The former parent company of Silicon Valley Bank is nearing a deal to sell its VC and credit-investment arm out of bankruptcy, according to a Wall Street Journal report Friday, citing people familiar with the matter. SVB Financial Group
SIVPQ,
is in talks with two bidders for SVB Capital: Anthony Scaramucci’s SkyBridge Capital and Atlas Merchant Capital, and private-equity firm Vector Capital. A court decision on a winner is expected in the next few weeks in a deal that could fetch between $250 million and $500 million. Silicon Valley Bank failed in March and was taken over by regulators, cascading into a banking crisis that later took down Signature Bank and First Republic.
Sky’s the Limit: 3 Stocks Ready to Rocket as Flying Cars Surge
From planes to trains to automobiles, every innovation in human movement has opened new doors and new industries. Some of the most innovative companies of today are now bringing in flying cars, promising to once again revolutionize the way we travel around. Flying car stocks will bring about easier short-flights, and the possibility to fly and then drive to your destination. They may even replace helicopters as the medium of choice for getting across town without the traffic. And some are even priced at the cost of a luxury car and not the cost of an airplane, well out of reach of all but the ultra-rich.
The flying car stocks with the greatest potential today are those with proven technology and strong partnerships. A flying car needs to fly — obviously — but it also needs a market to fly in. So many flying car stocks have partnered with airlines, and air travel cities will be the natural first stop for many of these vehicles.
In addition, the best flying car stocks to buy are often pushing aggressive timelines, hoping to start ferrying passengers within the next two years. With interest rates and the cost of borrowing rising, this is likely prudent as flying car stocks need to start making money before they run out of runway provided by their cash and investments.
With the FAA taking steps to regulate air taxi services, flying cars are for the first time entering the mainstream. So, before you jet off to your next meeting, let’s look at the companies that might take you there.
XPeng (XPEV)
XPeng (NYSE:XPEV) made news recently by buying DiDi Global’s (OTCMKTS:DIDIY) electric car division for around $744 million dollars. XPeng’s stock shot up after the deal was announced. But XPEV isn’t just an electric vehicle (EV) stock, it’s also a flying car stock. The company has been touting the potential of flying cars that can also drive on roads for years now. And its recent successful test flight of the Voyager X2 showed XPeng has the technology to back it up. While the flight was short, the event marked a significant milestone in the company’s journey toward electric air mobility.
The Voyager X2 has a projected price range of $126,000 to $236,000. This potentially positions it as an attractive option for those seeking efficient and convenient urban transportation. That price range is high for a traditional car but not for a helicopter. The transportation mode is advantageous to those wanting to avoid traffic congestion but one that can also drive when needed.
It’s worth noting that XPeng will face challenges from the E.U.’s potential anti-China tariffs. But that only makes diversifying into air taxis and flying cars even more beneficial. As urban congestion worsens and the demand for efficient transportation solutions grows, XPeng’s dual focus on EVs and electric air taxis positions could be key to the company’s future.
XPeng is still an unprofitable, speculative play. The company’s Q2 2023 earnings show that gross margin and vehicle margins were both negative. With total revenue of about $700 million and a net loss of about $390 million, it is burning cash. But with $4.65 billion in cash, short-term investments and time deposits, XPeng can keep burning for some time. And with huge potential for its vehicles, the company is still one of the most worthwhile bets in flying car stocks.
Joby Aviation (JOBY)
In the field of flying car stocks, Joby Aviation’s (NYSE:JOBY) recent developments show a bright future and high potential. For example, Joby and Delta Air Lines (NYSE:DAL) are partnering to provide air taxi services in New York and Los Angeles to take people to and from airports. This partnership leverages Delta’s expertise in aviation and Joby’s cutting-edge electric vertical takeoff and landing (eVTOL) technology to create convenient air travel in densely populated cities.
