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    Three Stocks to Avoid For Now

    By
    Editorial Staff
    -
    0

    Seeking out great stocks to buy is important, but many would say it’s even more essential to know which stocks to steer clear of. A losing stock can eat away at your precious long-term returns. So, determining which stocks to trim or eliminate is essential for proper portfolio maintenance.  

    Even the best gardens need pruning, and our team has spotted a few stocks that seem like prime candidates for selling or avoiding. Continue reading to find out which three stocks our team is staying away from this week. 

    According to CME data, investors expect to see short-term interest rates jump to a range of 5% to 5.25% before pausing, pointing to an increasingly likely recession in the wings. According to The Economist, in six of the past seven rate hiking cycles where rates increased this rapidly, a recession formed within two years.  

    One stock that has been especially vulnerable during recessions that may surprise you is aircraft maker Boeing (BA). The share price has dropped an average of 40% in the past five recessions, underperforming every other S&P 500 stock by the same metric. Shares of Boeing sank 56% in the recession that began in 2020, 43% in the one that started in 2007, and 47% in the 2001 recession. 

    Despite its role as a leader in commercial airplanes, demand seems to evaporate for Boeing products during recessions, along with its typically healthy backlog and direction for the stock. That presents a real hazard for anyone eyeing BA after plunging 37% so far this year. If a recession is forming, this could be just the beginning of Boeing’s losing streak.  

    At their September lows, Boeing shares were approaching levels comparable to the early days of the pandemic.   If the economy is indeed heading toward an extended slowdown, it could take years for Boeing shares to reach previous heights. Given all of the uncertainties combined with the lack of any significant positive catalyst for the company heading into 2023, we’re sticking to the sidelines on the stock.  

    Over the past two years, the dramatic shift from brick-and-mortar shopping to e-commerce has been a tremendous obstacle for investors in malls and shopping centers. The demise of cornerstones like Sears and JCPenny hastened the decline as shopping malls are now left without anchor tenants.   Recent data suggests that 25% of America’s 1,000 malls will be closed in the next 3-5 years.  

    Leading shopping mall REIT Simon Property (SPG) is struggling to pivot amid the inexorable decline of its core asset group. The REIT has been aggressive in diversifying into outlets and foreign real estate, which may help to hedge against increasingly substantial losses from their shopping mall category. But given current inflation and the possibility of an economic slowdown, both shoppers and retailers may be in a tight spot this holiday season which will inevitably weigh heavily on SPG.  

    Investors choose REIT stocks because of their income-producing abilities and yields. The fact that SPG is concentrated in brick-and-mortar retail is tangential to its income feature. Anyone looking for the reliable income that real estate and mortgage investments can bring would be wise to steer clear of Simon Property for now. 

    Food delivery leader and pandemic darling DoorDash (DASH) was one of the big winners in the shift to stay-at-home culture. Between 2019 and 2021, DASH revenue increased by 451% from $885 million to $4.88 billion. But once the economic reopening was complete, Wall Street’s enthusiasm over the stock sharply halted. Since hitting its peak in November of last year, the stock has plunged more than 75%. Now that the tide has washed out, investors are left to access what’s left, searching for an answer to the looming question – is profitability in the cards for DoorDash?

    DoorDash has never generated a profit, with the exception of the second quarter of 2020, where it made a profit of $23 million. “It took a global pandemic to drive the firm’s one-quarter profitability. The firm has not been profitable since, and we think it may never be,” said David Trainer, the CEO and founder of New Constructs.

    The company reported third-quarter revenue and EBITDA of 4% and $29M above consensus expectations, but  DASH’s EPS is estimated to remain negative in 2022 and 2023. The company is expecting $49 to $51 billion in gross order volume in 2022, implying a modest 14% increase from $41.9 billion last year. However, that’s not enough to justify DASH’s lofty valuation. Currently, the stock trades at a price-to-sales multiple of 4.6, expensive compared to top competitors like Uber Technologies (UBER), which trades at a price-to-sales multiple of 2.1 – half that of DASH.

