|Bid||187.74 x 800|
|Ask||198.18 x 800|
|Day's Range||0.00 - 0.00|
|52 Week Range|
|PE Ratio (TTM)||N/A|
|YTD Daily Total Return||26.99%|
|Beta (5Y Monthly)||0.98|
|Expense Ratio (net)||0.18%|
Keith Meister says hedge funds have been struggling with a pair of “pain trades” that have made it even more challenging than it already has been for active managers
Value-oriented ETFs are beginning to pull ahead, but some investors remain skeptical of a full on rotation and attribute the sudden shift as a short-term blip. In the recent market rebound, value stocks have been outpacing the market. Big value fund managers, including those from Hillman Funds, Artisan Partners and Eaton Vance, revealed they are taking the rally in value stocks to selloff some of their best performers in exchange for those that are further out of favor, reflecting views that the market shift to value will not last, Reuters reports.
For the most part, growth stocks have had a really good 2019 as stabilizing global economic conditions have converged on plunging rates to create an ideal investment backdrop for long duration assets. The iShares S&P 500 Growth ETF (NYSEARCA:IVW) is up more than 20% year-to-date. But one growth stock that has come up short in the big 2019 rally is Square (NYSE:SQ) stock.Source: Jonathan Weiss / Shutterstock.com In 2019, SQ has struggled with competition concerns and slowing growth trends against the backdrop of a rich valuation -- a combination which has ultimately resulted in SQ stock rising only 12% year-to-date and being down 30% over the past year.Will the struggles in SQ stock continue? I don't think so. At $60, the long-term bull thesis on Square stock looks incredibly compelling from a fundamental valuation perspective. At the same time, the optics surrounding Square stock should improve over the next few months, and that improvement should inject confidence back into the investor base.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Industrial Stocks to Buy for a Strong U.S. Economy Net net, I think the fundamentals and optics underlying SQ stock lay the groundwork for a compelling reason to buy the stock at $60. Will it run higher immediately? Probably not. But does it have immense upside potential from here in a multi-quarter to multi-year window? Absolutely.As such, for investors who are willing to be patient, SQ stock looks like a great buy here. The Fundamentals Are Very AttractiveThe story on Square is pretty easy to understand. Everywhere, all across the globe, consumers are pivoting from cash to non-cash payment methods, such as card and digital payments. In order to keep up with this secular pivot, merchants, retailers, and restaurants everywhere need to adopt payment processors which handle all types of payments. Square sells these payment processors.So do a lot of other companies. But Square is differentiated in three big ways. First, they've built a software ecosystem surrounding their payment processors which helps merchants of all sizes modernize, digitize, and automate workflows. Second, they've built this ecosystem to be particularly advantageous for small-to-medium sized businesses who are often behind the curve on modernization and digitization. Third, their payment processors come in all shapes and sizes -- ranging from a mag-stripe smartphone attachment, to a full-on register -- so that merchants can sell whenever, wherever, and however they want.Thus, the core growth narrative here is that as cash increasingly becomes obsolete and card payment volume continues to grow, Square will leverage its unique advantages to grow relevance, reach, and share across the global retail world. That was a $24 trillion world back in 2018, of which Square only controlled about 0.35%. In the long run, then, Square has a tremendous opportunity to sustain 20%-plus revenue growth for a lot longer, which should drive healthy margin expansion through positive operating leverage.Zooming out, Square projects as a 20%-plus revenue grower into 2025, with sizable upside margin drivers. Net net, that paves a tangible pathway for EPS to $4 by 2025. Based on a payment processing average 30-times forward multiple and a 10% discount rate, that equates to a 2019 price target for SQ stock of $75. The Optics Will ImproveTo be sure, the fundamentals have pointed to a 2019 price target for SQ stock of $75 for some time now. Yet, Square stock has languished around $60 for over a month.Clearly, Square stock needs a catalyst outside of "it's undervalued" to shoot shares higher.That catalyst could come over the next few quarters as the optics surrounding the stock materially improve. This breaks down into three parts. First, I expect the broader financial market backdrop to improve over the next few months as trade tensions ease (neither side wants the trade war to escalate further), U.S. consumers spend big during the holiday season (everyone is working and making more), and rates remain low (inflation is muted everywhere). Click to EnlargeSecond, SQ stock is showing resilience at a multi-year support line narrowly above $60. The lower $60's have proven to be a "bottoming" area for Square stock twice before since mid-2018, breaking only once during the late 2018 stock market wipe-out. If Square stock does indeed hold this lower $60's level again, then technical traders will rush into the stock, and that will provide an upward lift for the stock.Third, I think the numbers will get better from here. Square's revenue growth has been decelerating recently, but it should stabilize over the new few quarters as new investments start to yield healthy returns. These investments include the roll-out of Orders API to help merchants manage order fulfillment, the build-out of the Cash App ecosystem, the launch of Square Terminal in Australia, operational expansion among bigger merchants, and more. Bottom Line on SQ StockIt's been a rough ride in SQ stock over the past year, But this turbulence is to be expected after SQ stock rallied about 700% from mid-2016 to mid-2018. * 10 Stocks to Buy for September In other words, in the big picture, the past 52 weeks of weakness in Square stock is a just a blip on the radar -- a minor consolidation period in a long-term uptrend. Importantly, the growth fundamentals here remain highly favorable, and because of such, SQ stock can and will move significantly higher in the long run.As of this writing, Luke Lango was long SQ. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post 2 Big Reasons to Like Square Stock at $60 appeared first on InvestorPlace.
