WSB leans into $SoFi & is $AAPL breaking above $135?
Tech has had a good week
The List of stocks for June 30 – July 6, 2021
See historical performance
Watch out above, WSB is on SoFi
I already liked SoFi ($SOFI) as a business and it looks like the Reddit Wall Street Bets crowd is rallying behind it so you might see the stock price pop in the short term.
I think it’s worth owning, regardless, and it has pulled back a couple of bucks recently so this might be a good window to get into the stock if you were thinking about it.
A recent Reddit Deep Dive: SOFI – So Fly
Benzinga: SoFi, Workhorse Emerge As New Top WallStreetBets Interests Alongside Wish, Clover Health, BlackBerry, AMC
And the call buying volume recently pushed it up to Options Action on CNBC as well, where they pointed that it had a rapid rise to over 100 implied volatility, with big buyers on options ending this week as well as some for the July & August expiration.
Then commentator Dan Nathan pointed out that the big banks have just had their capital restrictions lifted and SoFi could be great acquisition target for a big bank to get new customer base and technology.
CNBC: FinTech on fire: Bullish bets on SoFi
Which then just overnight, JP Morgan Chase ($JPM) started doing that by acquiring fintech company Open Invest. So maybe there’s a chance…
Will the banks keep going up?
This past Monday the 28th, after hours, the banks were able to announce their plans for dividend increases and buybacks now that they have passed the Fed’s stress tests. To some degree, these announcements were already baked into the price so most of the stocks haven’t moved much, apart from Morgan Stanley ($MS) who doubled their dividend.
Even though there wasn’t a strong pop immediately on the news, with earnings in just a few weeks, July 13th for JP Morgan Chase ($JPM) & July 15th for Bank of America ($BAC), the banks may start to run again after the holiday weekend.
Some traders are getting more enthusiastic though beyond just the short term since change now frees up a lot of the bank’s cash to return value to shareholders or make acquisitions over the next 6-18 months. Plus if interest rates go up, that should also help the banks. Then again, fintech is getting so crowded and competitive that this may only be a temporary reprieve before a much more difficult few years ahead.
Microsoft & Salesforce might keep going up
Over the past month, a lot of the growth & technology stocks have started to come back to life and are posting gains again. I’m feeling good but still cautious because the market feels a bit fragile, like any small piece of news or sudden move in bond yields could wipe out the recent gains in a heartbeat.
That said, there are a couple names that could continue to be strong; Microsoft & Salesforce. Of the two, I think Microsoft ($MSFT) has more growth story trends going for it with gaming, Microsoft Teams & cloud. But Salesforce ($CRM) from a price perspective could also find some growth after the Slack acquisition closes around July. So they are both worth a second look.
In the video below they target $290-95 for Microsoft (currently around $270) and if Salesforcecan get above $250 (currently around $245) then it could break out to $300.
CNBC: Strategas’ Chris Verrone lays out his top picks in the software space
Early success of Crispr treatments
This week saw a 50% single-day gain for Intellia Therapeutics ($NTLA) after early results were very positive from using the gene-editing treatment inside a patient to cure a genetic disease. Previous successes required them to remove cells from the patient, modify them in a lab and then put them back into the patient, a very expensive procedure. Now they were able to use a single IV infusion treatment to have a massive impact on the disease.
This is a huge step forward for the technology that should lead to more treatments and more scale for the company. Plus helping or curing a ton of people with challenging genetic diseases. Really amazing.
After the announcement, Intellia is raising $400m via an equity offering so that will bring the stock price back down a bit giving a better entry point.
If you’re a reader you can pick up Codebreaker, a Water Isaacson biography which is about the Intellia founder & Nobel-prize winner who discovered Crispr, Jennifer Doudna.
Or if you’re a Netflix ($NFLX) subscriber, you can watch a documentary series about Crispr which features Jennifer Doudna called Unnatural Selection.
CNBC: Crispr breakthrough will allow treatments to be affordable, says Walter Isaacson
CNBC: Crispr shows gene-editing success
China’s ride-sharing app Didi is IPO’ing today Jun 30
Didi, China’s Uber++, will start trading as DIDI later today. They priced their shares initially around $14 on Tuesday night but it will probably trade between that & ~$40 a share after open (just a wild guess).
Jim Cramer was encouraging people to buy Didi as he felt it had a reasonable valuation.
I’m less enthusiastic. It may pop on the IPO and trade well for a while but in Shanghai recently, a new rival ride-sharing app called T3 came on the scene with better service at a similar price and many of my friends in Shanghai have switched over.
So while DIDI has a ton of market share (90%?!), they have little brand loyalty nor a unique offering. I’m also a bit skeptical that they will be a player in autonomous driving (but they are trying).
Didi is expanding also into many other services and spending a lot of subsidies to finance that growth. It’s still TBD how successful it will be as a result.
I think that you could dabble in the IPO if you’re interested but I wouldn’t go wild on it. Until they make service improvements, launch breakthrough technology or have successful international expansion, I’m not putting much into it. They’re burning cash for growth.
Marketwatch: Didi IPO: 5 things to know about the ride-hailing giant as it seeks to raise nearly $4 billion
Shopify continues to invest in partners
At Shopify Unite 2021, the company showed that they are continuing to push & deliver value to entrepreneurs, developers and partners. Shopify ($SHOP) is a company to own for years to come.
CNBC: Shopify president: The future of retail is ‘modern-day town squares’
Shopify: The Most Flexible, Scalable, and High-Performing Shopify Ever
Consider REIT’s if you’re looking for higher yields
If you’re more of a dividend investor (looking at you RC) or if you want to ride the rising real estate & rental prices due to loose monetary policy & spending, then you might be interested in these REITs (Real Estate Investment Trusts).
I’m pretty ignorant on the space so I can’t make any recommendations but this article could be a place for you to start your research.
TheStreet: 3 High Yield REITs Paying More Than 7% For Your Income Portfolio
Or you could consider European Healthcare like oncology for yield instead?
CNBC: Reposition your portfolio for dividend yields, says Ariel’s Bhansali
Walmart expanding into healthcare
One stock that I thought would do better during & after the pandemic was Walmart ($WMT). I felt like they were well positioned for a distressed consumer but ultimately that hasn’t really played out, at least not in the stock price.
The headline below caught my eye as it’s an interesting move for the retail giant. If you can’t pass along inflation costs easily to the consumer, perhaps you can cut into crazy healthcare margins from products that match your demographic?
TheStreet: Walmart Launches Low-Priced Private Brand Insulin In Latest Healthcare Push
Apple broke $135 this week
For the past few days, Apple ($AAPL) has touched & retreated from the $135 price ceiling, trying to break out to the upside. It might pullback a bit ahead of the July 4th weekend but for the rest of the month of July I believe it could go higher.
Loup Ventures also believes that the new demand levels for Apple will sustain it through the year.
Loup: Apple Lead Times Suggest Best Days Ahead for Mac and iPad
See you after the long holiday weekend.
-B
I believe in Win & Help Win.
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