and the market surely reflects that.

Atlassian (TEAM) stock rose over 20% today after a great earnings report with a good forecast for the coming year.

Software company Atlassian Corp (TEAM) found itself on Stock Card’s list of winners today as its share prices rocketed up over 20% by the close. Atlassian provides management and collaboration software and earns revenue from its subscriptions and IT services. 

The earnings report shows a 30% increase in revenue year-over-year and a subscription revenue growth of 50% year-over-year. The cloud revenue was up 57%, thanks to the migration of more than 1000 users in Q4 alone. In the past, investors weren't confident that cloud migration could happen as fast. That's why today's results are well-received by the market. Topping a good performance with a good forecast, management expects to see continuous growth in subscription revenue, the main source of income for Atlassian at roughly 40% each year. 

If you click on Atlassian's operations on its Stock Card, you'll see despite being unprofitable, it is a free cash flow generating company. The stock was already overvalued, and this price jump makes it even more expensive. That's typically the price you pay for good companies. However, I would wait for the earnings excitement to calm down before buying shares. 

Pinterest’s (PINS) earnings report shows growth, but a recent decline in users caused investors to doubt.

On the loser side, Pinterest (PINS) landed on Stock Card’s losers list. The stock is down 18% today. The image sharing and social media service reported its 2021 Q2 earnings yesterday, with a 125% growth in revenue and a 9% growth in monthly active users globally, year-over-year. It’s the monthly active users (MAU) that didn’t sit right with investors, though. The company may have seen growth year-over-year, but MAU is down 7% compared to last month. It's not surprising, however, to see the decline. Pinterest had an excellent uptake during the pandemic, and now things are settling down. 

This is the lowest the stock has been since late May. Is this a buy-the-dip opportunity?

Looking at the Stock Card, Pinterest has a decent future ahead of it. When it comes to growth, it is benefiting from a growing market. Sales have been doing great too, but the one glaring problem is the company’s profitability, as you would expect from growth companies. Like Atlassian, it's a free cash flow generating stock that you can buy at a lower price today. 

If you look at the reasons I had for having the stock on my watchlist, by visiting the 2021 Watchlist, you see that my wish has come true. I've had it on my watchlist for its flexibility to adopt new business models, including the partnership with Shopify (SHOP). The stock is a part of my high conviction, 2-greener watchlist that I've been monitoring for a chance to invest when the stock gets beaten down, potentially around the earnings report day. Today's price drop brings my watchlist wish true.

Check out Paul Essen’s portfolio, our featured investor and partner of the week.

Okay, let's wrap up by stopping by Paul Essen's portfolio. You can find it on Stock Card's Stock Picks page. Paul and his Freedom portfolio are the Featured investor and partner of the week. He is one of the best long-term investors I like to follow on Stock Card. He and I had a chat about his investment strategy earlier this week. I’ll leave a link to that conversation in the show notes. Drop by Pauls' Freedom portfolio and follow him to get notified of his buys and sells. 

• Despite the less-than-expected GDP growth, the market indices ended the days with record highs.
  
• Celebrating Robinhood’s IPO (#HOOD)
• A deep dive into Robinhood’s growth, revenue, volatility, and regulation worries.

Despite the less-than-expected GDP growth, the market indices ended the days with record highs.

The market indices ended the day in the green.

A report by the Department of Commerce was released today, showing a 6.5% increase in the GDP, which is lower than expected. This could be a sign of struggles with inventory and supply chains, or just a slight pullback in growth. Regardless of the reasons, investors seemed to remain optimistic and brought the indices to record highs.

Celebrating Robinhood’s IPO (#HOOD)

Before Robinhood's IPO analysis, I'd like to pause a second and celebrate the company’s Initial Public Offering.

Robinhood's IPO is in a sense, a celebration of the entire individual investor community. My fellow Stock Cardians, and even other individual investors that haven't found Stock Card yet, it’s a big day for you all! Today Robinhood went public. There is so much controversy around Robinhood and retail investing these days that it casts a shadow on the significance of this event. 

Robinhood's IPO is a huge milestone for all of us who believe in owning our financial destiny. We are passionate about investing. We like the thrill of discovering new investment ideas, and we embrace the responsibility that comes with managing our money. I even dare to say we enjoy it!

Today, we tip our hats to the Robinhood team and its 22 million+ users. Congratulations!

