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Bernstein, Bears No Extra
Nice Ones, in the event you’re anticipating some massive commentary from me on Russia and Ukraine … don’t maintain your breath.
The scenario is what it’s. And from an investing standpoint, it’s simply one other go browsing the Wall Avenue volatility dumpster hearth.
Should you’ve been paying consideration, studying your every day Nice Stuff and consuming a well-balanced breakfast … y’all ought to be OK. I imply, I can solely give you so many alternatives to discover ways to revenue from market volatility … nicely, so many plus one, it appears:
Paul Mampilly and his protégé Ian Dyer are as much as their outdated market-beating tips with Fast Revenue Dealer! Should you’ve checked out different market volatility buying and selling methods earlier than and yawned … then you really want to take a look at this thrilling new “Revenue Boosting” occasion!
I’ve even saved you a seat! Simply click on right here to search out out extra!
Anywho, we’re not speaking about volatility, Russia, Ukraine and even the Fed immediately. No sir!
We’re speaking about Superior Micro Gadgets (Nasdaq: AMD).
Now, I do know a few of y’all are a contact salty over AMD, and that’s comprehensible. The inventory is down some 28% since we beneficial it in Nice Stuff Picks again on January 3. Curse you market volatility!
Keep in mind, we didn’t purchase into AMD due to Wall Avenue. We purchased into AMD due to AMD. The corporate is really firing on all cylinders proper now and is considered one of two crucial semiconductor shares it is best to personal no matter what the broader market is doing.
Don’t imagine me? Properly, simply ask the Bernstein bears.
This morning, Bernstein Analyst Stacy Rasgon upgraded AMD from market carry out to outperform with a value goal of $150 — that’s a 30% upside from AMD’s shut on Friday.
OK, so Bernstein wasn’t an AMD bear.
I imagine you’re pondering of Berenstain, Mr. Nice Stuff!
Proper you might be. However Bernstein may as nicely have been an AMD bear. The final time the rankings agency issued an outperform ranking on AMD was about 10 years in the past!
Heck, Nice Stuff Picks beneficial AMD almost three years in the past … and I felt late to the sport at that time. (Btw, readers who purchased in once I first beneficial AMD in Nice Stuff Picks again on June 10, 2019 are up greater than 300%!)
What’s extra, Bernstein makes all the identical bullish AMD factors that I’ve made numerous instances. Rasgon touted AMD’s rising market share in server chips, graphics chips and online game consoles. Rasgon even addressed its 10-year outperform hiatus on AMD:
Time heals all wounds, and (as has frankly been abundantly clear for years) this isn’t the AMD of a decade in the past. And with the mixture of continued stellar execution, more and more bankable earnings energy, and a current sizeable pullback making valuation (dare we are saying?) downright engaging we’re, for the primary time in virtually a decade, pulling the set off.
Did you catch that? That necessary little tidbit in there about “a current sizeable pullback?”
That’s proper. Even Bernstein acknowledges that AMD is undervalued proper now, with Rasgon noting that AMD “appears to be like even higher on a income foundation.”
And Rasgon believes, as I do, that AMD’s income beneficial properties are going to return on the expense of Intel’s (Nasdaq: INTC) restructuring and manufacturing woes:
Intel’s current commentary at their analyst day final week suggests the subsequent a number of years could also be open season in datacenter.
We suspect AMD will take as a lot share as they will handle to produce.
With chip-making juggernaut Taiwan Semiconductor (NYSE: TSM) heading up AMD’s chip foundry operations, I’d say that AMD will take each little bit of market share that Intel hasn’t already nailed to the ground.
The underside line right here is that in the event you haven’t already taken my suggestion to purchase AMD inventory, now’s your likelihood to purchase in at a cut price value … earlier than AMD skyrockets later this 12 months.
Good: Donut Give Up — Donut Give up
Mmmm … scent that, Nice Ones? The candy scent of barely burnt sugar, day-old espresso percolating in a piping-hot pot … and the metallic tang of cash altering arms early within the morning.
It’s the catered breakfast of champions — a Krispy Kreme (NYSE: DNUT) donut dream!
And now I’m hungry, thanks.
By some inflation-induced miracle, Krispy Kreme managed to high Wall Avenue’s income expectations this quarter regardless of elevating costs twice to offset rising labor and commodity prices.
