Leaders Getting Hit, Market Still Trending Up
Current Market Outlook
Two weeks ago we saw a bunch of positive earnings reactions that bolstered leading stocks, but last week was mostly the reverse—the leaders that had been running for months took on water, often reacting poorly to earnings and/or share offerings. Of course, while we see a few storm clouds, it’s not a hurricane, as the major indexes are in good shape and there are a growing number of “fresher” leaders (just getting going in the past few weeks) that are still acting just fine. All in all, the majority of the evidence is bullish, so we are as well, but it’s a stock-by-stock environment—many names look fine and are even buyable (preferably on weakness), but if you do have some extended stocks that are wobbling, have a plan in place (tightening stops, partial profits, etc.) in case the sellers gain strength.
This week’s list contains many of those fresher leaders mentioned above, including a few that have taken off on earnings. Our Top Pick is Zillow (Z), which should be a great bet to benefit from the new housing boom.
| Stock Name | Price | ||
|---|---|---|---|
| Agnico Eagle Mines (AEM) | 79.05 | ||
| Chart Industries (GTLS) | 72.05 | ||
| Digital Turbine (APPS) | 24.75 | ||
| Freeport-McMoRan Inc. (FCX) | 13.78 | ||
| Freshpet (FRPT) | 107.99 | ||
| LivePerson (LPSN) | 58.55 | ||
| Maxar Technologies (MAXR) | 27.02 | ||
| Ollie’s Bargain Outlet (OLLI) | 103.94 | ||
| Taiwan Semiconductor (TSM) | 78.41 | ||
| Zillow (Z) | 76.64 |
Agnico Eagle Mines (AEM)
Why the Strength
With precious metals acting well this year (32% gain for gold and 55% for silver), it’s not surprising that many investors have gold fever. And when gold soars, the shares of companies that mine the metal tend to significantly outperform the bullion. Among those that are enjoying the party is Agnico Eagle, a senior Canadian gold miner with operations in Canada, Finland and Mexico, whose policy of no-forward gold sales gives it full exposure to higher gold prices. Although COVID shutdowns impacted seven of its eight mines in Q2 (gold production of 331,064 ounces was 20% lower from a year ago), its production-per-ounce cost of $854 and all-in sustained cost per ounce of $1,142 gives the company plenty of daylight compared to gold prices north of $2,000. Estimate-beating revenue (+6%) and earnings (+258%) completed the positive quarterly picture. Looking ahead, the company restarted shuttered mines earlier than expected and continues to ramp up operations, with exploration a major focus going forward (it sees lots of potential at the LaRonde, Malartic and Kirkland Lake projects). Agnico also expects gold production to average around 500,000 ounces per quarter in the second half, with excellent total cash costs in the $690 to $740 range. With gold prices likely to continue rising both due to safe-haven demand and expectations of future inflation, Agnico’s future looks bright.
Technical Analysis
After hitting a four-year low of 30 in March, AEM snapped back very impressively, nosing to new highs in April. It spent the next two months consolidating that rebound before taking off again in July as gold prices soared (which was partly due to a weakening U.S. dollar). We like the volume on the recent advance—while dips are possible, we’re not expecting a ton of weakness unless gold prices really give up the ghost.
