We had an information-packed meeting this week. Markets experienced a correction on Thursday, and the fallout continued into Friday, as the tech stocks that have led the markets back from the lows of March experienced a sell-off. Following their stock splits Tesla and Apple dropped roughly 8% each on Thursday, and both finished the week down around 5%. Investors have been fearing a messy end to these frothy levels; however, many are hopeful that the brief recovery late on Friday means that this could be just a routine market correction.
Mikias Stewart ’23 presented on Blink Charging Co. and the stock’s recent collapse. Blink deploys EV chargers in the most sought-after charging locations. Blink Charging’s stock price nearly doubled in July, but the stock fell 30% during Thursday’s session amid allegations that its charger network is smaller than advertised. Now the company is claiming its stock price is being manipulated by false information. BLNK and its CEO have said that they plan to overcome these allegations.
Chisom Njoku ’23 took a closer look at Walmart’s recent stock performance. Walmart and Microsoft continue their pursuit of TikTok, with Walmart stock shooting up 5% when the news was announced. TikTok could provide Walmart a “way to reach and serve omnichannel customers as well as grow [their] third-party marketplace and advertising businesses”. Walmart Plus will be a delivery service aimed at competing with Amazon Prime. The membership will cost $98, with a launch date set for September 15th. Walmart’s stock has grown 18% year to date.
The Club’s Financials Analyst Brett Berger ’22 provided an update on Morgan Stanley’s acquisition of E*TRADE. Morgan Stanley is currently in a branding takeover of the trading platform after it made an all-stock purchase valued at $13 billion back in February. The deal is arranged; however, they are awaiting Anti-trust and shareholders’ approval. Once the deal is closed, the legal barriers will come down and the platform will challenge the likes of Robinhood.
Marketing Director Jack Evans ’22 analyzed the recent run in gold prices and what it means for the broader market. The price of gold has jumped ~30% this year, from around $1,500 in January to a high of $2,036 in early August, and it is currently trading around $1,940. The main causes of this rise are the fall in interest rates, inevitable inflation, and gold being used as a “safe haven”. There are two markets for gold, the physical market, and the futures market, however, another way to play the recent gold rush is through gold mining stocks. GDX, the ETF that tracks gold miners is up ~40% on the year and Warren Buffett’s Berkshire Hathaway recently bought a large stake in Barrick Gold. Recent volatility has been mostly caused by a flood of investors into the Gold Market as they prepare for a volatile Fall. Analysts believe Gold prices will continue to rise until there are clear signs of economic recovery, prices rose for 3 years following the 2008 crash.
Healthcare Analyst Dylan Jainchill ’21 provided a sector update of the Club’s Healthcare holdings. The current make up of our Healthcare positions are GILD = 2.1%, MDT = 3.1%, PFE = 1.7%, TMO = 1.2%, UNH = 3.0%. Gilead had a GAAP loss of 0.92 cents per share for Q2 despite the emergency approval of Remdesivir for COVID-19 by the FDA. Pfizer beat Q2 earnings expectations but reported a 30% decline Y/Y; the mRNA vaccine is on phase 2 of 3 with currently 20,000 participants enrolled. ThermoFisher exceeded Q2 2020 expectations with 5% Y/Y growth; Qiagen acquisition approved for $50.97 per share. UnitedHealth Group reported EPS of $7.12 for Q2, exceeding expectations $5.18 EPS and Q2 2019 EPS of $3.60; Q3 report will be released in October
Industrials Analyst Ian Lee ‘22 broke down the club’s industrial positions and recent performance. The sector averaged a return of 18.7%, compared to the Dow’s 11.1% and the S&P’s 12.7%. Two of our industrial names that have been in the news recently are Boeing and Raytheon Tech. Boeing still faces industry headwinds, as people may not return to the same level of travel for a while. Goldman Sachs now projects that air travel won’t return to 2019 levels until 2023. Boeing suffered a loss of $2.4 billion in Q2 due to the cancellation of plane orders by airlines. Because of Apple’s stock split, Raytheon Technologies was dropped from the Dow on August 31, replaced by Honeywell. This has caused some investors to sell, but the reason for the drop was because, with Apple’s split, tech would have been underrepresented in the index.
Vice President Connor Thatcher ’21 gave a quick tutorial on how to give a successful stock pitch. Learn more about how to give a pitch to the club by clicking here. We Look forward to hearing our first pitch of the year this Friday.
Sources/Articles for Further Information:
U.S. Stocks Fall Amid Decline In Tech Shares – WSJ
Stocks Fall in Another Volatile Session – WSJ
Walmart Unveils $98 Membership – Yahoo! Finance
Walmart Is Teaming Up With Microsoft – CNBC
Morgan Stanley to Acquire E*TRADE – Morgan Stanley
ETF Boom Fuels Gold’s Sharp Rise – WSJ
BullionVault Gold Price Chart – BullionVault