There Are Better Ways to Play EVs Than This Speculative Stock

QuantumScape (NYSE:QS), a startup founded a decade ago, touts a game-changing solid-state battery tech for EVs.

However, it’s unproven at scale and faces lawsuits over alleged fraud. A recent $300 million equity offering raised concerns about dilution.

Investing in QuantumScape may seem like a binary bet, hinging on whether they successfully bring a solid-state battery for EVs to market.

However, there are other factors to consider, which could make it a risky proposition at current prices. 

QuantumScape posted Q2 earnings of ($0.26) per share, missing estimates by ($0.04) and down slightly from the previous year. Analysts expect a full-year negative EPS of -0.98. The CTO sold 144,623 shares at $10.14 each, holding 766,495 shares currently.

A Closer Look at QuantumScape Stock

Credit Suisse AG substantially boosted its QuantumScape holdings in Q1 2023, owning 422,216 shares valued at $3,454,000, indicating 0.10% ownership.

However, not all important investors are buying into the stock. Insider Mohit Singh recently sold 10,300 shares at $8.52 per share, totaling $87,756. Singh now holds 700,386 shares valued at approximately $5,967,288.72.

Insiders have sold 584,894 shares worth an estimated $4,858,682 over the past 90 days. Insider ownership is currently at 10.18%, but appears to be on the downtrend. This update is relevant for investors and those tracking QuantumScape’s stock performance.

Solid-state batteries could revolutionize EV batteries, providing enhanced range and safety compared to current lithium-ion batteries. If SSBs can be mass-produced for EVs, they may quickly replace lithium-ion batteries.

However, short-sellers and others who have proven to be skeptical about the science behind these batteries have pointed to various issues tied to the eventual commercialization of these batteries that is concerning.

It’s one thing to produce an effect in a lab setting, and it’s another to test this effect int he real world.

Investors once pushed QS stock above $100 per share during the EV hype, and some still invest despite its low price.

A potential QuantumScape breakthrough may not significantly boost its current $7 per share value. Various macro factors may continue to pressure the stock, and market reaction to a breakthrough could be less positive than expected.

The Bearish View

Evercore ISI’s bullish case for QS stock has two flaws. First, commercialization isn’t imminent. While QuantumScape has advantages, there’s no clear timetable for robust revenue and profits from its EV battery technology.

Commercialization might take a decade or never occur. In the near term, this uncertainty could cause the stock to keep declining.

Cost advantages may not be as significant as they seem. Other factors further diminish QS’s attractiveness. Time will reveal if they have a technological edge, but competitors may reach the market sooner.

What Now

Investors in QS stock aren’t expecting quick gains; they know the QuantumScape story will unfold slowly. However, some believe the commercialization stage might not arrive until the mid-to-late 2020s.

QS stock could face impatience due to its long timeline, and shareholder dilution is a concern as the company may need more funding for SSB technology development.

I think this is a company investors can watch for a few years and probably pick up at a lower price. For that reason, I remain on the sidelines with this name right now.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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7 S&P 500 Stocks Set to Explode Higher

With a good deal of uncertainty over interest rate hikes and the potential for recession, markets have been far more volatile. However, if some of the uncertainty fades, we could also see a year-end rally, which I strongly believe could happen. That being said, investors may want to consider these S&P 500 stocks to buy before they push even higher.

S&P 500 Stocks to Buy: Apple (AAPL)

One of the top S&P 500 stocks to buy is Apple (NASDAQ:AAPL), a household name, thriving on consumer loyalty and new product launches, including its latest iPhone. Trading at $170 today, the stock is up 36% year to date and over 200% in the past five years. While the company did see a pullback in revenue thanks to lower consumer spending, don’t count Apple out just yet. Besides the wide range of products, the company also generates revenue from the services segment, which is a major contributor to its total revenue. It also plans to expand its product lineup next year and will release its Vision Pro.

Alphabet (GOOG) (GOOGL)

Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) has a significant user base through its Google products and YouTube. It also serves multiple industries and has become an important part of our lives. The company has been investing in artificial intelligence and is working on improving Google Search with AI. The stock is up 48% year to date and is exchanging hands at $132. Despite a drop in its ad business, it holds an edge over other companies and it can manage to bounce back as the economy improves. It has recently launched a service known as “Duet for Workspace” which will bring AI upgrades to Gmail, Sheets, and Google Docs. Through this, the company aims to attract new users and retain existing ones.

