Friday Four Play: The “Final Frontier” Edition
Space: The final financial frontier. These are the voyages of the newsletter Great Stuff.
Its lifetime mission: to explore strange new investments. To seek out cutting-edge stocks and massive new returns. To boldly profit where no investor has profited before!
Captain’s log: Stardate 2021 … we’re talking about space investing today, Great Ones — the last great investing frontier and one of the hottest investment sectors for 2021.
I bet you’re thinking: “Space investing? So … that’s just Virgin Galactic, right?”
Wrong! There’s so much more to space investing than Virgin Galactic’s (NYSE: SPCE) overhyped space tourism.
I mean, just think of everything it takes just to get to space: Semiconductors. Artificial intelligence. Metal fabrication. Nonmetal fabrication. Programming. Fuel production. Food.
The truth is the list of what it takes to not only get to space but truly begin to explore it is staggering. I don’t exaggerate when I say that this endeavor will literally take the total sum of human knowledge. It really is that big. (And I mean real “literally.” Not that fake “literally” that people use nowadays.)
So … you want us to invest in literally everything?
Well … yes and no. Yes, in that it will take everything we have to further our reach in space. No, in that there are a few key players that will benefit more than others in the great new space race.
And you can count on me, your space cowboy — some people call me Maurice — to help guide you to the most profitable investments.
For instance, unless you simply love risky trades and hitting yourself in the face, Virgin Galactic is probably one of the worst space investments you could make right now. Eventually, Virgin could be worth looking at seriously. But for now, Maxar Technologies (NYSE: MAXR) is a much better bet on the space market’s future.
Maxar provides earth intelligence and space infrastructure globally — everything from satellites to imagery and geospatial intelligence. Basically, it makes “spy” satellites … but in a good way. Maxar also works on robotics, propulsion, communications and defense systems.
Now, I don’t want this to turn into an ad for MAXR. I won’t add it to the Great Stuff Picks portfolio … yet.
All right, Mr. Space Cowboy, where do you suggest we invest right now?
Great question! If you have a little patience — just a little patience, yeaaahh — there is a space ETF on its way soon. Ark Invest will launch the Space Exploration ETF (Ark puts all its money into investing, not creative ETF names).
According to the SEC filing, the ETF will trade under the ticker ARKX and focus on companies “leading, enabling, or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth.”
This may be one of the few times I’m excited about an ETF — and that says something.
But I hear you. An ETF with an undetermined launch date isn’t enough. You want those space profits beamed up now!
Well then, the only logical choice, captain, is Paul — the Great Ones’ favorite techy (but maybe not Trekkie). Paul believes the space crusade is going to be the biggest investment opportunity in history.
And he’s found three cutting-edge companies that are mission-critical to America’s success. He says: “Early investors could see these stocks soar as much as 900% … 1,000% … and 3,900% over the next three to five years.”
You can make of those gains what you will, but to find out the truth of the matter…
And now for something completely different, here’s your Friday Four Play:
No. 1: JP Supreme
JPM’s earnings came in at $3.79 per share, pile-driving expectations for $2.62.
The bank brought in $30.16 billion in revenue, beating the $28.7 billion estimate with room to spare.
The not-so-secret secret behind the success is trading revenue — much like it was earlier in the pandemic.
Sounds like money’s just piling up to the ceiling over there; what gives? Is JPM all stimmied up?
Well, kind of. The real meat of the Morgan matter is that the bank released about $2.9 billion from its cash stockpile (What? You don’t have a Scrooge McDuck swimmin’ pool o’ riches? Wow.)
This is money that it set aside in case a massive wave of credit defaults came along with the pandemic, i.e. if everyone and their mother (literally, in this case) came up short on their loans. This release totaled up to a $0.72-per-share boost on the earnings front, though JPM still would’ve beat expectations without the leg up.
CEO Jamie Dimon was quite clear on why the bank coughed up its default-prep funds: stimulus and positive vaccine developments, the rollout roulette notwithstanding.
Yet, JPM isn’t counting out the possibility of choppy waters ahead, despite already dipping into the credit cookie jar. The bank still has over $30 billion in its credit reserves. You know … just in case.
