Weekly Performance Review March 1st – 5th, 2021

The major benchmarks finished mixed as longer-term interest rates continued their ascent.  The rise in rates again weighed on growth stocks by increasing the discount on future earnings, while value stocks managed gains, according to Russell indexes.  Within the S&P 500 Index, energy shares outperformed as oil prices hit their highest levels in over a year.  Technology shares were broadly weak, while consumer discretionary stocks continued to be dragged lower by electric vehicle maker Tesla.

Investors seemed divided about whether the rise in longer-term bond yields was due to a welcome upswing in growth expectations or a worrisome increase in inflationary pressures.  Trading started out on a strong note, which could be attributed in part to continued optimism about the rollout of coronavirus vaccines.  On Monday, the federal government began distributing the Johnson & Johnson single-dose vaccine, which regulators had approved over the weekend, and President Joe Biden announced on Wednesday that new deals with drugmakers meant that every American adult should have access to vaccines by the end of May—moving up his timetable by two months. 

Continue reading to find out how our trades did this week.  

03-01-2021_KGC up 3.48%

Kinross Gold Corp. (KGC) is a Canadian-based gold and silver mining company founded in 1993 and headquartered in Toronto.  The company has seen earnings grow by 65% per year over the last three years and they were up 213% in the third quarter.  Analysts expect earnings to rise by 21.6% for the year.

The current valuations for the stock are extremely low with the trailing twelve month P/E at 6.96 and the forward P/E at 9.18 . The company does pay a modest dividend with the current yield being 1.68%.  It has a high liquidity and trades over 2.3 million shares per day.

Of 18 analysts covering the stock, 14 rate the stock a Buy and 4 rate the stock a Hold.  There are currently no Sell ratings for KGC stock.  

03-02-2021_RMO down 25%

Romeo Power Inc. (RMO) is an energy technology company focused on designing and manufacturing lithium-ion battery modules and packs for commercial electric vehicles.  Rather than competing in an increasingly saturated market, Romeo builds next-generation EV batteries — necessary components for future EV integration.  Essentially, you’re selling tickets to the big game instead of wagering on which team will win.  For risk-averse investors, RMO stock is a much more palatable option.

The potential for RMO stock is massive for patient investors.  

03-03-2021_RBBN down 5.4%

Ribbon Communications (RBBN) has a trailing twelve month P/E ratio of 16.62, which compares favorably with the Zacks Computer and Technology sector’s trailing twelve month P/E ratio, which stands at 32.12.  This indicates that the stock is relatively undervalued compared to its peers.  Moreover, the current year consensus estimate has improved by 19.7% in the past 2 months bringing an extra boost of encouragement from the pros covering the stock.

It has a $1 billion market cap, so it’s not a small firm. The stock is up 152% in the past year, and 25% in the past three months. It’s also a solid takeover target for a larger telecom.

03-04-2021_SRNE up 3%

Analysts have praised Sorrento Therapeutics, Inc.’s (SRNE) pipeline of diagnostic tests and therapies that, if approved, could generate more than $2 billion in near-term sales, according to Alliance Global analyst James Molloy.  Meanwhile, B. Riley Securities analyst Mayank Mamtani believes Sorrento’s stock price could rise roughly 78% to $26, thanks to its diversified portfolio of projects.  

Of the four analysts covering SRNE stock, all rate the stock a Buy.  Share price is expected to to grow more than 200% for fiscal year 2021.  The median price target for SRNE stock is $28 per share.  

03-05-2020_FANG up 1.2%

Diamondback Energy (FANG) stock currently trades with a P/E ratio of 13.63.  A much more attractive number when compared to Diamondback’s top publicly traded competitors, Continental Resources, Inc. (CLR) and EQT Corporation (EQT) which both have a P/E ratio well above 30.  Of the 20 analysts offering recommendations for FANG stock, 18 rate the stock a Buy and 2 rate it Hold.  There are no Sell ratings for FANG stock.

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