Michael Kamerman, CEO of Skilling, shares his opinion on what stock you should watch this week.
Starbucks
Recently, there’s been a surge in the selloffs of hyper-growth stocks which has deterred many investors from any hopes of positive returns this year.
Apart from energy, sectors including healthcare, technology and industrials have all performed worse than their previous quarters.
However, one stock that has escaped the trend is Starbucks. If we take the last earnings report, Starbucks beat on overall revenues, narrowly missing on the Earning Per Share metric owing to an increase in supply chain and labour costs.
Despite this, during a time when companies have spiked their prices in line with inflation and seen a drastic decline in customer demand, Starbucks have not.
Strong leadership from their CEO Howard Schultz, partnered with their decision to suspend the $20bn buyback programme, and instead investing more into their staff and stores, have all played a part in the stock’s success.
Looking ahead, the pace of unionisation amongst Starbucks employees needs attention, especially given that forty US Starbucks shops have already voted to unionise. Internal conflict between employees and management will be an issue, and if it results in poor publicity, it’s one that shareholders will feel the brunt of.
However, if negotiated efficiently, the company can enjoy the consumer shift from goods to services - a trend that will hopefully boost the bottom line and reassure investors.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Michael Kamerman, CEO of Skilling, shares his opinion on what stock you should watch this week.
Amazon
This week we are seeing Q1 earning results from 175 of the S&P 500 companies including big tech results from Microsoft, Google and Meta. Companies like Apple have thrived in the new year and reached all-time record earnings this quarter, continuing to make them an attractive investment for traders.
One to watch will be Amazon’s earnings report. Much like any other online-based service provider and seller, Amazon saw a boost in sales during the last two years due to Covid and lockdown affecting consumer behaviour. However, now that things have settled, recent UK sales reports are showing online sales falling noticeably across the board.
AMZN is currently down 23% from its November 2021 high and investors are keen to see whether their earnings show that things are picking up or slowing down.
Amazon’s 18% stake in electric vehicle maker Rivian last quarter helped “juice” their gains, however, Rivian’s recent struggles surrounding botched price hikes and supply chain issues may affect the big tech’s profitability, as Rivian is now consequently trading at near all-time lows.
Additionally, Amazon’s fuel and inflation surcharge come into effect on April 28th to combat rising prices. Alongside the unionisation situation, it has had to deal with in Alabama and now New York, this may likely affect stock prices.
On the offset, Amazon Web Services has been a key profit driver for Amazon in the last quarter with Amazon’s cloud sales growth hitting 40%.
In any case, investors will need to closely consider Amazon’s earnings in comparison to the other big tech giants to make a decision on their trading.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Michael Kamerman, CEO of Skilling, shares his opinion on what stock you should buy this week.
Twitter
The Musk effect on markets is a trend we’ve increasingly seen over the past year and it’s no different with the recent news around Twitter.
Last week Elon Musk announced he was purchasing Twitter shares and joining the company’s Board of Directors and, despite the latter not materialising, Twitter’s share price surged.
However, as the news flow became less supportive, the price also retreated – proof that traders should never just follow the zeitgeist. In fact, if we look at Twitter, the app has consistently been outperformed by social media competitors such as Facebook.
Despite this, new additions such as CEO Parag Agrawal and the introduction of new premium services including Twitter Blue in the US, Canada, Australia and New Zealand will hopefully bring in more revenue for the app.
Whilst celebrities and magnates like Elon Musk make the headlines, increasing publicity around Twitter, it is crucial investors don’t rely on the noise.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Not investment advice.
Michael Kamerman, CEO of Skilling, shares his opinion on what stock you should buy this week.
Tesla
By now, Tesla is renowned for its well-performing stock as well as its prolific CEO, Elon Musk. But, the company has reached new heights, delivering 310,048 cars in the first quarter of 2022.
Despite ongoing supply chain interruptions and China’s zero Covid policy, Tesla broke their own sales record – delivering nearly double the 184,800 cars in Q1 2021.
With Tesla’s Berlin factory up and running, and the increase in overall production, momentum will only grow for the company.
Whilst this progress is impressive, it is the news of a stock split that has accelerated Tesla’s stock price. Investors may see this as a green light to invest in Tesla stock but they should be wary that a stock split could have little to no impact on the overall stock price.
An added facet for investors to consider is the concerningly high valuation of the company. This gives very little room for the company to stall or misstep, something which comes with the territory of the market.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Not investment advice. Past performance is not indicative of future results.
Michael Kamerman, CEO of Skilling, shares his opinion on what stock you should buy this week.
Intel
The pandemic unearthed many key trends, one being the demand for semiconductors and computer chips.
Part of this demand is due to the versatility of computer chips being used in various sectors including the automotive industry and with 5G rolling out around the world, this momentum will only increase.
Whilst Intel was once dominant in the industry, it has since been surpassed by competitors such as AMD and Nvidia, who innovated quicker and more effectively.
Therefore, investors should consider Intel’s pace of innovation before taking bets on the stock.