S&P 500 Stocks to Buy: Tesla (TSLA)

A leader in the electric vehicle industry, several catalysts are working for Tesla (NASDAQ:TSLA). The company reported record deliveries in the second quarter. And, as it gears up to post third-quarter delivery numbers on Oct. 3, I believe it will set another record. Despite a drop in margins in the second quarter, Tesla reported a revenue growth of 47%. The company will start production of CyberTruck very soon and it also aims to have its Robo Taxis on the road.

It will also generate revenue from its EV charging stations and its energy storage deployments will gain momentum in the coming year. With so much working for the company, Tesla is a no-brainer stock to own. Trading at $241 today, the stock is down 9.79% in the year.

Microsoft (MSFT)

Microsoft (NASDAQ:MSFT) just saw a 15% rise in its productivity segment which hit $4.5 billion. In addition, Microsoft 365 subscribers increased by 12% to 67 million. Plus, as it expands its artificial intelligence offerings, the company could see a sizable boost in revenue. It’s also a big name in the gaming sector and continues to generate revenue through Xbox. Up 30% year to date, the MSFT stock is trading at $313 and is a solid buy.

S&P 500 Stocks to Buy: Visa (V)

Visa (NYSE:V) is growing at a rapid pace and is going to dominate the market. People have started using digital payments after the pandemic and this gave a boost to the business. This is one company that will continue to thrive no matter how the economy moves from here.

It is also the largest payment processor and a dividend-paying company. In the recent quarter, the company saw a 9% rise in the payments volume. Trading at $231 today, the stock is moving closer to the 52-week high of $250 and this is one stock to buy and hold forever. It boasts a dividend yield of 0.78% and has recently paid a quarterly dividend of $0.45. There is no stopping the momentum of Visa and it is much ahead of the competitors today.

Nvidia (NVDA)

Nvidia (NASDAQ:NVDA) is a long-term buy and hold. The company is a major player in the industry and holds a big share in the graphics processing units. It makes chips that help develop and run AI models. This is why it has become a prominent player in the industry and is the first option for AI-focused companies who want the right hardware.

Its financials have broken records and the stock is up 200% year to date. It is trading at $430 today and has the potential to soar higher. With each quarterly result, the company beats expectations, and the stock soars. For the third quarter, the company expects revenue to be $16 billion-plus. This is one stock that will continue to pay in the long term.

S&P 500 Stocks to Buy: Amazon (AMZN)

E-commerce giant Amazon (NASDAQ:AMZN) is a safe stock to invest in. Its global presence and market dominance have made it a solid stock to own. The company has recently invested $4 billion in Anthropic, an AI company that will use AWS and Amazon chips and allow the technical professionals of Amazon to use its technology. This is considered a solid move in the industry and it is for this reason that the stock is a buy even at a premium value.

It has already been using AI for its products and services, but with this investment, it is taking one step ahead. The business is on a growth path, and it generates revenue from multiple sources, making it a reliable investment in difficult times. AMZN stock is trading at $125 and is up 46% year to date. 

On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.

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Ticking Time Bombs: 3 Nasdaq Stocks to Dump Before the Damage Is Done

Although an inherently uncomfortable topic, investors need to seriously consider the idea of certain Nasdaq stocks to sell. With the namesake exchange featuring some of the most innovative – but also simultaneously risky – enterprises, you’ll want to do some fall cleaning here.

Another reason to target Nasdaq stocks to sell centers on basic realities. Consider a chess game – unless both sides are committed to a pure draw for some reason, the pieces will not stand as they are. Instead, with competitive chess, it’s not about if you lose pieces but which ones and under what circumstances.

So it is with the market. If you want consistent success, you can’t just be an indefinite buy-and-hold investor. At some point, you will have to let go of your stinkers. With that, below are three possible Nasdaq stocks to sell.

