Boeing’s Mighty Wings, AMC Goes Spartan & Canopy Burns Out
Take These Broken Wings…
No, no, no … it’s too late to deny it now. I have the emails to prove it — you know who you are.
At the time, Boeing had lost that lovin’ feeling, was barely aloft on broken wings and was apparently headed to destinations unknown.
But the company went through the fire, fought through the danger zone and is looking ahead to hot summer nights.
Can you say: “I told you so?” Sure you can.
But, just in case BA outperforming the S&P 500 this year isn’t enough for you, let’s hear from Cai Von Rumohr, analyst at ratings firm Cowen:
Now that the U.S has hit a 50% vaccination rate, air traffic/indicators are accelerating. Fast improving air traffic is bolstering aircraft demand…
Beyond traffic, aircraft demand is bolstered by (1) better economics of new planes, (2) low interest rates and (3) lower carbon emissions.
Now, we’ve both heard a Rumohr: They say you’ve got a broken heart … I heard…
Joking aside, Von Rumohr is correct — even if he is a little late to the game. I mean, I told you to buy BA back in December, after all.
Interest rates are low, and they’re going to stay low for the foreseeable future. That means that businesses like Boeing and its customers will see lending heaven in the Fed’s eyes for some time.
Right now, Great Stuff Picks readers sit on a gain of more than 17% on BA. But those gains are set to climb even higher as Boeing ramps up 737 MAX production and settles its 787 Dreamliner issues with the FAA.
Those issues should be far behind Boeing by the time demand for new airplanes spikes to handle the incoming post-pandemic travel boom.
Luckily for you, there’s still time to get in on BA’s rally. So, if you’re ready to stop playing with the boys and have your breath taken away, now’s the time to jump on Boeing’s mighty wings before your portfolio gets inverted.
But I get it — you’re a Great One looking to make the most of a target-rich environment. But every Maverick needs a wingman, no?
My colleague Ted Bauman recently sat down with TradeSmith CEO Keith Kaplan … and he saw something that really shocked him.
Pretty recently, Ted recommended a stock that gave his subscribers a shot at a 25% gain. Not bad, right? Well, Keith demonstrated how one small change could’ve increased the gains to a whopping 467%! Most surprising of all, it had nothing to do with options or leverage.
On Wednesday, June 2 at 8:00 p.m. EDT — during a FREE online event, the 2021 Peak Profits Summit — Ted and Keith will walk you through exactly how it works. You’ll see how you could apply this tweak to any stocks you already own to boost gains.
Going: Ni … Oh!
The financial media appeared to be a bit confused over Chinese electric vehicle (EV) maker Nio (NYSE: NIO) today. Practically every single headline declared that Nio deliveries declined, yet the stock still rallied.
“Why?” they asked. It made no sense.
Well … the “why” was readily apparent, but it didn’t exactly fit the sensationalist headline of a decline in Nio’s deliveries.
You see, deliveries nearly doubled year over year to 6,711 vehicles, rising 95% from May 2020. But the financial media focused instead on those same deliveries slipping from 7,102 vehicles in April — even after Nio warned of delivery concerns during its quarterly earnings report on April 30.
We all know the culprit: the global semiconductor supply crunch. But Nio isn’t worried. The company left second-quarter deliveries unchanged at 21,000 to 22,000 EVs, which means the company is planning on churning out 8,200 vehicles in June — a record for Nio.
Nio “will be able to accelerate the delivery in June to make up for the delays from May,” the company told investors this morning. How’s that for confidence?
What’s more, Citigroup Analyst Jeff Chung upgraded Nio from hold to buy and reiterated his price target of $58. Chung cited improving market positioning in China for the upgrade, reversing his opinion after cutting the shares in January.
All I can say is that if Nio does deliver 8,200 vehicles by the end of this month, watch out — NIO shares are going to surge.
Going: I Think The Canopy’s Cashed Out
If Nio’s still tripping over its feet in the revolving door of Wall Street expectations … watch out below, pot stocks.
Earnings came in at a loss of $1.85 per share, whereas analysts only expected a $0.25 per-share loss — in Canada-land funny money, mind you.
It’s called a “loonie.”
No, you’re a loonie…
Anyway, revenue grew on the quarter to reach C$148.4 million, but that still fell short of analysts’ ever-increasing expectations for C$151.4 million.
While Canada’s legal cannabis market is streets ahead of the U.S. … the Great White North clearly isn’t as far as the U.S. in ending pandemic lockdowns. It’s hurting Canopy bad — there’s no other way around it.
Can we blame the chip shortage, or is that not for Doritos?
For Canopy to continue its strides for success — and profitability — it really needs the U.S. to legalize federally. Get that cross-North American mega market all nice and opened up. But who knows when (if?) that will happen? I don’t expect broad-scale legalization this year unless there’s a miracle.
