S&P 500, Nasdaq nab all-time closing highs as Powell soothes taper fears

All three indexes posted weekly gains.

“I see two things happening,” said Mike Zigmont, head of research and trading at Harvest Volatility Management in New York. “I see a reflexive dip-buying validation and I see the market embracing a dovish Fed.”

Regarding the indexes’ recent string of all-time highs, including the S&P 500’s 52nd record high close so far this year, Zigmont said “The march north has been very consistent. The drawdowns are super shallow, and the recoveries are very fast.”

In his prepared remarks, Powell stopped short of providing a clearer picture regarding the timing of the central bank’s tapering of asset purchases or hiking interest rates, the key elements of its dovish monetary policy aimed at helping the economy recover from the pandemic recession.

Indeed, Powell appeared to strike a more dovish tone than other Federal Open Market Committee (FOMC) officials, including St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester, who said earlier in the day that they expect the tapering process to begin soon and wind down next year.

“The market is very happy that the Fed is pumping more liquidity into the economy every month,” Zigmont added. “The Fed is enabling asset prices to climb and the market is pleased with that.”

Economic data released on Friday delivered, in large part, precisely what economists expected – a pullback in consumer spending and sentiment due to the COVID-19 Delta variant, and signs that the current wave of price spikes will not morph into long term inflation, inline with Fed assurances.

The Dow Jones Industrial Average rose 242.68 points, or 0.69%, to 35,455.8, the S&P 500 gained 39.37 points, or 0.88%, to 4,509.37 and the Nasdaq Composite added 183.69 points, or 1.23%, to 15,129.50.

Ten of the 11 major sectors of the S&P 500 advanced, with energy shares enjoying the largest percentage gain.

Chipmaker Nvidia’s shares rose 2.6% after sources said it would likely seek antitrust approval from the European Union to take over British chip designer Arm.

Workday Inc jumped 9.1% as brokerages upped their price targets after the company beat second-quarter revenue estimates.

Stay-at-home darling Peloton Interactive Inc slid 8.5% following its profit warning and its announcement it was being probed by U.S. regulators over an accident involving the safety of its treadmills.

Beijing continued its crackdown on its tech companies, threatening to curb their ability to list on U.S. exchanges.

U.S.-listed shares of Alibaba Group and Tencent Music Entertainment fell 3.5% and 1.4%, respectively, while the Invesco Golden Dragon ETF dropped 1.1%.

Advancing issues outnumbered declining ones on the NYSE by a 5.21-to-1 ratio; on Nasdaq, a 3.40-to-1 ratio favored advancers.

The S&P 500 posted 60 new 52-week highs and one new low; the Nasdaq Composite recorded 132 new highs and 37 new lows.

Volume on U.S. exchanges was 8.67 billion shares, compared with the 8.95 billion average over the last 20 trading days.

(Reporting by Stephen Culp; Additional reporting by Devik Jain in Bengaluru; Editing by Marguerita Choy)

Western Digital-Kioxia In Talks to Create Chipmaker Giant

The companies could reach an agreement as early as mid-September, and Western Digital CEO David Goeckeler would run the combined firm, the person said, requesting anonymity to discuss confidential matters.

The Wall Street Journal reported the talks earlier on Wednesday. Kioxia Holdings Corp and Western Digital both told Reuters they do not comment on speculation about mergers.

A combination of the two would rewrite the competition to capture robust demand for memory chips that has been driven by 5G expansion and a pandemic-fueled rise in work from home.

While Samsung dominates with over a third of the NAND market, according to research firm TrendForce, Kioxia has a nearly 19% share and Western Digital 15%. South Korea’s SK Hynix Inc and U.S. firms Micron Technology Inc and Intel Corp are the other large players.

“Such a deal would be a defensive, but prudent, move by Western to reinforce its competitive position in the swiftly consolidating chip market,” Morningstar analyst William Kerwin said in a research note.

“In the long term, we expect the NAND market to … consolidate down to about three leading players for a largely commodity-like product,” Kerwin said.

The memory chip industry is already consolidating, with Hynix agreeing to buy Intel’s NAND business for $9 billion last year, a deal still awaiting anti-trust clearance.

A Western Digital-Kioxia merger is also likely to draw anti-trust scrutiny in several countries, including in the United States and China.

Monopoly concerns and a years-long trade conflict between the United States and China have scuppered deals in the past few years.

Qualcomm Inc, for instance, walked away from a $44 billion deal to buy NXP Semiconductors after failing to secure Chinese approval in 2018, and Nvidia Corp’s planned $40 billion acquisition of British chip designer ARM hit a major hurdle last week in the UK.

Chinese antitrust watchdog State Administration for Market Regulation did not immediately respond to a request for comment on approval for a potential Western Digital-Kioxia deal.

KIOXIA OWNERS

In Japan, the two companies jointly produce NAND chips, which don’t need power to retain data and are used in smartphones, TVs, data center servers and public announcement display panels.

“For privately held Kioxia, we think $20 billion or more would secure a solid return,” Morningstar’s Kerwin said.

Kioxia, sold by Toshiba Corp in 2018 to a consortium led by Bain Capital for $18 billion as Toshiba Memory Corp, shelved plans last year for what would have been Japan’s largest initial public offering in 2020.

An IPO is still a possibility should Kioxia fail to reach a deal with San Jose, California-based Western Digital, the source told Reuters. Financial magazine Diamond in June said Kioxia was planning an IPO as early as September.

Kioxia said in its statement to Reuters on Thursday that it was considering the appropriate timing for an IPO.

Toshiba, which still owns about 40.6% of Kioxia, is in talks with at least four global private equity firms to seek their ideas for a new strategy, Reuters reported on Wednesday, citing sources.

Toshiba’s shares were up 1.3% in afternoon trading.

Western Digital’s shares closed up 7.8% on Wednesday, giving it a market capitalization of more than $20 billion.

Toshiba said it was not involved in the management of Kioxia and not in a position to comment. It said it continues to consider the most appropriate approach to its investment in Kioxia to maximize shareholder value.

Bain was not immediately available for a comment.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Eva Mathews in Bengaluru, Krystal Hu in New York and Makiko Yamazaki in Tokyo; Additional reporting by Brenda Goh in Shanghai; Writing by Sayantani Ghosh; Editing by Stephen Coates and Tom Hogue)

NVIDIA Stock Through The Lens Of Big Money

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And NVIDIA has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the stock is trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares the last year.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the big money signals NVDA has made the last year.

The last few days have seen Big Money activity, too. Each green bar signals big trading volumes as the stock ramped in price:

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Source: www.mapsignals.com

In 2021, the stock has attracted 19 Big Money buy signals. And the only sell signals were back in March during a growth scare. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

  • YTD outperformance vs. technology ETF (+30% vs. XLK)

Outperformance is huge for leading stocks.

