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    Bear Watch Weekly: Stocks to Sideline Now

    By
    Editorial Staff
    -
    0

    The right stocks can make you rich and change your life.

    The wrong stocks, though… They can do a whole lot more than just “underperform.” If only! They can eviscerate your wealth, bleeding out your hard-won profits.

    They’re pure portfolio poison.

    Surprisingly, not many investors want to talk about this. You certainly don’t hear about the danger in the mainstream media – until it’s too late.

    That’s not to suggest they’re obscure companies – some of the “toxic stocks” I’m going to name for you are in fact regularly in the headlines for other reasons, often in glowing terms.

    I’m going to run down the list and give you the chance to learn the names of three companies I think everyone should own instead.

    But first, if you own any or all of these “toxic stocks,” sell them today…

    Rigetti Computing (RGTI): Overvalued and Burning Cash

    Rigetti Computing (RGTI) has seen its stock price plunge 50% from recent highs, but this isn’t necessarily a dip worth buying. While quantum computing remains an exciting frontier, Rigetti’s financials and valuation suggest it’s a stock to avoid.

    Rigetti generated less than $12 million in revenue over the past year, while burning $60 million in cash—a significant mismatch that raises questions about the company’s long-term viability. Even after its steep drop, Rigetti’s market capitalization sits at $2.8 billion, translating to an eye-watering price-to-sales (P/S) ratio of 234. This lofty valuation is hard to justify, especially given the lack of consistent demand for its services and the broader industry consensus that quantum computing is still decades away from widespread utility.

    CEO Jensen Huang of Nvidia recently highlighted quantum computing’s potential but tempered expectations by stating the technology won’t be broadly useful for at least two decades. This reality has likely fueled recent sell-offs in Rigetti and other quantum computing stocks as investors recalibrate their timelines and expectations.

    Rigetti’s balance sheet also presents a major concern. With just $20 million in cash on hand and a high cash burn rate, the company faces liquidity challenges in the near term. Without significant improvements in revenue generation or access to additional funding, its ability to survive long enough to capitalize on quantum computing’s potential remains in doubt.

    While the promise of quantum computing is undeniable, Rigetti’s current financial and operational metrics make it a high-risk investment. For now, this is a stock best avoided.

    Workiva (WK): Regulatory Uncertainty Raises Concerns

    Workiva (WK) saw its stock drop significantly lat week, sparked by reports of potential changes to the European Union’s (EU) sustainability reporting standards. This development has rattled investors, as Workiva’s platform for tracking and submitting non-financial metrics under the EU’s Corporate Sustainability Reporting Directive (CSRD) has been a key driver of its growth strategy.

    The CSRD, which went into effect in January 2023, has created a significant market for Workiva’s services. However, if the EU moves to ease reporting requirements, Workiva could face a considerable shortfall in anticipated sales. While the extent of potential policy changes remains unclear, reports of regulatory easing in the EU have led to concerns that one of Workiva’s primary growth drivers could weaken.

    The company is set to release its fourth-quarter earnings on February 25, which may shed more light on its exposure to possible regulatory shifts. Until there’s more clarity, the uncertainty surrounding Workiva’s growth prospects, coupled with its sharp stock price decline, makes this a risky hold for investors.

    For those concerned about portfolio stability, Workiva’s dependence on evolving government policies could create continued volatility. It’s a stock worth avoiding for now.

    Trump Media (DJT): Lofty Valuation with Uncertain Fundamentals

    Trump Media (DJT) saw its stock tumble 18.3% last week, underperforming broader market gains of 1.7% for the S&P 500 and 1.6% for the Nasdaq. This sharp pullback highlights the risks associated with a business heavily reliant on momentum rather than fundamentals.

    The sell-off came after President Trump’s inauguration, which initially sparked investor enthusiasm for the stock. However, the anticipated rally failed to materialize, leading to a “buy the rumor, sell the news” dynamic. Adding to the bearish sentiment, the launch of the Official Trump cryptocurrency raised concerns about the company’s focus and direction. While the coin may have generated some excitement, it also drew criticism, potentially reflecting poorly on Trump Media’s broader brand and strategy.

    Trump Media’s core business struggles to justify its $7.1 billion market cap, especially with reported revenue of only $1.61 million over its first three quarters as a public company. The Truth Social platform has shown weak user engagement and monetization, and the company’s foray into streaming remains unproven as a meaningful revenue driver.

    With limited clarity on how Trump Media plans to scale its business and generate sustainable growth, the stock appears to be trading more on speculation than substance. Its current valuation far outpaces its fundamentals, and without a clear path to profitability, Trump Media is likely to continue behaving like a meme stock—highly volatile and unpredictable.

    For investors seeking stability and growth backed by strong business fundamentals, Trump Media is a stock to avoid.

    Steel Stocks Set to Surge Under Trump’s Policy Changes

    By
    Editorial Staff
    -
    0

    The U.S. steel industry could be entering a pivotal period as President Trump’s proposed trade policies aim to bolster domestic production and protect U.S. manufacturers. With potential tariffs and fiscal stimulus on the horizon, the sector appears primed for growth. Despite some lingering concerns about global oversupply and pricing pressures, the combination of cyclical factors, such as steady demand and lower interest rates, alongside structural changes like favorable trade policies, suggests promising opportunities for investors.

    In this watchlist, we’re highlighting three steel companies that stand to benefit from these developments. These stocks offer exposure to different aspects of the steel industry, from large-scale production to infrastructure-driven growth. Here’s why they’ve caught our attention.