| Market Cap | $19.8B | EPS $ Annual (Dec) | |
| Forward P/E | 52 | FY 2018 | 0.31 |
| Current P/E | 74 | FY 2019 | 0.96 |
| Annual Revenue | $2.67B | FY 2020e | 1.63 |
| Profit Margin | 8.0% | FY 2021e | 3.20 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 557 | 6% | 0.18 | 80% |
| One qtr ago | 672 | 26% | 0.23 | 64% |
| Two qtrs ago | 753 | 40% | 0.37 | 164% |
| Three qtrs ago | 683 | 32% | 0.36 | 3500% |
AEM Weekly Chart
AEM Daily Chart
Chart Industries (GTLS)
Why the Strength
Last week, the Institute for Supply Management reported that July’s U.S. manufacturing index was 54.2, its highest reading since March 2019. (Anything above 50 means expansion.) And the improvement was broad-based, with 13 of the 18 industries tracked by ISM expanding. That’s great news, and that improvement is showing up on the books of Chart Industries. Chart manufactures highly engineered equipment used in the production, transportation, storage and end-use of cryogenic liquid gases (primarily atmospheric, natural gas, industrial and life sciences gases) for a variety of industries. Despite many of its customers coming from the depressed oil and gas industry, the company beat analysts’ estimates for the quarter, racking up earnings of $0.63 per share, surpassing estimates by a huge 20 cents, while revenues of $310 million also crushed forecasts for $290 million. The company’s orders for medical oxygen-related equipment rose 24% as a result of COVID-19 demand, while the global push for renewable energy helped Chart’s LNG business, boosting demand for smaller-scale LNG processing and storage, including over-the-road trucking fuel tanks and LNG fueling stations. Even better when it comes for the stock, forward-looking new orders in Q2 came in at $268 million, with June orders the highest year-to-date, and Chart also secured orders from 132 new customers during the quarter. The good results prompted Chart to increase its guidance for the year, now estimating revenue between $1.3 billion and $1.4 billion and earnings between $3.00 and $3.50 per share. Overall, the firm is playing in some growing fields and it looks business will crank ahead for many quarters to come.
Technical Analysis
GTLS crashed to multi-year lows in March, and while it bounced with everything else, it showed solid persistency given its reliance on a lot of cyclical areas (which, until recently, has been lagging). The stock hit some resistance in June, but held its 10-week line and has surged seven weeks up in a row, including a pop higher on earnings in late July. It should be a name that benefits from the market’s rotation—dips of a few points would be tempting.
| Market Cap | $2.66B | EPS $ Annual (Dec) | |
| Forward P/E | 23 | FY 2018 | 2.03 |
| Current P/E | 26 | FY 2019 | 2.59 |
| Annual Revenue | $1.33B | FY 2020e | 3.10 |
| Profit Margin | 7.2% | FY 2021e | 3.69 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 310 | 0% | 0.63 | -7% |
| One qtr ago | 321 | 11% | 0.57 | 46% |
| Two qtrs ago | 342 | 18% | 0.72 | 18% |
| Three qtrs ago | 358 | 31% | 0.77 | 4% |
GTLS Weekly Chart
GTLS Daily Chart
Digital Turbine (APPS)
Why the Strength
With nearly four million apps in Google Play Store, developers face the daunting task of targeting potential customers. Digital Turbine makes this effort easier by simplifying the app advertising, delivery and tracking process, helping developers and digital advertisers increase revenue and user engagement at scale. Its software has been used by more than 40 mobile operators and OEMs (including Verizon, AT&T and Samsung), delivering more than three billion app preloads for advertising campaigns. Carriers use the firm’s DT Ignite software to install apps they want you to see during your phone’s initial set up, or after factory resetting. (To date, Digital Turbine’s software has been installed in more than 400 million devices globally.) While lockdowns have resulted in lower ad campaign spending generally speaking, it has also resulted in much higher smartphone use among individuals (good news for future sales). The firm’s fiscal Q1 boasted 93% revenue growth to $59 million, thanks to higher revenue per device (RPD) figures from U.S. and international carrier partners. And per-share earnings of 13 cents per share were up 160% from a year ago and ahead of estimates. Digital Turbine’s market share is expanding, but management believes it’s still under 10% of total smartphone penetration, leaving lots of room for future growth. Analysts see revenues up nearly 70% this year while earnings more than double, and even that could prove conservative.
