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    Three Stocks to Consider on Peaking Inflation

    By
    Editorial Staff
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    Now is the perfect time to check your positioning ahead of the new economic environment

    Along with a 50 basis point interest rate hike, Federal Reserve Chair Jerome Powell announced today that policymakers will look for “substantially more evidence to have confidence that inflation is on a sustained downward path.”  Still, recent data has signaled a possible inflation peak, causing market participants to consider their positioning ahead of the new economic environment.

    The November consumer price index report showed a lower-than-expected increase for the second month in a row, signaling that inflation may have peaked. Consumer prices rose just 0.1% in November from the previous month and 7.1% from the previous year, where economists expected a 0.3% monthly increase and a 7.3% increase year-over-year.

    If inflation has peaked and the worst is behind us, certain stocks are set up to potentially gain. This list will look at three stocks that should get a boost as inflation subsides.  

    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., 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, Amazon Prime, and its 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 still 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 significant 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 Wednesday’s closing price. 

    Whether inflation has peaked or not, healthcare is an undeniable necessity. Our following recommendation is a small but profitable pharma biotech company with massive expansion plans in the wings. The company also pays a sizeable dividend to shore up your portfolio for what could be coming.  

    Drugmaker, Viatris’ (VTRS)  portfolio currently comprises more than one thousand approved molecules across a wide range of key therapeutic areas, including globally recognized iconic and key brands, generic, complex generic, and biosimilar products. Branded products include EpiPen, Amitiza, Lipitor, and Viagra. Its biosimilar portfolio includes pegfilgrastim, trastuzumab, and adalimumab biosimilars.

    Viatris is profitable, but it is looking for more growth. The company reported revenue of $4.1 billion in the third quarter, down 10.1% year over year. Adjusted earnings came in at $0.87 per share, surpassing consensus estimates, but down from $0.99 per share the year-ago quarter. 

    The company generated $144 million in revenues from products launched in 2022, primarily driven by lenalidomide, its myeloma treatment, its interchangeable insulin injectable Semglee, and its unbranded insulin pen in the United States. It is on track to achieve approximately $525 million in new product revenues in 2022, which is below expectations due to the timing of launches but with better-than-expected margins.

    Viatris’ earnings are expected to contract by 4% in 2022, and the stock is down 21% year to date. However, analysts, on average, expect Viatris to rise nearly 18% going forward, according to FactSet. The reason behind Wall Street’s optimism is changes to the company’s business plan that have already been set into motion. 

    The company is in the process of trimming its less-profitable operations, including its biosimilars, women’s health division, and its over-the-counter drugs. In its place, the company 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, the company said, adding that it sees the acquisitions generating at least $1 billion in sales by 2028.

    The company has a relatively high debt-to-equity ratio of nearly two, but it has the right idea by trimming its less-profitable operations and paying down its debt. Management sees revenues expanding at a CAGR of 3% between 2024 and 2028 and EPS expanding at a CAGR of around 15% over the same period. VTRS hopes to use the expanding revenue to reward its investors through steady dividend growth. Its current yield is 4.4%, and its payout ratio is very safe at 20%. Though it’s a speculative recommendation based on the success of the company’s business transition, the rewards could be handsome.

    Cyclical stocks have had a tough time in 2022, but 2023 could be a banner year for growth stocks as inflation cools and the Fed eventually finishes the rate hiking cycle. One notable growth name that got hammered in 2022 is Meta Platforms Inc. (META). The stock currently trades at its cheapest level at less than 17x forward earnings, and it may have further to fall. Still, with the most prominent family of apps and 4 billion users worldwide, META’s recovery could be swift when tech turns around. 

    Meta was once one of the world’s most valuable companies and is considered one of the Big Five American information technology companies, alongside Alphabet, Amazon, Apple, and Microsoft. As of 2022, it is the least profitable of the five, and has fallen from the list of the top twenty biggest companies in the United States. The company owns Facebook, Instagram, and WhatsApp, among other products and services. In October 2021, the parent company of Facebook changed its name from Facebook, Inc., to Meta Platforms, Inc., to “reflect its focus on building the metaverse.”  

    The metaverse is still in its embryonic stages, but an increasing number of market participants are jumping in on the companies they believe will lead the way into this fantastic new iteration of the internet. For investors who want to get their foot in the door now, pioneering META seems like a good choice, especially since its price has been slashed more than 66% over the past year.

    Signs of a weakening ad market have been apparent as prices have risen across the board. Regulatory troubles, layoffs, and management changes have intensified the pain for META this year. But as inflation cools, Meta’s commercial ad spend seems likely to recover as soon as the second half of 2023.   If investors should be greedy when others are fearful, the perfect time to scoop up shares of the social media giant.  

    Of 58 polled analysts, 38 recommend buying META stock, while 19 rate the stock as a Hold, and only 1 rate it as a Sell. A median price target of $145 represents an increase of 20% from Wednesday’s closing price.  

    Read Next – NEW WARNING: This could end America…

    From the legend who predicted the Great Financial Crisis, the collapse of Fannie Mae and Freddie Mac, General Motors, and General Electric

    He predicted the 2008 financial crash…

    He warned the government’s bailouts, money printing, and soaring debt burden would lead to a crisis of America’s civil society… 

    Predicting in near-perfect detail the riots, lockdowns, shortages, and rampant inflation we’ve all been subjected to. 

    Today, he’s stepping out of retirement to issue an urgent new warning, one he says could forever change America. 

    “Lockdowns and government control of your private health choices were only the beginning… 

    Soon, entire swaths of our economy may be shut down – forever. Tens of millions of Americans will be wiped out financially.” 

    He says this coming event will be more devastating than the dotcom blowup, the 2008 financial crisis, or the Covid crash. 

    And, for those who are unprepared, it could decimate their savings, investments, retirement, and even their way of life. 

    The shockwaves will rip our country even further apart, leading to a surge in violence, protests, and economic disruption.  

    However, for those who know what’s coming, there are ways to protect yourself and your family… and to even make huge profits.

    To get all the details, click here now. 

    Three Stocks to Watch for the Week of December 12th

    By
    Editorial Staff
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    After two positive weeks in a row, the major U.S. stock indexes fell last week on mixed economic data as recession concerns intensified. Investors are worried that recent mixed inflation data could challenge the Federal Reserve’s expectations of slowing the pace of interest-rate increases. For the week, the Dow shed 2.8%, the S&P 500 fell 3.4%, and the Nasdaq lost 4%. 

