Golden Ocean GroupGOGL is scheduled to report fourth-quarter 2021 results on Feb 16.
– Zacks
The Zacks Consensus Estimate for fourth-quarter earnings has been steady at 75 cents over the past 60 days. The consensus mark for revenues is currently pegged at $284.30 million.
Against this backdrop, let’s discuss the factors that might have impacted Golden Ocean’s performance in the December quarter.
We expect GOGL’s fourth-quarter performance to have been driven by the gradual uptick in economic activities in the United States. This, in turn, might have perked up its revenues from the year-ago quarter’s reported figure despite the omicron-induced uncertainty.
The optimism surrounding the Drybulk market is likely to have boosted Golden Ocean’s top line in the to-be-reported quarter. Revenues are likely to have increased owing to favorable Drybulk freight rates. However, we expect GOGL’s fourth-quarter bottom-line performance to have been hurt by an escalated time charter and voyage expenses. Steep oil price is flaring up fuel costs. This, in turn, is likely to have pushed up the operating costs in the to-be-reported quarter.
What Does the Zacks Model Say?
Our proven model does not conclusively predict an earnings beat for Golden Ocean this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. However, that is not the case here as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Golden Ocean has an Earnings ESP of 0.00% as the Most Accurate Estimate is in line with the Zacks Consensus Estimate of 75 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Golden Ocean currently carries a Zacks Rank #3.
Highlights of Q3 Earnings
Golden Ocean’s third-quarter earnings (excluding a couple of cents from non-recurring items) of 95 cents per share beat the Zacks Consensus Estimate of 55 cents. Total revenues of $387.6 million surpassed the Zacks Consensus Estimate of $251.8 million.
Stocks to Consider
Investors interested in the broader Transportation sector may consider Eagle Bulk Shipping Inc. EGLE. Grindrod ShippingGRIN and Expeditors International of Washington, Inc. EXPD as these stocks possess the right combination of elements to beat on earnings this reporting cycle.
Eagle Bulk currently has an Earnings ESP of +25.88% and a Zacks Rank of 3. EGLE will report fourth-quarter results on Mar 3.
The stock has gained 90% in a year. Eagle Bulk has a trailing four-quarter earnings surprise of 33% (one miss and three beats), on average. Strong trading volumes are likely to have boosted EGLE’s performance in the to-be-reported quarter.
Grindrod Shipping currently has an Earnings ESP of +10.62% and a Zacks Rank of 3. GRIN will report fourth-quarter results on Feb 16.
Grindrod Shipping’sfourth-quarter results are likely to be aided by the improved market sentiments surrounding the Drybulk market. Uptick in trading volumes is also likely to have contributed to GRIN’s fourth-quarter performance.
EXPD is being aided by higher airfreight revenues. Due to the coronavirus-induced imbalance between scheduled capacity and demand, Expeditors is using charters to meet the customer needs. Revenues from the airfreight services unit increased approximately 54% year over year in the first nine months of 2021.
In addition to the investment ideas discussed above, would you like to know about our 10 top picks for the entirety of 2022?
From inception in 2012 through 2021, the Zacks Top 10 Stocks portfolios gained an impressive +1,001.2% versus the S&P 500’s +348.7%. Now our Director of Research has combed through 4,000 companies covered by the Zacks Rank and has handpicked the best 10 tickers to buy and hold. Don’t miss your chance to get in…because the sooner you do, the more upside you stand to grab.
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Welcome to Episode #268 of the Value Investor Podcast.
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
Despite growth stocks being down on their luck in 2022, growth stock investors are still trolling value investors on Twitter and Stocktwits but it’s value investors who are having the last laugh as many value stocks remain red-hot in the new year.
The “boring” stocks are where it’s at. How have some of the value stocks that have been covered on the Value Investor Podcast over the last year holding up this year?
The Andersons is an agriculture company that operates in trade, ethanol and fertilizers. Its trade group operates grain elevators in the United States.
The Andersons shares have also been up big in the last year, gaining 44.6% in that time.
Shares are still attractively valued, with a forward P/E of 16.7.
The Andersons also pays a dividend, yielding 1.9%.
Diamondback Energy is an independent oil and natural gas company that operates in the Permian Basin. It has a market cap of $23 billion.
Diamondback Energy shares have been on a tear over the last year as WTI crude has surged above $90 a barrel. Shares are up 80% in that time.
Yet Diamondback Energy remains cheap, with a forward P/E of just 6.6 as earnings soar.
Is it too late to get into Diamondback Energy in 2022?
What About the Value Industries that are NOT Hot?
There are some value industries that were hot in 2021, but now are not. Are those stocks still values or are they traps?
Tune into this week’s podcast to find out.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +25.4% per year. So be sure to give these hand-picked 7 your immediate attention.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Wall Street has been on choppy ride since the start of 2022 due to rising rate worries. At the end of Feb 9, 2022, the yield on the benchmark 10-year Treasury note jumped to 1.94% from 1.81% at the start of the month. The yield on the 30-year Treasury bond increased 13 basis points from Feb 1 to 2.25%. The yield on the benchmark 2-year Treasury note surged 18 bps from the start of the month to 1.36%. Rates have been rising in the United States on faster and multiple Fed’s rate hike bets.