    Three Stocks to Watch for the Week of December 26th

    By
    Editorial Staff
    -
    0

    Stocks finished last week mixed following the release of data that showed consumer inflation continued to ease in November. The Dow gained 0.9%. But the S&P 500 lost 0.2%, and the Nasdaq sank 1.9% as concerns about prolonged Fed rate hikes and the possibility of a recession in 2023 weighed heavily on investor sentiment.  

    The stock market is wrapping up its worst year in decades. But every cloud has its silver lining. Eventually, every bear market throughout history has represented an opportunity for patient investors looking to pick up shares in desirable names at bargain prices. The question isn’t “if” you should be looking for stocks to buy, but which stocks to buy. This list will cover three tickers to consider in the holiday-shortened week ahead.  

    As price increases slow down, consumers may spend more, providing a boost to some battered consumer discretionary names. Amazon (AMZN) tops our list of stocks to consider on peaking inflation as its share price has been nearly cut in half this year on higher inflation and rising rates.

    Amazon is by far the world’s largest e-commerce company and, in 2021, surpassed Walmart as the world’s largest retailer outside of China. Without a direct competitor in the U.S., Amazon has experienced rapid growth through its third-party marketplace. The company operates 110 fulfillment centers worldwide, with 110 in the U.S.

    Amazon’s business model has built-in advantages like its subscription service, Prime, and streaming platform. The service currently has more than 200 million subscribers globally and 163.5 million in the U.S. That figure is expected to continue to expand at a steady pace. According to a report by Statista, U.S. Prime members are expected to reach more than 176.5 million by 2025.    

    The e-commerce market may continue to suffer in the coming months amid recession fears. Nevertheless, the $9 trillion industry is expected to expand at a CAGR of 14.7% for at least the next four years. Considering the online shopping behemoth held five times the market share of its closest rival, Walmart. Its 38% leading market share means it will likely gain the most considerable advantage from the market’s growth.    

    Even though the tech sector, in particular, has been hit this year, Citi and Goldman Sachs both recently named the tech titan as one of their top picks for 2023, echoing the sentiment of many of Wall Street’s pros. Of 53 analysts offering recommendations for AMZN, 48 call it a Buy, and 4 call it a Hold. There are no Sell recommendations for the stock. A median price target of $136 represents a 46% upside from Friday’s closing price. 

    With shipping rates down from record levels, it’s unsurprising that many shipping stocks have been whacked hard this year, creating opportunity for investors looking for dividend stocks. According to the International Chamber of Shipping, 90% of global trade passes through the maritime shipping industry. This is a very volatile sector, but it’s essential to the world’s supply chain.

    Anyone who has kept tabs on the global supply chain and shipping saga that’s been unfolding since the outbreak of covid is probably familiar with Genco Shipping (GNK). The company owns a fleet of 44 ships it leases for dry bulk transportation of goods like grain, coal, and iron ore. The going rate to rent one of Genco’s ships is no less than $27,000 per day, which provides some solid cash flow that the company uses to reward its shareholders.  

    Dry bulk shipping rates, along with GNK’s share price, have fallen in recent months. Still, as China recovers from recent lockdowns and seasonal demand is expected to be strong, it’s hard to see the pullback in share price as anything less than an opportunistic bargain. This is a very volatile sector, but it’s essential to the world’s supply chain. 

    GNK’s share price is up 6% over the past month. Although the company missed consensus EPS and revenue estimates in the third quarter, it remained consistent with its previously outlined value strategy. The company’s prudent cargo coverage in Q2 resulted in significant benchmark freight outperformance in Q3, allowing Genco to pass the savings onto its investors via a 56% quarterly dividend increase on a sequential basis. Over the last four quarters, the company has declared dividends of $2.74 per share, delivering on its commitment to return substantial capital to shareholders. GNK currently pays a 20% dividend yield.  

