Weekly Performance Review March 15th – 19th, 2021

Markets were choppy this week, with investors weighing brightening economic prospects on one hand and worries that interest rates will climb sooner than anticipated on the other.  The major indexes continued to move to record highs early in the week but then lost ground as bond yields reached their highest levels in over a year. 

Some investors are betting that inflation will rise as growth picks up and that it will remain elevated long enough to force the Federal Reserve to tighten monetary policy.  Those concerns have led to a sharp selloff in the government bond market and spurred investors to exit tech and other high-growth stocks.

The tides changed Friday as tech stocks outperformed the broader market and yields inched slightly lower.  The yield on the benchmark 10-year Treasury note edged down to 1.729% after ending Thursday at 1.730%, its highest since January 2020.

“After a bit of significant selling, investors tend to lick their wounds and wake up and say: Is this a real selloff or a temporary blip in the road?” said Gregory Perdon, co-chief investment officer at private bank Arbuthnot Latham.  Friday’s relatively muted moves are “indicative that investors think it is just a bump in the road.”  

Only time will tell.  Nevertheless, there are winning stocks to be found and our research team is dedicated to bringing those names to you in our free daily trade alerts and weekly watchlists.  

Congratulations to our readers who have been reaping the rewards from our trades earlier in the month.  If you followed our trade from Friday March 5th and bought Energy Fuels Inc. (UUUU) and are still holding, you’ve gained more than 23%.  Even better if you managed to sell this week for more than 40% gains.  And if you bought MP Materials (MP) on the 10th then you’ve gained more than 17% on that trade.  

For more insight from our track record, continue reading.  

03-15-2021_APPS down 6.97%

Digital Turbine‘s results last month confirmed the company’s strong positioning at the intersection of app economy and the digital transformation.  Third-quarter revenues grew to $88 million, which is a 146% increase.  On top of that, they got operating leverage.  They reported $0.15 of net income per share, growing from $0.04 in the last quarter of last year. 

The company’s expected earnings growth rate for the current year is more than 100%, according to Zacks Research.  Of 7 analysts offering recommendations for APPS stock 6 rate the stock a Buy.  There is one Hold rating and no Sell ratings for the stock.  

03-16-2021_BGFV up 7.14%

Sporting goods retailer Big 5 Sporting’s net sales for the fiscal 2020 fourth quarter ended January 3, 2021 were  $290.58 million, which represents 19% improvement year-over-year.  Its gross profit increased nearly 33% year-over-year to $102.39 million.  BGFV’s net income came in at $21.02 million for the quarter, up more than 5805% year-over-year.  Its EPS increased 4650% year-over-year to $0.95.

A consensus EPS estimate of $0.38 for the quarter ending June 30, 2021 represents an improvement of 1166.7% year-over-year.  The consensus revenue estimate of $260.18 million for the quarter ending March 31, 2021 represents a 19.5% gain on a year-over-year basis.

The analysts are bullish on BGFV, setting a price target of $16, indicating it has nearly 9% upside potential.  This upside potential is higher than nearly 60% of all stocks categorized as consumer cyclicals.  If you still aren’t convinced BGFV is worthy of your investing dollars, look no further than its dividend of nearly 3%.

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03-17-2021_SI up 8.35%

Silvergate Capital Corporation recently announced to have filed for a $300 million at-the-market public stock offering. Perhaps, investors are optimistic of the company’s plans to use these proceeds to aid in its growth organically or through strategic acquisitions.

This company is expected to post quarterly earnings of $0.48 per share in its upcoming report, which represents a year-over-year change of +108.7%. Revenues are expected to be $32 million, up 56.8% from the year-ago quarter.

Of 6 analysts offering recommendations for SI stock, 5 call it a Buy and there is one Hold rating.  There are no Sell ratings for SI stock. The stock also sports a 2.61% dividend yield. 

03-18-2021_TDOC up 0.58%

 Teladoc’s recent acquisition of Livongo is starting to pay off. The pipeline of opportunities more than doubled from November to February. Despite the progress, Teladoc CEO Jason Gorevic says the bulk of the financial impact will land in 2022. With the deals signed so early in the year, it’s hard not to see that as another conservative target.

Although growth is strong, and the acquisition of Livongo seems to be on track, Wall Street has recently gotten nervous about Teladoc stock. Shares, which once traded as high as $295, now change hands at about $190, down by more than a third. The price-to-sales ratio (P/S) of 16 is only slightly above the low it hit at the depths of the March 2020 sell-off and then again in November.

The majority of Wall Street Pros agree that  TDOC is a Buy at these levels. The 29 analysts offering recommendations, 17 rate the stock a Buy, 11 Hold ratings and only one Sell rating.  The median 12-month price target for TDOC is $266.00

03-19-2021_DMXF up 0.20%

Exposure to global ESG investments may be more important now than ever before as some European and Asian Countries are gearing up to make huge advancement in their progress in the coming years.  Investing in companies on an international level can be difficult for every day investors.  A much more sensible route into global ESG investing is through an ETF.  

The iShares ESG Advanced MSCI EAFE ETF (DMXF) seeks to track the investment results of an index composed of large- and mid-capitalization developed market companies excluding the U.S. and Canada that have a favorable environmental, social and governance rating while applying extensive screens for company involvement in controversial activities.  The fund currently has 533 holdings and the top countries are Japan, France and the U.K..

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