Bret Kenwell, Author at Elite Stock Chat

LUNR – SpaceX Rumors Are Lifting Intuitive Machines (LUNR) Stock to the Moon

Written by Bret Kenwell on February 24, 2023. Posted in LUNR, Stock Report.

Shares of Intuitive Machines (NASDAQ:LUNR) are well off the session highs, but they are up about 25% on the day. At one point in the session, LUNR stock was up by more than 90% as volatility persists in this name.

Today hasn’t been the only day of volatility for the stock. Shares rallied by more than 115% on Wednesday and then fell 75% on Thursday. A week ago, on Feb. 16, shares ended the day higher by more than 250%.

By comparison, that action almost makes Friday look calm!

In any regard, what has LUNR stock moving on Friday? It’s not just the market-wide volatility following a hotter-than-expected inflation report. Instead, it’s due to rumors regarding Elon Musk’s SpaceX.

According to reports, it appears that SpaceX and Intuitive Machines will be working together in some capacity.

Much of that speculation is being driven by Intuitive Machine’s tweet, which read: “We knew @ElonMusk was taking #Dogecoin to the Moon, but had no idea it would be on our flight.”

Is There More Potential With LUNR Stock?

LUNR stock was a special purpose acquisition company (SPAC) holding, which was a big trend on Wall Street that led to the height of the bull market. The stock recently made its debut on the Nasdaq and apparently with good timing.

The company — Intuitive Machines — previously traded under the ticker symbol “IPAX” but has since moved to LUNR.

In any regard, the company “is the most NASA-awarded commercial lunar program. The company has three missions that will deliver NASA and commercial payloads into orbit and on the surface of the Moon.”

Further, “Intuitive Machines is an end-to-end space exploration company delivering lunar access, lunar data services, extreme lunar mobility, and more.”

It’s not exactly clear what’s at stake here. However, it’s clear there is a lot of hope among investors. And let’s not forget, this is a stock with a sub-$350 million market capitalization. While that’s a big company to most people, it’s small potatoes in the world of public equities.

So when news like this starts to fly around, so too does the stock price. That’s exactly what we’re seeing in LUNR stock lately.

For those taking a flier on this name, keep a close eye on the headlines. Any positive talk or confirmation on a deal with SpaceX will likely send Intuitive Machines higher.

On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

JWN – Nordstrom Stock: Ryan Cohen Just Created the Newest Meme Stock

Written by Bret Kenwell on February 3, 2023. Posted in JWN, Stock Report.

Nordstrom (NYSE:JWN) is turning a few heads on Friday, with shares up more than 20% so far on the day. Even though shares are soaring on Friday — and are now up close to 40% on the week — Nordstrom stock seems to be flying under the radar.

That’s as investors digest earnings reports from Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG). Together, the trio accounts for more than $4.8 trillion worth of combined market capitalizations.

Combine that with the hotter-than-expected jobs report, and there isn’t much room for other main talking points for the day.

So even as Nordstrom stock scorches higher, investors seem to be missing the market with the retailer. The rally comes as Ryan Cohen reportedly has taken a large stake in the retailer. In fact, he is now a top five non-family shareholder in the firm and wants to use his position to shake up the board.

If Cohen’s name rings a bell but you can’t remember why, it’s from his role in the so-called “meme stocks.” Cohen is the chairman of GameStop (NYSE:GME) and had a large position in Bed Bath & Beyond (NASDAQ:BBBY) before exiting on one of the stock’s large rallies. He was also one of the founders of Chewy (NYSE:CHWY).

Cohen has the ability to move a stock price once word gets out that he’s involved. We’re obviously seeing that response today in Nordstrom stock.

What Does Cohen Want With Nordstrom Stock?

Along with a potential shakeup of the board, Cohen is seeking cost cuts at the firm. Specifically, Cohen is reportedly taking aim at board member Mark Tritton. Tritton was the previous CEO of Bed Bath & Beyond. In addition to working on the board, he also serves as chairman of Nordstrom’s compensation committee.

In response, the company had this to say on the matter:

“While Mr. Cohen hasn’t sought any discussions with us in several years, we are open to hearing his views, as we do with all Nordstrom shareholders … We will continue to take actions that we believe are in the best interests of the company and our shareholders.