Despite this, Intel is hedging on production to Asia being outsourced and has announced plans for a $17 billion production facility in Madgeburg, Germany.
By reducing the competitive edge of production in Asia, Intel is hoping to rediscover its success and market share. However, this will hinge on protecting their market share of existing chips, whilst innovating at the same time. Only then, might Intel stock be attractive for investors.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Not investment advice. Past performance is not indicative of future results.
Michael Kamerman, CEO of Skilling, shares his opinion on what stock you should buy this week.
Gamestop
Retail investors will be aware of Gamestop given the influence the stock had over the course of the pandemic. Once again, the stock is fast gaining attention.
In the last 12 months, the company has massively increased sales to 30% year on year. Also, with Gamestop set to enter the NFT space, its growth is likely to continue – similar to that of companies such as OpenSea.
Despite net sales rising by 6.2% to $1.88 billion, the firm reported a net loss of $147.5 million proving that Gamestop remains a high-risk bet.
Investors need to consider the combination of supply chain issues and the Omicron variant before taking bets on the stock. Gamestop is likely to take a while to rebuild, especially given the company’s loss and worldwide shift towards digital gaming solutions.
Whilst the NFT marketplace grew to $41 billion in 2021 and therefore offers strong opportunities for growth, Gamestop will ultimately have to turn profitable to gain investor confidence.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Not investment advice. Past performance is not indicative of future results.
Michael Kamerman, CEO of Skilling, shares his opinion on what stock you should buy this week.
Microsoft
In light of recent political triggers, markets are more prone than ever to volatility. For investors, it’s best to focus on big companies during this – given their high transparency and rigid business models.
Valued at over $2 trillion, Microsoft is a great example of a robust company. However, even the most robust companies are vulnerable to market volatility, as shown by shares falling by over 22% from the highs of $311 before rallying to $303.
Whilst buying during the dip has been a winning strategy for investors in the past, they need to exercise extra caution given the impact of political triggers on stocks currently. The stock market is facing heightened pressure and as a result, stocks aren’t performing in line with investors’ expected patterns. This means investors need to be certain they’re making rational and realistic decisions, rather than following the zeitgeist.
Despite this, Microsoft stock is still a sustainable choice for investors given its track record of healthy returns. Also, given the growth runway, Microsoft can reap from the cloud, there’s a great opportunity for extra revenue for the company. By considering gaming and the emerging metaverse, the company can also look at expanding its offerings exponentially.
Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Not investment advice. Past performance is not indicative of future results.
Disclaimer: The information contained within this article is for educational and entertainment purposes ONLY. The commentary provided is the opinion of the author and should NOT be considered as personalised advice or recommendation. The information provided in this article should NOT be a person’s sole basis for an investment decision. All investments are made at the reader’s own risk.
David Morrison, Senior Market Analyst at Trade Nation, and Michael Kamerman, CEO of Skilling, share their opinions on what stock you should sell this week, and what stock you should buy.
Buy: BP
As Russian hostilities in Ukraine continue to ratchet up, and after the West imposed its toughest set of sanctions on Russia, BP announced it would dump its 20% stake in Rosneft, estimated to be worth £25 billion. The news led to a delayed opening last Monday and BP’s stock price fell 7%. This took the stock down to 350 pence. BP began the year at 330 pence and then rallied to 418 by 11th Feb. It has sold off ever since until hitting 350 pence on Monday. It subsequently jumped to 375 pence, having recovered all losses after the Rosneft news. But the stock slid below 350 on Friday 4th March following news that Russian forces had attacked Ukraine’s largest nuclear power plant. BP is trading a long way below the 720 pence high from 2006, but it’s comfortably above its October 2020 low when it fell below 200 pence. BP is undeniably a volatile stock. Fortunately, investors have received decent dividends over time, as a reward for their loyalty.
Does the current sell-off open an opportunity for dip buyers? Quite possibly. Looking at the chart, since the October 2020 low BP has trended upwards, putting in a succession of higher highs and lower lows. This is bullish. On top of this, WTI crude oil has just traded at levels last seen eleven years ago, and the latest OPEC+ meeting showed that members were in no mood to raise output above their current meagre supply increase. This should help with BP’s profitability. BP is a good dividend payer and is open to buybacks. In addition, the divestment of BP’s Rosneft stake could, according to a report from Bloomberg, boost the company’s environmental credentials, thereby making it more acceptable to the ESG crowd.
Sell: Big Retailers Like Macy’s
Department store group Macy’s, whose brands include Bloomingdale’s and beauty outlet Bluemercury, could struggle if the current economic environment persists. Inflation hasn’t proved to be transitory and seems likely to rise further given the recent jump in energy and food prices. At the same time, we could be looking at a period of falling growth. If so, then we should expect consumers to adapt to conditions and look at where they can make quick and easy savings. Maybe cut back on streaming subscription services for instance. But which ones? Also, the monthly subscriptions aren’t too onerous if you’re working. But what about jewellery, clothing, kitchenware, bedding? US consumers may decide to stop purchasing luxury items while deciding they can live a bit longer before replacing other household items. I think this could be a problem for Macy’s. In mitigation, last month Macy’s released a strong set of quarterly results. The group also offered positive forward guidance for 2022, citing fresh initiatives such as expanding its digital business, as well as private brands and small, off-mall stores. These, along with the opening of the global economy post-Covid 19, should all be positives for the group. But gains in the stock price will depend on the success of the fresh initiatives, against what could be challenging economic conditions for the year ahead.