    In the coming days, investors will be focused on the latest inflation data due for release and the two-day Fed policy meeting, with central bankers expected to announce an interest rate decision and near-term projections for the U.S. economy on Wednesday. Fed policymakers are widely expected to hike interest rates by an additional 50 basis points in their ongoing effort to tamp high inflation. This will be the seventh and final rate hike for 2022. The Fed has raised its benchmark rate by a cumulative 375 basis points so far this year, in the fastest tightening cycle in over 40 years.

    Since the U.S. government officially introduced the first-ever tax credit for clean energy storage projects, there have been remarkable positive business developments in the industry. At the end of 2021, the global installed energy storage capacity measured about 46 GWh.  According to InvestorPlace, a meager 1.5% of renewable energy production in the world is backed by energy storage today. As governments and corporations worldwide strive toward carbon neutrality, that figure is set to grow exponentially. This week’s first recommendation is a pure play on advanced energy storage with enormous upside potential.  

    Stem Inc (STEM) is a pure play on the smart energy storage space offering artificial intelligence-driven clean energy storage systems. The company’s advanced energy storage solutions with Athena(TM), an artificial intelligence-powered analytics platform, enables customers and partners to optimize energy use by automatically switching between battery power, onsite generation, and grid power.

    The company has already built up considerable infrastructure with established names. STEM’s Athena Software seems likely to become mission-critical for many electric utilities because of the rapidly increasing supply and demand for renewable energy.  

    For the third quarter, Stem reported a record-breaking backlog of $727 million, up 191% from $250 million at the end of Q2 2021. Bookings were up 402% from $45 million to $226 million, and the 12-month pipeline increased 8% from the previous quarter to $5.2 billion. Revenue grew a whopping 246% year-over-year and came in 5% above the high end of guidance at $67 million. 

    We are encouraged by Congressional support for the Inflation Reduction Act of 2022. The climate provisions in the Act would drive continued investment in America’s aging power grid, support customer adoption of renewable energy, and improve energy security by incentivizing development of our domestic supply chain. Importantly, a stand-alone Investment Tax Credit (ITC) for energy storage, and the extension of the solar ITC, would improve the economic returns for our customers.”  

    “Supply chain constraints, permitting and interconnection delays, and certain regulatory actions continue to pose challenges, but we believe we remain well-positioned to manage these risks and continue with our strong execution through the rest of 2022,” commented John Carrington, Chief Executive Officer of Stem.

    STEM has high growth potential and looks like an ideal long-term investment. The company’s Athena platform seems like an industry changer with wide-ranging applications. STEM’s infrastructure is far ahead of its competitors and will likely prove to be a crucial piece of the investment thesis moving forward. Of the 11 analysts covering the stock, 9 rate it a Buy, and 2 rate it a Hold. There are no sell ratings for STEM. A median price target of $19.50 represents an increase of 85% from Friday’s closing price.  

    37 U.S. states and four U.S. territories have laws that permit the use of marijuana. While it is still  illegal on a Federal level, President Biden’s recent proclamation included a request for the attorney general “to initiate the administrative process to review expeditiously how marijuana is scheduled under federal law.”  Many see this as a significant step in the right direction, but it’s expected to be a slow road.    

    Potential legalization of cannabis is likely to be a major positive catalyst for the leader in net cannabis revenue, Tilray (TLRY). The company has a presence in all key markets, with a focus on recreational and medicinal cannabis; the addressable market is significant and expanding. 

    TLRY surged following the recent announcement that President Biden would encourage the reassessment of marijuana laws but gave back some of those gains when the company reported Q1 2023 revenue and EPS misses. The company has its sights set on Revenue of $4 billion by 2024, a realistic target if regulatory hurdles wane. At $3.48 per share, TLRY currently trades at -6.5x forward earnings.   The stock remains deeply oversold and is worth buying even after the recent uptick.

    Global healthcare leader Eli Lilly And Company (LLY) has been creating high-quality medicines for over a century. The drug firm focuses on endocrinology, oncology, neuroscience, and immunology. Key products include Trulicity, Jardiance, and Humulin for diabetes; Taltz and Olumiant for immunology; and Verzenio and Alimta for cancer.  

    The mega-cap pharmaceutical giant’s pipeline is locked and loaded with promising advancements, which means plenty of potential upcoming opportunities for investors to benefit from. In the first half of 2022, Lilly received word that the FDA was fast-tracking its investigation of tirzepatide. A drug designed to treat adults who are overweight with weight-related comorbidities such as diabetes. Eli Lilly expects its rolling application to be completed by April 2023.

    JPMorgan analyst Chris Schott recently summed up his bullish outlook on LLY. The analyst believes that Eli Lilly remains the best-positioned growth story in his coverage and one of his top picks following the stock’s pullback over the past month. The analyst sees a “significant opportunity” for Tirzepadite in type 2 diabetes, and obesity, which in his view “warrants increased attention.”  Schott currently gives the stock an Overweight rating and a $300 price target.  

    Lilly’s share price is up nearly 33% in 2022 and seems likely to continue to gain steam into the new year. The stock sports a dividend of $0.98 or 1.21% annually. LLY’s dividend payout for the year is set for the low 40% range, which should allow for robust future dividend growth.

    A strong pipeline and a stable dividend make Eli Lilly an attractive consideration. The pros on Wall Street also think so. Among 17 polled analysts, 14 say to Buy LLY, 2 call it a Hold, and only one rates the stock a Sell. A median 12-month price target of $351 represents a 9% increase from its current price.

    Three Stocks to Avoid Next Week

    By
    Editorial Staff
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    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. With fears of a global recession escalating, now is the time to prepare for the worst because 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, especially now.  

    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. 

    The dramatic shift from brick-and-mortar shopping to e-commerce over the past two years has been a tremendous obstacle for investors in retail. With interest rates marching higher as the economy slows, this is likely just the beginning of the pain for retailers.  

    Recent data suggests that 25% of America’s 1,000 malls will be closed in the next 3-5 years. As a cornerstone to shopping malls across the country, department store chain Macy’s (M) has been among the stocks to suffer. Over the past twelve months, M stock has declined 36% to trade at $22.23 a share.     

    Although Macy’s delivered a solid third-quarter report along with an increase to its earnings outlook, there are obstacles ahead for the iconic retailer. With the Federal Funds Rate at its highest level since 2008 and no sign of slowing down, the consumer economy faces unprecedented challenges. While anyone left holding M stock could enjoy a holiday bump, in the face of a looming recession, any increase seems likely to be short-lived. 