Nordstrom is scheduled to report earnings on March 2, but the recent news hasn’t been great. On Jan. 19, the retailer reported weak holiday sales and slashed its outlook. While Nordstrom stock was down more than 6% at one point on the following day, shares ended up closing slightly higher in that session.

From the lows on Jan. 20 to today’s high, the stock has rallied more than 65%. Further, it has rallied in nine of the last 11 trading sessions, with one of the “down days” being a drop of 0.05%.

We’re getting to an interesting point in the stock market as speculation comes raging back into sight. That’s not to say Nordstrom stock will necessarily be next, but the recent move has definitely raised a few eyebrows.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

GS – Housing Market Alert: Why So Many Americans Are Now Rent-Burdened

Written by Bret Kenwell on January 27, 2023. Posted in GS, Stock Report.

A paper cutout of a house is attached to a tag reading

Source: Pixelbliss / Shutterstock.com

The housing market remains front and center. Is it because of the housing boom during Covid-19 and that now seemingly everyone is looking for the “bust” part of that equation? Or is it because so many Americans have become rent-burdened by increasing costs and higher inflation?

While investors don’t like to talk about it, there’s another element in play: 2008.

Like it or not, the scars from the Great Recession and implosion from the housing market have left investors and homeowners forever worried about the state of the real estate market.

Prior to 2008, real estate had been one of the steadier assets out there. Regardless of what else was going on, the housing market was generally stable. But not in 2008. That’s as worries over a banking crisis began to grow and as the economy entered a prolonged recession.

We’re not in the same boat now, but there are definitely concerns.

A recent report from Goldman Sachs (NYSE:GS) made the bearish case for the housing market. More specifically, though, it laid out which cities are most at risk of a housing bust.

Ultra-low interest rates, flush liquidity and a boom in remote work helped fueled housing prices to new highs. As the economy enters a softer stretch — and as interest rates continue to climb — there are concerns about the housing market going forward.

Will a Fall in the Housing Market Help Rent-Burdened Consumers?

One big aspect to the rise in the housing market has been the implication for renters. Put simply, rent prices have been rising rapidly as well. That has left many consumers trapped, as rising costs have squeezed them into a tough spot.

Along with climbing prices for groceries, transportation and other expenses, rent is on the rise, too. The numbers back this up.

In 1999, Moody’s began tracking the percent of household income that goes toward rent — the rent-to-income ratio. For the first time ever, that figure has crossed 30%. It did so in 2022, which was up from 28.5% in 2021 and 25.7% in 2020.

That alone concludes we have rent-burdened consumers in the United States, as this figure has steadily risen over the years. Martha Galvez, the Executive Director of the Housing Solutions Lab at New York University’s Furman Center, had the following to say about this situation, per The Seattle Times:

“We’ve been moving in this direction for decades […] Since the ’70s, rents have been rising faster than incomes. And among lower-income households, high rent burdens have been the norm for a long time.”

Further, not all consumers are hit the same. That is to say, some are more rent-burdened than others. For instance, the rent-to-income ratio in New York was 68.5% last year. Miami and Fort Lauderdale had the second- and third-highest ratios, at 41.6% and 36.7%, respectively. In Los Angeles, the ratio came to 35.6%.

Some are hoping that a decline in real estate prices and the housing market will help alleviate some of the rent pressure. While a softening economy should help, rent has been proven to be stickier than other consumer costs. That said, it has also come down in recent months.

On the date of publication, Bret Kenwell did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

AMD – Stay Long AMD Stock Into Earnings Regardless of the Results

Written by Bret Kenwell on July 26, 2021. Posted in AMD, Stock Report.

Advanced Micro Devices (NASDAQ:AMD) will report earnings after the close on Tuesday July 27. AMD stock hasn’t been the worst performer out there, but it has been suspiciously quiet for about a year now.