Nasdaq Stocks: United Fire Group (UFCS)

At first glance, United Fire Group (NASDAQ:UFCS) doesn’t seem a natural candidate for Nasdaq stocks to sell. As an insurance company, United Fire primarily offers property and casualty insurance through its subsidiaries. Unfortunately, the myriad difficulties associated with the post-pandemic recovery process have left UFCS in a bind. Since the start of the year, shares fell nearly 29%.

Even worse, they’re down 32% over the trailing one-year period. One factor to watch out for is the options arena. Specifically, the implied volatility (IV) curve screams upward in the far out-the-money (OTM) direction, peaking at 469%. On the other hand, IV only rises to 169% toward the far OTM call direction. Put another way, traders appear to be hedging for tail risk. Also, United’s financials don’t provide much encouragement. For example, its three-year revenue growth rate slips to 6% below breakeven. It also suffers from negative net margins.

Finally, Piper Sandler analyst Paul Newsome pegs UFCS a “moderate sell” with a $19 price target, implying almost 4% downside.

Veritone (VERI)

Based in Irvine, California, Veritone (NASDAQ:VERI) is an artificial intelligence-focused technology firm that provides computing solutions through its proprietary platform aiWARE. The underlying system integrates a range of machine learning models to process and transform unstructured data – like audio, video, and text – into structured data automatically. Notably, this has significant implications for everyday functionality.

As an example, in the media and entertainment space, Veritone allows for easy content classification, ad verification, and content monetization. Additionally, it can be used for serious needs such as predictive maintenance for infrastructure. Despite extraordinary relevancies, VERI hasn’t caught on with Wall Street, with shares down over 50% since the January opener. To be fair, it has some positives such as solid revenue growth. However, it also suffers from severely negative operating and net margins. Also, its Altman Z-Score of 1.49 below zero indicates deep distress.

Lastly, analysts peg VERI as a moderate sell with a $2.50 target, implying nearly 4% downside risk. Thus, it’s probably one of the Nasdaq stocks to avoid.

AudioCodes (AUDC)

Hailing from Israel, AudioCodes (NASDAQ:AUDC) held much promise during the early phase of the Covid-19 pandemic. With its advanced communication software, products, and services for enterprises and service providers, the company cut a utilitarian profile. However, when the calendar turned to 2022, the dramatic rise in inflation devastated AUDC. Since the January opener, it plunged nearly 43%.

Looking back over the past 52 weeks, AUDC dropped almost 55% in equity value. A key factor here may be the options market. Looking at AUDC’s IV curve, the metric peaks at 150% in the OTM put direction. On the other side of the fence, IV rises to a max of 110% in the OTM call direction. Again, it appears that traders are hedging for tail risk.

Financially, AudioCodes doesn’t seem too bad. With a strong balance sheet and consistent profitability, one might wonder what the fuss is about. However, AUDC could be one of the Nasdaq stocks to sell because of a conspicuous erosion of the top line.

In closing, analysts peg AUDC as a moderate sell with an $8.50 target, implying over 15% downside risk.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

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3 Warren Buffett Stocks Set to Explode Higher

Source: Kent Sievers /

Through his holding company Berkshire Hathaway (NYSE:BRK-A/NYSE:BRK-B), Warren Buffett runs a massive investment portfolio, currently worth $340 billion. He also holds nearly $150 billion of cash in the portfolio in case, as he likes to say, opportunities arise.

Buffett’s investments are highly concentrated in a handful of notable names such as Apple (NASDAQ:AAPL) and Bank of America (NYSE:BAC). However, he has smaller positions in dozens of other stocks that attract less attention from the media.

Many have proven their investment value, thereby helping Buffett outperform the benchmark S&P 500 index, earning him the adage greatest investor of all time. So, let’s dive into three Warren Buffett stocks set to explode higher.

T-Mobile (TMUS)

Source: Shutterstock

Warren Buffett is a notorious dividend collector.

The Oracle of Omaha must have been thrilled when wireless internet provider T-Mobile (NASDAQ:TMUS) recently declared its first ever dividend payment. The company promises to pay a dividend of 65 cents per share to stockholders on December 15.

Buffett currently owns 5.24 million shares of TMUS stock worth more than $735 million. Based on his current holdings, he will receive $3.40 million when T-Mobile pays the December dividend. If the internet company maintains its dividend at 65 cents a share each quarter, that would total $2.60 per share for the year.

