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    Three Stocks to Avoid Next Week

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    Editorial Staff
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    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. As interest rates keep rising, the likelihood we see this bear market in tech stocks continue into 2023 increases. With a price more than 70% below its ATH, some may be eyeing our first recommendation of stocks to avoid next week as a bargain, but a closer look reveals several reasons that are not likely the case.

    At one point, Meta Platforms (META), formerly Facebook, was one of the very few businesses with a market cap of over a trillion dollars. Due to a host of headwinds, including a macroeconomic downturn, increased competition, lower ad revenues, and post-pandemic normalization of revenue trends, the company’s market cap is a far cry from its $1.07 trillion peak from August 2021. Some may be eyeing META as a bargain currently valued at less than $300 billion. A closer look may persuade anyone on the fence to stay on the sidelines for now.

    Meta has seen a lot of changes from what it once was as Facebook. The social media giant’s new vision aims to transform how we connect with its investment in the Metaverse. The company continues to dump billions to bring its Metaverse plans to fruition, but any signs of a near-term payoff are nil. According to management, there is a “long road ahead,” and it will be “years before the metaverse is built.”  Therefore, meaningful profit from the new segment is a long way off. Meanwhile, Meta’s core social media business’ daily active users have been growing more slowly, and its advertising business is suffering due to stiff competition.  

    The company’s Q3 results were mixed as revenue topped expectations but operating income missed, and 2023. Investors were disappointed by the company’s fiscal 2023 operating expense guidance. Management sees opex in the range of $96-101 billion,  including an estimated $2 billion in charges related to consolidating its office facilities after it lays off 13% of its workforce. At the midpoint, the company estimates a 13% year-over-year surge in expenses, significantly above Street revenue growth estimates of 7%.

    Some adventurous investors may get lucky with well-timed short-term bets on META, as volatility amid tech stocks will likely persist. Still, anyone with a longer-term outlook would do well to wait until there is more certainty for the company.   

    Rising interest rates and a cooling off of the red-hot housing market create a challenging backdrop for mortgage provider Rocket Companies (RKT).   Mortgage interest rates have increased about 370 basis points year-to-date, and the average rate for a 30-year mortgage is currently 6.92% versus an average of 3.09% in 2021.   Furthermore, the Mortgage Bankers Association recently reported that mortgage application volume is down 37% year-over-year. 

    Rocket has struggled to meet expectations for the past few quarters as it laps 2021’s blockbuster numbers.  Most recently, the company came out with adjusted quarterly earnings of -$0.03 per share, missing the consensus estimate of $0.02 per share.  This compares to earnings of $0.46 per share a year ago.  Revenue was reported as $1.44B, down nearly 48% from the same period last year and 26% lower than the consensus estimate.  Rocket’s been underperforming the broader market so far in 2022. RKT shares have lost about 55% since the beginning of the year versus the S&P 500’s decline of 25%.  The pros on Wall Street say to HoldRKT.  Of 16 analysts offering recommendations, 2 rate the stock a Buy, 12 rate it a Hold, and 2 say to Sell RKT shares. 

    Struggling high-end retailer Vera Bradley (VRA) reported lower-than-expected quarterly results last week and lowered 2023 guidance in the face of inflationary and recessionary pressures. The company reported Q2 EPS of $0.08, versus $0.28 from the same period last year. Revenue came in at $130.4 million, missing consensus expectations of $132.51 million.

    This isn’t the first rotten quarter for VRA. The designer of high-end handbags, apparel, and luggage has been struggling for some time, missing the consensus mark for earnings and revenue for six of the past seven quarters. According to management, investors should not expect a shift anytime soon. Management sees full-year revenue of $480 – $490 million, less than the $497.56 million that Wall Street expects, indicating the pros could be overestimating the company’s recent performance.  

    VRA sees 2023 EPS in the ballpark of $0.20 – $0.28, representing a decline of 50% or more from the same period last year’s EPS of $0.57.   “We expect the challenging macroeconomic environment to continue for the balance of the year and anticipate it will take additional time to return the Pura Vida e-commerce business to growth, high gas prices and other inflationary pressures will continue to impact the Vera Bradley factory channel, and there will be continued pressure on gross margin. Therefore, we believe it is appropriate to further adjust our outlook for the fiscal year,” CEO Rob Walstrom commented.   

    Two Stocks to Buy and One to Sell Next Week

    By
    Editorial Staff
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    Stocks rallied to close the week after a smaller-than-expected rise in consumer prices for October fueled hopes of cooling inflation. The S&P 500 closed the week more than 5% higher, logging its best weekly performance since June. Meanwhile, the Dow added 4%, and the Nasdaq Composite stacked on around 8%.  

    Since the U.S. government officially introduced the first-ever tax credit for energy storage projects, the industry has had remarkable positive business developments. 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 producer of solar and wind energy. They’re owners of Florida Power & Light and 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, largely 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 developing renewable energy and 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 which indicates that NextEra truly is an outlier in the industry. 

    The undisputed global leader when it comes to 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 the 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 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 inevitable 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.  

    Read Next – Get Out of U.S. Banks Immediately

    A Wall Street legend has warned 8.4 million Americans to prepare immediately.

    “A historic financial reset in 2023 could cause a run on the banks unlike anything we’ve seen in our country’s history,” he says.

    Marc Chaikin has already appeared on 30 different TV networks to share his warning.

    Even CNBC’s Jim Cramer has taken notice.

    But few people realize this could actually happen on U.S. soil.