It Might Be Time to Take Profits as AMD Stock Takes a Breather

Source: flowgraph / Shutterstock.com

While frustrating, that type of consolidation is incredibly healthy in my view. It gives the stock time to rest and a chance for it to build up some power to push higher. Of course, it’s even more frustrating when the overall markets continue to grind out all-time high after all-time high. Unfortunately, that also creates risk. Because an eventual correction in the broader market could unfairly hit AMD stock.

Regardless, this company is set to report earnings soon. I’m long and staying long and nothing this quarter will change that.

Why I’m Staying Long AMD Stock

The simple answer is usually the best answer and that is, I’m staying long AMD because it continues to generate impressive growth.

Analysts expect substantial growth in both earnings and revenue. The year ago revenue and earnings per share were $1.93 billion and 18 cents respectively, and the average estimates for the upcoming report are $3.62 billion and 54 cents respectively. For the naysayers: no, that’s not just a post-Covid rebound.

AMD did robust business throughout 2020, continually blowing away consensus expectations. For 2020, estimates called for about $7 billion in revenue and 60 cents in EPS. AMD delivered over $2 per share in earnings on $9.76 billion in revenue.

Estimates for 2021 have exploded higher over the last 12 months. This is something I have been writing about for a while now, continually pointing out how conservative the analysts have been. The same goes for Nvidia (NASDAQ:NVDA) too.

For what it’s worth, I am long NVDA stock as well. Like AMD, that thesis is simple too — it continues to generate above-average growth. Nvidia is building the backbone to various technologies and while it’s playing a larger role in that regard than AMD, both are helping to build our technological future, which is why I like both of them for the long term.

The focus doesn’t come down to any one quarter or earnings report. With a long-term view, investors understand there will be bumps in the road. Eventually those “conservative” analyst forecasts will likely become “aggressive” forecasts and these companies will disappoint. Perhaps that quarter is even among us in a few days. But the long-term demand for AMD’s products isn’t over and that’s why I remain bullish on this company.

Digging Deeper

AMD’s turnaround has been spectacular. Once left for dead and trading for sub-$2 in February 2016, it’s hard to imagine the run AMD has been on. Unlike many other companies with explosive revenue growth, AMD’s management has had the discipline to turn those dollars into bottom-line improvements.

AMD has become profitable, cash flow positive and lowered its debt load. More assets and fewer liabilities are a great combination for Wall Street.

Now the company is likely set to acquire Xilinx (NASDAQ:XLNX) for $35 billion. For that much money, one could argue that AMD could have acquired something a bit more exciting with more growth.

Honestly, I agree with that. But Nvidia could have acquired something more exciting than Arm, too. With these acquisitions, it’s not always about “exciting.” Instead, it’s about adding depth to the financial roster.

Look at Nvidia’s acquisition of Mellanox, a quiet company that had steady growth, earnings and cash flow with a low valuation. Nvidia scooped it up, tucked it into its current operations and instantly expanded its profitability.

AMD’s hoping to do the same thing with Xilinx — although Xilinx’s valuation is a bit higher and AMD is using stock to finance the deal. Admittedly, that can create some headaches when it comes to AMD’s stock price, but it should be better off in the long haul with Xilinx rather than without it.

Trading Advanced Micro Devices

In early July 2020, AMD stock exploded higher. That’s as the company was dominating against Intel (NASDAQ:INTC) and as the latter faced a large delay in one of its chips. However, AMD has been relatively range-bound since.

Stuck between $74 and $87, the stock has had trouble getting out of this range. When it has, $95 has served as resistance.

Last week, AMD gave bulls a bullish engulfing candle by opening below the prior week’s range and closing above it. That’s positive, although earnings will be the main driver of the stock’s price action in the short term.

On a bullish post-earnings reaction, I’d love to see a push up through $95. Above $95 puts the all-time high of $99.23 in play, along with $100. Above $100 opens the door to 161.8% extension around $115.

On a bearish post-earnings reaction, I want to see AMD stock hold the $87 to $89 area. Below that puts the 50-week and 21-week moving averages back in play. Below that and $80 or lower could be on the table.

On the date of publication, Bret Kenwell held a long position in AMD and NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Bret Kenwell is the manager and author of Future Blue Chips and is on Twitter @BretKenwell.

Author: Bret Kenwell