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, NVIDIA has been growing revenues and earnings rapidly. Take a look:

  • 3-year sales growth rate (+22.17%)
  • 3-year earnings growth rate (+18.04%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, NVIDIA has been a top-rated stock at my research firm, MAPsignals, many times before. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

NVDA has a lot of qualities that are attracting Big Money. And since it first appeared on this report back on 2/17/2015, it’s up over 3700%! The blue bars below show the 60 times that NVDIA was a top pick:

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Source: www.mapsignals.com

Looking at that chart above, that’s what I call the stairway to heaven! I wouldn’t be surprised if NVIDIA makes additional appearances in the years to come. Let’s tie this all together.

NVIDIA continues to fire on all cylinders technically alongside growing sales and earnings. I like the long-term story of the stock.

The Bottom Line

The NVIDIA rally could have further to go. Big money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a growth-oriented portfolio.

Disclosure: the author holds no position in NVDA at the time of publication.

Learn more about the MAPsignals process here.

Disclaimer

https://mapsignals.com/contact/

For a look at all of today’s economic events, check out our economic calendar.

 

NVIDIA Trading Modestly Higher After Earnings

NVIDIA Corp. (NVDA) shook off a modest decline in Wednesday’s post-market and is trading higher by more than 1% on Thursday morning, after investors took a more bullish view of the mostly inline Q2 2021 earnings report. The chipmaker posted a profit of $1.04 per-share during the quarter, just $0.02 better than expectations, while revenue rose an impressive 68% year-over-year to $6.51 billion, about $170 million higher than consensus.

Warning on Supply Constraints

Vertical industry and hyperscale customers generated record data center revenue. Demand for gaming chips also underpinned results, outpacing supply due to the worldwide chip shortage. The company warned that “we will see a supply constrained environment for the vast majority of next year”, raising a red flag for industry rivals. Automotive revenue declined sequentially, as the self-driving juggernaut ran into the impenetrable wall of limited supply.

NVIDIA posted an historic 221% return in 2020 and has added another 49% so far in 2021. Supply constraints haven’t impacted the bullish technical pattern, at least yet, but it will be hard for risk conscious investors to take exposure until mean reversion takes control and prices drop off lofty levels. Even so, there’s little doubt the company is destined for long-term market leadership, given its amazing track record since 2016.

Wall Street and Technical Outlook

Wall Street consensus has declined to an ‘Overweight’ rating in the last three months, based upon 28 ‘Buy’, 6 ‘Overweight’, 4 ‘Hold’, 1 ‘Underweight’, and 2 ‘Sell’ recommendations. Price targets currently range from a low of $130 to a Street-high $300 while the stock is set to open Thursday’s session about $26 below the median $220 target. The modest buy-the-news reaction suggests that price can now ease toward the $200 level.

NVIDIA broke out above the 2018 high at a split-adjusted 73.19 in May 2020, entering a powerful uptrend that stalled just below 150 in September. The stock cleared resistance in April 2021 but momentum didn’t kick into gear until a May buying spree added 74 points into July’s all-time high at 208.75. Mixed weekly and monthly Stochastics readings since that time indicate that price has entered a trading range that could persist well into the fourth quarter.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Nvidia’s Q2 Revenue to Jump Over 60%, Earnings Could Disappoint

The Santa Clara, California- based multinational technology company, Nvidia is expected to report its second-quarter earnings of $1.02 per share, which represents year-over-year growth of over 50% from $2.18 per share seen in the same period a year ago.

The company, which designs graphics processing units for the gaming and professional markets, as well as system on a chip unit for the mobile computing and automotive market would post year-over-year revenue growth of over 60% to $6.3 billion. The company has delivered an earnings surprise in each of the last four consecutive quarters.

Nvidia shares have gained over 54% so far this year. The stocks ended 1.42% higher at $201.88 on Friday. But next week’s better-than-expected results could help the stock hit new all-time highs.

Analyst Comments

Nvidia stock has seen an impressive rise of 5% over the past week and currently trades at $206 per share. This rally was driven by expectations of strong earnings growth in the company’s upcoming Q2 2022 results, expected later this month. For Q1 2022, Nvidia posted stellar revenue growth, with revenue rising to $5.66 billion from$3.08 billion in Q1 2021, which helped drive the company’s net income to $1.91 billion from $917 million over this period. The strong jump in earnings came due to a combination of shrewd expense control and a slightly lower effective tax rate,” noted analysts at Trefis.

“After the recent rally, will Nvidia stock continue its upward trajectory over the coming weeks, or is a correction in the stock more likely? According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data for the last ten years, returns for Nvidia stock average close to 2.1% in the next one-month (21 trading days) period after experiencing a 5% rise over the previous one-week (five trading days) period.”

Nvidia Stock Price Forecast

Twenty-nine analysts who offered stock ratings for Nvidia in the last three months forecast the average price in 12 months of $209.42 with a high forecast of $250.00 and a low forecast of $150.00.

The average price target represents a 3.73% change from the last price of $201.88. From those 29 analysts, 28 rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

UBS raised the price target to $230 from $184. BofA lifted the price objective to $250 from $225. JPMorgan increased the price target to $215 from $176. Several other analysts have also updated their stock outlook. Wells Fargo raised the price target to $245 from $219.

Check out FX Empire’s earnings calendar

Best ETFs For August 2021

Hendrik Bessembinder proved it with his research in his paper “Do Stocks Outperform Treasury Bills?”

That’s why I spend my time crafting portfolios chock full of outlier stocks. If you choose right, you’ll have enormous gains on your hands in the years to come.

Now, I pick my ETFs perhaps a bit differently than other people. I can find outlier ETFs by tracking the Big Money. But that alone isn’t enough: when I catalog the components and find outlier stocks underneath… that’s the winning recipe.

That’s how I found the best big money ETFs for August.

First, I looked at all ETFs making Big Money signals by going to MAPsignals.com and scanning the Big Money ETF Buys and Sells chart. I looked for recent days with heavy buying (the bright blue spikes):

Chart, histogram

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Source: www.mapsignals.com

Once I knew which ETFs Big Money was buying, then I wanted the best opportunities. Remember: ETFs are just baskets of stocks. MAPsignals specializes in scoring more than 6,000 stocks daily. Therefore, if I know which stocks make up the ETFs, I can apply the stock scores to the ETFs. Then I can rank them all strongest to weakest.