That’s a whole lotta waiting for CGC investors waiting for the company to turn a profit. It’s also a whole lotta time for new brand ambassador Martha Stewart to come up with … whatever the heck they brought her on board for.
Now … even if the U.S. legalized cannabis nationwide tomorrow, Canopy might still be playing second fiddle to companies — like Curaleaf, Trulieve and Cresco — that already have products in front of (some) American consumers.
Once again, that’s a whole lot of time for Canopy to ramp up production enough to compete with local brands. Its agreement to buy up Acreage Holdings is a foothold in the right direction … but the company needs brand recognition to bring its earnings into the green sometime this decade.
And believe it or not … brand recognition is starting to matter in the legal weed market. It’ll only get more important as these corporate entities stake their claims on consumer influence.
Man, for a company hellbent on getting America stoned, its reports sure do harsh my mellow unlike any other. (Well … maybe except for Hexo.)
Gone: Locked & Loaded
You wanna know what I like about AMC Entertainment (NYSE: AMC)?
It’s not that the stock is up 1,400% this year — that’s meme stock insanity.
It’s not that AMC has a cult following among Redditors or retail investors — again, that’s meme stock insanity.
No, what I like is that — unlike other meme stocks such as GameStop — AMC Entertainment embraced its meme stock status and leveraged that fame to put its finances in order.
This morning, AMC announced that it has sold 8.5 million shares to Mudrick Capital Management for $230.5 million. Doing the math, that means Mudrick bought AMC stock at $27.12 each, or a 3.8% premium to Friday’s close.
Now, this isn’t the first time AMC has sold stock into a meme rally. Back in January, AMC said it sold $304.8 million in stock to shore up finances and pay down debt.
But this time … oh, this time is different!
This time, AMC said it would use the funds for acquisitions and investments in existing theaters. So, now that AMC is financially stable, it’s going post-pandemic bargain-hunting! AMC is locked and loaded and looking to snap up competing theaters on the cheap … and I can’t think of a better use for this meme money pouring into AMC’s coffers.
That said, I still think the stock is waaaay overvalued right now. I’d be a buyer at $15 or so … but $30? I’d rather not personally finance AMC’s ambitions or be on the hook for losses once this meme rally dies down.
So, how about that … checks calendar … summertime?
We’re as ready as you, Great Ones, to start living our best sunshiney lives — lol, as if — to get out in the real world and see what this “new normal” life is all about. But none of us here are as ready for the Great Reopening as Disney (NYSE: DIS) … and probably the Disney über-fans (I know you’re out there).
On the Street, the resurging reopening and tick-up in traveling have analysts hyping up their best picks for summertime spending. Visa was one, as far as Piper Sandler is concerned. But for Laffer Tengler Investments — and myself, to be fair — the real underdog “dud of the Dow” is none other than the Mouse’s House.
Thanks for finally catching up with Great Stuff Picks investors, but whatevs. Here’s Nancy Tengler, chief investment officer:
Done nothing for the year? That’s a funny way to spell “took over the entire streaming market.”
It shouldn’t surprise y’all out there, but I think even Tengler underestimates how much Disney is being underestimated. Ha! How’d you like that now?
What’s the point of being enthusiastic about the stock without so much as a price target, upgrades, upside talk — nada? Even Piper Sandler stuck its neck out and predicted a 25% upside for Visa. (Name a better duo than vacation spending and last-minute credit card declines … I’ll wait.)
Tengler doesn’t offer any outlook for DIS? Seems wishy-washy to me. It makes me think they’re underestimating DIS’s full upside — once the House of Mouse fully reopens and parks are no longer a drag on earnings and revenue.
Just like with Boeing (see above … literally), I feel the need to recap Disney’s situation for you Great Stuff Picks investors … and the ratings firms that continue to gloss over reopening picks we talked about months ago.
Unlike its theme park brethren and streaming platform sisters alike, Disney has mastered the art of plate-spinning and cash cow milking. It won’t let its hard-won digital presence slip during the reopening.
When Disney spots another revenue stream about to flow, Mickey just sprouts another arm to juggle the weight. Miss out on revenue? Ha-ha, not today!
Analysts simply have no idea the dam of pent-up demand that’s ready to flood into Disney’s parks from every corner of the world — all while Disney+’s summer launch schedule keeps churning out new flicks.
How many times do we have to say it? Never underestimate Disney. Just like the Wu-Tang Clan, the Mouse’s House ain’t nothing to Donald Duck with.
If you catch my drift, don’t give a flip or just want to riff about stock-trading tangents … there’s an inbox for that. Whatever you feel like sharing — market-related or otherwise — drop us a line at GreatStuffToday@BanyanHill.com.
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Until next time, stay Great!
Editor, Great Stuff