– Zacks
Higher inflationary expectations emanating from supply chain disruptions as well as higher crude prices should make Fed members comfortable with rate hikes in the coming days. Federal Reserve policy makers indicated that they are likely to enact their first interest rate hike since 2018 in their March meeting to combat sky-high inflation. As of Feb 9, 2022, CME’s FedWatch Tool said that there are 32.7% chances of 2022 closing out with 150-175 bps of rates while a 29.8% probability is there for the year to end at 125-150 bps of rate.
What Should Be Your Investing Stance?
Anemic growth in developed economies, the QE scenario and muted bond yields have kept value investing subdued in the past decade and boosted growth stocks. But the scenario is changing now. Since the growth sector relies on easy borrowing for superior growth and its value depends heavily on future earnings, a rise in long-term yields cuts the present value of companies’ future earnings.
And this is where value investing rises. Value stocks perform better in a rising rate environment. Moreover, during the peak of the pandemic, value stocks were hit hard. So, now is the time for them to flourish on beaten-down valuation.
Apart from value stocks, dividends also do good in a rising rate environment, both high dividend stocks that offer benchmark-beating yields as well as dividend growth stocks that offer stability. After all, high-dividend stocks and ETFs provide investors avenues to make up for capital losses, if that happens at all. Even if the stock or the fund falls, higher current income would go a long way in protecting investors’ total returns.
Financial stocks also perform better in a rising rate environment. Talks about Fed’s rate hike in March have boosted the banking space lately. The steepening of the yield curve is a tailwind for banking stocks as these improve banks’ net interest margins. This is because interest rates on deposits are usually tied to short-term rates while loans are often tied to long-term rates.
Against this backdrop, below we highlight a few ETFs that are must buys at present. All these ETFs have a Zacks Rank #1 (Strong Buy).
The underlying S&P 500 Enhanced Value Index tracks the performance of stocks in the S&P 500 Index that have the highest value score. SPVU charges 13 bps in fees and yields 2.21% annually. Financials, Healthcare, Industrials, IT and Consumer Staples have a double-digit weight in the fund.
The underlying Russell Midcap Value Index measures the performance of the mid-capitalization value sector of the U.S. equity market. IWS charges 23 bps in fees and yields 1.44% annually. Financials, Industrials, Real Estate and Consumer Discretionary have a double-digit weight in the fund.
The underlying S&P 500 High Dividend Index is designed to measure the performance of the top 80 dividend-paying securities listed on the S&P 500 Index, based on dividend yield. SPYD charges 7 bps in fees and yields as high as 3.57% annually. Financials, Utilities, Real Estate, Energy, Consumer Staples and Healthcare have a double-digit weight in the fund.
The underlying Morningstar US Dividend Growth Index is composed of U.S. equities with a history of consistently growing dividends. SPVU charges 8 bps in fees and yields 1.98% annually. Financials, IT, Healthcare, Industrials and Consumer Staples have a double-digit weight in the fund.
The underlying Financial Select Sector Index seeks to provide an effective representation of the financial sector of the S&P 500 Index. The XLF ETF charges 10 bps in fees and yields 1.56% annually (read: 3 Sector ETFs to Win Amid Rising Rates).
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After a tough January, investors are seeing some respite in February. Solid fourth-quarter earnings releases and an encouraging labor market scenario keep the market sentiments improving. Market analysts think that the improving jobs report signals a higher possibility of the Federal Reserve hiking the benchmark interest rates in March. This might be preparing investors for the upcoming rate hike, supporting market sentiments.
– Zacks
The Federal Reserve has indicated that the first rate hike since 2018 could be seen as early as March 2022. It has already started tapering bond purchases, which it expects to complete by this March.
Now, all eyes are on the Consumer Price Index report. Analysts expect to see continued hot inflation results with the metric for January to touch the highest pace since 1982 (per a CNBC article).
In this regard, Art Hogan, chief market strategist at National Securities, has also commented that “The market seems to have found a more constructive tone in the tug of war between trepidation over the Fed and the better fundamentals that we’ve seen in both earnings and the economic data. Having Disney do better than Netflix after its earnings report certainly seems to be a positive,” as stated in a CNBC article.
Considering the current backdrop, let’s take a look at some ETF areas that can be great additions to your portfolio:
Banking ETFs
Several factors are working in favor of the space. The shift toward a tighter monetary policy will push yields higher, thereby helping the financial sector. This is because rising rates will help in boosting profits for banks, insurance companies, discount brokerage firms and asset managers. The steepening of the yield curve (the difference between short and long-term interest rates) is likely to support banks’ net interest margins. As a result, net interest income, which constitutes a chunk of banks’ revenues, is likely to receive support from the steepening of the yield curve and a modest rise in loan demand. Notably, as the economy starts operating in full swing, the banking space will be able to generate more business.
Let’s take a look at some banking ETFs that can gain from the current environment: First Trust Nasdaq Bank ETFFTXO, Invesco KBW Bank ETF KBWB, Invesco KBW Regional Banking ETF (KBWR), iShares U.S. Regional Banks ETF (IAT) and SPDR S&P Regional Banking ETF (KRE) (read: Warren Buffett Wins in 2022: ETF Lessons to Learn From).
Technology ETFs
The technology space has been showing a strong comeback after a disturbing January. Investors are resorting to their favorite space after sell-offs as they appear to be great bargain buys at the current levels. Going on, technology has been playing an instrumental role amid the ongoing COVID-19 uncertainty in aiding people in maintaining safe-distancing norms. Certain other ‘new normal’ trends have also emerged amid the health crisis like work from home, increasing digital payments, growing video streaming and soaring video game sales.