    Snowflake provides cloud-based ways for companies to better utilize their data over the internet. The company offers cloud-based data storage and analytics, generally termed “data-as-a-service.” Snowflake’s platform offers Data Cloud, an entire ecosystem that enables customers to consolidate and share data. They also provide a tailored version of their Data Cloud, explicitly aimed at the media and advertising industry.  

    Although Snowflake trades at a premium, it has the qualities investors look for in a potentially parabolic stock. The company provides customers with crucial tech infrastructure, and its share price has plunged 65% from its peak last year. 

    For the third quarter, Snowflake’s revenue surged 67% year over year in Q3, driven by the healthy growth in its customer base and increased customer spending. The company reported a 34% year-over-year spike in the total number of customers. Moreover, the number of customers who have spent more than $1 million on Snowflake products over the past year nearly doubled. The company’s pipeline of contracted future revenue that is yet to be realized also shot up 66% year over year to $3 billion. Snowflake should sustain such impressive growth, with addressable market management claims could be worth $248 billion by 2026. 

    Analysts are expecting 295% annual revenue growth over the next five years. However, investors will have to pay a rich 25 times sales to own SNOW shares. But that represents a considerable discount from last year’s price-to-sales-ratio of 97. Investors searching for high-growth-potential stocks may want to give SNOW some thought.  

    Three Stocks to Watch for the Week of January 23rd

    By
    Editorial Staff
    -
    0

    After a positive start to the year stocks suffered their first negative week of 2023 amid mixed earnings results, big layoff announcements from major tech firms, and recession concerns. The Dow lost 2.7%, and the S&P 500 fell 0.6%. Meanwhile, the technology-focused Nasdaq Composite finished the week with a 0.6% gain.  

    Last week, the 10-year Treasury yield hit a four-month low of 3.37%, fueling optimism around tech and growth stocks. Meanwhile, as Fed rate hikes appear close to a peak, hopes for an economic soft landing are growing.   The Nasdaq composite hit a bear market closing low as recently as Dec. 28. But it is up 6.4% in 2023. 

    Our first of three weekly stock recommendations is a mega-cap tech name presenting an attractive opportunity as inflation subsides.

    As price increases slow, consumers may spend more, boosting some battered consumer discretionary names. Amazon (AMZN) tops our list of stocks to watch this week as its share price has been nearly cut in half this year on higher inflation and rising rates.

    Amazon is by far the world’s largest e-commerce company and, in 2021, surpassed Walmart as the world’s largest retailer outside of China. Without a direct competitor in the U.S., the company has experienced rapid growth through its third-party marketplace. The company operates 110 fulfillment centers worldwide, with 110 in the U.S.

    Amazon’s business model has built-in advantages like its subscription service, Prime, and streaming platform. The service has more than 200 million subscribers globally and 163.5 million in the U.S. That figure is expected to continue to expand at a steady pace. According to a report by Statista, U.S. Prime members are expected to reach more than 176.5 million by 2025.    

    The e-commerce market may continue to suffer in the coming months amid recession fears. Nevertheless, the $9 trillion industry is expected to expand at a CAGR of 14.7% for at least the next four years. Considering the online shopping behemoth held five times the market share of its closest rival, Walmart, its 38% leading market share, it will likely gain the most significant advantage from the market’s growth.    

    The tech sector took a beating in 2022, creating opportunities in some desirable names. Citi and Goldman Sachs recently named the tech titan as one of their top picks for 2023, echoing the sentiment of many of Wall Street’s pros. Of 53 analysts offering recommendations for AMZN, 48 call it a Buy, and 4 call it a Hold. There are no Sell recommendations for the stock. A median price target of $135 represents a 57% upside from Friday’s closing price. 

    Throughout 2022, established automakers like Ford, GM, and Mercedes unveiled plans for dozens of new electric vehicles. Mass production of most of these vehicles will kick into gear starting in 2023 and 2024. Our first of three stock recommendations for the week is a small cap with extreme growth potential over the next few years on the black of upcoming E.V. production.   

