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Stock Picks: MAC, DRNA, CMCSA, SHOO and ABEO

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By Dmitriy Gurkovskiy, Chief Analyst at RoboForex

Macerich (MAC)

Maserich is included into the S&P 500. Its major activity is acquiring, selling, managing, developing, and remodeling shopping malls all over the US. As of now, Maserich owns around 53M square feet of commercial property, which includes 48 retail shopping malls.

Maserich stocks fall into the Financial Retail category; over the last week, they fell by 0.55%.

Technically, the stock tried to break out the 200-day SMA and start forming an ascending trend. With $60 acting as a strong resistance, its breakout may issue a signal of such a trend really forming. Meanwhile, the support is at $57, while the first major target is 10 dollars higher, at $67.

The investment fund transactions show the market is becoming interested in the stock, and while the buys are still very low, at around 0.29%, one should bear in mind that Maserich had not been previously considered as something valuable at all, so even such a small buying volume may boost future performance.

Over the last two months, the stock declined, but for now open sell positions are not that high, just around 4.87%. As such, the decline did not draw too much traders’ attention; it even acted in a contrary way, making Maserich quite attractive.

Dicerna Pharmaceuticals, Inc. (DRNA)

Dicerna Pharmaceuticals was founded in 2006. A biopharmaceutical company, its major is creating drugs for curing chronic liver and cardiovascular diseases.

The company falls into Healthcare/Biotechnology sector. It showed a good rise last week, jumping up by 12.88%.

Chiefly, this is due to the company having resolved its dispute with Alnylam Pharmaceuticals. Dicerna Pharmaceuticals finally agreed on paying $2M and grant Alnylam 983,208 shares (equals to around $12M), with more $13M to be paid within the Following four years.

2017 saw Dicerna Pharmaceuticals with $114M net profit; thus, the upfront payment of $2M (less than 2% of profit) is not going to weigh that much. The agreement on staged payments during the next 4 years was also positive, as the company would suffer much more losses if the dispute had not been resolved.

The board members did not take any significant actions during the trials, i.e. neither bought nor sold any shares. In the meantime, the funds cut their share by 2.3%, but with over 84% still remaining, this is not a big deal either. Besides, the news on the dispute being resolved came only Friday, with all market action going to take place this week.

Open selling positions percentage (2.74%) shows the investors are not very much interested in selling Dicerna, while many bears locked in their profits Friday, when the stocks rose as much as by 17.86%.

Technically, there is an ascending trend forming, with the price being above the 200-day SMA. As long as the price manages to break out $11 level and close above it, this trend may continue, having a chance to test $17, the analysts say.

Comcast (CMCSA)

Comcast Corporation is a global telecommunication giant, being the leading broadcasting corporation in the world in terms of revenue. This is also the second biggest pay cable TV and internet provider company. Besides, Comcast has been involved into TV shows and movies production since 2011.

Comcast falls into Service (Entertainment – Diversified) sector. It has grown just by 0.58% over the last week.

The Service sector in general performed badly last week, with just 2.1% growth, which shows the overall situation is a bit sore.

Technically, a descending trend is prevailing, with the price being below the 200-day SMA. The support is currently located at $33, that, if broken put, may push the prices further below to $30.

The board members have recently decreased their share by 4.95%, while the investment funds are very little interested in the company, with just a 0.1% buy. Still, the open short positions are quite low, too, being at 1.33%, which allows some room for the company growth. Still, this may only happen in case the price breaks out $35, being then able to go towards $36.

Steven Madden, Ltd. (SHOO)

Steven Madden was founded back in 1990 and named after its founder, Stephen Madden, who is both a businessman and a fashion designer. The company creates and sells footwear and fashionable accessories for men, women, and kids.

Steven Madden, Ltd. falls into the Consumer Goods (Textile – Apparel Footwear & Accessories) sector. Over the last week, the company stocks rose by 2.05%.

Overall, Consumer Goods sector was the weakest one last week, having fallen by 3.4%. The way Steven Madden are doing is quite optimistic compared to that, and this allows one to assume this rise is going to continue.

The investment fund longs are very low, at around 0.33%, but this is quite obvious, as their overall share has already reached 95.6%.

Technically, there is an ascending trend forming, with the price being above the 200-day SMA. Breakout of $48 may lead to the stock growing further.

Many analysts say Steven Madden may well reach $53 or even $58 per share.

Abeona Therapeutics Inc. (ABEO)

Abeona Therapeutics Inc was founded back in 1974; this biopharmaceutical company develops methods of curing rare and life-threatening genetic diseases.

The company falls into Healthcare/Biotechnology sector. Over the last week, its price per share increased by 5.82%.

Overall, Healthcare fell by 0.1% last week, which makes ABEO a pretty much attractive asset.

The percentage of open short positions is very high (37.11%), which may lead to a very sharp increase in price. Meanwhile, the company shares have already increased from $14 further on, as many traders started closing their selling transactions after the analysts missed the quarterly earnings forecast.

With such a high sell-off percentage, the investment funds have still increased their share by 1.14%, to reach 63.20%.