Therefore, Buffett will earn $13.63 million from shareholder payouts. Not bad for one of Buffett’s newer investments. TMUS stock is up 3% over the last 12 months and has gained 100% over five years.

Amazon (AMZN)

Closeup of the Amazon logo at Amazon campus in Palo Alto, California. The Palo Alto location hosts A9 Search, Amazon Web Services, and Amazon Game Studios teams. AMZN stock

Source: Tada Images /

The antitrust lawsuit filed against Amazon (NASDAQ:AMZN) by the U.S. Federal Trade Commission (FTC) and 17 state attorneys general accuse Amazon of monopolistic behavior. Not a good look, to be sure.

However, the antitrust action has been long anticipated and will likely take years to resolve. It’s more of a strong breeze than a headwind for the e-commerce company. And, while the antitrust action plays out, Amazon is making lots of right decisions that should help the company and its stock move forward.

First, Amazon is adding advertisements to its Prime Video streaming service and charging all users an additional fee of $2.99 per month to avoid seeing the ads. The addition of both the ads and optional skip fee should help to make Amazon’s streaming unit more profitable, bringing extra revenue. Next, Amazon announced plans to invest $4 billion in artificial intelligence (AI) company Anthropic, which is a rival to ChatGPT creator OpenAI. This could be a major catalyst for the stock.

AMZN stock has gained 46% so far in 2023. Warren Buffett currently owns 10.55 million shares of Amazon worth $1.31 billion.

United Parcel Service (UPS)

Close up of UPS logo printed on a delivery truck.

Source: Sundry Photography / Shutterstock

A catalyst for logistics and delivery giant United Parcel Service (NYSE:UPS) comes in the form of labor peace.

The Teamsters union that represents 340,000 workers at UPS recently announced that its members voted in favor of a new contract agreement. This essentially ends the risk of a major strike that threatened to disrupt millions of package deliveries, causing supply chain and inventory headaches for large and small businesses.

In fact, the new five-year collective agreement with the Teamsters was not cheap for UPS. The company has said that at the end of the new contract, the average UPS full-time delivery driver will earn $170,000 a year in pay and benefits.

However, the deal is a small price to pay compared to the damage that could have been wreaked had a strike occurred at UPS. The consulting firm Anderson Economic Group estimated that a 10-day strike at UPS would have cost the U.S. economy more than $7 billion.

UPS stock is one of Buffett’s smaller positions as he holds just 59,400 shares of the company worth $9.10 million. UPS stock has declined 12% year to date (YTD) but up 32% over five years.

On the date of publication, Joel Baglole held long positions in AAPL and BAC. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

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7 Consumer Discretionary Stocks Set to Skyroc

Recent comments by Bank of America (NYSE:BAC) CEO Brian Moynihan have increased my confidence in my thesis that the U.S. is heading for “a soft landing.” Specifically, Moynihan said the U.S. Federal Reserve already achieved “a soft landing.” That being said, investors may want to consider jumping back into consumer discretionary stocks – especially those that pulled back too much.

Consumer Discretionary Stocks: General Motors (GM)

General Motors (NYSE:GM) stock is down about 18% from its July high amid worries about the economy, higher interest rates, and the strike by its unionized employees. As has been the case in the past, I expect GM and its union to reach a deal that is fair to both sides and won’t “break the bank” at GM. In addition, the automaker’s net income jumped to $2.57 billion last quarter, up from $1.69 billion during the same period a year earlier. After the recent decline of GM stock, the shares trade at a tiny forward price-earnings ratio of 4.75. In addition, analysts, on average, expect its earnings per share to climb to $7.71 this year from $7.59 in 2022.

Cheesecake Factory (CAKE)

Cheesecake Factory (NASDAQ:CAKE) is a good stock to buy within the sector. Last quarter, the company’s top line climbed 4% versus the same period a year earlier to $866 million, while its income from operations jumped 5.5% year-over-year. Last quarter, the company bought back $9.3 million of CAKE stock, and it has a rather high dividend yield of 3.7%. The shares have a very enticing forward price-earnings ratio of just nine.