    By 2029, electric vehicles could account for a third of the North American market and about 26% of vehicles produced worldwide, according to AutoForecast Solutions. Lithium Americas Corp (LAC) is one company hoping to ride the wave of anticipated global E.V. demand. Launched in 2007, the Canada-based firm searches for lithium deposits in the U.S. and Argentina. While the company is still a pre-revenue concern, its pipeline is brimming with potential, including one project set to enter production stages this year.

    The company has full ownership of two development-stage operations in Argentina. One of which is approaching initial production, expected to come later this year. The timeline has been disrupted on LAC’s U.S. project –The Thacker Pass, Nevada lithium mine – due to ongoing legal and regulatory discrepancies. However,  a U.S. judge said on Thursday she would rule “in the next couple of months” on whether former President Donald Trump erred in 2021 when he approved the company’s right to begin mining the U.S.’s largest-known lithium resource. It seems likely that the case outcome will be positive for LAC, considering Washington’s push to boost domestic production of metals crucial to the green energy transition and wean the country off of Chinese supplies.  

    The high-growth -potential small-cap has been gaining the attention of the pros on Wall Street. “We believe 2023 could be an eventful year as there could be a number of key announcements on growth projects and Argentina divesture, which could be catalysts for the share price,” explained HSBC analyst Santhosh Seshadri. To this end, Seshadri recently initiated coverage of LAC with a Buy rating, backed by a $36 price target.

    Most analysts agree with Seshadri’s thesis. LAC claims a Strong Buy consensus rating, based on 13 Buys vs. 1 Hold and no Sell ratings. At $37, the average price target makes room for 12-month gains of 79%.

    With shipping rates down from record levels, it’s unsurprising that many shipping stocks have been whacked hard this year, creating opportunity for investors looking for dividend stocks. According to the International Chamber of Shipping, 90% of global trade passes through the maritime shipping industry. This is a very volatile sector, but it’s essential to the world’s supply chain.

    Anyone who has kept tabs on the global supply chain and shipping saga that’s been unfolding since the outbreak of covid is probably familiar with Genco Shipping (GNK). The company owns a fleet of 44 ships it leases for dry bulk transportation of goods like grain, coal, and iron ore. The going rate to rent one of Genco’s ships is no less than $27,000 per day, which provides some solid cash flow that the company uses to reward its shareholders.  

    Dry bulk shipping rates, along with GNK’s share price, have fallen in recent months. Still, as China recovers from recent lockdowns and seasonal demand is expected to be strong, it’s hard to see the pullback in share price as anything less than an opportunistic bargain. This is a very volatile sector, but it’s essential to the world’s supply chain. 

    GNK’s share price is up 6% over the past month. Although the company missed consensus EPS and revenue estimates in the third quarter, it remained consistent with its previously outlined value strategy. The company’s prudent cargo coverage in Q2 resulted in significant benchmark freight outperformance in Q3, allowing Genco to pass the savings onto its investors via a 56% quarterly dividend increase on a sequential basis. Over the last four quarters, the company has declared dividends of $2.74 per share, delivering on its commitment to return substantial capital to shareholders. GNK currently pays a 20% dividend yield.  

    Three Stocks to Watch for the Week of February 27th

    By
    Editorial Staff
    -
    0

    Stocks declined last week as incoming data showed that inflation may have reversed course and adjusted market expectations around further Fed rate hikes this year. On Friday, the Commerce Department reported that its core (less food and energy) personal consumption expenditures (PCE) price index jumped 0.6% in January, above expectations of an increase of 0.4% and its most significant rise since August.

    The S&P 500 suffered its worst weekly loss since early December, dropping 2.7%. As of Friday’s close, the index had surrendered roughly 35% of the rally that began in October, but it remained up 3.40% for the year. The Dow lost 3% and fell into negative territory for 2023, while the Nasdaq sank 3.3%. 

    On paper, this week’s first featured company should be reeling from the pressures impacting the consumer economy, but its brand remains as powerful as ever. The stock is a favorite among hedge funds, and it garners a Strong Buy rating from the Wall Street pros. 

