Goldman Sachs Group Inc.
GS,
is planning to launch a new sports franchise unit in its investment banking business to offer its wealthier clients ownership stakes in private sports teams, The Wall Street Journal reported Friday. The business will include the bank’s mergers and acquisitions practice, as well as its sports financing team to work with asset and wealth managers on offering investments in stadiums, teams and other high profile transactions, the report said. Banker Greg Carey, who is chairman of Goldman’s public sector and infrastructure group, will co-lead the new Goldman Sachs unit along with Dave Dase, who heads up the investment banking unit’s Southeast region. Goldman Sachs stock was up 0.3% in premarket trading on Friday.
LI Stock is a China EV Play With Plenty of Charge Left
Among U.S.-listed Chinese EV stocks, Li Auto (NASDAQ:LI) has been a top performer. Since January, LI stock has experienced a nearly 93% run-up in price.
Compare that to another high-profile Chinese EV play, Nio (NYSE:NIO). While NIO is in the green for 2023, the stock has delivered far less spectacular returns (around 4.6%) year-to-date.
Another name in this category, Xpeng (NYSE:XPEV) has performed well, but its gains for the year (77.5%) are moderately below that of LI.
Beyond delivering an outsized performance compared to peers, Li Auto may have the strongest chance amongst the bunch to “level up” on its recent success. This leaves shares in a strong position to add to their latest gains.
This is despite the market’s latest skepticism about future runway for the stock, as seen from its plateauing in price since last month.
LI Stock: Cooling Excitement Sets in After Big Rally
Eight months back, it seemed as if it was going to be a bumpy road ahead for Li Auto. With Tesla (NASDAQ:TSLA) initiating an EV price war in China, locally-based competitors appeared to be in a tough spot.
Following suit with price cuts threatened margins. Sitting out of the price war threatened market share/future growth. However, in the ensuing months and quarters, price war fears proved to be an overreaction. Li wound up reporting strong delivery and earnings figures for the ensuing months/quarters.
Yet while these impressive numbers helped to spur a new round of investor enthusiasm for LI stock, as mentioned above, this rally has screeched to a halt.
This comes even as the EV maker has continued to crush it. In August, deliveries grew 663.8% year-over-year. Last quarter (ending June 2023), Li reported sequential revenue growth of 52.6%, and sequential earnings growth of 92.9%.
Given current macro-related worries about China, the market’s pivot to an “on the fence” view makes some sense. That said, a closer look suggests that, much like with the perceived price war headwind, investors may be once more making a mountain out of a molehill.
Why Sentiment Could Shift Back to Bullish
“Doom and gloom” headlines about the Chinese economy may imply tougher times ahead for LI stock, but that may not be necessarily the case, even if the economic environment in its home market becomes more challenging.
For one, state efforts like the extension of tax break for EVs through 2027, could help to keep demand steady. The latest industry-wide data on Chinese auto sales suggest that this tax break extension (announced in June) is having the intended effect.
More specific to Li Auto, it may just well be the type of car it is producing that keeps it continuing to experience satisfactory revenue and earnings growth.
As Louis Navellier and the InvestorPlace Research Staff pointed out back in June, what may explain Li’s success in recent quarters could be the company’s focus on SUVs for the mass affluent market.
Li’s success at capturing a greater share of this niche within the Chinese automotive market may continue, helping to outweigh the impact of a sluggish economy on overall EV sales.
Investors may be bracing for impact, but if Li’s monthly delivery and quarterly fiscal figures continue to meet/beat expectations, chances are this stock will experience another big rally.
An Appealing Buy on Weakness
Yes, if Chinese EV demand ends up being more resilient than currently expected, this could be a booster for both of this stock’s above-mentioned peers. However, even in this scenario, LI likely has a clearer path to higher prices.
Both Xpeng and Nio keep facing challenges with reaching profitability. This could outweigh the benefit of further revenue growth. In contrast, Li is already profitable, and earnings could rise dramatically if growth comes in line with expectations.