The pandemic has been a blessing in disguise for the e-commerce industry as people are practicing social distancing and shopping online for all essentials, especially food items. The world is gradually moving toward digitization, increasing the dominance of technology in the financial sector.
Investors willing to be part of the tech rally can bet on some top-ranked technology ETFs like Vanguard Information Technology ETF VGT, The Technology Select Sector SPDR FundXLK, iShares U.S. Technology ETF (IYW) and First Trust NASDAQ-100-Technology Sector Index Fund (QTEC) (read: Be Choosy In Tech Investing: ETFs to Buy/Sell).
Material ETFs
The materials sector performed decently in 2021. In addition, the space is expected to remain strong as improving labor market conditions, growing consumer confidence, accelerated coronavirus vaccine rollout and the passage of the much-awaited $1.2-trillion infrastructure bill are pointing toward a faster recovering economy.
The strong jobs report for January is leading to solid optimism. The U.S. economy added 467,000 jobs in January 2022, surpassing market expectations of a rise of 150,000. The upside was largely driven by easing business restrictions amid the reopening of economies and accelerated coronavirus vaccine rollout. January figures stood out to be pleasantly surprising as the Omicron coronavirus variant weighed on the jobs market. The ADP report also showed that private companies cut 301,000 jobs.
Against this backdrop, let’s look at some material ETFs like iShares U.S. Basic Materials ETFIYM, The Materials Select Sector SPDR Fund XLB, Vanguard Materials ETF (VAW) and Fidelity MSCI Materials Index ETF (FMAT) (read: Top-Ranked Material ETFs to Bet on This Year).
Energy ETFs
The coronavirus vaccine rollout is gradually helping control the spread of the outbreak across the globe. The optimism surrounding the gradual reopening of global economies and increasing demand is painting a rosy picture for cyclical sectors. The progress in coronavirus vaccine rollout presents a strong case,favoring a faster return to normalcy and economic recovery.
Oil prices have been rising since the beginning of 2022. The upside in crude oil prices is triggered by various factors like easing Omicron variant concerns, supply shortages, and geopolitical tensions in Eastern Europe and the Middle East.
Against the bullish energy sector backdrop, let’s take a look at some energy ETFs that are worth adding to your portfolio for boosting returns: Invesco Dynamic Energy Exploration & Production ETFPXE, Vanguard Energy ETFVDE, Fidelity MSCI Energy Index ETF (FENY), The Energy Select Sector SPDR Fund (XLE) and iShares U.S. Energy ETF (IYE) (read: Bet on These 5 ETFs to Combat the Current Market Tantrums).
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Inflation and Volatility: Navigating This Whipsaw Market
The major indices opened sharply lower Thursday on the heels of a worse-than-expected Consumer Price Index (CPI) print. U.S inflation continued its drastic ascent in January, with prices spanning a wide range of goods and services surging higher amid supply chain issues and lingering scarcities. The indices were able to pare most of the morning losses by midday.
– Zacks
This morning, the Bureau of Labor Statistics released its monthly CPI data point which showed a 7.5% annual gain, topping the 7.3% rise forecasted by leading economists. The gain represented the swiftest pace for the inflationary measure going back to 1982. The widely followed gauge climbed 0.6% from December, reflecting a broad-based increase that included higher energy and food costs.
Even excluding the more volatile food and energy prices, the core CPI rose 6% in January versus the same time a year ago which also marked a 40-year high.
During corrections, the market has a way of reeling investors back in, only to prove the majority wrong and continue to fall. I can’t count on two hands how many times I saw that the bottom was in during the past two weeks. And while the bottom for this recent market move may have been hit in January, making those types of predictions is a fool’s game. We’ll leave that to the bottom-fishers.
We’re going to stick to the plan and identify leading stocks in this tough environment. There’s a lot of whipsaw going on in this market, and when that’s the case it’s best to be cautious and limit any new trade initiations. The time to become more aggressive is when investments are working and volatility remains calm – that isn’t the case at the moment, as the popular VIX volatility gauge spiked 10% higher this morning.
The stock market is dynamic and things can change quickly, so we must be ready to alter our outlook as more data comes in and things progress. Let’s take a look at two leading stocks that are outperforming the market. Both stocks are components of the Zacks Computer and Technology sector, which ranks in the top 38% of all Zacks Sectors.
Drilling down further, these stocks are contained within the Zacks Computers – IT Services industry group, which is also ranked in the top 38% of all Zacks Ranked Industries. Quantitative research studies have historically illustrated that approximately half of a stock’s future price appreciation is due to its industry grouping. By investing in stocks within the top 50% of all Zacks Ranked Industries, we can dramatically improve our investing success.
Dell Technologies, Inc. (DELL)
Dell Technologies develops, markets, and sells information technology solutions and products globally. DELL operates through three segments: Infrastructure Solutions Group (ISG), Client Solutions Group (CSG), and VMware. The company’s ISG segment primarily provides storage solutions, servers, and networking products. The CSG segment offers desktops, workstations, notebooks, displays, and projectors. The VMware segment produces IT solutions for DELL’s diverse client base, offering a cloud-based platform that enables its customers to gain a strategic advantage. Dell Technologies was founded in 1984 and is headquartered in Round Rock, TX.
DELL boasts an impressive history in terms of earnings surprises, surpassing estimates in each quarter for the past three years. The IT provider most recently reported Q3 EPS back in November of $2.37, a +1.72% surprise over the $2.33 consensus estimate. DELL has delivered an average earnings surprise of +17.93% over the past four quarters, aiding the stock’s market-beating 52.39% run during the past year.