    Apple (AAPL) 

    Apple’s greatest strengths center on its operational dominance. For instance, its three-year revenue growth rate is 20%, beating out 85.62% of its competitors. Its net margin pings at 24.56%, outpacing 95.52% of rivals. Currently, Wall Street analysts peg AAPL as a consensus Strong Buy. Further, their average price target stands at $171.94, implying over 15% upside potential.

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    QuantumScape (QS)

    QuantumScape has shipped prototypes to automakers, who are in the process of testing its breakthrough batteries. Due to the nature of the companies’ agreements, the company can’t disclose any testing details. But it has been said that the tests are going well, which will likely translate to a smooth operational ramp over the coming quarters. Plus, QuantumScape is excelling when it comes to cutting costs and managing cash; it extended its runway to 2025 when commercial operations are expected to start.

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    Match Group (MTCH)

    The pandemic provided a bump in online dating and sent MTCH stock price soaring, reaching its ATH of around $169 in October 2021. Since the share price has lost nearly 75% of its value, but the global, fundamental need to meet people isn’t going anywhere. Match benefits from inelastic demand, compared to other consumer discretionary names, which the company intends to continue capturing with its technologies, including Tinder, OkCupid, and Hinge providing a solid and resilient subscription-based business. MTCH has a consensus Buy rating. A $60.23 price target implies a 38% upside.

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    Three Stocks to Watch for the Week of March 13th

    By
    Editorial Staff
    -
    0

    Stocks pulled back sharply last week as renewed inflation concerns sparked worries of extended rate hikes, erasing nearly all of 2023’s market gains. Tough talk from Fed Chair Jerome Powell during his testimony before Congress on Tuesday suggested that the course of interest-rate hikes could steepen and last longer than expected if inflation remains high. The three major indexes all sustained steep weekly losses of around 4.5%, and the S&P 500 fell to its lowest level since early January.

    Market participants will be focused on the latest inflation readings in the coming days, starting on Tuesday with the Consumer Price Index (CPI) report for February, followed by the Producer Price Index (PPI) reading on Wednesday. These reports will follow January data that showed prices for consumers and producers remained high, fueling concerns that there’s no immediate end in sight when it comes to interest-rate hikes. 

    On paper, this week’s first featured company should be reeling from the pressures impacting the consumer economy, but its brand remains as powerful as ever. The stock is a favorite among hedge funds, and it garners a Strong Buy rating from the Wall Street pros. 

    Apple (AAPL) 

    Apple’s greatest strengths center on its operational dominance. For instance, its three-year revenue growth rate stands at 20%, beating out 85.62% of its competitors. Its net margin pings at 24.56%, outpacing 95.52% of rivals. Currently, Wall Street analysts peg AAPL as a consensus Strong Buy. Further, their average price target stands at $173, implying over 16% upside potential.

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    Matador resources (MTDR) 

    2022 was a huge year for energy stocks, but so far, in 2023, the sector’s performance has been underwhelming. However, several Wall Street pros say the bull market for energy stocks still has room to run.   

    Anyone seeking to beef up their energy position would do well to consider Matador resources. Matador shareholders can take confidence from the fact that EBIT margins are up from 36% to 60%, and revenue is growing. Earnings are expected to grow by 6.21% per year over the next ten years. MTDR is a good value with a PE ratio of 5.4 times compared to the US Oil and Gas industry average of 7 times.

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    Archer-Daniels-Midland (ADM)

    Despite the challenging conditions in the stock market last year, ADM stock has gained over 6.4%. Stronger-than-anticipated results from South America have helped it post robust top and bottom-line numbers in recent quarters. In its fourth quarter, sales and operating profits were up 13.6% and 18%, respectively. Surprisingly, ADM stock trades at 0.4 times forward sales estimates, roughly 62% lower than the consumer staples sector average.

    ADM has a yield of 2.21% and boasts an A-graded dividend profile, demonstrating dividend growth for 50 consecutive years. Moreover, its forward dividend per share growth of 7.4% is more than 40% higher than the sector average.