So let’s get to the 5 best ETF opportunities for August. Given that usual seasonal summer volatility is here, and the stock market is a constant washing machine of sector rotations, we are taking a barbell approach this month. We went for 3 of the strongest ETFs and 2 weaker ones while still having strong fundamental qualities

#1 Technology Select Sector SPDR Fund (XLK)

First off, tech is king again. We can see that Big Money has been plowing money into this ETF over the last year. We saw a few fresh buy signals recently too:

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XLK holds some awesome stocks and one great example is Fortinet, Inc. (FTNT). Below we see the Big Money signals for FTNT:

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#2 iShares U.S. Home Construction ETF (ITB)

Anyone trying to buy a home right now may find it’s tougher than usual, especially here where I live in South Florida. Building supplies and home inventory is scarcer than usual due to the pandemic. But with rates remaining low for the near future and construction booming, the setup is nice to take advantage of an ITB pullback from highs (don’t let the red sells confuse you- if there is selling on quality ETFs holding great stocks, it’s often an opportunity):

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One great stock that ITB holds is Sherwin Williams Co. (SHW). The paint maker has their product deployed in many new homes being built as well as older ones being remodeled. It has awesome fundamentals and some recent big money buying:

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#3 iShares Russell 1000 Growth ETF (IWF)

Growth has seen its ups and downs this year. But IWF holds some phenomenal stocks. It’s also collecting lots of green:

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As I said, IWF holds a plethora of great growth stocks. One big winner that caught my eye is Veeva Systems, Inc. (VEEV). It was a huge winner last year and is suddenly seeing a resurgence:

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#4 ARK Next Generation Internet ETF (ARKW)

Cathie Woods, the star of Wall Street last year has hit some head winds. Her ETFs have suffered a bit after a monster performance last year. The ARKW saw huge buying through February then hit a wall. But the pullback, I believe, is an opportunity because it holds some terrific companies:

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It holds one of my all-time favorite stocks, Nvidia Corp. (NVDA). This stock is quite possibly the biggest outlier of all. They make chips and graphics cards for computers and are the best at it. Big Money loves this stock:

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#5 Invesco Solar ETF (TAN)

Solar is a boom-bust type of sector. It’s fallen significantly off its highs. Big Money loved TAN leading up through February as well. Then it got crushed:

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But TAN holds some great solar stocks that make money. One industrials company in their portfolio is Fastenal Co. (FAST), which saw Big Money buying earlier in the year, and has rallied to 1-year highs:

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Here’s a reminder for what to look for in the charts above:

  • When Big Money buying pours in, stocks tend to go up
  • Repeated buying usually means outsized gains

Let’s summarize here: the top 3 ETFs (XLK, ITB, and IWF) for August score well in terms of MAPsignals’ scores. That means Big Money has been pouring into them:

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ARKW and TAN however, rank lower on our list, mainly due to weaker technicals. That’s why I think these weaker ETFs represent great potential bargains.

The Bottom Line

XLK, ITB, IWF, ARKW, and TAN are my top ETFs for August 2021. Tech, homebuilders, and growth stocks have performed well lately. My bet is they continue.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds no positions in XLK, ITB, IWF, ARKW, TAN, FTNT, SHW, VEEV, NVDA, or FAST at the time of publication.

Investment Research Disclaimer

https://mapsignals.com/contact/

 

Low Expectations Ahead of Intel Report

Dow component Intel Corp. (INTC) reports Q2 2021 earnings after Thursday’s closing bell, with analysts expecting a profit of $1.07 per-share on $17.8 billion in revenue. If met, earnings-per-share (EPS) will mark an 18% profit decline compared to the same quarter in 2020. The stock sold off more than 5% in April after beating Q1 2021 estimates and lowering Q2 guidance. The 6.2% year-over-year revenue decline noted in that release stoked longstanding fears of market share losses to more nimble rivals.

Competition Grabbing Market Share

The semiconductor shortage is expected to have an adverse impact on Q2 earnings at the same time that Intel is committing major capital to foundry construction and expansion in the United States and overseas. Those plans now include more than $20 billion in investments for two plants in Arizona. The company is also engaged in talks to buy New York-based GlobalFoundries for an estimated $30 billion, in an attempt to add even more capacity as China redirects its vast chip resources into local production.

Competition has grown exponentially in the last two years while production and innovation have faltered, yielding market share losses that have contributed to poor stock performance. Advanced Micro Devices Inc. (AMD) and NVIDIA Corp (NVDA) processing chips have grown popular with formerly loyal customers while Taiwan Semiconductor Manufacturing Co. LTD (TSM) and Samsung Electronics Co. are spending a combined $216 billion to grow manufacturing capacity. None of these developments bode well for Intel in coming years.

Wall Street and Technical Outlook

Wall Street consensus has deteriorated from modestly bearish levels so far in 2021, with a ‘Hold’ rating now based upon 12 ‘Buy’, 1 ‘Overweight’, 17 ‘Hold’, and 3 ‘Underweight’ recommendations. More importantly, 8 analysts are recommending that shareholders close positions and move to the sidelines. Price targets currently range from a low of $40 to a Street-high $85 while the stock is set to open Thursday’s session about $11 below the median $67 target.

Intel sold off from 76 in 2000 to 12 in 2009 and remains within those boundaries, more than 12 years later. The long-term recovery mounted the .786 Fibonacci selloff retracement level in January 2020 and failed the breakout during the pandemic decline. Bounces above this harmonic barrier in June 2020 and April 2021 also failed, reinforcing a nearly impenetrable barrier above 60. The stock is now trading at the dead center of the 18-month trading range, unlikely to reward longs or short sellers with a sustained trend.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Nasdaq Ends Lower as Investors Sell Big Tech

Amazon, Apple Tesla and Facebook all fell. Nvidia tumbled around 4%.

The S&P 500 technology sector index ended a four-day winning streak. Earlier this week, investors’ favor for heavyweight growth stocks pushed the S&P 500 and the Nasdaq to record highs.

The S&P 500 energy sector index fell more than 1% and tracked a drop in crude prices on expectations of more supply after a compromise agreement between leading OPEC producers.

Fresh data showed the number of Americans filing new claims for unemployment benefits fell last week to a 16-month low, while worker shortages and bottlenecks in the supply chain have frustrated efforts by businesses to ramp up production to meet strong demand for goods and services.

Federal Reserve Chair Jerome Powell told lawmakers he anticipated the shortages and high inflation would abate. Yet many investors still worry that more sustained inflation could lead to a sooner-than-expected tightening of monetary policy.

“People are very nervous and concerned about inflation, tax rates and the (2022 midterm) election. Those three things are very much on people’s minds,” said 6 Meridian Chief Investment Officer Andrew Mies, describing recent phone calls with his firm’s clients.

Unofficially, the Dow Jones Industrial Average rose 54.52 points, or 0.16%, to 34,987.75, the S&P 500 lost 14.29 points, or 0.33%, to 4,360.01 and the Nasdaq Composite dropped 101.82 points, or 0.7%, to 14,543.13.

Morgan Stanley dipped as much as 1.2% after it beat expectations for quarterly profit, getting a boost from record investment banking activity even as the trading bonanza that supported results in recent quarters slowed down.

Second-quarter reporting season kicked off this week, with the four largest U.S. lenders – Wells Fargo & Co, Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co – posting a combined $33 billion in profits, but also highlighting the industry’s sensitivity to low interest rates.

