Weekly Performance Review April 12th – 16th, 2021

Good economic news propelled stocks to new highs last week, with equities, bonds and commodities all rallying. Most of the major benchmarks recorded their fourth consecutive week of gains and moved to record highs. The Dow surpassed 43,000 for the first time, as signs of 1) rising demand (consumer spending), 2) rising inflation and 3) rising earnings all point to an accelerating recovery. 

The week kicked off the unofficial start of earnings season with 22 of the S&P 500 companies scheduled to report first-quarter results, according to Refinitiv. Overall sentiment seemed to get a boost from Wednesday’s release of earnings results from banking giants JPMorgan Chase, Goldman Sachs, and Wells Fargo. Analysts polled by both Refinitiv and FactSet currently expect overall earnings for the S&P 500 to have grown by roughly 25% in the quarter on a year-over-year basis, the most since the sharp cut in corporate tax rates that took effect in 2018.

Congratulations to our readers who are taking advantage of our free daily trade alerts.  If you purchased OKTA after our trade alert went out on March 29th, you have seen a 25% increase in just three weeks.  Continue reading for more insight from our team and to find out how our trades did this week.  

04-12-2021_LOVE down 1.96%

The Lovesac Co. (LOVE) is a niche consumer discretionary company that designs “foam-filled furniture,” which mostly includes bean bag chairs. 

Shares have followed, rising about 45% for the year-to-date and more than 1,000% over the past 52 weeks.  And analysts expect even more upside ahead, driven by a long-term growth rate forecast of 32.5% for the next three to five years, according to S&P Global Market Intelligence. 

Stifel equity research, which specializes in small caps, says LOVE is among its small caps to Buy.  They expect the consumer shift to buying furnishing online to persist, and even accelerate, once the pandemic subsides.

04-13-2021_UAL up 2.57%

United Airlines (UAL) stock is receiving positive commentary from analysts. That’s because analysts are optimistic that UAL can weather the current storm with enough liquidity.  UAL stock has been in rally mode since the start of 2021, with the shares up over 40% year-to-date.  Of course, the notable slowdown in the pandemic could be the reason.  It could also because the vaccination is starting to have a positive impact. 

04-14-2021_QTWO up 1.96%

Q2‘s business model and execution has Wall Street drooling over the mid cap’s growth prospects.  Indeed, analysts expect the software company to generate compound annual earnings per share growth of 150% over the next three to five years, according to data from S&P Global Market Intelligence. 

“In the last year, the pandemic has accelerated the digital transformation efforts and investments of the financial services industry, and we believe Q2 Holdings is well positioned to support and grow its customer base,” writes Stifel equity research analyst Tom Roderick, who rates the stock at Buy

Of the 19 analysts covering Q2 tracked by S&P Global Market Intelligence, 10 call it a Strong Buy, five say Buy and four rate it at Hold. Their average target price of $152.25 gives QTWO implied upside of almost 50% over the next 12 months or so.  The company is slated to report first quarter earnings on the 5th of May.  

04-15-2021_ARKF down 1.5%

Even after the growth of the cashless payments space in recent years, the majority of payment transactions around the world are still done in cash.  The potential of fintech is pretty irresistible.  

Whenever you have a high-growth and relatively young industry, it can seem intimidating to try to choose one or two stocks to invest in.  An alternative that lets you profit from the fintech boom without having to pick individual stocks is an ETF.

Cathie Woods’ ARK Fintech Innovation  ETF (ARKF) is an excellent choice for long term investors who want exposure to companies with excellent growth potential, without the risk of choosing just one or two companies.

04-16-2021_SQ down 2.65%

Investors will be hoping for strength from Square as it approaches its next earnings release, which is expected to be May 6, 2021. In that report, analysts expect SQ to post earnings of $0.15 per share.  This would mark year-over-year growth of 850%.

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