Monthly Archives: September 2021

What Investors Need to Know About Elastic's Q1 Earnings

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Elastic (NYSE:ESTC) is a search company, but not in the traditional sense. Its software platform brings search functionality to a wide range of business use cases, allowing clients to ingest and analyze data. For instance, Elastic makes it possible to sift through corporate resources to find a particular document or file. The platform also logs billions of events each day, which helps IT and security teams troubleshoot application performance issues and remediate cyberattacks.

In this Backstage Pass video, which aired on Aug. 26, 2021, Motley Fool contributors Trevor Jennewine and Brian Withers discuss Elastic’s Q1 earnings.

Trevor Jennewine: Elastic is a search company, not in the Google-type way. But they provide search tools too. You can think of it as an internal workplace search engine. Their platform allows you to log an index data, and then go back through and search the data, analyze it, visualize it. Search is a tool they put at the center of these various use cases.

Just to give a couple of examples on how it’s used, you can use the Elastic search to put a search box in an application or a website. Shopify, the help documentation on the Shopify website is powered by Elastic. MercadoLibre’s seller listings are powered by Elastic. When they want to go in and update a price or find all their listings that they have on the platform, that’s powered by Elasticsearch.

[And] because their logging and indexing data, that also has applications for observing network performance and application performance or just generalized infrastructure performance. IT teams can use that to identify problems, resolve them, security analyst can do the same to identify threats and then remediate them. But the big thing is Elastic is a search company, and they use that functionality for a lot of different use cases.

I’m going to share my screen one more time here. We’re going to look at their most recent results. This first slide, I’m trying to make it a little bit bigger. This is the first quarter of fiscal 2022. Revenue growth came in at 50%. That number was $193 million up 50% from the prior year. But one of the company’s growth strategies is to expand usage of Elastic Cloud and this is its software as a service product, and lots of industry, lots of enterprises are shifting resources to the Cloud, and so management thinks is a great opportunity for them to grow this product. That product they actually grew 89% with Elastic Cloud. This product is growing faster than the overall business, which is a good sign; it shows that the management has a good feel for their growth strategy and they’re executing on it.

One of the things that investors should pay attention to of this company is its ability to grow customers, and its ability to grow its customer base and expand within its customer base, are two more big pillars of management’s growth strategy. With that in mind, they reach 16,000 subscription customers during the most recent quarter, and not all of those customers are actually using Elastic Cloud. They generate subscription revenue from onsite deployments too, and onsite deployments represent the majority of the way the customers are consuming Elastic right now. To put the Elastic Cloud number in perspective, revenue from Elastic Cloud was about $62 million in the first quarter. That’s about 32% of total revenue. But they are making progress. Last year that number was 27%, and the year before it was 22%, and the year before that it was 17%. They are moving up the curve there.

Then the last thing I’ll note is that they are gaining traction with some of these bigger customers. They have 780 customers with an annual contract value of over $100,000 now and that number is up 24% over the prior year. One other thing, at the end of fiscal 2021, the end of the last quarter, they actually had 75 customers that are having an annual contract value of over $1 million, and that was up from 50 [customers in the prior year]. They’re adding new customers, but they’re also growing with these bigger customers, which is a good sign.

Then down here, management notes that their net expansion rate was slightly below 130 %, and this is the way they phrased it in the previous quarter as well. Coming into 2020, they would note in their SEC filings that their expansion rate was over 130% than it had been for the previous three years. Then last year, it gets below 130% and that’s where it stayed during this quarter, but that’s still strong expansion. Customers are still spending more each year. The business is gaining traction.

Let’s see here. One positive note in terms of profitability, they generated positive free cash flow for the first time last year and they maintain that into the first quarter of this year with $12.4 million of free cash flow. They also have a strong net cash position. They have just under $1 billion dollars in cash and equivalents on their balance sheet and that’s compared to about $566 million in debt. So net cash position there.

Let’s see. During the earnings call, management mentioned that they expect revenue to reach $1 billion dollars, annualized revenue to reach $1 billion dollars by fiscal 2023. That’s not this year, but the following year. That’s not incredible growth, but it is strong growth over that period. Let’s see. Over the trailing-12-months, they’ve generated somewhere in the $670 million range. Over the next two years, they expect that to jump up to over a billion. They’re optimistic about the future prospects of the business. It looks we have a few more seconds here.

One other thing I wanted to throw in real quick is management is going pretty hard at the cybersecurity or the security solutions provided through the Elastic. They did make two acquisitions very recently. They acquired CMD and Build.Security. These play into what they call their limitless extended detection and response platform that they just released. This platform, it unifies security information event management, and it has endpoint protection and now it’s pulling Cloud security with these two recent acquisitions in it. Management sees that as a big growth driver. Cybersecurity is a pretty hot topic right now. I like the way they’re thinking about that.

Brian Withers: Yeah, Trevor, I noticed as I went through the Elastic presentations and the earnings call and they talk about being a search company. But some of those, as you pointed out, some of the use cases for search company are helping figure out bugs and track down issues in their IT system because their software is basically set up to peer into all of the applications that you have across your enterprise. They seem to be doing a little bit of competing with Datadog as well.

Trevor Jennewine: Right. I think they’re very similar. I think Datadog has a more robust solution on the application performance monitoring side of things, but that’s exactly right. Elastic, they’re very good at logging and indexing this information and then allowing the search through it for various purposes. One final anecdote. There’s a site, DB-Engines, that ranks various databases which you can actually go into the workplace search engine and Elastic is the leader by a good margin. Splunk could take second place there. Elastic is the most popular workplace search engine according to DB-Engine.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

China Shares Still Hold Promise

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china flag

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Some Chinese stocks got thumped recently when investors were spooked by actions China's government took to rein in the country's tech and tutoring companies. But the supervisory moves were no surprise to old China hands, says Winnie Chwang, comanager of Matthews China (MCHFX) and Matthews China Small Companies (MCSMX).

“Regulation in China is part and parcel of a macro-reform agenda that's ongoing,”she says. “We do not think this is an effort to stifle private business entrepreneurship in China.”

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Foreign investors dominated the sell-off, which was concentrated in well-known tech stocks such as Alibaba Group Holdings (BABA) and Tencent Holdings (TCEHY). The more domestically focused China A-share market gained a robust 16% over the past 12 months, while the broad China market, as measured by the MSCI China Index, lost 4%.

Chwang and her comanager, Andrew Mattock, know all about the A-share! market. That's their focus at the Matthews China fund. They comb through roughly 2,200 candidates to find growing, high-quality companies of any size trading at reasonable prices. Once they've narrowed the list to about 150, they like to get a 360-degree view of a company before settling on some 35 to 45 stocks.

The bright spot of late is the managers'other fund, Matthews China Small Companies, which has a chart-topping 26% five-year annualized return. The managers follow the same investment process with the Small Companies fund as with the China fund, but they focus on firms with a market value between $1 billion and $5 billion.

Fast-growing technology and healthcare companies dominate the Chinese small-cap market, says Chwang, so close to 30% of the fund's assets are invested in those sectors. “Entrepreneurship is important to China's economic engine,”she says. “These small companies contribute 60% to the country's overall gross domestic product growth.”

Chwang expects Chinese stocks overall to post earnings growth of 10% to 15% over the next three to five years. And shares are relatively cheap: China stocks trade at 14 times expected earnings for the year ahead; U.S. shares trade at 22 times earnings.

china shares table.imgHideOnJavaScriptDisabled_4059a3rksu1t66g { display: none !important; } china shares table

As of August 6, 2021. Source: Morningstar

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With Strong Catalysts on the Way, Stem Stock Is Worth Buying

Stem (NYSE:STEM) reported strong second-quarter results, while the company and STEM stock should be meaningfully helped by two bills likely to be passed by Congress and other government initiatives.

STEM stock A concept photo of different energy storage systems.Source: Shutterstock

Also positive for Stem is the continued, rapid transition to renewable energy and electric vehicles. Meanwhile, after the declines of STEM stock in the last few months, the shares’ valuation is quite attractive.