    Nucor (NYSE: NUE): A Resilient Industry Leader

    Nucor remains a heavyweight in the U.S. steel industry, and its diversified operations position it well for future growth. While the stock has faced challenges this year, falling over 11% year to date, the outlook suggests a turnaround. Analysts forecast 4% annual volume growth and 2% annual pricing growth in 2025, supported by robust demand from construction and manufacturing sectors. Nucor’s ability to navigate cyclical downturns while maintaining steady performance makes it a solid choice for long-term investors. Wall Street’s price target of $166 implies significant upside, bolstered by expectations of steady earnings growth and improved market dynamics.

    Commercial Metals Company (NYSE: CMC): A Quiet Performer Ready to Shine

    Commercial Metals Company has been a standout performer, with its stock rising more than 23% year to date. The company’s strong focus on construction and infrastructure materials aligns perfectly with potential fiscal stimulus under the new administration. Projections of 4% annual volume growth and 2% annual pricing growth, alongside a compound annual growth rate of 9% by 2026, highlight its growth trajectory. With tariffs likely to limit foreign competition, CMC’s domestic focus could help sustain its momentum. For investors seeking a more stable play in the steel sector, CMC offers both growth potential and resilience.

    Cleveland-Cliffs (NYSE: CLF): A High-Risk, High-Reward Play

    Cleveland-Cliffs offers a compelling, albeit higher-risk, investment opportunity. Its focus on value-enhancing projects and cost reductions could drive outsized returns, with a projected 47% compound annual growth rate over the next two years. However, the stock has faced headwinds, plummeting nearly 39% year to date. Still, with anticipated annual volume growth of 3% and pricing growth of 1%, along with potential tailwinds from increased infrastructure spending, CLF could see significant gains if trade policies and demand trends unfold as expected. Investors with a higher risk tolerance may find this stock’s upside potential too enticing to ignore.

    As we enter a period of heightened trade policy shifts and fiscal initiatives, these three steel stocks represent a strategic way to gain exposure to an evolving industry landscape. While each comes with unique risks and opportunities, the sector’s favorable dynamics and growth prospects make them worth a closer look. Stay tuned for further developments as trade policy details emerge and the U.S. steel industry finds its footing in this new era.

    Three Strong Conviction Buys for the Week Ahead

    By
    Editorial Staff
    -
    0

    In the ever-shifting stock market landscape, separating the wheat from the chaff is no easy feat. It’s a world where the wrong picks can erode your hard-earned gains, but the right ones? They have the power to catapult your portfolio to new heights. With thousands of stocks in the fray, pinpointing those poised for a breakthrough can feel like searching for a needle in a haystack.

    This is where we step in. Every week, we comb through the market’s labyrinth, scrutinizing trends, earnings reports, and industry shifts. Our goal? To distill this vast universe of stocks down to a select few – those unique opportunities that are primed for significant movement in the near future.

    This week, we’ve zeroed in on three standout stocks. These aren’t your run-of-the-mill picks; they are the culmination of rigorous analysis and strategic foresight. We’re talking about stocks that not only show promise in the immediate term but also hold the potential for sustained growth.

    CRISPR Therapeutics (CRSP): Betting on Gene-Editing Innovation

    CRISPR Therapeutics (CRSP) may be hovering near its 52-week low, but this gene-editing biotech is far from out of the game. With its groundbreaking treatment, Casgevy, for transfusion-dependent beta-thalassemia and sickle cell disease, the company is positioned to make waves in the healthcare space. Casgevy, priced at $2.2 million in the U.S., addresses a patient population of at least 58,000 and is projected to generate over $1 billion in peak sales. While revenue from the treatment hasn’t yet materialized due to its complex administration, it represents a significant opportunity for growth.

    CRISPR Therapeutics also boasts a robust pipeline. One standout is CTX112, targeting certain B-cell malignancies. The FDA recently granted this therapy Regenerative Medicine Advanced Therapy (RMAT) designation, a status that accelerates development for treatments showing early promise against serious diseases with limited options. This milestone demonstrates the potential of CRISPR’s pipeline to deliver groundbreaking therapies in the future.

    Investing in smaller biotechs like CRISPR comes with risks, such as setbacks in clinical trials. However, for investors willing to stomach the volatility, the upside is compelling. As Casgevy gains traction and CRISPR advances its innovative pipeline, the company could reward patient investors with significant returns. If you’re looking to bet on the future of gene editing, CRISPR Therapeutics is worth a close look.

    Berkshire Hathaway (BRK.B): A Diversified Powerhouse Worth Buying

    Berkshire Hathaway (BRK.B), led by legendary investor Warren Buffett, has a history that few companies can rival. Over the past six decades, the conglomerate has delivered annualized returns of nearly 20%, handily outpacing the S&P 500. While Berkshire’s stock is currently about 7% off its 52-week high, this dip could be an attractive entry point for long-term investors looking to own a piece of one of the most diversified and successful businesses in the market.

    Berkshire’s strength lies in its unique structure. The company’s investment portfolio gets plenty of attention, with each quarterly 13-F filing serving as a roadmap for investors. However, Berkshire’s wholly owned businesses are the real engine behind its success. Spanning vital industries like energy, railroads, consumer goods, and insurance, these businesses generate steady cash flows that allow Berkshire to reinvest and expand its portfolio even in challenging economic environments.

    What sets Berkshire apart is its management philosophy. Buffett’s hands-off approach lets the highly capable executives running Berkshire’s subsidiaries operate independently, driving consistent performance. This strategy fosters innovation and growth without the interference of micromanagement, a sharp contrast to activist investment tactics often seen elsewhere.