Macy’s has also rejected calls from activist investor Jana Partners to spin off its e-commerce operations. Jana Partners calculate that a split could double the group’s valuation. But Macy’s insists it would cost too much to make the change. No doubt activists will continue to circle, but investors will have to do their own due diligence to work out how this could affect the share price going forward.
- David Morrison, Senior Market Analyst at Trade Nation
Buy: NVDIA
NVDIA has some of the most sought-after gaming graphics processing units (GPUs) globally and is outperforming many of its competitors in the industry. Despite recent blips for the stock including a cyberattack, NVDIA has reported its best quarter in ten years. With the added potential of the metaverse, NVDA stock is an exciting option for investors.
Jaguar Land Rover has also just entered a partnership with NVIDIA to develop their upcoming vehicles on the platform. With the highly anticipated RTX 4000 GPU rumoured to be released later this year, NVDA stock is likely to gain momentum. The company is also expected to offer a 150% performance increase with a forecasted revenue of $8.11 billion for Q1 2023.
However, investors need to be mindful of market volatility. After prolonged global chip shortages, it could take months for the supply of Nvidia GPUs to catch up with demand. As a result, investing in this stock can cause big losses as NVDA tumbles from recent highs and may take some time to be actionable once again. Despite this, NVIDIA is still a dominant force in the chip space. By focusing on gaming, AI and the emerging metaverse, the company is expanding its business offerings exponentially.
Whilst the sluggish price momentum due to political triggers shouldn’t deter investors completely, as with any investment, investors need to understand what they’re investing in and make a rational, emotionally intelligent decision.
- Michael Kamerman, CEO of Skilling
Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 89% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Not investment advice. Past performance is not indicative of future results.
Disclaimer: The information contained within this article is for educational and entertainment purposes ONLY. The commentary provided is the opinion of the author and should NOT be considered as personalised advice or recommendation. The information provided in this article should NOT be a person’s sole basis for an investment decision. All investments are made at the reader’s own risk.
David Morrison, Senior Market Analyst at Trade Nation, shares his opinion on what stock you should sell this week, and what stock you should buy.
Sell: Intel
With the extended sell-off we’ve had since the beginning of this year there are fewer shorting opportunities now than two months ago. On top of this, my current investment thesis is that global stock indices, in particular the S&P 500, are close to bottoming and should soon start to bounce quite aggressively. But the semiconductor designer and fabricator Intel is currently out of favour and may remain so. Over the years there has been much criticism of the company’s direction which even the replacement of CEO Bob Swan by Pat Gelsinger last year has failed to halt. In a big change of direction, the company intends to spend over $43 billion on new chip fabrication plants, for Intel chips but also other chip designers. This may pay off over time but could weigh on the company in the near term. In addition, Intel sources vital raw materials such as neon and palladium from Ukraine and Russia respectively. If hostilities result in further sanctions and supply disruptions, then this could be a serious issue going forward. The stock is currently testing support at around $44. A sustained break below here could signal further weakness for the chip giant.
Buy: Roku
While you wouldn’t know it from the current state of the markets, the fourth-quarter earnings season has been a great success so far. According to FactSet, of the 80% of S&P 500 constituents that have reported, 78% have beaten expectations for both revenues and earnings per share. That’s why the overnight collapse in the share prices of Netflix, Meta Platforms (Facebook) and Peloton following their earnings releases was such a shock. Netflix slumped 21%, Meta lost over 24% and Peloton plunged 33%. It was their weaker-than-expected subscriber numbers that did the damage, as active users are a key metric for tech companies. Roku also suffered. The streaming service fell 29% in the first few hours following its own update. That meant the stock was down around 75% since its peak last summer. It is yet another of those companies that outperformed during the pandemic and is now paying the price. But while the last quarter was disappointing in terms of missed revenue expectations and guidance for the current quarter, it’s possible to argue the reaction is overdone, with current market conditions playing a large part. The poor results were mostly down to supply chain disruptions, which, hopefully, are being ironed out. In addition, Roku beat expectations for new sign-ups, and the average revenue per user on a trailing 12-month basis was up 43% from the same time last year. By hours streamed, Roku is the top platform in the US, Canada, and Mexico. Lastly, the company reaffirmed its revenue guidance for 2022. The company is aggressively investing for growth with a long-term perspective. It’s certainly not Peloton. I know this is a bit of a punt, but it is hard to pass by this opportunity given the sharp selloff in the stock price.
Disclaimer: The information contained within this article is for educational and entertainment purposes ONLY. The commentary provided is the opinion of the author and should NOT be considered as personalised advice or recommendation. The information provided in this article should NOT be a person’s sole basis for an investment decision. All investments are made at the reader’s own risk.
