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KEY POINTS
OVERALL MARKET
The market ended the day in the green, rebounding from Japan’s COVID announcement.
All 3 major indices ended today’s trading session in the green.
After a tough week with some negative news weighing on the market, like Japan banning spectators from the Olympics over COVID spikes, index prices corrected themselves before the close. This could be investors attempting to lock in some possible gains before we head into the weekend. GET THE DAILY MARKET RECAP
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Stamps.com (STMP) is bought out by Thoma Bravo firm, boosting the price nearly 64% by close.
I was browsing today’s Winners list on the Stock Card website when I noticed Stamps.com (STMP), which had seen nearly a 64% jump by closing time. You may know that Stamps.com is one of my favorite stocks. I even have an old podcast episode investigating the origin of Stamps.com. I highly recommend you listen to it. Stamps.com saw challenges when it voluntarily discontinued its exclusive partnership with the USPS, yet this is a classic example of a well-managed company that is worth holding for the long run.
Today the news broke that the eCommerce shipping giant had confirmed a buyout by private equity firm Thoma Bravo. Stamps.com was purchased for a whopping $6.6 billion dollars. Thoma Bravo is a firm that specializes in buyouts, making small changes to aid in the growth of companies it acquires. The firm definitely recognizes the potential in the eCommerce sector and the advantage Stamps.com has. It is a veteran in the space, providing other eCommerce businesses with services across the entire pipeline of online orders and shipping. It can benefit from the growth of online shopping and shipping that is a bigger part of our society than ever before. If you own it, hold until the buyout is closed. After an acquisition, there is always the possibility of a new acquisition offer to come in. If not, you just get paid cash at the end when the buyout is closed. WHAT'S DOWN?
Peloton (PTON) regains recall losses, but the future is unclear.
Peloton (PTON) stock has had a tough 2021 so far. The downward trend of the price was only given more momentum since its treadmill recall that caused shares to plummet early in May. That being said, this dip could offer an opportunity to those who believe in the company and its business model. At the end of June we saw Peloton’s price finally gain back the losses from the recall, but it has not been able to maintain that value these past two weeks. Is this dip worth buying?
Overall, investors are worried that the market itself is ripe for at-home athletic equipment companies. Since the pandemic era when all gyms were closed, many consumers are opting to keep their workouts at home. This was a boost for Peloton, but the same goes for its competitors. Beachbody (BODY) went public on Monday, which may pose a challenge to Peloton. This company is founded by the P90X team, who have been keeping the company profitable for 20 of it’s 22 years in business. Beachbody can take advantage of the 2.6 million user base it has recorded, but even that is barely more than half of Peloton’s 4.4 million users. If you go to the company’s Stock Card and scroll down to strong operations, Peloton holds a green rating for sales growth, cash availability, and effective management. The fundamentals are there, but too many slip ups like this year’s recalls, and it could struggle for a while. My goal is to figure out whether Peloton can continue to grow rapidly despite the re-opening of gyms and people's appetite to get out of the house to work out. WANT TO RECIEVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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KEY POINTS
OVERALL MARKET
The market took losses today as Tokyo announced a COVID emergency for the Olympics, and new unemployment claims rose.
Today’s market ended the session with all 3 major indices in the red.
There were two negative news stories that brought down the mood. Specifically, Tokyo announced a COVID emergency this morning and banned spectators from the upcoming Olympics. This caused sell-offs around the market for stocks banking on the global reopening, like cruise lines and other tourism-related businesses. Moreover, the new unemployment claims rose, possibly worrying investors of a slowdown in the reopening of the economy. Fortunately, total claims remained the lowest since March 2020. Nevertheless, the market didn't feel too optimistic today. GET THE DAILY MARKET RECAP
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By the way, we just released a new update to Stock Card's platform. This new update makes the platform's log-in process more secure among several other enhancements around the platform. You may notice that we ask you to re-login when you visit Stock Card the next time, or if you leave your browser where you have Stock Card open inactive for a long time. All you need to do is to log in and have fun researching stocks.
NEW STOCK LIST
Introducing the Potential Meme Stock Collection on Stock Card!
We just published a new list of stocks on Stock Card. Type in 'meme stocks' in the search bar and get the list of the Potential Meme Stocks. If you visit blog.stockcard.io, you can find a recap by our analyst Felipe of the methodology and criteria used to compile these stocks.
Many investors frown upon investing in meme stocks, but we wanted to publish this list for you for two reasons: #1) Not every potential meme stock is a bad investment. Just because a stock gets caught in the meme stock phenomena doesn't disqualify it as a good long-term buy. #2) When you see the "meme stock" bubble on any stock on Stock Card, it can help you understand the possible high volatility that can come with investing in that stock. WHAT'S UP?
Potential meme stock Virgin Galactic (SPCE) experiences wild volatility as the founder’s manned flight approaches.