Blackstone said late on Wednesday it would pay $2.2 billion for 9.9% stake in American International Group’s life and retirement business. AIG and Blackstone both rallied.

Johnson & Johnson dipped after it voluntarily recalled five aerosol sunscreen products in the United States after detecting a cancer-causing chemical in some samples.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Noel Randewich; Additional reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Maju Samuel)

 

Why NVIDIA Stock Keeps Moving Higher

NVIDIA Stock Gains Ground As Market Remains Focused On Growth Story

Shares of NVIDIA have recently tested a new all-time high level at $818.24 as the stock continued to move higher amid optimism about the company’s future performance in the world that is hungry for chips.

Analysts estimates for NVIDIA keep moving higher which is bullish for stock. Currently, NVIDIA is expected to report a profit of $15.83 per share this year. In the next year, the company’s profit is projected to increase to $17.25 per share as demand for NVIDIA’s products continues to grow.

The stock is trading at roughly 47 forward P/E, but the market ignores valuation concerns as it remains focused on NVIDIA’s growth prospects.

Analyst raise their price targets together with their earnings estimates so the stock is boosted by multiple upgrades. Analysts from BMO have even issued a price target of $1,000 per share.

What’s Next For NVIDIA Stock?

NVIDIA shares are up by more than 50% year-to-date, and the stock has significantly outperformed S&P 500. The company’s market capitalization has recently exceeded $500 billion, and it looks that mega cap stocks continue to attract investors’ interest regardless of valuation levels.

Traders remain focused on the rapid digitalization of the world which was triggered by the pandemic and are ready to look beyond the next few years, so near-term earnings estimates do not have a major impact on NVIDIA’s share price performance.

The key question for traders right now is whether the trade is getting crowded as other crowded trades in the tech space like Tesla had some trouble this year when some traders decided to take profits after the major rally.

However, it remains to be seen whether the stock is ready for a pullback as analyst price targets keep moving higher while the company’s valuation has not reached extraordinary levels.

For a look at all of today’s economic events, check out our economic calendar.

Best ETFs For July 2021

That’s why I spend my time crafting portfolios chock full of outlier stocks. If you choose right, you’ll have enormous gains on your hands in the years to come.

Now, I pick my ETFs perhaps a bit differently than other people. I can find outlier ETFs by tracking the Big Money. But that alone isn’t enough: when I catalog the components and find outlier stocks underneath… that’s the winning recipe.

That’s how I found the best big-money ETFs for July.

First, I looked at all ETFs making Big Money signals by going to MAPsignals.com and scanning the Big Money ETF Buys and Sells chart. I looked for recent days with heavy buying (the bright blue spikes):

Chart, histogram Description automatically generated

Once I knew which ETFs Big Money was buying, then I wanted the best opportunities. Remember: ETFs are just baskets of stocks. MAPsignals specializes in scoring more than 6,000 stocks daily. Therefore, if I know which stocks make up the ETFs, I can apply the stock scores to the ETFs. Then I can rank them all strongest to weakest.

Once the ETFs were sorted, I noticed Real Estate funds at the top. That’s why this month the top ETF is IYR.

#1 IYR – iShares U.S. Real Estate ETF

As we can see- there was a lot of Big Money buying plowing into this ETF over the last year. It accelerated noticeably since February:

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IYR holds some great stocks. One fine example is PLD (Prologis, Inc.). Below are Big Money signals for PLD:

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#2 BOTZ – Global X Robotics & Artificial Intelligence ETF

A.I. and Robotics are undoubtedly a huge part of our future. Big Money thinks so too. Look at the buying of BOTZ over the last year below.

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One great example stock that BOTZ holds is Intuitive Surgical. They make the surgical robot called DaVinci. It allows remote surgery- a phenomenal technology.

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#3 VDE – Vanguard Energy Sector ETF

Energy was an unloved sector last year. But it’s having a sudden resurgence. Big Money has been buying VDE:

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VDE holds a bunch of great energy stocks. One such stock that has been a Big Money darling in the past is FANG which is seeing a rebirth:

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#4 LIT – Global X Lithium ETF

Like it or not, lithium is the power of the foreseeable future for EVs. Look at all that green last year:

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And LIT holds some great stocks. One of them is the best-known EV manufacturer which is very reliant on lithium: Tesla Inc.

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#5 ARKQ – ARK Industrial Innovation ETF

The media has recently heaped scorn upon Cathie Wood, CEO of ARK Invest after she was Wall Street’s darling last year. The proof is ultimately not in the headlines, but in the Big Money buying. Here we can see clearly that Big Money loved ARKQ last year. The question is: when we see selling (red) should we worry?

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The answer lies in which stocks the ETF holds. And ARKQ holds some great ones. One such outlier is Teradyne:

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Let’s summarize here: the top 3 ETFs (IYR, BOTZ, and VDE) for July score well in terms of MAPsignals’ scores. That means Big Money has been pouring into them:

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LIT and ARKQ however, rank lower on our list of ETFs. This is because of weak technicals. These weaker ETFs represent great potential bargains.

So, there we have the 5 best ETFs for July.

The Bottom Line

IYR, BOTZ, VDE, LIT, & ARKQ represent top ETFs for July 2021. Real Estate, Energy, and Robotics stocks have performed well lately, which should continue. Lithium has an interesting story too. Paying attention to the fundamental quality of ETF constituents is paramount.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions in TER in managed accounts, but no positions in IYR, BOTZ, VDE, LIT, ARKQ, PLD, ISRG, FANG, or TSLA at the time of publication.

Charts Source: www.mapsignals.com, FactSet, End of day data sourced from Tiingo.com

Investment Research Disclaimer

Why NVIDIA Stock is Up By 3% Today

NVIDIA Stock Gains Ground As Analysts See More Upside

Shares of NVIDIA gained strong upside momentum and tried to get above the $775 level despite the weakness of the general market after the stock was upgraded by Jefferies with a price target of $854.

NVIDIA stock was very strong in June as traders continued to bet on the semiconductor sector. Earnings estimates have been also moving higher in recent weeks, which provided additional support to the stock.

Currently, analysts expect that NVIDIA will report earnings of $15.73 per share in the current year. Next year, earnings are projected to increase to $17.16 per share, so the stock is trading at almost 45 forward P/E.

This is a rich valuation, but the stock managed to move higher even when the market became worried about potential rate hikes in 2022 – 2023.

What’s Next For NVIDIA?

Technically, NVIDIA shares are overbought, and the risks of a pullback are increasing. Fundamentally, the stock is trading at a rich valuation but the market is ready to pay a rich premium for companies with solid potential in the current environment. For example, Tesla stock trades at roughly 100 forward P/E.

It remains to be seen whether the market will pay any attention to risks of higher rates which can put more pressure on tech stocks. At this point, Treasury yields are declining despite recent commentary from the Fed, which is bullish for tech stocks including NVIDIA.