Another issue for NIO and XPEV in the future is a recent crackdown on Chinese EV makers in Europe. Expansion into Europe has been a big part of the respective growth stories for both stocks, whereas Li has been taking things slowly with its global expansion plans.
Considering these strengths, LI stock is one of the better ways to play the rise of EVs in China, if you’re bullish that this trend will continue.
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.
Catalent gets NYSE notice that it’s not in compliance with listing rules over late 10-K filing
Drug manufacturer Catalent Inc.
CTLT,
said Friday it has received a notice from the New York Stock Exchange informing it that’s it’s not in compliance with listing rules due to a delay in filing its annual form 10-K with the Securities and Exchange Commission. The company has six months from Sept. 13 to regain compliance. The company had previously disclosed in August that it was unable to file the 10-K in a timely manner because of management’s assessment of its internal controls over financial reporting as of June 30. The company said it has dedicated significant resources to the matter but was still unable to file by a Sept. 13 deadline. “The company is working diligently to complete the necessary work to file the Form 10-K as soon as practicable and currently expects to file the Form 10-K within the six-month period granted by the NYSE Notice; however, there can be no assurance that the Form 10-K will be filed within such period,” it said in a statement. The stock has gained 10% in the year to date, while the S&P 500
SPX,
has gained 17.3%.
7 F-Rated Consumer Discretionary Stocks to Sidestep Immediately
Consumer discretionary stocks largely rely on the whim of the consumer. After all, the name of the segment says it all. These stocks are attached to companies that sell products that consumers really don’t need. They have to want to make a purchase.
These stocks include automotive, retail, entertainment and hospitality companies. They do well when the economy is doing well, or when the company has an innovative enough product that it encourages consumers to buy.
Largely, consumer discretionary stocks rely on consumers to have plenty of disposable income to make those types of luxury or impulse buys. But when the economy is questionable or inflation is high, or when interest rates make borrowing more expensive, consumer discretionary stocks are among the first to falter.
The economy this year has been better than anyone predicted it would be. But there are economy-related headwinds that are pushing some consumer discretionary stocks into “F” ratings. And there are some industry-specific problems that also factor in.
If you own any of these F-rated consumer discretionary stocks, it’s time to rethink your portfolio.
Mullen Automotive (MULN)
I know I’ve said this before, but it bears repeating. Mullen Automotive (NASDAQ:MULN) is an awful automotive stock.
The company has aspirations to be the newest, hottest electric vehicle company with plans to sell crossovers, sports cars, pickups and commercial vehicles. But nobody’s buying. Or at least, not enough people are buying to make the investment worthwhile.
Mullen split its stock twice so far this year to prop up the sagging share price to more than $1 just to stay in compliance with Nasdaq rules, but even that didn’t work. Just a month after the most recent reverse split, the stock price is back below a buck and Nasdaq sent Mullen a delisting notice.
Mullen is fighting the effort and asked for a hearing, but the delisting seems inevitable. MULN gets a well-deserved “F” rating from the Portfolio Grader.
Walt Disney Co. (DIS)
If you want a company that’s the polar opposite of Mullen, you could make an argument for Walt Disney Co. (NYSE:DIS).
One of America’s most iconic brands, Disney made a fortune from its movie franchises, theme parks, cruises, hospitality experiences and from streaming and television networks.
But that history hasn’t kept it from hitting bottom lately.
Disney stock is down 24% since February and is approaching 52-week lows. The company’s coming off a fiscal Q3 2023 earnings report that saw a net loss of $460 million, or 25 cents per share. That’s down from a year-ago profit of $1.41 billion.
The Disney+ streaming service hasn’t taken hold as investors had hoped. The subscriber count of 146.1 million as of July 1 was down 7.4% from June.
Disney’s former CEO, Bob Iger, returned a few months ago to try to right the Disney ship, but now the entertainment division is looking at a writer’s strike that essentially shut down Hollywood.