Finally, I believe that Stem is one of a group of companies that’s using artificial intelligence in a way that will make them highly successful.

Strong Q2 Results

Stem’s top line soared nearly 340% year-0ver-year in Q2, reaching $19.3 million. Its gross margin, excluding certain items, came in at -1%, up from -40% in Q2 of 2020.

Most impressively, Stem’s 12-month pipeline jumped 21% versus Q1 to $1.7 billion, and its contracted backlog climbed 13% quarter-over-quarter to $250 million.

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The company continues to expect 2021 sales of $147 million and adjusted 2021 EBITDA of -$25 million.

During Stem’s Q2 earnings call, CEO John Carrington, explained succinctly and effectively that, “Our solution drives customer value by lowering energy costs, reducing dependency on conventional fossil fuel generation, and solving the intermittency challenges posed by solar and wind.”

More specifically, Stem’s AI platform, Athena, increases the efficiency of energy storage systems that work in tandem with renewable energy “by automatically switching between battery power, onsite generation and grid power.” It’s also able to predict solar generation and use that information to determine when to utilize electricity from batteries or solar power.

Help From the Government

As I reported in my previous column on STEM stock, an analyst expects the Democrats’ budget to include a new tax credit for energy storage, along with enhanced tax credits for renewable energy and tax breaks for utilities that would give them more money to spend.

The bipartisan infrastructure deal that passed the Senate, meanwhile, includes appropriations for new transmission and energy storage infrastructure. Stem is well-positioned to obtain a meaningful portion of those funds.

I think that a key reason for the weakness of STEM stock and its peers is concern over whether the infrastructure bill and the budget will pass, amid procedural disagreements between progressive and moderate Congressional Democrats. But I think that the debate is primarily an example of political grandstanding, rather than deep-seated differences. In other words, the progressives and moderates want to show their backers that they are fighting for certain principles.

But in the end, because both factions want to pass legislation to improve the party’s electoral chances, I expect both bills to be approved with fairly slight modifications.

Meanwhile, the U.S. federal governments, state governments and foreign nations are looking to speed up the transition to renewable energy and electrified transportation. As these transitions progress and accelerate, the cost savings enabled by Stem’s Athena platform are likely to continue increasing, causing the company’s top and bottom lines to surge further.

The Right Type of AI

I’m becoming convinced that the most successful AI companies will be those that provide AI that’s tailored to certain, narrow fields, rather than general decision making. Because these narrow AI systems have been fed a great deal of data on specific subjects, I think that they are both better decision makers and much more difficult to replicate than more generalized AI offerings.

For example, Upstart (NASDAQ:UPST), whose AI platform focuses on enabling higher performing bank loans, has done quite well, generating a large amount of revenue and growing rapidly. Since the scope of Stem’s Athena is also narrow, I expect it to also continue growing rapidly.

The Bottom Line on STEM Stock

Stem has multiple, strong, positive, upcoming catalysts, and its narrowly tailored AI should enable it to be very successful. As a result, the shares, whose market capitalization is now less than $3 billion, should prove to be a bargain over the long term.

On the date of publication, Larry Ramer held a long position in STEM stock.

Larry Ramer has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015.  Among his highly successful, contrarian picks have been GE, solar stocks, and Snap. You can reach him on StockTwits at @larryramer.

After Surfside Collapse, 6 Crucial Steps Every Condo Board Should Take Today

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A couple hug as they look at pictures of victims of the collapsed 12-story Champlain Towers South condo building on July 8, 2021, in Surfside, Florida.

A couple hug as they look at pictures of victims of the collapsed 12-story Champlain Towers South condo building on July 8, 2021, in Surfside, Florida.

Joe Raedle, Getty Images

Condo association managers have a tough job juggling residential politics and balancing homeowners requests and budgets at the same time. Most of their tasks are mundane, such as enforcing guest parking rules and making sure people pick up after their pets. When things run smoothly, no one notices the work theyre doing behind the scenes. But when things go wrong, the consequences can be tragic as with the collapse of the condo tower in Surfside, Florida, which killed 98 people.

That condo collapse should be a huge wake-up call for boards across the country. The most important job condo associations have is to ensure residents safety. Aging buildings require regular structural audits and upkeep, and boards need to stay on top of that. Plus, they need to figure out how to pay for it.

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With this in mind, what should managers of high-rise condominiums do right now as fiduciaries to make sure their buildings are safe and everyones investments are secure? If you are a condo board manager, you can be sure the owners, their lenders, insurance companies and local governmental bodies will be closely monitoring your work. (For more, please see Could Surfside Happen to You? What Concerned Condo Owners Should Do Now.) So be prepared by following these six steps:

Step 1: Obtain a Current, Comprehensive Structural Audit

Every high-rise condo building should conduct structural audits by structural engineers on a regular basis, such as every five years more often if there are signs of structural/safety problems, such as cracking, unusual noises or flooding, especially saltwater flooding. Be sure the structural audit is current and up-to-date, and if you have not been performing structural audits, procure one at once. Make sure you share all of the audits with your owners as soon as they are available.

I have lived in the same nine-story condominium, the Towers (TT), in Fargo, N.D., since 1978. Our board of managers hired excellent mangers in the 80s, and they made sure we obtained regular structural audits from licensed structural engineers, and they helped us interpret them and address any issues raised.

As it turned out, the audits revealed that the integrity of the buildings 64 concrete balconies was degrading over time, and for safety reasons, every single one of them would need to be replaced. It was a huge project.

Step 2: Focus on the Political Problem

If an audit reveals a structural/safety problem like ours did, you may have a bigger problem on your hands than crumbling balconies. The real problem could be political. How you communicate with your residents is crucial.

When you make an early political/management error such as not informing all owners of problems as soon as you know of them and not g! iving them! updated estimates of costs and possible special assessments you might find yourself lost, no matter what engineering, financial and legal solutions might be available.

Unless you can obtain an early consensus among your owners about steps to take in light of structural/safety issues, you might be battling with different owner factions and even having to foreclose assessment liens. To avoid this, make sure all owners are fully informed of all developments, ask for their assistance, and make them part of any solution.

At TT we gave notice of all meetings concerning our safety/structural issue, eventually deciding to replace each of our 6,000-pound concrete balconies with modern metal ones that weighed only 250 pounds. We asked owners for their help and advice every step of the way.

The balcony removal project gets underway in Fargo, N.D..imgHideOnJavaScriptDisabled_eexbsrktdtszga { display: none !important; } The balcony removal project gets underway in Fargo, N.D.

The balcony removal project gets underway in Fargo, N.D.

Courtesy of Roger Minch

Step 3: Contact Your Condos Insurance Agent and Attorney

The cost to address some structural/safety issues might be covered by insurance. Either way, unless you contact your insurance companies at once about a potential claim, and fully cooperate in investigating the claim, available insurance coverage might be lost. So, your attorney should help evaluate your coverage and give notice of potential claims ASAP.

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In addition, have your attorney review your structural audit, all information about structural/safety issues, and all possible causes of the problems. Third parties, such as architects, contractors, inspectors and others, might be responsible and might have their own insurance coverage.

Be sure to consult with your attorney right away, as parties related to the building trades have been active in procuring short statutes of limitations and other barriers to recovery.

Step 4: Clearly Identify the Problem, the Solution and the Cost

Have your structural engineer help you locate other team members, such as architects and contractor! s, so you! can clearly identify the structural/safety issue, possible solutions and most important, a cost range. The sooner you can inform your owners of the potential cost the better, so they do not feel surprised and can begin planning to answer a special assessment if your reserve fund, insurance and third-party recoveries will be insufficient.

At TT we had our architect prepare bid specifications, reviewed them with our owners, widely advertised the bids, asked for suggestions from our owners and advised them at once of the bids and which one we accepted.

The cost of our project: a jaw-dropping $1 million. Our reserve fund was nowhere near enough to cover the job which leads us to the next step.