    The company isn’t without near-term challenges—its exposure to the insurance sector means it faces financial implications from events like California’s recent wildfires. Additionally, uncertainty around Federal Reserve rate cuts has weighed on the stock. However, these pressures are temporary, while Berkshire’s structural advantages and cash-generating ability are built for the long haul.

    For investors seeking stability, growth, and a chance to align with one of history’s greatest investors, Berkshire Hathaway remains a compelling buy.

    Ally Financial (ALLY): A Digital Banking Leader with Growth Potential

    Ally Financial (ALLY) has had a challenging year, with shares down 13% over the past six months and only a modest 3% gain in 2024. However, this all-digital banking leader is uniquely positioned for long-term growth, making it worth a closer look for investors seeking opportunities in the financial sector.

    As the largest all-digital bank in the U.S., Ally stands out in a crowded market. It has leveraged its first-mover advantage since spinning off from General Motors in 2010, building a platform that now boasts 3.3 million deposit customers and an industry-leading 95% retention rate. In 2024, Ally added 57,000 net new deposit customers and grew retail deposits by $1.3 billion, reaching $141.4 billion. Notably, Millennials and Gen Z account for 74% of new members, providing a strong foundation for long-term customer engagement and growth.

    Ally’s auto-lending business remains a key strength, originating $9.5 billion in auto loans in Q3 2024 and on track to process 14 million applications for the year—an increase from 13.8 million in 2023. While high interest rates and elevated defaults have prompted a more conservative lending approach, Ally has tightened its credit standards, with the average FICO score rising to 710. This demonstrates the company’s focus on maintaining quality while navigating a tougher credit environment.

    Despite near-term challenges, Ally’s innovative digital platform and robust auto-lending division position it as a standout in the financial sector. With younger generations driving growth and its prudent approach to credit risk, Ally offers a compelling mix of stability and opportunity for investors looking to capitalize on the future of banking.

    Nuclear Energy Stocks Powering Up Amid Big Tech Deals

    By
    Editorial Staff
    -
    0

    The nuclear energy sector has been buzzing with excitement lately, driven by groundbreaking deals between tech giants and nuclear power providers. This renewed focus on nuclear energy stems from its role in powering AI data centers, which have massive energy demands. Earlier this year Microsoft (MSFT) signed a 20-year deal with Constellation Energy (CEG) to supply nuclear power for its data centers. But the real game-changer came last month when Amazon (AMZN) and Google (GOOGL) also jumped into the nuclear game, securing contracts that sent nuclear-related stocks surging.

    These contracts signal a critical shift as hyperscalers—companies that run large-scale data centers—look to nuclear energy to meet their rapidly growing power needs. This is not just a trend; it’s a major movement, as more tech firms turn to nuclear energy to fuel their future operations. Below are three nuclear-related stocks that have caught our attention in the wake of these developments.

    Oklo Inc. (OKLO)
    “Nuclear Startup Backed by Big Tech”
    Oklo Inc. has been riding the wave of interest in nuclear power, particularly since major hyperscalers like Amazon and Google signed contracts to explore nuclear energy for their data centers. Oklo, which develops fast fission power plants, is backed by some big names, including Sam Altman, CEO of OpenAI. In October alone, the stock has surged more than 127%, driven by increased investor confidence in the nuclear space.

    The company’s fast fission technology is designed to scale efficiently, offering a potential solution to the growing energy demands of AI. With Amazon and Google entering the nuclear space, Oklo’s expertise in this area makes it one to watch. Oklo’s CEO recently described the opportunity as “staggering,” and with the company gaining traction, its growth potential is enormous.

    NuScale Power Corp. (SMR)
    “Leading the Way in Modular Nuclear Reactors”
    NuScale Power is another major player gaining momentum after the tech industry’s recent moves into nuclear. With its stock up 640% in 2024, NuScale has established itself as a leader in the development of modular nuclear reactors (SMRs), which offer a smaller, more scalable approach to nuclear power. The company’s reactors are designed to meet the rising demand for clean energy, particularly in the context of AI-driven data center expansion.

    NuScale’s partnership with Microsoft earlier this year was just the start, but with Amazon and Google now jumping into the nuclear game, the company is well-positioned to benefit from further industry adoption. Its reactors, which are projected to come online by 2030, offer a reliable, carbon-free energy solution. The company’s stock is up 40% since Google’s announcement of its nuclear deal with Kairos Power, and NuScale continues to attract attention as more hyperscalers explore nuclear energy.

    Nano Nuclear Energy Inc. (NNE)
    “Innovating Nuclear for Earth and Beyond”

    Nano Nuclear Energy is bringing a futuristic edge to the nuclear space with its portable, on-demand microreactors. The company has seen its stock jump 21% in the past month, and for good reason: it’s not only developing nuclear technology for data centers, but also exploring applications for space. With Amazon and Google’s recent foray into nuclear, Nano Nuclear Energy is in the perfect position to capitalize on this growing demand.

    The company has announced the creation of NANO Nuclear Space, a subsidiary focused on using microreactor technology to power space exploration and extraterrestrial missions. Its ZEUS and ODIN reactor designs are intended for long-distance missions, human habitation, and propulsion in space, making it a highly speculative but exciting play in both the energy and space sectors.

    The deals signed by Amazon and Google last month mark a turning point for nuclear energy stocks, as these tech giants look to secure long-term, carbon-free power solutions. With AI driving unprecedented energy demand, the nuclear sector is poised for significant growth in the years ahead. Keep an eye on Oklo, NuScale, and Nano Nuclear Energy as these companies navigate the new nuclear landscape and continue to develop game-changing technologies.