Consumer Discretionary Stocks: Penn Entertainment (PENN)

Disney’s (NYSE:DIS) ESPN just signed a $2 billion deal with Penn Entertainment (NASDAQ:PENN) to rebrand its sportsbook as ESPN Bet. I believe that the arrangement will be a positive, game changer for PENN stock. Moreover, because Disney received $500 million of warrants for PENN stock as part of the deal, the conglomerate is financially incentivized to work hard to pitch ESPN Bet to its audience. Helping, the U.S. online sports betting market as a whole soared 70% year-over-year to $31 billion in the first quarter, and the ESPN deal gives Penn an inside track at getting a much bigger piece of this huge pie.

Lululemon (LULU)

Investment bank Raymond James recently issued a glowing review of yoga apparel maker Lululemon (NASDAQ:LULU). In fact, the firm called LULU “one of the highest quality companies among global brands, with a strong yet still emerging brand with significant opportunities for growth.” In addition, according to a recent report, 10% of Americans now practice yoga, and the number of Americans engaging in it soared “63.8% between 2010 and 2021.” This is clearly a trend that is not going away, and it is likely to continue to grow very rapidly going forward.

Supporting my thesis, in Q2 LULU’s men’s and women’s product revenue jumped 15% year-over-year and 16% year-over-year, respectively. Moreover, LULU’s profits continue to soar, as its income from operations jumped 23% YOY, excluding some items, last quarter. The shares are changing hands at a forward price-earnings ratio of 32, which is low, given the company’s rapid growth and strong prospects.

Consumer Discretionary Stocks: Dutch Bros (BROS)

In a column published a year ago, I wrote that there was “an excellent chance that Dutch Bros (NYSE:BROS)” could use its “‘coolness factor’”  to embark on a “path to riches.”

That trend appears to be playing out, as the coffee chain on Aug. 8 reported that its top line had soared 34% in the second quarter versus the same period a year earlier, while its ” systemwide same shop sales growth” came in at nearly 4%. Moreover, BROS noted that its marketing initiatives had helped enable its same-store sales to climb 5.8 percentage points in Q2 versus Q1.

Also noteworthy is that the gross profit of the firm’s company-owned shops had soared to $52.1 million versus $31.2 million in Q2 of 2022. The metric shows that the firm’s overall profitability is poised to jump once its marketing spending drops. The latter phenomenon should occur once its brand awareness increases over the next year or two. The shares are changing hands at a very low trailing price-sales ratio of just 1.5.

TJX Companies (TJX)

TJX Companies (NYSE:TJX), which operates discount retailers, continues to grow rapidly, while its profits are quickly increasing. It appears that many consumers are gravitating towards the firm’s combination of low prices and fairly high-quality products. Last quarter, TJX’s top line soared 7.8% versus the same quarter a year earlier, while its comparable store sales climbed an impressive 6% year-over-year. “Our overall comp sales growth was driven by customer traffic, which increased at every division,  Our overall apparel and accessories sales were very strong,” CEO Ernie Herrman noted. In addition, the retailer’s earnings per share soared 23% year-over-year to 85 cents.

Best Buy (BBY)

Best Buy (NYSE:BBY) appears to be rather well-positioned for the upcoming holiday season. That’s because, after many American consumers bought new tech products in 2020, a large percentage of them may be looking to upgrade their products again this year. Moreover, the proliferation of artificial intelligence could help Best Buy sell many new computers as consumers look to exploit this trend as effectively as possible.

Starting in October, the retailer will be offering special discounts and rewards in an effort to get consumers’ attention and kick off the holiday season on a strong note. What’s more, the company reported that it intends to offer many state-of-the-art products that utilize “new and emerging technologies, like e-transportation, health and wellness, and outdoor living.” These offerings could very well entice many consumers into spending much more at Best Buy than in past years. The shares are changing hands at a very low price-earnings ratio of 11.8 and have a high dividend yield of 5.3%.

As of this writing, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.

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Ticking Time Bombs: 3 EV Stocks to Dump Before the Damage Is Done

Whenever positive industry tailwinds last for the long term, multiple new players enter the industry. This includes start-ups and existing companies that diversify. However, over time, fewer players remain. The industry cycles a phase of consolidation of potential company failures coupled with acquisitions.

