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A Tiny Stock with Massive Potential
Adam Garcia
July 09, 2024
Good Morning!
I hope you are well-rested and ready to conquer the day. Here’s what’s going on in the market today.
Markets 📈
The S&P 500 and the NASDAQ made new record highs yesterday, although not by much.
Still, green is much better than red.
The markets traded flat for most of the day, and momentum looks to continue into this morning as futures trend higher.
Futures:
Futures are flat before the bell. Let’s hope the momentum from yesterday can carry into today.
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What to Watch Today:
Early this morning, the National Federation of Independent Business (NFIB) released its Small Business Optimism Index for June, which reached the highest reading of the year at 91.5, a one-point increase from last month.
The last time the index was higher was in December 2023 when it reached 91.9. Despite this improvement, the index has remained below the historical average of 98 for the 30th consecutive month.
Inflation continues to be the top issue for small businesses, with 21% of owners reporting it as their single most important problem, down one point from May.
Later today, at 10:00 AM ET, Federal Reserve Chairman Jerome Powell will testify before the Senate. His testimony is highly anticipated as it offers insights into the Federal Reserve's perspectives on the economy, inflation, and future monetary policy actions.
Market participants will be closely watching Powell's remarks on interest rates, economic growth, and inflation trends.
A recent government grant has put this under-the-radar stock on the map.
It has the potential to become a key player in one of North America's most crucial supply chains.
And it's currently sitting on an impressive portfolio of assets, plus claims that could deliver huge opportunities down the road.
It has the potential to be an excellent swing trade candidate, and now could be a great time to make a move.
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Premarket Highlights 🔎
BP Shares Drop Amid $2 Billion Impairment Warning
BP shares dropped 3% on Tuesday following the company's announcement of a potential impairment of up to $2 billion in the second quarter. The firm highlighted weaker refining margins and oil trading performance as key factors weighing on its results, which are expected to be released on 30 July. In early market trading, BP shares were down 2.6% at 08:39 a.m. London time.
Expected Financial Impact
BP anticipates weak refining margins and oil trading performance will impact its second-quarter results, with the estimated hit ranging between $500 million to $700 million. The company also expects to record post-tax asset impairments and contract provisions in the range of $1 billion to $2 billion, including charges related to the review of its Gelsenkirchen refinery in Germany. Upstream production for the second quarter is expected to be broadly flat compared to the previous quarter, with an average gas marketing and trading result.
Sector Performance and Company Transition
The overall energy sector has modestly underperformed, according to RBC analyst Biraj Borkhataria, despite stronger than anticipated upstream volumes. BP is undergoing a transition period after former CEO Bernard Looney resigned, with Murray Auchincloss now serving as permanent CEO since January. BP aims for at least $2 billion in cash cost savings by the end of 2026, following a drop in profit in the first quarter due to weaker margins in fuels and lower gas and oil prices.
Shell's Similar Challenges
Similarly, last week, Shell announced an expected post-tax impairment hit of up to $2 billion, primarily linked to its Singapore and Rotterdam plants. Shell's second-quarter performance in its core gas division is projected to be below the first quarter of 2024 due to seasonality.
Featured Earnings 💰️
Helen of Troy Limited [HELE] ... AM
Byrna Technologies [BYRN] ... AM
Smart Global Holdings [SGH] ... PM
Kura Sushi USA [KRUS] ... PM
Saratoga Investment Corp New [SAR] ... PM
Running Hot 🔥
Gainers
Zapp Electric Vehicles Group Ltd [ZAPP] >> +46%
Pineapple Holdings Inc [PEGY] >> +61%
ANEW Medical Inc [SYTA] >> +47%
Decliners
Beneficient (BENF) >> (20%)
Greenlane Holdings Inc [GNLN] >> (15%)
Shapeways Holdings, Inc [SHPW] >> (23%)
Indivior PLC [INDV] - Last Close: $15.34
This pharmaceutical company is off by nearly 40% in pre-market trading.
Shares are sinking due to the company cutting its 2024 profit forecast.
The company also announced it would discontinue sales of its schizophrenia drug, Perseris.
My Take: Indivior's profit cut and stopping Perseris sales show tough times ahead. Investors should watch how they bounce back to regain trust.
Helen of Troy Ltd [HELE] - Last Close: $89.01
Helen of Troy's stock dropped 26% on Tuesday after the company missed earnings expectations and forecasted continued difficulties.
The company, known for brands like Hydro Flask and OXO, reported adjusted earnings of 99 cents per share on revenue of $416.8 million for the fiscal first quarter, falling short of analysts' expectations of $1.59 per share on $446 million in revenue.
Last year, they reported earnings of $1.94 per share on $475 million in revenue.
My Take: Helen of Troy's disappointing earnings and gloomy outlook suggest ongoing struggles for the company. Investors should be cautious and look for signs of improvement in their next few quarters. The significant drop in both revenue and earnings compared to last year raises concerns about their ability to navigate current market challenges.
QXO, Inc. (QXO) - Last Close: $49.09
Shares of QXO continued to slide this morning, down 19%
This is on top of yesterdays rough trading day where shares closed down 20%
The stock is falling on news that there are not enough shares in its float to meet NASDAQ listing requirements.
QXO is a meme stock that shot up due to that same low float that is causing it troubles.
My Take: Just stay away. Its too messy.
That's it for today! Thanks for reading, and good luck out there!
Best Regards,
— Adam Garcia
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