The market will continue to wait for the ARM merger which is facing some regulatory delays. However, the market remains optimistic that the merger will be approved, which is bullish for the stock.

In the near term, NVIDIA shares may pull back due to technicals and lofty valuation, but the stock’s long-term upside trend and the fundamentals behind it remain strong.

For a look at all of today’s economic events, check out our economic calendar.

Tech-Heavy Nasdaq Ignores Hawkish Fed News to Advance

The performance of the tech-heavy Nasdaq was in stark contrast to the S&P 500 and Dow, which slumped as investors reacted negatively to the Fedeignoral Reserve’s unexpectedly hawkish message on monetary policy on Wednesday.

Chipmaker Nvidia Corp jumped 5.4%, leading the charge among technology behemoths after Jefferies raised its price target on the stock.

Technology shares, which generally perform better when interest rates are low, powered a rally on Wall Street last year as investors flocked to stocks seen as relatively safe during times of economic turmoil.

The group has come under pressure this year on fears that rising inflation would lead the Fed to hike interest rates sooner than expected. The central bank on Wednesday moved its first projected rate increases from 2024 into 2023.

Still, shares of Apple Inc, Microsoft Corp, Amazon.com Inc and Facebook Inc reversed premarket declines to rise between 1.4% and 2% as investors bet that a steady economic rebound would boost demand for their products in the long run.

“Yes there is rising inflation but the market is focusing more on the positives of improving earnings, robust GDP growth and the wider economy getting stronger,” said Randy Frederick, vice president of trading and derivatives at Charles Schwab in Austin, Texas.

“Today’s action is indicative that the Fed hasn’t said anything that the market didn’t already know.”

The Nasdaq briefly advanced to within 16 points of its lifetime peak achieved on April 29, before pulling back a touch.

By 1:55PM ET, the Dow Jones Industrial Average fell 198.57 points, or 0.58%, to 33,835.1, the S&P 500 gained 0.24 points, or 0.01%, to 4,223.94 and the Nasdaq Composite added 127.04 points, or 0.9%, to 14,166.73.

Interest rate-sensitive bank stocks slumped -3.8% as longer dated U.S. Treasury yields dropped.

The strengthening dollar, another by-product of the previous day’s Fed news, pushed U.S. oil prices down from the multi-year high hit earlier in the week. The energy index, in turn, fell more than 3%, the biggest laggard among the 11 main S&P sectors.

Other economically sensitive stocks including materials and industrials fell 2.4% and 1.5% respectively, as data showed jobless claims rising last week for the first time in more than a month. Still, layoffs appeared to be easing amid a reopening economy and a shortage of people willing to work.

“In the balance of June and into the summer we anticipate continued volatility as we get more signals from economic data, Fed policy and as we get into the earnings season,” said Greg Bassuk, chief executive officer at AXS Investments in New York.

In corporate news, U.S.-listed shares of CureVac NV sank 41.5% after the German biotech said its COVID-19 vaccine was 47% effective in a late-stage trial, missing the study’s main goal.

For a look at all of today’s economic events, check out our economic calendar.

(Reporting by Shashank Nayar and Medha Singh in Bengaluru; Editing by Sriraj Kalluvila, Anil D’Silva, Maju Samuel and Dan Grebler)

 

Nvidia Is Struggling To Get The Arm Deal Done. Qualcomm Is Looking In

U.S. chip manufacturer Qualcomm has offered to invest in U.K. chip designer Arm if the company’s $40 billion acquisition by Nvidia fails to go through due to regulatory concerns.

Qualcomm ready to invest in Arm

Nvidia has tabled a $40 billion offer to purchase U.K. chip designer Arm. However, the deal is facing some regulatory uncertainties and could be blocked from happening. If that happens, U.S. chip manufacturing giant Qualcomm has revealed that it would be ready to invest in Arm.

Qualcomm’s incoming CEO, Cristiano Amon, stated that the company is willing to buy a stake in Arm alongside other major investors. However, the deal depends upon SoftBank, Arm’s current owners, not selling the company to Nvidia.

NVIDIA stock price. Source: FXEMPIRE

Amon said pointed out that if Arm has an independent future, then there would be a lot of interest from numerous companies within the sector, including Qualcomm, who are ready to invest in Arm. If Arm is no longer under SoftBank and moves to become a publicly traded company, it would have numerous companies investing in it and that would ensure great possibilities for Arm, he added.

The incoming CEO said Qualcomm is open to the idea of investing in Arm, and he has held discussions with certain companies that feel the same way.

An IPO would not be enough for Arm

Although Qualcomm is in support of Arm becoming an independently listed company, Nvidia believes the move would not be enough to support Arm’s growth. Arm’s energy-efficient chip architecture is used in 95% of the world’s smartphones. The company also licenses its chip designs to hundreds of companies globally that use the designs to develop their own chips.

Nvidia believes Arm needs more than an IPO to help with its growth. Instead, Nvidia said it would welcome Qualcomm’s help in creating new products and technologies for Arm.

Qualcomm stock price. Source: FXEMPIRE

Qualcomm’s stock price is up by less than 1% since the news broke out, while Nvidia’s stock is also up by less than 1% since the market opened.

Best Stocks For July 2021

Here’s how I found the top stocks to own in July of 2021. I went to MAPsginals.com and I found all the Top 20 stocks since 2012. I then just sorted for the most frequently occurring stocks in descending order. This is what I found:

Source: MAPsignals.com

Outlier stocks are the ones that account for a lion’s share of the gains of the stock market. One thing they have in common is the same ones keep showing up over and over. These were the top 5.

To show why they are great quality stocks, I wanted some quick metrics. I looked up the following key fundamentals I look for:

  • 1 Year Sales Growth
  • 3 Year Sales Growth
  • 1 Year Earnings Growth
  • 3 Year Earnings Growth
  • Profit Margin
  • Debt/Equity

The best quality stocks being bought by big money is what I look for and these fit the bill. Look at these stunning fundamentals:

Source: FactSet

The real test is if Big Money is buying the stocks. By finding the ones most frequently on the Top 20 report, we get a quick filter for the best of the best. In order to even get on one instance of a MAP Top 20 report, the stock needs to have superior fundamentals and get some Big Money Buy Signals. The Top 20 stocks are the best 20 out of over 6,000 every week. So imagine what it means to be on a report 70 or 80 times!

Here’s what it looks like… below we are the instances when each stock saw Big Money buying and made our rare Top 20 report. The key to finding outlier stocks is the repeating Buy signals.