Image Source: TradingView
What the Zacks Model Reveals
The Zacks Earnings ESP (Expected Surprise Prediction) seeks to identify companies that have recently seen positive earnings estimate revision activity. This technique has proven to be quite useful. In fact, when combining a Zacks Rank #3 or better with a positive Earnings ESP, stocks produced a positive surprise 70% of the time according to our 10-year backtest.
With a Zacks Rank #3 (Hold) and a +4.88% Earnings ESP, another earnings beat may be in the cards for DELL when the company reports on February 24th.
Even with last year’s price ascent, DELL trades at a relatively undervalued 9.03 forward P/E when compared to the industry average (23.09). Looking into 2022, the Zacks Consensus Estimate shows analysts are expecting an 8.25% increase in EPS to $8.66. Sales are anticipated to rise by 12.92% to $106.49 billion.
Fair Isaac Corp. (FICO)
Fair Isaac Corp. is a global developer of software, data management, and analytics products that give businesses the opportunity to automate processes. The company operates in the Americas, Europe, the Middle East, Africa, and Asia. FICO solutions and technologies for Enterprise Data Management allow its clients to increase sales, reduce fraud losses, and manage risk more efficiently. FICO markets its products and services through its direct sales organization, indirect channels, as well as online. Fair Isaac was founded in 1956 and is based out of Bozeman, MT.
A Zacks Rank #2 (Buy) stock, FICO has exceeded earnings estimates in each of the past seven quarters. The software developer recently reported its fiscal Q1 earnings which once again surpassed consensus estimates. Quarterly EPS came in at $3.70, delivering a positive surprise of 8.2% over the $3.42 Zacks Consensus Estimate. FICO has posted a trailing four-quarter average earnings surprise of +18.7%. The stock is up over 20% YTD, easily outperforming the major indices.
Image Source: TradingView
Analysts covering FICO have increased their fiscal 2022 EPS estimates by 1.85% in the past 60 days. The Zacks Consensus Estimate is now $15.97, which would represent growth of 22.19% relative to 2021. FICO’s next earnings report is scheduled for May 4th.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers “Most Likely for Early Price Pops.”
Since 1988, the full list has beaten the market more than 2X over with an average gain of +25.4% per year. So be sure to give these hand-picked 7 your immediate attention.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
7 Penny Stocks To Buy Based On Cathie Wood’s ARK Invest Holdings
With the stock market selling off in 2022, growth funds have felt a lot of pressure. But no single firm or fund manager has been placed in the spotlight more than Cathie Wood. She famously put a massive price target on electric vehicle company Tesla. In 2020, she voiced her optimism on Musk’s TSLA stock, saying it would reach $7,000 per share in the next five years.
PennyStocks.com – PennyStocks
At the time, shares of Tesla were trading around $730 on a pre-split basis. Fast-forward to last year’s fourth quarter, and the EV stock had reached a post-split record high of $1,243.49. That’s roughly $6,217.45 on a pre-split basis. Was Wood that far off from her outlook? Since there’s still time, will the $7,000 target be reached before 2025?
Even in light of growth stocks selling off, retail traders have still followed some of what ARK Invest is up to in 2022. So what about penny stocks?
Believe it or not, among Wood’s portfolio of investment funds, ARK has built positions in several stocks under $5. Today we look at some of these names, which ARK funds hold them, and just how much Cathie Wood is betting on penny stocks right now. I’ll leave the final decision up to you whether these are the best penny stocks to buy or not.
Cathie Wood Penny Stocks to Buy 1. Joby Aviation Inc. (NYSE: JOBY)
Shares of Joby Aviation have been high-flying this week. Thanks to excitement in the EV space and a general appetite for growth recently, the electric aircraft company’s stock has popped after news.
Joby’s flagship 5-seat aircraft can take off and land vertically. This is useful since the company is targeting more of a taxi-like industry. Aerial ridesharing has now become a thing. Its aircraft have a 150-mile range and can reach top speeds of 200 mph. Users can access the service via the Joby app or the Uber app in core U.S. markets.
This week, Joby and SKT Telecom inked a deal to introduce emissions-free aerial ridesharing services to South Korea. “By joining forces with Joby, a global leader in this field, we expect to accelerate our journey towards the era of Urban Air Mobility and lead the way on introducing this exciting new technology,” said Ryu Young-sang, CEO of SKT.
Cathie Wood’s ARK Space Exploration & Innovation ETF (NYSE: ARKX) has a position in JOBY stock as of today’s date. According to documents on the ARKX site, JOBY makes up 1.21% of the ETF, equating to a position of just over 1 million shares.
2. Compugen (NASDAQ: CGEN)
Another one of the “Cathie Wood penny stocks” on this list is Compugen. The company specializes in predictive target discovery finding new drug targets, and developing therapeutics for immunotherapy applications. Its lead candidate is COM701, being studied as a potential treatment for solid tumors. It also has COM902, which is under development for treating solid and hematological tumors. Both are in early phase studies, and the company has license agreements with companies like Bayer and AstraZeneca.
Next week could be an important one if you’ve got CGEN stock on your watch list. On February 16th, the company presents at the SVB Leerink Global Healthcare Conference. This presentation comes just a few weeks after Compugen was awarded a US Patent covering the method of use for COM701 in triple combination use with anti-PD-1 and Anti-TGIT antibodies.
