August 26, 2021

Portfolio Changes:
Porsche (POAHY) MOVES FROM HOLD TO SELL

The Elites Meet at Jackson Hole
While only insiders will be attending the Federal Reserve’s annual Jackson Hole symposium, which starts this morning, markets will react to any hints on the Fed’s move to tighten monetary policy and lift interest rates.

It does seem a bit odd that that markets seemingly look past a resurging Covid, the Afghanistan fiasco and surging federal spending and debt. The latter might have the most impact as the House this week narrowly passed a $3.5 trillion budget blueprint and locked in a September vote on a roughly $1 trillion infrastructure bill.

Meanwhile, Sir Richard Branson’s Virgin Orbit is going public through another SPAC valued at $3.2 billion, including another investment from Boeing. Firefly, Rocket Lab, and Branson’s Virgin Orbit are seen as front-runners among new compact satellite launch firms offering unique “air-launch” methods of sending satellites to orbit.

Back to Earth and our Explorer recommendations, the standout again this week was Novonix (NVNXF), followed by Sea Limited (SE). Marvell Technology Group (MRVL) is expected to report earnings today.

Portfolio Updates

Explorer Trading Stocks
Altimeter Growth Corp. (AGC) shares were again quiet this week ahead of the company’s impending merger with Grab, which recently announced that second-quarter deliveries demonstrated strong year-on-year growth of 49%. Grab is Southeast Asia’s leading super-app platform with over nine million users in Southeast Asia offering them a wide range of delivery, mobile payments, and financial services. I suggest you buy a half position here if you have not already done so. BUY A HALF

ChargePoint Holdings (CHPT) went from 21 to 22 in its first week as an Explorer recommendation. With more than 112,000 charging points in North America and Europe, ChargePoint is one of the biggest EV charging companies in the world. The company claims to control 70% of the public charging market share in North America.

This lead is a huge advantage because of network effects as the company already has partnerships with more than roughly 60% of the Fortune 50 companies. I believe the market may be undervaluing ChargePoint’s strong growth outlook. Consequently, I believe that the stock can be accumulated at its current levels. The company is expected to release financial results for the second quarter after market close next Wednesday, September 1. BUY A HALF

Cloudflare (NET) shares added five points over the last week to reach 123, and are up about 65% so far in 2021. This company provides network security, performance and reliability services to a growing portion of global web traffic. I’m going to keep this a hold though more aggressive investors can add to their position. HOLD A HALF

Fisker Inc. (FSR) shares have developed a modest upward trend over the last two weeks. Fisker’s Ocean EV has a sub-$40,000 retail price point making it a more affordable EV option. We have to accept that the company will have little or no sales revenue in 2021 and that the company’s first product will be launched in 2022. This is an aggressive stock but I confirm a buy rating on Fisker. BUY A HALF

Marvell Technology Group (MRVL) shares are trading at 63 as the company is expected to report earnings today. Credit Suisse upgraded the stock with a 70 price target, calling Marvell “one of the most strategic assets in semiconductors.” Marvell’s semiconductor products are state-of-the-art and in high demand, allowing businesses and consumers to take advantage of new 5G capabilities, plus the majority of those products are proprietary and made in-house. I recommend buying at current prices if you have not already done so. BUY A HALF

Novonix (NVNXF) shares are up 63% in the last month. Novonix is an Australian technology and advanced materials supplier focused on synthetic graphite for the electric vehicle and storage battery industry. Wood Mackenzie, a research and consultancy firm, projects that demand is expected to grow from 165,000 tons in 2018 to almost one million tons by 2030. This is an aggressive idea but this stock has been in an uptrend since May and is a play on an important clean technology. BUY A HALF

Palantir Technologies (PLTR) shares have been going a bit sideways for some time despite posting good numbers. Its maverick brand makes it a favorite among retail investors but institutional investors remain wary. This data and software company looks to expand its commercial client base as its non-government commercial revenue is growing 90% year-over-year. The company recently reported closing 32 deals of $5 million or more and 21 deals of $10 million or more. I encourage you to buy shares if you have not already done so. BUY A HALF

Porsche (POAHY) shares have been flat over the last month, prompting me to downgrade the stock from a hold to a sell. It is up modestly since we added it as an Explorer recommendation but it is one of the weaker performers with no apparent near-term catalyst. It remains a quality value play and could work out for those with a long-term perspective. But I’m moving it to sell. MOVE FROM BUY TO SELL

Sea Limited (SE) shares continue their upswing following an impressive second-quarter earnings report. Morgan Stanley raised its target to 351 and forecast that Sea’s fintech revenues will grow at a compounded rate of better than 60% from 2021-2024. Total revenue in the quarter was $2.3 billion, up 159% year-on-year, and total gross profit was $930.9 million, up 363% year-on-year. Sea has become both the largest digital entertainment platform and the largest e-commerce operation in the Southeast Asia region.

I would be an incremental buyer of this stock but long-time holders should definitely take partial profits from time to time. BUY A HALF

Taiwan Semiconductor (TSM) shares are up since Monday to 117 as the company announced plans to raise prices in line with increased demand. Consensus expectations are for TSMC to post $56 billion in revenue this year and it could generate $75 billion in revenue in 2025. A potential headwind is that the company plans to boost its capital expenditures by roughly $100 billion over the next three years. I encourage you buy this dominant, strategic semiconductor stock if you have not already done so. BUY A HALF

Virgin Galactic (SPCE) shares increased to 26 this week despite announcements that some insiders are selling shares. For example, Sir Richard Branson is selling of around a fifth of his stake. I believe a hold rating is appropriate for the time being. HOLD A HALF

Explorer Core Stocks
International Business Machines (IBM) shares tacked on a point this week as President Joe Biden urged a group of tech chief executive officers to help improve cybersecurity across the nation’s critical infrastructure. IBM will be a key player in this initiative and its stock now trades at just 13 times prospective earnings – half the level of the S&P 500 – and yields 4.6% while sitting on $8 billion in cash. BUY A HALF

Pershing Square Holdings (PSHZF) shares were quiet this week as Bill Ackman was squarely in the news related to his SPAC activities. PSHZF shares trade at around a 27% discount to their net asset value. Pershing Square Holdings has a concentrated portfolio of about 10 stocks. This fund offers you access to the stock selections of Ackman, a highly respected value investor, and his judgment in hedging markets. BUY A HALF