Market Movers (Issue #2)
Our coverage of major stock winners and losers.
Welcome to the second edition of Market Movers, our coverage of major stock winners and losers.
“Winners” represent stocks that recently experienced upward price momentum, while “losers” have faced downward price pressures. Note: the companies we highlight aren’t necessarily the biggest movers from a return standpoint.
The Kraft Heinz Company (KHC) is a familiar name in the food industry. Beyond its namesake, Kraft Heinz owns a sizable portfolio of American food brands, including Oscar Mayer, Velveeta, and Philadelphia.
In recent years, KHC resembled a dumpster fire. The company curtailed investments in key brands and performance suffered. The downward trend culminated when KHC recognized a $15.4 billion write-down on several key operations in February 2019.
From 2017 to 2020, shares of KHC dropped from the upper $90s to…$22.
Since hiring CEO Miguel Patricio in July 2019, Kraft Heinz has reversed course — to the point where Warren Buffet voiced a positive opinion of KHC (which always helps). Plus, the company experienced sales bumps across all business segments in the first quarter of 2021. Shares of KHC closed at $43.87 on May 20.
Evolve Transition Infrastructure LP(SNMP), which used to be named Sanchez Midstream before rebranding, is a smaller player in the energy industry. The company owns natural gas gathering systems, pipelines, and processing facilities in South Texas — but it’s pursuing investments in cleaner energy projects.
Why is Evolve a winner?
On Monday, Evolve announced an agreement with Nuvve Holding Corp. (NVVE) to form a new sustainable infrastructure joint venture (JV) under the name Levo Mobility. Nuvve’s proprietary vehicle-to-grid (V2G) platform will be used to outfit fleets of zero-emission electric school buses across school districts all over the country. Evolve and its investors will contribute $750 million of capital to this project.
Shares of SNMP closed at $0.92 on May 20 — up from $0.59 at the beginning of the year.
Fossil Group, Inc. (FOSL) is an American fashion designer and manufacturer with a well-known portfolio of apparel brands — such as Kate Spade and Puma.
Well, Fossil is only a semi-winner.
From a return standpoint, Fossil is having a helluva year; FOSL shares are up 36.7% as of May 20. From a revenue and earnings standpoint, it’s been a struggle. Since 2015, Fossil’s revenues have consistently trended downward. So, shareholders have been major winners — but who knows if that’ll remain true if Fossil earnings continue to dip.
Shares of FOSL closed at $11.85 on May 20.
PureCycle Technologies Inc. (PCT) provides recycling services. Its patented recycling process separates color, odor, and contaminants from plastic waste feedstock to transform it into ultra-pure recycled polypropylene.
As lovely and good-natured as that sounds, the stock plummeted earlier this month after a well-known short-seller, Heidenburg Research, released its latest report titled, “PureCycle: The Latest Zero-Revenue ESG SPAC Charade, Sponsored By The Worst Of Wall Street.”
The company issued a brief response shortly after, calling the report a tactic to drive down PCT shares. But the damage had already been done. PCT shares have gradually declined in value ever since.
Shares of PCT closed at $15.85 on May 20, representing a 56% decline from its 52-week high. That said, it’s been on the rise since the beginning of the week — so keep an eye on PCT.
Flora Growth Corp (FLGC) is a cannabis company that cultivates and supplies medicinal-grade cannabis oils to various distributors. Its also the latest cannabis company to pursue an IPO, which brought in $16.7 million of gross proceeds for the company.
That’s great for Flora Growth because it’s definitely not generating the cash flow necessary to sustain operations. According to the company’s prospectus, Flora Growth only generated $106,000 of revenue last year; its net loss was $14.3 million. Since listing at $5.00 per share, FLGC has dipped 33% to $3.36.
It’s a prime example that investing in IPOs can be quite risky.
CleanSpark Inc. (CLSK) is a software developer in the energy efficiency space. More recently, they’ve added bitcoin mining solutions to their arsenal with the hope of tackling the digital asset’s energy consumption problems.
Depending on your view of Bitcoin, that’s either encouraging or concerning. Regardless, the company has attracted a ton of attention from investors — including short-seller Culper Research, which issued a report questioning ClearSpark’s integrity. The company responded, helping the stock recover some, but it’s still significantly down from its YTD high of $42.60.
Like Fossil, CleanSpark is a semi-winner though. Over the last year, CLSK has appreciated by 563%. In more recent news, the company announced the purchase of 2,400 new rigs, which are expected to improve mining efficiency.
Shares of CLSK closed at $15.98 on May 20.
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