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KEY POINTS
OVERALL MARKET
Consumer Sentiment report confirms inflation worries are widespread, as the market ends the day in the red.
All of the stock market indices ended the day and the week in the red.
A report covering consumer sentiment was released today by the University of Michigan. The results surely affected the indices today, as it was apparent inflation fears had not gone away. According to the report, consumers are expecting prices to increase by 4.8% in the next year. Economists’ expectations were quite off as well. The consumer sentiment index was down 5 points to 80.5, while they expected to see an increase. With the Fed insisting on the short-term nature of the inflation rate, investors seem skeptical about the future. GET THE DAILY MARKET RECAP
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Zynex Inc (ZYXI) shares rise 10.66% today after impressive sales growth.
Zynex Inc. (ZYXI) stood out to me today on the winner’s list of stocks on our site. Zynex manufactures and sells medical devices to treat pain with modern electromagnetic technology. We have talked about this stock in the past because of its strong operations and growth potential despite the difficulties of selling its devices during the pandemic.
Contrary to the pandemic year, today’s share price rose 10.66% by the close! This price jump follows a press release from the CEO about year-over-year orders increasing by 246% this quarter. Also, the company is revising its estimated EBITDA, otherwise known as Earnings Before Interest, Taxes, Depreciation, and Amortization, to reflect the good numbers so far. I opened Zynex’s Stock Card to dig a little deeper. The company has an impressive rating for growth potential, as well as sales growth and profitability. The company is also rated highly for shareholders’ return on investment. Not only have previous investors got their money’s worth, but all signs are pointing to a great future in the medical technology sector for Zynex and its portfolio of products. Even with today's stock price jump, the stock is lower than the estimated fair share price using the historical price to sales ratio and the average analyst's price target. You can see that on its Stock Card's fair share price section. Lastly, Zynex benefits from the growing market for electrical stimulation devices. Society is becoming more aware of the adverse effects of painkillers, including opioid addiction. In a way, Zynex is on the right side of the industry. The stock is a part of Stock Card's Risk-Taker portfolio, and I believe it is still a good time to invest in this company. WHAT'S DOWN?
Beyond Meat (BYND) stock falls from $157 to $124 halfway through the month. Is this a buying opportunity?
Beyond Meat (BYND) is one of the standout brands in the world of meat alternatives. We've discussed this a few times. The last time stock hovered around $100, I hesitated to invest in it, and later on, I regretted not buying. That's why when I noticed the "negative sentiment" update on its Stock Card, I had to dig deeper.
Beyond Meat started July trading at roughly $157 but since then, it has fallen almost daily, closing today at $124. Recent headlines might make you assume otherwise, with the company’s new fake chicken tenders appearing nationwide. What you aren’t seeing is that consumer food brands across the country are expecting to raise prices to keep up with inflation. Restaurants may be opening back up, but labor shortages are dampening profits. Likewise, transportation costs are rising rapidly, and Beyond Meat is now struggling with its margins. The 2021 first-quarter earnings report shows that the company’s EBITDA was a net loss of $10.8 million this year, compared with last year’s first-quarter EBITDA profit of $13.9 million. It's also not lost on the investors that Beyond Meat is up against giant competitors like ConAgra (CAG), Kellogg (K), and Tyson Foods (TSN), who are all in the meat alternatives market too. Some partners, such as Dunkin', may have started discontinuing some of Beyond Meat’s menu items to add insult to injury. When you look at the overall situation, the Pessimistic Investors sentiment on the BYND Stock Card is beginning to make sense. I'm watching the downward trend closely. This can be a good fit for the Future of Food portfolio on Stock Card, thanks to the negative sentiment. Featured Collection: Plant-Based Stocks
Which companies are part of plant-based stocks to buy?
Talking about Beyond Meat reminded me of the Plant-Based Products collection on Stock Card. As you know, we simplify your investment research by giving you access to a well-researched and curated list of stocks around important themes. Plant-Based products are one of those important themes. Type in “Plant-based” on the search bar and see all the plant-based stock lists you need.
Better yet, go to the Screener page, start a new filter, type in “plant-based” in the search bar of your screener page, and add some other criteria such as no cash concerns to get closer to the list of plant-based stocks you might want to buy now. WANT TO RECIEVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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KEY POINTS
OVERALL MARKET
The market ends mixed despite good earnings reports.
The stock market indices ended the day mixed, with only the DOW finished the green.
18 companies in the S&P 500 this week beat analysts' earnings expectations, yet the index was still not able to beat its previous record. A slightly weaker-than-expected Chinese GDP growth may have given investors the indication of slower global recovery in the rest of the world. GET THE DAILY MARKET RECAP
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Is the AMC stock squeeze over?