A deep dive into Robinhood’s growth, revenue, volatility, and regulation worries.

​Now, celebrations aside, it's time to take a look at the stock and find the good, the bad, and the ugly. First up:

The Good:

Robinhood’s branding is a large part of its success. It is one of the more prominent fintech companies, widely known for its accessibility and ease of use for retail investors. The name Robinhood is practically synonymous with retail investing, and that’s a valuable asset.

In terms of user engagement, Robinhood's zero fees model and easy-to-use design have led to a highly engaging product. It has more than 17 million monthly active users, and more than 80% are acquired either organically or through user referrals.

The company has grown its revenue 245% year-over-year in 2020, and an even greater 309% year-over-year by this March. The company uses rebates from other financial institutions, premium subscriptions, and its own investments to generate revenue. It's a rapidly growing start-up. Overall, Robinhood clearly understands how to benefit from trends and retain customers. 

The Bad:

Pessimism is Robinhood’s greatest enemy. As soon as the market opened, share prices dropped. Although it almost broke even around 1:00 EDT, it was dragged further down into the red during the rest of the session. By closing time, the price had fallen to $34.82. It seems investors are not as excited about Robinhood. 

The volatility of HOOD stock is worth understanding. The company kept about 20-35% of its shares for sale to retail investors, which I might add, is quite on brand. However, this is higher than most companies, which according to CNBC, tend to keep more of their stock invested with institutions like hedge funds. This allows more volatility, which investors should be aware of. 

Also, profit-wise, the company is not quite there yet, and may not get there anytime soon. According to Robinhood's S1 document, it "incurred operating losses each year since its inception in 2013 through 2019, including net losses of $6.1 million, $57.5 million and $106.6 million for fiscal 2017, 2018 and 2019, respectively." 

The Ugly:

The sustainability of revenue is a concern of mine. One thing that bothers me about Robinhood's revenue is how reliant it is on options trading revenue, dogecoin trading revenue, and general hype. If you look at the distribution of revenue on its S1 document, the majority of revenue in 2020 comes from Options trading. And, similarly more than half are coming from the 2020 users. 

Coincidentally, the trading of options has also caused one of the company’s biggest missteps. At the end of June, FINRA fined Robinhood a record $70 million for customers’ losses during the “outages” like during the Gamestop (GME) squeeze, misleading customers, and for approving options trading for customers the company knew should not be trading options. Overall, there is a lot of backlash against the so-called order flow revenue model.

If that wasn’t enough, the CEO of Robinhood is currently under FINRA investigation as well for not being registered with FINRA. This is showing the company in a bad light at a time where it needs good publicity the most, but it seems the CEO Vlad will not be found in violation, since he does not directly oversee the brokerage, only the parent company. This may mean the company has to find a FINRA-registered CEO so the two co-founders can step further back from brokerage operations.

Can Robinhood maintain the revenue growth? That is the question I'm pondering as I consider investing in the IPO. For now, I think I’ll stay out of the fray. Good brands and well-managed companies stay for a long, long time, and there will be plenty of opportunities to invest. I won't rush in, and let Robinhood hash out some of the ugly regulation and revenue challenges it's currently facing. 

IPO days are some of my favorites. It’s exciting to watch a company enter the world of public trading. Want to find all the latest IPOs in one spot? Type in "2021 IPO" in the search bar, and click on the “2021 IPO” collection to get a list of all the IPOs this year. 

Check out Paul Essen’s portfolio, our featured investor and partner of the week.

​Okay, let's wrap up by stopping by Paul Essen's portfolio. You can find it on Stock Card's Stock Picks page. Paul and his Freedom portfolio are the Featured investor and partner of the week. He is one of the best long-term investors I like to follow on Stock Card. He and I had a chat about his investment strategy earlier this week. I’ll leave a link to that conversation in the show notes. Drop by Pauls' Freedom portfolio and follow him to get notified of his buys and sells.

• The stock market ended the day mixed after the Fed released remarks from its monetary policy meeting.
• Tilray (TLRY) earnings boost marijuana stocks and give a positive outlook for the industry.
• Canopy Growth (CGC) refocuses on profitability and free cash flow while the outlook on American legalization remains fuzzy.

The stock market ended the day mixed after the Fed released remarks from its monetary policy meeting.