The King of Kreme himself, CEO Mike Tattersfield, credited vacation demand for the corporate’s sturdy gross sales development, saying: “Our model doesn’t are usually a every day ritual. It tends to be a gathering.”
Positive, Mike. Positive. Gathering gaffes apart, it wasn’t all candy treats for DNUT traders on the Avenue.
The donut designer nonetheless got here in a penny — sure, a complete penny — underneath Wall Avenue’s earnings estimates for $0.09 per share. However contemplating that not simply any neighborhood bakeshop could make desserts that’ll delight your style buds like Krispy Kreme … DNUT traders weren’t about to chew the sugary hand that feeds them.
As such, DNUT inventory is surging over 7% immediately on its modest quarterly win.
Higher: Macy’s On Parade
Mall retail by some means nonetheless isn’t lifeless but — and neither is the debutant of division retailer fare, Macy’s (NYSE: M).
Don’t get me improper: Macy’s nonetheless isn’t bringing within the mega billions like its Amazonian cousins *nudge nudge, wink wink*.
However it’s bringing within the minuscule billions … and that in itself is one thing to write down residence about.
For the quarter, Macy’s made $8.67 billion in contrast with the $8.47 billion anticipated. Topping it off, adjusted per-share earnings hit $2.45, which blew the Avenue’s $2 per share revenue out of the water.
To reiterate: That’s a double beat from a near-dead enterprise. Has anybody checked exterior to see if pigs are flying round? What kinda wingspan do you suppose these suckers would wish to get off the bottom?
Close to lifeless? Dude, you’re raving once more…
Proper. Extra importantly, Macy’s additionally licensed a $2 billion share buyback program, a 5% dividend improve and stated that it gained’t be separating its digital and bodily retailer segments regardless of stress from activist traders to chop the twine.
Now, usually I might aspect with the activist traders with regards to retail revitalization — and doubly so for dinosaur shops.
However contemplating immediately’s shock double beat, possibly … simply possibly … Macy’s is doing one thing proper all by itself. What do you suppose, Nice Ones? When was the final time you shopped at Macy’s … or any mall, for that matter?
Greatest: Residence Depot Digs Deep
Know who else is bucking the current retail income droop? Why, it’s the one-stop-shop, DIY-‘til-you-drop residence enchancment improviser Residence Depot (NYSE: HD)!
To say that Residence Depot demolished its newest quarter could be an understatement — it utterly nailed it. Fourth-quarter internet earnings reached $3.4 billion on gross sales of $35.7 billion, with earnings per share hitting a wholesome $3.21.
In the meantime, same-store gross sales — a key metric that mainly measures how nicely current shops have been working — jumped 8.1% over the past three months.
And let’s not miss the 15% dividend improve that Residence Depot simply introduced, which can push its quarterly dividend to $1.90 per share. That’s an HD stockholder incentive that may make Software Time Taylor weep.
And but … Residence Depot inventory is slipping almost 9% decrease on the day. What provides?
Properly, it might appear analysts are involved that a lot of Residence Depot’s development was pushed by increased costs on account of inflation … and never a sudden uptick in residence enchancment initiatives, new housing development or the easing of provide chain constrictions.
So … the identical because it ever was?
To the window, to the wall, Nice Ones. Analysts nonetheless suppose HD will get low.
Broad uncertainty is the identify of this 12 months’s recreation … and till the Avenue finds its future-looking confidence as soon as once more, corporations like Residence Depot will proceed to be caught within the crossfire — irrespective of how a lot cash they make.
Whereas 2022 is shaping as much as be a tricky time for shares, my colleague Clint Lee has been devising a plan of assault that may make volatility work for traders. (Trace: That is your second volatility play immediately … fortunate you!)
In actual fact, a number of the greatest beneficial properties in his Flashpoint Fortunes again checks got here from shares that had been falling — not shares that had been climbing increased!
The excellent news is, Clint has been given the inexperienced gentle to reopen Flashpoint Fortunes to new members for a restricted time.
To see how his service works — and the way to make volatility work on your portfolio — click on right here now.
And after you’ve checked that out — hey, hey, I stated after you’ve checked that out — drop us a line at GreatStuffToday@BanyanHill.com together with your ideas.
Your electronic mail may even be featured on this week’s version of Reader Suggestions! We’d love to listen to from you. Within the meantime, right here’s the place else yow will discover us:
Till subsequent time, keep Nice!
Regards,
Joseph Hargett
Editor, Nice Stuff
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