Author: Editor

There’s growing fear of cyberattacks.

In fact, the FBI has called on the private sector to be prepared for potential attacks launched by Russia throughout the latest chaos with Ukraine.

Also, according to ABC News:

“Given the very high tensions that we are experiencing, companies of any size and of all sizes would be foolish not to be preparing right now as we speak — to increase their defenses, to do things like patching, to heighten their alert systems, to be monitoring in real-time their cybersecurity,” deputy attorney general Lisa Monaco said in remarks at the Munich Cybersecurity Conference. “They need to be as we say, ‘shields up’ and to be really on the most heightened level of alert that they can be and taking all necessary precautions.”

What’s worse is the U.S. isn’t prepared if there is an attack.

Cities, hospitals, schools, and many companies aren’t ready.

In fact, according to FireEye, as noted by Cybersecurity Insiders, about 29% of organizations haven’t even bothered to test their cyber defenses in over a year. Considering the constant threat, and the cost of cyberattacks, that shouldn’t be.

You almost want to bang your head against the wall. Worse, it’s only a matter of time before we’re hit with another massive cyberattack.

With the threat becoming even more critical by the day, it has to be taken seriously.

For investors, here are some of the top stocks to keep on radar.

Global X Cybersecurity ETF (BUG)

“The Global X Cybersecurity ETF (BUG) seeks to invest in companies that stand to potentially benefit from the increased adoption of cybersecurity technology, such as those whose principal business is in the development and management of security protocols preventing intrusion and attacks to systems, networks, applications, computers, and mobile devices,” says Global X.

Over the last several months, the BUG ETF exploded from about $24.50 to about $27.75. From here, we could see a potential test of $40, near-term, as the cyber situation intensifies. Some of the ETFs top holdings include Fortinet, Crowdstrike, Palo Alto, Okta Inc., and Rapid7 Inc. to name a few. What’s nice about an ETF is that it offers a good deal of exposure at less cost.

iShares Cybersecurity and Tech ETF (IHAK)

According to iShares, “The iShares Cybersecurity and Tech ETF seeks to track the investment results of an index composed of developed and emerging market companies involved in cyber security and technology, including cyber security hardware, software, products, and services.”
Some of its top holdings include Zscaler, Fortinet, Docusign Inc., Okta Inc. and Proofpoint Inc.

Palo Alto Networks (PANW)

PANW is one of the biggest cybersecurity firms in the world. Even after running from a low of $225 to $470, it could still see higher highs. JMP Securities recently assumed coverage of the stock with an outperform rating with a target price of $620. Even Citi just initiated a buy rating on the PANW stock with a $585 price target.

PANW will release its latest earnings after closing bell tonight.

Americans bought another 19.9 million guns last year.

While that’s down 12.5% year over year, it was still the second highest on record.

According to Forbes, “Observers think politics and CV-19 are key reasons for this surge: The pandemic — and the economic devastation it wrought — fueled safety worries, purchases remained high during summer 2020’s nationwide protests, and sales regularly spike ahead of presidential elections.”

Also, about 30% of guns purchased in 2021 were first time gun owners, according to a survey from the National Shooting Sports Foundation (NSSF).

On top of that, the U.S. is seeing a massive shortage of ammunition.

“The NSSF estimated that 8.7 billion were produced in 2018, a marked increase from the 8.1 billion produced in 2017. Fast forward to a year ago and some 9 billion rounds were produced. That increase should have in theory been more than enough to meet the demand, yet it hasn’t and likely won’t, at least well into next year and perhaps even beyond. Demand for ammunition could likely continue throughout 2022.”

With demand for guns, and an ammunition shortage showing no signs of letting up, some of the top stocks to keep an eye on include:

Vista Outdoor (VSTO)

Oversold, VSTO is up about $1.05 to $35.72.

Most recently, the company reported net income of $118.1 million, or $2 per share, up from $78.9 million, or $1.31 per share. Adjusted EPS of $2.10 beat estimates for $1.92.

“Two years into the pandemic, people continue to find enjoyment in their newly acquired and rediscovered outdoor passions,” said chief Executive Chris Metz, as quoted by MarketWatch. “We continue to see increasing levels of activity and participation across outdoor recreation whether it be golfing, camping, hiking, biking, hunting or recreational shooting.”

The company also authorized a new $200 million share buyback program.

Sturm Ruger & Company Inc. (RGR)

In its most recent earnings report, the company reported net sales of $178.2 million and diluted earnings of $1.98 per share, compared with net sales of $145.7 million and diluted earnings of $1.39 per share in the third quarter of 2020.