Furthermore, Joby’s substantial investment and partnership with Toyota Motor (NYSE:TM) demonstrates strong financial backing. Toyota’s $400 million investment and supply agreement provides Joby with the necessary resources for research and development. But it also signifies the automotive giant’s belief in Joby’s plans for the future of air transportation.
But the true showcase of Joby’s potential may be the recent hydrogen-powered voyage of the HY4 aircraft. That flight showed liquid hydrogen propulsion offers longer flight ranges of up to 932 miles. Note: The median flight in the United States is just 634 miles. Although not strictly a flying car, as it cannot drive, the HY4 could transform the aviation industry with short-haul hydrogen-powered flights.
Joby’s most recent earning report showed no revenue and a net loss of $286 million dollars. With $1.2 billion in cash and short-term investments, Joby still has a few quarters of runway to let them take off. But its partners still see potential, and so do I. As a flying car stock, Joby may soon upend the short-haul aviation industry, so keep it on your watchlist.
Archer Aviation (ACHR)
Archer Aviation (NYSE:ACHR) has had a good year as a flying car stock. It recently settled a lawsuit with Boeing (NYSE:BA) over theft of trade secrets. They still plan to offer air taxi services by 2025. Year-to-date Archer stock soared by over 200% at the time of this writing. And with its partnership with United Airlines (NASDAQ:UAL) to fly an air taxi service in Chicago in 2025, the company is on track to meet its deadlines.
But Archer isn’t just interested in the civilian market. The company’s agreement to supply eVTOL aircraft to the United States Air Force underscores the confidence that even major players have in the company’s technology. That partnership not only provides valuable revenue but also highlights the versatility and reliability of Archer’s aircraft. Even beyond civilian air mobility, Archer is making waves.
The craft it will supply to the Air Force is the Midnight eVTOL. Recently shown off at the 2023 Global Aerospace Summit, Archer claims the vehicle is optimized for 20-mile trips, with a pilot, seating for four and just a 12-minute charge. The Midnight is an impressive option for getting across town in a jiffy.
Archer’s Q2 2023 earnings report shows no revenue, net loss of $184 million, and cash and cash equivalents of $408 million. The company has a very short runway compared to other flying car stocks. But with partnerships, routes and aircraft already lined up, Archer can still dominate the air taxi industry if it can last until 2025. For investors who think they can, Archer is one of the best flying car stocks to buy this year.
On the date of publication, John Blankenhorn 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.
The Call Drops on Verizon: Don’t Be Fooled by VZ’s Deceptive P/E
On the surface, Verizon Communications (NYSE:VZ) may seem like an appealing buy for value investors. VZ stock trades at a very low price-to-earnings ratio, with a forward earnings multiple of only 7.2.
Not only that, shares in this telecom giant also sport a dividend yield that’s undeniably high, even in today’s high interest rate environment. VZ has a forward dividend yield of 7.86%.
But before you run out and possibly buy this stock, on the view that its valuation has nowhere to go but up, and its high payout will provide you with a steady baseline of returns, think otherwise.
With valuation, it’s possible that, rather than being very undervalued, VZ is instead slightly overvalued, and at risk of another price correction.
As for its high-yield? With this large payout comes an even larger dose of uncertainty.
VZ Stock: A Low Valuation Can Deceive
Verizon trades at a low multiple, but don’t assume this makes it undervalued. While there are some exceptions, low multiples aren’t out of the ordinary with telecom stocks. This makes sense, given the mature (i.e. low growth) and capital-intensive nature of the industry.
In fact, compared to other major telecom names, like AT&T (NYSE:T), VZ stock trades at a premium, as T stock trades for only 6 times forward earnings. Now, it’s possible that this valuation gap exists because of differences in dividend yield. Or, due to the perception that this telecom firm is facing fewer challenges than “Ma Bell.”
However, it’s tough to find backing for either argument. While T stock has a lower forward dividend yield (7.59%), it’s not that much lower than VZ’s yield. AT&T has been contending with issues like a heavy debt load and slowing subscriber growth, but it’s not like Verizon is in that much better of a situation.