Step 5: Devise a Plan on How to Pay to Fix the Problems

Unless your reserve fund is sufficient and can be maintained at an adequate level for other needs, or unless you have certain and immediate recoveries from insurance or third parties (very unlikely), you will need to call on your owners to share the cost.

Have your attorney review your declaration and bylaws to determine whether the cost relates to common areas, and if so, how assessments should be made against differing condo units.

Typically, your notice of assessment would require the payment of a sum certain on or before a date certain. The notice of assessment likely will contain a warning that if the assessment is not paid in full and when due, the association will record assessment liens, and, if necessary, foreclose the liens.

At TT, we chose not to try to borrow the necessary funds. Instead, we levied a special assessment of $17,500 against each of the 64 units that had concrete balconies to pay for the work. We gave notice of what the special assessment likely would be months before we made it.

Step 6: Collect the Assessments, Pay for the Work and Enjoy the Results

Keep a separate account to collect the special assessments and to pay for the work done as a result. Expect that architects and contractors will r! equire ad! vance payment or proof of the ability to pay, and there will almost always be a long delay between the time repairs need to be performed and insurance and third-party claims can be resolved.

Im happy to report that for our $1 million balcony-replacement project, 54 of the owners paid in full by the due date, another six arranged loans to pay the assessment and the remaining four all paid later with interest. We only filed a few assessment liens and did not have to foreclose any.

The new metal balconies give the Fargo condo towers a more updated look..imgHideOnJavaScriptDisabled_eexbsrktdtszgj { display: none !important; } The new metal balconies give the Fargo condo towers a more updated look.

The new metal balconies give the Fargo condo towers a more updated look.

Courtesy of Roger Minch

After all work was done and approved in 2017, we were able to refund about $1,600 of each assessment, all while maintaining the basic reserve fund we had in place before the balcony problem arose.

The Bottom Line

The goal in addressing unexpected owner expenses to address structural/safety issues revealed by structural audits is to treat the problem as political, not so much engineering or financial. Done correctly, owners will have been fully informed and involved in the entire process from the beginning. They will have been asked to volunteer on committees and they will have been asked for their advice and ideas all along the way. This will allow the association to make and collect one special assessment sufficient to fully address all structural/safety problems, leaving a sufficient reserve fund in place.

Your goal is to have your owners trust your ability, and even be thankful they do not have to volunteer their time to address problems themselves, where they are rewarded in the end with a continuing sound and safe building. When we did the $17,500 assessment, the units were worth only about $60,000 to $70,000. Today they are worth double that, thanks in part to the new balconies.

Throughout my experience at TT, I learned that engineers can fix anything and people will find the money to pay to protect their homes if they have been consulted, kept fully informed along the way and! treated ! with respect.

Financial Fixes to Make after the PandemicThis article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.About the AuthorRoger J. Minch, J.D.

Of Counsel, Serkland Law Firm

Roger Minch has been an attorney at Serkland Law Firm since 1978. He focuses on alternative dispute resolution, bankruptcy, creditors rights and condominium board of managers representation. Minch first appeared in Best Lawyers in America in 1993, and has continued to be selected by his peers for inclusion for 30 years, including the 2022edition. Minch is a fellow in the American College of Bankruptcy. He has lived in the same Fargo, N.D., condominium since 1978 and served as president of its board of managers for many terms.

Here’s Why You Should Hold Onto Select Medical (SEM) Now

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Select Medical Holdings Corp. (SEM Quick QuoteSEM ) is poised to grow on the back of its growing patient admissions, diversified business, increasing top line, favorable cash flows, plus acquisitions and partnerships with various healthcare entities.

The company is a leading operator in its business segments, based on the number of facilities in the United States. Its leadership position and reputation as a high-quality, cost-effective healthcare provider in each of its business segments allows it to attract patients and employees, aids in marketing efforts to referral sources and helps negotiate payor contracts. As of Jun 30, 2021, the company had operations in 46 states and the District of Columbia. It operated 99 critical illness recovery hospitals in 28 states, 30 rehabilitation hospitals in 12 states and 1,833 outpatient rehabilitation clinics in 38 states and the District of Columbia. Concentra, a joint venture subsidiary, operated 518 occupational health centers in 41 states as of Jun 30 2021.

With its presence in these areas, the company is well-positioned to benefit from rising demand for medical services owing to an aging population in the United States, which will drive growth across its business segments.

The following factors reflect the company’s strong business enterprise and why holding the stock over the long term will fetch good investment gains.
Increasing Top Line: Revenues have been increasing over the years. The same was up 17.5% in the first six months of 2021. Expansion of facilities and the rising incidence of diseases will steadily increase patient admissions, fuelling growth in turn.

Proven Financial Performance and Solid Cash Flow: The company has an established track record of improving the financial performance of its facilities owing to its disciplined approach to revenue growth, expense management and a firm focus on free cash flow generation. This, in turn, enables it to deploy adequate funds to its business. It0 expects to generate! approximately $450-$500 million of free cash flow in the upcoming years.

Sturdy Inorganic Growth: Since its inception in 1997 to date, the company has completed many significant acquisitions including the buyouts of Physiotherapy, Concentra and U.S. HealthWorks. It improved the operating performance of these businesses over time by applying its standard operating practices and realizing efficiencies from its centralized operations and management. These takeovers complemented the company’s organic growth.

Successful Partnerships With Large Healthcare Systems: Over the past several years, the company has teamed up with large healthcare systems to provide post-acute care services. It offers operating expertise to these ventures through its experience in running critical illness recovery hospitals, rehabilitation hospitals and outpatient rehabilitation facilities. Alliances with other healthcare entities also helped the company grow its top line.

Strong Guidance: Following second-quarter 2021 results, the company revised its earnings estimates for the second time this year. Revenues are now estimated to be $5.85-$6.05 billion, up from the previous outlook of $5.7-$5.9 billion (indicating 7.5% growth from the 2020 reported figure). Adjusted EBITDA for 2021 is forecast between $970 million and $1 billion, hinting at growth from the prior guidance of $870-$900 million (suggesting 23% growth from the 2020 reported figure). Earnings per share are expected within $2.91-$3.08, higher than the previous projection of $2.41-$2.58 for the current year (implying 55.2% jump from the 2020 reported figure).

For the 2021-2023 forecast period, the company’s long-term guidance for revenues, adjusted EBITDA and earnings per share were unchanged from the prior outlook. The company is targeting a revenue CAGR in the range of 4-6%, adjusted EBITDA in the 7-8% band and EPS within 17-20%. A strong guidance instills investors’ confidence in the stock.

Bottomline

Select Medical, curren! tly carry! ing a Zacks Rank #3 (Hold), is strongly placed for growth over the long haul. Year to date, the stock with a market capitalization of $4.83 billion has gained 29% compared with its industry’s growth of 16.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

 

Zacks Investment Research
Image Source: Zacks Investment Research

Other stocks in the same space, namely Community Health Systems, Inc. (CYH Quick QuoteCYH ) , Tenet Healthcare Corporation (THC Quick QuoteTHC ) and Da Vita Inc. (DVA Quick QuoteDVA ) , have also rallied 49%, 82% and 4.5%, respectively, over the same time frame.

 

Why iQiyi Blasted 9% Higher Today

Investors unhappy about the lackluster recent performance of Chinese stocks shed some of their gloom on Tuesday, with the almost 9% rise of iQiyi (NASDAQ:IQ). The video streaming company reported some highly encouraging news about one particular piece of content.

So what

iQiyi announced that it’s hot-off-the-server TV drama series The Ideal City has debuted to a large audience, and instantly become a white-hot piece of entertainment. According to the company, its Aug. 12 online premiere was a monster hit, with roughly 1.5 million of its subscribers “indicating interest” in the show.

A family on a couch watching TV.

Image source: Getty Images.

In what iQiyi is pushing as a stronger indication of its popularity, posts with The Ideal City hashtags on the high-traffic Weibo social media platform collectively had over 1 billion views from the premiere date to Aug. 23.

The buzz around the series might have much to do with its demographic.