Speaking of potential meme stocks, Virgin Galactic (SPCE) grabbed my attention on the list. The stock has been fluctuating rapidly all year in reaction to delays and resuming of test flights. It had almost doubled since January before it shot up significantly on June 25th, when the FAA announced the green light for commercial passengers.
Investor sentiment is growing more excited by the day as the July 11th flight date for founder Richard Branson approaches. This flight has been in the spotlight for its race against Jeff Bezos' Blue Origin company. Now that Reddit retail has piled on, the volatility is getting quite turbulent. For example, if you go to the sentiment section on the company's Stock Card, you can see the stock is heavily shorted. Every time there is a possibility of good news, the opportunity presents itself for a significant price rally because the stock meets the criteria for being a potential meme stock. This is a classic meme stock with high short interest and new external triggers such as the billionaires’ space race. I own a few shares after selling a big portion of what I owned before that last drop. I plan to hold the rest as a bet on humanity's progress in conquering the space frontier. WHAT'S DOWN?
Squarespace (SQSP stock), a potential meme stock, continues on a downward trend despite the market opportunity.
Squarespace (SQSP) is another stock on the meme stock list that grabbed my attention. It is a new publicly traded stock, having direct-listed its IPO on May 19th. While the first few days may have been rocky, the stock gained a lot of ground in the month afterwards. Despite this, the stock has been on a steady downtrend since the end of June, including today’s loss of -3.45%. It’s unclear what exactly is causing such poor investor sentiment, but it may be the case that potential shareholders are waiting for an earnings call or something of the sort to indicate whether this will be a stock worth holding.
Although Squarespace is one of the clear leaders in the non- and low-code website design market, its competitors are constantly challenging it. For example, Wix (WIX stock) extended its business model to connect restaurants to their customers. Overall, the revenue is expected to grow double-digit this year, similar to the last year, as you can see on its Stock Card. I'm not 100% sure about its balance sheet because the company's short term and long term assets are not as strong as some of the latest IPOs. Moreover, new IPOs are often the target of short-term investors looking to capitalize off the initial hype. No wonder it ended up on the Potential Meme Stock list. I don't plan to jump on board anytime soon, at least until we get more clarity on its growth trend and balance sheet. WANT TO RECEIVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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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 market indices ended the day barely in the green, with Treasury bond yields continuing to fall.
We ended today with a green stock market, but only barely. The DOW and S&P 500 indices closed in the green, as well as the NASDAQ which barely finished above zero.
While the market still saw growth, the 10-year Treasury bond yield dropped to its lowest since mid-February. This is not a great sign for investors, however, the overall sentiment appeared to remain positive with the numbers put up by the DOW and S&P. GET THE DAILY MARKET RECAP
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Watch it, Listen to it, Or, read it. Sign up for a free Stock Card account to get the report in your mailbox every day. PLATFORM UPDATE
By the way, we just released a new update to Stock Card's platform. This new update makes the platform's log-in process more secure among several other enhancements around the platform. You may notice that we ask you to re-login when you visit Stock Card the next time, or if you leave your browser where you have Stock Card open inactive for a long time. All you need to do is to log in and have fun researching stocks.
WHAT'S UP?
Coinbase (COIN) announces it will be open to any and all crypto, as well as 4% APY for the dollar-tethered USD Coin.
Folks, considering the recent volatility in the crypto market, today I searched the cryptocurrency list of stocks on Stock Card. This is where I noticed Coinbase (COIN), today’s winner stock, and the biggest name in crypto.
Earlier this month, CEO Brian Armstrong said that Coinbase was planning on accepting and listing every cryptocurrency it could, to promote a free market and be the go-to exchange. This will help keep them ahead of challenger exchanges. On top of this, the company recently announced that it will soon begin offering a 4% annual percentage yield on USD Coin, which is tied to the price of the dollar. Such a rich offering could encourage more users to store their money on Coinbase exchange, even if they decide not to invest in cryptocurrencies. Despite today's 8% or so jump, Coinbase shares are down 30% over the past three months, falling more or less in tandem with Bitcoin. Unsurprisingly, this upward movement follows Bitcoin, which also rose for the majority of today, only dropping after the stock exchange closed. Like I mentioned, if you are looking to benefit from the growth of crypto without directly investing in cryptocurrencies, investing in Coinbase is one of your best choices. Also, have a look at other cryptocurrency related stocks by searching for cryptocurrency in the search bar. I'll leave a link to this list in the show notes. Explore our cryptocurrency collection of stocks here! WHAT'S DOWN?
Pinterest (PINS) fell 3% today, stunting the stock’s path to a record high.
The social media eCommerce platform Pinterest (PINS) took a -3% loss today. This is a small loss compared to the 40% it has gained since May, which was on track to eclipse it’s year record high.
