Weekly Performance Review Feb. 1st – 5th, 2021

U.S. stocks posted their best weekly gain since November, with major indexes closing at fresh record highs. Fiscal-stimulus expectations and progress on vaccine distribution continue to underpin the bullish market narrative. Crude oil traded to the highest levels in more than a year, logging an almost 10% gain for the week. On the economic front, the January jobs report disappointed, as the U.S. economy added 49,000 jobs in January, below the 100,0000 expected. However, the outlook for a strong rebound later this year did not change. Infection trends have started to improve, and initial jobless claims, a more timely measure of the labor-market trends, declined for the third consecutive week, indicating that economic headwinds may be starting to ease. Consumer spending, and therefore the economic recovery, remain well supported by additional fiscal stimulus, accommodative central-bank policies, and the rollout of vaccines.

As for the WSWD stock picks for the week, we called a Buy on VRM on Thursday and the stock shot up more than 12% in 2 days.  We’re also celebrating our wins from last month, like SNAP, which is up more than 20% since we issued our Buy alert on the 26th.  Continue reading to find out more about VRM and other trades that we highlighted in the past week.

02-01-2021_LAZR up 5.2%

Luminar expects to generate revenues of 15 million in 2020, which is expected to jump to $837 million by 2025.  The company has recorded year-over-year revenue growth (CAGR) of 7.8%. 

Northland Capital Markets analyst Gus Richard upgraded Luminar Technologies from Market Perform to Outperform with  a price target of $41.  The analyst commented, “LAZR will be the entrenched supplier to Mobileye by 2025.”  

02-02-2021_V up 3.94%

Visa’s annual revenue rose from $13.9 billion in 2015 to $21.8 billion in 2020, while its net income jumped from $6.3 billion to $10.9 billion.  Analysts expect Visa’s revenue and earnings to rise 7% and 8%, respectively, in fiscal 2021 before accelerating to double-digit growth rates in 2022 as the pandemic passes.

Visa’s stock has nearly tripled over the past five years, but it still trades at a reasonable 29 times forward earnings — and it could have plenty of room to run as cash gradually vanishes from our daily routines.

02-03-2021_LMT up 1.62%

Late last year, Lockheed Martin (LMT) announced plans to acquire and merge into its own space operations rival rocket company Aerojet Rocketdyne (AJRD) in a $5 billion all-cash transaction. Lockheed Martin will either (a) pay Aerojet shareholders $56 for each share they currently hold, or (b) permit Aerojet to pay its shareholders a $5 special dividend in March, then pay the remaining $51 per share in cash to acquire the company later in the year. 

Lockheed Martin may want Aerojet to profit from future SLS launches, which could be coming sooner than expected.  NASA announced that the next test could come as soon as late February.  As for expectations for the results of the test, that’s anybody’s guess.  But you can bet Lockheed Martin has its fingers crossed.

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02-03-2021_KGC up 2.55%

Analysts expect revenue to jump by 25.3% in the fourth quarter and by 21.2% in 2021.  The company is scheduled to report earnings on February 10th.  

The gold stock has a market cap of $9 billion and has an EPS of $0.85.  KGC generated revenue of $3.4 billion in 2019.  It has a high liquidity and trades over 2.3 million shares per day.

The current valuations for the stock are extremely low with the trailing P/E at 11.41 and the forward P/E at 15.11. The company does pay a modest dividend with the current yield being 1.68%.

02-03-2021_FLL up 10%

 New slot management systems at two locations, a revamped loyalty program and reduced costs from cutting things like low-priced buffet dining have all helped boost Full House‘s balance sheet.

 A customer base that drives to its locations rather than flies has helped sustain Full House’s business even as travel has deteriorated, while a growing online gambling operation continues to bring in money throughout the pandemic. Full House‘s operating income tripled year over year in the third quarter, and the company is well on its way to continued success in 2021.

02-03-2021_GLUU up 2.3%

The gaming stock has a market cap of $1.51 billion and has an EPS of $0.05.  Glu Mobile has high liquidity and trades 734,415 shares per day.  It generated revenue of $411 million in 2019.

Investors will be hoping for strength from GLUU as it approaches its next earnings release, which is expected to be February 9, 2021. On that day, GLUU is projected to report earnings of $0.12 per share, which would represent year-over-year growth of 20%. Meanwhile, the consensus estimate for revenue is projecting net sales of $124.62 million, up 14.96% from the year-ago period.

02-03-2021_RBBN up 5.85%

This is a behind-the-scenes player that rarely gets the spotlight but is doing very important work to keep the headline companies in the headlines.

It has a $1 billion market cap, so it’s not a small firm. The stock is up 192% in the past year, and 25% in the past three months. It’s also a solid takeover target for a larger telecom.

02-03-2021_STON down 1.97%

Given an aging demographic and consolidation in this industry, STON may not be a sexy stock, but it’s in a solid market. The stock is up 158% in the past year, and its recent sales out West mean more money for expansion in its core markets.

02-04-2021_VRM up 12.15%

Analysts believe that Vroom is poised for a strong comeback.

Of 14 analysts offering recommendations for VRM, 10 rate the stock a Strong Buy, compared to 3 Hold ratings and only 1 Sell rating.  With more inventory on hand and strong digital demand, this company is one of the best growth stocks to buy on the dip.

02-05-2021_RMO down 0.64%

 Rather than competing in an increasingly saturated market, Romeo builds next-generation EV batteries — necessary components for future EV integration.  Essentially, you’re selling tickets to the big game instead of wagering on which team will win.  For risk-averse investors, RMO stock is a much more palatable option.  To make a long story short, the company incorporates systems to keep its battery always running at the optimum temperature.

This should go a long way in making EVs accessible for not only every American but for global citizens.  Thus, the potential for RMO stock is massive for patient investors.  

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