Technical Analysis
It took a while for the bull market in APPS to gain traction after the March panic, as investors were unsure of the advertising climate as everything locked down. But all of that changed when shares broke out on June 3 on extremely high volume. Shares advanced nicely for a while after that, and the four-week rest under 14 gave way to a massive, earnings-induced gap up last week. You could nibble here, though we’re more interested in snagging shares on dips of a couple of points.
| Market Cap | $1.96B | EPS $ Annual (Mar) | |
| Forward P/E | 46 | FY 2019 | 0.08 |
| Current P/E | 76 | FY 2020 | 0.20 |
| Annual Revenue | $167M | FY 2021e | 0.46 |
| Profit Margin | 21.2% | FY 2022e | 0.58 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 59 | 93% | 0.13 | 160% |
| One qtr ago | 39.4 | 45% | 0.05 | 67% |
| Two qtrs ago | 36 | 18% | 0.05 | 25% |
| Three qtrs ago | 32.8 | 38% | 0.05 | 400% |
APPS Weekly Chart
APPS Daily Chart
Freeport-McMoRan Inc. (FCX)
Why the Strength
Freeport is the world’s largest publicly-traded copper producer, mining 767 million pounds of copper in the latest quarter and owning nearly 34% of the market, a figure that’s expected to rise to 50% over the next five years as the company eats into the competition and launches some new mines. Freeport also produces gold, increasing production by 19% in Q2 to 191,000 ounces. Gold prices have obviously been in an uptrend, which has helped, but realized prices for copper were $2.55 per pound, down 7.3% from last year. Still, that’s in the past—after crashing in March, copper prices nosed out to one-year highs three weeks ago before pulling back, and that has expectations rising, especially as the CEO said global copper inventories remain low, which should support higher prices. The increase in the price of gold (34% year-to-date) and cost-cutting measures (including a chop to its dividend and a 22% reduction in overall spending) kept the bottom line in the black during Q2, which actually was up from a loss a year ago. (Revenues were in line with expectations at $3.1 billion.) All in all, analysts see decent growth in the back half of this year and a huge earnings recovery in 2021, which is what big investors are keying off of.
Technical Analysis
FCX topped in early 2018 and bumped downhill all the way to March of this year, when the crash took it down to 5. But the upmove since then has been steady, with three- to five-week rests in April/May, June and July all giving way to higher prices. The big-volume pop to new highs last week was very encouraging—you can enter here or on minor weakness.
| Market Cap | $20.3B | EPS $ Annual (Dec) | |
| Forward P/E | 91 | FY 2018 | 1.52 |
| Current P/E | N/A | FY 2019 | 0.02 |
| Annual Revenue | $13.1B | FY 2020e | 0.16 |
| Profit Margin | 1.4% | FY 2021e | 1.20 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 3.05 | -14% | 0.03 | N/A |
| One qtr ago | 2.8 | -26% | -0.16 | N/A |
| Two qtrs ago | 3.91 | 6% | 0.02 | -82% |
| Three qtrs ago | 3.31 | -33% | -0.01 | N/A |
FCX Weekly Chart
FCX Daily Chart
Freshpet (FRPT)
Why the Strength
Freshpet has one of those long-term, “secular” growth stories that keeps attracting more and more big investors and driving the stock higher over time. As pets have become an integral part of the family, people are willing to spend more on them, and Freshpet is the leader in selling higher-quality (and higher cost) food for Fido and Whiskers. The firm offers natural, vitamin-packed foods that are prepared at lower temperatures to preserve key nutrients; its offerings contain much more protein that competing brands and most users say they see a visible improvement in their pets’ health. As we wrote above, longer-term, this is a goldmine of an industry, as the entire pet food sector is recession resistant, and the high-end pet food area is likely to more than double by 2025 (3.5 million household customers now, 8 million goal). That’s all to the good, and even better than that is the fact that the pandemic, while causing some initial disruptions, has actually proven to be a boon—in Q2, Freshpet’s sales growth (up 33%) was the fastest its seen in years, and while e-commerce was just 5% of total sales, they more than tripled from a year ago. Earnings and EBITDA easily topped estimates as well, causing management to boost its sales and EBITDA outlook for the year. Of course, it’s not as sexy as some names, but big investors like firms with rapid and reliable growth, and Freshpet is a poster child for that.