Cathie Wood’s ARK Innovation ETF (NYSE: ARKK) and ARK Genomic Revolution ETF (NYSE: ARKG) have positions in CGEN stock as of today’s date. According to documents on the ETFs’ sites, CGEN makes up 0.14% of the ARKK ETF equating to a position of just over 5.5 million shares. CGEN stock makes up 0.26% of the ARKG ETF equating to a position of roughly 3.27 million shares.
3. Nano Dimension (NASDAQ: NNDM)
Nano Dimension is another one of the penny stocks in multiple Cathie Wood ETFs. The company specializes in technology printing, for lack of a better term. Its DragonFly IV system, for example, allows users to actually print proprietary conductive substances and integrate things like capacitors and antennas along with other electromechanical components to produce high-performance electronic devices. These are used in autonomous vehicles, drones, satellites, smartphones, and even medical devices.
The company recently reported preliminary Q4 and full-year 2021 revenues. Both were substantially higher than the previous year’s results. Fourth-quarter revenues are expected to come in at $7 million, up 255%, and full-year figures are closer to $10 million, up 194%. Next month the company presents at the InPrint Munich conference. Nano Dimension’s Global Inkjet Systems division will give an overview of its latest print application capabilities. If NNDM stock is on your watch list, keep March 15-17th in mind as this is when the conference is happening.
Cathie Wood’s ARK Autonomous Tech & Robotics ETF (NYSE: ARKQ) and ARK Next Generation Internet ETF (NYSE: ARKW) have positions in NNDM stock as of today’s date. According to documents on the ETFs’ sites, NNDM makes up 1.83% of the ARKQ ETF, equating to a position of just over 7.7 million shares. NNDM stock makes up 1.18% of the ARKW ETF, equating to a position of roughly 7.96 million shares.
4. Skillz Inc. (NYSE: SKLZ)
If you’ve followed the growth of esports and online gaming, then you might know a bit about Skillz Inc. The company offers a mobile games platform hosting casual esports competitions and tournaments. But with a slowdown in high-tech momentum as far as the stock market is concerned, it’s been less fun and games for SKLZ stock.
Recently, however, shares have mounted a bit of a comeback. This was after it announced plans for its next earnings report. The company will officially show its performance for the last quarter, toward the end of February. So if SKLZ stock is on your watch list right now, keep February 23rd in mind. In advance of these results, analysts seem to have grown more bullish. Citigroup recently reinstated its Skillz outlook with a Buy rating and a $9 price target.
Cathie Wood’s ARK Next Generation Internet ETF has a smaller position in SKLZ stock as of today’s date. According to documents on the ARKW site, SKLZ makes up 0.02% of the ETF, equating to a position of roughly 96,801 shares.
5. Surface Oncology (NASDAQ: SURF)
Though a lower volume penny stock compared to some of the names on this list, Surface Oncology has also caught the eye of Cathie Wood’s investment funds.
The company has a pipeline of treatment candidates targeting tumor microenvironments to achieve sustained anti-tumor responses in patients. It also has collaborative partnerships with the likes of Novartis (NZV930) and GlaxoSmithKline (GSK4381562, which is the exclusive license of Surf’s SRF813).
Cathie Wood’s ARK Genomic Revolution ETF has a position in SURF stock as of today’s date. According to documents on the ARKG site, SURF makes up 0.48% of the ETF, equating to a position of 5.465 million shares.
6. Quantum-Si (NASDAQ: QSI)
Quantum-Si is another life sciences company on this list of penny stocks Cathie Wood’s funds have a position in. It focuses on developing protein sequencing platforms. Its suite of technologies is based on its semiconductor chip created to allow for digitized proteomics research in drug discovery and diagnostics.
Earlier this year, Quantum-Si established its list prices for the end-to-end protein sequencing platforms expected for pre-order placement in the first half of this year. These included its PlatinumTM Single Molecule Analyzer and CarbonTM automated sample preparation instrument. In response, John Stark, Chief Executive Officer of Quantum-Si, explained that “The Company entered a tremendous growth phase in 2021 enabled by the capital raised taking the company public with expansion of the team across all areas of the Company…We look forward to discussing our progress and building upon our strong momentum as we continue our commercialization path in 2022.”
With earnings coming on February 28th, the market has a near-term date to keep in mind. Meanwhile, Cathie Wood’s ARK Genomic Revolution ETF has already established a position. As of today, the firm shows 11.585 million shares held, which equates to 1.26% of the ETF’s weighting.
7. Archer Aviation Inc. (NYSE: ACHR)
Rounding out this list of Cathie Wood penny stocks is Archer Aviation. The beaten-down name reached fresh 52-week lows at the end of January. Like Joby, Archer focuses on air mobility and has designed its own electric vertical takeoff and landing aircraft. The company came into the spotlight amid allegations of a civil case with Wisk and specific trade secret allegations against Archer.
Last year, Wisk filed a federal lawsuit, which accused Archer of patent infringement and trade-secret misappropriation. The allegations included “brazen theft” of “intellectual property and confidential information” related to a prototype electric vertical takeoff and landing aircraft of Wisk’s. Archer has denied any wrongdoing, but the concern hasn’t helped ACHR stock. Earlier this month, Archer announced that the U.S. Attorney’s Office decided not to bring charges against Archer’s employee and not to continue the investigation.