    Despite rising consumer prices, Americans kicked off the holiday season with record spending on Black Friday and Cyber Monday. As a result, many retail and e-commerce stocks are seeing a nice holiday boost. However, some names will enjoy the holiday cheer more than others.  

    One e-commerce firm to be cautious about is online furniture and home goods seller Wayfair Inc. (W). Wayfair saw a dramatic recovery from its pandemic lows as consumers focused on their homes. With shelter-in-place orders in effect and mortgage rates at record lows, Americans snapped up spacious family houses, leaving behind once-desirable apartments in the city. As a result, Wayfair’s share price rocketed 572% from its March 2020 low to a high of $340 by August 2020. Sadly, W stock has fallen nearly 90% since then and is currently trading at $42.10, 50% below its pre-pandemic price. 

    Opportunistic bargain hunters may be eyeing the stock’s momentum due to a 12% increase over the past four weeks. However, those looking for e-commerce stocks to ride the holiday wave would do better looking elsewhere. Not only has demand shifted, but consumers are also now met with economic pressures, which inevitably affects discretionary spending, and Wayfair is feeling the pinch. The online retailer’s active customers shrunk by 1 million quarter-over-quarter in Q3 or more than 4% to 22.6 million, down a whopping 22.6% from the year-ago period. The trend of dwindling customers may continue amid rising consumer prices. 

    Wayfair has only managed to turn an annual profit once – in 2020. From the looks of it, 2022 will not be the year that changes. Operating loss for the year has already surpassed $1 billion, while the year-to-date net loss is $980 million. Over the past 6 weeks, the median consensus forecast has been slashed by nearly 25% to $40, representing a loss of 5% from its current price. 

    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 of 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 4% and $29M above consensus expectations, but  DASH’s EPS is estimated to remain negative in 2022 and 2023. The company expects $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 trailing twelve-month price-to-sales multiple of 3.7, expensive compared to top competitors like Uber Technologies (UBER), which trades at a price-to-sales multiple of 1.9 – almost half that of DASH. 

    One Fintech Stock to Buy and One to Avoid Like the Plague

    By
    Editorial Staff
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    A rebound for fintech may be on the way in 2023, but some names are positioned to recover ahead of others.

    Amid rising interest rates and a drastic rotation out of technology, fintech stocks have taken a beating this year, vastly underperforming the overall market. Global X FinTech ETF (FINX), which tracks an index of up to 100 fintech stocks, has plunged over 50% this year versus the S&P 500’s loss of 17%. Many fintech names are also feeling the pressure from the recent plunge in digital currency prices resulting from the FTX bankruptcy. Meanwhile, competition in the space is intensifying as a wave of fintech startups aim to draw in merchants.  

    Nevertheless, the shift in consumer spending habits to online and mobile platforms is undeniable. Expansion of the adoption of contactless payment and the growing popularity of “buy now, pay later” transactions should serve as significant tailwinds for the strong names in the industry. But not all fintech companies will stay in the race.  

    With a potential rebound for fintech stocks on the horizon in 2023, many investors are considering fintech stocks that have had their prices recently slashed. However, not all tickers from the space are equal. Some companies are likely to recover more robustly than others, while others may have further to suffer before making a turnaround. In this article, we’ll look at two firms from the fintech space. One that has several positive qualities that are likely to give it steam for a healthy rebound. The other – not so much.  

    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 has developed a range of payment solutions utilized by e-commerce for businesses and merchants all over Latin America. StoneCo reported about $390 million in revenue and earnings in the third quarter. Small and medium-sized businesses using the platform surpassed 2.3 million, and total payment volume in the quarter grew to nearly $14 billion.

    StoneCo stock is down close to 47% this year on news of rising interest rates, macroeconomic risks in Brazil, and some operational blunders. 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. Meanwhile, StoneCo’s revenue growth should benefit from rising digitization of payments, higher take rates, and elevated growth in banking and software. STNE stock currently trades at roughly 1.4 times projected forward revenue and 33 times forward earnings, which seems fair for a disruptive, fast-growing company in a developing market.  

    Institutional investors can provide valuable insights about where a stock may be headed. At the end of the third quarter, Berkshire Hathaway disclosed a new $110 million position in the company. Warren Buffett isn’t the only institutional investor who’s recently raised an investment in StoneCo.  Cathie Wood’s Ark Innovation fintech exchange-traded fund (ARKF) owns roughly 2.55 million shares of the payments company valued at more than $26.5 million. STNE has a Hold rating from the pros who cover it and a median target price of $12.20, representing a 19% increase from Friday’s closing price.  

    While a winning fintech stock could boost your portfolio significantly, the wrong fintech stock could be detrimental to your precious long-term returns. That’s why avoiding tickers from the group that seem especially vulnerable is critical. One stock we’re avoiding is Upstart Holdings (UPST). 

    Upstart’s management provided less than inspiring Q4 guidance during the company’s disappointing third-quarter earnings call, sparking yet another sell-off for the stock. UPST’s share price is down more than 95% from its October 2021 ATH, and it may have more to go as bank partners tighten their fists.  

    In the midst of aggressive shifts in monetary policy, institutional lenders are less willing to fund Upstart’s loans than ever. It makes sense for backers to be so cautious in the current macroeconomic environment. Rising interest rates will continue to pressure consumers, leading to more defaults. Upstart is especially vulnerable as its AI models have yet to be tested during a significant down period in the credit cycle.  

    Making matters worse, Upstart more than doubled the amount in loans it funded with its own cash in Q2 in just a single quarter. The company reported $600 million in loans on its own balance sheet, up from $250 million in the previous quarter, severely exposing its balance sheet to credit risk at a terrible time. This was one contributing factor to Upstart’s third-quarter revenue miss and management’s decision to lower Q4 guidance.

    Management sees Q4 revenue in the range of $125 million to $145 million. That implies revenue growth of roughly 18%, representing a sharp deceleration from the 252% revenue growth UPST delivered in Q4 2021. With growth momentum slowing while competition in the space is simultaneously growing, UPST is one fintech stock to stay away from for now. 

