Today, Larry Berman CFA, CMT, CTA and Stockchase Insights commented about whether NANO-U, SHOP-T, SVI-T, XLE-N, ZWP-T are stocks to buy or sell.
United Auto Workers strike will result in higher car prices.
Rising costs in labor will be passed on to consumers.
Technology will help car companies cut costs.
Believes raising interest rates in solution to higher food costs.
Canada major importer of food and is caught in a tough spot.
Federal government intervention not required for food costs.
Expecting a US Federal reserve "hold" on interest rates next week.
Believes upcoming US Federal Reserve meeting will not result in interest rate hikes.
Pain on main street (job losses) has not occurred.
Believes higher interest rates are required to slow economy down.
Expecting economic hard landing on the horizon.
Stock price P/E ratios need to fall in order to align with historical averages.
We would be a bit more interested in SVI in the $4.25 range. The company has done an admirable job building out its business and consolidating its acquisitions. There are still plenty of small operators it can acquire. The stock had an initial big run and now has paused a bit (down 19% YTD) as investors reconsider economic prospects and the company's quite-high debt load. We do not think SVI has done anything wrong, but we would consider it a higher risk position now with higher interest rates and somewhat of an economic slowdown. It may see some tax loss selling. Generally though we like it, but would like it more a bit cheaper to reflect some of the risks here.
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We still like SHOP and suggest it as a long term growth pick. There is no specific news today, but last week Tik Tok came out with an app that may allow merchants to be less reliant on existing e-commerce players. Last week Ark Funds also announced it had sold some of its SHOP positions. Profit taking could also be at play, the stock is still up 72% YTD. Tech in general has also been weak of late.
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NANO has $33M net cash, but is still struggling to get to any meaningful revenue. Cash burn was $12M in the last 12 months. It had a corporate update in August, outlining its progress with CBMM, commercializing of its One-Pot technology, six new patents and new potential partners. But there was not a lot of 'meat' in the release. The stock is up 15%, and market cap is now $300M, so expectations remain very high for a company expected to have less than $5M in sales next year. Losses are expected to continue for some time. The technology is interesting, no doubt. But it is hard to just 'assume' everything is going to work as planned, in scale, and profitably. Thus, we have to stay on the cautionary side here.
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Understand your investments:
Warren Buffett said it best: “I never invest in something I do not understand.” Seriously, how many current cryptocurrency investors do you think actually know what they are doing? We always get customer questions on market-linked guaranteed investment certificates or principal-at-risk notes. Even with 40 years’ investment experience, we can barely get through all the documentation and risk disclosures that come with these products.
There are now leveraged single-stock exchange-traded funds (ETFs). There are leveraged ETFs where you are promised two or three times the return of some specified investment or index. You can buy ETFs that go up when the market goes down, or ones that go up if volatility increases.
We like to keep things simple. If you can’t explain an investment to your 10-year-old, you are probably taking on too much risk.
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An original cloud king that went profitable a long time ago and is now into AI. Up 58% this year. But after reporting last Thursday, it slid 4% though has partially recovered. Some feel that Adobe's quarter dropped the ball, but he disagrees. They report a modest revenue beat with sales up 10% YOY, with the digital media business better than expected and non-GAAP EPS also beating. There was no problem in the guidance with the earnings outlook robust. Note: a week before the report Adobe announced price increases for subscribers starting Nov. 1 as it develops its Firefly AI. So, share rallied hot before the report. Shares ran up and typically people sell on the news and take profits. Also, Adobe moved its full-year forecast to next December, which spooked some weak-kneed investors. He wanted to hear an update about their Figma buy, but they couldn't yet. Buy this pullback.