With no new series or movies in the works in the near future, and with bloated ESPN continuing to contract, the immediate future looks bleak for the House of Mouse.
DIS stock has an “F” rating in the Portfolio Grader.
Plug Power (PLUG)
A few years ago, Plug Power (NASDAQ:PLUG) seemed like a can’t-miss prospect. The idea of a zero-emission energy source like hydrogen fuel cells seemed to be the perfect solution for a globe grappling with global warming.
But it’s not to be. Plug Power still hasn’t figured out a way to make the technology profitable, which is why it had a gross margin of -28% last year.
Q2 earnings brought in revenue of only $260.18 million. But the company spent almost twice that, with a net loss of $236.4 million for the quarter.
Less than three years ago, PLUG stock was flying high at $65 per share. Now it’s less than $10 and is down 33% just in 2023. PLUG stock has an “F” rating in the Portfolio Grader.
Dish Network (DISH)
You know a company’s in trouble when its name alone tells you how irrelevant and out of touch it is. Maybe that sounds a little harsh, but the concept of little satellite dishes to watch TV seems to be a very 20th-century concept in an era where 5G internet is everywhere.
Dish Network (NASDAQ:DISH) seems self-aware enough that it’s branched out into streaming television as well by owning Sling TV. But Sling is losing subscribers quicker than it can get them, with its headcount down 97,000 in the second quarter.
Its total user base of about 2 million is its lowest in five years. That’s not a good trend.
Overall, Dish’s Q2 saw revenue of $3.91 billion, down from $4.21 billion a year ago. Income of $200 million and 31 cents per share was down from $523 million and 81 cents per share in Q2 2022.
Dish also owns Boost Mobile, but that’s not a good business, either. The wireless provider saw subscriptions drop by 188,000 in the second quarter, leaving Boost with 7.73 million subscribers.
DISH stock is down 55% this year and has an “F” rating in the Portfolio Grader.
Farfetch (FTCH)
Farfetch (NASDAQ:FTCH) is an e-commerce platform that caters to the luxury fashion industry.
It now claims to carry brands from more than 50 countries and 1,400 suppliers.
But if you’ve not heard of this brand before, you’re not the first. There are massive e-commerce brands that dwarf tiny Farfetch, which has a market capitalization of just $920 million and a debt load of $1.15 billion.
And Farfetch continues to lose money each quarter. Year-over-year revenue growth is only 1%, but the company has a comparatively steep profit margin of -37%.
The trend continued in the second quarter, where Farfetch reported revenue of $572.09 million, less than analysts’ expectations of $650.71 million. The EPS loss was 21 cents.
FTCH stock is down 50% this year and has an “F” rating in the Portfolio Grader.
Jerash Holdings (JRSH)
Jerash Holdings (NASDAQ:JRSH) makes a lot of the clothes that you probably own or see around town.
The company creates clothing for 19 global brands, including Timberland, North Face, New Balance, Tommy Hilfiger, Calvin Klein and more.
Production facilities and the workforce are in Amman, Jordan and Hong Kong, where the company produces 45,000 pieces of clothing per day.
But the demand for clothing dropped significantly in recent quarters. CEO Sam Choi calls it a “challenging retail environment” that affects profitability as consumers shifted to lower-margin items.
Revenue for the company’s fiscal Q1 2024, ending June 30, 2023, was $34.7 million, up from $33.4 million in the same quarter a year ago. Profits dropped to $5.6 million from $6.6 million a year ago.
Income of $495,000 came in at 4 cents per share, down from $17 million and 14 cents per share in the same period a year ago.
JHSH stock has an “F” rating in the Portfolio Grader.
Workhorse (WKHS)
I can’t stop thinking that Workhorse (NASDAQ:WKHS) got the fuzzy end of the lollypop when it lost out on the U.S. Postal Service deal in 2021.
The company (and many investors) thought it was in perfect shape to win a lucrative contract to supply the next-generation mail truck.