As seen in recent results, revenue and earnings have been declining. Also, like I pointed out recently, the company may have an environmental issue on its hands, and a debt problem of its own.
What May Make this No-So-Cheap Stock Even Cheaper
VZ stock has already experienced several rounds of valuation contraction. Back in 2019, this stock traded for just over 12 times earnings. In 2021, VZ was trading at a P/E ratio of around 9.
But even after these prior valuation drops, another one may be around the corner, given that the valuation gap between VZ and T may not be sustainable.
While it is possible T’s valuation climbs up closer to that of VZ, given the similar challenges both companies are facing, a move by VZ down towards a valuation on par with that of T may be far more likely.
Based on current earnings per share forecasts for Verizon this year ($4.71 per share), this would mean a drop from $34 per share, to around $28.25 per share, or a 16.9% price decline. Such a pullback would of course outweigh the aforementioned 7.86% annual payout.
Speaking of which, remember I said there’s high uncertainty surrounding the dividend? I have talked of VZ’s “dividend trap” status before, and this risk has unfortunately not gone away. Much like AT&T has reduced its dividend to pay down debt/invest in growth, Verizon may follow suit.
The Bottom Line
With so many holding VZ just for the dividend, any sort of cut to its payout could cause an even more significant sell-off for shares. If the company’s other issues don’t lead to VZ’s valuation falling down to that of T stock, a dividend cut certainly would.
Many times with stocks, it’s possible to make as strong of a bull case as it is to make a bear case. With Verizon, however, things are pretty cut-and-dry.
Best case scenario, further slight price declines will outweigh gains from the stock’s 7.86% dividend. Worst case scenario, Verizon reduces the dividend/otherwise experiences additional multiple compression, resulting in even heavier losses for investors buying today.
Although this is not a high-risk stock, with such unappealing reward potential, consider it best to skip out on VZ stock.
VZ stock earns a D rating in Portfolio Grader.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
The 7 Most Undervalued Stocks in the Market Right Now: September 2023
With markets remaining choppy and sentiment still cautious, many quality stocks are trading at tempting valuations. Recent indiscriminate selling has knocked down the valuations of profitable, growing companies to levels that don’t accurately reflect their long-term potential. Savvy investors can exploit this disconnect by identifying and buying shares in temporarily-mispriced businesses.
Though broader macroeconomic challenges persist, these companies operate successful business models that should drive significant shareholder value creation over the long term. Some industry leaders have simply been oversold due to this risk-off environment. Others face short-term headwinds, but have levers to pull to reaccelerate their growth. And some are great businesses unfairly tarnished by association with struggling sectors.
Of course, further market declines may pressure stocks lower still in the near term. But buying companies with strong fundamentals at these levels enables outsized returns once the tide eventually turns. Here are the seven most undervalued stocks to look into:
Carl Zeiss Meditec (CZMWF)
Source: Dmytro Zinkevych / Shutterstock.com
Carl Zeiss Meditec (OTCMKTS:CZMWF) is down almost 40% from its 52-week highs despite reporting robust Q3 results. The microsurgery company’s revenue grew 12.9% year-over-year on a currency-adjusted basis to €1.51 billion. This broad-based growth was driven by its Ophthalmic Devices and Microsurgery segments.
Carl Zeiss continues to benefit from powerful demographic trends, including an aging global populations and the rising prevalence of eye diseases. The company estimates the cataract surgery market will sustain mid-single digit growth, while premium intraocular lenses represent a massive opportunity growing at 10%+ annually. With its advanced technology in lasers, intraocular lenses and visualization systems, Carl Zeiss is well positioned to capitalize on these strong tailwinds.
Even with the healthy revenue growth, and temporary factors like China lockdowns, supply chain issues fading away and rebounding margins this quarter, the stock is yet to rebound. At current valuations around 24-times forward earnings, the stock seems to price in an excessively negative scenario, in my opinion. As macro conditions eventually stabilize, Carl Zeiss’ long-term growth story should regain momentum. Analysts expect the top-line growth here to hover near double digits for the foreseeable future. Accordingly, the average analyst expects 40% upside in one year.