For the nine months ended October 2, 2021, net sales were $562.7 million and diluted earnings were $6.64 per share. For the corresponding period in 2020, net sales were $399.6 million and diluted earnings were $3.31 per share.

Smith & Wesson Brands (SWBI)

In its most recent quarter, revenue fell about 7.3% year over year to $230.5 million. Net income came in at $55.3 million, or $1.13 per diluted share, as compared to $52.8 million, or 93 cents per diluted share year over year. In addition, according to CFO Deana McPherson remarked, “We delivered a 370-basis point increase in gross margin that more than offset a 7.3% decrease in revenue compared with the prior year second quarter.”

Lithium stocks, like Lithium Americas (LAC) are on fire.

Helping, JP Morgan just said there are “lot of catalysts ahead to support [Lithium Americas] stock in a choppy market,” as quoted by the Dow Jones.

In addition, the firm sees a positive outcome for the company by the end of the first quarter, with regards to Thacker Pass.

At Thacker Pass, results of a Feasibility Study on the first phase of Thacker Pass (for at least 30,000-35,000 tpa of lithium carbonate) are expected soon. Engineering is underway to consider a 20,000 tpa lithium hydroxide chemical conversion plant, to provide flexibility to meet potential customer and partner needs.

Even HSBC analyst Santhosh Seshadri recently initiated coverage of LAC with a Buy rating and $36 price target. According to the analyst, as quoted by TheFly.com, LAC is “a force to reckon with” given that its projects are large enough to exceed the capacity of incumbents like Livent.

Plus, remember, countries all over the world want a greener future, and millions of emission free electric vehicles on the roads. Even major automakers are adopting EV models, replacing fleets of gas guzzling autos. But for that to happen, we need lithium.
A lot of lithium. There’s just one tiny problem. We don’t have enough supply.

Even the International Energy Agency is warning that the, “The supply of critical minerals crucial for technologies such as wind turbines and electric vehicles will have to be ramped up over the next decades if the planet’s climate targets are to be met.”

The chip shortage won’t end in 2022.

In fact, according to AMD CEO Dr. Lisa Su, “There’s tremendous investment that’s happening across the semiconductor industry, whether you’re talking about on the wafer side or on some of the substrates or the back-end assets. So, we are making progress. I do believe that the first half of this year will continue to be quite tight. But the second half of this year, I think things will get a little bit better,” as quoted by Yahoo Finance.

Unfortunately, “a little bit better” may not be enough.

With far more demand than supply, millions of products – including the smartphones, and autos – are coming under pressure.

“We aren’t even close to being out of the woods,” U.S. Commerce Secretary Gina Raimondo tweeted last month. “The semiconductor supply chain is very fragile, and it’s going to remain that way until we can increase chip production.”

Worse, manufacturers that rely on chips are down to five days of inventory, according to the U.S. Commerce Department whose recent study found:

• Median demand for chips highlighted by buyers was as much as 17% higher in 2021 than 2019, and buyers aren’t seeing commensurate increases in the supply they receive. This is a major supply and demand mismatch.
• The median inventory of semiconductor products highlighted by buyers has fallen from 40 days in 2019 to less than 5 days in 2021. These inventories are even smaller in key industries.
• The primary bottleneck across the board appears to be wafer production capacity, which requires a longer-term solution.

With no near-term relief in sight, consider trading the pullbacks in the VanEck Semiconductor ETF (SMH), the iShares Semiconductor ETF (SOXX), Cirrus Logic (CRUS), Qualcomm (QCOM), Micron (MU), and Skyworks (SWKS).

 

Oil prices are gushing.

At the moment, oil is quickly nearing $100 a barrel, a high we haven’t seen since 2014.

“The oil market is heading for simultaneously low inventories, low spare capacity and still low investment,” Morgan Stanley analysts wrote in a research note, lifting their price forecast for the summer quarter by $10 a barrel, to $100 for Brent and $97.50 for West Texas Intermediate,” as noted by The Wall Street Journal.

Two, there could be a war this week. But don’t hold me to that.

The U.S. says Russia is moving into attack positions and will attack by the end of the week.

However, “Hours after issuing a global statement saying he heard Russia would attack his country on Feb. 16, Ukrainian President Volodymyr Zelenskyy walked back the prediction on Monday, clarifying that he was referring only to media reports,” as reported by NBC News.

Three, if there is war, we could see pain at the pump with $150 oil.

“RBC Capital Markets explained one scenario where oil prices could jump to record levels. It has more to do with demand than supply. Oil supplies are growing at a relatively slow rate, in part because OPEC has been unwilling—and potentially unable—to boost production. Several OPEC members are not adding as much supply as they were expected to add under current limits. If Russia invades Ukraine, supply could be reduced again, because countries might impose sanctions on Russian oil and reduce the amount of global supply available.”