Archer’s Chief Legal Officer, Andy Missan, said, “We believe the U.S. Attorney’s decision strikes at the very heart of Wisk’s trade secret allegations against Archer and reinforces what we have said all along: that Boeing’s joint venture, Wisk, misused the judicial and criminal justice systems for the sole purpose of stifling innovation. We find these kinds of anti-competitive tactics by big business deeply disturbing.”
Cathie Wood’s ARK Autonomous Tech & Robotics ETF currently has a position in ACHR stock as of today’s date. According to documents on the ARKQ site, ACHR makes up 1.60% of the ETF, equating to a position of just over 8.3 million shares.
Cathie Wood’s Investing Approach: Ark On Steroids
In an interview with CNBC, Wood seemingly upped the ante on her bullish market outlook. She explained that her firm is “testing out a portfolio, but it’s really Ark on steroids.”
“We think the benchmarks are where the big risks are long term, because they are filling up with value traps — those companies that have done very well historically but are going to be disintermediated and disrupted by the massive amount of innovation that’s taking place.”
Though this methodology could be more volatile, according to Wood, she expects that in 5 years, the world “will look nothing like it does today, and we’re invested in all the disruptors, the winners, that are going to disrupt the traditional world order.”
Like penny stocks with insider trading, investment fund purchases can bring their own type of sentiment. The important thing to keep in mind is that different investors buy different stocks for specific reasons. Based on this, it’s always vital to do further research and determine if penny stocks are right for you no matter if people like Cathie Wood are buying them.
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https://www.entrepreneur.com/article/417843
From NFTs to the Metaverse: Cathie Wood unpacks ARK’s Big Ideas for 2022 and beyond
<In a recent Public.com Town Hall, Wood explored innovation trends on the minds of retail investors, and shared ARK’s approach to investing in the future of disruptive ideas.
– Public.com
Cathie Wood founded ARK with a focus on disruptive innovation. One of the early principles she applied was to shape ARK into what she calls a “sharing economy,” and to create an open and collaborative ecosystem of ideas.
For example, the annual ARK Big Ideas report and virtual event—freely accessible to the public—includes perspectives from ARK analysts, thought leaders, and Wood herself. The report focuses on themes like blockchain, autonomous driving, healthcare, and more.
In a recent Public.com Town Hall with retail investors, Wood explored key themes from Big Ideas 2022 and shared ARK’s approach to investing in disruptive innovation. The below is excerpted from Cathie Wood’s Public.com Town Hall, which can be viewed in full here.
On the meme stock revolution
Retail investing activity makes up nearly 30% of all stock market activity by some estimates—that’s about 3X the share that retail investors accounted for in 2019. Investors on Public.com were curious about Wood’s take on the retail revolution and meme stocks in particular.
Wood called the meme stock movement an “an interesting period of history that showcases smaller investors, in aggregate, can move markets meaningfully.” With that, she added that ARK is encouraged by companies that are opening up access to investing for “new, often underrepresented, participants.”
Wood called the meme stock movement an “an interesting period of history that showcases smaller investors, in aggregate, can move markets meaningfully.” With that, she added that ARK is encouraged by companies that are opening up access to investing for “new, often underrepresented, participants.”
In terms of ARK’s investments, Wood reiterated that the focus is on applying “top-down research to guide bottom-up stock selection,” which she notes is very different from investing in meme stocks.
Making sense of market volatility through a long-term lens
Given the recent volatility in the public markets, Public.com members wondered how Wood and the team at ARK navigate short-term fluctuations given ARK’s five-year horizon.
Wood reiterated ARK’s underlying thesis that innovation solves problems and is expected to transform human lives at an accelerated rate during the next five to ten years.
“We believe people should invest for the future, not for a short term gain,” she said, “I know it’s not easy at times and requires conviction, but that’s why we focus our research on the next five years, not the next quarter.
ARK’s paying attention to DeFi, NFTs, and the Web3 shift from offline to online
Unsurprisingly, the topics of the metaverse and NFTs came up more than once during the Public.com Town Hall. Retail investors wanted to know if Wood was buying into the hype, and if Web3 as a theme fits within ARK’s vision for disruptive innovation.
Citing Big Ideas research, Wood shared that internet users spent 38% of their free time online and 62% offline on average in 2021—and that ARK expects these averages to flip over time.
“We are very much focused on the Web3 revolution and the shift from offline to online activities,” she said. “We estimate that revenue associated with discretionary online time will increase from $1.8 trillion today to $4.1 trillion in 2026.”
Will ARK be trading NFTs anytime soon? Wood stated that ARK does not actively trade NFTs, but does have “conviction in DeFi and the utility of NFTs for various use-cases.”
Blockchain’s use-cases beyond crypto, according to Wood
With interest in crypto continuing to enter into the mainstream, curiosity around blockchain was also abound in Wood’s Town Hall. Public.com members asked Wood to unpack how ARK thinks about blockchain’s applications beyond crypto. Here’s what she shared.
Citing ARK’s latest Big Ideas report, Wood described the blockchain opportunity as three revolutions:
Money Revolution – Coordination of value transfer and property rights outside the purview of centralized authorities, governments, and top-down control.
Financial Revolution – Coordination of financial services and contracts outside the purview of traditional financial institutions.
Internet Revolution – Coordination of identity, reputation, and data outside the purview of traditional media conglomerates and big tech.
Cathie Wood’s Public.com Town Hall can be viewed in full here.