JinkoSolar (JKS)
Source: Lutsenko_Oleksandr / Shutterstock.com
As one of the largest solar module suppliers globally, JinkoSolar (NYSE:JKS) operates an integrated production network spanning silicon wafers to solar modules. However, negative market sentiment due to Chinese regulatory risks has driven JKS stock down over 60% from 2022 highs, now trading at just 3-times forward earnings. This seems like a huge overreaction, creating a compelling bargain buy for long-term investors.
First things first, the company’s revenue growth is above 50%, as of the latest quarter. JinkoSolar beat analyst estimates for revenue by a massive $210 million, and beat on its earnings per share number ($5.78 compared to estimates of $3.52)! JKS has demonstrated outstanding execution, even amidst challenging conditions. The company also reported 65.6% sequential growth in net income, driven by a 36% jump in solar module shipments. Its next-gen N-type modules already comprise 58% of shipments, underscoring its technology leadership. JKS expects N-type to reach 60-65% of shipments in the coming quarters.
With fully integrated operations spanning silicon ingots to solar modules, JKS enjoys significant cost advantages relative to non-integrated peers. Its global manufacturing footprint extends throughout China, Southeast Asia, and the U.S. This footprint allows JinkoSolar the flexibility to navigate regulatory risks and tariffs. Currently, the company sees no impact from the recent U.S. ban on Chinese solar imports.
Looking ahead, JinkoSolar issued upbeat guidance expecting full-year module shipments of 70-75 GW, implying over 25% growth. Its mass production capabilities for next-gen high-efficiency N-type modules should support continued market share gains. Trading at just 0.09-times sales and 3-times forward earnings, JKS stock is undoubtedly among the most undervalued solar stocks now. This creates a very compelling risk-reward proposition for investors who can look past short-term volatility.
Advance Auto Parts (AAP)
Source: James R. Martin / Shutterstock
Advance Auto Parts (NYSE:AAP) operates a network of over 4,790 auto parts stores, catering to both retail do-it-yourself customers and professional installers. The company has faced margin headwinds this year from elevated inflation and investments to improve parts availability. This led to a 66%+ decline in AAP stock price from 52-week highs. However, I believe the market has overreacted, and AAP stock looks like among the most undervalued options among its peers right now.
In Q2 results, Advanced Auto Parts delivered positive net sales growth despite comparable store sales dipping 0.6%. Importantly, sales trends improved sequentially, with comparable store sales slightly increasing over the last four weeks. The company is seeing traction from initiatives to boost parts availability and maintain competitive pricing. Supply chain investments are also helping improve inventory close rates.
Looking ahead, powerful secular tailwinds should drive accelerating demand for auto parts. The average age of vehicles on U.S. roads is at a record high today. Plus, high inflation means fewer consumers can afford new car purchases, necessitating higher spending on maintenance and repairs.
Meanwhile, Advanced Auto Parts is continuing its pivot towards higher-margin-owned brands, which should support gross margin improvement over time. The company does face near-term headwinds from elevated costs and its pricing strategy. However, Advanced Auto Parts has targeted significant improvements through supply chain optimization, cost savings, and asset productivity. While growth in 2023 will likely be muted, the long-term growth story remains intact. The current undervaluation with AAP stock provides an attractive entry point for investors.
Farmers and Merchants Bank of Long Beach (FMBL)
Source: shutterstock.com/marozhka studio
Farmers and Merchants Bank of Long Beach (OTCMKTS:FMBL) is a community bank operating in California since 1907. The outlook for regional banks has weakened considerably amidst economic uncertainty, sending FMBL stock down close to 36% from 52-week highs. However, this excessive pessimism has created a buying opportunity in this high-quality regional bank.
