Weekly Performance Review May 3rd – 7th, 2021

Friday’s rally reversed some losses from earlier in the week, but the major indexes posted mixed results across the board. The Dow was the top performer, while the tech heavy Nasdaq  suffered its worst weekly loss in two months.  Tech underperformed along with consumer discretionary, utilities, and real estate.  For the third week in a row, value stocks outperformed growth stocks, along with a continued rotation out of momentum stocks—those that have seen substantial recent appreciation.

Earnings season is winding down.  So far, 442 of the S&P 500 companies have reported first-quarter results.  Earnings over the quarter have generally surpassed analysts’ estimates by a wide margin.  A report from FactSet stated that analysts polled are currently expecting overall profits for the S&P 500 to have grown by over 49% versus the previous year.    

Congratulations to our readers who followed our trade on Monday and bought shares of Clearfield, Inc. (CLFD), which turned a 12.85% profit in just five days.  Clearfield has a reputation for excellence and we stand by our buy and hold recommendation for the stock.  Continue reading for more information on Clearfield and some of our other recent picks.  

  05-03-2021_CLFD up 12.85%

There has been a massive turn-up for 5G over the past year, but the industry is still very much in its infancy. Clearfield maintains a strong competitive position in a rapidly growing multi-billion-dollar fiber optics industry, especially with the roll-out of 5G.  While there has been a rapid turn up for 5G, the industry is still in its infancy.  The 5G market is believed to have a 20+ year sustainable opportunity.  

Founded in 2008, Clearfield has 12 out of 12 profitable fiscal years under its belt.  That’s a twelve year history of positive free cash flow.   If that’s not enough to pique your interest in CLFD stock –  the small-cap company also boasts an impressively healthy balance sheet with $48.4 million in cash and investments and zero debt. 

05-04-2021_MU up 2.19%

Micron Technology has a market cap of more than $95 billion and posted more than $21 billion in revenue in September 2020.  With US President Biden pushing a plan for massive government spending to boost local manufacturing, Micron Technology is one of the firms that could gain from this new attention on American brands. 

05-05-2021_BIDU down 4.9%

The China-based multinational technology company Baidu Inc. (BIDU) is one of the largest AI and Internet companies in the world.  Last year Baidu rolled out its first fully AI-powered car as part of its Apollo project.  On May 2, BIDU launched a paid, driverless taxi service in Beijing.  This is a big milestone for the autonomous driving industry as Baidu is the first Chinese company to commercialize autonomous driving technology.

BIDU’s valuation is reasonable compared to its peers.  BIDU is currently trading at a Forward P/E ratio of 19.92.  This represents a discount compared to its industry’s average Forward P/E of 28.17.

The large-cap-tech firm will be looking to display strength as it nears its next earnings release, which is expected to be May 18, 2021.  The company is expected to report EPS of $1.46, up 16.8% from the prior-year quarter.

The company is expected to grow substantially in the coming months owing to its diversified business operations and large customer base.  BIDU’s EPS is expected to rise 33.3% in the first quarter, 8.3% in the second quarter, 3.4% in the current year, and 21.6% next year.  Analysts expect the company’s revenues to improve 30.7% in the quarter ended March 2021, 19.3% in the current year, and 14% in fiscal 2022.

05-06-2021_UPWK up 5%

For Upwork, whose online platform connects businesses with freelancers in 180 countries, user growth has surged. Even though sales have increased significantly, the business is still not profitable. This alludes to the fact that the gig economy is still in its infancy, and Upwork has chosen to concentrate on growth rather than profit.

Given its dominant position in the market, the company stands to gain the most from the gig-economy trend.  The winds of the gig economy are blowing in the company’s favor and explosive returns are anticipated.  

05-07-2021_IDNA up 1.4%

Genomics is one niche within the biotech group that could offer unimaginable returns, but the technology is so new and so advanced, many investors shy away from companies that are making astounding advancements.  One solution delegate individual stock picking to the pros and invest in an exchange-traded fund (ETF).

IDNA holds a concentrated portfolio of global companies in the biopharmaceutical and healthcare equipment and services industries that could benefit from the long-term growth and innovation in genomics, immunology and bioengineering.

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