Futures are pointing to a higher open. to start the week, with the S&P set to open .37% higher as I write this. Asia markets closed mixed overnight while Europe indexes are in the green this morning. The US dollar, Oil, and Gold are higher while Yields are lower.
And this is what UPB is reading this morning: https://www.optionmillionaires.com/morning-reads-166/
I am working on my Top 5 Stocks for 2023 Webinar. I will be putting some of the names I am researching in the #2023-ideas channel. Feel free to add any names you think may outperform in 2023 or any comments you may have.
We are now entering Santa Claus rally territory which is typically the last 5 days of December and the first 2 in January... or thereabouts. According to data, the S&P 500 has gone up an average of 1.3% during that timeframe - likely because of positioning and rebalancing. Will be interesting to see how this week plays out. It is a very light week in regards to catalysts and typically a week you do not see as many analyst changes. Would like to see that 50dma at $386.28 breached and held, and maybe we can get that move to $390 before years end. That lower Bollinger band is sitting there at $376 so would be some support if the market comes under pressure which is not out of the question:
2022 has been a rough year, especially in Tech. Here is the YTD performance for the markets along with the Q4 Performance(which surprisingly, has not been too bad):
And the YTD performance in some select tech names:
Pretty eye-opening... Of course it is easy to say in hind-sight that a rising rate environment makes momentum/growth names less attractive, but who would have said ROKU would be down over 80% this year. ROKU is down 8 sessions in a row and at levels not seen since the start of 2019. There were rumors of a buyout in the summer when the stock was in the $90s, and it was already down over 60% at that point. It has been cut in half since then. Think this one can be one of those Santa Rally stocks into the new year. I already added some calls last week and may look for some strikes to play for a move back into the $50s and beyond into January:
I added some SQ calls on Friday under the same premise as ROKU... a name that has likely been a victim of tax-loss selling. It trades nearly 2x's revenues and still posted a solid Q3, growing over 15%. Think it trades back into the $70s in the coming weeks:
VKTX continued its rally on Friday, closing up over 4% and has now finished in the green for 9 straight sessions. Think $9+ is in the cards this week and still looking for some later dated strikes on the name as I think the MDGL data puts the M&A crosshairs on this one:
It was a rough day for ZYME on Friday. It tried to test and break $9, only to find resistance and sellers. My calls are now flat. Still think this one is headed over $10 in the coming weeks:
AYX is still setting up nicely here and looks like a possible bull-flag. That 200dma at $56.31 should be coming soon:
WING is back on watch here after its $20 melt down since mid-december:
CMG is off over $200 since mid-december and always seems too find a strong bid and multi-day rally on bounces off the lower-bollinger band:
Insurers have been strong this year. I really liked CI earlier this year and its trading right at all-time highs. HUM has fallen from its highs and found some support at the end of the week. May look to trade this one for a move over its 50dma at $530 this week:
Here are the analyst changes of note for today:
| Piper views TriCare T-5 contract awards as neutral for Accolade |
| On December 22, the Department of Defense awarded $136B of TriCare T-5 contracts to Humana (HUM) in the East Region and TriWest in the West Region, Piper Sandler analyst Jessica Tassan tells investors in a research note. The analyst views the initial T-5 contracts t outcome as neutral for Accolade (ACCD) and reiterates an Overweight rating on the shares with a $13 price target. Heading into the T-5 contract awards, Accolade had teaming agreements with two of the three managed care organization bidders to provide certain navigation services under the new contracts, says Tassan. She believes the teaming agreements were with Humana and HealthNet. Accolade has worked with TriWest in the past and, a T-5 partnership "remains entirely possible," the analyst contends. Based on the initial T-5 contract awards, Tassan has visibility into Accolade's partnership with Humana in the East Region. She estimates Accolade's T-5 teaming agreement with Humana should generate $4.7M of annualized revenue, or 52% of the $9.0M Select Navigator run-rate |
| Lithuanian order enhances AeroVironment visibility, says William Blair |
