The Tech Pullback Is A Buying Opportunity
While some may fret over the recent pullback in tech shares we recognize it for what it is. A sector rotation and buying opportunity for long-term investors. Tech shares are down on fear of slowing growth, fears spurred by rising interest rates, and their growth may slow but it won’t end. Tech is the new normal, we live it, breathe and love it, for the most part, it isn’t going anywhere and neither are consumers. While price action may be down it won’t stay down for long and these upgrades highlight what we mean.
A New Road To Growth For Twitter
Love it or hate it Twitter (NYSE: TWTR) is here and it is on track to grow. In fact, the analysts at Truist not only see this company growing with a CAGR in the 20% range they are upping their targets based on the new road map. Analyst Yousef Squali upped the stocks rating to buy from hold and giving a $74 price target on what he calls "the most exciting product roadmap we’ve ever seen out of the company with Topics, Fleets etc, on the back of recent tangible tech platform and operational improvements." The new valuation assumes a 25% CAGR, up from 20%, and one that may accelerate more if Twitter’s effort gain traction. Shares of the stock are up more than 5.0% on the news and confirming support at the bottom of February’s price gap.
Amazon Is King In Two Courts
Amazon (NASDAQ: AMZN) is the hands-down winner of eCommerce. There are lots of other winners, would-be princes in the realm, but none of them will produce the world’s richest man the way Amazon did for Jeff Bezos. Amazon is also a winner in the technology and tech-infrastructure sphere although many have no idea the websites and cloud functions they rely on are served by AWS. and the company is still growing because eCommerce is still growing and its cloud-focused AWS is accelerating along with the rest of the industry which is why JP Morgan Chase listed it as a top pick. According to them, the stock offers long-term sustainable growth at a “reasonable valuation”. Shares of Amazon are mostly steady following the news and continue to show support near $3,000.
Carvana A Hardlines Play Says Wells Fargo
Wells Fargo included Carvana (NYSE: CVNA) in a group of plays it says are well-positioned as hardline retailers. According to them, volatility in the hardlines segment has created a number of opportunities that investors should get aggressive with. In our view, this reinforces our position on Carvana as not only well-positioned within the booming used-car market but in the eCommerce space as well. The company is a near-pure play on eCommerce and auto sales and one that has seen robust growth in the wake of the pandemic. Shares of this stock are down following the press release but trading about the strong $240 support level.
Micron, It All Starts With Chips
Micron (NASDAQ: MU) and the memory chip market are no longer suffering from oversupply and under-demand as it once was. The demand for memory chips, as predicted last year, has finally shifted in favor of the manufacturers and the analysts are taking notice. Longbow, for instance, maintained its buy rating and raised the price target by $24 or 25% to $120 based on an “underappreciated” uptick in pricing and downtick in cost that it expects will widen margin and deliver EPS 33% greater than current consensus. Morgan Stanley is also expecting a strong quarter driven by higher pricing and wider margins. Micron reports earnings on Wednesday, its shares are down in today’s action but holding steady at the short-term EMA.
Amazon.com is a part of the Entrepreneur Index, which tracks some of the largest publicly traded companies founded and run by entrepreneurs.7 Bellwether Stocks Signaling a Return to Normal
Bellwether stocks are considered to be leading indicators about the direction of the overall economy, a specific sector, or the broader market. They are predictive stocks in that investors can use the company’s earnings reports to gauge economic strength or weakness.
The traditional definition of bellwether stocks brings to mind established, blue-chip companies. They are the home of mature brands with consumer loyalty. These may be stocks that aren’t associated with exceptional growth; some may be dividend stocks.
But there’s something different about normal this time around. If it’s true (and I think it is) that the old rules no longer apply, investors need to change the way they think about bellwether stocks. Plus, let’s face it, many stocks that we might consider to be bellwether stocks have already had a bit of a vaccine rally. That means that the easy gains are gone.
With that in mind, we’ve put together this special presentation that highlights seven of what may be termed the new bellwether stocks. These are stocks that investors should be paying attention to as the economy continues to reopen.
One quality of many of these stocks is that they are either negative for 2021 or underperforming the broader market. And that means that they are likely to have a strong upside as the economy grows.
View the "7 Bellwether Stocks Signaling a Return to Normal"
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