    Three Warren Buffett Stocks for 2023 and Beyond

    By
    Editorial Staff
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    0

    Warren Buffett is one of the most successful investors on Wall Street. The Berkshire Hathaway CEO is known for a long track record of market-beating returns, evident in the exemplary gains in Berkshire’s Class A shares since 1965. Over the past 57 years, the widely followed Berkshire Hathaway portfolio has generated returns of over 3.64 million percent. In other words, if you had invested $100 in Berkshire in 1965, that investment would be worth more than $3.64 million today. That works out to be an increase of around 20% compound annually, more than twice that of the S&P 500 over the same period. That stellar performance is why investors may want to take a page out of Buffett’s playbook and consider striking up a position in some Berkshire-held potential long-term winners themselves. 

    The 92-year-old investing legend maintains the same buy-and-hold investment philosophy that has defined much of his success over the past six decades. Historically, the Oracle of Omaha has favored reliable blue chips in industries like healthcare, consumer goods, financials, and energy and tended to avoid unprofitable, speculative, high-growth potential stocks. However, that doesn’t mean there aren’t any growth stocks in Buffett’s collection.  

    Buffett made waves on Wall Street when the most recent addition to Berkshire’s $700 billion portfolio was disclosed. In this list, you’ll get all the details on this tech winner, plus two more Buffett stocks that should not be ignored. 

    It should be no surprise that Buffett owns a major stake in Apple (AAPL) stock, considering its strong earnings, returns, and management. As the Number 1 stock in Berkshire’s portfolio by market value (worth a whopping $123.66 billion at the end of September), Apple makes up nearly 41% of Berkshire’s total equity portfolio. In the third quarter of 2022, Buffet added to the firm’s tech investment with a sizeable stake in the world’s largest contract chipmaker Taiwan Semiconductor (TSM).

    Also known as TSMC, Taiwan Semi is at the top of the list when it comes to the semiconductor manufacturing group. The company makes chips for the likes of AMD (AMD), Nvidia (NVDA), Qualcomm (QCOM), and it’s a key chip supplier to Apple.  

    After hitting a two-year low due to a sharp slowdown in global chip demand, TSM’s share price jumped when Berkshire disclosed its more than $4.1 billion position in the stock. Still down more than 40% from its January 2022 peak, anyone on the sidelines might consider now an appropriate time to strike. “Only a small number of companies can amass the capital to deliver semiconductors, which are increasingly central to people’s lives,” said Tom Russo, a partner at Gardner, Russo & Quinn in Lancaster, Pennsylvania, when he reiterated the bullish case for TSM.  

    US investors have been cautious when betting on the Taiwan-based chipmaker as it would lose all Western contracts in the event of a Chinese takeover of the island. However, the company is working to reduce its geopolitical risk with a new $40 billion foundry in Arizona, expected to be operational by 2024. The investment has Washington’s support as it comes amid a U.S. push to boost domestic supplies of semiconductors and Congressional passage of the $52 billion CHIPS and Science Act. 

    Taiwan Semi reported earnings of $1.79 per share from $20.23 billion in revenue in the third quarter, surpassing consensus expectations of $1.41 EPS from revenue of $19.96. Management reiterated its outlook of Q4 revenue in the range of $19.9 billion to $20.7 billion. The gross profit margin is expected to be between 59.5% and 61.5%, and the operating profit margin is expected to be between 49% and 51%.

    TSM has a 90% Buy rating from the 38 analysts offering recommendations and zero Sell ratings. Anyone on the sidelines may want to consider striking up a position in this Buffett stock and holding on for years.  

    At the end of the third quarter, Berkshire also disclosed its position in the leading Brazilian fintech company StoneCo Ltd. (STNE). The firm reported owning close to 10.7 million shares, currently valued at more than $110 million, amounting to a roughly 3.4% stake in the company.

    Stoneco 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 has developed a range of payment solutions utilized by e-commerce for businesses and merchants all over Latin America. In the third quarter, Stoneco reported about $390 million in revenue. Small and medium-sized businesses using the platform surpassed 2.3 million, and total payment volume in the quarter also grew to close to $14 billion.

    Despite its steady progress, Stoneco stock is down close to 47% this year on news of rising interest rates, macroeconomic risks in Brazil, and some operational blunders. 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. Meanwhile, StoneCo’s revenue growth should benefit from rising digitization of payments, higher take rates, and elevated growth in banking and software. STNE stock currently trades at roughly 1.4 times projected forward revenue and 33 times forward earnings, which seems fair for a disruptive, fast-growing company in a developing market.

    Buffett isn’t the only institutional investor who’s recently raised an investment in StoneCo.  Cathie Wood’s Ark Innovation fintech exchange-traded fund (ARKF) owns roughly 2.55 million shares of the payments company valued at more than $26.5 million. STNE has a Hold rating from the pros who cover it and a median target price of $12.20, representing a 19% increase from Wednesday’s closing price. 

    The Way of the Future: 3 Green Hydrogen Stocks To Supercharge Our Portfolios

    By
    Editorial Staff
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    0

    A recent analyst report shows that burning fossil fuels produces about 83% of the world’s carbon emissions. Governments worldwide are attempting to shift focus to more renewable energy sources as the ongoing political and social conflicts surrounding the climate problem only seem to grow. The study also predicts that green hydrogen will lead the decarbonization effort and play a crucial part in enabling a complete transition to net zero by 2050. No more nasty emissions! Zilch. Natural gas output is anticipated to be 70% lower, and oil production will likely be down more than 55% from where it is now by 2050. Coal? Doesn’t stand much of a chance.

    In a continuous attempt to decarbonize heavy industries, long-haul freight, shipping, and aviation, green hydrogen has been funded with various emissions reduction pledges from the UN Climate Conference, also popularly called “COP 26.” The Green Hydrogen Catapult, the Inflation Reduction Act, and other legislative initiatives by the European Commission aim to provide secure, clean energy on a global scale by decarbonizing the gas market using renewable sources. If you were asked which renewable energy source is the best to use and you answered with “green hydrogen,” then by all accounts, you’d most likely be correct. As investors, we know that renewable energy is buzzing and gaining popularity. For now, I’m going under the radar with green hydrogen stocks to show off a few of the industry’s greatest.

    Let’s get into the three green hydrogen stocks I picked; I’ve accounted for performance, recent events and developments, growth, analyst sentiment, and what a stock’s intrinsic value could be. Experts agree that we should grab these hydro-tickers:

    Shell PLC (SHEL)

    Shell PLC (SHEL) is an oil and petrochemical business with operations in Europe, Africa, Asia, the U.S., and the rest of North and South America. SHEL extracts natural gas, crude oil, and natural gas liquids, markets and transports such resources, and runs the upstream and midstream infrastructure required to give gas directly to the market. SHEL also markets and trades energy, carbon-emission rights, and LNG as fuel for heavy-duty vehicles. Furthermore, SHEL manufactures basic chemicals ranging from basic aromatics to detergent alcohols. SHEL also generates power using wind and solar energy, produces and sells hydrogen, and offers electric car charging services (as well as electrical storage). In January 2022, the business changed its name from Royal Dutch Shell PLC to Shell PLC. SHEL was established in 1907 and is based in London, England.

