Every day we round up that stocks – good, bad, ugly, and everything in between – that are trending. This doesn’t have to be good news; in fact, as we’ll see in Wednesday’s trending stocks, sometimes stocks trend because investors drop them like hot potatoes in an Arizona heatwave.
Nevertheless, these are the stocks currently lighting up Wall Street.
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Ampco-Pittsburgh Corporation (AP)
Ampco-Pittsburgh closed down over 4% on Tuesday to $6.29 per share, continuing a weeklong downward trend after their Q1 2021 results posted $4 million less in net income YOY, with operating income down to $0.9 million against $4.4 million YOY. Still, despite this setback, the specialty steel manufacturer is trading up over 14.7% YTD, and their internal projections suggest a return to business as usual as soon as 2022.
Although the company is optimistic about their future, our AI is currently less so, as Ampco-Pittsburgh rates A in Quality Value, D in Low Volatility Momentum, and F’s in Technicals and Growth.
This poor grading can be attributed largely to the steel manufacturer’s most recent annual fiscal performance, with revenue down to $328 million compared to $419 million three years ago.
Furthermore, their operating income halved in that time frame, from almost $11 million to $5.5 million, while EPS plummeted to $0.54 from $5.57 in per-share earnings three years ago. At the same time, ROE dropped significantly from 34% to 13%.
With an abysmal year behind them and only future hope to cling to – given the uncertain future in light of the pandemic’s global waxing and waning – Ampco-Pittsburgh may be a buy…this time next year.
Electronic Arts (EA)
Electronic Arts, the brand famous for its sports games including FIFA 21 and Madden NFL 21, noted an enormous drop in fourth-quarter net income from $418 million in the year-ago period to $76 million, with revenue declining from $1.39 to $1.35 billion.
However, the company promoted an optimistic outlook going forward, with EA’s chief executive noting in a statement, “We delivered a record year…. We’re now accelerating in FY22, powered by expansion of our blockbuster franchises to more platforms and geographies, a deep pipeline of new content, and recent acquisitions that will be catalysts for further growth.”
Our AI shares some of the chief executive’s optimism, though slightly more cautiously, with the company receiving A’s in Quality Value and Technicals, C in Low Volatility Momentum, and F in Growth. While their most recent quarter is fairly humdrum, the company’s revenue has grown over 13.7% in the last three fiscal years, from $4.95 billion to $5.63 billion, with operating income rising to $1.05 billion.
However, their EPS has fallen in the same period from $3.33 to $2.87, with ROE nearly halved from 20.5% to just under 11%.
Still, Electronic Arts is trading with a forward 12-month P/E of 22x earnings, and their stock price has nearly broached their five-year high twice this year, leaving EA as one to watch in the coming weeks.
NIKE, Inc (NKE)
Nike’s stock is trending today primarily thanks to Jefferies upgrading the stock from Hold to Buy and increasing the price target by over $50 per share. While investors are split on whether this was the right call, our AI notes that Nike falls squarely into average territory, with C’s across the board in Technicals, Growth, Low Volatility Momentum, and Quality Value.
The company’s balance sheet supports the potential for more growth, as the last year has seen significant improvements overall. Revenue grew by almost 3%; small potatoes on paper, but still a decent $1bn increase from $36.4 billion to over $37.4 billion. This brought EPS up 33.7% in the last year to $1.60, with three-year per-share earnings up almost 83%.
Additionally, operating income expanded almost 41% to $3.1 billion, though this is down from nearly $4.45 billion three years ago. That said, Nike is projected to grow in the next year, with 12-month estimates sitting around 10.4%. And with a forward 12-month P/E of nearly 37x, Nike could well be overvalued – or about to make an unprecedented break for the $200 line.
The Western Union Company (WU)
When you think money wires via Western Union, it’s unlikely that you think Google Pay
Despite this (presumably) good news, Western Union still closed down over 1% Tuesday to $25.50 per share, with nearly 5 million trades in the bank and prices slipping just below the 22-day average of $25.80. Currently, Western Union is up 16.2% YTD.
While Western Union is a massive, multi-national financial services and communications company, its global status didn’t help its bottom line in the last year. Revenue only grew by 0.4% to $4.8 billion, down significantly from $5.59 billion three years ago, with forward 12-month projections sitting just over 1% growth.
The company’s operating income shrank from $1.1 billion three years ago to $992 million in the last year, with per-share earnings falling from $1.87 to $1.79 in the same time frame. Currently, the company is trading with a forward 12-month P/E of 11.56.
All that said, our AI still sees good things in store for Western Union in the months to come, with ratings of A in Technicals, B in Low Volatility Momentum and Quality Value, and C in Growth.
Crocs, Inc (CROX)
If you’re like much of the world, you forgot about Crocs
Namely, what the hey?
Crocs had a banner year after the onset of the pandemic, with the company regaining its losses in about six months – and then, somewhat inexplicably, over doubling their five-year, pre-pandemic high. And while the company ticked down 0.06% on Tuesday to $104.17 per share, with 1.4 million trades on the books, this is still $13 higher than the 22-day price average of $91 and change. Overall, Crocs is up 66% YTD.
So…what the hey?
Quite simply, Croc shoes – while often unfashionable – are the epitome of comfort. And when stay-at-home orders set in around the world, the brand found themselves soaring in demand. At the same time, their less hole-filled shoes have been a comfortable staple of healthcare workers for years – and with nurses, doctors, and orderlies working more hours in more uncomfortable situations over the last year, Crocs donated 10,000 pairs of shoes per day to healthcare professionals at the start of the pandemic.
All that to say, the shoe company made famous for their amusing tan lines (tan dots?) experienced a banner 2020, with revenue up nearly 13% to $1.4 billion, operating income growing by over 41.6% to $249 million, and EPS ballooning 29% to $4.56 in the last fiscal year. And with a forward 12-month P/E of 16.8 and sky-high ROE of 148% trailing, our AI has fit Crocs with rating of A in Growth and Quality Value and C’s in Technicals and Low Volatility Momentum.
Long live the Croc.
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