The Ideal City focuses on a group of youthful architects, and iQiyi says that “With its honest portrayals of contemporary social issues such as the struggles of ‘Shanghai drifters’ (young people who come to Shanghai for work) and the ‘007 work schedule’ (working from midnight to midnight, seven days a week), the series is a salute to young people who stay true to their aspirations.”

Now what

iQiyi might be a bleeding-edge video streaming company, but like entertainment purveyors from the dawn of time, its success ultimately depends on its content. The Ideal City seems to be a big hit; let’s see if iQiyi can keep its momentum going, and build on it with new original series and films.

This article represents the opinion of the writer, who may disagree with the official recommendation position of a Motley Fool premium advisory service. Were motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Advisors Asset Management Inc. Has $521,000 Position in IDEX Co. (NYSE:IEX)

Advisors Asset Management Inc. cut its holdings in shares of IDEX Co. (NYSE:IEX) by 21.3% during the second quarter, Holdings Channel reports. The fund owned 2,369 shares of the industrial products company’s stock after selling 641 shares during the quarter. Advisors Asset Management Inc.’s holdings in IDEX were worth $521,000 as of its most recent filing with the Securities and Exchange Commission.

Other hedge funds have also bought and sold shares of the company. Vontobel Holding Ltd. increased its holdings in shares of IDEX by 7.8% during the 1st quarter. Vontobel Holding Ltd. now owns 24,286 shares of the industrial products company’s stock worth $5,084,000 after acquiring an additional 1,763 shares during the last quarter. Boston Private Wealth LLC increased its holdings in shares of IDEX by 19.1% during the 1st quarter. Boston Private Wealth LLC now owns 102,675 shares of the industrial products company’s stock worth $21,492,000 after acquiring an additional 16,440 shares during the last quarter. Allianz Asset Management GmbH increased its holdings in shares of IDEX by 11.0% during the 1st quarter. Allianz Asset Management GmbH now owns 399,939 shares of the industrial products company’s stock worth $83,715,000 after acquiring an additional 39,693 shares during the last quarter. US Bancorp DE increased its holdings in shares of IDEX by 26.2% during the 1st quarter. US Bancorp DE now owns 62,869 shares of the industrial products company’s stock worth $13,161,000 after acquiring an additional 13,041 shares during the last quarter. Finally, HighTower Advisors LLC increased its holdings in shares of IDEX by 3.7% during the 1st quarter. HighTower Advisors LLC now owns 6,558 shares of the industrial products company’s stock worth $1,374,000 after acquiring an additional 237 shares during the last quarter. 91.05% of the stock is currently owned by institutional investors and hedge funds.

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NYSE:IEX opened at $225.85 on Friday. The firm’s fifty day moving average is $223.38. The company has a market cap of $17.16 billion, a P/E ratio of 40.99, a price-to-earnings-growth ratio of 2.91 and a beta of 1.07. The company has a current ratio of 3.32, a quick ratio of 2.52 and a debt-to-equity ratio of 0.45. IDEX Co. has a fifty-two week low of $166.51 and a fifty-two week high of $235.76.

IDEX (NYSE:IEX) last released its earnings results on Monday, July 26th. The industrial products company reported $1.61 earnings per share for the quarter, missing analysts’ consensus estimates of $1.62 by ($0.01). The company had revenue of $685.95 million for the quarter, compared to the consensus estimate of $687.34 million. IDEX had a net margin of 16.57% and a return on equity of 17.58%. The business’s revenue was up 22.2% compared to the same quarter last year. During the same quarter in the previous year, the company posted $1.10 earnings per share. On average, analysts expect that IDEX Co. will post 6.34 EPS for the current fiscal year.

The firm also recently disclosed a quarterly dividend, which was paid on Friday, July 30th. Investors of record on Thursday, July 15th were given a dividend of $0.54 per share. The ex-dividend date was Wednesday, July 14th. This represents a $2.16 annualized dividend and a dividend yield of 0.96%. IDEX’s dividend payout ratio is currently 41.62%.

A number of research analysts have commented on IEX shares. Royal Bank of Canada upped their price objective on IDEX from $232.00 to $247.00 and gave the company an “outperform” rating in a report on Thursday, April 29th. Rosenblatt Securities upped their price objective on IDEX from $225.00 to $255.00 and gave the company a “buy” rating in a report on Monday, May 3rd. DA Davidson upped their price objective on IDEX from $190.00 to $205.00 and gave the company a “neutral” rating in a report on Thursday, April 29th. They noted that the move was a valuation call. Wells Fargo & Company upped their price objective on IDEX from $240.00 to $260.00 and gave the company an “overweight” rating in a report on Monday, May 3rd. Finally, Morgan Stanley upped their price objective on IDEX from $230.00 to $250.00 and gave the company an “overweight” rating in a report on Thursday, April 29th. Two investment analysts have rated the stock with a hold rating and five have issued a buy rating to the company’s stock. The stock currently has a consensus rating of “Buy” and a consensus target price of $233.71.

IDEX Profile

IDEX Corp. engages in the provision of engineering solutions. It operates through the following segments: Fluid and Metering Technologies; Health and Science Technologies and Fire and Safety or Diversified Products. The Fluid and Metering Technologies segment involves in the design, production, and distribution of displacement pumps, valves, flow meters, injectors, and fluid-handling pump modules and systems.

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Want to see what other hedge funds are holding IEX? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for IDEX Co. (NYSE:IEX).

Institutional Ownership by Quarter for IDEX (NYSE:IEX)

Harley-Davidson (NYSE:HOG) Price Target Cut to $54.00 by Analysts at Wedbush

Harley-Davidson (NYSE:HOG) had its target price cut by Wedbush from $60.00 to $54.00 in a report issued on Thursday morning, The Fly reports. They currently have an outperform rating on the stock. The analysts noted that the move was a valuation call.

Other research analysts have also issued research reports about the stock. Citigroup upped their price target on shares of Harley-Davidson from $39.00 to $55.00 and gave the company a buy rating in a research note on Monday, May 17th. Royal Bank of Canada reduced their price target on shares of Harley-Davidson from $48.00 to $41.00 and set a sector perform rating on the stock in a research report on Thursday, July 22nd. Edward Jones downgraded shares of Harley-Davidson from a hold rating to a sell rating and set a $39.59 price objective for the company. in a research note on Tuesday, July 27th. increased their price objective on shares of Harley-Davidson from $39.00 to $55.00 and gave the company a buy rating in a research note on Monday, May 17th. Finally, Morgan Stanley raised their price target on shares of Harley-Davidson from $38.00 to $40.00 and gave the company an underweight rating in a research note on Thursday, July 22nd. Two equities research analysts have rated the stock with a sell rating, five have given a hold rating and nine have assigned a buy rating to the stock. Based on data from MarketBeat, Harley-Davidson presently has a consensus rating of Hold and a consensus price target of $48.41.

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Shares of HOG stock opened at $37.10 on Thursday. The company has a debt-to-equity ratio of 2.24, a quick ratio of 1.16 and a current ratio of 1.30. The firm’s 50-day moving average is $40.88 and its 200-day moving average is $42.65. The stock has a market cap of $5.71 billion, a price-to-earnings ratio of 11.74, a PEG ratio of 0.43 and a beta of 1.46. Harley-Davidson has a 52-week low of $22.56 and a 52-week high of $52.06.

Harley-Davidson (NYSE:HOG) last issued its earnings results on Tuesday, July 20th. The company reported $1.41 earnings per share (EPS) for the quarter, beating the Zacks’ consensus estimate of $1.17 by $0.24. The company had revenue of $1.53 billion for the quarter, compared to analysts’ expectations of $1.38 billion. Harley-Davidson had a net margin of 10.53% and a return on equity of 29.87%. Harley-Davidson’s quarterly revenue was up 128.9% compared to the same quarter last year. During the same period in the prior year, the firm earned ($0.60) EPS. Sell-side analysts predict that Harley-Davidson will post 3.52 EPS for the current fiscal year.

