- The Street Sheet
- Posts
- 😯 These Small Caps Could Be a Double Whammy
😯 These Small Caps Could Be a Double Whammy
Plus, how "Big Short" investor Steve Eisman sees the latest tech sell-off
Pencils down, it’s time for lunch. Here’s what you missed this morning:
🟩 | Market Snapshot: The S&P 500 and Nasdaq Composite rose by roughly 1%, and the Dow shot over 600 points higher this morning as investors digested new US inflation data.
👍 | In focus: The Fed’s key inflation gauge, the personal consumption expenditures price index, increased 0.1% in June, up 2.5% from a year ago. This shows that inflation is easing slightly, which could encourage the Fed to go forward with a September interest rate cut.
🔭 | Noteworthy: Steve Eisman, famous for shorting the housing market before 2008, sees the recent tech-led market pullback as driven by emotions rather than a fundamental deterioration.
😯 | The Midday Trade: These Small Caps Could Be a Double Whammy. Scroll down for more.
Plus, don’t just survive earnings season — learn how to potentially thrive with today’s partner!
TOGETHER WITH STOCKEARNINGS.COM
Don't just survive earnings season - learn how to potentially thrive. Veteran trader reveals strategies for navigating market-moving announcements.
Discover how to time your trades for maximum potential profit. Bonus: Daily earnings updates delivered straight to your inbox.
STREET STATS
MORNING MOVERS
COIN: Coinbase’s stock rose due to a rise in Bitcoin, and the exchange added OpenAI executive Chris Lehane to its board of directors (IP)
CHTR: Shares of Charter Communications popped after it reported revenue above estimates, boosted by a surge in residential mobile service (Bloomberg)
WW: Weight Watchers’ stock plummeted after a Morgan Stanley downgrade that cited the rise in obesity medication (CNBC)
MHK: Flooring manufacturer Mohawk Industries’ stock shot higher after it topped Q2 earnings estimates and received a double upgrade from BofA (SA)
COUR: Coursera’s stock exploded higher and is heading for its best day ever after reporting a strong second-quarter beat (Investing.com)
TOP CALLS
Honeywell: RBC Capital Maintains Sector Perform on Honeywell Intl, Lowers Price Target to $214 (Trade It)
Globe Life: Piper Sandler Maintains Overweight on Globe Life, Raises Price Target to $106 (Trade It)
Invitation Homes: RBC Capital Maintains Outperform on Invitation Homes, Lowers Price Target to $37 (Trade It)
Boston Beer: Piper Sandler Maintains Overweight on Boston Beer Co, Lowers Price Target to $325 (Trade It)
Imax: Barrington Research Maintains Outperform on Imax, and Maintains $25 Price Target (Trade It)
Wyndham: Truist Securities Maintains Buy on Wyndham Hotels & Resorts, Lowers Price Target to $104 (Trade It)
THE MIDDAY TRADE
Shifting To Small Caps
Tech stocks have been slumping lately, and investors are starting to move some of their capital into small caps. The Nasdaq is down 1.7% this month, but the Russell 2000 has gained 8% over the same period.
Investors are anticipating Fed rate cuts as lower rates are a catalyst for small caps due to their high use of leverage. Many of them pay a solid dividend, as well. In a rate cut environment these stocks could offer investors both capital appreciation and income.
Northern Oil & Gas
CNBC Pro compiled a list of small caps that offer a dividend yield of at least 3%, have at least 60% of the analysts covering them assign a buy or overweight rating, and have average price targets that suggest at least 10% upside.
Northern Oil & Gas (NOG) is one such company. Its average price target suggests around 28% upside, and its EPS is expected to grow to $1.39. Analysts also point to its recent joint acquisition of Uinta Basin assets as a potential catalyst.
Atlas Energy
Atlas Energy (AESI), an oil and gas logistics company, also fits the bill. The stock is up 21% YTD and pays a dividend yield of 3%. All analysts covering the stock give it a buy or overweight rating. Average price targets point to around 30% upside despite coming down to $27 per share.
Investors have been waiting all year for potential rate cuts to boost small caps, and it seems that may finally be happening.
TOGETHER WITH STOCKEARNINGS.COM
Don't just survive earnings season - learn how to potentially thrive. Veteran trader reveals strategies for navigating market-moving announcements.
Discover how to time your trades for maximum potential profit. Bonus: Daily earnings updates delivered straight to your inbox.
SURVEY THE STREET
The worst of the global tech outage is behind us — CrowdStrike announced that 97% of Windows sensors are now back online.
Despite the PR nightmare, most analysts don’t think the outage will have a significant long-term impact on the company.
Of the 22 analysts covering the stock in the last seven days, 14 rate it Buy/Overweight.
How do you rate CrowdStrike? |
Plus, Yesterday’s Poll + Results:
🟩🟩🟩🟩🟩🟩 Bullish 🐂
⬜️⬜️⬜️⬜️⬜️⬜️ Bearish 🐻
What did you think of today's edition? |
This communication from The Street Sheet is for informational purposes only. It is not intended to serve as a recommendation to buy, sell, or hold any security and is not an offer or sale of a security. Information contained within should not be perceived as a research report and is not intended to serve as the basis for any investment decision. Any third-party views reflected herein do not reflect the opinion of The Street Sheet. All investments involve risk, and the past performance of a security does not guarantee future results or returns. There is always the potential for financial loss when investing in securities or other financial products. The information contained in this newsletter is subject to change without notice, and we do not undertake any obligation to update it. Readers are encouraged to conduct their own research and due diligence and seek advice from licensed professionals regarding their specific financial needs and circumstances. By reading this newsletter, you agree to hold us harmless from any and all losses, liabilities, costs, or expenses arising from your use or reliance on the information provided. The Street Sheet is reader-supported. When you buy through links on our site, we may earn a commission.
Reply