Today’s market indices ended the day mixed.

The DOW Jones was down, while the S&P 500 finished in the red by a hair. The NASDAQ managed to stay in the green. This comes after a statement by the Federal Reserve confirming that the economy has shown great improvement. Chair Jerome Powell emphasized that the Fed is not planning on pulling back its favorable money policies until the nation was sustainably back on track. Some investors are growing impatient that the Fed is not addressing the rising inflation as a challenge and keeps its policies. That's most likely what contributed to the market's mixed results. 

Tilray (TLRY) earnings boost marijuana stocks and give a positive outlook for the industry.

Today, several cannabis stocks showed up on the winners' list. I typed in "cannabis" in the search bar, and the cannabis (marijuana) collection on Stock Card is registering all green. Marijuana stocks have declined all year since the retail-fueled trading frenzy earlier in 2021 with other meme stocks. Why are cannabis stocks suddenly rocketing? 

The industry has struggled with COVID shutdowns and closing dispensaries, where customers are more likely to spend money on more expensive products than shopping online. This was Tilray’s (TLRY) response to slightly underwhelming revenue during its earnings call yesterday. The stock is up over 25% today for its positive results. Tilray showed a 27% increase in revenue year-over-year, with a 55% growth in cannabis revenue specifically. The company operates mainly in the Canadian market but has branched out to Europe with its merger this May with Aphria. Aphria was operating in the same industry but making most of its revenue from its branch in the German medical marijuana market. 

Despite COVID challenges, the positive outlook by Tilray boosted several marijuana stocks higher today. Growth is on the horizon for companies on both sides of the border. In the U.S., statistics show that nationwide cannabis sales increased 67% in 2020, while 12% of Americans are active marijuana users. With more states legalizing it by the day, the market is ever-growing. Not a surprise to see investors are digging marijuana stocks once again.

Canopy Growth (CGC) refocuses on profitability and free cash flow while the outlook on American legalization remains fuzzy.

Yesterday a fellow Stock Cardian, Robert Milling, asked me whether it's time to buy CGC now that the price is lower than what I paid for it. I own Canopy Growth Corp (CGC) in my portfolio and have kept that as my foot in the industry's door. I also picked it because it is one of the well-funded companies in that sector. Robert made me go back and see what's going on with CGC.

Canopy Growth Corp (CGC) is operating in Canada like Tilray and holds licenses to distribute medical marijuana products in over twelve other countries. The company has been rapidly expanding in the Canadian market, but it is still losing money each year. Profitability is one reason the company has been cutting some celebrity partnerships. If you take a look at the company’s Stock Card, you’ll find that it has a great outlook on industry growth, and its sales revenue has been on a promising upward trend for a while. My strategy to keep a foot in the door still applies as CGC continues to focus on growth and profitability. 

The risk I'm taking with CGC is still quite high. While the industry has seen plenty of growth in states and countries where marijuana has been legalized, there’s still quite a ways to go.Accordingly to Wikipedia, only two countries, Canada and Uruguay, have fully legalized commercial activities nationwide. More countries have legalized recreational or medical use, but full commercialization is still just beginning. In the U.S., a new bill has been introduced to the Senate for the federal legalization of marijuana.  The time it will take to reach that point is anybody’s guess. Marijuana investors need to be patient and master their emotions during market volatility. 

The steep losses this year do present a buying opportunity if you want to take a long position on a marijuana stock but prepare to hold through some major volatility over the coming years from the U.S. market. CGC or Tilray either can be a good one to consider, you may also take a look at marijuana-focused ETFs such as MJ, although I haven’t yet looked at the ETFs in detail. 

Check out Paul Essen’s portfolio, our featured investor and partner of the week.

​Okay, let's wrap up by stopping by Paul Essen's portfolio. You can find it on Stock Card's Stock Picks page. Paul and his Freedom portfolio are the Featured investor and partner of the week. He is one of the best long-term investors I like to follow on Stock Card. He and I had a chat about his investment strategy earlier this week. I’ll leave a link to that conversation in the show notes. Drop by Pauls' Freedom portfolio and follow him to get notified of his buys and sells. 

• The stock market ends the day in the red as fears of inflation and Chinese regulation strike the market.
• Regardless of the pandemic, the pet care industry is continuing to grow, evident by PETS, CHWY, and TRUP stocks.
• Earnings calls with disappointing outlooks hurt a few growth stocks, including TDOC, UPS, and LOGI.

