MarketBeat: Week in Review 2/1 – 2/5

Despite Jeff Bezos announcing he was stepping down as CEO of Amazon (see Sam Quirke below), this week was almost calm compared to the frenzy of the past couple of weeks. Congress has passed a stimulus plan. And there is more hope on the vaccine front as Johnson & Johnson filed for an Emergency Use Authorization (EUA) for its Covid-19 vaccine candidate. The FDA won’t make its ruling until the end of February, but it is widely expected to decide in favor of the company.

The vaccines can’t roll out fast enough. The monthly Jobs Report was disappointing, indicating that the labor market remains under stress. Some of the states that imposed the harshest lockdown measures are in the process of reopening. Yet the combination of low-interest rates and additional stimulus has the market surging higher. At some point, the economy needs to stand on its own two feet, but for now investors are content with more of the same.

Earnings season has remained largely positive and next week another blizzard of companies will report. This is always a time when the market finds direction and the MarketBeat staff will continue to bring you insight on stocks of interest.

Articles by Sean Sechler

Sean Sechler was writing about three C’s that are drawing investor’s attention. I’m referring to cryptocurrency, cannabis, and China stocks. For investors intrigued by cryptocurrency, Sechler took readers down a path that gives them exposure to this fascinating sector without directly trading in the volatile currencies. Cannabis stocks are drawing renewed attention since November’s election.  President Biden is widely expected to decriminalize cannabis this year and that may be the first step to full-scale legalization at the federal level. If that happens, Sechler gave readers three cannabis stocks that are worth adding to your portfolio. And China stocks continue to have bullish sentiment and Sechler writes about three stocks that are among the strongest momentum plays at this time.

Articles by Jea Yu

Lithium is one of the most investable trends in early 2021. The rare earth element is in high demand because of their application in electric vehicle (EV) batteries. Jea Yu gave readers a bullish outlook on Lithium Americas (NYSE:LAC), a U.S. junior mining company that is surging due to increased demand for lithium. As another way to play the EV market, Yu advised readers to consider the global vehicle parts manufacturer Magna International (NYSE:MGA). The company has several deals in place to provide EV parts and, in the case of Fisker (NYSE:FSR), full assembly EV rollout. Yu was also looking at the red hot mobile gaming sector and particularly, Zynga (NASDAQ:ZNGA). The company’s stock is surging due to growth in revenues and daily active users (DAU). With many partnerships in place with social media and entertainment companies, a move into iGaming would seem like a logical, and profitable, pivot for the company.

Articles by Thomas Hughes

Thomas Hughes wrote, “In a world where better-than-expected is the new normal companies that actually impress the market are hard to find.” With that said, Hughes gave readers three growing companies that beat earnings expectations and are raising their future forecasts. Another company that is showing strong growth is Scotts Miracle-Gro (NYSE:SMG), which is seeing its strategic diversification pay off at the perfect time. Hughes was also advising readers to take a close look at Manpower (NYSE:MAN). The global hiring and employment specialist recently posted a solid earnings report, but the stock is still dropping. Considering MAN stock was already a value compared to its peers, this may be a good buy-the-dip opportunity.

Articles by Nick Vasco

For better or worse, earnings season is a report card for companies. When companies get high marks, its stock tends to climb. That was the case for Align (NASDAQ:ALGN) that beat on the top and bottom lines. This made it two straight quarters for the orthodontic’s company. The company was able to adapt its business model to weather the pandemic and is set up for future growth in a post-pandemic world. Another company that has done well during the pandemic is Pinterest (NYSE:PINS). The social media “idea” company has seen its share price quadruple since the beginning of 2020 and is positioned for additional growth even at a lofty valuation. Vasco was also looking at Activision Blizzard (NASDAQ:ATVI) whose stock is surging after better-than-expected earnings. The company has three of the most identifiable video game franchises (Call of Duty, Candy Crush, and World of Warcraft) in the gaming industry driving its growth. And the best may be yet to come with the gaming industry projected to continue to post strong CAGR through 2027.

Articles by Sam Quirke

Sam Quirke wrote that Amazon (NASDAQ:AMZN) remains a dream stock for investors. The company posted better than expected earnings this week. But it was the magnitude with which it beat estimates that should excite investors. The stock may dip a little on the news that CEO Jeff Bezos is transitioning to a new role with the company, the long-term outlook for the stock remains exceptional. Qualcomm (NASDAQ:QCOM) is a stock that’s dropping for other reasons. The company posted mixed results and some analysts believe the company’s 5G catalyst is losing steam. Quirke suggests, however, that QCOM still has solid fundamentals and may be getting punished as other tech giants are posting earnings beats. Moving from the tech sector to the more subdued consumer staple sector, Quirke is seeing a lot of value in Colgate (NYSE:CL). After a strong 2020, the stock was down about 10% heading into earnings. A solid beat on the top and bottom lines should send the stock moving higher.

Articles by Chris Markoch

Sometimes a quality stock drops for reasons that are easy to explain. As Chris Markoch points out, that seems to be the case with Abbvie (NYSE:ABBV) which was dropping after its ex-dividend date. It’s also possible that traders were taking profits to cover short positions in the “Reddit stocks.” Either way, Markoch suggested that ABBV stock was a great buy-the-dip candidate. Markoch was also looking at the valuation of Penn National Gaming (NASDAQ:PENN) and thinking it might be time to take some profits. The company’s stock is likely to rise after earnings, but investors who aren’t already in may have missed the best opportunity. 

Articles by Steve Anderson

Steve Anderson had his eye on Nio (NYSE:NIO) which is starting to show investors that 2020 was just a preview of things to come. The company just posted strong delivery numbers and the only thing that appears to be in the way of the stock price going higher is investor sentiment about whether the company’s share price is too high. Anderson was also writing about Apple (NASDAQ:AAPL) as the company took a major step forward in becoming a new entrant into the electric car field. Finally, Anderson was encouraging investors to not overlook Vertex Pharmaceuticals (NASDAQ:VRTX). The company posted solid earnings but results that were not as good as analysts were expecting. But Anderson notes that with a stock like VRTX you’re better off playing the long gamewhich still looks exceptional.