Up first is Facebook, Inc (FB):

Source: MAPsignals, end of day data sourced from Tiingo.com

Now, Align Technology, Inc. (ALGN):

Source: MAPsignals, end of day data sourced from Tiingo.com

And Fortinet, Inc. (FTNT):

Source: MAPsignals, end of day data sourced from Tiingo.com

Number 4 is Adobe Systems Inc. (ADBE):

Source: MAPsignals, end of day data sourced from Tiingo.com

Finally, NVIDIA Corp. (NVDA):

Source: MAPsignals, end of day data sourced from Tiingo.com

So there you have it: a power packed list of the best stocks for July 2021. I’d like to say this is a quick and dirty way to find the best stocks out there, but there’s nothing dirty about it. MAPsignals uses quantitative analysis of mounds of daily stock data. Thirty years of it says two clear things:

  1. Outliers keep appearing time and time again.
  2. When they do, those are the best in show.

When Big Money is buying the best quality stocks, we should always pay attention. But when they do it year after year, it’s a message we don’t want to miss.

The Bottom Line

FB, ALGN, FTNT, ADBE, & NVDA represent the best stocks for July 2021. Based on strong fundamentals and Big Money buy signals year after year, these are worth further investigation.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds no positions in FB, ALGN, ADBE, FTNT, & NVDA at the time of publication.

Investment Research Disclaimer

https://mapsignals.com/contact/

For a look at all of today’s economic events, check out our economic calendar.

Nvidia Asks Chinese Regulators to Approve $40 Billion Arm Deal – FT

The application was made in recent weeks and sets in motion a period of scrutiny that could take up to 18 months, according to Chinese antitrust lawyers, the FT report https://on.ft.com/3w4hY8j added.

Nvidia said last month it expects to close the Arm acquisition by March 2022, after having struck a deal with SoftBank Group in September 2020.

The Japanese conglomerate, meanwhile, is in talks with banks for a loan of about $7.5 billion tied to the Arm sale, Bloomberg News reported https://bloom.bg/3cps3Fk on Tuesday, citing sources, with Mizuho Bank Ltd coordinating the deal.

In February, Bloomberg reported that the U.S. Federal Trade Commission had opened an in-depth probe into Nvidia’s agreement to buy Arm.

Nvidia Chief Executive Jensen Huang had told the Financial Times last month the U.S. chip company had “started the process” of engaging with Chinese regulators and was confident the deal would be cleared within the time frame set by Nvidia.

(Reporting by Nandakumar D and Kanishka Singh in Bengaluru; Editing by Ramakrishnan M.)

NVIDIA Shares Ease After Topping Earnings Forecasts

NVIDIA Corporation (NVDA) shares slipped in Wednesday’s extended-hours trading session despite the chipmaker surpassing Wall Street’s top and bottom-line expectations.

The Santa Clara-based company posted a first-quarter profit of $3.66 per share, easily exceeding analysts’ expectations of $3.28 a share. Meanwhile, revenue for the period came in at $5.66 billion, with the figure coming in comfortably ahead of the $5.41 billion consensus mark and growing 84% from a year earlier on the back of a surge in demand for graphics chips driven by pandemic gaming. Moreover, the company said it expects sales in the current quarter to increase 62% from a year ago.

However, news that supply issues look like continuing for the foreseeable future spooked investors. “We expect to remain supply-constrained into the second half of the year,” chief financial officer Kress said, per MarketWatch. The company said it planned to manage the shortage by adding software to deter cryptocurrency miners from using its gaming chips. During the quarter, processing chips designed specifically for digital currency generated $155 million in revenues.

Through Wednesday’s close, the NVIDIA share price has a market capitalization of $391 billion, offers a tiny 0.10% dividend yield, and trades 20.26% higher on the year. By comparison, the tech-heavy Nasdaq index has gained 6.59% over the same period. From a valuation standpoint, the stock trades 24% above its five-year average forward earnings multiple of 36.69 times.

Wall Street View

Susquehanna’s Christopher Rolland reiterated his ‘Positive’ rating and $700 price target after Nvidia’s quarterly report. Rolland told investors that demand for the chipmaker’s GPUs remains robust, but he sees sales slowing in the second half of the year as reopenings and physical activities resume across the United States.

Broker coverage remains firmly in the bull camp elsewhere on Wall Street also. The stock receives 29 ‘Buy’ ratings, 5 ‘Overweight’ ratings, 4 ‘Hold’ ratings, 1 ‘Underweight’ rating, and 1 ‘Sell’ rating. Twelve-month price targets range from a Street-high $800 to $380 low, with the median pegged at $675.

Technical Outlook and Trading Tactics

NVIDIA shares have traded within a $175-point range since early September, with the bulls nor the bears able the take control of price action.

Given Wednesday’s after-hours weakness, active traders should consider opening a short position near the trading range’s upper trendline resistance area at $645, while looking to cover near the range’s lower trendline at $470. Protect capital by exiting the trade if the stock breaks out to a new all-time high on above-average volume.

For a look at today’s earnings schedule, check out our earnings calendar.

NVIDIA Split Announcement Raises Red Flag

NVIDIA Corp. (NVDA) reports Q1 2021 earnings in Wednesday’s post-market, with analysts expecting a profit of $3.22 per-share on $5.2 billion in revenue. If met, earnings-per-share (EPS) will mark a 78% profit increase compared to the same quarter last year, when the pandemic triggered worldwide shutdowns. The stock sold off more than 8% in February, despite beating Q1 2020 top and bottom line estimates and issuing higher revenue guidance.

Why Announce Split Just Before Earnings?

The systems chip manufacturer announced a four-for-one stock split on Friday morning, effective on July 20th. The timing raises a red flag, given the close proximity of this week’s report, triggering speculation the company is attempting to manage potential disappointment ahead of a less-than-spectacular quarter. Even so, the long string of better-than-expected releases is unlikely to defer investor interest ahead of the news.

KeyBanc analyst John Vinh upgraded the stock from ‘Sector Weight’ to ‘Overweight’ on May 20, one day before the split announcement, setting a $700 price target. He noted NVIDIA “is best positioned to monetize one of the fastest and highest value-added workloads in the data center in artificial intelligence/machine learning.” Vinh downgraded rival Intel Corp (INTC) at the same time, highlighting the chip behemoth’s loss of market share to the juggernaut in the last year.

Wall Street and Technical Outlook

Wall Street consensus stands at an ‘Overweight’ rating based upon 28 ‘Buy’, 5 ‘Overweight’, 4 ‘Hold’, 1 ‘Underweight’, and 1 ‘Sell’ recommendation. Price targets currently range from a low of $380 to a Street-high $800 while the stock closed Friday’s session about $75 below the median $675 target. This low placement suggests Main Street investors are more worried than professional analysts about high valuation and the continued worldwide chip shortage.