The company also recently disclosed a quarterly dividend, which will be paid on Friday, September 24th. Investors of record on Friday, September 10th will be paid a $0.15 dividend. This represents a $0.60 annualized dividend and a yield of 1.62%. The ex-dividend date is Thursday, September 9th. Harley-Davidson’s dividend payout ratio is currently 77.92%.

Several hedge funds and other institutional investors have recently added to or reduced their stakes in HOG. AMG National Trust Bank raised its position in Harley-Davidson by 1.2% in the 2nd quarter. AMG National Trust Bank now owns 24,896 shares of the company’s stock valued at $1,141,000 after purchasing an additional 294 shares in the last quarter. Shelton Capital Management increased its position in Harley-Davidson by 4.6% during the second quarter. Shelton Capital Management now owns 8,141 shares of the company’s stock worth $373,000 after buying an additional 359 shares during the period. Wedbush Securities Inc. increased its position in Harley-Davidson by 4.6% during the second quarter. Wedbush Securities Inc. now owns 8,301 shares of the company’s stock worth $380,000 after buying an additional 368 shares during the period. HighTower Advisors LLC increased its position in Harley-Davidson by 5.4% during the second quarter. HighTower Advisors LLC now owns 7,461 shares of the company’s stock worth $341,000 after buying an additional 379 shares during the period. Finally, Berman Capital Advisors LLC increased its position in Harley-Davidson by 55.3% during the first quarter. Berman Capital Advisors LLC now owns 1,132 shares of the company’s stock worth $45,000 after buying an additional 403 shares during the period. Institutional investors and hedge funds own 92.44% of the company’s stock.

Harley-Davidson Company Profile

Harley-Davidson, Inc is engaged in the manufacture and sale of custom, cruiser and touring motorcycles. It operates through the following segments: Motorcycles & Related Products; and Financial Services. The Motorcycles & Related Products segment manufactures, designs, and sells at wholesale on-road Harley-Davidson motorcycles as well as motorcycle parts, accessories, general merchandise, and related services.

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Analyst Recommendations for Harley-Davidson (NYSE:HOG)

BeiGene’s (BGNE) BLA for Tislelizumab in ESCC Accepted by FDA

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BeiGene, Ltd. (BGNE Quick QuoteBGNE ) announced that the FDA has accepted the biologics license application (“BLA”) for its anti-PD-1 antibody, tislelizumab, as a treatment for patients with unresectable recurrent locally advanced or metastatic esophageal squamous cell carcinoma (“ESCC”), following prior systemic therapy. A decision from the regulatory body is expected on Jul 12, 2022.

The BLA was based on data from the open-label, multicenter phase III RATIONALE 302 study, which evaluated the safety and efficacy of tislelizumab as compared to investigator’s choice chemotherapy as a second-line treatment for patients with advanced/metastatic ESCC.

The BLA also included safety data from patients who received tislelizumab as a monotherapy across a broad clinical program. The BLA was filed in collaboration with Novartis (NVS Quick QuoteNVS ) .

Shares of BeiGene were up in pre-market trading on Monday. In fact, the stock has rallied 36.3% so far this year compared with the industry’s rise of 0.8%.

Zacks Investment Research
Image Source: Zacks Investment Research

We remind investors that, in January 2021, Novartis entered into a strategic collaboration agreement with BeiGene, following which the former in-licensed tislelizumab in major markets outside of China. The above-mentioned BLA is the first regulatory filing for tislelizumab outside Chinese territory.

Per the company, tislelizumab is an anti-PD-1 monoclonal antibody specifically designed to minimize binding to FcγR on macrophages. It is approved in China for five oncological indications. Tislelizumab is also under review as a treatment for patients with locally advanced or metastatic ESCC who have disease progression following first-line standard chemotherapy, or are intolerant to the same, in China.

BeiGene currently markets three internally discovered oncology! products — BTK inhibitor, Brukinsa (zanubrutinib), in the United States, Canada and China; anti-PD-1 antibody, tislelizumab, in China; and PARP inhibitor, pamiparib, also in China.

Zacks Rank & Stocks to Consider

BeiGene currently carries a Zacks Rank #4 (Sell).

Better-ranked stocks in the biotech sector include Spero Therapeutics, Inc. (SPRO Quick QuoteSPRO ) and Corvus Pharmaceuticals, Inc. (CRVS Quick QuoteCRVS ) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Spero Therapeutics’ loss per share estimates have narrowed 8.2% for 2021 and 10.6% for 2022, over the past 60 days.

Corvus Pharmaceuticals’ loss per share estimates have narrowed 24.4% for 2021 and 21.4% for 2022, over the past 60 days.

Mdex, Curve DAO Token Among Top Crypto Movers In 24H

After pulling data from Benzinga Pro the following is the list of top crypto gainers and losers at the time of publication:

GAINERS
eCash (CRYPTO: XEC) is up 26.55% at $0.0. The trading volume for this coin is currently $518.22 million, which is 3.71% higher than its average full-day volume over the last 100 days. The coin’s market cap stands at 4,730,519,844.
Circulating Supply: 18,843,020,896,789.4
Max Supply: Not Available Curve DAO Token (CRYPTO: CRV) rose 26.49% to $2.73 over the past 24 hours. The trading volume for this coin is currently $591.43 million, which is 2.58% higher than its average full-day volume over the last 100 days. The coin’s market cap stands at 1,102,358,315.
Circulating Supply: 401,731,539.6
Max Supply: 3,303,030,299 Bitcoin Cash ABC (CRYPTO: BCHA) increased by 20.67% to $246.79. The trading volume for this coin is currently $758.59 million, which is 3.47% higher than its average full-day volume over the last 100 days. $BCHA’s estimated market cap is $4,679,191,182 as of today.
Circulating Supply: 18,794,058.4
Max Supply: Not Available Aave (CRYPTO: AAVE) increased by 18.93% to $377.93. The trading volume for this coin is currently $649.09 million, which is 0.85% higher than its average full-day volume over the last 100 days. $AAVE’s estimated market cap is $5,009,680,527 as of today.
Circulating Supply: 13,176,786.68
Max Supply: 16,000,000 xSUSHI (CRYPTO: XSUSHI) rose 18.06% to $15.09 over the past 24 hours. The trading volume for this coin is currently $2.84 million, which is 0.53% higher than its average full-day volume over the last 100 days. As of today, $XSUSHI’s estimated market cap is $1,106,122,732.
Circulating Supply: 73,318,005.7
Max Supply: Not Available Sushi (CRYPTO: SUSHI) rose 17.75% to $12.74 over the past 24 hours. The trading volume for this coin is currently $539.17 million, which is 0.63% higher than its average full-day volume over the last 100 days. The coin’s market cap stands at 2,464,098,005.
Circulating Supply: 192,789,255.86
Max Supply: 250,000,000 Synthetix Network Token (CRYPTO: SNX) increased by 16.53% to $13.43. The trading volume for this coin is currently $450.83 million, which is 2.3% higher than its average full-day volume over the last 100 days. $SNX’s estimated market cap is $2,332,897,902 as of today.
Circulating Supply: 173,230,359.59
Max Supply: 233,860,369.9
LOSERS
Waves (CRYPTO: WAVES) declined by 3.46% to $29.14 over the past 24 hours. Trading volume for this coin is 137.08 million, which is 0.34% lower than its average full-day volume over the last 100 days. $WAVES’s estimated market cap is $2,913,466,811 as of today.
Circulating Supply: 100,000,000
Max Supply: Not Available Cardano (CRYPTO: ADA) declined by 2.85% to $2.37 over the past 24 hours. The trading volume for this coin is currently $3.56 billion, which is 0.02% higher than its average full-day volume over the last 100 days. The coin’s market cap stands at 76,065,466,649.
Circulating Supply: 32,066,390,668.41
Max Supply: 45,000,000,000 Terra (CRYPTO: LUNA) decreased by 2.79% to $35.12 over the past 24 hours. The trading volume for this coin is currently $899.70 million, which is 0.46% higher than its average full-day volume over the last 100 days. As of today, $LUNA’s estimated market cap is $14,172,422,869.
Circulating Supply: 402,411,127.39
Max Supply: Not Available Mdex (CRYPTO: MDX) declined by 2.54% to $1.68 over the past 24 hours. Trading volume for this coin is 25.26 million, which is 0.56% lower than its average full-day volume over the last 100 days. As of today, $MDX’s estimated market cap is $1,096,423,405.
Circulating Supply: 650,681,553.23
Max Supply: Not Available Celsius Network (CRYPTO: CEL) fell 2.24% to $5.19 over the past 24 hours. Celsius Network’s current trading volume totals $8.70 million, a 0.46% decrease from its a 100-day average volume. The coin’s market cap stands at 2,197,168,632.
Circulating Supply: 423,415,980.35
Max Supply: Not Available FTX Token (CRYPTO: FTT) decreased by 1.69% to $67.08 over the past 24 hours. The trading volume for this coin is currently $791.86 million, which is 1.3% higher than its average full-day volume over the last 100 days. As of today, $FTT’s estimated market cap is $8,114,573,896.
Circulating Supply: 120,775,460.62
Max Supply: 336,645,796.69 LEO Token (CRYPTO: LEO) declined by 1.31% to $3.04 over the past 24 hours. LEO Token’s current trading volume totals $2.68 million, a 0.15% decrease from its a 100-day average volume. $LEO’s estimated market cap is $2,875,428,572 as of today.
Circulating Supply: 945,832,690.9
Max Supply: Not Available