    Three Strong Conviction Buys for the Week Ahead

    By
    Editorial Staff
    -
    0

    In the ever-shifting landscape of the stock market, separating the wheat from the chaff is no easy feat. It’s a world where the wrong picks can erode your hard-earned gains, but the right ones? They have the power to catapult your portfolio to new heights. With thousands of stocks in the fray, pinpointing those poised for a breakthrough can feel like searching for a needle in a haystack.

    This is where we step in. Every week, we comb through the market’s labyrinth, scrutinizing trends, earnings reports, and industry shifts. Our goal? To distill this vast universe of stocks down to a select few – those unique opportunities that are primed for significant movement in the near future.

    This week, we’ve zeroed in on three standout stocks. These aren’t your run-of-the-mill picks; they are the culmination of rigorous analysis and strategic foresight. We’re talking about stocks that not only show promise in the immediate term but also hold the potential for sustained growth.

    Medtronic (NYSE: MDT) – A Steady Performer with Growth Potential

    Medtronic, the global medical equipment leader, is attracting attention for its strong dividend yield and promising outlook. The company currently pays a 4% dividend yield with a manageable payout ratio of 48% and a net leverage ratio of just 2 times earnings—signs of financial stability that should appeal to income-focused investors.

    The stock has seen mixed analyst sentiment, with 16 out of 33 analysts rating it a strong buy or buy, while 15 recommend holding. Despite dipping 3% last year, Medtronic has gained momentum, advancing over 7% in the last six months and outperforming the S&P 500. Analysts are increasingly optimistic, with an average price target of $95 suggesting more than 15% upside from Friday’s close.

    On Wednesday, Medtronic gained over 3% following news that rival Johnson & Johnson had temporarily halted the use of its new heart device due to safety concerns. This disruption could shift attention and potential market share toward Medtronic’s portfolio. Another competitor, Boston Scientific, also benefited from the development, rising 4% in the same session.

    For investors seeking a blend of reliable income and growth potential, Medtronic looks compelling. The stock’s recent performance and the strategic advantage from competitor challenges position it as a solid pick for this week’s watchlist.

    TaskUs (NASDAQ: TASK) –  A Leader in Digital Customer Experience Ready to Deliver More

    TaskUs, a standout player in the digital customer experience outsourcing space, is showing signs of even greater potential heading into the new year. The company recently impressed with a robust third-quarter report, beating expectations on both revenue and earnings. But what really caught our attention is the potential for its fourth-quarter results to serve as a positive catalyst for the stock.

    TaskUs has built a reputation for offering premium outsourcing services to high-growth tech companies, and its competitive position in this niche is second to none. Margins remain “best-in-class,” underscoring the company’s operational efficiency. Analyst Cassie Chan recently upgraded the stock to a buy, citing its attractive risk/reward profile and predicting strong fourth-quarter results. Chan also expects TaskUs to guide fiscal 2025 revenue growth ahead of the market consensus at 9%.

    After climbing 41% in 2024, TaskUs shares still appear to have room to run. With underperformance earlier in the year now in the rearview mirror, the next quarterly update could be the turning point that pushes the stock higher. For investors seeking exposure to a proven growth story in digital customer experience, TaskUs is well worth a closer look.

    Constellation Energy (CEG) – Powering AI Growth

    Constellation Energy is at the forefront of the nuclear energy boom, benefiting from its established infrastructure and strategic deals with major tech players. The company operates 21 nuclear reactors across the Midwest and Northeast, making it a cornerstone of U.S. nuclear power.

    In 2024, Constellation shares surged 91%, propelled by partnerships like its two-decade agreement with Microsoft to supply nuclear power for AI data centers. The company further bolstered its position with a $840 million contract to provide power to federal agencies, signaling strong government support for nuclear energy expansion. Looking ahead, management projects annual earnings growth of at least 13% through 2030, backed by a robust pipeline of deals and the benefits of the newly clarified hydrogen tax credits. For investors seeking a stable yet growth-oriented energy play, Constellation offers both reliable dividends and a foothold in a rapidly evolving market.

    Bear Watch Weekly: Stocks to Sideline Now

    By
    Editorial Staff
    -
    0

    The right stocks can make you rich and change your life.

    The wrong stocks, though… They can do a whole lot more than just “underperform.” If only! They can eviscerate your wealth, bleeding out your hard-won profits.

    They’re pure portfolio poison.

    Surprisingly, not many investors want to talk about this. You certainly don’t hear about the danger in the mainstream media – until it’s too late.

    That’s not to suggest they’re obscure companies – some of the “toxic stocks” I’m going to name for you are in fact regularly in the headlines for other reasons, often in glowing terms.

    I’m going to run down the list and give you the chance to learn the names of three companies I think everyone should own instead.

    But first, if you own any of these “toxic stocks,” sell them today…

    Quantum Computing (QUBT): A Stock to Avoid Amid the Hype

    Quantum Computing (QUBT) has captured investor attention with its meteoric rise—up about 2,400% in just three months—fueled by growing excitement around artificial intelligence (AI) and quantum computing. But beneath the buzz lies a company with a questionable history, limited revenue, and a valuation that raises more red flags than confidence. Here’s why investors might want to steer clear of this speculative play.

    Quantum Computing, the company, has undergone several pivots since its founding in 2001, starting as a seller of inkjet cartridges, shifting to beverages, and now claiming a place in the quantum computing space. This pattern of reinvention, coupled with past business failures and legal troubles, raises concerns about the company’s long-term strategy and credibility. Its recent rebranding to Quantum Computing feels reminiscent of gimmicky moves like Long Island Iced Tea’s infamous pivot to blockchain—a rebrand that capitalized on hype without substantial business fundamentals.