Disclosures: The content of this presentation is for informational purposes only and is subject to change without notice. This presentation does not constitute, either explicitly or implicitly, any provision of services or products by ARK and participants are encouraged to consult counsel and/or other investment professionals as to whether a particular investment management service is suitable for their investment needs. All statements made regarding companies, securities or cryptocurrencies are strictly beliefs and points of view held by ARK and are not endorsements by ARK of any company, security or cryptocurrency or recommendations by ARK to buy, sell or hold any security or cryptocurrency. Historical results are not indications of future results. Certain of the statements contained in this presentation may be statements of future expectations and other forward-looking statements that are based on ARK’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. The matters discussed in this presentation may also involve risks and uncertainties described from time to time in ARK’s filings with the U.S. Securities and Exchange Commission. ARK assumes no obligation to update any forward-looking information contained in this presentation. Certain information was obtained from sources that ARK believes to be reliable; however, ARK does not guarantee the accuracy or completeness of any information obtained from any third party. ARK and its clients as well as its related persons may (but do not necessarily) have financial interests in securities, cryptocurrencies, or issuers that are discussed. There is no assurance that ARK will make any investments with the same or similar characteristics as any investment presented. The reader should not assume that an investment identified was or will be profitable. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE PERFORMANCE, FUTURE RETURNS ARE NOT GUARANTEED.
https://www.entrepreneur.com/article/417840
2 Worst Performing Mega-Cap Stocks in January
Mega-Cap stocks are generally considered all-weather stocks due to their ability to protect investors from market volatility and to endure harsh economic downturns. However, mega-cap stocks NVIDIA (NVDA) and ASML (ASML) have been among the worst-performing names of late due to various macroeconomic headwinds and the Fed’s hawkish tilt. Read on.
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Companies with a market capitalization of more than $200 billion are considered mega-cap. They are typically industry leaders, characterized by strong brand recognition and global market presence. Such companies typically have solid financials and cash flows, which allows them to remain stable even during an economic downturn.
The stock markets corrected last month on investors’ concerns over rising inflation, geopolitical tensions between U.S and Russia of Ukraine, and the Fed’s signal that it will raise interest rates multiple times this year.
Nasdaq-listed NVIDIA Corporation (NVDA) and ASML Holding N.V. (ASML) were amongst the worst performing mega-cap stocks, falling more than 14% in price in January. The Nasdaq Composite Index posted its worst January performance since 2008, declining about 9%.
Santa Clara, Calif.-based NVDA is an artificial intelligence computing company. It operates through the Graphics and Compute & Networking segments. Its Graphics segment includes its GeForce graphics processing unit (GPU), Quadro/NVIDIA RTX GPUs, and automotive platforms for infotainment systems. Its Compute & Networking segment includes data center platforms and systems for artificial intelligence, high-performance computing, and accelerated computing. NVDA has a $625.69 billion market capitalization.
On Feb. 7, 2022, NVDA announced the termination of its acquisition of Arm Limited from SBG due to significant regulatory challenges. The deal’s collapse is a blow for NVDA because the acquisition would have been the largest semiconductor deal on record.
NVDA’s automotive revenue for its fiscal third quarter, ended Sept. 30, 2021, decreased 11.1% sequentially to $135 million. The company’s cash flow from operations fell 43.3% sequentially to $1.51 billion. Also, its operating expenses increased 25% year-over-year to $1.96 billion.
Headquartered in Veldhoven, Netherlands, ASML manufactures chip-making equipment. The company develops, produces, markets, sells, and services semiconductor equipment systems, consisting of lithography systems. Its products include systems and installed base products and services. It has a market capitalization of $268 billion.
On Jan. 7, 2022, ASML reported that there was a fire at its Berlin plant, which affected part of the production area for some of its critical machines. The company said it was looking to minimize the impact on output because the plant produces parts for its advanced extreme ultraviolet lithography machines that are needed to make innovative chips that are faster, cheaper, and more efficient.
For the fiscal fourth quarter, ended Dec. 31, 2021, ASML’s revenue decreased 4.8% sequentially to €4.98 billion ($5.68 billion). The company’s gross profit declined 0.3% sequentially to €2.70 billion ($3.08 billion). Also, its selling, general, and administrative costs increased 33.6% year-over-year to €202.50 million ($231.22 million).
Analysts expect ASML’s EPS and revenue for the quarter ending March 31, 2022, to decrease 50.4% and 27.2%, respectively, year-over-year to $1.91 and $3.83 billion. In January, the stock had declined 14.9% in price.
NVDA shares were trading at $264.42 per share on Wednesday afternoon, up $13.34 (+5.31%). Year-to-date, NVDA has declined -10.09%, versus a -3.99% rise in the benchmark S&P 500 index during the same period.
About the Author: Dipanjan Banchur
Since he was in grade school, Dipanjan was interested in the stock market. This led to him obtaining a master’s degree in Finance and Accounting. Currently, as an investment analyst and financial journalist, Dipanjan has a strong interest in reading and analyzing emerging trends in financial markets.
The Zacks Analyst Blog Highlights Spirit Airlines, Frontier Group Holdings, SkyWest Allegiant Travel and Gol Linhas
For Immediate Release
Chicago, IL – February 9, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Spirit Airlines SAVE, Frontier Group Holdings ULCC, SkyWest SKYW Allegiant Travel Co. ALGT and Gol Linhas GOL.