| The Lithuanian Ministry of National Defence last week signed a contract with the United States to procure Switchblade 600 anti-tank drone systems for the Lithuanian Armed Forces, William Blair analyst Louie DiPalma tells investors in a research note. The analyst says the deal, worth approximately $48M, represents the first major international order he's seen for the Switchblade 600. On addition to the Switchblade 600, the United States will deliver AeroVironment's smaller Switchblade 300 systems to the Lithuanian Armed Forces, he adds. DiPalma thinks the Lithuanian order "provides enhanced visibility" for AeroVironment's fiscal 2023 guidance and is a positive sign for Switchblade momentum entering 2024. He anticipates upside in the shares over the next 12 months |
| Baird doubts FTC order will have 'material impact' on MasterCard |
| Baird analyst David Koning noted that the FTC issued a press release Friday announcing that it is requiring MasterCard to start allowing alternative networks to be accessed by giving PAN data on e-commerce debit transactions. However, he believes that if a merchant chooses to use an alternative network, they lose the benefits of MasterCard's tokenization, fraud, and other services and doubts the order will have "a material impact." The analyst, who thinks U.S. online debit is about 3% of MasterCard revenue and doubts they will lose much of this, adding that he thinks they "can gain in some places," likes the stock "a lot" and maintains an Outperform rating on MasterCard shares. |
| Cryoport 'head and shoulders above' competitors in cryogenics, says BTIG |
| After having recently took a tour of Cryoport's Global Supply Chain Center, BTIG analyst David Larsen tells investors that he came away "convinced" that Cryoport is the category leader in ultra-cold and cryogenic logistics and shipping and is "head and shoulders above several competitors" in the space. The analyst, who said he was impressed with the extent of the infrastructure, technology, staffing, and overall capabilities of the plant in New Jersey, also contends that it is "clear to us that the allogeneic industry is a reality." Larsen keeps a Buy rating and $40 price target on Cryoport shares |
| Barclays does not see big impact to MasterCard from FTC order |
| Barclays analyst Ramsey El-Assal keeps an Overweight rating on MasterCard with a $428 price target after the Federal Trade Commission issued a preliminary order requiring the company to allow other debit networks to access its "token vault," so that merchants can more easily route tokenized/online debit transactions to other networks. Given MasterCard' minority U.S. debit market share, "we do not expect a very material P&L impact," El-Assal tells investors in a research note |
| Apple iPhone supply 'continues to improve slowly,' say JPMorgan |
| JPMorgan analyst Samik Chatterjee says that in week 16 of his Apple product availability tracker, supply for the iPhone Pro models "continues to improve slowly," with lead times moderating further in China. A majority of models are now available for in-store pickup across all geographies, including China for the first time since product launch, Chatterjee tells investors in a research note. The analyst says lead times for the Pro models are now tracking in line with lead times seen prior to the COVID outbreak in Zhengzhou, China, "suggesting that supply is improving and inching slowly towards parity with demand." In the U.S., lead times for the iPhone 14 and iPhone 14 Plus ticked up to five days each from one day prior, which is in-line with timing for iPhone 13 and 13 mini last year, Chatterjee writes. The analyst has an Overweigh rating on Apple shares |
| Raymond James sees 'solid benefits' to AT&T from BlackRock venture |
| Raymond James analyst Frank Louthan keeps a Strong Buy rating on AT&T (T) after the company announced a joint venture with BlackRock (BLK) to develop fiber-to-the-home outside its 21-state footprint. Financial terms were not disclosed, but AT&T twill likely contribute its existing fiber assets in these markets as a base case to build on, with the Gigapower team and BlackRock funds handling the rest of the way to the customer, Louthan tells investors in a research note. The analyst says this is a much smaller initial step than he would have anticipated, with a target of "only" 1.5M locations to be passed. He estimates this will cost about $1,000 per passing and result in $3,000 or less per subscriber, assuming low 30% penetration. However, the sell-through from wireless and churn reduction from bundling fiber-based broadband has "solid benefits" to AT&T beyond the actual subs and joint venture returns, Louthan contends |
And here is what I am watching today: HUM, CI, WING, CMG, ROKU, SQ, VKTX, NFLX, PTON, BYND, ALGN, ULTA, BLK, RARE, AYX, SPOT, BURL, WYNN, U, and TWLO.
Let's have a great day!
-JB