Remember the GameStonk short squeeze of early 2020? If early indications are correct, that marvelously awful event that saw hedge funds lose billions and average Joes rack up startling portfolio profits overnight is about to make a sudden reappearance.
See what else is trending this fine Tuesday with Q.ai’s roundup of high-investor interest stocks.
Q.ai runs daily factor models to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself.
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Facebook, Inc (FB)
First up on our trending list is Facebook, Inc
However, there may be trouble brewing once more for the oft-criticized social media giant, as a group of U.S. Democrats urged the company to drop plans for a version of photo-sharing app Instagram for children between the ages of 6 and 12. Their objection comes on the heels of last week’s protest, wherein a group of 40 state attorneys general also urged Mark Zuckerberg to abandon ship before it sets sail.
At the same time, Facebook also announced the launch of Live Shopping Friday. Throughout this three-month event, well-known beauty and fashion companies like Sephora and Abercrombie & Fitch
Facebook is taking these gambles on the back of a strong 2020. Revenue grew 9.8% in the last fiscal year, though not quite matching pace with the 69% growth over the last three, bringing total revenue from $55.8 billion to $85.97 billion. Forward 12-month revenue is expected to grow by 3.71%.
Facebook’s operating income also grew last year by 16.8% to $32.67 billion, with per-share earnings expanding 15.7% to $10.09. However, the company’s ROE dropped from 27.9% to 25.4% over the last 36 months. Currently, Facebook is trading at 23.7x earnings.
Our AI is generally favorable on Facebook, given the company’s 5-year track record of high share prices and continued innovation. Facebook has earned ratings of A in Growth, B in Low Volatility Momentum and Quality Value, and C in Technicals.
Ampco-Pittsburgh Corporation (AP)
Next up is Ampco-Pittsburgh
While Ampco-Pittsburgh has a long way to go yet before they approach their three-year-ago performance, the company appears to be doing well, as CEO J. McBrayer just shelled out $65k to increase his stock holding by 14%.
Ampco-Pittsburgh experienced an abysmal 2020 to follow a slightly more abysmal 2019 (if that’s even possible). The company’s revenue decreased from $419 million to $328.5 million in the past three years, with operating income halved from just under $11 million to $5.5 million. At the same time, EPS plummeted from $5.57 to $0.54 in per-share earnings.
As you might expect, our AI is skeptical of Ampco-Pittsburgh’s long-term performance. The steelmaker is admittedly making strides toward their once-great stock prices – but with a long road ahead of them, they’ve earned mediocre ratings of A in Quality Value, D in Low Volatility Momentum, and F in Technicals and Growth.
American Airlines Group (AAL)
American Airlines is trending this week in part due to a statement Sunday that announced they’re expanding their quarantine-free flight list. While the company has been offering quarantine-free flights from JFK airport to Italy since early April, recent changes in Italy’s travel restrictions allow any eligible customers to take these flights starting May 16. All that’s required is proof of a negative Covid-19 test before departure and upon arrival.
This positive news is welcome not only for cooped-up Americans, but those who see reopening international travel as the end of the pandemic. And that’s good news for American Airlines, whose 2020 year was marked by plummeting revenues and share prices alike.
American Airlines raked in revenue of $17.3 billion in the last fiscal year, a sorry amount compared to $44.5 billion three years ago. Still, their operating income managed to expand 17.5% to $11 billion compared to $3.76 billion three years ago, with EPS ballooning to $18.36 in per-share earnings. And with nowhere to go but up, American Airlines is expected to see revenue growth of almost 18% over the next 12 months.
Still, while prospects look lukewarm to promising as travel reopens, our AI sees American Airlines as a poor investment for any savvy investor, with F’s across the board in Technicals, Growth, Low Volatility Momentum, and Quality Value.
Apple, Inc (AAPL)
While the company’s stock appears to be undergoing a correction from its historically high prices, that may soon change, as Apple announced this week that it’s preparing to release several new Mac products over the coming months with M1 processing chips of their own design. The goal to phase out Intel’s processors will, hopefully, lead to longer battery life, enhanced graphics and computing cores, and increased speeds.
Apple had a banner 2020, with revenue growth topping 18.5% to $274.5 billion, a nearly $10 billion increase over the last three years. Forward 12-month revenue growth is tapped at 1.4%.
Operating income ballooned by 34% over the last 12 months, outpacing 25% growth in the last three years to end 2020 on a high of $66.3 billion. However, this still falls short of the company’s $70.9 million operating income three years ago.
At the same time, per-share earnings jumped 35.6% in the last fiscal year to $3.28 in per-share earnings, a 49.3% increase over $2.98 per-share earnings three years ago. And ROE expanded from 49.4% to 73.7% over the past 36 months. Currently, Apple is trading with a forward 12-month P/E of 24.25x.
As an investor, it’s usually a bad call to bet against Apple, and that holds especially true on the heels of a pandemic. Our AI agrees that Apple is a sound investment at the moment, rating the company A in Growth, B in Low Volatility Momentum and Quality Value, and C in Technicals.
GameStop Corporation (GME)
Poor, poor GameStop
GameStop is trending once again this week as reports of short sellers circulated widely on Monday, sparking talk that traders may be about to push the stock up again to keep the latest round of short-betting hedge funds from squeezing profits out of GameStop’s surely inevitable decline. And in fact, traders have lost over $930 million in meme stock short positions in the last five trading days alone – with no end in sight.
The stock closed up 12.9% for the day, ending at $180.60 per share with a final trade volume of 7.46 million. The stock has started climbing again in the past week, with shares up significantly from the 10-day price average of $158 and change. Currently, GameStop remains up 858% YTD.
Despite GameStop’s historically high stock prices, the company had an abysmal 2020. Revenue was down from $8.28 billion three years ago to $5.1 billion in the last fiscal year. Operating income declined from $320 million to $249 million in the same time frame. And per-share earnings plummeted from $6.60 to $3.31.
And, despite what internet traders think of GameStop’s stock, our AI sees the stock as a poor investment, with ratings of B in Growth, D’s in Low Volatility Momentum and Quality Value, and F in Technicals.
Long live the stonk.
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