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The DOW and S&P hit record highs as the indices ended the week in the green.
Stock market indices finished the week in the green.
The 10-year Treasury yield rose slightly, showing signs that inflation concerns are more short-term. This eases some of the tension from the yield dropping days ago.
Moreover, this earning’s season has been an optimistic one. Investors are pleased with the recent performance of the stocks, especially in the S&P 500, where 90% of companies are reporting a positive surprise in revenue year-over-year this quarter.
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The Olympics kicked off Roku (ROKU) stock’s gains today as shares near an all-time high.
Roku (ROKU) stock ended the week with a bang, coming just shy of it’s all time high with more than a 12% jump today. This jump earned it a spot on Stock Card’s list of winning stocks today. The opening ceremony of the Olympics was held earlier in the day, and kickstarted a great trading session for the streaming service company. Roku landed the right deal at the right time when it came to an agreement with NBCUniversal to be the home of the network’s Olympic coverage.
Viewer count is bound to grow over the course of the two-week event. But, it's not all about the Olympics! Roku has been hot this year already. The company’s first quarter earnings report this year boasted a 35% growth in accounts registered on the streaming service, and that’s not to mention the 101% growth in revenue from the platform year-over-year. Roku is doing great, even as shutdowns are phased out and people return to events outside their homes.
If you head to it’s Stock Card, you can see that it is killing the game in Profitability, Sales Growth, and Cash Availability. Scrolling down a little further, you can see that investors have had great returns over the past few years compared to the S&P 500.
Roku was once an underdog that no one believed had a fighting chance in the streaming war, and now it is leading the market. If you invest in a well-managed company and ignore the volatility, you’ll find a more dependable way to grow your investment.
Chinese education stocks (TAL and EDU) suffer from regulatory uncertainties as the government explores turning the sector into not-for-profit.
If you remember, we covered TAL Education Group (TAL) andNew Oriental Education & Technology Group (EDU) in a daily recap a little over a month ago. Chinese regulators were beginning to reassess the tutoring and private education industry, and the future of these companies was suddenly up in the air. In that episode, I recommended that you stay away from the dip, as attractive as it looked. Throughout the rest of June, both TAL and EDU regained some ground. Naturally, some fellow Stock Cardians were asking questions! How come they went up?
Fast forward to today. Both TAL and New Oriental Education stocks took a nosedive. On today’s loser list on Stock Card, TAL was down over 70% by close, and EDU followed closely behind with a 54% drop. Sources informed Bloomberg that Chinese regulators are considering turning million-dollar tutoring businesses into non-profits and binding them from being publicly listed, among other possible legislative changes.
This is an example of how you should approach companies that are dealing with regulation changes. The stock may have seemed like a great opportunity to enter at a low price and may have even shown some growth. Still, the regulatory changes are completely out of the control of investors and even the company themselves. You want to avoid betting on such uncertain situations. There’s no guarantee that the government cares for the profitability of any given company, no matter how much analysis you’ve been doing on the fundamental or technical aspect of the stock. For now, even if I lose a chance for significant gain, I don't think the uncertainty is worth the potential upside. To me, once again, this is not a buy-the-dip opportunity.
Portfolio Update by The Next 10X Portfolio
This week, Alex Koh, Stock Card partner and the YouTuber behind "Family Investment YouTube" and The Next 10X Stock portfolio on the Stock Picks page, updated his portfolio and added his next 10X stock pick. He also published a video talking about his stock analysis.
Make sure to watch his latest Best Buy Now video:
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