NVIDIA completed a breakout above 2018 resistance at 293 in May 2020 and entered a powerful uptrend that carved a straight-line channel into the September peak at 589. February and April 2021 breakout attempts failed while the stock is now engaged in a third attempt. This mixed action has carved an expanding wedge pattern that should limit momentum until buying pressure clears 680, which is more than 13% above the current price.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Earnings to Watch Next Week: AutoZone, Nvidia, Medtronic and Costco Wholesale in Focus

Earnings Calendar For The Week Of May 24

Monday (May 24)

Ticker Company EPS Forecast
NDSN Nordson $1.64

Tuesday (May 25)

IN THE SPOTLIGHT: AUTOZONE

The Memphis, Tennessee-based auto parts retailer is expected to report its fiscal third-quarter earnings of $20.02 per share, which represents year-over-year growth of about 39% from $14.39 per share seen in the same period a year ago.

The United States’ leading retailer and a leading distributor of automotive replacement parts and accessories would post revenue growth of 17% to $3.26 billion. In the last four quarters, on average, the company has beaten earnings estimates over 12%.

AutoZone (AZO) could comp ~30% in F’Q3 with a boost from the stimulus, and a flat comp is possible in F’Q4 on a tougher compare. However, these beats may not fully flow through to F’22. Risk/reward looks positive but less favorable after the stock’s recent run. Stay ‘Overweight’ with a $1,640 price target,” noted Simeon Gutman, equity analyst at Morgan Stanley.

AZO is our top pick in DIY Auto. We see it as a high-quality retailer with the ability to compound earnings/FCF growth over time. While not immune to a tougher macro backdrop (fewer miles driven), we believe AZO is best positioned through any recession given its leading exposure to the more defensive DIY segment (~80% of sales). In addition, its DIFM growth was accelerating pre-COVID and we think it can gain more share in that segment going forward. In our view, ongoing share gains coupled with solid expense management should allow AZO to overcome headwinds from less driving in the near- to medium-term.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 25

Ticker Company EPS Forecast
SHB Shaftesbury £0.64
VSAT Viasat $0.22
CBRL Cracker Barrel Old Country Store $0.27
AZO AutoZone $20.02
HTHT Huazhu Group Limited -$1.61
DY Dycom Industries $0.06
URBN Urban Outfitters $0.17
HEI Heico $0.48
TOL Toll Brothers $0.79
A Agilent $0.83
INTU Intuit $6.52
JWN Nordstrom -$0.58
VNET 21Vianet -$0.43
BYG Big Yellow £22.76

Wednesday (May 26)

IN THE SPOTLIGHT: NVIDIA

The Santa Clara, California- based multinational technology company is expected to report its first-quarter earnings of $3.28 per share, which represents year-over-year growth of over 80% from $1.80 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 10%. The company, which designs graphics processing units for the gaming and professional markets, as well as system on a chip unit for the mobile computing and automotive market would post year-over-year revenue growth of over 70% to $5.4 billion.

“For the first quarter of fiscal 2022, NVIDIA anticipates revenues of $5.3 billion (+/-2%). Non-GAAP gross margin is projected at 66% (+/-50 bps). Non-GAAP operating expenses are estimated to be $1.20 billion. Capital expenditures are expected to be approximately $300-$325 million,” noted equity analysts at ZACKS Research.

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 26

Ticker Company EPS Forecast
VAR Varian Medical Systems $1.10
NVDA Nvidia $3.28
BMO Bank Of Montreal USA $2.17
CPRI Capri Holdings Ltd $0.01
ANF Abercrombie & Fitch -$0.41
DKS Dick’s Sporting Goods $1.16
UHAL Amerco $5.07
WDAY Workday $0.73
SNOW Intrawest Resorts -$0.16
AEO American Eagle Outfitters $0.47
DXC DXC Technology Co $0.70
LI Li Auto -$0.14
WSM Williams Sonoma $1.72

Thursday (May 27)

IN THE SPOTLIGHT: MEDTRONIC, COSTCO WHOLESALE

MEDTRONIC: An American Irish-domiciled medical device company is expected to report its fiscal fourth-quarter earnings of $1.42 per share, which represents year-over-year growth of over 140% from $0.58 per share seen in the same period a year ago.

In the last four consecutive quarters, on average, the company has delivered an earnings surprise of over 44%. The Fridley, Minnesota-based medical company would post year-over-year revenue growth of over 35% to $8.14 billion.

“Peer results and commentary suggest ~33-34% organic growth (the upper end of mgmt guidance) is achievable, and we expect FY22 guidance in-line with Cns with room for raises. We continue to see valuation as attractive and Risk/Reward positive into FY22 recovery,” noted Cecilia Furlong, equity analyst at Morgan Stanley.

Medtronic is well aligned with our 2021 pro-recovery thesis, and we see sustainable 5%+ organic growth driven by the company’s ~5% WAMGR and supported by pipeline product launches & tuck-in M&A contributions. CEO Geoff Martha has committed to initiatives to smooth bulk purchasing and deliver more consistent results, and redeploy $450mn annual OpEx savings toward innovation & product reinvestment.”

COSTCO WHOLESALE: The world’s fifth-largest retailer is expected to report its fiscal third-quarter earnings of $2.31 per share, which represents year-over-year growth of over 20% from $1.89 per share seen in the same period a year ago.

The Fridley, Minnesota-based medical company would post revenue of $43.6 billion.

COST’s results have consistently been among the best in Retail. Over the past decade, COST has delivered ~6% comps and ~10% EBIT growth on average. It is rare to find a business with COST’s solid comp/membership growth, while relative e-commerce insulation differentiates its value proposition from other retailers,” noted Simeon Gutman, equity analyst at Morgan Stanley.

“We are Overweight even as the stock trades at an elevated valuation given COST’s scarcity value, safety, and scale. In the near-term, we expect incremental sales uplifts from COVID-19 disruption, and earnings power looks stronger despite COVID-19 expenses.”

TAKE A LOOK AT OUR EARNINGS CALENDAR FOR THE FULL RELEASES FOR THE MAY 27

Ticker Company EPS Forecast
EGFEY Eurobank Ergasias S.A. ADR $0.01
SAFM Sanderson Farms $2.44
DG Dollar General $2.13
ADSK Autodesk $0.94
CM Canadian Imperial Bank Of Commerce USA $2.49
DLTR Dollar Tree $1.39
TD Toronto-Dominion Bank $1.39
RY Royal Bank Of Canada $2.06
MDT Medtronic $1.42
BBY Best Buy $1.34
BURL Burlington Stores $0.80
ULTA Ulta Salon Cosmetics Fragrance $1.93
CRM Salesforce.com $0.88
VMW VMware $1.58
HPQ HP $0.88
BOX BOX $0.17
PLAN Progressive Planet -$0.09
VEEV Veeva Systems $0.78
GPS Gap -$0.06
COST Costco Wholesale $2.31
ASND Ascendant Resources -$1.83
YY YY -$0.06

Friday (May 28)

Ticker Company EPS Forecast
BIG Big Lots $1.67
For a look at all of today’s economic events, check out our economic calendar.

Why Nvidia Stock Jumped After Announcement Of Four-For-One Split?

Nvidia Video 21.05.21.