Technically, there is an ascending trend forming, with the price being above the 200-day SMA. The key support at $20 has already been broken out, which may allow the price go further to reach its target at $26.

The analysts say ABEO may well reach $26 or even $36 per share.

 

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 15 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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Analysis

Boeing Still a Good Investment, but Not Now

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

In one of our previous articles, we spoke about the rising demand of pilots and air transportation, which made us focus on relevant companies. Another important aspect here is aircraft, without which no air transportation is possible. So today, we’ll analyze one of the largest aircraft manufacturers out there, Boeing.

Boeing Company (NYSE: BA) is a leading aircraft, military and space equipment manufacturer. Headquartered in Chicago, IL, the company mostly operates in Seattle, WA. Boeing is among the top three military equipment companies in the US by the yearly order volume. Around 50% of the company’s budget accounts for military orders.

Over the last four years, Boeing’s yearly revenue is always somewhere near $90B, while the net profit is steadily growing.

Since 2014, the company’s equity was going down, with the debt growing at the same time, and thus the debt-equity ratio is currently not the best one.

Despite the debt, however, the investors get the dividends regularly, and those have been growing speedily since 2014: from $1.94 per share that year to $6.50 in 2018. Meanwhile, the growing demand led to Boeing supplying 763 aircraft in 2017. This was a record high, and the earnings went up from $4.985B to $8.197. The price per share also rose by over 100%, breaking out $300. In 2018, the company is going to supply 912 aircraft, or 20% more.

Boeing Contracts

Recently, Boeing got a contract for $62.7M which included maintenance and modification of F/A-18 и EA-18G. The contract is expected to be fulfilled by Sep 2019.

Another contract won by Boeing is worth $805M and includes developing, manufacturing, testing, and supplying for pilotless aircraft to the US Air Force by 2024.

The US Air Force also has yet another contract with Boeing, which is worth $9.20B and includes both aircraft and flight simulators. At the first stage, the company will get $813M to supply 351 Advanced Pilot Training aircraft and 46 simulators. The overall deadline is 2034.

This is just to name a few, and still one could clearly understand Boeing has orders for at least the next 10 years.

Boeing is also a significant player in the international military business; with the emerging countries increasing their budgets in the light of global geopolitical uncertainty, the company is sure to get more orders.

Apart from military aircraft, Boeing is planning to launch an air taxi prototype next year, which would carry passengers for short distances, while the company is also determined to create an air transport management system within 5 years.

All this makes the outlook perfect, with both dividends and share prices growing steadily. Technically, however, there is some extreme volatility, which shows investors are uncertain; some are closing their positions to lock in over 100% profit, others are, conversely, buying. This led to the price forming a wide range between $315 and $370. At this rate, it may well reach $400 and then bounce back to $300.

Technical Analysis

In 2016, Boeing shares started rising from $100, with the volumes growing, and reached the high at $350, i.e. those who bought at $100, started selling at $350. This means one should better wait for higher volumes and lower prices, as well as some good news, before buying, rather than going long straight away.

Alphabet Inc (NASDAQ: GOOG) experienced a similar situation, when the price was between $1,000 and $1,200, and then, when good earning reports came out, it reached $1,270. Then, Google shares went down again, and are now trading at $1,150, while being fundamentally very strong. So, it may start rising again soon, but at lower levels.

You remember an old saying ‘Buy rumors, sell facts’, of course. This is true with Boeing as well. The news on the company plans must be already priced into the shares, so before adding Boeing to your portfolio, you’d better wait for some lower prices.

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 15 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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Stock Picks

Stock Pick: General Motors

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General Motors Company (GM) is an American multinational corporation that designs, builds, and sells automobiles such as cars, trucks, crossovers as well as automobile parts. Its most popular vehicle brands include the Buick, Cadillac, GMC, and Chevrolet.  Currently, GM has a workforce of 180,000 employees across 35 countries. In 2017, the company posted revenues of $145.59 billion.

Technical Analysis of General Motors (GM)

GM has been in a slump since June 2018 when it respected resistance of $45. In as little as four months, the stock lost over 23% of its value. At first glance, it might appear that GM has some more downside potential. A close look, however, reveals that GM is due for a bounce. That’s when our play can come in.

Technical analysis shows that GM is approaching the uptrend support of $33. This support has never been breached since July 2012. Bulls have managed to defend it multiple times and that tells us that they’ll also do the same this time.

On top of that, we can see on the weekly RSI that GM is nearly oversold. This gives us confidence that we can expect some selling relief soon. The oversold conditions plus the increased demand at the support can be the catalysts of a strong rally.

Fundamental Analysis of General Motors (GM)

In addition, we have fundamental analysis to support our bullish view. GM’s trailing twelve month price to earnings ratio is 5.51. The stock is undervalued considering that the PE ratio TTM of the automotive – domestic industry stands at 12.39. The comparison tells us that GM has good upside potential.

Also, our research shows that GM is a fundamentally strong company. In its second-quarter report, GM’s US sales volume was up 4.6% year-over-year. Additionally, sales volume in China was up 4.4%. Lastly, a look at the firm’s income statement shows that GM’s earnings before interest, taxes, depreciation, and amortization (EBITDA) growth rate in the last five years was 17.40% per year. This tells us that the company is generating a lot of revenue at a high growth rate.

