Everything you need to know about this weekOct 11, 2021
We're bringing you all the news you need to know for this week. This report contains news on the most important IPO this week, the crypto world & earnings news. We've highlighted the most important topics in each section!
If you missed our post on Facebook last week we'd recommend checking it out here so you have context on why this is news is so big! And that news is: The ability to sign-In with your Ethereum wallet address is coming soon! If you've ever signed into a 3rd party website or app, you often see the ability to sign in with Facebook, Google or another big tech company.
While it makes the experience easier, it ultimately helps these companies collect your data and sell it to third parties. While there has always been talks of a privacy enabled identity solution, this way of signing in would actually enable this!
If this ends up getting adopted by many platforms, companies like Facebook are going to have an even harder time making money. With less data, comes less power and this firsthand would topple their monopoly.
We'll continue to monitor this situation to see how fast it gets launched and adopted but this has the ability to dismantle many large advertising giants as well as boost the popularity of Ethereum to more users. We continue to be bullish on the outlook for crypto while being bearish on the long term outlook for Facebook!
If you want more crypto news and access to our free trading channel on Discord just click here -> Crypto Discord Channel
We've been regularly outperforming the market and our most recent trade ($DYDX) was up over 165% just in the last few days alone!
Most Important IPO This Week:
GitLab is a US based collaboration platform that allows programmers to share and manage code. It uses ‘Git’ software, which tracks changes in files, to enable multiple developers in a project to work simultaneously on tasks for maximized workflow efficiency. If you've heard of Github, they are one of Gitlab's closest competitors. Microsoft recently bought them out for $7.5B, which is slightly lower than their targeted valuation of $9B.
Looking at the numbers we are seeing some strong initial metrics:
- More specifically their revenue grew 69% YoY for the latest quarter - equaling over $230 million on an annualized basis.
- While this revenue growth is strong, their net losses continued to increase - equaling $40M from $9.4M the year before.
- While this is not a good sign, what is extremely encouraging is their net revenue retention rate. In subscription based businesses this number is beyond important and usually spells success or failure for most mature SaaS platforms. When we analyze their numbers we see that their rate hit 152% most recently.
This retention rate would rank them as one of the top public software companies!
As with all IPO's, getting allocations of pre-secondary market shares is the key to success. If you're able to grab these primary shares then we'd definitely recommend locking them up! If you're not able to, we'd wait until some of the early trading volatility shakes out before allocating a portion of your portfolio to this new IPO. In the long run though, we're buyers of the name and are looking forward to tracking their growth!
Most Important Companies Reporting Earnings This Week:
JP Morgan (JPM), October 13th:
JP Morgan has been one of our top finance stock picks for awhile. To see our most recent write up on them just click: here
With JPM just recently hitting our price target, this earnings call is more important then ever.
Last we published their price target, we were looking towards their cash reserves and M&A activity to gauge the future of the company. Fast forward to today and it looks like they've been making the right moves ever since. With the Fed set to raise interest rates in late 2022/ early 2023, companies like JPM will stand ready to benefit from the interest received on cash reserves as well as the higher payments on any new loans.
Therefore during this earnings call we're hoping to get an update on any economic outlook that they're forecasting. As an investor, you need to be looking very closely at their management's comments surrounding the outlook of the economy. Not only will this affect the stock market, but it should highly affect the financials sector as a whole. These companies will have more insight into future policy moves than virtually anyone else!
Delta Airlines (DAL), October 13th:
Delta right now is in a precarious position. On one hand travel is resuming but on the other, any outbreak could shut down large swaths of their overall business. But we think there is one trend that many people are ignoring and that is corporate travel.
Last we wrote about them we noted that change here, but since then corporate travel has rebounded in a "weird way". What we mean by this is that executives and other travelers are returning for different reasons than they were before. Historically they were traveling for business meetings and client travel but today many people are traveling to be reunited with their remote workforce.
In order to keep morale high and culture strong, many companies are now flying their remote employees all over the globe in order to maintain constant contact. This is something we did not foresee coming but is helping resupply the seats often purchased by companies.
During this earnings report we'll be watching closely for revenue growth specifically from the corporate travel business line as this should be the "breaking point" for their revenue going forward.
If the number is strong, we'll continue to hold our position, but if it cracks we may use this time to pair our position back. In any case, we're projecting for the number to come in above expectations!
Alcoa (AA), October 14th:
This week we're watching very closely to hear the earnings report from the aluminum giant! If this company sounds familiar it is because they are one of our top picks from this year and last! As you can see in the chart above, the stock is on an absolute tear over the last 12 months as they're up 286%.
A large part of this run up is due to the infrastructure plan laid out by the Biden Administration. There has and continues to be a lot optimism for their materials needed as the US looks to spend billions of dollars on repairing airports, roads, bridges, and other public projects.
While our position in the stock is up well over 250%, we're continuing to hold onto the name until it shows any signs of weakness. We'll be using this earnings report to see if there is an outlook change from the companies leadership.
If there is not, we project the price to continue to increase. If they issue caution, we'll be using this time to pair back some of our gains.
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