    Even if we set aside its murky history, Quantum Computing’s financials tell a concerning story. The company generated only $386,000 in trailing 12-month revenue, giving it a staggering price-to-sales ratio of about 5,400. For comparison, even some of the most well-established, high-growth tech stocks rarely sustain P/S multiples above 50. With minimal revenue and significant costs associated with developing quantum computing systems, the company is likely to continue burning cash for the foreseeable future.

    To fund its operations, Quantum Computing has already raised $14.6 million through secondary offerings in the first three quarters of 2024. With its stock price surging, management may be tempted to raise more capital through additional offerings, diluting existing shareholders and potentially putting downward pressure on the stock.

    The speculative nature of this company, combined with its outsized valuation and history of pivots, makes it a risky bet. While quantum computing has vast potential, investors should look for more established players in the field rather than chasing a company with minimal revenue and questionable fundamentals. For those considering QUBT, the risks far outweigh the rewards at this point.

    Viking Therapeutics (VKTX): A Sell in the Face of Heightened Competition

    Viking Therapeutics has had a standout year in biotech, thanks to impressive mid-stage results for its weight loss candidate VK2735. The stock has seen significant gains, though it has recently pulled back sharply, dropping more than 10% in one session and 24% over the past month. The cause? Mounting competition in the weight loss drug market—specifically from industry heavyweight Merck.

    Merck’s recent announcement of a $112 million licensing deal with Hansoh Pharma to develop an oral GLP-1 weight loss candidate signals the company’s serious intent to enter this lucrative market. While Merck’s candidate, HS-10535, is still in pre-clinical testing, the mere prospect of such a formidable competitor has rattled Viking’s shareholders.

    Although Viking’s VK2735 remains ahead in clinical development, its dominance is now uncertain as more established players with deeper resources, like Merck, move into the space. This competition increases the risk for investors at a time when the weight loss market is already heating up with high-profile drugs from Eli Lilly and Novo Nordisk.

    The company’s other programs, including VK2809 for liver disease, have shown promise, but the long timelines, costly clinical trials, and the potential for setbacks create additional uncertainty.

    While Viking Therapeutics has shown strong innovation and potential, the recent selloff underscores the risks of investing in a mid-cap biotech facing intensifying competition. For investors seeking stability or less speculative growth, Viking Therapeutics may be a stock to avoid for now.

    Lucid Motors (NASDAQ: LCID) A Risky Bet in a Competitive EV Market

    Lucid Motors continues to draw comparisons to Tesla, but the gap between the two companies remains vast. While Lucid has made strides in producing and delivering vehicles—reporting a 90% year-over-year improvement in Q3 deliveries—it still lags far behind Tesla’s scale. To put it in perspective, Tesla delivered 462,890 vehicles in the same period, compared to Lucid’s 2,781.

    This stark disparity underscores Lucid’s uphill battle to compete in an increasingly crowded EV market. While Tesla faced little competition during its early days, Lucid must contend with both established automakers and new entrants vying for market share. Building its business requires massive capital investments, and Lucid is still deep in the red. The company reported a Q3 2024 loss of $0.41 per share, widening from a $0.28 loss a year ago.

    Management has emphasized its liquidity of $5.16 billion, but this cash reserve is not infinite. The company faces significant pressure to scale production and move toward profitability before those funds run dry. With stiff competition and a challenging road ahead, Lucid remains a speculative bet rather than a stable investment.

    Unless you’re prepared to take on high levels of risk in the hopes of a long-term turnaround, Lucid Motors is a stock to avoid for now. Watch the story unfold from the sidelines rather than betting on a recovery that’s far from guaranteed.

    Ready to Ride the EV Boom? These 3 Stocks Could Soar

    By
    Editorial Staff
    -
    0

    2024 was a challenging year for the EV sector. While the S&P 500 surged ahead, the S&P Kensho Electric Vehicles Index lagged behind, reflecting ongoing skepticism about EV adoption and increased competition among manufacturers. Even Tesla, the industry’s most well-known name, has faced challenges despite its recent rally. Yet, the EV market is far from stalling out.

    Global EV adoption is on the rise. Gartner predicts there will be over 85 million EVs on the road by the end of 2025, a 35% jump from the current 64 million. Most of this growth will come from battery-operated vehicles (BEVs), not hybrids, as consumer demand continues to shift toward fully electric solutions. For investors, this growth translates into a wealth of opportunities—if you know where to look.

    Whether it’s a company dominating EV production, innovating on battery technology, or leveraging a strategic approach to electrification, some names are well-positioned to ride the next wave of industry growth. Here are three EV-related stocks that could see significant upside as the sector picks up steam heading into 2025.

    BYD Company (OTC: BYDDY) Dominating the World’s Largest EV Market

    BYD Company has taken the crown as the world’s largest EV manufacturer, surpassing even Tesla in unit production. Its dominance stems from its stronghold in China, the world’s biggest EV market. BYD shares have already climbed 35% year-to-date, and the company’s momentum could continue as China’s economy shows signs of recovery.

    For U.S. investors, it’s worth noting that BYD shares trade over-the-counter (OTC) under the ticker BYDDY. Unlike stocks listed on major exchanges, OTC stocks are traded through a decentralized network of dealers rather than on a centralized exchange like the NYSE or Nasdaq. This often allows investors to access international companies like BYD more easily. You can typically purchase OTC stocks through most online brokerage accounts.

    While China’s economic challenges, including a weak real estate sector, have created headwinds, there are positive signals. Retail sales have grown steadily since late 2023, with October seeing a 4.8% year-over-year increase. Industrial output also rose 5.3%, and Goldman Sachs forecasts 4.5% GDP growth for China in 2025. These indicators point to improving consumer confidence, which bodes well for BYD’s vehicle sales. Analysts expect the company’s revenue to grow by over 20% next year, making BYD a strong play on the global EV boom.

