Apellis Pharmaceuticals Inc. shares
APLS,
jumped 8% premarket on Tuesday after competitor Iveric Bio, a unit of Astellas Pharma Inc.
ALPMY,
on Monday released results of a trial of Izervay as a treatment for geographic atrophy, a form of age-related macular degeneration. Based on the new data, Izervay’s “efficacy is totally unclear and safety got worse,” Raymond James analysts wrote in a note Monday. The analysts maintained a strong buy rating on shares of Apellis, whose geographic atrophy treatment Syfovre was approved by the U.S. Food and Drug Administration early this year. Syfovre has also been dogged by safety concerns, but Apellis late last month identified a certain type of needle as a potential cause of inflammation of retinal vessels seen as a rare but serious side effect of the eye treatment. Apellis shares have dropped 9% in the year to date, while the S&P 500
SPX,
has gained 16%.
How to ACTUALLY trade stocks for beginners (Etrade buying/selling TUTORIAL)
Hanesbrands stock surges, as potential sale of Champion business is being considered
Shares of Hanesbrands Inc.
HBI,
jumped 2.2% in premarket trading Tuesday, after the clothes and underwear seller said it is considering a broad range of alternatives for its Champion athletic-apparel business, including a potential sale. The company said it has not set a timetable to complete its review of alternatives, and there is no assurance that the review will result in any transaction. “In recent years, the executive leadership team has implemented significant structural improvements within Champion that have resulted in greater distinction between the company’s innerwear and activewear businesses,” said Chairman Ronald Nelson. “With this in mind, and after careful consideration, we have commenced a comprehensive review of strategic options for the global Champion business.” The stock has tumbled 29.9% year to date through Monday, while the S&P 500
SPX,
has gained 16.0%.
The Sweet Spot: 3 GARP Stocks You Can’t Afford to Overlook
Source: shutterstock.com/Lemonsoup14
GARP, or “Growth at a Reasonable Price,” is an investing strategy popularized by Wall Street legend Peter Lynch, who managed the Fidelity Magellan Fund (MUTF:FMAGX). Peter Lynch’s approach garnered a 29.2% annualized return during his time and beat the S&P 500 index for several years. The GARP strategy looks at companies with growth and value characteristics to ensure investors are focused on those with high valuations and consistent growth.
With his renowned performance, GARP investing has become one of the most followed strategies by investors looking for that sweet spot between value and growth. S&P500 has even created an index focusing on these stocks, called the S&P500 GARP index. The index follows the same mantra as Peter Lynch, focusing on companies with superior earnings power, sensible valuation, impressive financial strength, and steady fundamental growth. This helps investors who want to adopt the GARP strategy easily choose stocks that fall in that category.
This article will look at three of its constituents that are the best in the pack.
Devon Energy Corporation (DVN)
An independent energy firm, Devon Energy Corporation (NYSE:DVN) specializes in the exploration, development, and production of fuel products like oil, natural gas liquids, and natural gas. While energy stocks have been strengthening thanks to rising oil prices, DVN is also slowly creeping up after hitting its 52-week low of $44.03 last March. Its slow descent gives investors room to buy in before it shoots up, reclaims its year high, and continues its upward trajectory.
Wall Street analysts love Devon, rating the company with a “Strong Buy” recommendation and a high target of $79.00 in the next 12 months, a potential upside of around 50%. The company is poised to capitalize on the high oil demand due to supply cuts. DVN hopes to add more shareholder value as it expands its stock repurchase program. In addition, DVN dividends could potentially increase and offer shareholders higher income on the back of rising crude oil prices, making it one of the more attractive GARP stocks in the market.
Cigna Group (CI)
Let’s face it: health services companies tend to be boring as some investors forget about them. That’s unfortunate because they’re missing out on some great GARP stocks like Cigna Group (NYSE:CI), which offers services that cater to the challenges of our healthcare system. These services include medical, pharmacy, dental, and behavioral product offerings like Cigna Healthcare and Evernorth Health Services. As insurance plan redemption and pharmacy benefits management grow, I expect this will translate to increased earnings.
While CI’s business does sound boring to some, it makes up for it with consistent profitability. Indeed, CI’s mission is to lower medical costs, boost the company’s image, retain its current customer base, and attract new clients. The results speak for themselves: the company has consistently beaten earning expectations in the last four quarters. Not only that, Cigna’s revenues have been consistently growing, and for shareholders, the company currently pays a 1.71% dividend yield – cementing its place as an attractive GARP stock to buy.