    Or what a sizable impact it could have on your wealth, especially if you have large amounts of cash in the bank right now.

    Chaikin is best known for predicting the COVID-19 crash, the 2022 sell-off, and the overnight collapse of Priceline.com during a CNBC debate.

    In his 50-year Wall Street career, he worked with hedge funds run by billionaires Paul Tudor Jones and George Soros.

    But today, he is now urging you to move your money out of cash and popular stocks and into a new vehicle 50 years in the making.

    “This is by far the best way to protect and grow your money in what will surely be a very difficult transition for most people,” Chaikin says.

    Click here for the full story, and his free recommendation.

    Three Network Security Stocks With More Than 25% Upside Expected

    By
    Editorial Staff
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    One of the biggest threats to corporate America is ransomware. The growing possibility of losing access to essential or confidential digital property is a nightmarish scenario for executives, as the financial consequences can be enormous.  

    But it’s not just major companies that are at risk. We are all threatened with the loss of personal data security as hackers continue to develop new ways to exploit networks, software, and the array of evolving technology services. As the world advances to become more digitized, so too do its threats.

    According to Research and Markets, the global network security market size reached a valuation of $4.68 billion in 2021. Experts project that by 2027, the segment will command a valuation of $16.6 billion, representing a CAGR of 23.5% from 2023 estimates.

    Online security is a young, quickly evolving industry. Competition is heavy in the space, and demand continues to grow faster in both volume and complexity. Not all companies from the burgeoning subsector are set to last. In this article, our team examines three attractive tickers set to benefit as the demand for protection from cyber abuse continues to grow.

    Palo Alto Network Inc. (PANW) is a top choice for customers looking to stay ahead of quickly evolving cybersecurity threats. For ten years straight, the company has been named a market leader in network firewalls by leading research and advisory company Gartner. It achieved the highest position for ability to execute and the furthest position for completeness of vision in Gartner’s Magic Quadrant for Network Firewalls for 2021. Still, they haven’t been letting the recognition go to their head. Over the past few years, Palo Alto has aggressively expanded its portfolio with significant investments and acquisitions.    

    The groundbreaking acquisition of Bridgecrew, a developer-first cloud security company, enabled Palo Alto’s Prisma Cloud to become the first cloud security platform to deliver security across the full lifecycle of an application, from the building stage to deployment to run. This is the most recent in a string of additions to its portfolio of NGS (next-generation security) services.

    In fiscal 2021, Palo Alto’s NGS services generated $1.18 billion in annual recurring revenue (ARR), representing roughly 28% of its top line and surpassing its prior ARR guidance of $1.15 billion. That segment’s accelerating growth complemented the stable growth of its on-site appliances and services, and its total revenue increased by 25% for the full year. 

    Palo Alto serves more than 85,000 customers today, compared to about 9,000 customers nine years ago. The company expects its revenue to rise 24%-25% in fiscal 2022, and its stock trades at about fifteen times that forecast. The consensus estimate of $227.09 represents a nearly 50% increase from the current price. Down 27% from its April high, PANW may be a solid choice to add to your portfolio. 

    The undisputed global leader when it comes to 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 and was positioned both highest in the ability to execute and furthest in 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. A consensus estimate of $179.89 represents an upside of 25.77%

    According to Mordor Intelligence, the application delivery controller market is expected to reach a valuation of $3.78 billion by 2026, representing a CAGR of 9.63%. One of the companies set to benefit most from the trend is A10 Networks (ATEN). Specialists, when it comes to the manufacturing of application delivery controllers, A10 leverages artificial intelligence protocols to provide automated protection against distributed denial-of-service (DDoS) attacks, which are increasing in relevance by the day.  

    Widening profit margins surfaced in the most recent quarterly results as earnings expanded faster than revenues. Second-quarter earnings came in at $0.20 per share, surpassing the consensus estimate of $0.18. Revenues were also upbeat at $72.1 million, representing a 10% increase from the same period last year and exceeding analyst expectations of $$71.02 million.

    “A10 is consistently achieving revenue and EPS targets despite a variety of macro headwinds in all regions. This demonstrates robust demand for our proprietary security-led solutions, disciplined execution, and a focus on diversification that drives sustainability. We have positioned our business to avoid concentration in any single geography, any specific customer type, or any isolated product offering, and this diversification enables consistent execution despite economic, supply chain, and geopolitical challenges. Customer-centric technical innovation, global commercial execution, and focus on driving the business model are bolstering our sustainability and driving continued success,” said Dhrupad Trivedi, President, and CEO of A10 Networks.

    The drastic earnings growth indicates the business is going from strength to strength. A trend that investors hope will continue well into the future. Management reiterated its full-year top-line growth target of 10 – 12% and expanding EBITDA in the range of 26 – 28% of revenue. An average price target of $24 represents a 27% upside. A10Networks certainly ticks a few boxes and seems well worth watching.

    Three Stocks to Watch for the Week of November 7th

    By
    Editorial Staff
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    Stocks rallied on Friday, but it was not enough to make up for losses from earlier in the week as the market processed another aggressive Fed rate hike. The Dow broke a four-week winning streak with a loss of 1.4%, while the S&P and the Nasdaq lost 3.3% and 5.6%, respectively.  

    Investors looking for hints of Fed dovishness were disappointed on Wednesday to find no indication that the Fed may be poised to pause its tightening campaign. Fed Chair Jerome Powell said that the central bank still has “some ways to go” before the current rate hike cycle is over, noting that “incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected.”

