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Time to look at beaten-down names

Dec 22, 2021

Good morning!

The markets rebounded sharply yesterday in what I called a show of resilience during a chat with the folks at Yahoo! Finance. (Watch)

Now, let’s see if it continues and talk about what to do next.

Perception is key, as I noted during an appearance earlier this morning on Mornings with Maria. (Watch)

Here’s my playbook.

1 – Time to look at beaten-down names

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I called 2021 a year to “Reset, rethink or risk missing out” as the world comes to terms with Covid et al. Now it’s time to take a hard look at some of the great names that are being kicked to the curb.

Paypal, for example.

It’s down 30%+ from highs yet … powers 1 in 4 transactions on Shopify (so it grows as Shopify grows), is on track for 750 million users by 2025, is one of the top 4 BNPL providers (BNPL sales rose 400% this past Friday BTW), and owns Venmo.

You get the idea – selling puts or using LowBall Orders could make a great entry if you want to go shopping. Especially as we head into the holidays.

2 – Dividend investors will say “how come nobody told me this earlier”

Human food shortage isn’t the only thing happening – pets are feeling the pinch too. Well, the owners really but you get the point.

The pandemic has created a huge shift in consumer behaviour and pets are a part of that. In fact, pet food purchases grew 6.9% YoY vs just 2.3% for human food. Forget toilet paper hoarding; pet owners will do anything they can to “stock up” when we’re talking about their furry, feathered or scaly friends!

Everybody who’s a part of the One Bar Ahead™ Family will recognize this as a primary thesis behind one of our favourite income recommendations. The company has a 3%+ dividend, an ultra-low beta of 0.22 (meaning it’s 78% less volatile than the broader markets) and has several billion-dollar brand portfolios poised for double-digit growth. (Read)

If you’d like to know what this stock is, please consider joining One Bar Ahead™. The January issue comes out shortly and, in it, I’ve got two brand new recommendations with at least as much profit potential. Perhaps more! (Click here to join today)

3 – Adidas just did it and you won’t believe what happened

Adidas sold $22 million worth of NFTs within hours but got snagged when the Mutant Ape Yacht Club owners couldn’t mint the NFTs it should’ve and was forced to hit a pause. No fears, Adidas has apparently promised to reimburse everybody who lost gas fees while minting stopped. (Read)

Got all that??!!

It’s a brave new world my friends. …

In English, Adidas entered the metaverse by creating a series of non-fungible tokens in partnership with organizations like the Bored Ape Yacht Club, Punks Comics and several others. Think of this like the 1982 Frank Sinatra Edition Chrysler Imperial … a limited edition speciality product in conjunction with specific partners like Old Blue Eyes. Then, Adidas ran into trouble when production - aka minting - hit a snag forcing people to spend money – gas – but getting nothing in return.

It’s a cautionary tale and too early to pick winners when it comes to NFTs.

Companies like Adidas may successfully do it because they’re massive brands with a global following but other companies will fall by the wayside by virtue of the greater fool theory.

Try collecting Starbucks mugs instead. One woman recently resold a tumbler she purchased for $20 for $165. Resellers listed Halloween cups for $100 - $500 per. This site will take you back. (Read)

4 – Why shipping companies are going “ashore”

Maersk just bought Asian warehouse giant LF logistics for $3.6b and it’s not the only big player making a shoreside move. Tomorrow’s logistics profits are going to go to the best vertically integrated players. (Read)

5 – Citi piles on

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Citi analyst Jim Suva just raised his price target on Apple to $200 from $170 citing double-digit price potential in 2022. Ummm … yeah.