    Since 2015 — after shifting its focus from greenhouse gasses — SHEL has been gradually implementing a sustainable energy transition, investing heavily in wind and solar power, green hydrogen generation, and reforestation. SHEL aspires to be a net-zero-emissions energy company by 2050. SHEL is doing quite well, with 39 hedge funds currently holding approximately twenty million shares, equaling roughly $1 billion. SHEL now has a P/E ratio of 5.02x, and a decent 0.68 beta, making it less volatile than the broader market. To showcase its Q3 2022 performance, I’ll lean on my new approach by listing the year-over-year growth with what’s reported: Revenue – $95.75 billion (+59.46%), Net Income – $6.74 billion (+1,608%), EPS – (+1,633%), and Profit Margin – 7.04% (+1,051%). SHEL beat Wall Street analysts’ Q3 revenue projection by a margin of 103.78%. SHEL has a dividend yield of 4.29%, with a quarterly payout of 62 cents per share ($2.48 a year). Analysts that offer annual price estimates give SHEL a consensus median price target of 70.00, with a high of 78.70 and a low of 60.00. The assessment is a 21.94% increase over current pricing; it gives us another excuse to take advantage of SHEL’s buy rating.

    Linde PLC (LIN)

    Linde PLC (LIN) is an industrial gas and engineering firm with operations in North and South America, the Middle East, Africa, Europe, and Asia Pacific. LIN provides atmospheric gases like oxygen, argon, nitrogen, and rare gases. In addition, LIN designs and builds turnkey process plants for third-party clients and gas shops, promoting several varieties, such as olefin, natural gas, hydrogen, and synthesis gas facilities. LIN has been involved in other business sectors: healthcare, energy, manufacturing, food, beverage carbonation, fiber optics, steel manufacturing, aerospace, chemicals, and water treatment. LIN was formed in 1879 and is headquartered in Woking, England.

    There is an active Hydrogen Council of which LIN is a member. LIN has invested in wind-powered plants that transform water into hydrogen and has predicted that by 2035, hydrogen vehicles will likely be competitive with EVs. LIN started producing green hydrogen on a large scale in France, Greece, and other European nations as of November 2022. Of course, LIN is a favorite of mine for timely events, but it also shows excellent past performance. From Q4 2021 to Q3 2022, LIN bested analysts’ projections on both lines; for four consecutive quarters. Here are LIN’s Q3 financials with corresponding yearly growth: Revenue – $8.8 billion (+14.72%), Net Income – $1.27 billion (+30.03%), EPS – $2.54 per share (+35.11%), and Profit Margin – 14.47% (+13.31%). 

    LIN has a dividend yield of 1.40%, with a quarterly payout of $1.17 ($4.68 annually). Analysts who offer yearly price projections have given LIN a median price target of 350.00, with a high of 380.00 and a low of 260.00. This is a 4.69% increase from the last price, and speaking of price—LIN’s buy rating holds up because it is considered undervalued, making the price a bargain. It’s hard not to like this one.

    Plug Power Inc (PLUG)

    Plug Power, Inc. (PLUG) specializes in developing, designing, and manufacturing hydrogen and fuel cell systems for handling materials and stationary energy storage sectors. PLUG’s fuel cell system solutions are intended to replace lead-acid batteries in some distribution and manufacturing enterprises’ electric vehicles, as well as industrial trucks. George C. McNamee and Larry G. Garberding created PLUG on June 27th, 1997, and it is located in Latham, New York.

    I gushed over the first two, and they deserved it. It’s not that PLUG isn’t a good stock; it is, but it’s simply not operating on the same scale as LIN and SHEL. In other words, PLUG is a grower and probably best suited for long-term investors. That said, PLUG showed sales of $161.9 million for 2021. In 2022, PLUG is estimated to finish the year with $350 million, an estimated 113% growth from last year. Analysts forecast 33.30% more growth to end Q4 2022 and 21.60% growth in the first quarter of 2023. For Q3, PLUG’s big silver lining was in the $188.63 million sales, representing 31.06% growth.

    PLUG has a market cap of over $9 billion and a higher daily average volume (17.2 million) than its peers on this list combined. PLUG’s stock is down by 47.01% year-to-date, which could explain such modest and speculative financials. However, there is also an opportunity to be had here. Analysts’ 12-month price estimates give PLUG a median target price of 28.00, with a high of 78.00 and a low of 15.00. This is an enormous 87.17% increase over the last price. PLUG’s upside potential is obvious enough to justify its buy rating. Although it’s not as “big” as its peers, it comes down to whether it’s the right stock for you and at the right time. Look at all the factors. Do your due diligence. Keep an open mind but a cautious one.

    Read Next – Bloomberg: This fuel is the key to “solving the energy crisis.”

    It’s time for you to take part in the greatest energy revolution of our lifetime.

    It’s projected to be 10X bigger than the electric vehicle revolution…

    Which turned an early $500 investment in Tesla into $207,000. 

    And it will be bigger than the solar power revolution…

    Which would have turned a $2,500 investment in Enphase Energy into over $1 million.

    This is the greatest energy investing opportunity of our lifetimes. 

    And the best part is…

    According to Bloomberg, President Biden has “almost guaranteed” that investors will have a shot at making a fortune from this brand new type of energy. 

    Because it holds the key to “solving the energy crisis” in America. 

    And Biden has authorized $80 billion be spent immediately to bring this new type of energy to market ASAP. 

    And for the small company at the center of this energy revolution, their share price is about to go through the roof. 

    A small $500 stake could potentially turn into $234,000. 

    Those billions of federal funding are set to be dispensed any minute…

    And when that happens, this stock is expected to rocket to the moon. 

    So, you need to see the details about this opportunity right now. 

    We explain everything. 

    Take a look here. 