Despite the tough operating environment, I expect a strong recovery over the long-run. For now, the rising rate environment will impact near-term profitability. And unfortunately, there is little to analyze with this stock, due to its size.
However, as per Gurufocus’ model, they believe FMBL’s fair price will be at $8,000 by the end of this year and believe the stock is significantly undervalued.
Regardless, FMBL maintains a rock-solid balance sheet, ending the quarter with capital ratios substantially above regulatory requirements. Its credit quality also remains resilient, with non-performing loans below 0.25% of total loans. While many regional banks are struggling, FMBL seems well-positioned to weather near-term headwinds.
Trading at just 0.48-times on a price-to-tangible-book value basis, and 7-times forward earnings, FMBL stock is undoubtedly cheap for a profitable bank of its caliber. The stock also offers an attractive dividend yield of 2.2%. While risks exist in this uncertain environment, the risk-reward now seems skewed positively for long-term investors, adding exposure at current levels.
Insulet Corporation (PODD)
Source: Roman Zaiets / Shutterstock.com
Shares of Insulet Corporation (NASDAQ:PODD) have plunged by nearly 47% since May despite the medical device company beating estimates and delivering stellar top and bottom line growth in its most recent quarter. Insulet is the maker of the Omnipod system for diabetes management. The stock’s steep decline reflects worries that new diabetes drugs like Eli Lilly’s (NYSE:LLY) Mounjaro could have a major negative impact on Insulet’s insulin pump business.
However, I believe these competitive concerns are overexaggerated. Insulet just reported record revenue in Q2, up 32.4% year-over-year. Its flagship Omnipod 5 product saw U.S. sales surge 41%. The company is also expanding Omnipod 5’s rollout internationally. Though new medication options may modestly dampen pump demand, Insulet still has an incredible opportunity to grow over the long-term, as its diabetes tech platform continues taking market share.
Even if we assume the company takes a significant hit from new competition, Insulet’s current valuation reflects an overly dire scenario. Shares trade at just 55-times forward earnings with a price-to-sales ratio of 8-times. That suggests the market expects minimal growth, an unlikely outcome given Omnipod 5’s early success and the still highly underpenetrated insulin pump market. Insulet also has a pristine balance sheet to lean on during any temporary slowdown.
Innovative Industrial Properties (IIPR)
Source: Shutterstock
Innovative Industrial Properties (NYSE:IIPR) has faced its own struggles over the past two years. Shares are down almost 70% from its peak. The cannabis industry-focused REIT has dealt with tenant struggles, including some missed rental payments. Investors worried about the shaky financial health of IIPR’s cannabis tenants have clearly been dumping this stock.
However, the worst seems behind for Innovative Industrial Properties. Collections have improved, after the company negotiated lease amendments with distressed tenants. IIPR is also being more conservative with capital deployment in the current environment. Additionally, its existing properties support an attractive dividend, which was recently increased by 11% year-over-year.
With tailwinds from broader cannabis legalization still ahead, IIPR’s experienced management team is positioned to drive growth for years to come. The REIT collects very high yields on its properties, given cannabis companies’ limited access to traditional financing. Once capital markets normalize, demand for IIPR’s specialized facilities should reignite.
After substantial multiple compression, Innovative Industrial Properties trades at just 11-times forward FFO, a massive discount to historical valuations. The stock appears positioned for a gradual turnaround as financial conditions improve industry-wide.
FMC Corporation (FMC)
Source: Shutterstock
FMC Corporation (NYSE:FMC), a diversified chemical company, has also endured steep valuation multiple contraction in 2023. Shares are down 40% year-to-date and trade near 5-year lows. The stock swoon reflects FMC’s expectation for a 9% revenue decline this year, driven by reduced pesticide demand. However, this headwind is temporary.
Wall Street analysts forecast FMC will deliver 7.7% revenue growth in 2024 as agricultural markets stabilize. Over the long term, FMC should achieve around 5% annual growth thanks to its robust product pipeline and strategic pivot toward higher-value offerings. Margin expansion will also likely accompany revenue growth.