Technical Analysis
FRPT has been in a longer-term uptrend for years as the story has played out, but that doesn’t mean it can’t correct sharply at times, as we saw in February/March. The uptrend quickly resumed after that (it nearly hit new highs in April) and, over the last two weeks, popped a bit out of trend on the upside before and after earnings. That usually leads to a pullback, but odds favor weakness offering a good chance to get in.
| Market Cap | $4.11B | EPS $ Annual (Dec) | |
| Forward P/E | 447 | FY 2018 | -0.15 |
| Current P/E | N/M | FY 2019 | -0.04 |
| Annual Revenue | $281M | FY 2020e | 0.23 |
| Profit Margin | 0.2% | FY 2021e | 0.57 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 80 | 33% | 0.01 | N/A |
| One qtr ago | 70.1 | 28% | -0.10 | N/A |
| Two qtrs ago | 65.8 | 27% | 0.12 | 140% |
| Three qtrs ago | 65.3 | 28% | 0.08 | N/A |
FRPT Weekly Chart
FRPT Daily Chart
LivePerson (LPSN)
Why the Strength
LivePerson is a conversational commerce company, as it’s on the forefront of amazing technological changes from legacy voice calls to artificial intelligence systems that enable automated messaging in business-to-customer communications. AI-powered, automated messaging mines and massages dialogue data and then uses complex machine learning algorithms to create AI chatbots. We used to phone each other when we had something to say, but today—especially with the younger generation—digital messaging is the way to go; some 100 billion messages are sent every day on WhatsApp, Instagram and Facebook, and 15.2 million texts are sent every minute. Studies are showing that AI messaging is improving profits as customer satisfaction increases; according to LivePerson, companies who switched to messaging as their main form of customer communication reported a 20% rise in customer satisfaction and a similar rise in sales conversions. That’s all good news for LivePerson, whose platform for these types of interactions is growing ever more popular, including among huge outfits. In Q1, sales lifted 29% as a result of 47 new customer contracts and a 25% rise in customer spending. The company isn’t profitable yet, but its net loss continues to shrink. LivePerson is the leader in this space, due to its size, its ability to mine data (over 100 million messages per month) and new products like its Conversational Cloud platform that enables customers to create, edit and manage their AI-powered communications. The company says its addressable market is in the tens of billions, so there’s plenty of room to grow. Analysts see steady growth both this year and next (revenues up 22% each year), but given the move to everything online, that could prove conservative.
Technical Analysis
LPSN has been in a long-term uptrend for years, albeit with plenty of hiccups along the way. The stock crashed with everything else in February/March, but stormed back to 40 (nearly back to its prior highs of 45) after earnings in May. It effectively consolidated for the next 10 weeks while finding support near its 10-week line before blowing the roof clean off last week. The action of growth stocks is a risk, but we like the power here; you can take a small position here or (preferably) on dips.
| Market Cap | $3.80B | EPS $ Annual (Dec) | |
| Forward P/E | N/A | FY 2018 | -0.24 |
| Current P/E | N/A | FY 2019 | -1.27 |
| Annual Revenue | $324M | FY 2020e | -0.38 |
| Profit Margin | N/A | FY 2021e | -0.17 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 91.6 | 29% | -0.22 | N/A |
| One qtr ago | 78.1 | 18% | -0.41 | N/A |
| Two qtrs ago | 79.1 | 20% | -0.36 | N/A |
| Three qtrs ago | 75.2 | 17% | -0.36 | N/A |
LPSN Weekly Chart
LPSN Daily Chart
Maxar Technologies (MAXR)
Why the Strength
Satellite technology not only makes possible the emerging space travel industry, but also facilitates key areas like weather forecasting, communications and navigation. Maxar is a pure play in this industry with two segments: Earth Intelligence (communication, imagery and data analytics) and Space Infrastructure (satellite manufacturing and robotics). It’s one of the few aerospace firms where most of its business is commercial (as opposed to government), forcing it to be cost-competitive and boasting a solid record of on-orbit success. Maxar is assisting NASA in its quest to return to the moon by providing it with the power and propulsion element for the moon-orbiting lunar Gateway space station (an access point to the moon and beyond). The firm is also building the Worldview Legion satellite constellation (scheduled to launch in Q1 2021), a major potential revenue generator. While the top line for Q2 was 10% lower than a year ago, the firm reported consensus-beating sales of $439 million (thanks partly to a $15 million increase in Earth Intelligence and a $3 million increase in Space Infrastructure). Adjusted EBITDA was 18% higher and the firm ended the quarter with $500 million in liquidity. Management is positioning for profit growth by reducing the cost structure and moving to a more capital efficient model through lower satellite capacity costs and more data-driven products. Overall, Maxar isn’t changing the world, but it operates in an area where a lot of money is flowing, and business should pick up nicely going forward.