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    Three Stocks to Watch for the Week of January 30th

    By
    Editorial Staff
    -
    0

    Stocks rebounded last week, bouncing back from the worst week of the new year. The Nasdaq surged 4.3% for its fourth positive week in a row. Meanwhile, the S&P 500 and the Dow posted smaller gains, rebounding from declines the previous week. With only two trading sessions left in January, the Nasdaq was on track to record its strongest monthly result since July.

    The week ahead will be eventful, with the FOMC’s policy meeting taking center stage. At its meeting ending on Wednesday, the U.S. Federal Reserve is expected to lift its benchmark interest rate again. Market participants are also looking forward to earnings from some of the largest companies in the world, including big tech firms Apple, Amazon, Google, and Meta Platforms.

    Software stocks were among the market’s biggest losers in 2022 amid drastic shifts in Fed policy. But amid signs of cooling inflation over the past few months, interest rate hikes have slowed. With inflation collapsing, it seems likely that interest rates will continue falling through 2023. If they do, it could be up, up, and away for software stocks, such as our first of three recommendations for the week ahead. 

    The next-generation data storage market is predicted to grow by 8.5% to $81 billion by 2025. All-flash data storage hardware and software products developer Pure Storage (PSTG) has upward solid top and bottom-line results, a healthy balance sheet, and growing cash flow. PSTG investors benefit from its subscription-based model, which is now at over $1 billion in annual recurring revenue. With a growing customer base in a market with substantial long-term growth potential, investors may want to take a bullish stance on this company.

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    StoneCo Ltd. (STNE) provides back-office software, loans, and other financial services to small and medium-sized businesses with a focus on reinvesting the cash it generates to acquire or build new financial products for its customer base. Since early 2019, the company has grown the number of small and medium business clients by 3x, revenue by 2.3x, and net income by 2.2×. Stoneco stock lost 53% of its value in 2022 on rising interest rates and macroeconomic risks in Brazil. But base interest rates in Brazil seem to have peaked, and a potential decline in the second half of 2023 is expected as Brazil’s inflation normalizes, reducing the margin pressure from rising financial expenses.

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    Drugmaker, Viatris’ (VTRS) is profitable and looking for more growth. The company is trimming its less-profitable operations, including its biosimilars, women’s health division, and over-the-counter drugs. In its place, it is adding an ophthalmology franchise through the $750 million acquisitions of Oyster Point Pharma and Famy Life Sciences. The deal is expected to close in the first quarter of 2023. Management expects the acquisition to generate at least $1 billion in sales by 2028. 

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    Three Stocks to Avoid or Sell Next Week

    By
    Editorial Staff
    -
    0

    Seeking out great stocks to buy is important, but identifying quality investments is only half the battle. Many would say it’s just as essential for investors to know which stocks to steer clear of. A losing stock can eat away at your precious long-term returns. So, figuring out which stocks to trim or get rid of is essential for proper portfolio maintenance.  

    Even the best gardens need pruning, and our team has spotted a few stocks that seem like prime candidates for selling or avoiding. Continue reading to find out which three stocks our team is staying away from this week.

    Bed Bath & Beyond (BBBY)

    The home goods retailer is staving off bankruptcy by raising capital from selling its preferred stock and warrants. But, unfortunately, this action may prolong its inevitable bankruptcy. 

    In early 2021 BBBY’s share price rose to more than $35.  Two years later, it’s below $1 per share and is one of the most heavily shorted stocks in the market. The company is struggling to keep up against retail heavy-hitters like Walmart and Target, and it will only worsen with Bed Bath continuing to close retail locations.

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    Ascent Solar Technologies (ASTI) 

    The photovoltaic specialist carries significant implications for the solar energy industry. With society gravitating toward clean and renewable energy solutions, ASTI should be enjoying extraordinary relevance. Unfortunately, its narrative hasn’t been so fortunate. Year to date, ASTI share price is down 72%. In the trailing year, it’s down almost 96%.   Glaringly, its three-year revenue growth rate sits at 90.3% below parity. Profit margins have slipped to ridiculously negative rates while the balance sheet is a mess. Gurufocus.com warns that Ascent solar is a possible value trap.  