Despite the difficult operating environment, FMC continues generating solid cash flows. Its dividend yield sits at an attractive 3% after 5 straight years of payout hikes. At only 12-times forward earnings, FMC stock reflects undue pessimism about its future prospects. The company has successfully navigated prior industry downturns. Once macro conditions improve, FMC’s discounted valuation sets up a substantial upside. The consensus price target is at $110, implying over 47% upside in one year’s time.
On the date of publication, Omor Ibne Ehsan 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.
Bullish Directional Butterfly Options Strategy on Lowes (LOW)
The 3 Most Undervalued Travel Stocks to Buy in September 2023
Travel stocks have embarked on a remarkable journey in recent times, one that investors are keenly following. With the travel industry slowly regaining its footing after the turbulence of the past couple of years, discerning investors are eyeing opportunities in the market. In this article, we’ll delve into the realm of travel stocks. We focus on uncovering promising options for those looking to make savvy investments. You can expect more of the same here.
The appeal of travel stocks, particularly undervalued ones, lies in their potential for robust growth as the world gradually reopens. The pandemic-induced slump hit the sector hard, leaving some gems undervalued and overlooked. These underrated travel stocks offer a unique chance to enter the market at a favorable price point.
Amidst the plethora of options, investors should focus on travel stocks showing strong fundamentals, a resilient business model and adaptability to the evolving travel landscape. These qualities will serve as a solid foundation for potential long-term gains. Let’s explore some of these hidden gems in the travel industry and the factors that make them stand out.
Investors scouting for opportunities in the travel sector will find these stocks enticing, backed by positive industry connotations and the promise of future growth.
Southwest Airlines (LUV)
Southwest Airlines (NYSE:LUV) is traversing a turbulent year, with its stock showing a year-to-date return of -11.23%. The topsy-turvy nature of its sojourn this year mirrors the quality of its recent financials.
In the second quarter of 2023, Southwest Airlines kicked things up a notch with a 4.59% surge in revenue, reaching an impressive $7.04 billion. However, they encountered turbulence as net income experienced a 10.13% dip, settling at $683 million. Ouch! Furthermore, operating income took a significant nosedive, plummeting by 31.35% to $795 million.
Regarding earnings per share, Southwest Airlines slightly botched the landing at $1.08, just below expectations. On a brighter note, revenue slightly exceeded expectations.
These results reflect the challenges Southwest Airlines faces, like many in the travel industry, due to rising fuel costs and other disruptions.
Against this backdrop, it’s important to consider the broader travel industry landscape. Travel stocks, including airlines, have faced uncertainties such as labor disputes and fuel cost pressures. Bank of America (NYSE:BAC) has taken a cautious stance on airline stocks in light of these challenges. However, Southwest Airlines’ recent tentative agreement with Transport Workers Union Local 555 is positive for labor relations within the company.
While short-term caution is advised, long-term investors looking for undervalued travel stocks may find Southwest Airlines intriguing. It continues to navigate these headwinds and position itself on a bright note for the future.
In summary, Southwest Airlines presents a mixed picture. On the one hand, it is certainly facing headwinds. However, it is worth considering as a long-term pick as it works through these industry-wide issues.
Walt Disney (DIS)
Walt Disney (NYSE:DIS) has been on a rollercoaster ride in the past six months, with its stock experiencing a 10% slump. However, with a dazzling display of financial resilience amidst turbulent market waters, the media juggernaut Disney unveiled its latest earnings report, replete with riveting revelations. Despite a battlefield of adversity, Disney defied the odds, boasting a splendid 3.84% year-over-year (YoY) surge in revenue, an astounding $22.33 billion spectacle! However, not every scene in this financial epic was filled with triumph. Alas, the company’s net income unveiled a dramatic twist, plunging to a staggering -$460 million, marking a harrowing plummet of 132.65%.