    QuantumScape (NYSE: QS) Revolutionizing EV Batteries with Solid-State Technology

    QuantumScape isn’t an EV manufacturer but a critical player in the industry’s future. The company is pioneering solid-state battery technology, which promises to address two major EV adoption hurdles: range anxiety and battery lifespan. QuantumScape’s batteries can extend EV range from 350 to 500 miles and last for up to 300,000 miles, significantly outperforming current lithium-ion options.

    The year 2025 could be transformative for QuantumScape as it begins generating commercial revenue. Recent agreements, including a deal with Volkswagen for up to one million batteries annually, highlight its potential. The global solid-state battery market is projected to grow at an annualized rate of 36.4% through 2024, driven primarily by EV adoption. For investors willing to bet on game-changing technology, QuantumScape offers a high-risk, high-reward opportunity.

    Toyota Motor (NYSE: TM) A Calculated Bet on EVs at a Discount

    Toyota has taken a cautious yet thoughtful approach to the EV market, focusing on hybrid electric vehicles (HEVs) as a stepping stone for consumers hesitant to adopt fully electric cars. While only one-third of Toyota’s production is currently electrified, the company’s reputation for quality and reliability positions it well for a larger EV push when the time is right.

    Despite its deliberate strategy, Toyota’s stock has struggled, falling 30% from its March peak. This drop has pushed the stock to a trailing 12-month price-to-earnings ratio of just 8.4, with a forward dividend yield of 3%. Analysts see 17% upside potential, with a consensus price target of $212.81. As global economic conditions improve, Toyota’s stock could experience a strong rebound, particularly given its unmatched reputation in the automotive industry.

    The EV market’s evolution is creating both challenges and opportunities. BYD’s dominance in China, QuantumScape’s breakthrough battery technology, and Toyota’s strategic patience offer investors three distinct ways to participate in the sector’s growth. Whether you’re seeking exposure to established players or emerging innovators, these picks could position your portfolio for success in 2025 and beyond.

    Three Strong Conviction Buys for the Week Ahead

    By
    Editorial Staff
    -
    0

    In the ever-shifting landscape of the stock market, separating the wheat from the chaff is no easy feat. It’s a world where the wrong picks can erode your hard-earned gains, but the right ones? They have the power to catapult your portfolio to new heights. With thousands of stocks in the fray, pinpointing those poised for a breakthrough can feel like searching for a needle in a haystack.

    This is where we step in. Every week, we comb through the market’s labyrinth, scrutinizing trends, earnings reports, and industry shifts. Our goal? To distill this vast universe of stocks down to a select few – those unique opportunities that are primed for significant movement in the near future.

    This week, we’ve zeroed in on three standout stocks. These aren’t your run-of-the-mill picks; they are the culmination of rigorous analysis and strategic foresight. We’re talking about stocks that not only show promise in the immediate term but also hold the potential for sustained growth.

    Walmart (WMT) – A Retail Giant Poised for Continued Growth

    Walmart has proven yet again why it’s a staple for both shoppers and investors. With 255 million customers visiting its stores and Sam’s Club locations weekly, Walmart continues to thrive by keeping costs low while embracing new technologies. Innovations like online ordering with same-day delivery and in-store pickup have driven more customers to its doors, solidifying its position in the retail world.

    In the fiscal third quarter ended Oct. 31, 2024, Walmart’s U.S. segment saw same-store sales climb by 5.3%, with over half of the growth coming from e-commerce. Adjusted operating income rose 6.2% for the quarter, and management expects profitability for the year to increase by at least 8.5%. These numbers reflect a company firing on all cylinders.

    Walmart’s status as a Dividend King, having raised dividends annually since 1974, is a testament to its financial strength. During the first nine months of 2024, it generated $6.2 billion in free cash flow, easily covering the $5 billion paid out in dividends. This reliable income stream is backed by a business model that continues to evolve while staying true to its roots.

    The stock has rewarded investors handsomely, surging over 71% in 2024—far outpacing the S&P 500’s 23% gain. While Walmart’s price-to-earnings ratio of 37 is higher than the S&P 500 average of 30, this premium seems justified given its strong performance and forward-looking growth potential. For investors seeking a combination of steady income and continued capital appreciation, Walmart remains a solid pick.

    SentinelOne (S) – AI-Driven Cybersecurity for the Future

    SentinelOne has emerged as a standout in the cybersecurity space, offering an AI-powered, cloud-based platform, Singularity, that detects and responds to cyber threats with precision. As businesses increasingly prioritize secure operations in a digital-first world, SentinelOne’s comprehensive protection makes it a compelling choice for organizations worldwide.

    Over the past three fiscal years, the company’s revenue has more than tripled, climbing from $204.8 million to $621.2 million. Gross margins have steadily improved, rising from 60.1% in fiscal 2022 to an impressive 74.1% in the most recent quarter of fiscal 2025. This expansion in margins fueled a gross profit surge of nearly 260% during this period, and for the first nine months of fiscal 2025, SentinelOne achieved positive free cash flow of $15.5 million—a significant turnaround from negative cash flow in prior years.

    Annualized recurring revenue reached $860 million in Q3 2025, up 29% year over year, reflecting the growing adoption of its platform. Management has identified a $100 billion total addressable market by 2025, underscoring the company’s immense growth potential. Innovations like the Purple AI solution, built on its Singularity Data Lake, enhance the platform’s speed and coverage, delivering real-world cost savings and setting it apart from competitors.