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    Big Lots (BIG)

    Shares in the big box retailer may be down by nearly 71% over the past 12 months. Some investors are still being tempted by its 10.82% dividend yield. However, with the company reporting a net loss of $7.30 per share and expected to stay in the red through 2024, it’s highly questionable whether BIG’s high rate of payout will continue for long.

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    Three Wildly Undervalued Growth Stocks

    By
    Editorial Staff
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    0

    These stocks with enormous growth potential are too profoundly discounted to ignore.  

    The growth stock collapse of 2022 has shifted to a growth stock resurgence in 2023. Cathie Wood’s growth-centric ARK Innovation ETF (ARKK) sank nearly 70% last year. This year it’s up more than 20% and may just be the beginning amid a shifting economic backdrop.

    The Federal Reserve has become increasingly dovish in 2023, downshifting all the way back to a 25-basis-point rate hike at its most recent meeting. Recent talk of a pause and potential rate cuts in the future has made way for investors with an appetite for growth stocks with high reward potential.

    Even after a hot start to 2023, some growth stocks look way too cheap. We’ve got three recommendations of stocks with stellar growth potential presenting attractive risk-reward propositions at their current prices.    

    Meta Platforms Inc. (META)

    One notable growth name that got hammered in 2022 is Meta Platforms Inc. The stock currently trades at less than 25x forward earnings. Still, with the most prominent family of apps and 4 billion users worldwide, META’s recovery this year has been swift. The ticker has stacked on 64% YTD. 

    Despite its recent rally, the social media leader’s stock is still down 46% from its high and looks cheaply valued for long-term investors. Meta trades at under 20 times the expected annual profit and four times expected sales. With a core business that has held up well against intense pressures, underappreciated potential for success in the metaverse and shares trading at multiples that leave room for big upside, Meta stock continues to look significantly undervalued.

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    Lithium Americas Corp (LAC) 

    By 2029, electric vehicles could account for a third of the North American market and about 26% of vehicles produced worldwide, according to AutoForecast Solutions. Lithium Americas Corp is one company hoping to ride the wave of anticipated global EV demand. The company has full ownership of two development-stage mining operations in Argentina. One of which is approaching initial production, expected to come later this year. 

    The high-growth -potential small-cap has been gaining the attention of the pros on Wall Street. “We believe 2023 could be an eventful year as there could be a number of key announcements on growth projects and Argentina divesture, which could be catalysts for the share price,” explained HSBC analyst Santhosh Seshadri. To this end, Seshadri recently initiated coverage of LAC with a Buy rating, backed by a $36 price target.

    Most analysts agree with Seshadri’s thesis. LAC claims a Strong Buy consensus rating, based on 13 Buys vs. 1 Hold and no Sell ratings. At $37, the average price target makes room for 12-month gains of 74%.

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    AssetMark Financial Holdings (AMK)

    Leading asset manager AssetMark Financial continues to grow as it looks to become a full-service wealth management platform. Its recent acquisition of Adhesion Wealth, which provides wealth management technology solutions to investment advisors and asset managers, will expand its offerings. The company has been growing rapidly and has forecast annual EPS growth of 32% during the next five years. It has also seen its valuation come down to a P/E of 22, which is an excellent value for this growth stock.

    The stock is up 34% already this year. Even if the market does retreat, AssetMark still expects roughly 10% growth in assets on its platform in 2023 and 20% year-over-year revenue growth. And as we emerge from this volatile market toward the next bull market, the company, a leader in the market, should see continued growth since asset managers thrive in bull markets.

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    Three Stocks to Avoid or Sell Next Week

    By
    Editorial Staff
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    0

    Seeking out great stocks to buy is important, but identifying quality investments is only half the battle. Many would say it’s even more important for investors to know which stocks to steer clear of. A losing stock can eat away at your precious long-term returns. So, figuring out which stocks to trim or get rid of is essential for proper portfolio maintenance.  