The diluted earnings per share also mirrored this decline, standing at -$0.25, down by 132.47%. These figures translate to a net profit margin of -2.06%, showing a decrease of 131.45%. On a more positive note, Disney’s net change in cash surged by $1.06 billion, a remarkable 437.58% improvement.
In light of these financials, Disney surpassed analysts’ expectations, beating EPS estimates by an impressive 6.1%. The reported EPS of $1.03 outshone the expected $0.97. However, the company fell slightly short on revenue, with reported figures of $22.33 billion compared to the expected $22.53 billion, resulting in a minor surprise of -0.89%. These recent developments come amidst rumors of potential changes within Disney. These include discussions about selling ABC networks and a recent Disney/Charter deal. A potential agreement could significantly impact Disney+, ESPN, and the broader pay-TV landscape.
As investors ponder the future of this iconic entertainment giant, it’s clear that Disney faces both challenges and opportunities. Travel stocks have their own unique dynamics to consider, making Disney an intriguing option in the broader context of undervalued travel stocks. While Disney’s recent financials show a mix of positive and negative signals, it will be fascinating to see how the company navigates these waters and adapts to the ever-changing media and travel industry landscapes.
Tripadvisor (TRIP)
Tripadvisor (NASDAQ:TRIP) has navigated a challenging year, with year-to-date returns showing approximately 13.9% decline. However, keen investors are finding reasons to consider this travel stock, and here’s why. In June 2023, Tripadvisor reported revenues of $494 million, reflecting an impressive YoY growth of 18%. While net income did experience a dip of 23% to $24 million, the company maintained a steady net profit margin of 4.86%, indicating resilience despite industry headwinds. Operating income decreased by 30.2%, landing at $44 million.
One noteworthy aspect is Tripadvisor’s commitment to enhancing its experiences and dining segment, which could be a growth catalyst in the travel industry. There is anticipation of potential collaboration amid recent discussions between Tripadvisor’s Chief Executive Officer (CEO) Matt Goldberg and Google/Alphabet (NASDAQ:GOOG)/(NASDAQ:GOOGL). This partnership, if realized, could open new doors for Tripadvisor. However, investors should consider rising costs as the company pursues its growth strategies. The recent earnings report revealed a miss in diluted EPS (-8.1%) and a revenue beat (+4.3%). However, Tripadvisor’s potential as an undervalued travel stock for 2023 is worth considering, especially for those seeking unique opportunities in the sector.
On the publication date, Faizan Farooque did not hold (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.
3 Strong Sell Stocks for September 2023
If you’re looking out for stocks to avoid, you’ve come to the right place. Knowing when to give up on a company, cut your losses, and move on can be difficult for investors. But knowing when to sell is just as important as knowing when to buy. The companies I mention below are stocks that the average investor shouldn’t touch with a ten-foot pole. The only things these companies offer investors are uncertainty and a massive risk of potential losses.
AMC Entertainment (AMC)
First on the list of stocks to avoid right now is AMC Entertainment (NYSE:AMC). Headquartered in Leawood, Kansas, AMC owns and operates 950 movie theaters in the U.S. and Europe. They are a very well-known meme stock that rose to prominence following the game-changing events of the GameStop (NYSE:GME) short squeeze in early 2021. At this time, AMC Entertainment is trading at just over $8 per share. However, it reached an all-time high on June 17, 2021 at $607.30 per share due to a short squeeze similar to GameStop. Since then, retail investors have been in and out of this stock, looking to make huge returns.
Since September, their stock price has fallen by 90%. On Aug. 8, the company reported second-quarter earnings, which stated a net income of $8.6 million compared to a net loss in Q2 2022 of $122 million. They saw revenue growth of 15.6% compared to the previous year.
It was also recently released that for the upcoming premiere of the Taylor Swift: The Eras Tour concert film, AMC sold approximately $26 million in advance ticket sales, marking the most significant single-day revenue for AMC.