Arch Capital Group (ACGL)
Arch Capital Group Ltd. (NASDAQ:ACGL) is a Bermuda-based insurance company operating worldwide and focusing on specialty insurance. As a specialty insurance provider, ACGL insures specialty case properties that require unique assessment per case. The company also has a reinsurance segment that sells a portion of its exposure to other insurers to minimize its risk. Its other operations focus on mortgage and casualty & professional insurance.
ACGL is another stock beloved by Wall Street analysts with a “Strong Buy” recommendation and a $100.00 high estimate. Arch Capital’s earnings have also been consistently surpassing analysts’ estimates for the last four quarters. The company’s annual sales have also been growing over the previous five years and show no signs of slowing down. The industry’s favorable conditions have significantly boosted AGGL’s growth and standing in the S&P 500’s GARP index list.
On the date of publication, Rick Orford 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 InvestorPlace.com Publishing Guidelines.
Best Buy to start holiday savings events in October with 2-day flash sale, partnerships with Microsoft and Samsung
Best Buy Co. Inc.
BBY,
said Tuesday it’s planning to start its annual holiday savings events in October this year, leading up to Black Friday in November. The electronics retailer said loyalty program members will be entitled to thousands of deals and discounts staring in October and will receive a $50 reward certificate for every $500 they spend. Members will also be granted early access to Black Friday deals from Oct. 27 to 29. The company is teaming up with Samsung
005930,
and Microsoft
MSFT,
for special sales events with shoppers who spend $1,00 on Samsung products, including home theater and appliances, entitled to a $100 reward certificate. For the Microsoft event, shoppers can save up to $500 on Windows laptops. The company is also planning a 48-hour flash sales from Oct. 10 to 11 with deals on TVs and laptops, headphones and smartwatches, among other items. For gamers, the company will hold a three-day sale from Oct. 20 to 22. The stock is down 12% in the year to date, while the S&P 500
SPX,
has gained 16%.
Beware! 7 Airline Stocks Waving Massive Red Flags Right Now.
The airline industry has been flying high since 2022, thanks to the post-pandemic “revenge travel” trend, but after a rare period of strong operating and stock price performance, now may be the right time to consider what are the airline stocks to sell.
Since July, shares in legacy and budget carrier alike have plunged, as soaring labor and fuel costs point to greater uncertainty over future results. To some, the across-the-board price declines may suggest that this uncertainty is already baked into airline stock valuations.
However, these stocks may still have a way to go before the dust truly settles. Only starting now to walk back earnings forecasts, a worsening of the situation (like say, from a possible 2024 recession that curbs air travel demand) could cause an additional round of price declines.
With these seven airline stocks to sell, not only is the possibility of industry headwinds a major risk to future performance. Sometimes, there’s possible turbulence from company-specific headwinds as well.
American Airlines (AAL)
Shares in legacy carrier American Airlines (NASDAQ:AAL) have tumbled sharply since the airline sell-off began two months ago.
AAL has during this time frame dropped from just above $19 per share, down to around $13.30 per share as of this writing.
Yet even after dropping by 30%, more declines may be on the radar for AAL stock. At first, it could appear that the market has priced in the prospect of lower profitability. Shares today trade for just 4.5 times forward earnings. Still, management has warned investors to brace for impact, more bad news may lie ahead.
For instance, with the carrier’s flight attendants threatening to strike, American may be forced to concede to another costly labor deal.
Other unpleasant surprises may be revealed in October, when the company releases its next quarterly earnings report. Ahead of another potential plunge, stay away from AAL.
Alaska Air Group (ALK)
Alaska Air Group (NYSE:ALK) is definitely a name to include on any airline stocks to sell list. This airline is more of a low-cost carrier than a legacy carrier, but like American Airlines it too is contending with soaring costs, in particular soaring pilot labor costs.
Alongside rising costs, softening demand is also a risk with ALK stock. As InvestorPlace’s Alex Siriois pointed out earlier this month, the airline itself has conceded this will result in miniscule (3%) revenue growth this quarter. Yes, sell-side consensus calls for earnings growth in 2024.
This may explain ALK’s valuation (around 6.7 times forward earnings) is at a premium to peers.
However, keep in mind that these forecasts range widely, with some calling for Alaska Air Group to report a sharp earnings decline next year. As any further disappointment with future results could knock ALK to new multi-year lows, avoid.
Delta Airlines (DAL)
Compared to AAL, Delta Airlines (NYSE:DAL) has experienced a smaller decline in price since the airline stock sell-off kicked off in July, falling by less than 20% during this time.
