Market Movers (Issue #3)
Our coverage of major stock winners and losers.
Welcome to the third 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.
AMC Entertainment Holdings Inc. (AMC) — which we issued a report for on March 26 — is the world’s largest theater operator.
Considering the pandemic brought the film industry to a screeching halt, you wouldn’t think a theater operator would be able to boast triple-digit share price appreciation — even with society returning to a semblance of normal.
Yet, that’s the case; shares of AMC are up 470% over the last month. A decent box office weekend spurred retail investors to scurry for more shares.
All the while, AMC’s first-quarter revenue came in at $148.3 million, which represents an 84.2% decline compared to the first quarter of 2020. On top of that, AMC issued more shares, which generally hurts a share price. But meme stocks don’t play by the rules of logic, so AMC (and its shareholders) are major winners right now.
If you can believe it, shares of AMC closed at $51.34 on Thursday.
Vertex Energy, Inc. (VTNR) is a specialty refiner of alternative feedstocks and marketer of high-purity petroleum products. With an annual processing capacity of over 115 million gallons, Vertex is one of the largest processors of used motor oil in the U.S.
So far this year, VTNR is up 1,219%.
Vertex shares jumped after the company announced that it will acquire Shell’s Mobile, Alabama refinery. On top of that, an HC Wainwright analyst reiterated a Buy rating for VTNR, increasing a price target to $25 — which is 166% higher than what VTNR closed at on Thursday ($9.39).
eMagin Corporation (EMAN) manufactures organic light emitting diode (OLED) technology, providing microdisplays to military, medical, commercial, and consumer markets. For instance, its microdisplays are incorporated in night vision goggles and head-mounted display systems for the U.S. military.
eMagin recently reported a net loss of $7.4 million for Q1 (although $7.2 million of which was a non-cash expense related to the change in fair value of a warrant liability). So, why is EMAN up 112% this year then?
Outside of an HC Wainwright analyst issuing a bullish rating for EMAN a couple of weeks ago, the stock’s momentum doesn’t appear to be news-related. Shares of EMAN closed at $3.50 on Thursday.
Castor Maritime Inc. (CTRM) provides seaborne transportation services for dry bulk cargo (e.g. coal, grains, fertilizers, etc.) via three Panamax vessels.
Well, man the lifeboats, because Castor stock is capsizing. Over the last three months, CTRM is down 55%.
The Baltic Exchange Dry Index (BDI) has dropped to 2,530, considerably down from its May 5 peak of 3,266. In case you’re unfamiliar with the shipping industry, the BDI is a leading indicator of global demand for commodities and raw materials. It’s compiled based on the average shipping costs of four sizes of ships (Capemax, Panamax, Handymax, Handysize). A declining index indicates less demand for shipping dry bulk goods, which would mean shipping companies like Castor make less money.
Shares of CTRM closed at $3.53 on Thursday.
HP Inc. (HPQ)represents the PC and printer side of Hewlett-Packard, which split into two companies in 2015.
HP continues to smash earnings estimates; for its latest quarter, HP beat its Q2 earnings estimates by 4.5%, which seems mild compared to its Q1 surprise of 39.4%. Suffice to say, HP is crushing it...so why are shares down 14% over the last month?
Well, HP became the latest company to reference the global semiconductor shortage in its earnings release, as HP expects the limited supply of computer chips to impact its ability to meet demand. By some estimates, the shortage could extend into next year...and maybe beyond.
So, despite its recent success, investors don’t appear to be very bullish about HP’s near future.
Shares of HPQ closed at $29.93 on Thursday.
fuboTV (FUBO) provides streaming TV services with an emphasis on sports and competes with the likes of YouTube, Hulu Live TV, and Sling.
Depending on your perspective, fubo is either a big winner or a big loser. Over the last year, shares of FUBO have appreciated 149%. But compared to its 52-week high, shares are down 56%.
So, what gives?
Like HP, fuboTV is a semi-winner.
fuboTV more than doubled its subscriber base from 1Q20 to 1Q21; the company had 590,961 subscribers as of March 31.
fuboTV’s 1Q21 revenue increased 105% to $119.7 million compared to the prior year period.
fuboTV’s advertising revenue was $12.6 million in 1Q21, which was a 206% year-over-year increase.
fuboTV spends a lot of money on subscriber-related expenses — $113.3 million in 1Q21 (or ~95% of the company’s revenue. That doesn’t even account for a slew of other expenses including broadcasting and transmission, sales and marketing, tech and development, and G&A.
More to that point, fuboTV is nowhere near profitable. The company had a net loss of $70.1 million in the first quarter of this year alone.
But, then again, losses aren’t unusual for a company that’s trying to scale its operations by investing in potential revenue sources. (For instance, fubo is incorporating sports betting into its platform.) Seven out of eight analysts rate FUBO as a buy with pretty lofty price targets, so Wall Street likes what the company is doing.
Shares of FUBO closed at $27.18 on Thursday.
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