    Labor data released on Friday further fueled concerns that the Fed will push the economy into a recession with its aggressive stance in the battle against inflation. This morning’s payrolls release showed 261,000 jobs were added in October, surpassing the expectations of 205,000 additions. 

    Market watchers will be focused on inflation in the days ahead and how it has been affecting consumer confidence. The October CPI inflation report is due on Thursday, followed by the preliminary November reading of the University of Michigan’s Consumer Sentiment Index (MCSI) on Friday.  

    This week will be quiet on the earnings front, as nearly 85% of S&P 500 companies have already reported earnings. Companies scheduled to report include AstraZeneca, BioNTech, The Walt Disney Company, Activision Blizzard, DuPont, and Norwegian Cruise Line. According to FactSet data, leaving the 139% jump in energy earnings, companies across the S&P 500 would be reporting a year-over-year 5% decline in profits. 

    Last week, the average rate on a 30-year fixed-rate mortgage surged to 7.23% – the highest level since 2002. Mortgage rates have more than doubled since the start of the year when the average 30-year mortgage stood at 3.11%. Our first recommendation will appeal to anyone looking to benefit from astronomical borrowing rates.  

    As the Fed’s hawkish monetary policy has caused short-term borrowing rates to soar, things couldn’t get much worse for mortgage REITs. However, for those with longer-term sights, AGNC Investment (AGNC) seems appealing. The REIT should benefit from higher interest rates over time. While Fed policy has raised short-term borrowing costs, it’s also boosting the yields on the mortgage-backed securities AGNC is stocking up on.  

    AGNC boasts a robust and well-safeguarded portfolio. Based on preliminary third-quarter results from the company, it ended September with an investment portfolio totaling $61.5 billion, of which only $1.7 billion was credit-risk transfer assets. Almost the entire portfolio is composed of agency assets, which the federal government protects in the event of default. There’s quite a bit of safety built into AGNC’s supercharged 18% yield. AGNC pays its dividend monthly and has averaged double a digit yield in 12 of the past 13 years.    

    The consensus expects the REIT to post quarterly earnings of $0.71 per share in its October 24th report, representing a year-over-year decline of 5.3%. The consensus EPS estimate has increased by 12% over the past month leading up to the call. Revenues are expected to be $289.1 million, down 34.7% from the year-ago quarter.

    The decline in tech may be offering 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) recently dipped below $100 after its recent 20-for-1 stock split. At its lowest level in over a decade, the stock is more accessible for investors, which should help when 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 19 times forward earnings, Alphabet shares are trading in line with the S&P 500. Still, the current earnings multiple may underestimate the company’s potential to re-accelerate earnings once its many growth catalysts start to play out.

    For advertising to make an impact, ads must be seen, by a real person,  in the intended geography, in a brand-safe environment. Challenges like the latest fraud schemes have led to increasingly stringent criteria for ads and heightened risk to the company’s brand reputation. Our first recommendation is an industry leader in digital advertising solutions that’s gaining attention on Wall Street.  

    Advertisers seeking stability and clarity in an increasingly unstable and opaque marketing environment are turning to DoubleVerify (DV) for its industry-leading quality and performance solutions. DV’s products automatically analyze the effectiveness of digital ads. Among the metrics evaluated by the software are “brand safety, viewability, and geography,” along with “exposure and engagement” potential, giving customers clarity and confidence in their digital investments, ultimately driving better outcomes and ROI.   

    The company’s impressive customer base includes Meta (META), Amazon’s (AMZN), Twitch Ads, and Microsoft (MSFT). There have also been recent rumblings on Wall Street that Double Verify has partnered up with Netflix (NFLX) for its upcoming ad offering.

    Total advertiser revenue grew by 43% YOY in the second quarter to $110 million. It generated a net income of $10.3 million primarily due to a 24% increase in Media Transactions Measured and a 10% increase in Measured Transaction Fees. The Gross Revenue Retention rate was over 95%. “We delivered an outstanding second quarter and surpassed our expectations for growth and profitability fueled by record Activation revenue and continued momentum on Social and CTV platforms,” said CEO Mark Zagorski.

    DoubleVerify anticipates third-quarter revenue of $108 to $110 million, representing a year-over-year increase of 31%, and Adjusted EBITDA in the range of $32 to $34 million, representing a 30% margin. Full Year 2022 Revenue of $448 to $450 million represents a year-over-year increase of 35%. We’ll find out if the company has sustained its impressive growth momentum during its  November 11th earnings call.  

    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. 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. 

    Rising interest rates are cooling off the entire housing sector, with mortgage applications in their fourth month of decline, dropping to the lowest level since 1997. The 30-year fixed mortgage rate recently hit 7.23% – the highest level since 2002. Home resales are sitting at a two-year low. According to the latest data from the U.S. Department of Housing and Urban Development,  new residential construction fell 8.1% month over month across the U.S. in September. 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 in the range of $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 increasing analysts predicting a housing recession, the company could be forced to further lower its earnings forecast.  

    Headwinds against e-commerce car vendor Carvana (CVNA) had already been intensifying before the sizable ramp-up to its vehicle inventory in the first quarter. Management recently admitted that it accelerated its car-buying business at the wrong time during a worsening economic environment, causing investors to flee the stock in search of greener pastures. CVNA could continue to burn through cash at an alarming rate as it faces threats to the value of its inventory.  

    “It has become clear over the past few months that the company is facing serious challenges to the business,” Morgan Stanley analyst Adam Jonas wrote in a note to clients after he downgraded CVNA to Equal Weight from Overweight and slashed the price target by 70% to $105, down from $360. “By the company’s own admission, it had accelerated growth at precisely the wrong time into a consumer slowdown leaving a major mismatch between capacity and demand, creating a liquidity crunch,” he continued.