This pattern holds true for the electric vehicle industry. In the next 12 to 24 months, certain EV stocks will plummet while others surge higher. A clear differentiation between leaders, laggards, and losers will come into view.

Let’s focus on the bearish outlook of three EV stocks to sell that are unlikely to create value. Even from a speculation perspective, these EV stocks look uninteresting.

Fisker (FSR)

Fisker (NYSE:FSR) stock has been resilient for year-to-date (YTD) 2023 with a downside of 7%. Currently bearish on FSR stock, I do expect a sharp correction in 2024. Notably, the short interest in the stock as a percentage of free-float is significant at 44%.

In a recent news, Fisker announced the target to deliver 300 vehicles per day in the U.S. and Europe. The company has manufactured 5,000 Fisker Ocean SUVs and already delivered to 900 customers. While this seems encouraging, it may be best to wait for quarterly numbers before taking a plunge.

Most concerning is the competition’s track record. Polestar Automotive (NASDAQ:PSNY) is on track to deliver 60,000 to 70,000 vehicles in 2023. However, PSNY stock has been trending lower as EBITDA losses sustain and further equity dilution is likely. Also, Lucid Group (NASDAQ:LCID) has been struggling with cash burn.

Fisker could fall upon similar concerns in the upcoming quarters. Potential equity dilution would translate into a sharp correction. Currently, the FSR has a low cash buffer of $521.8 million. Further, it remains to be seen if Fisker can meet its ambitious deliveries target.

Electrameccanica Vehicles (SOLO)

Electrameccanica Vehicles (NASDAQ:SOLO) is another stock to completely avoid, currently trading near 70 cents.

The first reason to avoid the stock is an intensely competitive EV market. Frankly, Electrameccanica is unlikely to survive a few years down the line. Further, SOLO launched a single-seater EV, which was the company’s differentiating factor. Sadly, it failed in that endeavor.

Additionally, the company has declined a merger with Tevva, a company focused on commercial EVs. Therefore, SOLO’s vision has completely changed with this proposed deal.

The merged entity is targeting a turnover of $1.3 to $1.5 billion by 2028. It’s likely that cash burn will sustain in the next few years and would imply further dilution of equity. With the commercial EV segment being equally competitive, the outlook is uncertain.

Mullen Automotive (MULN)

Mullen Automotive (NASDAQ:MULN) stock has been decimated after a correction of 99% in the last 12 months. The massive decline does not imply that MULN stock is undervalued. With the stock’s recovery unlikely, Mullen is unattractive even as a speculative bet.

Mullen Automotive has weak fundamentals with a first-time revenue of $308,000. Importantly, cost of sales was 81% of the revenue. Importantly, the cost of R&D is significant and has been increasing over the quarters. Unfortunately, the company hasn’t been able to translate its innovation into growth.

Currently, the company has cash and equivalents of $214 million. With cash burn sustaining, massive equity dilution is likely. Further, share repurchase in this scenario seems to be among the worst decisions.

In a recent news, Mullen has commenced delivery of Class 3 EV Cab Chassis Trucks. However, this event didn’t have any positive impact on the stock. It’s clear that investors prefer to stay away from this falling knife.

On the date of publication, Faisal Humayun did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.

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3 Dividend Stocks to Buy for Income Investors in a Rising Rate Environment

Source: iQoncept/

In the bustling world of investing, dividend stocks to buy for income stand out for those searching for dependable returns. It’s no secret that dividend aristocrats, those esteemed stocks with a rich legacy of payouts spanning over 25 years, are lauded as the epitome of financial reliability. These stalwarts have weathered stormy economic climates, delivering dividends even when the clouds of uncertainty loom large. Moreover, the dance of dividend stocks with interest rates is intricate, soaring when rates plummet and retreating when they ascend. Yet, several dividend-centric stocks have shown admirable resilience in today’s volatile interest rate landscape. Thus, if you’re scouting for robust, yield-rich additions to your portfolio, these dividend champions will be your prime contenders. Let’s look at three top dividend stocks to buy for income to add to your portfolios, offering stability and healthy upside ahead.