Instead, the work shockingly went to defense contractor Oshkosh (NYSE:OSK). And Workforce has never been the same.
The company still has dreams of making electric commercial vehicles and catering to the last-mile delivery market. But it operates on a much smaller scale than it expected to. It got only 62 orders in Q2 and delivered 42 vehicles.
At management’s urging, shareholders voted this month to increase the company’s share count to add equity and fund expansion efforts. While that dilutes the value of current shares, Workhorse is gambling that it could pay off in the long run.
But for now, the company’s prospects and the diluted share value pushed the stock price below $1 per share. WKHS may need to look at a stock split or other financial tricks at some point to get the share price back over Nasdaq compliance rules.
WKHS stock has an “F” rating in the 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.
Arm’s stock rises another 6.6% early Friday as it builds on robust gains after IPO
Arm Holdings Plc’s stock
ARM,
rose 6.6% in premarket trade Friday, extending the 25% gain it saw in its trading debut on Nasdaq on Thursday. The chip maker’s initial public offering priced at the high end of its proposed range and surged out of the gate. The company had a market capitalization of more than $65 billion at close of trade. Chief Financial Officer Jason Child told MarketWatch on Thursday that Arm’s focus going forward would be to take advantage of the skyrocketing costs of making smaller and smaller nanometer-sized transistors for chips. As transistors get smaller, the cost for intellectual property and software verification has ballooned to take up as much as three-quarters of the design cost, he said. More than 1.6 million shares had changed hands in premarket trade Friday.
#1 Cheapest Stock to Buy Now in the Stock Market
3 of the Cheapest EV Stocks to Buy Now
In the world of electric vehicles stocks, obvious names deserve a place in the long-term portfolio. Tesla (NASDAQ:TSLA) and Li Auto (NASDAQ:LI) are likely to be sustainable value creators. At the same time, other cheap EV stocks that hold value deserve some attention.
This column focuses on three of the cheapest EV stocks that can be considered at current levels. Many associated industries and companies are likely to benefit from the rising adoption of EVs globally. These include battery manufacturers and suppliers of automotive components.
The following stocks are undervalued and represent companies with good business fundamentals. Additionally, two stocks have an attractive dividend yield, making them among the best dividend growth stocks to accumulate.
Let’s discuss the reasons to be bullish on these cheapest EV stocks.
Polestar Automotive (PSNY)
Polestar Automotive (NASDAQ:PSNY) has plunged by almost 65% in the last 12 months. The decline is accelerating recently with Barclays warning of a soft EV market and the negative impact of equity dilution. But this sell-off may be overdone. PSNY stock has the possibility to deliver multibagger returns from current levels.
Last month, Polestar reported Q2 2023 results, and the company reiterated the guidance to deliver 60,000 to 70,000 vehicles for the year. PSNY also expects gross margin of 4% for the year. Margin improvement could be significant in 2024 on the back of operating leverage and cost cutting initiatives.
It’s worth noting that Polestar has currently commercialized two EV models. The company expect Polestar 4 production to commence in November and Polestar 3 in Q1 2024. The new models are likely to ensure that deliveries growth accelerates significantly next year and into 2025.
Panasonic Holdings (PCRFY)
Panasonic Holdings (OTCMKTS:PCRFY), the innovation-driven company and an EV battery maker, looks attractive with a forward price-earnings ratio of 9.4. PCRFY stock also offers a dividend yield of 1.88%.
It’s worth noting that Panasonic has embarked on an aggressive expansion plan through 2031. This is the main reason to be bullish on the stock.
To put things into perspective, the company expects to increase battery production capacity from 50 gigawatt hours in March 2022 to 200 gigawatt hours by March 2031. The four-fold increase in capacity will translate into sustained revenue and cash flow growth.
Also, Panasonic is working towards a potential increase in battery density by 20% by 2030, resulting in more efficient, lightweight batteries. With capacity expansion and innovation, the company is positioned to increase its market share.