    The company’s liquidity issues are likely to be compounded as the Fed boosts benchmark interest rates, making it more expensive to take out loans. With its business model, Carvana is also at risk of declining used car prices as that would devalue its inventory, and a pullback in prices is likely as interest rates rise.

     During Carvana’s most recent quarterly announcement, the company reported a bigger-than-expected quarterly loss and revenue that beat analyst expectations. Results showed a $1 billion increase in equity along with $3.275 billion in debt.  

    Carvana may look like a bargain, down 97% from its ATH just over a year ago. Still, with interest rates rising and growing concerns of a looming economic recession, the company could be further wrung out as economic growth slows.

    Inflation is taking a heavy toll on input costs for digital printing company Xerox (XRX), all while supply-chain disruptions are impeding the company’s ability to manufacture higher-margin products. XRX has lost 37% of its value since the beginning of the year. Anyone looking for a reason to buy on the dip of this long-time laggard would be hard-pressed to find one.  

    Xerox stock has carried a consensus Sell recommendation for more than a year. Zooming out on XRX’s chart, it’s not hard to see why.   The stock has underperformed the broader market by drastic margins in five of the past seven years. According to the pros, there’s little reason to see it snapping the losing streak anytime soon.  

    “Prior to the pandemic, Xerox had faced pressure from the rise of the paperless workplace and the corresponding decline in imaging equipment revenue,” writes Argus Research analyst Kristina Ruggeri (Hold). “The increase in work-from-home practices during the pandemic further accelerated this trend.”

    XRX currently boasts an attractive 7% yield, but it’s hardly enough to make up for the questionable path that the company has been on. We’ll be sticking to the sidelines for the foreseeable future.  

    Bargain Buys: 3 Undervalued Stocks To Buy at a Discount & Profit From

    By
    Editorial Staff
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    0

    More now than ever, investors would rather spend $80 for a share’s worth of a decidedly successful business than buy $180 worth of stock in a scandalous company with a poor balance sheet. A cheap stock purchase can allow one to be conservative with their investment while enjoying the potential it has—for example, if we’re talking about a stock that’s undervalued and is also expected to grow, then you combine those two with the eventual market recovery and shareholders could see big profits.

    The trading method referred to as “buying the dip” should be used with caution since there isn’t quite a science to it. If you play your cards well, you can get a sizable discount on equities with the right business fundamentals and promising futures. The fact is that many outstanding businesses may see short-term drops, but they tend to outperform over the long run. I’ve looked through many stocks that would be considered “cheap.” Don’t panic; they’ll likely be worth a lot more in the future. That’s the point.

    Join me while I break down three “cheap” stocks. These are stocks with solid fundamentals and are likely to rebound soon. The consensus among experts tells us the same as the buy ratings do. Now, let’s have a look at these time-appropriate tickers:

    Builders FirstSource Inc (BLDR)

    Builders FirstSource, Inc. (BLDR) manufactures and distributes building materials, manufactured components, and construction services in the U.S. to professional homebuilders, subcontractors, and consumers. BLDR provides lumber and sheet goods, including dimensional lumber, plywood, and strand board materials used in on-site home building; roofing, gypsum, and insulation products; siding, metal, and wood siding products. Other building materials and services offered by BLDR include cabinets and hardware, turnkey framing, and expert installation. BLDR, formerly BSL Holdings, Inc., was formed in 1998 and is headquartered in Dallas, Texas.

    BLDR shares have grown 204% over the past five years, yet it is currently down by 34.03%, an appropriate display of how it’s sitting below fair value. Drops of 30% or more have offered excellent entry chances during the past ten years. Since 2016, BLDR has grown its EPS and sales annually, with 3-year average annual growth rates of 94.9% and 44.9%, respectively. Over the next five years, analysts predict an estimated yearly EPS growth of 18.8% for BLDR. BLDR performs remarkably against quarterly earnings projections; In Q1 ‘22, BLDR surpassed analysts’ forecasts on EPS by 105.70% and revenue by 24.71%; Q2 ‘22: 93.07% and 21.17%, respectively. BLDR shows healthy year-over-year growth across the board. BLDR has a median price target of 86.50, with a high of 125.00 and a low of 75.00, as recorded by the analysts that offer yearly price projections. Taking everything into account, BLDR’s badass buy rating is starting to feel relatable. 

    Asbury Automotive Group Inc (ABG)

    Asbury Automobile Group, Inc. (ABG) and its subsidiaries are automotive retailers (collectively) in the U.S. ABG specializes in automotive services and products, such as new and used automobiles, as well as vehicle repair and maintenance and accident repair services. ABG offers financial and insurance products, such as third-party car financing, contracts, a debt cancellation service, and life and disability insurance. As of the end of 2021, the firm owned and operated 205 new car franchises representing 31 automobile manufacturers at 155 dealership sites in the U.S., along with 35 repair facilities. Asbury Automotive Group, Inc. was established in 1996 and is based in Duluth, Georgia.