Technical Analysis
After hitting a record high of 83 in 2015, MAXR crashed back to earth before bottoming below 5 in 2019. It then rode a wave of enthusiasm, rocketing from 6 last September to 21 by January before the market yanked it lower. After finding a bottom in March, MAXR rebounded back to 20 in June and, following a five-week rest, busted loose to new highs before and after earnings. We’re OK starting a position on dips.
| Market Cap | $3.80B | EPS $ Annual (Dec) | |
| Forward P/E | N/A | FY 2018 | 12.18 |
| Current P/E | N/A | FY 2019 | 1.38 |
| Annual Revenue | $324M | FY 2020e | -1.70 |
| Profit Margin | N/A | FY 2021e | -0.43 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 439 | 7% | 0.01 | -99% |
| One qtr ago | 381 | -12% | -1.30 | N/A |
| Two qtrs ago | 410 | -2% | 0.87 | -89% |
| Three qtrs ago | 413 | -19% | -0.69 | N/A |
MAXR Weekly Chart
MAXR Daily Chart
Ollie’s Bargain Outlet (OLLI)
Why the Strength
This year has been big for what we call “phoenix” situations, where a stock has a big run for a couple of years, an equally big decline (over many months or years), but then rises from the ashes to regain its leadership status. That fits Ollie’s story to a T—the company is the largest non-apparel portion of the closeout retail industry (furniture, food, pet supplies, sporting goods, housewares, etc.), with a classic cookie-cutter story that combined mid-teens (percentage-wise) store growth with low single digit growth in same-store sales to produce years of solid earnings growth. The firm then ran into some problems for a while (the CEO unexpectedly died late last year), but after some hard decisions and cuts, business stabilized, and now the pandemic is helping a lot—recent updates show that same-store sales boomed as much as 50% in May (!) and while that’s slowed down to “only” 20% or so in July, demand is strong for a variety of stay-at-home-related goods (outdoor patio, appliances, food prep, etc.). Management sees things going back toward normal as time passes, but it’s likely the low single-digit comp model is in the dustbin, and the current tough retail environment should help boost margins as Ollie’s can get more goods on the cheap. Plus, longer-term, the top brass believes there’s room to boost its store count by nearly three-fold. As it stands now, analysts see earnings taking a step function higher this year and being relative flat next, but we think that likely embeds lots of conservative assumptions (falling margins next year) that probably won’t come to pass. We like it.
Technical Analysis
OLLI’s comeback from the March lows (which capped off a 10-month implosion) was amazing, with shares rallying 12 of 13 weeks to a high of 105. Since then, shares have chopped around for seven weeks, testing their 50-day line a couple of times, including late last week. It looks like a good risk-reward situation to us—you could start a position here with a tight stop, and if OLLI perks up, you could add shares.