The firm’s net income may be suffering due to some external challenges but the figures show that GM continues to deliver solid results. Eventually, these results will be reflected in the stock’s price.

The strategy is to buy as close to $33 support as possible. If bulls can successfully defend the support, then GM might be able to rally to our target of $40. Sell immediately once the target is hit. Keep in mind, we are just playing for the bounce.

The timeline for the target is less than six months.

Weekly GM Chart

Monthly GM Chart

As of this writing, the General Motors Company stock (GM) is trading at $32.65.

Summary of Strategy

Buy: As close to $33 support as possible.

Target: $40

Stop: Close below $32.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.7 stars on average, based on 252 rated postsKiril is a financial professional with 4+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.




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Analysis

Investors Getting High on Cannabis

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By Dmitriy Gurkovskiy, Chief Analyst at RoboMarkets

A year ago, you would hardly find even the most financially illiterate person in the world that had not heard of Bitcoin or cryptocurrency. Regardless of whether they know what it was — at least they know you can earn money with it!

Opportunities to earn easy money sometimes do appear, but they do extremely rarely, and in this light the crypto boom is often compared to the tulipmania that happened in the 17th century. At that time, speculators with no experience joined the tulip futures trading, which eventually led to a sharp increase in flower bulb prices, while a year later the overheated market collapsed, bringing huge losses to all.

The chance to earn huge profits for people who do not have a close connection with the markets does not appear so often. But for those who work with stocks, such opportunities arise almost every quarter.

The price of bitcoin at the peak of its popularity, when almost everyone knew about it, went up by 2,000%. In the stock market, some companies can yield a return of 1,000% within a week or a month, and there is no need to wait a whole year around.

The last sharp increase in share prices after an IPO, which broke all records this year, was shown by Tilray. Since the IPO on July 19 this year, the stock yielded a return of 1,300% over 2 months, and for those who follow the IPO, there was plenty of time to buy this stock, as the price was at about $20 for about a month.

Tilray is a Canada-based company specializing in cultivation and sale of medical marijuana to consumers and pharmaceutical distributors.

When a stock experiences such a rise, however, it usually falls afterwards, and Tilray was no exception as it lost 50% of its maximum value, although it continues to trade at 600% higher against the initial IPO price.

2018 was a landmark for marijuana manufacturers, as in January California legalized the use of marijuana for recreational purposes. Currently, medical marijuana products can be consumed in 29 US states. It is expected that, by 2022, the marijuana market in the US and Canada will have grown by more than three times.

Tilray is a clear indicator of investors’ interest in such companies. However, it’s not just traders who are interested in marijuana producers. Constellation Brands, one of the largest beer producers in the US, announced its intention to invest $4B into Canopy Growth, another Canadian company. This will allow it to increase its share in Canopy Growth from 8.70% to 38.00%. In the next 3 years, the US company will get the right to buy another 139.7M shares for $3.5B, thereby increasing its stake to the controlling one.

Meanwhile, Microsoft has partnered with the Kind Financial, a US based startup company which develops software for government agencies that control the production and sale of marijuana.

On September 17, rumor had it that Coca-Cola was negotiating with Aurora Cannabis to create a beverage containing cannabis. Most likely, this drink will be used to reduce inflammation, seizures, and as an anesthetic.

All this confirms the interest of large companies and investors in marijuana manufacturers. At this rate, finding a marijuana company and investing your money in it could seem a good idea, but there is a risk of high volatility, just like in case of Tilray, which can put your deposit under serious threat. An easier way would be investing in an ETF with the same companies stocks.

The most interesting ETF in the marijuana industry is ETFMG Alternative Harvest (NYSE: MJ).

According to some sources, since August 22, this fund recorded a cash inflow of $112M, which is about 20% of the total value of its entire portfolio. With the money supply growing, the trading volumes increased up to 10M shares, which is 3 times higher than the volume in July.

The interest towards this ETF was especially frantic when California passed the law early this year: at that time, ETF MJ price rose from $29 to $39. Then, in March, the price tried to go up further, but the volumes stayed low, so the price had to get back and even sank a bit. It was only in August when $27 got broken out, and then the price went well up to reach $45, this time also with increased trading volumes. Currently, the support levels are at $34 and $39. Given the increased volatility, the price is quite likely to go down to $34.

ETF investment has always been considered less risky, and in case we are now on the brink of a marijuana boom, this ETF is certainly going to be the best investment vehicle.

 

Disclaimer

Any predictions contained herein are based on the authors’ particular opinion. This analysis shall not be treated as trading advice. RoboMarkets shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 15 rated postsHaving majored in both Social Psychology and Economics, I went on to continue my education in post graduate. Later I worked as a team lead of a tech and fundamental analysis lab in the Applied System Analysis Research Institute. This helped me to acquire all necessary skills and experience to become a successful trader and analyst, as well as a portfolio manager in an investment company. I'm a pro in the financial field and the author of articles for various international media. I also hold the position of Chief Analyst at RoboMarkets.




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