    ABG’s stock dropped by over 70% in the early 2020 market crisis; pullbacks (dips during an upward trend) of more than 25% have traditionally provided an excellent long-term opportunity to buy the dip. Well, ABG has been performing much better than it was a little more than two years ago. Analysts anticipate 18.5% annual EPS growth over the next five years. Being a positive outlook, perhaps they’re used to having their quarterly EPS projections surprised by ABG. I usually don’t bring these in as critical stats, but I’m evolving. Given the excitement, I’ll let it out bluntly just for now. ABG is a $3.3 billion market-cap firm with a trailing P/E ratio of 4.8 with a forward of 4.9. I don’t often refer to them, but these numbers are intriguing when I look at the price. For the present quarter, ABG has a stunning EPS forecast of $8.34 per share. From the analysts who provide 12-month pricing estimates, ABG has a consensus median price target of 225.00, with a high of 368.00 and a low of 135.00. This is a 44.38% increase from current pricing, and ABG’s buy rating is also part of the analyst consensus.

    Entegris Inc (ENTG)

    Entegris, Inc. (ENTG) manufactures equipment and systems that clean, preserve, and transport crucial elements to create semiconductors and related devices. In the U.S., Canada, Taiwan, Ireland, Singapore, Malaysia, China, Isreal, France, Germany, Korea, and Japan, ENTG employs around 5,800 people in manufacturing and research facilities. ENTG aims to assist manufacturers in production by enhancing pollutant control in various vital processes, including photolithography, bulk chemical processing, wafer handling, and shipping. The semiconductor sector currently uses around 80% of ENTG’s goods. ENTG was founded in 1966 and is headquartered in Massachusetts.

    ENTG has a history of success, but the stock has been down by over 50% year-to-date. Keep in mind, however, that this is after having increased by 212% during the previous five years. Since this current drop is a substantial decline for ENTG, long-term value investors may find this to be an excellent time to consider throwing a few chips in. Recent EPS growth, revenue growth, and net income growth for ENTG have all been increasing at rates close to 17% annually. Here’s a fun little piece of data I found while looking into ENTG’s financials: The last recording of year-over-year growth shows a “Net Change in Cash” growth of 1,720.82%. ENTG currently has a dividend yield of 0.63%, with a quarterly payout to shareholders of 10 cents per share (A tiny bit cheap, perhaps, but so is the stock). According to analysts who provide annual consensus pricing estimates, ENTG has a median price target of 100.00, with a high of 145.00 and a low of 80.00. This estimate shows a 57.78% increase from current pricing, giving us just one more reason to warm up to ENTG’s buy rating.

    Read Next: America is going mad—is this next?

    America is definitely going a little mad…

    Some states are threatening to break away. The rich are fleeing. The wealth gap is soaring. 

    According to a recent article in the New York Times, people are driving more recklessly than ever… and drinking more alcohol than ever too. 

    And that’s just the beginning…

    Altercations on airplanes are now at all-time highs. So are murder rates. And violent crime is soaring across the board. Students are more disruptive than ever. Hate crimes have hit a 12-year high, according to the FBI.

    The question of course is: 

    Where is this all headed… and what’s coming next?

    Well, one of the wealthiest and most successful entrepreneurs in America has a very clear answer you’re unlikely to hear anywhere else…

    Bill Bonner is a 73-year-old son of a tobacco farmer, who now owns six large properties in South America, Central America, and the U.S… plus three in Europe.

    Bonner is also one of the most humble and thoughtful men in the world today. He’s the author of three New York Times bestsellers… and has built several homes with his own hands, using ancient building techniques.

    I’m telling you about Bonner today because has just come forward with an important message… 

    What he calls: His 4th and Final Warning. 

    It’s worth paying attention to, because Bonner has made 3 other big macro-economic predictions in his career… and each one proved to be exactly right.

    Today, Bonner says we are headed towards a very difficult period in the U.S.… one of our most difficult times ever… which will result in something he calls: “America’s Nightmare Winter.”

    What does that mean, exactly—and how could it affect you and your money?

    Bonner doesn’t claim to have all the answers–but he recently went public with the fascinating analysis, recorded at his 60-acre property overlooking one of Europe’s most beautiful rivers.

    He says: 

    “I believe it falls on someone like me to warn people… clearly… and without distraction.

    “I can do this now because I’m too rich to care about money… and too old to care about what anyone says about me.”

    And in this analysis, Bonner explains exactly how he believes this difficult period will play out, and even more important: The 4 Steps every American should take right now to prepare.

    Get the facts. 

    Learn how to protect yourself and get a peek inside Bonner’s spectacular European property.

    We’ve posted Bonner’s full analysis and his 4 recommended steps on our website. 

    You can view it free of charge here…

    Two Stocks to Buy and One to Sell Next Week

    By
    Editorial Staff
    -
    0

    Stocks ticked higher to close the week, but it was not enough to make up for earlier losses as the market processed another aggressive Fed rate hike. The major averages notched 1% gains on Friday but finished lower for the week. The Dow broke a four-week winning streak with a loss of 2.5%, while the S&P and the Nasdaq lost 4.5% and 6.1%, respectively.  

    Investors looking for hints of Fed dovishness were disappointed on Wednesday to find no indication that the Fed may be poised to pause its tightening campaign. Fed Chair Jerome Powell said that the central bank still has “some ways to go” before the current rate hike cycle is over, noting that “incoming data since our last meeting suggests that the ultimate level of interest rates will be higher than previously expected.”

    Labor data released this morning further fueled concerns that the Fed will push the economy into a recession with its aggressive stance in the battle against inflation. This morning’s payrolls release showed 261,000 jobs were added in October, surpassing the expectations of 205,000 additions. 

    After another rough week, here are two recommendations of stocks to buy and one stock to stay away from.

    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 proclamation on October 7th 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 major step in the right direction, but it’s expected to be a slow road.    