| Market Cap | $6.76B | EPS $ Annual (Jan) | |
| Forward P/E | 37 | FY 2019 | 1.83 |
| Current P/E | 52 | FY 2020 | 1.96 |
| Annual Revenue | $1.44B | FY 2021e | 2.82 |
| Profit Margin | 9.2% | FY 2022e | 2.91 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 349 | 8% | 0.49 | 7% |
| One qtr ago | 422 | 7% | 0.74 | 4% |
| Two qtrs ago | 327 | 15% | 0.41 | 28% |
| Three qtrs ago | 334 | 16% | 0.35 | -13% |
OLLI Weekly Chart
OLLI Daily Chart
Taiwan Semiconductor (TSM)
Why the Strength
In today’s digital economy, chip makers have in many ways supplanted old-school transportation companies as the key economic cogs, as semiconductors are vital for delivering information and powering so many devices. Taiwan Semiconductor is a hands-down leader in this space, being the world’s largest dedicated pure-play semiconductor foundry, with many chip makers outsourcing fabrication of their components to the company. Indeed, the company’s hardware is so ubiquitous it can be found almost everywhere—from cars to cell phones to computers and even household appliances. The stock has come to life as the firm’s business has remained strong through the pandemic—in Q2, sales totaled $10 billion (+34%) while per-share earnings of 78 cents (which beat the consensus by 8 cents) nearly doubled from the year before. Smartphones accounted for nearly half of the top-line increase, and that’s one of the big drivers here; indeed, Taiwan Semi raised its 5G smartphone penetration rate forecast (it now sees high-teens penetration of the total smartphone industry in 2020) as the 5G market ramps up. Cloud computing-related chips are another big growth driver for the company—the firm’s high-performance computing segment saw an impressive 38% revenue increase in the quarter and accounted for a third of sales (the company has repeatedly emphasized it expects this segment to be a major growth driver in the coming years). Looking ahead, management guided for Q3 revenue to be 21% higher, in-line with analysts’ estimates (who also see EPS increasing to 81 cents in the current quarter). With chip demand for next-generation communications exploding, it’s hard to disagree with the optimism.
Technical Analysis
Unlike many chip stocks that took off immediately after the March bottom, TSM spent the better part of spring establishing a base after the COVID-related sell-off. This created a solid launching pad which it blasted off from in early July. And what a blastoff it’s been! TSM has soared more than 20 points since breaking out before hesitating the past couple of weeks. Minor weakness would be tempting.
| Market Cap | $415B | EPS $ Annual (Dec) | |
| Forward P/E | 26 | FY 2018 | 2.20 |
| Current P/E | 28 | FY 2019 | 2.17 |
| Annual Revenue | $40.9B | FY 2020e | 3.13 |
| Profit Margin | 38.9% | FY 2021e | 3.30 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 10.6 | 36% | 0.79 | 93% |
| One qtr ago | 10.3 | 45% | 0.74 | 95% |
| Two qtrs ago | 10.6 | 12% | 0.75 | 19% |
| Three qtrs ago | 9.45 | 11% | 0.63 | 12% |
TSM Weekly Chart
TSM Daily Chart
Zillow (Z)
Why the Strength
Zillow needs no introduction, as it’s by far the most popular online destination for real estate listings. And that’s a good thing these days, as housing remains one of the big surprise stories of the virus environment; indeed, Zillow hit new highs last week after a Q2 report (and conference call) gave big investors a lot of optimism about the future. The company’s premier agent business (effectively generating leads for agents thanks to its massive website traffic, which totaled 2.5 billion visits in Q2, up 14% from a year ago) actually saw revenues decline 17%, but that was far better than expected and was solely due to the initial virus impact (June saw the highest recurring revenue total for the premier agent segment in Zillow’s history). And the firm’s Homes segment, where it buys and (after some touch-ups) resells homes, had a slow quarter but is already ramping up again, as it’s actively purchasing homes in the 24 markets it operated in before the virus hit. (Despite that, margins were negative by just 2.2% including all expenses as Zillow works toward breakeven in this area.) Far more important was the future, with management expected Q3 to show solid progress. Simply put, the housing sector is undergoing an upheaval in terms of online shopping, and is showing surprising strength, and Zillow will be one of the clear beneficiaries going forward.
