Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Jun 10, 2020
A Broad Range of Results for Internet Retailers as Quarantine Results are Measured

A Broad Range of Results for Internet Retailers as Quarantine Results are Measured

The COVID-19 virus and the quarantine orders that occurred have had a tremendous impact on the internet retail sector. The sector includes companies that sell products and services through the Internet. With more and more consumers using online retailers, the companies have seen a big increase in the use of their services.

Some of the companies in the group are focused on selling business-to-business products and services. Others sell business-to-consumer products and services. Internet retailers offer a wide variety of products like books, apparel, and electronics.  Some companies even specialize in only one or two categories.

One potentially critical factor for players to thrive in this space is the quality and speed of product delivery. This requires an investment in efficient distribution networks. Things like logistics are important factors in the success in the extremely competitive industry.

For a company to stay relevant in the industry it must have effective pricing strategies and upgraded websites. The websites must be easy to navigate and engaging for customers.

In addition to the revenues generated from straight sales, internet retailers can generate revenue from subscription fees and advertising. Amazon.com, Inc., Alibaba Group, and JD.com are some of the global leaders.

What is really interesting is that if we look at how some of the most well-known names in the group have performed over the last few months, it has been the lowest rated stocks that have outperformed.

I looked at the entire group, but I focused on five stocks— Amazon (Nasdaq: AMZN), Alibaba (NYSE: BABA), Overstock.com (Nasdaq: OSTK), Shopify (NYSE: SHOP), and Wayfair (NYSE: W). What I found to be particularly interesting is how the stocks have performed over the past three months and how that correlated to the fundamental and technical analysis ratings for the stocks. As the market has rocketed higher after bottoming in March, there seems to be an inverse relationship to performance and quality.

The following screenshot is for the fundamental ratings of those five stocks. The order the stocks are arranged in is based on the returns from the last three months. It hasn't quite been three months since the March low, but it has been close. Notice the number of red stats you see for the top three—Overstock, Wayfair, and Shopify? Notice the number of red stats you see for the bottom two—Amazon and Alibaba?

The technical analysis screen is even more lopsided with the stocks arranged in the same order. There isn't a single red mark for Amazon and Alibaba and each of the other three stocks have at least two red marks. Wayfair and Shopify both have four negative marks on their technical analysis screens.

In order to be more specific, I looked at the price gains for these five stocks since the lows in the market on March 23. For comparison purposes, I also included the SPDR S&P 500 ETF (NYSE: SPY) and the Amplify Online Retail ETF (Nasdaq: IBUY). The chart shows how Wayfair and Overstock have seen meteoric jumps—gains of 466% and 376%. Shopify has gained 98% and the Amplify Online Retail ETF has gained 86%.

The Spyders have gained 44% and Amazon and Alibaba have underperformed the market with gains of 37% and 25%, respectively.

How can this be explained? The S&P 500 just went through its greatest 50-day rally in history and the internet retail ETF more than doubled the return of the index. Okay, that isn't a stretch since these companies should have benefitted from the increase in online shopping.

So how do you explain the stocks with the better fundamental ratings and technical ratings being outpaced by the stocks with lower ratings?

The rally off the March lows has been a full blown risk-on rally. Investors were looking to buy anything and everything that had sold off sharply and that included the likes of Wayfair and Overstock. Shopify held up rather well, as did Amazon and Alibaba.

Now that most of the indices have returned to the levels they were at when the year started and with many ETFs experiencing tremendous rallies over the last few months, I expect a return to quality. We have already seen a shift from growth to value and that has allowed poor performing sectors to catch up to the better performers for the first quarter. Now I expect investors to take profits on some of the high-flying names and seek out the higher quality names once again.