    The potential legalization of cannabis is likely to be a significant 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. 

    Following the recent Whitehouse announcement, TLRY surged 22% but gave back some 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 $3.17 per share, TLRY currently trades at -8.5x 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 more than a century. The drug firm focuses on endocrinology, oncology, neuroscience, and immunology. Key products include Trulicity, Jardiance, Humalog, and Humulin for diabetes; and 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 upcoming potential 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 20% this year 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 1 rates the stock a Sell. A median 12-month price target of $351 represents a 9% increase from its current price.

    Rising interest rates and a cooling off of the red-hot housing market create a challenging backdrop for mortgage provider Rocket Companies (RKT). The average rate on a 30-year fixed-rate mortgage surged to nearly 7% last week, its highest level in over 20 years, according to Freddie Mac. Mortgage rates have more than doubled since the start of the year when the average 30-year mortgage stood at 3.11%. Furthermore, the Mortgage Bankers Association recently reported that mortgage application volume is down 37% year-over-year. This situation won’t likely resolve anytime soon as the Federal Reserve isn’t signaling a near-term slowdown in monetary policy tightening.

    Rocket has struggled to meet expectations for the past few quarters as it laps 2021’s blockbuster numbers. Most recently, the company came out with adjusted quarterly earnings of -$0.03 per share, missing the consensus estimate of $0.02 per share. This compares to earnings of $0.46 per share a year ago. Revenue was reported as $1.44B, down nearly 48% from the same period last year and 26% lower than the consensus estimate.  

    Rocket’s been underperforming the broader market so far in 2022. RKT shares have lost about 55% since the beginning of the year versus the S&P 500’s decline of 20%. The pros on Wall Street say to Hold RKT. Of 16 analysts offering recommendations, 2 rate the stock a Buy, 12 rate it a Hold, and 2 say to Sell RKT shares.  

    Three Stocks to Watch for the Week of October 31st

    By
    Editorial Staff
    -
    0

    Stocks surged into the close on Friday on the heels of positive consumer spending figures and mixed corporate earnings results. Personal spending increased 0.6%, exceeding Wall Street’s expectations for a 0.4% rise. The major indices finished the week with solid gains. The Dow stacked on nearly 6% for its fourth consecutive positive week, while the S&P 500 and the Nasdaq rose for the second week in a row with 4% and 2% gains, respectively.  

    This week will be eventful on the earnings front, with reports expected from several prominent companies, including Pfizer, Moderna, Toyota, Qualcomm, PayPal, Starbucks, and Kellogg’s, among others. Investors will remain focused on economic growth with Fed policymakers set to gather for the two-day November Federal Open Market Committee (FOMC) meeting, which begins on Tuesday, and a critical interest rate decision expected on Wednesday.  

    The Federal Reserve is expected to lift its benchmark interest rate by seventy-five basis points, marking the fourth time in a row it’s approved such a steep increase. The Fed’s latest such hike in September pushed the rate to a range of 3.00% to 3.25%—a level last seen in 2008. The labor market will also be in the spotlight, as several key reports will be released, including the Bureau of Labor Statistics October nonfarm payrolls report.  

    Amid unrelenting inflation and a strong potential for a recession, volatility is widely expected to continue as we head into the new year, making the job of selecting stocks difficult. A logical move in times like these is dividend stocks, which pay you just to hold them. Dividend-paying companies regularly reward investors directly with a portion of the cash flow. The most desirable dividend stocks have a history of raising their payouts over time as the company’s profits grow. Our first recommendation for the week is a high-yielding stocks that seem ripe for the picking as we head into the new year.  

    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.  

    GNK pays a handsome 14.8% dividend yield. The company will be looking to display strength ahead of its November 2nd earnings release. The company is expected to report EPS of $0.88, down 38.89% from the prior-year quarter. Meanwhile, the latest Zacks consensus estimate is calling for revenue of $91.06 million, down 22.47% from the prior-year quarter.

    One area of the market that can perform well regardless of what’s happening elsewhere in markets is biotech. Biogen (BII) is a biopharmaceutical company focused on neurological and neurodegenerative disease therapies. The company is on the leading edge of creating drugs and therapeutics for some of the more perplexing chronic diseases like Alzheimer’s. Biogen has been working on drugs that can reduce the buildup of amyloid plaques which could be critical to stemming the advancement of the disease.  

    The neurological solutions pioneer has partnered with Eisai, a Japanese pharmaceutical company, to develop Lecanemab, one of its potential amyloid plaque-destroying drug candidates. The two companies will split the drug’s profits 50/50. Recent data from lecanemab has proven “robust” as the drug saw a 27% reduction in patients’ clinical decline on cognitive and functional metrics, causing the entire industry to rethink the historically elusive answer to Alzheimer’s.  

    Following the “better than expected” Phase 3 data for lecanemab, JPMorgan analyst Chris Schott raised the firm’s price target on Biogen to $275 from $221. The analyst foresees full FDA approval for lecanemab and believes there is a high probability that the Centers for Medicare and Medicaid Services will cover the drug. Schott would not be surprised to see further upside for the shares into year-end as he expects lecanemab to dominate the competition.

    While lecanemab takes center stage, Biogen has a pipeline that features several drugs in various clinical stages. The company’s Spinraza for treating spinal muscular atrophy has been a blockbuster drug. Multiple sclerosis drugs Avonex and Plegridy generate nearly $2 billion in annual sales.  

    BIIB shares spiked on the positive lecanemab results and have dwindled since. A better entry opportunity may come, but for long-term-minded investors focusing on growth, Biogen is an intriguing candidate even at its current level.