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Timken’s (TKR) Rollon Business Buys Intelligent Machine Solutions

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The Timken Company (TKR Quick QuoteTKR ) has acquired Intelligent Machine Solutions (iMS) in a bid to expand its Rollon linear motion product range in robotics and automation solutions. These product ranges complement with Timken’s larger and heavy-duty applications, such as seventh-axis robotic transfer units (RTUs) and gantry systems. This deal opens up opportunities for Rollon in the growing $700-million global robotic transfer unit industry.

Norton Shores, MICH-based iMS, is a producer of industrial robotics and automation solutions which designs floor-mounted, overhead, rotary and extreme seventh-axis RTUs and gantry systems for several manufacturers across industries to automate certain production processes.

In fact, the buyout will enhance Rollon’s leadership in the robotics and automation industry, packaging and marine end-market sectors, as well as aerospace and automotive production plants. This will also boost Rollon’s operational footprint in the United States.

In 2018, Timken acquired Rollon and stepped in the linear motion product space. These products include linear guides, telescopic rails, and linear actuators and systems, which are utilized in a wide array of industrial and commercial applications.

Timken continues to pursue strategic acquisitions to broaden its portfolio and capabilities across diverse markets, with a focus on bearings, adjacent power transmission products, and related services.  Along with Rollon, Timken acquired Cone Drive and ABC Bearings in 2018. In 2019, Timken completed the acquisition of BEKA Lubrication and the Diamond Chain Company. The acquisition of BEKA Lubrication strengthened the company’s global leadership in the automatic lubrication systems market sector.

The Diamond Chain acquisition has fortified Timken’s leadership in high-performance roller chains for industrial markets. In November 2020, the company purchased all assets of Aurora Bearing Company to expand its offerings in the engineer! ed bearings space. These acquisitions have strengthened the company’s global presence in growing markets, particularly China and Europe. These buyouts are expected to deliver significant cost and revenue synergies in the upcoming period.

Recently, the company reported second-quarter 2021 results, wherein earnings missed the Zacks Consensus Estimate but improved year over year. Revenues came in line with the Consensus Mark and increased year on year.

Timken expects revenue growth of 19% in 2021, higher than its previous expectation of an 18% rise. It anticipates adjusted earnings per share between $5.15 and $5.45. The mid-point of the range reflects year-over-year growth of 30%. Improving demand across most markets, higher organic revenues across the Mobile Industries and Process Industries segments, favorable impact from foreign currency exchange rates, as well as the benefit of acquisitions and positive pricing are supporting the company.

Share Price Performance

So far this year, shares of Timken have declined 4.2% compared with the industry’s growth of 3.8%.

Zacks Investment Research
Image Source: Zacks Investment Research

Zacks Rank & Stocks to Consider

Timken currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the Industrial Products sector include Encore Wire Corporation (WIRE Quick QuoteWIRE ) , Lincoln Electric Holdings, Inc. (LECO Quick QuoteLECO ) and Lindsay Corporation (LNN Quick QuoteLNN ) . While Encore Wire and Lincoln Electric sport a Zacks Rank #1 (Strong Buy), Lindsay carries a Zacks Rank #2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Encore Wire has a projected earnings growth rate of 332.6% for fiscal 2021. So far this year, the company’s shares have gained 45%.

Lincoln Electric has an expected earnings growth rate of 45.1% for 2021. The stock has ! appreciat! ed 22%, year to date.

Lindsay has an estimated earnings growth rate of 17.3% for the ongoing year. The company’s shares have gained 35%, so far this year.

3 Zacks Rank #1s Making New Highs

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Stocks may have pulled back a bit after the disappointing jobs report for August, but the interesting thing is that the major indices are still within 2% of their all-time highs. And there are plenty of individual names that are already making history or on the verge of doing so.

The Zacks #1 Rank New Highs screen will help you find them. Remember, you shouldn’t be afraid of stocks reaching new heights, because a really smart guy once said that objects in motion tend to stay in motion. The same is true for stocks.

Despite the delta variant, rising inflation and the possibility of the Fed tapering; stocks still have the potential for a strong back half of 2021 as we inch closer to normal. This screen can help you get ready by finding stocks most likely to leap higher moving forward. Below are three names that recently made the list.

onsemi (ON Quick QuoteON )

Not only is the semiconductor space going through several structural changes at the moment, but it’s also experiencing a chip shortage that’s sending demand through the roof. One of the companies operating well in this environment is onsemi (ON Quick QuoteON ) , which has beaten the Zacks Consensus Estimate for five straight quarters and is up approximately 37% in 2021.

The former ON Semiconductor is an original equipment manufacturer of a broad range of discrete and embedded semiconductor components. Therefore, it’s part of the semi – analog & mixed space, which is in the top 12% of the Zacks Industry Rank.

In its second-quarter report from early August, the company enjoyed broad-based strength across its industrial, computing, consumer and automotive end markets. Revenue jumped to $1.67 billion, which was over 37% better than the previous year while also beating our expectations by nearly 3%.

Earnings per share of 63 cents topped the Zacks Consensus Estimate by more than 28%, which brought the four-quarter average surprise to just under 25%.

The Auto! motive end market has perhaps the biggest potential moving forward with revenue surging 68.6% year over year. Its power and sensing product categories saw strong demand, while ON continued to gain traction among electric vehicle manufacturers.

Just a little over two weeks ago, the company entered into a definitive agreement to acquire GT Advanced Technologies for $415 million in cash. The move will help ON grow its supply of silicon carbide (SiC), a key material that can handle high voltages and thermal loads. It’s a major component in EVs, EV charging and energy infrastructure.

The automotive market helped all business segments in the quarter. The Power Solutions Group (PSG) business segment (which accounts for 50.7% of revenues) surged 37% year over year. The Advanced Solutions Segment (ASG) soared 42%, while the Intelligent Sensing Group advanced 28.1%.

The past 60 days have seen analysts boost their expectations on ON. The Zacks Consensus Estimate for this year is up 29.5% in that time to $2.50, while next year is up 20.3% to $2.78. At the moment, year-over-year growth is at 11.2%.

Zacks Investment Research
Image Source: Zacks Investment Research

BJ’s Wholesale Club (BJ Quick QuoteBJ )

Leave it to an unprecedented pandemic that forces people indoors to teach the importance of buying in bulk. It kind of defeats the purpose of social distancing if you’re running to the grocery store a couple times a week. So it makes sense that a company like BJ’s Wholesale Club (BJ Quick QuoteBJ ) would beat the Zacks Consensus Estimate for six straight quarters, which runs right through the year of Covid and more.