Related Tickers: AMZN
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 07, 2021
4 Tricks Hedge Funds Use to Get Ahead

4 Tricks Hedge Funds Use to Get Ahead

If the stock market were Major League Baseball, hedge funds and institutional investors would be the pros on championship teams while everyday self-directed investors (SDIs) are the benchwarmers in the minors.It’s how they get ahead, and it’s why 90% of SDIs lose money trying to play (invest and trade) in the major leagues. The 4 tricks we discuss below are rooted in one common theme: they all use Artificial Intelligence and algorithms to generate data and ideas.
John Jacques's Avatar
John Jacques
published in Blogs
Mar 22, 2018
A.I. Stock Market Predictions: Head & Shoulders

A.I. Stock Market Predictions: Head & Shoulders

Statistics for the Head-and-Shoulders Bottom Pattern The days where only hedge funds used algorithms to trade stocks are officially over. Now retail investors can use Artificial Intelligence (A.I.  Here’s an example of the algorithm in action: Late last year, Tickeron’s A.I.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Jul 10, 2020
3 Stocks to Buy if Coronavirus Second Wave Hits

3 Stocks to Buy if Coronavirus Second Wave Hits

By analyzing market trends from the first wave, you can predict behavior for the second. Technology stocks have performed at historic levels this year, but the market is severely overbought.To compensate for that, look at performance during Q1 and Q2, the height of global Covid shutdowns.
Edward Flores's Avatar
Edward Flores
published in Blogs
Feb 06, 2021
How to Become the Millionaire Next Door

How to Become the Millionaire Next Door

The Golden Gate Bridge is always a fixture of these walks too, one of man's most beautiful creations.  As we were walking, at one point she turned to me and said, "Man, I'll never have a million dollars."" My girlfriend is 27 years old and works as a graphic designer, making about $75,000 a year.
Alla Petriaieva's Avatar
Alla Petriaieva
published in Blogs
Feb 23, 2021
Is Ethereum’s Bomb about to Explode?

Is Ethereum’s Bomb about to Explode?

Ethereum’s software is set for an update in October.Until it is finished, participants in the Ethereum blockchain must determine how to delay the difficulty bomb – code that necessitates a steadily increasing amount of computer power to mine blocks and unlock rewards – that is already in place.
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Aug 07, 2018
When Is the Next Recession Coming?

When Is the Next Recession Coming?

However, we also know that economists predicted 22 recessions out of 11 that took place since 1945. Are there real recession signs we should watch for?Indeed, the answer is yes, and here are a few very important ones: The first one is almost obvious and known to everyone – it is the Fed.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 22, 2020
Central banks have been buying $2.4 billion in assets every hour for the past two months

Central banks have been buying $2.4 billion in assets every hour for the past two months

Some $17.8 billion has been poured into  bond markets over the past week, the biggest move in more than three months.Around $3.5 billion has been invested into gold, the second largest on record. 
Rick Pendergraft's Avatar
Rick Pendergraft
published in Blogs
Feb 07, 2021
Mid-January Short Interest Report Shows 8 Stocks with Good Fundamentals and High Short Interest
Sergey Savastiouk's Avatar
Sergey Savastiouk
published in Blogs
Mar 10, 2021
How to Start Trading Penny Stocks

How to Start Trading Penny Stocks

Penny stocks have long been marginalized within the professional investment community, oftentimes being painted with a broad brush of simply being “too risky.” Leonardo DiCaprio’s depiction of the penny stock peddling conman, Jordan Belfort, in the Wolf of Wall Street certainly didn’t help.Here are four reasons to start trading them now. Reason #1: Let’s State the Obvious -- Penny Stocks are Cheap A single share of Apple Inc. costs over $350.
Abhoy Sarkar's Avatar
Abhoy Sarkar
published in Blogs
May 08, 2020
US unemployment rate jumps to 14.7%, the highest in series history

US unemployment rate jumps to 14.7%, the highest in series history

The U.S. economy’s employment fell by -20.5 million in April. The coronavirus crisis led to unemployment rate soaring to 14.7% in the U.S, the highest rate in the Bureau of Labor Statistics-tracked series history that goes back to 1948. However, the figures were better compared to several economists'/analysts' forecasts of 22 million job losses and 16% unemployment rate.  Another unemployment measure that includes those who have stopped looking for work as well as those holding part-time jobs for economic reasons also touched an all-time high of 22.8%.