Folks, an interesting question came through our private Facebook community the other day that I want to dedicate today's episode to discussing with you.
A fellow Stock Cardian asked, is the AMC Entertainment (AMC) short squeeze over? To answer the question, let's step back for a second. 2021 has been quite an interesting year in the stock market, and the rise of “meme stocks” is definitely part of it all. Reddit forum Wallstreetbets began the meme mania with Gamestop (GME), and it has since spread to other companies. If you’ve been paying any attention to headlines, AMC Entertainment (AMC) has been the other favorite stock of retail traders banking on hype and short interest. Unfortunately, as time has gone on, things haven’t panned out quite as cleanly. On Wednesday, for example, AMC's share prices dropped 15%, bringing it down to half the price of its record high only a few weeks before. Let’s take a deeper look into this stock to find out where it might be headed. The mystical short squeeze was the goal of many recent meme stocks, AMC included. Hoping to capitalize off of cheap and heavily shorted stocks, retail traders piled on to push the stock price high enough to trigger the so-called short squeeze. This is the point when institutional investors who have bet against the stock have to buy the shares at the new and higher price to cover their short bets. That consecutively drives the stock price further up. But, that strategy seems to not be working anymore. Let’s explore three big factors that need to be considered:
From my perspective, the odds are high that the boat has already sailed if you were wanting to benefit from the short squeeze excitement. The pressure on short sellers to cover their positions fades by the day, and I’m not sure if AMC can gather enough steam to break out into new highs. The only wild card here is exciting news. For example, if AMC manages to partner with a large corporation, or some new large investor comes in to invest or buy the company. So, the short squeeze probability is low but you never know whether a wild card is around the corner or not. For full transparency, I have some shares of AMC, which I bought at $15 and am still holding just to have a stake in this phenomenon. AMC STOCK ANALYSIS - FUNDAMENTALS
An educated look at the future of AMC stock.
We can't talk about stocks and not do fundamental analysis. If you were considering owning AMC stock for the long run, here’s a cautious reminder that analysts are giving out a price target of $5.25, under the “Fair share price estimate” tab on its Stock Card. Investors and hedge funds alike recognize that the current price is not sustainable or reflective of the real value in the company. This might not matter in the short term when emotions are running high, but over time it’s inevitable that it will cool down and revert back to a realistic price.
To understand why analysts' price target is so low, let's do some stock analysis. I headed to AMC’s Stock Card again. Under the company's operational section, I'm curious about how long AMC can hold and fund its operations. I noticed the debt situation. Clicking on “Cash Availability” gives me more in-depth data. Its debt to equity ratio and debt affordability ratio are both quite poor. Clicking into “Profitability” raises another red flag- the company’s Earnings Per Share are terrible as well. The management is aware of this hole it’s in but is still crafting a strategy to climb out. One of these strategies included being able to raise capital by selling 25 million more shares,but this move was voted down by current shareholders. So, the strategy for AMC is a bet on a possible wild card, like a possible good piece of news that changes the current trend, that's all. There is no fundamental to support the stock and the short squeeze probability is low based on measurable information. I would be wary of entering into the stock this late in the game. MEME STOCKS TO BUY NOW
What are the Potential Meme Stocks that are worth buying now?
Let's wrap up discussing the best way you can find other potential meme stocks that are actually worth buying now. I told you last week about the launch of the "potential meme stocks" on Stock Card. Type in meme stocks in the search bar and get the full list of almost 300 companies.
We created the meme collection for you to know why some stocks fluctuate so rapidly, and you can also use the list to find some good investments. Just because something is a meme stock doesn't mean it's a bad company. So, I go to the screener page, create a new filter, add meme stock collection, and filter the list for stocks with high growth potential, strong sales growth, and no cash concerns. Those are some of the indicators that a growth stock can keep growing despite the high volatility that comes with a possible short squeeze. Click apply and voila, a list of 22 meme stocks worth buying. This is of course a starting point, add your own criteria and get to the final list. I’ll save my watchlist for you and you can get the list here: Get the watchlist of meme stocks to bu now! WANT TO RECIEVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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OVERALL MARKET
Fed Chair Powell told Congress that the government needs to continue to support the economy, as the market ends mixed.
The market closed today with a mix of red and green, but only barely. The DOW and S&P 500 both took gains, as the NASDAQ dropped by the end of the session.
Federal Reserve Chair Jerome Powell spoke in front of Congress today about the Fed’s view on monetary policy. He told Congress that the economy was still off from what the central bank would like to see before easing its favorable policies. This response resulted in a mixed close for the 3 major market indices, as investors aren't sure how keeping favorable policies could address the rising inflation. GET THE DAILY MARKET RECAP
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Levi Strauss & Co (LEVI) stock continues to run up after last week’s great earnings report.