    As demand for cybersecurity solutions continues to rise, SentinelOne is well-positioned for sustained growth. Its strong financial momentum, expanding market opportunity, and focus on cutting-edge AI-driven solutions make it a smart choice for growth-focused investors looking to capitalize on the future of cybersecurity.

    PepsiCo (PEP) – A Dividend King with Strong Recovery Potential

    PepsiCo might not have been a star performer in 2024, but it’s looking like a smart buy as we kick off 2025. The beverage and snack giant underperformed the S&P 500 last year, largely overshadowed by excitement in the tech and AI sectors. However, Pepsi’s fundamentals remain rock solid, and its long-term potential is hard to ignore.

    While organic sales growth slowed to just 2% through the first three quarters of 2024—down from 10% in 2023—Pepsi still delivered consistent profitability and robust cash flow. The company is projecting roughly 4% organic sales growth for the full year and an 8% boost in earnings per share. Investors will get a clearer picture when Pepsi reports Q4 results on February 4, along with its outlook for 2025.

    PepsiCo is a cash-return powerhouse. For 2024, the company returned $8.2 billion to shareholders, primarily through dividends. And speaking of dividends, Pepsi’s yield is now above 3.5%—a level not seen since the early days of the pandemic. With 51 consecutive years of dividend hikes under its belt, Pepsi’s status as a Dividend King remains secure, and another increase in 2025 seems almost guaranteed.

    While the exact timing of a growth rebound is uncertain, PepsiCo’s strong dividend, steady earnings, and leadership in the global snack and beverage markets make it a compelling pick for long-term investors. If you’re looking for a reliable stock to add to your portfolio this year, PepsiCo offers a blend of stability and future growth potential.

    Bear Watch Weekly: Stocks to Sideline Now

    By
    Editorial Staff
    -
    0

    The right stocks can make you rich and change your life.

    The wrong stocks, though… They can do a whole lot more than just “underperform.” If only! They can eviscerate your wealth, bleeding out your hard-won profits.

    They’re pure portfolio poison.

    Surprisingly, not many investors want to talk about this. You certainly don’t hear about the danger in the mainstream media – until it’s too late.

    That’s not to suggest they’re obscure companies – some of the “toxic stocks” I’m going to name for you are in fact regularly in the headlines for other reasons, often in glowing terms.

    I’m going to run down the list and give you the chance to learn the names of three companies I think everyone should own instead.

    But first, if you own any or all of these “toxic stocks,” sell them today…

    IonQ (IONQ): Why It’s Time to Avoid This Stock

    IonQ (IONQ) turned heads in 2024 with a remarkable 225% surge in its stock price, driven by investor enthusiasm around its promise in quantum computing. However, as we step into 2025, it’s worth taking a closer look at whether IonQ is a sound investment or simply a high-risk gamble. While the idea of quantum computing solving complex problems in healthcare, engineering, and other fields is enticing, IonQ’s fundamentals reveal significant red flags that cautious investors cannot ignore.

    The company is still in the early stages of its lifecycle, having reported only $37 million in revenue over the past 12 months. Meanwhile, it racked up over $171 million in net losses during the same period, with $120 million in negative free cash flow. This means IonQ is burning through approximately $30 million in cash each quarter. While the company has over $365 million in cash on hand to fund operations for now, this runway is not infinite. At its current pace, IonQ will likely need to raise additional funds through debt or equity offerings in the near future, which could dilute shareholders or add financial strain.

    Quantum computing is a fascinating but speculative industry, and IonQ is far from proving its commercial viability. The technology, while groundbreaking, remains error-prone and expensive to scale due to its sensitivity to temperature fluctuations and electronic interference. For IonQ to fulfill its potential, it must overcome these significant challenges and demonstrate that it can produce reliable and scalable quantum computing solutions. Until then, the company’s ambitious goals remain just that—ambitions.

    For investors seeking stable, profitable companies, IonQ represents a risky proposition. With limited revenue, mounting losses, and an unproven technology, it is not a stock for the faint of heart. While speculative investors may find IonQ’s potential intriguing, the risks far outweigh the rewards for those prioritizing consistent returns or value. IonQ’s performance in 2024 was impressive, but its fundamentals suggest that now might be the right time to step away and let this speculative play prove itself—if it can.

    Micron Technology (MU): Weak Demand Signals Trouble Ahead

    Micron Technology (MU) is facing mounting challenges that make it difficult to justify holding onto the stock right now. While the company has been ramping up production of high-bandwidth memory (HBM) to meet the soaring demands of AI applications, the market for standard memory chips—its bread and butter—looks increasingly grim.

    Prices for DRAM (dynamic random-access memory), which is widely used in PCs and smartphones, are expected to tumble by 8% to 13% in the first quarter of 2025, according to TrendForce. Even factoring in the boost from HBM, overall DRAM prices are projected to decline by as much as 5%. And it doesn’t stop there—NAND prices could drop 10% to 15%, with the PC and smartphone segments taking the hardest hit.

    Why the slump? A mix of seasonal softness, weak demand for consumer electronics, and some strategic over-ordering by customers anticipating tariffs under President-elect Trump’s administration. Add to that the pressure from Chinese manufacturers flooding the market with older DDR4 memory chips, and it’s clear Micron is grappling with serious headwinds.

    Even the much-hyped AI boom, which has buoyed demand for HBM, isn’t enough to offset these challenges. With PC and smartphone markets still sluggish and a glut of inventory weighing on prices, Micron’s profitability could remain under pressure for the foreseeable future.