    Three Stocks to Watch for the Week of December 5th

    By
    Editorial Staff
    -
    0

    A mid-week rally lifted stocks last week, but by Friday, the market had given back much of the gains. The moves higher were driven by comments from Fed Chair Jerome Powell signaling smaller interest rate hikes could start as early as the December 13 – 14 FOMC meeting. However, a stronger-than-expected jobs report on Friday raised concerns about prolonged aggressive Fed tightening, taking the wind out of the market’s sails. The major indices finished with modest weekly gains, with the Dow gaining 0.2%, the S&P 500 rising 1.1%, and the Nasdaq climbing 2.1%. The S&P 500 recorded its second positive month in a row in November, posting a 5.4% total return. All 11 sectors were positive; materials were the strongest performer, and consumer discretionary was the weakest, according to S&P Dow Jones Indices.  

    The week ahead will bring more updates on inflation and the state of the economy. Market watchers will be looking for clues on how high inflation, rising interest rates, and an economic slowdown are impacting consumer confidence when the University of Michigan releases the preliminary December reading of its Consumer Sentiment Index (MCSI). Also, on Friday, the Bureau of Labor Statistics (BLS) will release its Producer Price Index (PPI) for November. The PPI tracks inflation from the standpoint of goods-producing businesses and is considered a bellwether for the trajectory of consumer inflation.   

    The decline in tech has brought investors what many would consider a once-in-a-lifetime opportunity in some notable names. Our first recommendation for this week is one such company with many positive attributes, including a deep economic moat, high operating margins, and a strong balance sheet to boot.

    Google parent Alphabet (GOOG, GOOGL) shares traded for as low as $83.49 in the days following its recent 20-for-1 stock split. The stock has been steadily recovering, stacking on more than 20% over the past month.   At around $100 a share, the stock is still accessible for investors seeking big tech at a fair price. The company has multiple catalysts in the wings, which should keep momentum strong as enthusiasm for big tech stocks re-accelerates.   

    Over the last five years, GOOGL is up 101%, crushing the Nasdaq’s 64% gain and the Internet Services Market’s 72% gain over the same period. The company posted earnings per share of $1.21 on revenue that grew by 12.6% year-over-year to $69.69 billion. The consensus sees earnings dropping 7% in 2022 but rising in 2023 at $5.80 a share. Top-line growth is expected, with 2022 sales expected to climb 11% and another 10% in 2023 to $260.44 billion.

    Key catalysts to watch out for include its artificial intelligence tools that help users search in new ways, such as Google Lens, which is currently being used over 8 billion times a month.   Google also recently introduced a new multi-search feature to help users search with both words and images simultaneously. Shares also have a strong rebound potential once the digital ad market recovers.   

    At 20 times forward earnings, Alphabet shares are trading in line with the S&P 500. Still, the current multiple may underestimate the company’s potential to re-accelerate earnings once its many growth catalysts start to play out.

    A name offering defensive growth from the desirable sector currently is UnitedHealth Group (UNH). As the most significant health insurance company by market cap and market share, UNH’s size gives it built-in advantages over peers from the group.   

    Despite the market slowdown this year, UNH’s share price is up more than 6%, outperforming its peers and the broader market. The Health Care Select Sector SPDR Fund (XLV) is up a fraction of a percent YTD, while the S&P 500 is still down more than 15%.  

    Due to UnitedHealth’s rapidly expanding reach, Q3 revenue was up 12% from the same quarter last year to $80.89 billion. Earnings came in at $5.79 a share, surpassing the consensus estimate of $5.42 per share. In the third quarter, the company reported expanding its customer base by approximately 850,000, including 185,000.   “The strength of our performance reflects the diligence and determination of our colleagues to improve people’s experience across the health care system and make high-quality care simpler, more accessible, and more affordable,” said Andrew Witty, CEO of UNH. The company also increased its 2022 EPS view to $21.85-$22.05 from $21.40-$21.90. The consensus expectation is at the low end of the company’s forecast, at $21.87, suggesting that the pros on Wall Street may not give enough credit to the health insurance giant.   

    Momentum should be supported in the coming years thanks to UNH’s strong market position and attractive core business. Its international business expansion provides substantial diversification benefits and shields against the impact of tightening U.S. regulations while allowing the Dow giant to tap into the $8.3 trillion spent annually on global healthcare.

    UnitedHealth has a solid history of rewarding investors with a steady paycheck. The company went to a quarterly dividend in 2010 and, since then, has increased its dividend every year. That includes a 16% bump last year to $1.45 a share, which works out to a yield of 1.10% at its current price. UNH’s payout has increased 31% over the past five years, and the stock has a 5-year annualized dividend growth rate of 17.18%. The stock looks like a value at about 26 times earnings, compared to the healthcare industry, where the average P/E is around 34.

    Vertex Pharmaceuticals (VRTX) is the undisputed leader in cystic fibrosis therapies. The company’s portfolio of approved CF drugs will deliver at least an estimated $8.4 billion this year, made possible by intense market penetration and decades-long devotion to research and development in the space. 

    So far, the company has remained strongly profitable and has continued to expand revenue within the CF market at a steady pace. If management’s plans for expanded approvals for younger age cohorts continue to come to fruition over the next few years, Vertex will eventually be treating as many as 90% of all people with CF.

    The company is moving its pipeline beyond CF with a handful of mid-stage clinical programs for pain relief, kidney disease, and genetic hematologic disorders like sickle cell disease. In other words, even if it eventually corners the entire CF therapy market, there will still be other growth opportunities.  

    One potential catalyst is its partnership with CRISPR Therapeutics (CRSP) in developing gene-editing treatments for two rare blood disorders, which is expected to begin regulatory studies in March 2023. This means investors can look forward to a steadily increasing flow of new revenue and expanded approvals, which should significantly support the stock’s price.   

    Of 26 analysts offering recommendations for VRTX, 18 give the stocks a Buy rating, and nine rate it a Hold. There are no Sell ratings. It seems likely that Vertex will reward patient investors as the steadily growing biopharma company seems ripe for expansion for years to come.  

    Three Stocks to Avoid Next Week

    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. 

    Despite rising consumer prices, Americans kicked off the holiday season with record spending on Black Friday and Cyber Monday. As a result, many retail and e-commerce stocks are seeing a nice holiday boost. However, some names will enjoy the holiday cheer more than others.  

    One e-commerce firm to be cautious about is online furniture and home goods seller Wayfair Inc. (W). Wayfair saw a dramatic recovery from its pandemic lows as consumers focused on their homes. With shelter-in-place orders in effect and mortgage rates at record lows, Americans snapped up spacious family houses, leaving behind once-desirable apartments in the city. As a result, Wayfair’s share price rocketed 572% from its March 2020 low to a high of $340 by August 2020. Sadly for anyone who jumped on the post-pandemic bandwagon, W stock has fallen nearly 90% since then and is currently trading at $42.10, 50% below its pre-pandemic price. 