Albemarle Corporation (ALB)
Albemarle Corporation (NYSE:ALB) stock trades at a forward price-earnings ratio of 6.9 and is poising to double in the next 12 to 18 months. Additionally, the stock offers a dividend yield of 0.87%. Healthy dividend growth is likely in the coming years.
With the rising demand for EVs, lithium is a big investment theme. With strong fundamentals and robust cash flows, Albemarle is best positioned to capitalize on the opportunity. The company is on a high-growth trajectory, and 2023 revenue growth is expected to be in the range of 40% to 55%.
Further, Albemarle has guided for lithium sales volume growth of 20% to 30% through 2027. This growth is expected on the back of sustained expansion in lithium conversion capacity.
Importantly, lithium trending higher in the long-term will undoubtedly benefit Albemarle’s positioning. This will translate into higher dividends and flexibility to continue investing in capacity expansion.
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 InvestorPlace.com Publishing Guidelines
3 Stocks Billionaires Are Selling Before They Take a Tumble
In the dynamic world of stock trading, there’s no denying the importance of knowing which stocks billionaires are selling. Following these financial titans in their investment decisions can be invaluable in navigating the stock market’s volatility. Their access to top-tier research and wealth of experience often shape market trends, unlocking doors to potential investment avenues and shedding light on effective risk management.
Furthermore, their moves can significantly influence market trajectories. Their 13F provides a transparent view of Wall Street’s elite investors’ recent choices.
So, without further ado, let’s dive into three stocks that stocks billionaires are selling in the second quarter.
Chevron (CVX)
Chevron (NYSE:CVX) once basked in the golden glow of booming petroleum and natural gas prices, especially in the aftermath of Russia’s intervention in Ukraine last year.
Prominent investors have recently adjusted their stakes in Chevron. Prem Watsa completely sold out of his position, while Warren Buffet reduced his stake by 7.01%. Meanwhile, Jim Simmons made a significant cut, reducing his stake by 63.52%.
However, the party seemed to be winding down by the second quarter of this year. A dramatic plunge in earnings from $11.6 billion to a modest $6 billion can be attributed to a steep 80% year-over-year tumble in U.S. natural gas prices and a 37% dip in petroleum prices. The financial tapestry was further complicated as its free cash flow dropped by 76% year-over-year to a mere $2.5 billion, even with Chevron playing its hand with a massive $7.2 billion return to shareholders.
However, despite Chevron’s bullish maneuvers in the Permian Basin and its global escapades, its growing reliance on international results juxtaposed against the receding contribution from U.S. upstream earnings paints a concerning picture. Furthermore, you’re looking at a tough road ahead for Chevron with a not-so-rosy energy price forecast ahead and potential tremors such as the Australian union upheavals or a global economic downturn.
Tesla (TSLA)
Tesla (NASDAQ:TSLA) continues to baffle investors. Though it doesn’t rev up like a typical automobile bigwig, its meteoric rise, massive market footprint, and multifaceted ventures command attention.
In the second quarter, several prominent investors made changes to their positions in Tesla. Both George Soros and David Tepper fully divested from the company. Jim Simmons significantly reduced his stake by 48.03%, while Ken Fisher made a milder cut of 10.7%. This make it one of those notable stocks billionaires are selling.
The spotlight shone even brighter in the second quarter of 2023 when Elon Musk’s brainchild rolled out an eye-popping 480,000 vehicles and racked up a staggering $25 billion in sales. A strategy leaning towards competitive pricing, though driving sales, continues to nibble away at its operating margins.
Tesla’s operating margins skidded to a mere 9.6% in the second quarter, compared to the first quarter’s 11.4% and 16% in the fourth quarter of 2022. However, Tesla’s valuations continue to rival Silicon Valley’s crown jewels, with its stock trading at more than 54.5 times forward cash flow estimates. Hence, a deep dive into its fundamentals points to an inflated valuation, prompting a need for investor caution.