The stock market ends the day in the red as fears of inflation and Chinese regulation strike the market.

The market indices ended the day in the red.

A few forces are at play:

Regulatory crackdowns are continuing in China, and the U.S. listed stocks are losing billions as the week goes on. 

The International Monetary Fund, a financial institution with input from 200 countries involved, warned that inflation is not transitional, the road to recovery is very uncertain and subject to unforeseen effects, like supply chain issues.

The Federal Open Market Committee of the Federal Reserve commenced its monetary policy meeting today. Economists and investors are awaiting the announcement tomorrow of the Fed’s plan of action going forward.

It is not surprising that the market is not giddy. 

Regardless of the pandemic, the pet care industry is continuing to grow evident by PETS, CHWY, or TRUP stocks.

A report by the American Pets Product Association says that the great growth seen during the pandemic is due to continue through the rest of 2021. Food and treat sales had gone up 10% last year, as consumers pivoted to purchasing their pet products online who continue to do so regardless of the reopening. 

This overall market optimism kept Petmed Express (PETS) investors happy, despite a disappointing earnings report released yesterday. Income didn’t top last year’s same quarter, but it appears to be a hiccup in a reopening market. The company's CEO, Mendo Akdag, blamed a spike in advertising costs and a loss of sales to veterinarians that have reopened their doors for Petmeds underperforming operations.

This positive outlook on growth presents a good buying opportunity. While Petmed may have not killed it this past quarter, things are still looking good judging by the company’s stock card. Under Strong Operations, you can see great ratings for its cash flow and debt situation. It doesn’t have the best track record for returns on investments for shareholders, but at least the company is well-managed. Like I mentioned before, the healthcare and pet care markets are both expected to see plenty of growth. 

The market's direction may also mean good news for other pet stocks like Trupanion (TRUP) and Chewy (CHWY). Most people keep their pets even after a pandemic. So, if you got into buying stuff online for your pet, you’ll probably stick to it. I own Trupanion shares and plan to hold on to them. Chewy is on my watchlist too. 

Before moving to the loser stocks, let’s take a quick stop to explain why TAL Education (TAL) and New Oriental Education (EDU) are up. Based on our research, it seems short-sellers who benefited from the rapid price drop are not closing their positions to lock their gains and that means a hike in price due to covering shorts. This isn't the usual short squeeze we have talked about. It's just short-sellers enjoying their profit by selling at a really low price. 

Earnings calls with disappointing outlooks hurt a few companies today, namely Teladoc (TDOC), UPS (UPS), and Logitech (LOGI).

On the loser side, a few solid companies turned red today after their recent earnings showed signs of a slowdown in growth. Here are three I noticed on today’s loser list of stocks on the site:

Teladoc (TDOC) stock is down after hours. It released an earnings report today that disappointed investors. While revenue grew, net loss was more than 5x worse than the previous year. It wasn’t quite shaping up, and that wasn’t the only company that took a dive this afternoon. 

UPS (UPS) beat forecasts with its earnings report, showing an increase in revenue as well. But, like Teladoc, the stock dropped. It closed the day with a 7% loss as management made it clear that they expect to see a slowdown in growth over the rest of the year. FedEx (FDX) and UPS operate more or less side by side in the same market, and this pessimistic outlook brought down FDX share prices as well, down 5%.

Another similar situation happened for Logitech International SA (LOGI). The stock dropped over 10% after its earnings report yesterday. Operating income grew 146% year-over-year as more people needed computer accessories during the pandemic. However, management maintained its future guidance on sales growth, expecting numbers to remain flat, going no more than 5% in either direction. Such growth is in line with the sector growth as you can see on the company's Stock Card. The Technology and Computer Hardware sectors are expected to see a 5% growth rate, and with supply chain issues still affecting the industry, it’s a good thing management isn’t raising investor hopes too high.

All these companies are worth watching depending on your strategy, especially if the sell-off continues. 

Stock Card Went Viral on Tik Tok

​Folks, yesterday we went viral on TikTok thanks to our partner Invest Diva. She was telling TikTok about stock market research tools she loves and the TikTok investor community loved it. Check out Kiana's TikTok and see how she uses Stock Card to find interesting stocks. 

