What a week we had! It took less than a 3% decline to bring the dip buyers back in to finish at record highs last week. Mega-cap growth is back, cyclicals and industrials seem to have lost favor, for now.
The upcoming week will be one of the most eventful of the summer. There is a slew of economic data set to come out this week.The second quarter is expected to be the peak period for post-pandemic growth. Gross domestic production for the quarter will be released on Thursday. Then on Friday, the Fed’s favorite inflation metric, the personal consumption expenditure inflation index is set to come out.
Monday the FOMC will kick off their 2-day meeting. While the chance for a change in rates is slim to none, Wall Street will be watching for indicators that the Fed may soon begin to wind down its bond buying program, which could be interpreted as the first step towards a rate hike.
We’ll also hear get Q2 earnings numbers from more than 165 S&P 500 companies, including the biggest names in Tech – Microsoft (MSFT), Amazon (AMZN), Apple (AAPL) and Facebook (FB).
Truly, it’s anyone’s guess where this week will take us. Many of the pros on Wall Street are calling for a continuation of last week’s heightened volatility. With this in mind, our team has a few recommendations for stocks to watch in the coming days. Continue reading to find out who.
SmileDirectClub’s (SDC) teledentistry technology has proven quite useful for improving oral health and beauty. The translucent aligner system straightens malaligned and improperly spaced teeth in as little as a year.
Essentially, SDC is a disruptor stealing market shares from the companies that sell braces. The direct-to-consumer business aims to challenge the orthodontics industry. But since its IPO in September 2019, the company has largely struggled.
Disappointing Q1 earnings started an avalanche and then to add insult to injury SDC was hit with a cyber-attack. Share price is down more than 60% from it’s initial, September 2019, price and down nearly 40% YTD. Those who see hope for SDC’s cashflow down the line find it hard to see this as anything less than an opportunistic bargain.
Without a doubt, SDC has a unique and valuable offering. Dentists far and wide rave about their teeth straightening solution. It might not be long until their clear aligners completely displace braces as the best and cheapest way to straighten teeth. For now an investment in SDC stock should come with the knowledge that the company is still negative cashflow. Even still, the prospects are exciting enough for brave investors to take a gamble.
The 12 analysts offering a 12-month price forecast for SmileDirectClub have a median target of $9.75 which represents a 33% increase from its current level. Of 16 analysts polled 6 rate the stock a Buy, 4 rate it a Hold and 3 say to Sell SDC stock.
SDC is a notoriously volatile stock, as is evident by its 2.65 beta (meaning its more than 2.5 times as volatile as the market). Ahead of its upcoming August 9th earnings call heightened volatility can be expected.
A rally in crop commodity prices, rising food consumption and healthy farm economics are spurring demand for crop fertilizers globally. This bodes well for Mosaic Company (MOS), a leading producer and marketer of concentrated phosphate and potash for the global agriculture industry.
Phosphate markets will likely remain robust in the near term as tight availability along with firm demand drives up phosphate prices globally. Potash prices have also been boosted by robust global demand, aided by higher crop prices and low global inventory levels.
The company is well-positioned to leverage increasing global demand and higher realized prices in its businesses. It’s also taking cost cutting measures to improve the operating cost structure through transformation plans that are aimed at improving profitability. These transformational savings are also expected to drive margins in its Mosaic Fertilizantes segment.
The stock has rallied around 130% over the past year, and many are optimistic about the future. Consensus estimates have risen over the past three months, which is a good sign for MOS investors. The 19 analysts offering 12-month price forecasts for Mosaic have a median price target of $38, which represents an increase of 25% from its current level. Of 21 analysts polled 10 rate MOS a Buy, 10 rate it a Hold and only 1 says to Sell Mosaic stock.
San Diego based Qualcomm Inc (QCOM) manufactures and markets digital wireless telecom products and services. Their products include Code Division Multiple Access (CDMA) based integrated circuits (ICs) and system software for wireless voice and data communications as well as GPS products. The company also offers development and other product related services to U.S. government agencies and their contractors.
In March, Qualcomm completed the acquisition of the world-class CPU and technology design company NUVIA. The acquisition is expected to expand the company’s portfolio. Qualcomm Technologies expects to integrate next-generation CPUs across a broad portfolio of products, including powering flagship smartphones, digital cockpits, advanced driver assistance systems, and infrastructure networking solutions.
The company is scheduled to release its financial results for the third quarter (ended June 30, 2021) on July 28. This chipmaker is expected to post quarterly earnings of $1.67 per share in its upcoming report, which represents a year-over-year change of +94.2%. Revenues are expected to be $7.58 billion, up 54.8% from the year-ago quarter.
Over the past 30 days the consensus EPS estimate for the quarter has been revised 0.89% higher over the last 30 days, which is a reflection of how the covering analysts have reassessed their initial estimates upward, a good sign for the stock ahead of earnings.
The company has also announced a $0.68 per share quarterly cash dividend. An investment in QCOM initiated now won’t be eligible to receive this round of dividends. Even still the hike reflects solid financial strength. Plus, QCOM has consistently increased its dividend for the past 18 years, so it’s not likely their dividend is going anywhere anytime soon.
The consensus EPS estimate for the quarter has been revised 0.89% higher over the last 30 days to the current level. This is essentially a reflection of how the covering analysts have reassessed their initial estimates upwards.Of 29 analysts offering recommendations for QCOM, 19 rate it a Buy and 10 rate it a Hold. There are no Sell ratings for QCOM. A median 12-month price target of $175 represents a 23% increase from its current price.
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