Intel (INTC)
Intel (NASDAQ:INTC), despite flexing a robust second quarter, its stock is hovering stubbornly around the high $30s. CEO Pat Gelsinger paints a hopeful canvas, emphasizing potentially strong third-quarter revenues and promising collaborations.
During the second quarter, notable investors made adjustments to their Intel holdings. Steven Cohen significantly reduced his stake by 82.80%, Joel Greenblatt by 36.11%, Ken Fisher by 3.39%, and Jeremy Grantham by 0.61%
Additionally, the murky forecast for PC demand and potential hiccups in Intel’s data center narrative feed its bear case further. Feedback from tech titans such as Microsoft (NASDAQ:MSFT) and other PC moguls signals a sluggish resurrection of the market. While eyes are fixed on Intel’s upcoming Meteor Lake processor, its competition isn’t sitting idle.
The competition is already rolling out its AI-enhanced arsenal, increasing the competitive heat. Intel’s endeavor in the data center realm faces a gauntlet, especially from burgeoning AI accelerators. Moreover, on the margins front, Intel might be registering revenue upticks. Still, its gross margins are limping along at a snail’s pace, casting shadows on the efficacy of its turnaround plan.
On the date of publication, Muslim Farooque 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
AMC, Etsy, First Solar and more
An AMC Theatre in New York City, March 29, 2023.
Leonardo Munoz | Corbis News | Getty Images
Check out the companies making headlines before the bell.
Yum China — Shares rose more than 3% during premarket hours as the Chinese restaurant conglomerate announced new financial targets and unveiled plans to expand to 20,000 restaurants by 2026 during an investor day.
AMC Entertainment — Shares of the movie theater chain jumped 5% in premarket trading after AMC said it had completed the equity offering it announced earlier this month. The company said it sold 40 million shares at an average price of $8.14, raising about $325.5 million.
Etsy — Shares of the e-commerce retailer added 4% before the bell after Wolfe Research upgraded the stock to an outperform rating from peer perform. Wolfe cited three reasons for the upgrade: a rebound in consumer spending, the potential for margin improvement and an improved emphasis on Etsy’s primary franchise.
Semtech — The semiconductor stock rose 1% in early trading despite offering a fiscal third-quarter forecast late Wednesday that calls for a loss of 9 cents to 22 cents a share on revenue of $190 million to $210 million. Analysts had estimated it would earn 12 cents on revenue of $247.7 million during the period. In the second quarter, the company earned 11 cents a share, after adjustments, exceeding analysts’ expectations of 2 cents per share, according to FactSet.
Penn Entertainment — The sports betting stock climbed 3% in premarket trading following a short-term buy call from Deutsche Bank. The bank said there’s reason to believe the stock should see upside ahead.
First Solar — The stock climbed about 2% higher after BMO Capital Markets upgraded shares to outperform from market perform, citing a recent sell-off that has created an attractive entry point for investors.
Exxon Mobil, Chevron — Exxon Mobil and Chevron gained about 1% each before the market opened as oil prices reached their highest levels this year, with Brent crude topping $93 a barrel. Occidental Petroleum and Devon saw early morning gains as well.
HP — Shares of the printer and PC maker fell more than 3% in premarket trading after a regulatory filing showed Warren Buffett’s Berkshire Hathaway sold a portion of its stake. The conglomerate sold about 5.5 million shares of HP, worth around $158 million. The Omaha-based giant first bought the tech hardware stock in April 2022, becoming its largest shareholder. Berkshire still owns more than $3 billion in HP shares.
General Motors, Ford — Shares of the automakers were up fractionally in premarket trading after United Auto Workers President Shawn Fain said Wednesday night that a strike was “likely” against the companies if a contract agreement can’t be reached before the 11:59 p.m. ET Thursday deadline. Ford CEO Jim Farley struck back, saying the company has received “no genuine counteroffer” on its proposals.
— CNBC’s Michelle Fox, Alex Harring, Yun Li, Tanaya Macheel, Jesse Pound and Pia Singh contributed reporting.