AMC Entertainment has seen some negative results lately, including not having a positive EPS since Q4 2021. However, the company may see near-term hype regarding the recent earnings report and the partnership to release the Taylor Swift movie, leading to significant revenue. But, regarding risky investments, AMC Entertainment is at the top. Long-term investors in the company have already lost nearly all of their initial investment due to the stock trading at historical lows, making retail investors more and more skeptical of the company overall.
Rite Aid (RAD)
Rite Aid (NYSE:RAD) operates retail drugstore chains. They provide pharmacy services such as prescription management for their customers, and they also sell various over-the-counter medications, personal care products, household essentials, and food and drinks. They are headquartered in Philadelphia, Pennsylvania.
Over the past year, the company has seen a drastic fall in its overall share of 92%. They also have nearly 22% short interest at this time.
In its most recent earnings release, the company stated that its revenue declined by 6%, and it saw a net loss that nearly tripled compared to last year.
Rite Aid, CVS Pharmacy (NYSE:CVS), and Walgreens Boot Alliance (NYSE:WBA) have all been recently hit with large federal opioid lawsuits. CVS and Walgreens have agreed to billions in settlements. But this may be what sent Rite Aid into bankruptcy protection. CVS and Walgreens have both been hit hard by these lawsuits, and they are much stronger companies financially overall. Rite Aid’s future looks bleak.
Beyond Meat (BYND)
Beyond Meat (NASDAQ:BYND), located in El Segundo, California, is last but not least on the list of stocks to avoid right now. The company produces plant-based meat products and sells them through grocery stores, restaurants, and other food service outlets. When the company started trading publicly back in 2019, they were such a hit for investors they started trading on their IPO date at $46 per share, and within three months they were trading at over $200 per share. Multiple years later, they are trading at $10, which is a 51% drop so far this year alone. The company also has a large amount of short interest at approximately 37%.
On Aug. 7, they released their second quarter financial results, which stated a drop in overall revenue of 31%. Furthermore, they nearly cut their net loss in half compared to last year.
Consumers aren’t nearly as interested as they once were in plant-based food products, demonstrated by the continued decline in their sales internationally and within the U.S. In this last quarter, Beyond Meat reported a decrease in retail sales of 39% in the U.S. and a drop of 16% internationally compared to the year before, respectively.
As of this writing, Noah Bolton 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.
Instacart bumps up IPO price, following big debut for Arm
Instacart on Friday raised the estimated price of its IPO to between $28 and $30 a share, up from a prior range of $26 to $28, according to a filing. The upsized offering would give the online grocery-delivery platform a value of between $9.3 billion and $9.9 billion, the company said, and follows the big-splash debut made by Arm Holdings
ARM,
this week. Instacart plans to price its IPO on Monday evening and start trading on Tuesday, according to Axios. Instacart declined to comment. The company will trade on the Nasdaq Global Select Market under the ticker symbol “CART.”
Valero’s board authorizes share buyback of up to $2.5 billion
Valero Energy Corp.
VLO,
late Friday said that its board of directors has authorized a stock buyback of up to $2.5 billion, with no expiration date. The buyback is in addition to the amount remaining under Valero’s previous $2.5 billion authorization approved in February. Valero also said that Chief Technology Officer Cheryl Thomas plans to retire around Jan. 2. In the interim, Thomas will help with a transition, the company said. Shares of Valero were flat in the extended session Friday after ending the regular trading day down 1.6%.
Disney CIO is latest executive to depart: report
Walt Disney Co.’s
DIS,
chief information officer is leaving the company, shortly after the announced departure of the company’s chief financial officer. Diane Jurgens left the company this month, according to a Wall Street Journal report late Friday. In June, Disney said CFO Christine McCarthy was leaving to take a medical absence. Jurgens joined Disney in October 2020 under then-Chief Executive Bob Chapek and was responsible for Disney’s enterprise technology organization globally. Chapek was replaced in late 2022 by current Disney CEO Robert Iger.