Nvidia Announced A Four-For-One Split Of Its Stock

Shares of Nvidia opened with a gap up today after the company announced a four-for-one split of its common stock. The company stated that the move will make stock ownership more accessible to investors and employees.

In case the split is approved by the company’s shareholders at the annual meeting on June 3, 2021, each NVIDIA shareholder of record at the close of business on June 21, 2021 will get three more shares of Nvidia’s common stock.

The company anticipates that the stock would begin to trade on a split-adjusted basis on July 20.

With the price of roughly $600 per share, Nvidia stock is not easily accessible to some investors who do not have a big account and want to hold a diversified portfolio. When the price of one share drops after the split, the stock will become more attractive for a larger pool of potential investors, which is bullish for Nvidia.

What’s Next For Nvidia?

Nvidia is expected to report its quarterly results on May 26, after the market close. Analysts expect that the company will report earnings of $3.27 per share. For the full year 2021, Nvidia is expected to report earnings of $13.59 per share, while the company’s earnings are projected to grow to $15.37 per share in 2022.

At current levels, the stock is trading at 39 forward P/E for 2022 which is not cheap. However, such valuations are often seen in high-flying tech stocks.

The company’s graphic cards experienced huge demand from crypto miners at the beginning of this year, and Nvidia was even forced to reduce hash rates at some cards so that these cards can find their way to gamers. General supply shortages in the semiconductor industry have also provided support to the company’s shares this year.

At this point, the main risk for Nvidia is presented by rising interest rates which could put pressure on tech stocks. However, bond traders have managed to shrug off inflation worries in recent weeks, and Nvidia’s shares have a good chance to gain momentum ahead of the earnings release.

For a look at all of today’s economic events, check out our economic calendar.

The $217 Million Dollar Pizza: Don’t Let These 3 Stocks Get Away Like Bitcoin

Price is what you pay, value is what you get.

The infamous Warren Buffett quote sums up investing vs trading perfectly.

The short-term trade is all about instant gratification. Take a pizza for instance. We all know it’s bad for us, but it tastes so good. Maybe that’s why Americans eat 3 billion pizzas and spend $38 billion on them each year.

Short-term trades feel great when we win, just like pizza feels great going down. But later, that pizza might not feel so great. And long-term, we know it clogs arteries and does all sorts of other damage. So, when we tee-up a quick trade poised to clip a profit, the greed center of our brains is hoping to get to the pleasure center.

Short-term traders are often looking for free money.

Maybe this was what Laszlo Hanyecz was thinking on May 22nd, 2010. He was hungry and bought two pizzas in Jacksonville, Florida. Only he made the first real-world bitcoin transaction paying 10,000 BTC for them. Surely, at the time it felt like free money – or rather – free pizza. Who foresaw bitcoin’s future?

Maybe the pizza seller did. Because now those two pizzas are worth $217 million each.

If ever there was an example of someone who likely regretted the short-term trade and wish they’d held for the long-term, it might be poor Laszlo.

There are two sides to every coin (except perhaps bitcoin). What the short-term trade offers in terms of quick excitement, the long-term trade severely lacks. Buy-and-hold investing has a stuffy stigma. Let’s face it, being patient and waiting years for monster gains is boring. Not many want to do it.

That is until one looks up 5, 10, or 30 years from now at someone else’s successful long-term investments.

Imagine you had sold 2 pizzas for 10,000 bitcoins 11 years ago. And then never did anything with the cryptocurrency. Naturally, you’d have forgone a fast in-and-out trade trying to clip a few percent. You also would need the long-term view on bitcoin’s potential. But had you done nothing, you would have turned roughly $16 bucks into nearly half-a-billion dollars.

That, my friends, is the power of long-term investing.

At MAPsignals, we see the investing-world through the lens of stocks: specifically, outliers.

What’s an outlier?

An outlier stock is a stock that makes insane gains, more than most other stocks. Professor Hendrick Bessembinder proved that for the past nearly 100 years, only 4% of all stocks accounted for 100% the gains above treasuries. That 4% represents the outliers.

If you missed the bitcoin boat, don’t worry- I did too. But I did catch some monster outliers that helped me get closer to my long-term investing goals. And today, you’re in luck, because I’m about to share 3 outlier stocks with close ties to bitcoin and cryptocurrency. These stocks represent a great way to own awesome businesses, and simultaneously get exposure to cryptocurrency.

Nvidia Corporation (NVDA)

NVDA is a Technology stock focused on specialized semiconductors. It has great sales and earnings growth and a juicy 62% gross profit margin. It has reasonable debt levels and a reasonable P/E ratio. Their chips are popular with bitcoin miners.

Now, let’s take a look at the Big Money data. What’s that? We have a process that looks for high-quality stocks seeing buy activity in their shares. Only the best ones show up on our weekly Top 20 reports.

What we want to see is a repeat offender. Look how Nvidia has been a Big Money magnet over the years:

Times on the Top 20 since July 1st, 2014: 54

Outlier status: OUTLIER

First signal: 2000-06-05

Performance since first signal: +5433.85%

Here’s a chart of all of those rare signals:

 

Source: www.mapsignals, End of day data sourced from Tiingo.com

Next up is PayPal Holdings, Inc. (PYPL)

PYPL is a Financials stock focused on Consumer Finance Services. It has great sales and earnings growth and a juicy 55% gross profit margin. It has reasonable debt levels and a reasonable P/E ratio. They also own the popular digital payments app, Venmo.

Recently, PayPal has allowed their users (and Venmo users) to transact in bitcoin.

Now, let’s look at the Big Money profile for PYPL.

BIG MONEY DATA:

Times on the Top 20 since July 1st, 2014: 45

Outlier status: OUTLIER

First signal: 2016-09-20

Performance since first signal: +520.53%

 

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

Lastly, there’s Square, Inc. (SQ)

SQ is a Discretionary stock focused on Retail Industry Software. It has great sales and earnings growth and a juicy 28% gross profit margin. It has high debt levels and a high P/E ratio.

They have point-of-sale technology for merchants and the popular Cash App. The latter allows users to transact in bitcoin.

Let’s look at the historical Big Money profile for Square.

BIG MONEY DATA:

Times on the Top 20 since July 1st, 2014: 12

Outlier status: MATURING

First signal: 2017-10-17

Performance since first signal: +535.82%

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

Here’s the bottom line: If you missed out on bitcoin’s massive run, there are stocks that are correlated to the cryptocurrency’s success. If you’re looking for stock exposure that can benefit from the rise in bitcoin, consider Nvidia, PayPal, & Square.

Disclosure: the author holds long positions in PYPL & SQ in personal accounts and PYPL in managed accounts, but no position in NVDA at the time of publication.

Learn more about the MAPsignals process here: www.mapsignals.com

Disclaimer

https://mapsignals.com/contact/

For a look at all of today’s economic events, check out our economic calendar.