    Given the unprecedented situation with major world powers Russia and China,  Washington is taking steps to strengthen the technical capabilities of its military and its allies while also seeking to protect the U.S. from cyber threats.

    Booz Allen Hamilton (BAH) is one of the world’s largest cybersecurity solutions providers. Specializing in marketing cybersecurity products that other companies produce, nearly every U.S. federal, intelligence and defense agency uses its services. In other words, Booz Allen is poised to scoop up a significant portion of the whopping 15.6 billion that the U.S. is expected to spend on cybersecurity in 2023.

    For its fiscal 2023 first quarter, which ended June 30, revenue surged 13% year over year to $2.25 billion, while its net income jumped an impressive 50% to $138.1 million. Wall Street expects $4.88 EPS for the entire year, indicating a reasonable forward P/E of 19.4 times.  

    Stifel analyst Bert Subin recently raised the firm’s price target on BAH to $105 from $102 after hosting the company at the firm’s London Industrials & Renewables Summit and coming away with a favorable outlook, driven by continued demand tailwinds and an easing labor market. The current consensus recommendation is to Buy Booz Allen. A median price target of $105 represents an increase of 10% from the current price. 

    Three Stocks to Avoid for the Week of October 31st

    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.  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. 

    Rising interest rates and a cooling off of the red-hot housing market creates a challenging backdrop for mortgage provider Rocket Companies (RKT). The average rate on a 30-year fixed-rate mortgage surged to nearly 7% last week, its highest level in over 20 years, according to Freddie Mac.  Mortgage rates have more than doubled since the start of the year, when the average 30-year mortgage stood at 3.11%.  Furthermore, the Mortgage Bankers Association recently reported that mortgage application volume is down 37% year-over-year.  This situation won’t likely resolve anytime soon as the Federal Reserve  isn’t signaling a near-term letup in monetary policy tightening.

    Rocket has struggled to meet expectations for the past few quarters as it laps 2021’s blockbuster numbers.  Most recently the company came out with quarterly adjusted earnings of -$0.03 per share, missing the consensus estimate of $0.02 per share.  This compares to earnings of $0.46 per share a year ago.  Revenue was reported as $1.44B, down nearly 48% from the same period last year and 26% lower than the consensus estimate.  

    Rocket’s been underperforming the broader market so far in 2022. RKT shares have lost about 55% since the beginning of the year versus the S&P 500’s decline of 20%.  The pros on Wall Street say to Hold RKT.  Of 16 analysts offering recommendations, 2 rate the stock a Buy, 12 rate it a Hold and 2 say to Sell RKT shares.  

    While the future remains bright for renewable energy, not all solar stocks are a buy. Provider of solar engineering and construction services, iSun Inc. (ISUN), has seen operating losses skyrocket alongside revenue increases in recent years.  

    iSun reported second quarter 2022 revenue of $16.5 million representing a $12.1 million or 278% increase over the same period in 2021.  Alongside top line growth over the past year, the company has reported $15.3 million in operating losses.  Operating income in the second quarter was a loss of $5.6 million compared to a loss of $2.8 million over the same period in 2021. YTD operating income was a loss of $11.3 million compared to a loss of $5.4 million during the same period in 2021.

    Given the company’s already high debt position after a series of acquisitions in 2021, the additional losses could force the company to raise equity inorder to de-lever its balance sheet which could mean further declines for iSun.  The small, unprofitable solar company’s stock is down 72% over the past 12 months, but it’s far from a bargain considering the risk factor.  

    Fintech company Upstart Holdings (UPST) share price is down more than 93% from its October ATH and it may have more to go as bank partners tighten their fists.  Institutional lenders are less willing to fund Upstart’s loans than ever and it makes sense for backers to be so cautious in the current macroeconomic environment.  Rising interest rates will continue to add pressure to 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.  

    In Upstart’s Q2 report, management cited another reason for the lower outlook. The company more than doubled the amount in loans it funded with its own cash in just a single quarter.  At the end of Q1, the company held $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 what could be the worst possible time.  

    In the second quarter the company saw adjusted earnings of $0.01 per share from revenue of $228 million, missing the consensus expectation of $0.10 per share by 90%.  “This quarter’s results are disappointing and reflect a difficult macroeconomic environment that led to funding constraints in our marketplace. In response we’re taking the necessary actions to build a more resilient and committed funding model over time,” said Dave Girouard, co-founder and CEO of Upstart.  Until sustainable momentum is realized, we’re sticking to the sidelines.

    3 Once-in-a-Decade Buying Opportunities in the Bear Market

    By
    Editorial Staff
    -
    0

    As pessimism runs high, some stocks have fallen to unsustainably low valuations.

    The fast-moving stock market lends itself to high volatility. That factor may or may not work in favor of investors, though prospective buyers can find bargains if they exercise enough patience.

    However, the current down cycle is the most severe since the 2008 financial crisis. That factor could mean an opportunity to buy growth tech stocks that may not return for many years. Investors looking for these once-in-a-decade buys may want to consider Alphabet (GOOGL 4.41%) (GOOG 4.30%), MercadoLibre (MELI 5.37%), and Salesforce (CRM 2.05%).

    Shares of this internet giant are selling at a major discount

    Jake Lerch (Alphabet): Here’s a hypothetical: If you could go back in time and buy $10,000 worth of Alphabet shares on the day of its initial public offering (IPO), would you do it? Similarly, would you invest $10,000 in Alphabet on March 13, 2020, the start of the COVID-19 pandemic, as the entire stock market was plummeting? 