BJ operates more than 220 warehouse clubs (as of July 31, 2021) on the East Coast of the country, as well as 151 BJ’s gas stations in 17 states. It has about 5.5 million members. Shares are up nearly 60% so far this ye! ar.
The company has worked hard at its strategies and can now boast “outstanding” membership results and elevated consumer spending trends. It’s market share has also increased. As a result, BJ managed a solid fiscal second quarter performance last month.

Earnings per share of 82 cents beat the Zacks Consensus Estimate by more than 26%, bringing the four-quarter average surprise to more than 25%. Total revenues of $4.17 billion improved 5.6% year over year and eclipsed our expectations at around $3.9 billion.

Total comparable sales rose 4%. Digitally-enabled sales growth was also 4%, as members continued to adopt pandemic-era services such as curbside pickup.

BJ still doesn’t feel comfortable enough to offer a formal guidance, but believes its “solid membership trends, assortment initiatives, enhanced digital capabilities and robust real estate pipeline will drive sustained and strong profitable growth”.

Analysts believe the same thing as they’ve raised estimates over the past month. The Zacks Consensus Estimate for this year (ending January 2022) advanced 8.7% in that time to $2.86. Meanwhile, next year (ending January 2023) increased 6.6% to $3.09, which also suggests year-over-year improvement of 8%.

Zacks Investment Research
Image Source: Zacks Investment Research

Global Ship Lease (GSL Quick QuoteGSL )

Traffic jams aren’t reserved for dry land these days. Anyone who lives in a port city knows that the world’s supply chain is all messed up in the age of covid. That’s bad news for consumers and businesses that sell to them, but is kind of a boon to the containership charter market as shipping costs soar.

High demand and a tight supply of ships led to a strong second-quarter performance for Global Ship Lease (GSL Quick QuoteGSL ) , a leading independent owner of containerships. T! his envir! onment should remain for the foreseeable future, as record high charter rates lead to longer charter durations. As a result, the company’s earnings are currently expected to surge nearly 100% in 2022 over 2021.

GSL has a diversified fleet of mid-sized and smaller containerships. As of August 5, 2021, it owns 61 containerships and has contracted to purchase four more. Shares are up nearly 103% this year. It’s part of the transportation – shipping space, which is in the top 28% of the Zacks Industry Rank.

In its second quarter, earnings per share of 66 cents topped the Zacks Consensus Estimate by nearly 18%. It was the sixth straight positive surprise and marked an average beat of nearly 13% over the past four.

Revenue of $82.9 million bettered our expectation by more than 4% and advanced from $71.4 million a year earlier. GSL also grew its fleet by over 50% so far in 2021 and added over $900 million of contracted revenues.

The Zacks Consensus Estimate for this year is now at $3.37, which is up 5.3% from two months ago. But the big news is the outlook for 2022. GSL expects containership demand to remain strong moving forward, as it will take time to get back to normalized levels.

As a result, expectations for next year have skyrocketed 22.8% in 60 days to $6.69, which suggests year-over-year growth of 98.5%.

Zacks Investment Research
Image Source: Zacks Investment Research

Hippo Is Ready to Recover From a Chaotic Start

The story of Hippo Holdings (NYSE:HIPO) stock had an inauspicious beginning. The homeowners insurance provider emerged from a special purpose acquisition company (SPAC) deal that soured in the eleventh hour. Now, investors are wondering if HIPO stock is worth a buy.

HIPO stock: miniature home next to pen, pad of paper, calculator and coins on a deskHIPO stock: miniature home next to pen, pad of paper, calculator and coins on a desk

Source: MIND AND I / Shutterstock.com

InvestorPlace’s own Robert Lakin did an excellent job of detailing the less-than-stellar initial public offering (IPO) early last month. It’s a great primer for what happened to the company, which had the backing of the founders of Microsoft’s (NASDAQ:MSFT) LinkedIn and Zynga (NASDAQ:ZNGA) through a SPAC.

Not only did Hippo Holdings have big names behind it, but it also came from the same Tel Aviv startup incubator as Lemonade (NYSE:LMND). Initially, it looked like the new company would challenge Lemonade in the insurance technology revolution, given its pedigree. 

HIPO Stock Got Off on the Wrong Foot 

Ultimately though, Hippo would lose $192 million in funding. That money was returned to investors after Reinvent Technology Partners withdrew 83% of its capital from the project. 

Hippo was expected to receive $550 million in institutional private investment in public equity (PIPE) funding and $230 million in SPAC proceeds. This triggered a drastic fall in HIPO stock prices. 

A recent article outlining the fiasco offers a possible explanation for what caused the chaos: 

“Withdrawing part of the capital raised for the SPAC is a possible scenario in these mergers as the investors in the SPAC are the so-called ‘weak hands,’ who buy the SPAC shares even before the identity of the company that will be merged into it is known. To make it more attractive, investors in such a round receive two incentives. An option to sell the shares for their original $10 price, as well as an option to later acquire the public company’s shares.”

It seems that trepidation leading up to the IPO caused “weak hands” to err on the side of caution as the SPAC deal came under greater scrutiny. But even after that patchy start, there is hope for HIPO stock.

Is HIPO Stock Staging a Comeback?

Hippo did receive $550 million from the IPO, even though the SPAC proceeds failed to materialize as expected. That still left the insurance tech company with a reasonable shot at success. 

Part of that hope for a turnaround lies in the idea that Hippo could have been excessively punished or oversold by the market. If it truly has the capacity to challenge Lemonade, then current prices indicate real upside. 

But how can investors judge the upside potential of HIPO stock, or what to expect of it in terms of price? Well, it’s difficult to say.

There is no analyst coverage of the company currently, so there’s no help there. But HIPO shares have shown resilience this month, rising to nearly $7 on Sept. 9. 

That increase is likely attributable to the widespread desire to disrupt the centuries-old insurance industry. 

Big Names Are Interested in Hippo

Despite its unfortunate start, institutional investors are still keen to understand what Hippo Holdings has in store.

The company’s CEO Assaf Wand and CFO Stewart Ellis met with investors at a financial technology conference held by Goldman Sachs (NYSE:GS) on Sept. 9 and Sept. 10. There’s very clear potential for Hippo Holdings to impress financial institutions, despite the chaos surrounding its IPO. 

Hippo also formed a relationship with Ally Financial (NYSE:ALLY) just after going public. That deal was said to double its underwriting capacity, a surefire path toward increased revenues. 

The company didn’t have a stellar earnings report, but that might not matter. The bull thesis here is that Hippo could very well end up a phoenix rising from the ashes. All it needs is the right names behind it, and its poor start won’t matter.

The bigger picture is that insurance tech will remain an investment target, and Hippo Holdings could strengthen on that potential. 

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

Robot Trader Turns Bullish on Amazon, Facebook, and Nvidia. What It Sold.

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An exchange-traded fund with holdings decided by artificial intelligence loaded up on shares of Amazon, Facebook, and Nvidia this month, as the robot trader turned bullish on technology and U.S. retailand doubted some Covid-19 pandemic trend stocks.

The top five stocks by portfolio weight added to the Qraft AI-Enhanced U.S. Large Cap Momentum ETF (ticker: AMOM) in its monthly rebalancing this month include tech giants Amazon (AMZN) and Facebook (FB), chip maker Nvidia (NVDA), and retailers Walmart (WMT) and Home Depot (HD).

In a departure from recent months, the robot trader went all-in with its new picks, which now represent the five largest holdings in the fund. Amazon has a portfolio weighting of 7.98%, followed close behind by Facebook with 7.91%. Nvidia makes up 6.06% of the fund with Walmart and Home Depot at 4.83% and 4.24%, respectively.

The remaining stocks in the funds top 10, making up between 3.96% and 1.9% of AMOM, are software groups Adobe (ADBE) and Intuit (INTU), semiconductor companies Texas Instruments (TXM) and Lam Research (LRCX), and beauty products powerhouse Est茅e Lauder (EL).

Facebook and Nvidias respective pushes into the metaverse make them attractive investments, said Francis Geeseok Oh, a managing director at Qraft and the head of its Asia-Pacific business.