No. 2: I Don’t Want to Go on the Cart!
Usually, keen investors on the Street pounce on tech news like a hound baying after its squirrel archnemesis. But not always.
BlackBerry (NYSE: BB) shares soared almost 50% between yesterday and today — back up to 2018 price levels. But Wall Street was late to the jump on this one.
BlackBerry — if you haven’t heard the name since the Bush administration — finally made its way from cell phones to enterprise security around 2016 or so. And this latest patent sell-off further cements the company’s move.
The plus side is that BlackBerry now has some more cash sloshing around to sling toward growing its software business. But the real driver behind this recent rally was likely a short squeeze — when folks betting against the stock meet a rapid rally, thus forcing them to buy back and “cover” their sold positions.
BB saw a 14% jump in short positions recently, with 7.15% of the company’s publicly traded shares sold short. The big shorts were spooked into covering their positions, which only added to the surge.
If you looked to get into the not-awaited BlackBerry comeback — or just feel nostalgic about phones with actual tactile keyboards — BB does face some risk of consolidation after this jump. But, if the buying holds up, this could mark a new rally for BB.
No. 3: A Sublime Merger
I trade two pot stocks in the morning. I trade two pot stocks at night. I trade two pots stocks in the afternoon because it makes me feel all right.
Yesterday, Aphria released its fiscal second-quarter report to much fanfare. The company swung to a profit and beat Wall Street’s expectations on both revenue and earnings.
Today, Cantor lifted its price target on APHA from C$11.75 to C$26 — despite its disappointment in Aphria’s results. The best part of Cantor’s analysis was this line from the note:
What? I know that I make a lot of weird references in Great Stuff, but even I’m a bit befuddled on Cantor’s “bad hair day” commentary. Is this like saying: “Sure, they won the election, but their hair was just awful!”
Why even mention it at all? Aphria blew out expectations by a mile; revenue grew 33%. Furthermore, the company will merge with one of Canada’s hottest cannabis companies. Just imagine what it can do going forward … especially with a new pot-friendly U.S. government.
Now, I still favor Canopy Growth (NYSE: CGC) once the U.S. finally legalizes — it has massive connections stateside. However, Aphria/Tilray is a close second on that front, and it has the potential to become No. 1 globally if it plays its cards right.
No. 4: The Ives Have It?
I’m tired of talking about Tesla (Nasdaq: TSLA). You’re tired of talking about Tesla. We’re all tired of talking about Tesla!
But Wedbush Analyst Dan Ives isn’t. That man has a fever that not even more cowbell can cure.
In a research note to subscribers, Ives raised his TSLA price target from $751 to $950 and laid out a “bull-case scenario” target of $1,250. Ives’ Tesla fever hives are now the biggest on Wall Street.
Why is Ives so high on Elon Musk’s wonder bread? China:
Ives expects Tesla deliveries to top 1 million in 2022 and near 5 million by 2030. All because of China.
I don’t know where I got it, but I was apparently vaccinated against the Tesla hype. I like the company, sure. But this is all getting way out of hand.
I mean, did Ives even consider the fact that Chinese consumers lopsidedly prefer quality local brands?
Nio (NYSE: NIO) builds quality. It’s local, and it’s cheaper. Before long, the Tesla status symbol will die down in China. And when it does, Ives’ argument for Tesla domination falls apart.
I’m not saying Tesla will die off completely in China. I’m saying things aren’t quite as rosy as many on Wall Street think. But what am I saying? Great Ones like you already know this.
Great Stuff: Stuck in Orbit
Welcome to the weekend, Great Ones!
With our minds all filled with spacey dreams and galactic fantasies, be sure to hit up our inbox with your take on the next great space race. Or, let us know what you think about BlackBerry’s comeback, pot stock tie-ups or the constant Tesla overhype.
GreatStuffToday@BanyanHill.com is where you can unleash your own Great Stuff. We might even feature your email on next week’s Reader Feedback day. (That would be Thursday, for all of you new Great Ones around these parts. Welcome!)
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Until next time, stay Great!
Editor, Great Stuff