|Bid||N/A x N/A|
|Ask||N/A x N/A|
|Day's Range||6.03 - 6.53|
|52 Week Range||0.95 - 42.77|
|Beta (5Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||40.00|
Although Clover Health (NASDAQ:CLOV) has great potential, allegations against the company by a research firm make CLOV stock too risky to buy or hold at this point. Source: Shutterstock The allegations were made by Hindenburg Research in early February. Hindenburg has shorted stocks that it issued reports about it in the past. When it issued the report on Clover, however, it claimed that it was not shorting the company’s shares. Hindenburg alleged that Clover is under active investigation by the Department of Justice. The agency, which has issued a request for information to the company, is probing at least 12 issues ranging from kickbacks to marketing practices to undisclosed third-party deals according to Hindenburg, citing documents that it had seen.InvestorPlace - Stock Market News, Stock Advice & Trading Tips 8 Stocks to Buy for March The firm stated that an “independent” Clover subsidiary offers seniors advice in selecting Medicare plans. Citing former Clover employees, Hindenburg also alleged that much of Clover’s revenue is fueled by a brokerage firm controlled by Clover’s Head of Sales, Hiram Bermudez. Finally, according to Hindenburg, former employees charged that “Clover’s software is primarily a tool” to help the company obtain more money from Medicare using irrelevant diagnoses. In past columns about Luckin Coffee (OTC:LKNCY), I’ve noted that a number of companies that committed improprieties had managed to stay in business and do relatively well. In general, I do believe that the government will likely not seek to bankrupt companies unless their entire business is fraudulent or they are materially harming citizens’ health and/or their welfare. However, I do believe that regulators could look to severely punish and even bankrupt a company whose business model is based, partly or completely, on defrauding the government. Further, Hindenburg does appear to be alleging that Clover may be materially hurting some senior citizens. Hindenburg’s Credibility and CLOV Stock In the past few months, I’ve examined several reports or summaries of reports by Hindenburg. Although I think that sometimes the firm exaggerates the importance of its findings, especially in the case of Nikola (NASDAQ:NKLA), its statements do appear to generally be accurate. After reviewing Clover’s lengthy response to Hindenburg’s report, I believe that the company did not dispute the most important allegations against it by the firm. Specifically, Clover appears to have tacitly admitted and/or failed to dispute that it was being investigated by the Department of Justice and that its subsidiary claims to be independent but refers business to Clover. Further, Clover did not directly dispute Hindenburg’s allegations about the percentage of its revenue that is allegedly “fueled” by the brokerage company partly owned by its head of sales. Clover admitted that its executive has a 50% stake in the brokerage firm. Finally, on the crucial issue of whether Clover’s software helps the company obtain more money, Clover does not directly dispute the charge. Instead, it focuses on the idea that doctors can choose to disagree with the diagnoses produced by Clover’s software and will not be directly penalized by the company for doing so. However, I can think of two possible reasons why doctors may not want to disagree very much with the diagnoses produced by the software. First, if the software does tend to make suggestions that raise Medicare payments, the doctors themselves will likely make more money if they agree with those suggestions. Secondly, Clover admits that it pays personal care physicians (PCPs) $200 per visit when they use its software. “[T]his translates to roughly twice the traditional Medicare fees paid to PCPs for an office visit, more in line with fees paid to specialists,” according to Clover’s response. I believe that PCPs could worry that they will lose the lucrative $200 payments if they disagree with Clover’s software too often. Clover Has Tremendous Potential Seeking Alpha columnist Jhon Idrovo reported that Clover’s software has been able to, on average, lower seniors’ out-of-pocket costs while giving “the substantial majority of its members” more “freedom of choice” than its competitors. Finally, the columnist noted that the company’s membership has climbed at a compound annual growth rate of 27% since 2017, while enrollment in Medicare Advantage overall is continuing to increase quite rapidly. Given these points, Clover’s top and bottom lines could indeed jump tremendously in coming years, making CLOV stock a big winner for long-term investors. The Bottom Line on CLOV Stock Hindenburg’s allegations against Clover seem to have some credibility. Further, I agree with the firm’s assessment that, because of its dependence on Medicare, the insurer could face an existential risk if the government determines that it has engaged in extensive, material wrongdoing. After all, the government could fairly easily eject Clover from the Medicare Advantage program, potentially dealing the company an existential blow in the process. On the date of publication, Larry Ramer held a long position in Luckin Coffee. Larry has conducted research and written articles on U.S. stocks for 14 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Among his highly successful contrarian picks have been solar stocks, Roku, and Snap. You can reach him on StockTwits at @larryramer. Larry began writing columns for InvestorPlace in 2015. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Play to Profit from Biden's Presidency The post The Allegations Against Clover Make CLOV Stock Too Risky Right Here appeared first on InvestorPlace.