The metaverse is a buzzword referring to virtual environments in which users can immerse themselveswhether that be to interact and work with others, consume content, or more. As Barrons wrote last month, its like being inside the internet, versus just connecting to it.

Facebook CEO Mark Zuckerberg has said the companys future is in the metaverseand it recently rolled out virtual workspaces in Facebook Workrooms. Nvidia, similarly, has developed what it calls the Omniversea real-time, 3-D computer simulation and collaboration platform with industrial applications such as simulating factories.

Also read:The Metaverse Goes Beyond Facebook. Watch These Stocks.

As for Amazon, AMOMs recent buy only brings the tech giant back into the fold after a hiatus. AMOM removed Amazon last month before it missed Q2 earnings expectations, Oh noted, saying that its addition in September represents the advantages of an active strategy.

Oh also said that the robot traders picksnamely, Walmart and Home Depotemphasize a retail boom in the U.S. The latest retail sales data, from July, showed that sales have slowed, but there remains a convincing case for investors to remain optimistic about American consumers.

The additions in September came as the artificial intelligence behind AMOM removed chip maker AMD (AMD), social media group Snap (SNAP), video communications company Zoom (ZM), digital scanning and orthodontics specialist Align (ALGN), and connected television maker Roku (ROKU). AMD, Snap, Zoom, and Align previously made up AMOMs top-four holdings.

Oh noted that the AIs decision to remove AMD was likely a profit-taking trade. The stock is up almost 17% so far this year.

But its a different story for Zoom and Roku, Oh said, highlighting that the robot trader turned its back on two stocks that represent the pandemic tradebusinesses that have benefited from trends accelerated by the Covid-19 pandemic.

This may be a response to the Delta [coronavirus] variant and the increasing belief amongst many analysts that it has reached its peak, Oh said.

Plus:Jeff Bezos Isnt the Worlds Richest Person Anymore. Meet the Man Who Beat Him.

AMOM has been listed in New York since May 2019, and has delivered total returns of 15.5% so far in 2021 and 32% in the past yearoutpacing its benchmark, the S&P 500 Momentum index, which has climbed a comparable 30% in the past year.

AMOM is an actively managed portfolio driven by artificial intelligence, tracking 50 large-cap U.S. stocks and reweighting its holdings each month. It is based on a momentum strategy, with the AI behind its stock picks capitalizing on the movements of existing market trends to inform the decision to add, remove, or reweight holdings. The artificial intelligence scans the market and uses its predictive power to analyze a wide set of patterns that show stock-market momentum.

The fund is a product of Qraft, a Seoul, South Korea-based fintech group leveraging AI across its investment products, which include three other AI-picked versions of major indexes: a U.S. large cap index ( QRFT ); a U.S. large cap dividend index ( HDIV ); and a U.S. value index ( NVQ ).

The entrance of AI-run funds onto Wall Street promised a new high-tech future for investing, though it hasnt quite lived up to the hype yet. Theoretically, researchers have shown that AI investing strategies can beat the market by up to 40% on an annualized basis, when tested against historical data.

But Vasant Dhar, a professor at New York Universitys Stern School of Business and the founder of machine-learning-based hedge fund SCT Capital Management, argued on MarketWatch in June 2020 that AI-run funds wont crack the code of the stock market.

Advocating caution, Dhar said that it was difficult for funds underpinned by machine learning to maintain a sustainable edge over markets, which have a nonstationary and adversarial nature. He advised investors considering an AI system to ask tough questions, including how likely it is that the AIs edge will persist into the future, and what the inherent uncertainties and range of performance outcomes for the fund are.

Write to Jack Denton at jack.denton@dowjones.com

4 Staffing Stocks to Gain From a Rebound in the Labor Market

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When the coronavirus gripped the United States last year, the labor market was hit hard with economic activities being halted and millions losing their jobs. But thanks to rapid progress in vaccination, which has led to businesses opening up, the labor market is gradually turning around.

For the week ended Aug 14, initial jobless claims fell for the fourth straight week, reaching their lowest level since the middle of March 2020, as mentioned in a Reuters article, citing the Labor Department. The article mentioned, citing the Labor Department, that for the week ended Aug 14, initial claims declined by 29,000 from the previous week to a seasonally adjusted 348,000. A continuous decline in jobless claims indicates that job additions are progressing steadily, which should bode well for staffing firms.

Even though demand for labor has been increasing steadily on continued economic reopening, firms and businesses have found it difficult to fill up job openings. Certain factors have worked against them with several Republicans citing federal unemployment benefits as one of the reasons, including the $300 weekly payment. To boost labor participation in the workforce, 26 states ended federal benefits either in June or July, way earlier than the Sep 6 deadline, as mentioned in a CNBC article. Besides that, concerns related to COVID-19 might have kept people at home and unwilling to get back to work.

But the continued fall in jobless claims indicates that the situation is improving and adding to that positive sentiment, the Labor Department stated on Aug 6 that nonfarm payrolls increased by 943,000 in July, marking the highest gain since August last year, as quoted in another Reuters article. Further suggesting that more people are going back to work, the Reuters article stated that the unemployment rate fell to a 16-month low of 5.4% in July. In fact, to attract more workers into joining, businesses are also offering lucrative benefits and higher wages. The labor participation rate also witne! ssed an uptick in July, per the article, as it rose to 61.7% from 61.6% in June.

It’s interesting to note that the services side of the economy is resulting in higher job additions. As economic activities are resuming and people are going out more often, consumer spending is shifting from goods to services. This is because people are trying to make the most of the pent-up demand for such services. This is getting reflected in job additions in sectors like leisure and hospitality that increased by 380,000 in July, amounting to 40% of the job gains, as cited in the Reuters article. Employment at restaurants and bars also increased 253,000 during the month, going by the article.

4 Staffing Firms to Buy Now

The U.S. labor market is recovering gradually from the pandemic-related woes of last year as evident from the continuous decline in initial jobless claims. The unemployment rate also fell in July while nonfarm payrolls witnessed an uptick during the month. This seems then an opportune moment to invest in staffing firms with strong fundamentals that can make the most of the renewed strength in the labor market. We have handpicked four such stocks that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Korn Ferry (KFY Quick QuoteKFY ) , together with its subsidiaries, provides organizational consulting services, providing executive search services to fill executive-level positions for clients in the industrial, life sciences/healthcare provider, consumer, and other sectors.

Shares of Korn Ferry have risen 52.8% year to date and it currently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings increased 21.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 64.1%.

ManpowerGroup Inc. (MAN Quick QuoteMAN ) provides workforce solutions and services, offering recruitment services, including permanent, temporary, and contrac! t recruit! ment of professionals, as well as administrative and industrial positions under the Manpower and Experis brands. In the second quarter of 2021, the company reported that its revenues in the United States increased 21.9% year over year.

Share of ManpowerGroup have risen 31.3% year to date. The Zacks Consensus Estimate for its current-year earnings increased 11.2% over the past 60 days. This Zacks Rank #1 company’s expected earnings growth rate for the current year is 89.7%.

Robert Half International Inc. (RHI Quick QuoteRHI ) provides staffing and risk consulting services. The company reported on Aug 17 that its Robert Half mobile app, which is designed to help job seekers, has won a Gold Stevie Award in the 18th Annual International Business Awards.

Shares of this Zacks Rank #2 company have risen 62.7% year to date. The Zacks Consensus Estimate for its current-year earnings increased 17.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 81.1%.

Heidrick & Struggles International, Inc. (HSII Quick QuoteHSII ) , together with its subsidiaries, provides executive search and consulting services to businesses and business leaders worldwide. In the second quarter of 2021, the company reported a new segment, namely, on-demand talent, following the acquisition of Business Talent Group, which generated net revenues of $18.7 million, which was above the company’s expectations.

Shares of this Zacks Rank #2 company have risen 40.1% year to date. The Zacks Consensus Estimate for its current-year earnings increased 17.1% over the past 60 days. The company’s expected earnings growth rate for the current year is more than 100%.