Technical Analysis
Z looked to be getting going in February with a huge breakout, but that was bad timing, with the market causing the stock to collapse with everything else. The stock rallied back to its high by early June, and then tightened up—it consolidated between 55 and 65 for six weeks, nosed to new highs last month and then exploded to new highs last Friday. Pullbacks are possible, but we’re OK taking a swing at it around here.
| Market Cap | $16.1B | EPS $ Annual (Dec) | |
| Forward P/E | N/A | FY 2018 | 0.39 |
| Current P/E | N/A | FY 2019 | -0.54 |
| Annual Revenue | $$3.58B | FY 2020e | -1.37 |
| Profit Margin | N/A | FY 2021e | -1.05 |
| Qtrly Rev | Qtrly Rev Growth | Qtrly EPS | Qtrly EPS Growth | |
| ($M) | (vs. yr-ago-qtr) | ($) | (vs.yr-ago-qtr) | |
| Latest qtr | 768 | 29% | -0.17 | N/A |
| One qtr ago | 1126 | 148% | -0.25 | n/A |
| Two qtrs ago | 944 | 158% | -0.26 | N/A |
| Three qtrs ago | 745 | 117% | -0.12 | N/A |
Z Weekly Chart
Z Daily Chart
Previously Recommended Stocks
Below you’ll find Cabot Top Ten Trader recommended stocks. Those rated HOLD are stocks that traded within our suggested buy range within two weeks of appearing in the Top Ten and still look good; hold if you own them. Stocks rated WAIT have yet to dip into our suggested buy range … but can be bought if they do so within the next week.
Those stocks rated SELL should be sold if you own them; they will no longer be listed here. Finally, Stocks in the DROPPED category are those that failed to trade within our buy range within two weeks of our recommendation; that’s not a bad thing, we just never got the price we wanted. Please use this list to keep up with our latest thinking, and don’t hesitate to call or email us with any questions you may have. New recommendations each week are in green.
| HOLD | |||||
| 7/20/20 | ANGI Homeservices | ANGI | 14.5-16 | 16 | |
| 7/13/20 | Alibaba | BABA | ? | 244-254 | 248 |
| 7/20/20 | Arconic | ARNC | 15-16.5 | 21 | |
| 5/4/20 | Bandwidth | BAND | ? | 90-94 | 145 |
| 6/22/20 | Big Lots | BIG | 32.5-35 | 48 | |
| 6/1/20 | Bill.com | BILL | 69-73 | 88 | |
| 6/8/20 | Carrier Global | CARR | 21.5-23 | 29 | |
| 5/11/20 | Chegg | CHGG | ? | 58-62 | 82 |
| 3/23/20 | Cloudflare | NET | 19-21 | 37 | |
| 3/23/20 | Coupa Software | COUP | 124-132 | 285 | |
| 6/29/20 | Crispr Therapeutics | CRSP | 71.5-75 | 91 | |
| 11/11/19 | Dexcom | DXCM | 196-205 | 421 | |
| 9/9/19 | DocuSign | DOCU | ? | 55-58 | 198 |
| 7/20/20 | DR Horton | DHI | 61.5-64 | 70 | |
| 7/27/20 | Floor & Décor | FND | 69-72 | 68 | |
| 7/20/20 | GDS Holdings | GDS | 78-82 | 78 | |
| 5/26/20 | Horizon Therapeutics | HZNP | 45.5-48 | 76 | |
| 4/20/20 | Immunomedics | IMMU | 20.5-22 | 41 | |