While browsing the list of winning companies today on Stock Card, Levi Strauss & Co (LEVI) caught my eye. The stock closed up more than 4% today. Looking at the chart, this is part of a run that has been going for days. Levi’s second-quarter earnings report, put out last Thursday, was quite impressive. The company is revising its financial forecast for the remainder of the year, expecting to see numbers even higher than before the pandemic.
If you go to the company's Stock Card, under the sales growth section, you'd see the retail clothing veteran increased its net revenue by 156% over last year’s second quarter, as the company swiftly reopened stores. It has even been harnessing AI to predict demand for individual outlets and stores, stocking the correct clothing lines ahead of time. This has brought inventory down 12%, while the company continues to raise profits. It’s no wonder that the company has a green rating in Profitability on its Stock Card. The management appears very confident that the growth isn’t over, and that denim demand will continue to see a resurgence. While it’s tough to bet on a company’s success that changes with fashion trends, this is one you could have faith in to use your investment well. Before I cover today’s loser stock, it’s worth noting that Netflix (NFLX) has entered into the podcast market and is eyeing the gaming industry too. I noticed the Netflix Podcast website, and IGN, a video game media company, reported Netflix hiring an ex-EA executive. This tells us that Netflix management believes there is not much growth left in video streaming and the company is looking for its next big bet. Let's watch this development for a while. Could be the path for Netflix to become much bigger, although both markets are quite competitive. WHAT'S DOWN?
Upwork (UPWK) stock falls -17% after gaining ground all month, should you buy the dip?
Today, Upwork (UPWK) stock took a -17% plunge by closing time. This is a reversal of a nice run the stock had been on since the end of June. While it seemed that investors had a lot of faith in the stock with its gradual growth, they may be getting weary of the upcoming earnings report at the end of July. The last earnings report in May showed a 41% growth in the volume of services since last year, but still registered a net loss per share.
While the company got a boost in volume due to the work from home trend, it is still expanding its services. With the recent addition of Work Marketplace, there’s now a more complete service with tools for organizations to streamline the hiring and management process, and for freelancers to get in contact with employers. While the company isn't profitable, it's a free cash flow generating stock. I'm monitoring the stock to see why the price has been dropping steadily in the last few days. Perhaps it's a buy-the-dip opportunity. We just need to make sure there are no operational challenges before jumping in. Most likely, I'll wait for the next earnings report. WANT TO RECIEVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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OVERALL MARKET
The new Consumer Price Index report showed the largest month-over-month rise in inflation since 2008, bringing the indices into the red.
The stock market closed in the red today, with all 3 major indices taking losses.
The Consumer Price Index report was released today, causing the indices to drop. This report showed the fastest month-over-month growth in inflation during June than any other month since 2008. We haven’t been hearing as much inflation talk the past week or two, but this is surely igniting some fear again. Used car and truck prices particularly saw a sharp 10.5% rise. Investors' old concerns about inflation are back and alive across the markets. GET THE DAILY MARKET RECAP
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Nokia (NOK) announces better financial guidance to come soon, boasting a great second quarter.
Nokia (NOK) sparked some headlines today as management announced that they would revise the company’s financial guidance for the remainder of the year. The company had a great second quarter and is expecting to carry it higher throughout the year, according to the CEO.
You probably recognize Nokia from its indestructible phones that were huge back in the day. I did some research to find out what was driving this optimism in the company. Nokia generates a good chunk of its revenue from the network infrastructure side of its business. With 5G on the rise, the company is using the opportunity to land valuable contracts worldwide. Although the press release is promising, I want to dig deeper into its fundamentals. Looking at the company’s Stock Card, the growth potential is great. Its profitability and sales are a little concerning, but I wonder if the 5G opportunities can bring in enough revenue to get them back on track. It looks like Nokia has underperformed the market in the past as well. I hope this is a new chapter for the stock and its growth. I’ll be waiting until its earnings report at the end of the month to decide if it’s worth buying in. As usual, a winner stays a winner for a long time if you are investing for the long-term. Don't rush it! WHAT'S DOWN?
Affirm (AFRM) shares take a big hit as rumors of a new Apple (AAPL) financial service stokes investor fears.
Today, a rumor broke that Apple (AAPL) is in talks with Goldman Sachs (GS) to roll out a financial loan service through Apple Wallet. This info caused a few stocks in the same lane to tumble. I found Affirm Holdings (AFRM) on Stock Card’s losers list today, down by 10.5% by closing time.