    Opportunistic bargain hunters may be eyeing the stock’s momentum due to a 12% increase over the past four weeks. However, those looking for e-commerce stocks to ride the holiday wave would do better looking elsewhere. Not only has demand shifted, but consumers are also now met with economic pressures, which inevitably affects discretionary spending, and Wayfair is feeling the pinch. The online retailer’s active customers shrunk by 1 million quarter-over-quarter in Q3 or more than 4% to 22.6 million, down a whopping 22.6% from the year-ago period. The trend of dwindling customers may continue amid rising consumer prices. 

    Wayfair has only managed to turn an annual profit once – in 2020. From the looks of it, 2022 will not be the year that changes. Operating loss for the year has already surpassed $1 billion, while the year-to-date net loss is $980 million. Over the past six weeks, the median consensus forecast has been slashed by nearly 25% to $40, representing a loss of 5% from its current price.   

    According to CME data, investors expect to see short-term interest rates jump to a range of 4.25% to 4.5% by the end of the year, pointing to an increasingly likely recession in the wings. According to The Economist, a recession formed within two years in six of the past seven rate hiking cycles where rates increased this rapidly.  

    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 demand for the stock. That presents a real hazard for anyone eyeing BA after plunging 37% so far this year. This could be just the beginning of Boeing’s losing streak if a recession is forming.  

    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 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.  

    Rising interest rates are cooling off the entire housing sector, with mortgage applications in their fourth month of declines, dropping to the lowest level since 1997. The 30-year fixed mortgage rate is currently 6.46%, more than double what it was just one year ago. Home resales are sitting at a two-year low. According to the latest data from the US Department of Housing and Urban Development,  new residential construction fell 8.1% month over month across the US in November. More pain is expected as the Federal Reserve is widely forecast to continue lifting interest rates through the remainder of 2022 and into 2023 to dampen inflation.

    As the largest homebuilder in the U.S., Texas-based D.R. Horton (DHI) is likely to be impacted by the slowdown in the housing market. DHI’s share price is down 33% already this year, outpacing the decline of the S&P 500. As the housing market slows further heading into winter, more declines can be expected. The company has been slowing its number of housing starts in response.

    In its most recent Q3 earnings, D.R. Horton forecasted a slowdown, saying it now expects full-year revenues from $33.8 billion to $34.6 billion, down from its previous guidance of $35.3 billion to $36.1 billion. The company also reported a Q3 cancellation rate of 24%, up from 17% the previous year. With an increasing number of analysts predicting a housing recession, the company could be forced to further lower its earnings forecast.

    Two Stocks to Buy and One to Sell Next Week

    By
    Editorial Staff
    -
    0

    After a midday turnaround on Friday, stocks erased early losses and finished the week little changed. The S&P 500 and the Nasdaq logged modest weekly gains, while the Dow was down for the week. After a week of mixed economic data, our team has two recommendations of stocks to buy and one to sell heading into the close of the year.   

    Since the U.S. government officially introduced the first-ever tax credit for energy storage projects, there have been remarkable positive business developments in the industry. Our first buy recommendation for today is a company gaining traction as plans for much-needed upgrades to the nation’s aging power grid unfold.    

    NextEra Energy (NEE) is the world’s largest solar and wind energy producer. They’re owners of Florida Power & Light, along with some other utilities and businesses that do wholesale energy. They’re also the sponsor of NextEra Energy Partners, which is primarily renewable energy focused. Renewables are a big part of NextEra’s business. NextEra has emerged as the world’s most valuable utility, primarily by betting on utilities, especially wind.  

    NextEra had about 30 gigawatts of wind and solar farms at the end of last year, enough to power 17 million homes. And it’s expanding significantly, with contracts to add another 10 gigawatts of renewables. 

    For decades, NextEra Energy has been reducing emissions through the development of renewable energy and the modernization of its generation fleet. The company’s goal is to reduce the CO2 emissions rate by 67% by 2025 from a 2005 baseline. This equates to a nearly 40% reduction in absolute CO2 emissions, despite the company’s total expected electricity production almost doubling from 2005 to 2025. Working toward this goal, as of year-end 2021, NextEra has reduced its CO2 rate by 62.2%  and the absolute CO2 tons by 20% while their generation increased by 67.5%. That’s pretty impressive.  

    NextEra Energy has more energy storage capacity than any other company in the U.S., With more than 180 MW of battery energy storage systems in operation. The company leads the industry with storage innovations such as its Babcock Ranch Solar Energy Center – the largest combined solar-plus-storage facility in the country. This cutting-edge project incorporates a 10-MW battery storage project into the operations of a 74.5-MW solar power plant.

    NextEra has a solid track record of success. Between 2006 and 2021, their adjusted earnings per share grew at a compound annual growth rate of 8.4%, while dividends grew at a compound annual growth rate of 9.4%, that’s incredible growth over 15 years. Over the past five years, the stock is up 137% on a total return basis. That type of performance is not typical for a utility company, indicating that NextEra is an outlier in the industry. 

    The undisputed global leader in identity security, CyberArk (CYBR), has been gaining attention on Wall Street. The stock is up 26% over the past six months and could continue to gain heading into 2023. Regardless of any short-term earnings volatility, the potential for long-term, steady growth is too great to ignore.  

    CyberArk’s innovations occur across its self-hosted solutions and expanding SaaS portfolio of privileged access management, secrets management, and cloud privilege security offerings, helping its customers enable “Zero Trust” by enforcing least privilege. Under the framework of its Zero Trust approach, its teams can focus on identifying, isolating, and stopping threats from compromising identities and gaining privilege before they can do harm.

    The Israel-based company was recently named a leader in the Gartner Magic Quadrant for Privileged Access Management for 2021. It was positioned both highest in the ability to execute and furthest in the completeness of vision for the fourth time in a row. It comes as no surprise the business has been attracting customers to its subscription-based services, which means tremendously reliable cash flow, a good sign for anyone eyeing the small-cap.  

    For its third quarter, CyberArk reported a 133% growth acceleration from the previous year’s quarter of the subscription portion of its annual recurring revenue (ARR) to $255 million. Total ARR came in at $465 million, with growth Accelerating to 48%. Management also increased the full-year 2022 ARR Guidance Range to  $589-$601 million, up from a prior estimate of $583.5-$598.5 million.