The stock market has staged an epic rally to start 2019, and leading the charge for the market has been growth stocks. Year-to-date, the S&P 500 is up 17.5%. Meanwhile, the iShares S&P 500 Growth ETF (NYSE:IVW) is up 19%, while the iShares S&P 500 Value ETF (NYSE:IVE) is up 16%. Thus, stocks are up big in 2019, and growth stocks have broadly outperformed value stocks. There are many reasons why investors have returned to the growth trade in 2019. For starters, the economy has stabilized and even improved amid healthier China-U.S. trade relations. When the economy is healthy, investors tend to pile into risk-on, growth-oriented investments. Of equal importance, the Fed reversed its stance from "hike at all costs" to "wait and see". This stance reversal has kept rates low, and low rates help support growth valuations. Also, secular growth trends in markets like cloud, data, AI and digital ads are hardly slowing.Long story short, the growth trade is not dead. Considering that the Fed projects to remain dovish, U.S.-China trade relations project to improve, and secular growth trends project to remain healthy, then the growth trade projects to remain alive and well for the remainder of 2019.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe big takeaway? Stick with growth stocks. They've led the market higher over the past several years. They are leading the market higher today. And, they will continue to lead the market higher for the foreseeable future. * 7 Strong Buy Stocks That Tick All the Boxes With that in mind, let's take a look at six growth stocks to buy for the rest of the 2019. Facebook (FB)Source: Shutterstock The Long-Term Bull Thesis: The reasons to leave the Facebook (NASDAQ:FB) ecosystem were as strong as they will ever be in 2018 amid a plethora of data privacy scandals, and the company still added users. Net takeaway? Consumers are addicted to Facebook as much as they are addicted to the internet. Consequently, users aren't going to go away any time soon. Neither will advertisers, since they follow consumers. As such, Facebook's secular digital ad growth narrative remains robust. On top of that, the company is building out a complementary growth vertical in e-commerce. Overall, then, the growth trajectory at Facebook remains healthy, meaning that FB stock will only grind higher in the long run.The 2019 Bull Thesis: One of the biggest knocks against Facebook stock over the past few years has been that the company is entirely reliant on digital advertising and that the digital ad market will eventually slow. But that narrative will change in 2019. Over the next few quarters, we will see a new e-commerce growth narrative emerge. The emergence of that narrative will do two things. One, it will ease concerns related to slowing digital ad growth rates. Two, it will pave the path for 20%-plus growth to persist for a lot longer. Both of those developments will provide tailwinds for FB stock, and consequently, shares should stay in rally mode for the rest of 2019. Chegg (CHGG)Source: Shutterstock The Long-Term Bull Thesis: Digital education is the future. It only makes sense that as information migrates online, students increasingly turn towards online learning solutions to help them learn. But, at the current moment, there is no universal connected learning platform at scale. Chegg (NASDAQ:CHGG) is in the early days of becoming that. From homework solutions to on-demand tutors to test prep, Chegg provides a variety of learning tools through its all-in-one connected learning platform. Right now, Chegg only has 3.1 million subs, out of 36 million high school and college students in the U.S. Thus, the runway for growth is quite large, giving CHGG stock compelling long term upside potential. * 7 Stocks Worth Buying When They're Down The 2019 Bull Thesis: Chegg stock just dropped big on disappointing first-quarter numbers. But those numbers will get better as the year progresses. It's tough for me to believe that the recent college cheating scandal won't create a huge boost for Chegg's business come test prep time in the back half of 2019, as parents start spending more on college test prep amid what will likely become a more intense and rigorous college admissions process. Consequently, I expect to see Chegg's numbers get a lot better as the year progresses, and this improvement should get CHGG stock back on a medium to long-term uptrend. Weibo (WB)Source: Shutterstock The Long-Term Bull Thesis: The long-term bull thesis on Weibo (NASDAQ:WB) is pretty straight forward. Weibo is China's Twitter (NYSE:TWTR). But, Weibo has more users than Twitter, and operates at higher margins than Twitter. The only thing the company doesn't do as well is monetize each individual user, and that's likely a function of maturity (Twitter is three years older than Weibo). Eventually, Weibo will monetize each user at Twitter-like levels, meaning