Founded by Max Levchin, former founding member of PayPal (PYPL), Affirm allows people to buy the small stuff they want (like clothing or furniture) through several small installments. This is commonly known as a “buy now, pay later” service. Affirm was one of the earlier players in the game, and already has partnerships with several retailers. Some of its partners include Walmart (WMT), Adidas (ADDYY), and Peloton (PTON). Apple will likely be stepping right into its market, offering an attractive and very similar package. Afterpay (AFTPY) is an Australian-based company offering similar services. Its shares are listed in the U.S. too, and the stock took a 6% dip today after the news. It makes sense that these companies are afraid of the competition Apple could offer. Already one of the largest corporations in the world, it has already begun dipping its toes in the financial world with Apple Wallet. Goldman Sachs is already partnered with the company to support its virtual payment system, and Apple will be implementing this “buy now, pay later” service into the iPhone application. It remains to be seen exactly what features Apple will include in its financial service, typically the news of a big player entering a new space creates an overreaction in the market. Companies like Affirm and Afterpay have already created a large user base and work closely with retailers. The financial services industry is big enough to allow a few players to succeed side-by-side. If you are an investor in those stocks, consider the market's overreaction before selling. It may even be an opportunity to buy the dip. WANT TO RECEIVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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OVERALL MARKET
The DOW Jones Index took a sharp dive this morning but traded upwards to join the other indices in the green.
All three major indices ended today’s trading session in the green.
It was a volatile start of the week with the NASDAQ and DOW indices taking opposite directions in the beginning hours of the trading day. As far as my team and I could research, this was without any specific explanation. In the end, it all sorted, and all three indices finished in green. With the promising growth and earnings that we have seen from companies this first quarter, investors are likely optimistic about the upcoming earnings report season. GET THE DIALY MARKET RECAP
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Watch my conversion with Simon Erickson from 7Investing portfolio
By the way, before talking about the winners and losers, this morning, we published a new video on our YouTube channel. It's my conversation with Simon Erickson, founder of 7invetsing.com. Simon and his team recently launched a portfolio on Stock Card's Stock Picks page that you should follow if you are a long-term investor.
Click here to watch my conversation with Simon and get to know 7investing's portfolio and investment approach. WHAT'S UP?
Cosmetic stock InMode (INMD) jumps after projected earnings smash predictions once again.
Back in 2019, I looked at a cosmetic IPO that was growing rapidly. The company caught my eyes today because its shares jumped more than 12% by the end of the trading session. So, let's talk about it today.
InMode (INMD) is a company that provides cosmetic surgeries and cutting-edge medical devices for minimally invasive & non-invasive procedures in the beauty and wellness segment. Today I heard that the company’s projected earnings were looking great. In fact, it flew past many predictions by various analysts. The stock is among the 4-greener watchlist we created last week. If you look at its Stock Card, it has a solid green rating for both Growth Potential and Operations. I'm quite impressed with its sales, profits and cash positions. No wonder why INMD has continually beat analyst predictions for revenue and earnings per share in the past eight quarters since IPO. Cosmetic surgery is a growing industry with a great outlook, and as you can see on the company's Stock Card, the cosmetic medical device industry is also growing rapidly. The industry's growth is a strong force that pushes InMode's business forward. I expect this will likely not be the last time we discuss this stock. Watchlist worthy to say the least. WHAT'S DOWN?
Alteryx (AYX) stock drops after rumors of its competitor, the SAS Institute, being bought-out
On to today's losers, let's talk about a few cloud-based and analytics data companies that had tremendous growth during the pandemic. Since the re-opening, these stocks have had a choppy performance. Among them, two of my stocks were in the red today.
Alteryx Inc (AYX) provides analytics solutions to companies trying to wrangle their data and optimize their operations across many different platforms, tools, and data warehouses on the cloud or on-premise. Today, Alteryx stock fell by more than 4% when rumors broke online that Broadcom was planning to buy the SAS Institute, a direct competitor of Alteryx. Broadcom is a large corporation that serves the software infrastructure needs of other companies. Investors most likely assumed the acquisition of the SAS Institute would likely endanger Alteryx’s hold on its part of the market. Fastly (FSLY) is another stock that I noticed dropping by more than 3% today. Like Alteryx, Fastly provides cloud-based solutions for companies to deliver their content online rapidly and efficiently. Fastly deals with large enterprises like Pinterest, The New York Times, TikTok. Investors might have been wrongfully spooked by Fastly’s filing to convert Class B stock to Class A. Both companies are in my portfolio, and I don't think the price drop for either of the companies is problematics. I'm holding, and maybe buying more. WANT TO RECEIVE THE DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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