Starbucks shares closed down for five straight sessions last week, but edged up 0.8% on Monday, keeping them in range of their record close.
A slightly disappointing jobs report didn’t stop stocks from rallying to new highs on Friday. Now, let’s look at a few top stock trades for next week. Top Stock Trades for Monday No. 1: Ford (F) Click to EnlargeSource: Chart courtesy of TrendSpider Ford (NYSE:F) is moving slightly higher after earnings, but it’s had a choppy few weeks now. The weekly ranges have tightened, giving us a series of levels to work against.InvestorPlace - Stock Market News, Stock Advice & Trading Tips On the downside, we need to see the $10.45 area hold. A move below that will put the 10-week moving average in play, followed by the $9.40 to $9.50 area. There it will find the Q1 2020 high along with the 200-week moving average. On the upside, though, look for a move over the $11.50 zone, followed by this week’s high at $11.90. On a weekly-up move, look for the 52-week high to be tested at $12.15, then the 161.8% extension near $12.80. 8 Biometric Stocks to Consider as We Eye a Return to Normal That’s a lot of numbers and prices. The bottom line: watch how Ford handles key levels. As they break (on either the upside or the downside), just turn your attention to the next. Top Stock Trades for Monday No. 2: Clorox (CLX) Click to EnlargeSource: Chart courtesy of TrendSpider Clorox (NYSE:CLX) has been so strange lately. I was ready when the stock gave use a monthly-up rotation on Jan. 25. However, I was not expecting it to rally almost 11% at its session high, nor climb 17.6% in six trading sessions. That’s not what we expect out of a company like Clorox. Now the stock has cascaded down from those highs and the post-earnings reaction isn’t giving it a lift either. We need to see it hold the $193 area, which it’s failing to do at the moment. What now? Simple. Wait for CLX stock to reclaim $193. With any luck, it will do so soon and we’ll have a shallow downside level to measure against. A close below $190 and perhaps CLX stock will need to decline further before firming. Top Stock Trades for Monday No. 3: Regeneron (REGN) Click to EnlargeSource: Chart courtesy of TrendSpider Regeneron (NASDAQ:REGN) has been all over the place too. After a false breakdown in December below $471.50, share ripped higher. The stock climbed in 11 of 12 sessions, eclipsing $550 in the process. However, the stock then fell in six of the next seven sessions, breaking below $500. It’s been a mess. Regeneron reported earnings this morning, popping higher in the process. But shares were rejected by several key moving averages while failing to hold the 50-day moving average in the process. If REGN stock can take out its post-earnings high near $515, then a move back to the $535 to $540 area is possible. There it finds the 100-day moving average and downtrend resistance. Above puts the recent high in play at $558.91. 7 SaaS Stocks to Buy Today for the Smartphone Generation On the downside, however, a break of this week’s low near $490 puts the $471.50 area back on watch. Top Stock Trades for Monday No. 4: Luckin Coffee (LKNCY) Click to EnlargeSource: Chart courtesy of TrendSpider This one still trades? You bet! But Luckin Coffee (OTCMKTS:LKNCY) hasn’t been the same since its fraud charges last year. Rather than trading this one, I wanted to highlight Luckin as a learning opportunity. It’s a lesson to avoid the names that don’t have any business being traded. Sure, the stock went from $5 in December and hit $15 last month. But once it’s trading over-the-counter, all bets are off for most traders , be it for liquidity, quality, etc. This name has been in the garbage can for almost a year now and Friday’s 46% haircut underscores why, as Luckin files for Chapter 15 bankruptcy. There are hundreds of quality stocks to trade at any given time. Pick from one of the higher-quality ones. Remember, as traders, risk is always our top concern. And don’t let FOMO creep up on you, as there’s always another trade! On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in any of the securities mentioned in this article. Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell. More From InvestorPlace Why Everyone Is Investing in 5G All WRONG Top Stock Picker Reveals His Next Potential Winner It doesn’t matter if you have $500 in savings or $5 million. Do this now. #1 Stock for the Green Energy Boom The post 4 Top Stock Trades for Monday: F, CLX, REGN, LKNCY appeared first on InvestorPlace.