Dividend Stocks to Buy for Income: Canadian Natural Resources (CNQ)

A magnifying glass zooms in on the website for Canadian Natural Resources (CNQ).

Source: Pavel Kapysh /

Canadian Natural Resources (NYSE:CNQ), anchored in Alberta’s robust energy landscape, is a giant in the oil sands arena. Its unique sedimentary structure, where oil is niftily trapped in sandstone, promises a steady production stream, stretching its viability deep into the 2030s and beyond. In an era where new oil projects often face uphill battles, the longevity of CNQ’s assets shines incredibly bright. Moreover, once past the initial infrastructure costs, the low operating expenses of these oil sands thrust Canadian Natural into an enviable position of massive profit margins, especially with the resurgence in oil prices.

Beyond its operations, CNQ is making waves in the dividend domain, boasting a hefty 4% yield and a commendable 21% growth over five years. Topping it off, its year-to-date (YTD) performance showcases a 27% return, further cementing its standing as a beacon for investors.

CTO Realty Growth (CTO)

Image of a man holding a key chain with a key and house attached to the key ring over a office desk in the background

Source: Shutterstock

This year has been challenging for many real-estate-investment-trusts, and CTO Realty Growth (NYSE:CTO) hasn’t been spared, with its shares slipping over 12% since January. Specializing in retail properties in burgeoning metro zones, this dip positions CTO as an intriguing prospect for income stock enthusiasts. It boasts an impressive forward average-funds-from-operations growth of 7.6%, which trumps the sector median by over 85%. Moreover, its revenue growth over a five-year period stands at an impressive 9.65%, roughly 54% higher than the sector median.

Regarding dividends, it is currently yielding north of 9.36%, with 10 years of consecutive payout growth. Moreover, five-year dividend growth stands at a tremendous 80.2%. Despite overarching macro concerns, it projects an uptick in CTO’s funds from operations in 2024, hinting at potential dividend enhancements.

Realty Income (O)

realty income logo highlighted by a magnifying glass on a web browser

Source: Shutterstock

Realty Income (NYSE:O) stands out as one of the top players in the REIT universe, being one of the most popular monthly dividend businesses. This leading triple-net trust adopts a model where the tenants, not the landlords, bear the burden of primary expenses, including taxes, insurance and maintenance. Such a strategy is particularly advantageous in inflationary periods, offering landlords a cushion against unexpected cost surges.

However, even with this distinct edge, O stock has been unable to escape the broader REIT industry downturn. Rising interest rates have alarmed investors, translating to increased interest expenses for REITs. Consequently, O stock has dipped a remarkable 22% YTD.

But there’s a silver lining for eagle-eyed investors. The current slump could potentially present an attractive entry point. With its shares now boasting a forward dividend yield of around 6% and trading at a forward price-to-AFFO per share ratio slightly below the sector’s median, O stock is an excellent income stock to wager on.

On the date of publication, Muslim Farooque did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

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Activist Politan Capital engages with Azenta. Here’s how the firm may boost shareholder value

Choja | E+ | Getty Images

Company: Azenta (AZTA)

Business: Azenta is a life sciences company that operates through two segments. First, there’s the life sciences products division, which offers automated cold sample management systems for compound and biological sample storage, equipment for sample preparation and handling, consumables and instruments that help customers in managing samples throughout their research discovery and development workflows. Then, there is the life sciences services segment, which provides comprehensive sample management programs, integrated cold chain solutions, informatics and sample-based laboratory services to advance scientific research and support drug development. The services include sample storage, genomic sequencing, gene synthesis, laboratory processing, laboratory analysis, biospecimen procurement and other support services.

Stock Market Value: $3.02B ($50.19 per share)

Activist: Politan Capital Management

Percentage Ownership: 6.87%

Average Cost: $44.83

Activist Commentary: Politan Capital Management was founded by Quentin Koffey. Most recently, Koffey led the activism strategy at Senator Investment Group. Prior to that, he led the activist practice at D.E. Shaw, and before that he was at Elliott Associates. Koffey is operating Politan more like a private equity fund than a traditional long-short equity hedge fund, as it can draw down locked-up capital to give it enough time to accomplish its goals through active engagement with boards and management teams to improve governance, operations or strategic direction. Politan looks for high quality businesses that underperform their peers or potential. These businesses also have a clear fix and a defined pathway to implement that solution. This is Politan’s second 13D filing and third activist campaign, all of which have been in the health-care sector.