So, how do we profit from that potentially nightmarish situation?

One way is to buy the oil heavyweights, like Exxon Mobil (XOM) and Chevron (CVX).

Another way is to invest in the ETFs we’ve mentioned including:

SPDR Energy Select Sector ETF (XLE)

When we first highlighted the XLE, it traded at $52.70. It’s now up to $68.75, and could be headed to $75 near-term unless oil prices run.

The XLE ETF provides exposure to companies in the oil, gas and consumable fuel, energy equipment and services industries, as noted by State Street SPDR. Not only does an ETF allow for diversification, you can buy it for less.

Invesco DB Oil Fund (DBO)

DBO traded at $13.85 when we first mentioned it.
It’s now up to $145.87, and could push higher with oil prices. This ETF seeks to track changes, whether positive or negative, in the level of the DBIQ Optimum Yield Crude Oil Index Excess Return plus the interest income from the Fund’s holdings of primarily US Treasury securities and money market income less the Fund’s expenses. It trades WTI crude futures.

iShares Global Energy ETF (IXC)

IXC was at $27. It’s now up to $33.46 and pushing higher.

The iShares Global Energy ETF seeks to track the investment results of an index composed of global equities in the energy sector. Trading at $27, some of its top holdings include Exxon Mobil, Chevron Corporation, BP PLC, Total SA, and EOG Resources.

There’s been plenty of calls for $100,000.

Now, analysts over at FS Insight say it could reach $200,000 by the second half of the year.

“Bitcoin became increasingly correlated with equities toward the end of the fourth quarter of last year and fell when faced with the prospect of central bank tightening,” FSInsight’s Head of Digital Asset Strategy Sean Farrell said, as reported by Coindesk.

While investors can always invest in the cryptocurrency miners, they can also invest in companies with large Bitcoin holdings. That includes:

MicroStrategy Inc. (MSTR)

MSTR plummeted from about $900 to about $307 on the cryptocurrency pullback. Oversold, with strong support, the stock is just starting to pivot higher. From a current price of $420, we’d like to see MSTR refill its bearish gap around $450 initially.

MSTR just invested another $25 million in Bitcoin. According to NDTV Profit, “MicroStrategy is reportedly the biggest corporate investor of the world’s largest cryptocurrency by market value. The company now holds a total of more than 125,000 Bitcoins.”

Block Inc. (SQ)

After getting crushed, Block may be a strong opportunity for two key reasons.

One, SQ is incredibly oversold with over-extensions on RSI, MACD, and Williams’ %R. The last time these indicators were this oversold, shares of SQ rocketed from about $38 to $285. Helping, SQ holds about 8,027 Bitcoin.

Coinbase Global (COIN)

COIN is just starting to pivot higher. After plunging to about $150, COIN is now up to $214.43. From here, we’d like to see it closer to $280. That’s possible if Bitcoin can push higher. Even better, Coinbase Global held 4,487 Bitcoin, as of September 2021.

 

One of the best ways to make money is by trading fear – just like famed investors have done.

In fact, we’re seeing plenty of that in the tech sector these days, which is creating impressive opportunities. Sir John Templeton taught us to buy excessive pessimism.

Warren Buffett says that a “climate of fear is your friend when investing; a euphoric world is your enemy.” Even Baron Rothschild once told investors, “The time to buy is when there’s blood in the streets, even if the blood is your own.”

Meta Platforms (FB) is the perfect example.

For one, fear was out of control with Meta Platforms.

All after weak earnings, and a miss on forecasts – most of which appears to be priced in.

• Earnings per share: $3.67 vs $3.84 expected
• Revenue: $33.67 billion vs $33.4 billion expected
• Daily Active Users (DAUs): 1.93 billion vs 1.95 billion expected by analysts
• Monthly Active Users (MAUs): 2.91 billion vs 2.95 billion expected by analysts

Average Revenue per User (ARPU): $11.57 vs $11.38 expected by analysts

Two, Meta Platforms became technically oversold on RSI, MACD, and Williams’ %R. In fact, the last time this stock became this oversold using those indicators, FB rocketed from a low of about $140 to $385 more than a year later.

Three, after an onslaught of downgrades, analysts at Tigress Financial reiterated a strong buy rating on the stock, with a price target of $466 a share. The analyst says that similar warnings of revenue growth slowdowns from FB also proved to be buy opportunities, as well.

Last checked, shares of Meta Platforms were up $10 a share to $230.14.