| 7/27/20 | Invitae | NVTA | 30-32.5 | 29 | |
| 7/13/20 | Kinross Gold | KGC | 7.2-7.6 | 9 | |
| 8/3/20 | Kirkland Lake | KL | 49-52 | 51 | |
| 6/22/20 | LGI Homes | LGIH | 84-87 | 110 | |
| 6/15/20 | Lululemon | LULU | ? | 291-301 | 344 |
| 6/8/20 | Marvell Tech | MRVL | 32.5-34 | 35 | |
| 6/29/20 | Meritage Homes | MTH | 71.5-74 | 102 | |
| 6/15/20 | Novovax | NVAX | 47-50.5 | 179 | |
| 7/6/20 | Nu Skin Enterprises | NUS | 42.5-45 | 48 | |
| 3/30/20 | Nvidia | NVDA | 250-270 | 447 | |
| 3/30/20 | Okta | OKTA | ? | 118-126 | 200 |
| 7/13/20 | Pacira Pharmaceuticals | PCRX | 54-56 | 61 | |
| 6/1/20 | Pan American Silver | PAAS | 27-29 | 36 | |
| 4/27/20 | PayPal | PYPL | ? | 117-122 | 193 |
| 4/6/20 | Peloton | PTON | 27-29 | 67 | |
| 8/3/20 | Penn Nat’l Gaming | PENN | 34-36.5 | 45 | |
| 8/3/20 | Pinduoduo | PDD | 91-96 | 88 | |
| 8/3/20 | PINS | 33.5-37 | 36 | ||
| 7/20/20 | Plug Power | PLUG | ? | 8.0-8.7 | 12 |
| 8/3/20 | Qorvo | QRVO | 127-131 | 129 | |
| 8/3/20 | Qualcomm | QCOM | ? | 106-110 | 106 |
| 7/13/20 | Redfin | RDFN | 34.5-36.5 | 42 | |
| 7/13/20 | Roku | ROKU | 147-154 | 150 | |
| 7/20/20 | SAIA Inc | SAIA | 120-125 | 129 | |
| 7/27/20 | Sailpoint Tech | SAIL | 30-32 | 36 | |
| 8/3/20 | Scott’s Co. | SMG | 154-159 | 156 | |
| 7/27/20 | Sea Ltd | SE | 110-116 | 123 | |
| 5/26/20 | Spotify | SPOT | ? | 184-191 | 249 |
| 7/13/20 | Sunrun | RUN | 27.5-29.5 | 47 | |
| 11/11/19 | Tesla | TSLA | 320-335 | 1419 | |
| 6/8/20 | Thor Industries | THO | 101-106 | 108 | |
| 6/8/20 | Trade Desk | TTD | 338-358 | 466 | |
| 5/11/20 | Twilio | TWLO | 175-187 | 250 | |
| 7/6/20 | Ultragenyx Pharm. | RARE | ? | 83-88 | 85 |
| 7/27/20 | Watsco | WSO | 220-230 | 239 | |
| 5/11/20 | Wingstop | WING | 116-122 | 160 | |
| 7/13/20 | XP Inc. | XP | 43-46 | 48 | |
| 2/24/20 | Zoom Video | ZM | ? | 96-104 | 250 |
| 4/6/20 | Zscaler | ZS | 61-64 | 122 | |
| WAIT | |||||
| 8/3/20 | Advanced Micro | AMD | 72.5-75 | 82 | |
| 8/3/20 | Fortune Brands | FBHS | 74-77 | 81 | |
| SELL RECOMMENDATIONS | |||||
| 4/20/20 | CrowdStrike | CRWD | 65-67.5 | 97 | |
| 6/8/20 | Datadog | DDOG | 72.5-77 | 76 | |
| 5/18/20 | Fastly | FSLY | 36-39 | 78 | |
| 8/3/20 | GenMark Diagnostics | GNMK | 17-18.5 | 15 | |
| 7/27/20 | GSX Techedu | GSX | 85-88 | 97 | |
| 3/16/20 | Inphi | IPHI | ? | 62.5-66 | 118 |
| 7/27/20 | Owens & Minor | OMI | ? | 15-16 | 14 |
| 3/2/20 | Seattle Genetics | SGEN | ? | 107-111 | 158 |
| 6/29/20 | Staar Surgical | STAA | 56-59 | 51 | |
| 10/28/19 | Teladoc | TDOC | 69-72 | 194 | |
| 7/20/20 | Vapotherm | VAPO | 44-47 | 29 | |
| 7/27/20 | Wix.com | WIX | 262-275 | 278 | |
| DROPPED | |||||
| None this week | |||||
The next Cabot Top Ten Trader issue will be published on August 17, 2020.