Morning Brief

The market was down slightly yesterday but still closed out the month with a bang — best August on record since 1984. Zoom was one of the obvious highlights yesterday. The video conferencing app you love to hate quadrupled revenue from this time last year. Zoom’s revenue was $663.5 million compared to the analyst number of $500.5 million. That’s a quality beat after the company got a little scare on the security side at the start of the pandemic. SensorTower noted the company averages 148.4 million monthly users, which is up 4,700% since this time last year.

The downers yesterday were bank stocks. ChaseCitigroupBAC, and Wells Fargo were all down more than 2%.

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In other news, the SPAC frenzy continues on Wall Street, and this time its Utz Quality Foods. Yes, Collier Creek Holdings and the Pennsylvania potato chip-snack-maker inked a deal on Monday. Under the surprising ticker “UTZ,” the company will try to take its lockdown momentum to the big stage.  Second-quarter sales and adjusted operating profits rose 11% and 15%, respectively, from the prior year. For the year, Utz expects an 8% growth to $932 million in sales. Going public will likely make this largely Northeast brand into more of a nationwide name…It has a growing collection of snacks plus licensing deals with TGI Friday’s and Herdez. Already, by revenue, Utz is the fourth-largest snack food company in the U.S., and the incoming influx of cash will give them the runway they need to expand.

Ok, putting down my bag of cheese puffs now. Another area where I am taking a gander is the housing market. Demographic trends are showing a strong market as home-buyer interest and low interest rates combine for a market that is on fire. Don’t take my word for it, just look at some of these statistics:

  • The U.S. homeownership rate hit 67.9% in the second quarter of 2020, the highest level since the third quarter of 2008, up from last year’s 64.1%
  • The ownership rate among those under 35 rose to 40.6%, which is the biggest percentage gain by age group quarter to quarter, while the rate for those 35 to 44 also rose significantly.
  • This past week, the U.S. Census Bureau reported that new-home sales surged 13.9% on a month-to-month basis in July to a seasonally adjusted annual rate of 901,000, a 14-year high. Economists had been expecting sales to fall to 782,000 from 791,000 in June.

After looking at these numbers, we added Toll Brothers (TOL)Meritage Home Corporation (MTH)PulteGroup Inc. (PHM), and Lennar Corporation (LEN) to our watchlist.

Below you can find some of the most notable stocks to watch today.

Taylor Morrison Home Corporation (TMHC) – Last Close:  $23.53
This might be the apple-of-our-eye when it comes to homebuilders. TMHC has both near-term and long-term appeal, and its homes are appealing to millennials. The market has caught onto this one – it had an even higher discount a month ago – but this one has rallied $10 since May 1st.
Hennessy Capital Acquisition Corp. (HCAC)- Last Close:  $10.79
We are riding the SPAC wave and HCAC is merging with Canoo Holdings, a last mile delivery specialist with an interesting fleet. This “skateboard model” EV has interesting business model that allows for leasing, which could lead to more rapid adoption.

Workhorse Group Inc. (WKHS)- Last Close: $18.11
Another EV stock that did not interest us too much until yesterday. The all-electric van maker closed a deal with Hitachi America on Monday. Its a very interesting deal, in my opinion. It ramps up production for this niche small cap. Bottom line, the Japanese industrial conglomerate doing business with WKHS is a big vote of confidence.
TherapeuticsMD Inc. (TXMD) – Last Close: $1.46
This is a biotech play leveraging the $50B addressable market of women’s health. TXMD has a portfolio that covers a range of therapies and pre-natal vitamins. The company slowed down during the pandemic, but its ANNOVERA birth control ring could see enormous growth in the future, but like all biotechs, make sure to buckle your seat belt.
That’s it for today. Thanks for reading. Good luck out there!

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