However, while DAL stock hasn’t been knocked down to a lesser extent, don’t assume that means a lower level of downside risk ahead.
As a Seeking Alpha commentator recently argued, Delta Airlines is dealing with the same negative macro trends affecting the competition. These negative trends are also likely to continue.
Another sell-off may be on the horizon for DAL, and much sooner than the possible upcoming sell-off for AAL. Delta is less than a month away from reporting results for the quarter ending Sep. 30.
While the airline has warned investors through a walking back of guidance, an earnings miss or the release of additional discouraging outlook may spark a sharp post-earnings drop.
Hawaiian Holdings (HA)
Unlike most of the other airline stocks to sell, it’s not as if Hawaiian Holdings (NASDAQ:HA) merely faces the prospect of becoming less profitable.
As I pointed out back in August, this carrier didn’t manage to make a post-Covid return to profitability.
Although Hawaiian’s results have improved in recent quarters, it has continued to be unprofitable, as seen with a reported $12.3 million net loss last quarter. When I last wrote about HA stock, at the time there was an expected that the company would re-hit full-year profitability in 2024.
However, the sell-side has since materially revised its forecasts. Instead of reporting earnings of 21 cents per share next year, consensus now calls for a net losses of $1.03 per share.
HA may trade at lower prices today than it did when Covid lockdowns first hit in 2020, but this profitability problem could knock it even lower.
JetBlue Airways (JBLU)
With JetBlue Airways (NASDAQ:JBLU), it’s a fading potential catalyst that makes it one of the airline stocks to avoid.
As you may recall, JetBlue announced plans to merge with rival low-cost carrier Spirit Airlines (NYSE:SAVE) over a year ago. Unfortunately, regulatory pushback over the proposed transaction has left the merger in “pending” status.
Not only that, even as the carrier has attempted to convince regulators to approve the deal, through actions like planned divestitures, other factors may prevent the deal from ultimately going through. So, why is the increased likelihood of a canceled merger bad news for JBLU stock?
The cost synergies from this deal could in theory help JetBlue mitigate the impact of a post-“revenge” slowdown in air travel. Without the deal, however, after reporting a swing back to profitability last quarter, the carrier could dip back into the red in the quarters ahead.
Southwest Airlines (LUV)
For a long time, Southwest Airlines (NYSE:LUV) benefited from the perception that it was much better-run than its major competitors. However, in the past year, Southwest’s reputation among customers has taken a big hit, because of unanticipated mass cancellations of flights, last December and last April.
The reputation of LUV stock among investors has taken a big hit as well. The cancellation problems, coupled with the spiking cost problem airlines industry-wide are experiencing, has knocked shares back down to near their 52-week low.
Despite this stock price pullback, though, one thing has not gone away: LUV’s big valuation premium to other airline stocks.
LUV today trades for 15.3 times earnings, while comparable names mostly sport single-digit forward earnings multiples.
I’m not saying LUV will soon trade at a similar multiple, but as tough times continue for the air travel space, further de-ratings may be in the cards.
Mesa Air Group (MESA)
It may seem like it’s far too late to declare that Mesa Air Group (NASDAQ:MESA) is one of the top airline stocks to sell.
Shares have fallen by more than 91% over the past five years.
With this, I’ll admit that those holding this stock don’t need to hear once more that MESA stock has been a poor-performing investment. Still, there may be some contrarians interested in rolling the dice.
After all, recent efforts to right-size the business, including the sale of excess aircraft, may suggest the potential for clear skies ahead, right?
Not so fast. The regional air carrier’s turnaround efforts could stall, as industry conditions grow less favorable. Even if a turnaround takes shape, it’s more-than priced-in.
Shares trade for 22.1 times estimated earnings for the fiscal year ending September 2024. Instead of being a “bottom-fisher’s buy,” MESA remains a stock to sell/avoid.
On the date of publication, Thomas Niel 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 InvestorPlace.com Publishing Guidelines.
UAW sets deadline for further possible strikes
United Auto Workers President Shawn Fain said Monday that if the union has not made substantial progress toward reaching an agreement with the Big Three automakers by Friday at noon Eastern time, it is prepared to call for additional strikes. About 13,000 auto workers from three UAW plants in three different states are currently on strike at Ford Motor
F,
General Motors
GM,
and Stellantis
STLA,
and the union has said it is prepared to call on more workers to walk off their jobs if necessary. “We’ve been available 24/7 to bargain a deal that recognizes our members’ sacrifices and contributions to these record profits,” Fain said in a livestreamed update. “Still the Big Three failed to get down to business.” A GM spokesman said “we’re continuing to bargain in good faith with the union to reach an agreement as quickly as possible for the benefit of our team members, customers, suppliers and communities across the U.S.” An earlier Stellantis statement said the company resumed negotiations with the union Monday, which the union confirmed. “We continue to listen to the UAW to identify where we can work together and will continue to bargain in good faith until an agreement is reached,” the statement said. A Ford spokesperson said Monday night that the company is developing contingency plans in case of more work stoppages: “Bottom line: We’re working for a win-win.”