• The stock market ends the day in the green despite plummeting Chinese stocks.
• Microstrategy Inc (MSTR) stock is up 26% today as Bitcoin begins to climb.
• Chinese regulators deal a major blow to Tencent (TCEHY) and its monopoly over music rights.

The stock market ends the day in the green despite plummeting Chinese stocks.

The three major indices all closed today in the green, even if just barely.

This day in the green comes despite billions in losses from U.S.-listed Chinese companies in danger of regulatory crackdowns by the government. Shareholders are getting cold feet as the Chinese officials target education stocks and companies they deem concerning over data sharing. 

Nevertheless, investors across the rest of the market stayed optimistic and kept the indices moving forward thanks to better-than-expected earnings reports, which we discussed last week.

Microstrategy Inc (MSTR) stock is up 26% today as Bitcoin begins to climb.

​Microstrategy Inc (MSTR) is up 26% today, and it comes as no surprise because Bitcoin appears to be on the rise again. Crypto-minded investors have targeted the business intelligence company since it acquired over 2 billion dollars worth of Bitcoin as its treasury reserve asset. Management is betting on the cryptocurrency to be a safe investment vehicle for the company’s cash in the coming years. 

Despite its move in tandem with Bitcoin, Microstrategy is not part of the cryptocurrency industry. It provides business intelligence services to enterprises, specifically with a web-based platform for company-wide analytics and reporting. It has many large corporations as clients, including Fortune 500 companies. The sentiment cycle around Bitcoin leaves little space to discuss the company's core business. That's where Stock Card comes in.

Microstrategy’s Stock Card reminds us that software systems will see great growth in coming years, but the picture isn't all rosy. For example, Earnings Per Share, which you can find under the Profitability, is declining. It does generate free cash flow but carries some debt. Revenue growth is negative to flat too. So, I'm not sure about the core business. If I want to invest in crypto-related stocks, there are better ones to pick. 

For example, type in Cryptocurrency in the search bar to get the cryptocurrency-related collection on Stock Card! Some noteworthy mentions are PayPal (PYPL) and Coinbase (COIN), direct beneficiaries of digital currencies. I prefer them over Microstrategy for my investment in crypto-related stocks.

Chinese regulators deal a major blow to Tencent (TCEHY) and its monopoly over music rights.

If you go into the search function on Stock Card and enter “China,” you’ll see the China collection suggested to you. Click here, and turn off the OTC and Penny stocks filters. Then, order the list by losses, and you’ll get what seems to be a nearly bottomless page of stocks in the red! If you’ve been following the news, the Chinese government is investigating data security concerns, the private tutoring industry, and antitrust violations. Investors are selling as they fear their stocks may be next on the chopping block. 

Tencent (TCEHY) is no different, having fallen about 10% by closing time today. This massive corporation deals with social networking, online games, internet utilities like email, cloud networks, and entertainment content, including news and music. Unfortunately, the music industry is the latest to be scrutinized by Chinese regulators. In Tencent’s case, the government is taking direct action. Yesterday, the company was ordered to dissolve its exclusive music licensing deals around the world. According to officials, the corporation is violating policies meant to prevent monopolies, and it’s pretty evident that Tencent owns more than 80% of Chinese music rights.

This company is not the first nor the last to be impacted by the government’s crackdowns. It makes sense that investors are jumping ship across all the U.S.-listed stocks from China. However, it's very unlikely for the Chinese government to sacrifice these companies over regulations. It is most likely a period with widespread negative news, followed by regulatory corrections. This may mean an interesting investment opportunity for those who bet on China and are ready to take the risk and find good deals. I'm monitoring the situation for some bargain shopping if the sell-off continues. 

Get to Know Freedom Portfolio

Let's wrap up with an exciting update from Stock Card's partner community. This week, we celebrate Paul Essen, one of the latest portfolio publishers on Stock Card. Paul's portfolio is called Freedom on the Stock Picks page, and it is one of my favorite portfolios. He is such a true long-term investor that keeps adding to his winners and can hold through the price drops without getting cold feet. I highly encourage you to follow Paul's Freedom portfolio to get new investment ideas. 

To help you get to know Paul, I've just published my latest conversation with him about how he picks stocks. I enjoyed it quite a lot, and I’m sure you’ll find it valuable as well.

Make sure to watch this video!