    Of course, with the benefit of hindsight, we know those investments would have paid off. If you had bought $10,000 worth of Alphabet class C shares when they debuted in 2014, they would now be worth $34,700. A similar investment made in March 2020 would have grown to $15,800.

    I bring this up because those two dates appear like the best once-in-a-decade opportunities to have bought shares of Alphabet. And, as I’ve mentioned, they were great times to buy shares. Anyone who did has made a solid profit on their investment.

    However, today may seem like the wrong time to bet on Alphabet. The company just reported a lackluster quarterly report. Overall revenue growth slumped from 41% to 6%. YouTube, one of Alphabet’s biggest growth engines, saw its ad revenue decline for the first time ever on a year-over-year basis.

    Yet, despite an admittedly poor report, now seems like that once-in-a-decade opportunity. Why? Valuation. On a valuation basis, Alphabet shares are historically cheap. In fact, they’re closing in on their lowest levels ever.

    There are several ways to measure valuation, but I’ve included two of the most popular measures in the chart above: the price-to-earnings (P/E) ratio and the price-to-sales (P/S) ratio. 

    While they measure price against two different financial figures (earnings and revenue, respectively), both ratios indicate that Alphabet shares are cheap — extremely cheap. In the case of its P/E ratio, Alphabet shares are at a new all-time low of 17.89. 

    Obviously, economic conditions are not great right now. Inflation is high, and the stock market is mired in a bear market. But just like in March 2020, the darkest times are often the best times to buy stocks. Looking back many years from now, it might seem evident that October 2022 was the right time to load up on Alphabet. Using valuation as my guide, it sure looks like a once-in-a-decade opportunity to me.

    The Latin American tech juggernaut that American investors need to watch

    Will Healy (MercadoLibre): MercadoLibre is not a familiar name in the U.S. However, in Latin America, it has evolved into the Amazon of that region. Between the U.S.-Mexico border and the southern tip of Argentina, it is the most commonly visited e-commerce platform.

    However, what may drive investor interest is the ecosystem that enhances its e-commerce advantage. Latin America is a cash-based society. To make digital payments possible, MercadoLibre created Mercado Pago. That has since evolved into a fintech product that consumers can now use for non-MercadoLibre purchases and loans.

    Also, to address shipping and fulfillment-related challenges, the company created Mercado Envios. These and other businesses create synergies that can help the company fight off challenges from Amazon, Sea Limited‘s Shopee, and numerous other companies.

    Despite an environment that has sometimes faced high inflation and political uncertainty, MercadoLibre managed to generate $4.8 billion in revenue in the first half of 2022. This surged 57% compared with the first two quarters of 2021.

    Additionally, it turned profitable on an annual basis last year, a factor that should help it weather the current bear market. MercadoLibre stock has not escaped the bear market, as it has fallen more than 55% from its peak.

    Nonetheless, this is where the once-in-a-decade opportunity appears. It currently trades at a P/S ratio of less than five, a level previously reached in 2008. Since that 2008 trough, the stock has risen more than 100-fold!

    Admittedly, MercadoLibre stock will probably not repeat that feat. However, with its rapid revenue growth, it could still generate outsize gains as it continues dominating Latin America in e-commerce and fintech.

    A more mature Salesforce can still deliver significant investment returns

    Justin Pope (Salesforce): Customer relationship management company Salesforce was one of the original enterprise software stocks. Founded at the turn of the millennium, it’s survived the dot-com bust to deliver more than 3,600% total returns since late 2001. Today, Salesforce is a software conglomerate that has developed and acquired its way to having a do-it-all suite of software tools that companies can run their business. 

    Investors are facing one of the worst bear markets in many years, which has sunk valuations throughout Wall Street. Salesforce stock is trading at a price-to-sales ratio (P/S) of 5.4, its lowest in more than a decade:

    Management also believes the stock is cheap. The company authorized its first-ever share repurchase program in August for $10 billion, enough money to retire 6% of all outstanding shares at current prices. Reducing the share count boosts per-share metrics, which means that earnings per share (EPS), Salesforce’s profits per share, will grow faster.

    But the company’s revenue isn’t done growing either; management is targeting $50 billion in revenue by the end of the fiscal year 2026, an average of 17% growth annually between now and then. A growing addressable market and cross-selling across its business should drive this growth. While Salesforce’s best growth years are probably behind it, the stock should still have plenty left in the tank, which could translate to significant long-term gains for shareholders.

    Read Next – Warning: Massive Supply crisis ahead. Act now.

    Even as inflation continues to cripple investors, and the economy heads into a recession…

    The demand for one element is set to soar.

    In fact, some countries have already begun stockpiling it to get ahead of the curve.

    The last time supply and demand of this key element got slightly imbalanced, savvy
    investors could’ve made 30x their money in less than 6 years.

    Take a look at these two charts…

    The one on the left shows the slight surge in demand that resulted in 30x gains. 

    The one on the right is the widening chasm between supply and demand that could start as early as this coming January.

    Consider this: If the tiny blip in demand helped investors 30x their money last time…

    Imagine the huge gains we could see when demand completely overwhelms supply.

    But I don’t want you to rush in blindly. 

    Before you buy a single share of stock to take advantage of this event, I urge you to see what’s causing this massive shift right here. 

    P.S. Some of the biggest investment gains have been made during bear markets. It’s all about knowing what’s going drive demand before the rest of the world catches on. And right now, you have a chance to profit off that situation. Click here for my specific instructions.

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