Weekly Roundup

Stocks ended the week on a high note.  Friday’s 400 point rally brought the Dow’s weekly gain to about 4% for its second straight positive week.  The S&P 500 gained 2.2% for its second straight positive week and a new record closing high.  The Nasdaq finished in the red 0.5% for its third negative week in four as investors ditched technology names for cyclicials. 

The Russell 2000 small caps closed up 6.1% for their second straight positive week and a new record close for the first time since August 2018.  Here’s a look back at our trades for the week, including the three companies we dispatched on Monday in our “Top Small-caps Watchlist”.  

11-09-2020–GRBK up 10%

Green Brick Partners (GRBK) is a growing home developer in some of the hottest markets in the country.  The company started in Dallas then expanded to Atlanta.  Now, it has properties in Colorado Springs and Vero Beach as well. 

Record low interest rates and a supply shortage in the market are bullish signs for GRBK, which currently has a P/E ratio of 10.

11-09-2020–FORM up 6.89%

For the first six months of 2020, FormFactor’s revenues grew almost 18% year over year to $270.2 million, while adjusted profits jumped 66% to $51.9 million.

While second-quarter numbers did miss estimates, FormFactor’s exposure to 5G technology, where sales are expected to be strong in 2021, should inspire an upward swing in demand.  

11-09-2020–ZUO down 0.3%

While many growth dependent tech stocks have posted surprisingly strong performance this year, Zuora’s stock has lost roughly 24% of its value YTD.  The company has a market capitalization of roughly 1.3 billion and trades at about 4 times this year’s expected sales — a valuation that leaves plenty of room for growth.

11-09-2020–WYNN down 3%

 Although WYNN’s Q3 earnings numbers fell strongly short of Wall Street analyst expectations, CEO Matt Maddox highlighted some noteworthy positives during last week’s call.  In October the company went from 10% of the normal visitor volume up to almost 30%.  In light of today’s positive news, Wynn Resorts, along with other travel and leisure favorites, could be heading back to pre-pandemic levels.   

11-10-2020–BDX up 0.73%

Becton Dickinson (BDX) holds the largest market share in the $3 billion Syringe & Injection Needle Manufacturing industry in the U.S. and will likely increase production ahead of the release of a vaccine.  What’s more, those who receive the vaccine could require multiple doses.  It seems that immunity to COVID-19 following infection and recovery can last as little as three or four months.  This suggests that for the vaccine to be effective, it will require regular boosters.  That’s going to be a lot of syringes, and Becton Dickinson will deliver. 

11-11-2020–BDN up 5.81%

Brandywine Realty Trust (BDN) share price is still down ~30% from pre-covid levels and currently has a relatively low 12-month trailing P/E ratio of 5.7.  An EPS of 3,900% YOY for Q3 shows that the company is growing strong.  Plus, BDN stock also comes along with an attractive 7.50% dividend yield.  

A combination of receding COVID fears and a stricter tax regime might be just the right mix to send BDN shares higher.  

11-12-2020–WMT up 1.63%

The harsh reality is that many of the weaker retailers that have been limping along for years, kept alive by cheap credit, won’t survive this recession.  Others will need to consolidate and reduce store count.  Some of their losses will be Walmart’s gain.  In true Darwinian natural selection, only the strong survive.  And other than perhaps Amazon, no retailer has proven to be fitter than Walmart.  

11-13-2020–ZBRA up 0.44%

 Zebra is well positioned to benefit from secular tailwinds including ecommerce, warehouse automation and demand for logistics efficiency improvements.  As many workers in Amazon warehouses use Zebra’s scanners, ZBRA may be another way to capitalize on Amazon’s monumental growth.