What’s happening?

Politan has engaged in discussions with the Azenta board and management team regarding the company’s business, operations, financial condition, strategic plans, governance and other matters.

Behind the scenes

Azenta (formerly known as Brooks Automation) is not a new company. It has been around for nearly half a century. For decades it operated as a leading automation provider and partner to the global semiconductor manufacturing industry. On Feb. 1, 2022, Azenta sold its semiconductor automation business to Thomas H. Lee Partners, L.P. for about $3 billion. Today, it focuses exclusively on the life sciences businesses. Now, the company produces and services cold storage solutions and is the largest provider in its markets. 

Following the sale of the semiconductor business, the company had $2.7 billion of net cash on its balance sheet. Azenta used approximately $1 billion of that for stock buybacks and roughly $500 million to acquire B Medical, a temperature-controlled storage and transportation solutions business. That leaves them today with $1.1 billion in net cash and a $3.0 billion market cap. One-third of the company is cash, and investors want to know how it plans to deploy that capital. And they do have some cause to be concerned. While the share buyback was well advised, the acquisition of B Medical – which was completed on Oct. 3, 2022 – was not well received by the market. When the transaction was first announced on Aug. 8, 2022, the stock dropped over 10% through the following two days. Additionally, Azenta has missed guidance repeatedly, estimating double-digit margins and strong revenue growth, and falling woefully short on both metrics. This has put more pressure on the stock, which has dropped from $69.01 per share prior to the B Medical acquisition announcement to $50.77 prior to Politan’s 13D filing, a total of 26.4%. Over the same time, the S&P 500 has returned 8.1%.

Azenta has a very strong core business. The problems it is experiencing all revolve around the excess cash on the balance sheet. First, with one-third of the market cap of the company sitting in cash, it is impossible to accurately value Azenta when there is no clear direction for how that capital will be put to work. This is exacerbated by using $500 million on an acquisition that the market did not appear to agree with. This makes the company un-investable for many investors, not because they do not believe in management or think management is doing a bad job, but because of the uncertainty over such a big part of its asset base. However, this same dynamic creates an opportunity for activist investors. By getting a shareholder representative on the board who has a history of not only safeguarding, but growing shareholder value, it will give the market confidence that the capital will be put to an accretive use. This alone can change a company from trading at a discount to trading at a premium.

The second issue with the company is revenue growth and operating margins. The growth hurdles are not as much of an absolute issue as a relative one. Azenta’s top line has been growing, just not as fast as the company’s guidance. This also can be alleviated by adding board members with experience in communicating to the investor world. Further, operating margins have been significantly compressed, particularly versus guidance, but this is often a problem with companies that have an excess amount of cash. Companies that get a sudden influx of cash often lose the discipline to rein in costs as there is no urgency to operate on a tight budget. Putting a good portion of the cash to use wisely would not only create shareholder value, but it would force management to be more disciplined in their spending. This would lead to better operating margins that are more in line with management guidance.

If Politan is investing $200 million into a company that has one-third of its market cap in net cash, we expect the firm will want a seat at the table to advise on how that cash should be spent. We also believe that other shareholders would want the same. This is something management should want, too. Let’s make one thing clear that is often misunderstood in activist situations: Just because Politan filed a 13D and just because the firm is meeting with management, does not mean that it is critical of management. It also does not necessarily mean that the firm is not on the same page as management. It is very possible that both Politan and management want to do what is best for the share price and both value the other’s opinion, and we see a quick appointment to the Azenta board. However, if that is not the course taken, Politan has shown that it has conviction in its investments and will not shy away from a proxy fight. Given the company’s recent performance and the facts of this situation, we do not think it will come to that. Azenta’s director nomination deadline is Nov. 2, so we will not have to wait that long for an answer.  

Ken Squire is the founder and president of 13D Monitor, an institutional research service on shareholder activism, and the founder and portfolio manager of the 13D Activist Fund, a mutual fund that invests in a portfolio of activist 13D investments. Azenta is owned in the fund.

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