    Even the best gardens need pruning, and our team has spotted a few stocks that seem like prime candidates for selling or avoiding. Continue reading to find out which three stocks our team is staying away from this week. 

    Lemonade (LMND)

    Thus far, the self-proclaimed insurance industry disruptor has gained a healthy following. But in all of the enthusiasm surrounding its  AI-based underwriting technology, investors may be turning a blind eye to its laundry list of flaws.

    In 2022, Lemonade generated a 116% increase in premiums. By contrast, the company expects just 12% year-over-year growth in 2023. Aside from the dramatic slow-down in overall business, the company is bleeding cash, posting an adjusted EBITDA loss of $225 million last year. This year’s EBITDA loss is expected to come in at around $242 million.

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    Ascent Solar Technologies (ASTI) 

    The photovoltaic specialist carries significant implications for the solar energy industry. With society gravitating toward clean and renewable energy solutions, the company should be enjoying extraordinary relevance. Unfortunately, its narrative hasn’t been so fortunate. Year to date, ASTI share price is down 69%. In the trailing year, it’s down almost 96%.   Glaringly, its three-year revenue growth rate sits at 90.3% below parity. Profit margins have slipped to ridiculously negative rates while the balance sheet is a mess. Gurufocus.com warns that Ascent Solar is a possible value trap.  

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    Carvana (CVNA) 

    Used car prices skyrocketed coming out of the pandemic. However, it looks like the used car market is entering a correction, with some analysts calling for an impending collapse. The Manheim Used Vehicle Value Index showed that used car prices sank 14.9% year-over-year in December 2022, the most significant annualized price decline in the 26-year history of that index.

    Due to the steep decline in used car prices, Carvana stock has lost 95% of its value over the last 12 months. The company’s profit per vehicle was lower by 25% in 2022. Meanwhile, its total debt stands at $9.25 billion, with only $650 million of cash on hand. There have also been confirmed media reports that the company’s creditors have signed an agreement on how to handle negotiations with Carvana if it goes bankrupt. That’s not a good sign.

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    Three A.I. Stocks With Plenty of Room to Run

    By
    Editorial Staff
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    0

    Investors have been pouring into rapidly developing AI tech names over the past few months, and this is likely just the beginning. According to Grand View Research, the global artificial intelligence market reached a valuation of $136.55 billion in 2022. It’s projected that by 2030 the industry will command a revenue of nearly $1.9 trillion.  

    Anyone looking to profit from the paradigm shift may wonder which companies stand to gain the most as breakthrough advancements are made in the industry. Here we’ll look at three Buy rated standouts from the burgeoning AI group with average projected upsides of 40% or more.  

    CrowdStrike (CRWD)

    With cyber threats materializing all the time, cybersecurity technology specialists, CrowdStrike (CRWD), is one of the most relevant AI stocks to buy. After losing nearly half of its value in 2022, CRWD is up 6% this year. Of 37 analysts offering a recommendation for the stock, 33 have an optimistic view, yielding a consensus Strong Buy assessment. In addition, their average price target stands at $162.59, implying an upside potential of over 40%. Therefore, CRWD is one of the top AI stocks to buy.

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    Luminar (LAZR)

    Luminar (LAZR) is at the forefront of lidar technology development with products that integrate sensors with AI, giving cars autonomous safety features to support a human driver. After losing more than 70% of its value in 2022, LAZR is up nearly 50% this year. The stock garners a solid Buy rating from the 12 analysts offering recommendations. An average price target of $12.50 represents a 76% upside from the current price.

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    Brekshire Grey (BGRY)

    Small-cap Brekshire Grey (BGRY) leans to the speculative side of the scale, but according to certain Wall Street pros, BGRY has the potential to reward investors with a more than 80% projected upside. The American tech company develops integrated artificial intelligence and robotic solutions for e-commerce, retail replenishment, and logistics and has been gaining investor attention. Share price is up a whopping 150% YTD and may have plenty of room to run if the 2 analysts offering recommendations are correct. 

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