Target says its Circle Week fall savings event to kick off Oct. 1 to 7
Target Corp.
TGT,
said Tuesday its Target Circle Week, a fall savings event, will take place Oct. 1 to 7. The retailer’s Deal of Day will also start Oct. 1, offering deep discounts for members of its loyalty program. The company said it will offer thousands of gifts priced at under $25 this holiday season, as well as seasonal food and beverage items starting at just $2. The company said it’s introducing a long-term partnership with Austin-based lifestyle brand Kendra Scott, which will include more than 200 jewelry and accessories items, most priced under $40. The company is also bringing back Marks & Spencer gourmet food and beverage items. The company is planning to hire nearly 100,000 seasonal team members to help customers. The stock is down 20% in the year to date, while the S&P 500
SPX,
has gained 16%.
Top 5 AI Stocks to Buy Now
3 Top Stock Picks to Play the Rental Market Boom
Source: tokar / Shutterstock
Rental home investing has increasingly become a cornerstone of major investors’ portfolios. Even as interest rates rise, investment in single-family homes rose from 12% of all real estate purchases to more than 20% in a few short months. As housing supply outpaces demand, a reversal from recent trends, rental property purchases will likely continue.
Playing the rental market boom may seem impractical for those without a ton of cash on the sidelines. However, that isn’t the case. Some investment firms acquire rental properties and trade on public stock exchanges. Investors can choose from several stocks to capitalize on the rental market boom.
The bottom line is that you don’t have to be a millionaire to capitalize on the rental market economy. Let’s take a look at three stocks that will benefit from an uptick in rental property prices.
Invitation Homes (INVH)
Invitation Homes (NYSE:INVH) owns more than 83,000 single-family rental (SFR) homes nationally. They generally target the “starter” segment, or those fresh out of school and beginning their first job. Invitation Homes offers a bridge between schooling and professional life as consumers settle.
Invitation Homes capitalized on that trend as more professionals left school and entered the workforce right into a remote environment. Revenue growth exploded post-2020. Revenue grew by 3% year-over-year in 2020. In the following two years, revenue grew by 9.5% in 2021 and by 12.1% in 2022.
Invitation Homes kept pace while maintaining margins (income was $195 million in 2020 but hit $437 million in the preceding 12 months).
INVH is likely the best “pure play” for investors interested in playing the rental market boom. The stock also offers a modest 3% dividend to entice investor interest further.
Mid-America Apartment Communities (MAA)
Mid-America Apartment Communities (NYSE:MAA) is an S&P 500-listed real estate investment trust with more than 100,000 apartment home units in 16 states. Opening a position in MAA alongside INVH lets investors capture the biggest ends of the rental market: SFRs and individual apartments.
The company’s success is evident in its dividend consistency, and the REIT either maintained or increased its dividend since 1994. The biggest dividend jumps came in recent years, particularly in 2022, on the heels of a strong rental market. That trend isn’t likely to die soon, and the company just announced its next dividend increase.
A risk to keep in mind is that rent prices will decline as inflation cools. Declining rent prices will cut into MAA’s bottom line. This makes MAA a slightly riskier play than a home-based rental market stock but still one to consider for your portfolio.
Extra Space Storage (EXR)
Moving into a rental, or bouncing between rental homes, means that space is at a premium. This means that Extra Space Storage (NYSE:EXR) is as well-positioned to take advantage of the rental market boom as any direct investment stock. Despite the strong position, EXR is down 11% this year. That drop makes EXR a cheap stock for those interested in capitalizing on rental market trends.
If you’re turned off by recent market turbulence, EXR is also a stable stock. Its beta is just 0.57, meaning it moves less dramatically than the broader market. The company also issues a 2% dividend.
Ultimately, due in part to the rental market boom, self-storage demand grew to more than 1.7 billion square feet this year. That bodes well for EXR’s core operations. As 20% of Americans currently use some form of self-storage and 15% more expect to in the near future, Extra Space Storage is ideal if you want to diversify your rental market investment portfolio.
On the date of publication, Jeremy Flint held no position in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.