the company will have more users, more revenue, and more profits. Naturally, that should mean a bigger market cap, too. But, Weibo currently has a market cap about half the size of Twitter. Thus, long term upside potential is compelling.The 2019 Bull Thesis: The 2019 bull thesis in Weibo stock is likewise straightforward. Nothing Weibo did in 2018 warranted the huge selloff in WB stock. The numbers broadly remained very healthy. The only things that did happen were China's economy slowed meaningfully, trade tensions escalated, and the dollar strengthened. In 2019, China's economy is improving, trade tensions have eased, and the dollar has weakened. Thus, 2018 headwinds have turned in 2019 tailwinds. Ultimately, that should spark a big rally in WB stock into the end of the year. Square (SQ)Source: Via SquareThe Long-Term Bull Thesis: We are moving from a world of cash transactions, to a world of cashless transactions, and through facilitating various brick-and-mortar and e-commerce cashless transactions, Square (NYSE:SQ) is at the heart of this pivot. The company's gross payment volume as percent of global retail sales remains tiny. They are gaining traction among larger sellers. Growth rates remain robust. Margins are marching higher. The ecosystem is expanding with things like Cash App, Online Store, and Invoices. Overall, then, all signs here indicate that Square will continue to become a bigger and bigger player in the global retail scene over the next several years. As that happens, SQ stock will head higher. * 7 Marijuana Stocks That Are Bleeding Cash The 2019 Bull Thesis: SQ stock looks like a strong "buy the dip" candidate for the back half of 2019. This stock was crushed recently on weaker-than-expected Q1 numbers. But the numbers weren't that bad, and they should improve through the balance of 2019 as the global economy stabilizes and new e-commerce initiatives provide a healthy tailwind to growth. As such, things will get better for Square over the next few months, and as they do, SQ stock will rebound in a big way. iRobot (IRBT)Source: Shutterstock The Long-Term Bull Thesis: When it comes to iRobot (NASDAQ:IRBT), the long-term bull thesis hinges on the idea that the automation wave will ultimately sweep across the entire consumer household products space. iRobot started by selling robotic vacuum cleaners. Then, they got into robotic pool cleaners and mops. Now, they are getting into robotic lawnmowers. Next, they'll dive into robotic car cleaners, window cleaners, so on and so forth. In other words, this company expands its addressable market almost every year by introducing a new consumer robotics product. This trend will persist for the next several years as consumer robotics become the household norm. Ultimately, then, iRobot will benefit from huge revenue and profit growth in a long term window.The 2019 Bull Thesis: The reason to buy IRBT stock for the rest of 2019 is because this stock is due for a major bounce-back. IRBT stock was killed in late April on poor Q1 numbers. But, poor Q1 numbers are an anomaly, not the trend. Over the next several quarters, new product launches -- including the robotic lawnmower -- will drive improved results at iRobot, and that improvement will power a huge recovery rally in IRBT stock. Growth Stocks to Buy: Canopy Growth (CGC)Source: Shutterstock The Long-Term Bull Thesis: The growth potential in the cannabis space is enormous. At scale, the cannabis market will be as large, if not larger than, the global alcoholic beverage and tobacco markets. Both of those markets measure well above $500 billion, and they've each spawned multiple $100 billion-plus companies. Who will be the $100-billion plus giant in the cannabis space? Canopy Growth (NYSE:CGC). For three reasons. One, the company is already the leader in the legal Canada market by a mile. Two, they have $4 billion on the balance sheet which they are using strategically and aggressively to extend global dominance. Three, they are positioned to dominate the U.S. market, too, with the recent acquisition of Acreage. * Why I Regret Buying Cronos Group Stock The 2019 Bull Thesis: CGC stock should breakout into the end of the year for two big reasons. One, U.S. legislation is increasingly moving towards nationwide legalization of cannabis. As we inch closer to that landmark legislation, CGC stock will creep higher, given its Acreage acquisition. Two, the Canadian cannabis market is finally starting to stabilize after early volatility amid supply shortages. With those shortages in the rear-view mirror, the market should grow steadily, Canopy's numbers should improve meaningfully, and CGC stock should rise.As of this writing, Luke Lango was long FB, CHGG, WB, SQ, IRBT, and CGC. Compare Brokers The post 6 Growth Stocks to Buy for the Rest of 2019 appeared first on InvestorPlace.
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