Weekly Performance Review April 19th – 23rd, 2021

Stocks finished little changed in an up-and-down week amid some of the lightest daily trading volumes of 2021. Small-caps performed slightly better than large-caps, and the technology-heavy Nasdaq Composite Index modestly lagged the broad market

A shadow of adversity emerged last week with the S&P 500 falling 3 of the five days.  Keep in mind, however,  the market is just 1.2% below the recent high.  But given the sharp and steady gains over the past year, even a little volatility might feel uncomfortable.  After all, there have only been 28 days in the last twelve months in which stocks have dropped by more than 1%.   Looking beyond daily moves, more broadly, there have been just three 5% pullbacks and no 10% corrections in the last year, during which the S&P 500 has returned 52%.

The chips seem to be stacked in favor of this bull market continuing for some time.  Nevertheless, no bull market is invincible.  That’s why the WSWD research team is working, tirelessly, watching out for factors that could cause volatility, to keep you up to date on the twists and turns of the market.  

Congrats to our readers who have profited from our daily free trade alerts this month.  If you followed our trade alert from March 23rd and invested in the U.S. Steel Corp. (X) you have seen a nearly 20% gain in just one month.  And if you invested in Elemental Solutions Inc. (ESI) on March 25th, that investment has grown 12% in the same timeframe.  

For a look at how or trades stacked up last week, and more insight from our team, read on.  

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04-19-2021_RXT up 1%

Rackspace Technology (RXT) partners with cloud services providers such as Google parent Alphabet (GOOGL), Amazon (AMZN) and Microsoft (MSFT) to manage its enterprise customers’ cloud-based services. 

The pandemic accelerated many industries’ migration to cloud technology.  As such, plenty of firms have discovered they need all the help they can get when it comes to transitioning and managing their operations – often with more than one cloud service provider.  Research firm IDC forecasts the managed cloud services market to grow 15% a year to more than $100 billion by 2024.  As the leading company in the field of multi-cloud services, bulls argue that Rackspace stands to benefit disproportionately from all this burgeoning demand. 

04-20-2021_HLNE up 1.7%

Hamilton Lane (HLNE) is an alternative investment management firm providing innovative private markets services to sophisticated investors worldwide.  There are numerous reasons why the stock of this private-market investment firm is a great growth pick right now.

 The historical EPS growth rate for Hamilton Lane is 9.6%, but the more important aspect to consider is projected growth.  The company’s EPS is expected to grow 26.2% this year, crushing the industry average, which calls for EPS growth of 16.6%.

Hamilton Lane looks attractive from a sales growth perspective as well.  The company’s sales are expected to grow 19.5% this year versus the industry average of 4.6%.

HLNE is scheduled to report earnings on May 27th.

04-21-2021_PEAK down 0.2%

Healthcare REIT Healthpeak Properties (PEAK) owns 633 properties, balanced across the life sciences, senior housing and medical office sectors.

Longer-term, this high-yield (to the tune of 3.53%) REIT should benefit from demographic trends that include aging baby boomers demanding new treatments and medical devices, increased outpatient services and more seniors requiring daily living assistance.  In addition, the company boasts a $1.2 billion development pipeline that is already 63% pre-leased.

04-22-2021_NEO down 1.6%

NeoGenomics (NEO), an oncology testing and research laboratory, is still coming out from under the pressure of the pandemic, which led to the cancellation of legions of procedures.  But there’s been quite a lot of activity at the company, nevertheless, and analysts still see it as one of the better small-cap growth stocks to buy.

Of the 12 analysts covering NEO tracked by S&P Global Market Intelligence, nine call it a Strong Buy, two say Buy and one says Hold. With an average target price of $63.20, analysts give NEO implied upside of about 26% in the next year or so. 

04-23-2021_SNOW up 1.4%

Snowflake provides ways for companies to better utilize their data over the internet.  The company offers cloud-based data storage and analytics, generally termed “data-as-a-service.”  

The cloud data platform market — storing data off premise on cloud servers — is a relatively new $70 billion+ market.  Significantly, incremental warehouse data capacity and renewals are expected to be driven by and to the cloud, with more than 75% of databases in the cloud by 2022.  

SNOW investors have to deal with the falling knife aspect of it since the company IPOed back in September.  But, the stock seems to have stabilized considerably and is now trading in range about 9% lower than where SNOW opened after its IPO.  

Everything is going right with improving profit margins and sales, but investors are temporarily freaked out, which could create a tempting opportunity.