Weekly Performance Review June 7th – 11th, 2021

Stocks finished the week mixed amid quiet trading.  The Dow lost 0.8% for the week, while the Nasdaq gained nearly 1.9%.  The S&P 500 eeked out a tiny 0.4% gain and following more than a month of consolidation, reached a new record high, finishing the week at 4,247.

Investors shrugged off a larger than expected jump in the consumer price index this week, but with no clear upside catalyst, stocks meandered towards the close on Friday.  Many of the Wall Street pros foresee more consolidation to start next week, ahead of results from the Federal Reserve’s June meeting which are expected to come out Wednesday afternoon. 

A decline in interest rates helped lift tech stocks higher, while financials and other cyclicals dragged lower.  REITs were the best performing major sector for the week followed by health care and consumer discretionary.

Congratulations to our readers who acted on our trade alert from last Friday, June 4th, and bought shares of Affirm Holdings Inc (AFRM).  The emerging fintech company is on track to establishing itself as a global leader in the buy now, pay later space.  Share price for AFRM has stacked on nearly 14% since we issued our most recent Buy alert, and over 27% since our initial call to action went out on May 24th.  

To find out how our other recent trades have done and for more market insight from our team, keep reading.   

06-07-2021_TWLO up 7.74%

Twilio’s (TWLO) products will only become increasingly popular as we rely on our smartphone apps more and more.  It’s customer base is expanding healthily and customers are increasing what they spend.  The company posted a full-year 2020 net expansion rate of 137%.  

The average price target of $455 implies a more than 40% upside from its current level, which is around $310. 

06-08-2021_GNRC up 2.88%

Generac (GNRC) was the first company to engineer affordable home standby generators.  Today, it is the leading manufacturer of home backup generators.  The bottom line is that the company will profit from a number of secular global developments.  Generac management predicts a robust 40% – 45% increase in sales for 2021.

“The company is well positioned for future trends such as climate change and energy market disruption, 5G deployment, and automation in manufacturing,” writes Argus Research analyst John Eade, who rates the stock at Buy.

Their average target price of $400 represents a 21% upside over the next twelve months.

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06-09-2021_IJR down 1.83%

iShares Core S&P Small-Cap ETF (IJR) is the largest small-cap focused fund on Wall Street with over $60 billion in assets under management. The investment thesis behind a small cap investment is the growth factor that comes along with these securities. While mega cap firms have already hit their peak, many of these companies may be well on their way to becoming the next large cap, and this product gives investors access to over 600 of them.

06-10-2021_BA down 1.76%

The Boeing Company (BA) stock seems to be back on track after recent weakness due to its highly publicized 737 Max issues. Reuters reported last month that Boeing had drawn up preliminary plans for a fresh sprint in 737 Max output to as many as 42 jets a month by the fall of 2022.  

Boeing is a high quality company and as such, trades for a premium valuation.  But an investment in BA is an investment in its position as a global industry leader.  As leisure air-travel demand continues to improve, the case for BA at current levels is gaining appeal.  

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06-11-2021_GS up 0.55%

What makes Goldman Sachs (GS) stock appealing is that it trades for just nine times earnings despite analysts expecting almost 17% EPS growth annually over the next five years.  That makes for a price-earnings growth ratio of just 0.55, reflecting extreme value.

Plus, while many large banks pay high dividends, Goldman pays a modest 1.4% and uses just 12% of earnings to do so, meaning it has ample room to grow its payout in the years to come.

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