– Zacks
Here are highlights from Tuesday’s Analyst Blog:
Airline Stock Roundup: Spirit/Frontier’s Merger and More
In the past week, Spirit Airlines inked a definitive merger agreement with Frontier Group Holdings, the parent company of Frontier Airlines, to create America’s most competitive ultra low-cost airline. Subject to customary closing conditions, the $2.9-billion ($6.6 billion when the assumption of net debt and operating lease liabilities are considered) deal is expected to close in the second half of 2022.
While news pertaining to the deal between the two discount carriers grabbed headlines, SkyWest and Allegiant Travel Co. released their fourth-quarter 2021 earnings numbers. Brazilian carrier Gol Linhas was another news maker when it reported its January traffic numbers, which were impressive owing to the improved air-travel demand scenario in the country.
1. Per the terms of the cash and stock deal, Spirit Airlines’ shareholders will receive $25.83 per share, a premium of about 19% on the closing price as of Feb 4. SAVE will own approximately 48.5% of the combined airline, while the remaining will be owned by ULCC. On closure, the deal will result in the formation of the fifth largest airline in the United States. In the event of the merger deal materializing, $1 billion in consumer savings is likely to be generated annually.
The combined entity is expected to generate annual revenues of approximately $5.3 billion (based on 2021 results). Once fully integrated, Frontier and Spirit Airlines, both currently carrying a Zacks Rank #3 (Hold), are expected to deliver annual run-rate operating synergies of $500 million.
The board for the combined entity will have12 directors (including the CEO), seven of whom will be named by Frontier and five Spirit. The chairman of the same board will be Mr. Franke, the chairperson of Frontier Airlines.
2. SkyWest’s fourth-quarter 2021 earnings were 9 cents per share against the Zacks Consensus Estimate of a loss of 8 cents. In the year-ago quarter, SKYW reported a loss of 93 cents. Revenues of $777.2 million also outperformed the Zacks Consensus Estimate of $720.1 million.
3. Allegiant Travel Company reported fourth-quarter 2021 earnings (excluding 59 cents from non-recurring items) of $1.18 per share, beating the Zacks Consensus Estimate of $1.13. Sentiments regarding air-travel demand are bullish now (due to increased inoculation programs) compared with the year-ago quarter’s scenario when the company had reported a loss of $1.12 per share.
Operating revenues of $496.9 million beat the Zacks Consensus Estimate of $475.3 million and increased more than 100% on a year-over-year basis. In the first quarter of 2022, total operating revenues are expected to move up 5-9.5% from first-quarter 2019 actuals.
4. In January, Gol Linhas’ consolidated traffic rose 25.2% year over year. To match the increased demand situation, GOL is expanding its capacity. In the same month, capacity grew 26.2% year over year. GOL carried 27.3% more passengers last month from the year-ago levels.
Upbeat traffic in its domestic markets is leading to the rosy scenario on a consolidated basis. In January, domestic traffic and capacity improved 21.5% and 22.2%, respectively. On the domestic front, 25.6% more passengers boarded GOL’s flights in January 2022.
Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
Almost all airline stocks have traded in the green over the past week. However, apart from the double-digit uptick (14.7%) in the Spirit Airlines stock on the merger deal news, the other gains were muted in nature. The NYSE ARCA Airline Index was almost flat over the past week at $82.47. Over the past six months, the NYSE ARCA Airline Index has depreciated 10.2%.
What’s Next in the Airline Space?
Fourth-quarter earnings reports from some more carriers are expected in the coming days.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Norwegian Cruise Line Holdings Ltd.NCLH recently provided a business update. The spread of the Omicron variant at the beginning of December 2021, resulted in the cancellation of certain voyages in the fourth quarter of 2021 and the first quarter of 2022. The Omicron variant has also led to the postponement of the restart of certain vessels. As of Feb 8, 2022, 16 of its 28 ships, or 70% of its berth capacity, are operational with guests onboard. By the end of first-quarter 2022, the company expects to operate at approximately 85% of berth capacity. By the end of second-quarter 2022, the company anticipates operating with the full fleet. At the beginning of fourth-quarter 2021, the company witnessed week-over-week sequential growth in net booking volumes. However, in the later part of fourth-quarter 2021, booking volumes were negatively impacted by the Omicron variant. In recent weeks, net booking volumes have continued to improve sequentially. The company announced that pricing for the first half, the second half as well as full-year 2022 are above the record levels for the same time in 2019. The company has been witnessing strong booking demand for 2023. The company’s monthly cash burn for fourth-quarter 2021 was roughly $345 million, marginally lower than its prior estimate of $350 million. The company expects to report a net loss for fourth-quarter 2021 and full year. The company currently carries a Zacks Rank #3 (Hold). Shares of the company have fallen 14.8% in the past three months, compared with the industry’s decline of 12.6%.
Crocs flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 41.6%, on average. Shares of Crocs have increased 31.7% in the past year. The Zacks Consensus Estimate for CROX’s 2022 sales and EPS indicates a rise of 48.7% and 23.2%, respectively, from the year-ago period’s levels. RCI Hospitality flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 67.7%, on average. Shares of RCI Hospitality have surged 40.3% in the past year. The Zacks Consensus Estimate for RICK’s 2022 sales and EPS suggests growth of 33.7% and 18.9%, respectively, from the year-ago period’s levels. JAKKS Pacific flaunts a Zacks Rank #1. The company has a trailing four-quarter earnings surprise of 48.9%, on average. Shares of JAKKS Pacific have increased 9.9% in the past year. The Zacks Consensus Estimate for JAKK’s 2022 sales and EPS suggests growth of 4.9% and 227.8%, respectively, from the year-ago period’s levels.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
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