Tag: MarketClub Tips & Talk

1 Retail Stock To Avoid This Holiday Season

Posted on by The MarketClub Team

Shares of sporting goods retailer DICK’S Sporting Goods, Inc. (DKS) have declined 24.4% over the past year and 11.2% year-to-date. However, it has gained 4.2% over the past three months to close the last trading session at $102.17.

DKS Chart

Source: MarketClub

Recently DKS announced the launch of DSG Ventures, a $50 million in-house fund to invest in innovative sports-related companies like itself.

Ed Stack, DKS’ Executive Chairman, said, “DSG Ventures will enable us to give back and help support entrepreneurs achieve their dreams through our connections, experience, and support. We know that DSG Ventures (and our partners) will bring innovative products, services, and experiences to athletes worldwide.”

However, the macroeconomic headwinds could mar DKS’ business growth. Amid the sky-high inflation and rising recession possibilities, consumers are hesitant to spend on discretionary items even before the holiday season.

Leo Feler, the chief economist at market researcher Numerator, said, “It's food, it's medical care, it's housing and shelter costs. It's essential services such as veterinary care, and child care. All of these things come first before consumers buy holiday gifts."

Furthermore, U.S. holiday sales are expected to rise at a slower pace this year. The National Retail Federation (NRF) forecast holiday sales, including e-commerce, to rise between 6% and 8% compared to a 13.5% jump last year and a 9.3% increase in 2020 when supply chain issues and pandemic-related uncertainties weighed on.

Do you think the slightly eased October inflation will elicit a little more Christmas cheer?

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Continue reading "1 Retail Stock To Avoid This Holiday Season" →

1 Stock You Should Think Twice About Buying

Posted on by The MarketClub Team

E-commerce and tech giant Amazon.com, Inc. (AMZN) guided a slowdown in sales growth for the holiday season, making investors anxious. The company expects net sales between $140 billion and $148 billion for the year's final quarter, below analysts’ expectations, representing a year-over-year improvement of as little as 2%.

“We are seeing signs all around that, again, people’s budgets are tight, inflation is still high, energy costs are an additional layer on top of that caused by other issues,” Amazon Chief Financial Officer Brian Olsavsky said. “We are preparing for what could be a slower growth period, like most companies,” he added.

AMZN’s shares plunged substantially following the gloomy forecast and are hovering around its 52-week low. The stock has slumped 46% year-to-date to the last trading session at $89.98, well below its 50-day and 200-day moving averages of $116.72 and $130.19, respectively.

AMZN Chart

Source: MarketClub

AMZN’s market cap recently slipped below $1 trillion.

How soon do you expect the stock to rejoin the "Trillion-Dollar Club"?

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AMZN has been trying to navigate the macroeconomic headwinds and hosted two cornerstone sales events in a year: Prime Day in July and the Prime Early Access Sale last month. Continue reading "1 Stock You Should Think Twice About Buying" →

2 Oil and Gas Stocks for the Long Term

Posted on by The MarketClub Team

With fast and furious rate hikes yet to succeed in bringing inflation under control, the stock market is expected to witness further volatility. However, the energy sector remains well-positioned to thrive with tight supply and rising global demand pushing oil prices higher.

While OPEC+’s decision to cut oil production by 2 million barrels/day and limited availability of Russian oil will keep supply tight, OPEC expects global oil demand to increase to 103 million barrels per day (BPD) next year.

When do you think the global oil demand will peak?

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Besides being the relatively cleaner alternative among fossil fuels, the natural gas liquid market is set to grow at 5.7% CAGR to reach $29 billion by 2030. Hence, it would be opportune to capitalize on the industry tailwinds and load up on oil and gas stocks Diamondback Energy, Inc (FANG) and Baker Hughes Company (BKR) as some technical indicators point to solid upsides.

Diamondback Energy, Inc (FANG)

FANG is an independent oil and gas company with a market capitalization of $34.89 billion. The company is involved in acquiring, developing, exploring, and exploiting unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. It operates through two segments: the upstream segment and the midstream operations segment.

Over the last three years, FANG’s revenue grew at a 44% CAGR, while its EBITDA grew at 41.7% CAGR. Over the same time horizon, the company’s net income grew at a 67.2% CAGR.

During the third quarter of the fiscal year 2022, ended September 30, FANG’s total revenues increased 27.6% year-over-year to $2.44 billion. During the same period, the company’s income from operations increased 38.7% year-over-year to $1.61 billion, while its adjusted EBITDA increased 68.2% year-over-year to $1.91 billion.

FANG’s adjusted net income for the quarter came in at $1.14 billion or $6.48 per share. Due to high cash margins, and best-in-class well costs, the company generated nearly $1.2 billion in free cash flow, of which it returned around 75% to shareholders through share repurchases and dividend payouts. Continue reading "2 Oil and Gas Stocks for the Long Term" →

One Stock to Get Excited About Again

Posted on by The MarketClub Team

After two quarters of subscriber declines and slowing growth, streaming major Netflix, Inc. (NFLX) bounced back in some fashion as it added more subscribers than analysts estimated in the third quarter. NFLX reported a net gain of 2.41 million subscribers, which was considerably higher than the average 1.1 million additions expected by analysts.

Amid rising competition from other streaming platforms, NFLX reported a subscribers decline of roughly 200,000 in the first quarter and 970,000 in the second quarter, leading its shares to nosedive.

The higher-than-expected subscriber addition in the third quarter surprised the market. NFLX shares jumped after the company’s results were announced on October 18, 2022.

NFLX Chart

Source: MarketClub

NFLX has had a torrid time this year, with its stock declining 55.3% in price year-to-date to close the last trading session at $269.06. However, its shares have gained 12.6% over the past month.

The company comfortably beat Wall Street revenue and earnings estimates in the last reported quarter. Its revenue and EPS beat the estimates by 1.1% and 43.1%, respectively.

After a poor first half where The Walt Disney Company (DIS) overtook NFLX as the market leader, the company took up massive changes, such as introducing ad-supported streaming and cracking down on shared accounts. The company is also considering a cloud-gaming service.

In its letter to its shareholders, the company said that it expects 4.5 million new subscribers in the fourth quarter and expects its revenue to grow to $7.78 billion. Its subscriber guidance is higher than analysts’ estimates of 4 million. Continue reading "One Stock to Get Excited About Again" →

3 Energy Stocks That Could Benefit This Fall

Posted on by The MarketClub Team

President Biden seeks to add enough supply to prevent near-term oil price spikes by releasing U.S. strategic petroleum reserves (SPR) of 15 million barrels. However, that might be offset by OPEC+’s two million barrels per day (bpd) output cuts.

Oil prices have seen significant volatility this year thanks to the Russia-Ukraine war. However, strong demand is expected to keep the energy market afloat. OPEC+ expects medium-term and long-term growth in energy demand.

According to the latest U.S. energy information administration’s (EIA) short-term energy outlook report, oil prices could get a boost from potential petroleum supply disruptions and slower-than-expected crude oil production growth.

WTI Spot Price

Source: www.eia.gov

On top of it, Goldman Sachs’ head of commodities research Jeff Currie said that crude oil prices could . In addition, he said supply could get squeezed by several factors, like a stop on SPR releases, lack of drilling, and a European Union ban on Russian oil.

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Given this backdrop, investing in ConocoPhillips (COP), Hess Corporation (HES), and Northern Oil and Gas, Inc. (NOG) might be prudent in light of several technical indicators. Continue reading "3 Energy Stocks That Could Benefit This Fall" →