The website is on the 14th place in terms of users worldwide, yet it has been continuing to evolve and adapt to the online commerce landscape. For example, this year the company partnered with Shopify to integrate ecommerce into the platform. You can see the impact on its revenue already with the last earning’s report boasting a 78% growth in revenue, year-over-year, and a monthly user growth of 30% in the same time frame. Interestingly, the stock is a part of the 2-greener high conviction watchlist we created yesterday because of its High Growth Potential and Strong Operations. As we discussed yesterday, high conviction growth stocks may go through rapid fluctuations. The best strategy to invest in these is to monitor and buy the dip around the earnings timeframe, or when there is some sort of a short term negative news dragging investors sentiment. On the company's Stock Card, below the price chart, you can see a list of important dates, including the next earning’s report due for July 30th. I'll be watching the stock until then to buy the dip in Pinterest if the opportunity presents itself. WANT TO RECIEVE THIS DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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KEY POINTS
OVERALL MARKET
The market indices ended the day mixed, with bond yields dropping, and a slowing in service sector growth.
The stock market indices ended the day with a mix of red and green. The story is quite the opposite of last week, with the DOW and S&P closing in the red while the NASDAQ took it’s turn ending the day in the green.
One factor dragging the market may be yesterday's report about the bond yields dropping. This could mean investors are wary of the future. Another analysis to consider is the Institute of Supply Management Services Report. This indicator gauges the service sector's growth. May held a record high of 64%, but ISM’s June report today shows a slowdown in growth to 60.1%. There is still a strong upward trend, but this may be a sign that growth is peaking and investors didn't like that possibility. GET THE DAILY MARKET RECAP
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Tom Gardner, co-founder of The Motley Fool, shares some of his “high conviction” stocks, including Paycom (PAYC) and Docebo (DCBO)
During the long weekend, I was scrolling through Twitter and came across a thread by one of my favorite investors, Tom Gardner. Tom is one of the co-founders of The Motley Fool, and he shared five of his high conviction stocks. Several hundred investors chimed in and shared their ideas. While the responses below his tweet are great as well, I found his top picks very interesting. Two of the stocks are not very well known tickers that I thought you'd be interested to learn about.
Paycom (PAYC) is one of his picks. This company is one of the first to bring payroll systems completely online. As you can see on the company's Stock Card, the company operates in a few high growth markets such as Workforce payment products that is expected to grow by more than 10% in the next few years. As I scroll further down, I notice Paycom's strong operations. Last fiscal year revenue growth was 14%, and the company is expected to grow more than 21% this year. It's profitable and has a strong balance sheet and generates free cash flow. I love it, and am going to follow the stock to learn more in the next few weeks. The next high conviction stock from the Twitter thread is Docebo (DCBO). Docebo provides digital training platforms and programs to employers. Even if employees go back to physical offices, employee training is one of those activities that can be conducted fully online. Just like Paycom, the company boosts a solid growth potential and strong, cash-generation operations. Both these stocks are worth following and adding to your watchlist. One thing you may have noticed is that both stocks have two green boxes or growth potential and operations, but unknown past performance and valuations. This is quite common among younger companies and recent IPOs that have a lot of potential. So, let's create a 2-greener watchlist for companies similar to Paycom and Docebo. I go to the Screener page, start a new filter, and choose “high growth potential” and “strong operations” filters. I also make sure the past return and valuations are unclear just like those two stocks, and finally, look for companies with overexcited investors. And, viola, I have a list of 37 stocks that could be your watchlist for your high-conviction, less known companies. Get the list 2-greener high conviction watchlist by clicking here! WHAT'S DOWN?
U.S.-listed Chinese stocks take a hit from fears over government regulator investigations. DiDi Global (DIDI) and Pop Culture Group (CPOP) closed with big losses.
For the loser stocks of the day, let's talk about last week's news that the Chinese government is investigating the brand-new IPO DiDi Global (DIDI) for data security concerns. DiDi is known as "theUber (UBER) of China." In the process, they barred any new customers from downloading the app, and shares unsurprisingly plummeted. This of course led to many investors rethinking how safe their money was in U.S.-listed Chinese stocks. Fearing that the crackdowns would be applied to other companies, the sell-off spread to other listings.
The government cited possible issues with illegal stock trading and data privacy between these companies and other countries. Pop Culture Group (CPOP) is also one of the newer IPOs affected by this panic selling, losing nearly -41% by the end of trading today. Because the company is focused on building international relations with the U.S., it may be an investigation target. This may give us opportunities to pick up shares of Chinese stocks, if we can tolerate high volatility that hits these stocks every now and then. Type in "China" in the search bar and get the list of all companies listed in the U.S. that are head-quartered in China to start your research. GET THE DAILY STOCK MARKET RECAP IN YOUR MAILBOX?
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