    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. 

    Grab These 3 Leisure Tickers Before the Industry Takes OffLook Forward to Leisure!

    By
    Editorial Staff
    -
    0

    People are increasingly looking forward to more than just travel and “staycations” regarding how they spend their spare time. This is because of the increased growth recently seen in the leisure industry. Interactive teaching methods, mass customization, AI that supports cashless transactions, technological ecosystems, data, and machine learning insights, and augmented reality are some of the biggest trends branching out from tech and influencing the… leisure industry? Really? Yup.

    Leisure and fitness-related attitudes are evolving at a global level. Many people who had never been motivated to exercise or stay active started taking regular walks and looking to satisfy their fitness needs during the pandemic. The need for recreation and exercise resources both at home and at work will dramatically expand as a result. The proportion of Americans 65 and older is expected to rise from 15% to 24% between 2018 and 2060, with growing demand for various forms of recreation and entertainment. 

    I’ve considered track records of success, growth, analyst sentiment, and fundamentals. As the industry expands while prices are down, these leisure stocks come with strong buy ratings; Analysts agree that these tickers could be great opportunities:

    Planet Fitness Inc (PLNT)

    Planet Fitness, Inc. (PLNT) and its subsidiaries operate and license fitness facilities under a popular name in the fitness world. PLNT conducts operations in the U.S., Panama, Canada, Puerto Rico, Mexico, and Australia. PLNT sells exercise equipment to franchised establishments in the U.S. and Canada. PLNT was established in 1992 and is based in New Hampshire. PLNT announced that its franchisees and members had given more than $8 million to Boys & Girls Clubs of America since 2016, with $500,000 introduced to the fund just in October, made possible by PLNT’s charitable program, The Judgement Free Generation®, striving to eradicate bullying and encourage compassion among young people.

    PLNT reported solid numbers for Q3, beating analysts’ projections for EPS and revenue by 11.37% and 4.18%, respectively. Let’s look at a few of PLNT’s impressive metrics, with year-over-year growth (alongside): Revenue of $229.81 million (+63.69%), a net income of $26.91 million (+54.29%), and EPS growth of 52.38%. For the current quarter, estimates show a current EPS of 47 cents per share and $270.7 million. PLNT’s stock is down 14.85% year-to-date, but the intrinsic value depends on who you ask. Analysts that offer yearly pricing estimates have given PLNT a consensus median price target of 90.00, with a high of 115.00 and a low of 72.00. This estimate shows a 16.69% increase from its last price, and the consensus also leans heavily on PLNT’s buy rating. Even stocks need exercise.

    Pool Corporation (POOL)

    Pool Corporation (POOL) sells swimming pool materials, equipment, and associated leisure items on a wholesale basis. POOL also provides non-discretionary pool maintenance items such as chemicals and replacement parts and discretionary products such as packaged pool kits. POOL’s selection includes a vast selection of residential and commercial irrigation parts and products, landscaping equipment, and other specialty products. POOL was created in 1993 and is based in Covington, Louisiana. Well-regarded for years as an industry leader, POOL offers over 200,000 items from over 2,200 suppliers to over 120,000 professional contract and store clients, with 70% of its transactions done in person. POOL’s scale allows it to spend on its supply chain, technology, and customer support to set itself apart. 

    POOL brings in over 60% of its revenue from pool maintenance, giving it an expanding environment of recurring income as new pools are built each year. As of Q3 ‘22, POOL was/is working with a profit margin of 21.86%, revenue of $6.12 billion, EPS of $4.82 per share, and a Return on Equity margin of 72.07%. All the while, POOL’s stock is down year-to-date and is widely considered undervalued. Let’s not forget that POOL has a dividend yield of 1.27%, with an annual payout of $4.00 per share. Analysts who project 12-month pricing have given POOL a consensus median price target of 350.00, with a high of 420.00 and a low of 305.00. The estimate shows an 8.98% increase over current pricing, and POOL’s buy rating is something for investors with a large enough budget to consider.

    Cedar Fair LP (FUN)

    Cedar Fair, LP (FUN) owns and runs amusement parks, water parks, and resorts throughout the U.S. and Canada. FUN’s theme parks include Cedar Point in Sandusky, Ohio; Kings Island near Cincinnati; California’s Great America in Santa Clara; Canada’s Wonderland near Toronto; Worlds of Fun in Kansas City, Missouri; and two Schlitterbahn Waterpark locations —- one in New Braunfels, Texas and the other in Galveston, Texas. Established in 1983, FUN is based in Sandusky, Ohio.

    FUN’s revenue hit a record $843 million, a 12% increase ($90 million) over the same period last year. Let’s look at critical year-over-year growth for FUN: Revenue +34.30%, Net Income +125.05%, EPS +125.38%, and Net Profit Margin growth of 101.12%. FUN also offered a killer surprise for Q3– it reported an EPS of $5.86 vs. the $3.90 expected, an extraordinary margin of 50.53%. FUN’s Board of Directors recently declared a quarterly cash dividend payout of $0.30 per unit ($1.20 per unit annually), with a 2.89% yield. Analysts who provide 12-month price predictions give FUN a median price target of 51.00, with a high of 58.00 and a low of 41.00. The estimate represents a 22.63% increase from its last price, and FUN has a strong buy rating that can arguably base itself on any number of market factors.

    Read Next – BREAKING: Military to spend billions on “Living Missile”

    In 2018, Secretary of Defense Jim Mattis drafted a top-secret plan called “Project Overmatch.”

    It says that the weapons we have right now were designed to win wars in the 20th century.

    But to “Overmatch” our enemies in the 21st Century, we’re going to need 21st century weapons.

    Now here’s what most people don’t know.

    “Project Overmatch” just received final approval to be implemented in March.

    That’s given the Pentagon an extra $37.2 billion to spend on adding next generation weapons over the next 12 months.

    At the center of all this spending is a new “living missile.”

    CBS News Reports:“It’s an entirely new type of weapon.”

    The NY Times Reports:“No existing defense can stop it.”

    And the U.S. Army said, “We’re going to make a lot of them very quickly.”

    We’ve just prepared a new report on the small defense contractor that makes this weapon – plus three other small defense firms best positioned to ride this mega-trend…

    Please take a few seconds and download a pdf copy right now before the report link expires…

    GET: “21st Century Battlefield: 4 Companies Changing Warfare” >>>

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