One of the top ways to spot opportunity is with stock buybacks.

Since buybacks reduce the number of shares available to the market, the value of the existing stock can increase. Plus, a company’s management may initiate a buyback if they believe the stock is significantly undervalued and confident in the company’s future.

Most recently, these three companies announced buybacks, and watched shares pop.

Amgen (AMGN)

Amgen (AMGN) for example is up $18 a share, or about 8% on a volume spike to 4.03 million shares, as compared to daily average volume of 2.9 million. All after the company announced a $6 billion share buyback program for the first quarter. Helping, Amgen also said it expects for earnings to more than double by 2030 on sales of biosimilar drugs.

Amazon.com Inc. (AMZN)

Amazon.com just spent $1.3 billion to buyback 500,000 shares between Jan. 1, 2022 and Feb. 2. That’s big news considering the company hasn’t bought back shares since 2012.

After taking a dive form about $3,700 to $2,700, the ecommerce giant is now up to $3,102. From here, we’d like to see the stock again challenge its prior high of $3,700.

BP PLC (BP)

BP just boosted its share buyback program by $1.5 billion.

“At around $60 oil, we have the capacity for around $4 billion per annum of share buybacks,” Chief Executive Officer Bernard Looney said in an interview with Bloomberg TV. “So clearly if prices are higher, there is the opportunity for increased buybacks.”

Shell PLC (SHEL)

Shell just announced an $8.5 billion buyback program.

“It is intended that, subject to market conditions, this program will be completed by the company’s Q2 results, which are scheduled for July 28, 2022,” they noted. All after posting $6.4 billion of adjusted earnings in Q4, which was well above forecasts of $5.2 billion.

The Rumble SPAC, CF Acquisition Corp. (CFVI) is soaring.

Just yesterday, CFVI was up about 43% after offering Joe Rogan $100 million to bring his shows to Rumble from Spotify.

In fact, in a letter from Rumble CEO Chris Pavlovski to Joe Rogan, “We stand with you, your guests, and your legion of fans in desire for real conversation. So, we’d like to offer you 100 million reasons to make the world a better place. How about you bring all your shows to Rumble, both old and new, with no censorship, for 100 million bucks over four years?
This is our chance to save the world. And yes, this is totally legit.”

However, Joe may not go.

That’s because Spotify CEO Daniel Elk, as noted by Business Insider, has no intention of removing him from the program. “I do not believe that silencing Joe is the answer,” he said. We should have clear lines around content and take action when they are crossed, but canceling voices is a slippery slope.”

If that’s the case, CFVI could come down just as fast as it went up.

And, Spotify (SPOT) – which slipped from $250 to $155.57 – could recover some lost ground.

Star stock-picker Cathie Woods went bargain hunting over the last few days.

Tesla (TSLA)

Just last week, Woods’ Ark Invest bought about 55,000 shares to Tesla – worth nearly $50 million at the time. All after TSLA posted strong earnings.

According to TheFly.com, TSLA reported revenue of $17.72 billion, as compared to estimates for $16.35 billion. “Tesla said in its quarterly update letter: 2021 was a breakthrough year for Tesla. There should no longer be doubt about the viability and profitability of electric vehicles. With our deliveries up 87% in 2021, we achieved the highest quarterly operating margin among all volume OEMs, based on the latest available data, demonstrating that EVs can be more profitable than combustion engine vehicles.”

JP Morgan then raised its price target to $325 from $295. Citi raised its target to $313 from $262. Wells Fargo raised its target to $910 from $860.

Unfortunately, the stock is slipping today on news of an SEC subpoena with regards to a settlement with Elon Musk.

Robinhood (HOOD)

“The founder and CEO of Ark Invest purchased a total of 2.58 million shares of popular stock trading app Robinhood after the stock plunged to a record low of less than $10 per share on Friday following a dismal quarterly earnings report,” reported Forbes.

All after the trading app stock plunged to all-time lows.

Even better, some analysts believe HOOD has bottomed out. According to TheFly.com, “Mizuho analyst Dan Dolev lowered the firm’s price target on Robinhood to $19 from $20 and keeps a Buy rating on the shares. After a disappointing start as a public company, Robinhood has ‘turned the corner,” he said.

XPeng Inc. (XPEV)

In December, Woods’ firm bought another $4.3 million worth of XPEV.

While the stock has since pulled back, keep an eye on it. Not only is XPEV oversold, but its delivery numbers have been improving.

According to CNBC, “Xpeng said it delivered 12,922 electric vehicles in January, a more than 19% dip from December. But that still represents a 115% year-on-year rise.”