    For now, Micron feels like it’s stuck in a memory market time warp—a place where demand is soft, prices are falling, and hope is pinned on future recoveries that are far from certain. Investors looking for stability or near-term growth would be better off sitting this one out until the market dynamics improve. Sometimes, it’s better to step aside than hang on for a bumpy ride.

    Kraft Heinz (KHC): A High Yield with Hidden Risks

    At first glance, Kraft Heinz’s 5.2% dividend yield might seem appealing, especially compared to the consumer staples sector’s average of 2.5%. But a closer look reveals that this high yield comes with significant risks, particularly as the company’s much-touted turnaround plans for 2024 fell short of expectations.

    The struggles at Kraft Heinz are not new. Since the 2015 merger of Kraft and Heinz—spearheaded by 3G Capital with financial backing from Warren Buffett’s Berkshire Hathaway—the company has faced ongoing challenges. The initial cost-cutting strategy boosted profitability in the short term, but it quickly became apparent that Kraft Heinz couldn’t cut its way to sustained growth. Over the years, leadership changes and the eventual exit of 3G Capital in 2023 highlighted the company’s inability to execute effectively.

    In 2024, Kraft Heinz set modest goals, aiming for organic sales growth of 0% to 2%. Instead, the company posted declines in every quarter, with organic sales dropping 0.5% in Q1, 2.4% in Q2, and 2.2% in Q3. Even more troubling, its “Accelerate” businesses—supposedly the focus of its turnaround efforts—performed even worse, with a steep 4.5% decline in Q3.

    While other companies like Unilever have successfully implemented similar strategies, Kraft Heinz has failed to demonstrate meaningful progress. Unilever, for instance, achieved 4.5% sales growth in Q3 2024, a stark contrast to Kraft Heinz’s ongoing struggles. This poor execution has left the stock underperforming its peers, with little to suggest a near-term improvement.

    Although the company owns a portfolio of well-known brands and is investing in rebuilding its marketing and innovation capabilities, these efforts will take time to yield results. For now, the stock’s high yield is a reflection of its challenges rather than a reward for strong performance.

    Investors looking for stability or growth in the consumer staples sector should steer clear of Kraft Heinz until the company shows concrete signs of reversing its downward trajectory. For now, this high-yield stock remains a risky bet.

    Wise Income Strategies for an Unpredictable 2025

    By
    Editorial Staff
    -
    0

    Adding dividend stocks to your portfolio can be a game-changer. These stocks not only offer potential for long-term appreciation but also provide passive income in the form of regular dividend payments. Whether the market is up or down, these dividends act as a buffer, giving you returns even when the stock price takes a dip. And if you’re looking for reliable dividend payers, the Dividend Kings are a great place to start. These are companies that have increased their dividend payments for 50 consecutive years or more, showing a strong commitment to rewarding shareholders.

    With just $500—or even less—you can pick up shares in the following three Dividend Kings, all of which offer a mix of stability, growth, and dependable income.

    Coca-Cola (KO) – A Dividend Giant with Global Reach

    Coca-Cola’s dividend track record is as iconic as its brand. With over 60 years of consecutive dividend increases, the company pays $1.94 per share annually, yielding about 3%. Its free cash flow of over $3 billion provides ample support for continued dividend growth.

    Coca-Cola isn’t just about its namesake soda. The company offers a diverse portfolio of more than 200 brands, including Minute Maid juices and Dasani water. It serves over 2.2 billion drinks daily across 200 countries and territories. This global footprint and product diversity have driven steady growth. Its water, sports, and tea categories alone boast 12 billion-dollar brands.

    For investors, Coca-Cola’s long-term growth, broad product appeal, and strong dividend history make it a staple in any dividend portfolio.

    Johnson & Johnson (JNJ) – Riding a New Wave of Growth

    Johnson & Johnson isn’t just a Dividend King; it’s a legend, having increased its dividend payments for over 60 years. The company currently pays an annual dividend of $4.96 per share, yielding about 3.3%, well above the S&P 500 average of 1.3%. With free cash flow exceeding $19 billion, J&J has the resources to keep growing those dividends for years to come.

    What makes J&J even more compelling is its recent transformation. By spinning off its lower-growth consumer health business, the company has doubled down on its high-potential pharmaceutical and medtech segments. In the most recent quarter, both units reported operational sales growth of over 6%. Key pharmaceutical brands posted double-digit revenue growth, while its medtech division now leads in several high-growth cardiovascular markets.

    Investing in J&J gives you the security of consistent dividend income while also allowing you to benefit from the company’s renewed focus on innovation and growth.

    Abbott Laboratories (ABT) – A Diversified Healthcare Powerhouse

    Abbott Laboratories is another Dividend King with a 50-plus-year history of increasing payments. The company pays $2.20 per share annually, yielding 1.9%, and its robust free cash flow ensures it can maintain this trajectory.

    What sets Abbott apart is its diversified healthcare business, spanning medical devices, diagnostics, nutrition, and established pharmaceuticals. This diversification cushions the company against challenges in any single segment. For instance, while declining COVID-19 testing has weighed on its diagnostics revenue, its medical devices unit grew over 11% in the last quarter, helping overall revenue climb by 5% to more than $10 billion.

    Abbott’s steady innovation keeps it ahead of the curve. The recent launch of Lingo, a continuous glucose monitoring system aimed at wellness and nutrition, highlights the company’s forward-thinking approach. Buying Abbott shares means you’re investing in a resilient, innovative healthcare company while earning passive income.

    Whether you’re just starting to build a dividend-focused portfolio or looking to strengthen your existing one, Johnson & Johnson, Abbott Laboratories, and Coca-Cola offer a combination of income stability and growth potential. These Dividend Kings have proven themselves over decades and remain top choices for investors seeking dependable returns.

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