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Let's dive into the Gamestop squeeze -what happened and why? Is the market turning the corner from the hard-times we've experienced recently? With Swaggy's Top Stonks we stop at nothing to get you the latest trends and analytics.
Today's Letter
Is Gamestop back?
Sentiment Report
Earnings SZN Winners
The Crypto Scene
Meme Stocks
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Market Update
After hitting a new yearly low, GME rocketed up roughly 60% this week. So what exactly happened? I dug through the best of Reddit, yes Reddit, to find out what may have caused the short-squeeze in Gamestop as well as some "weed stock" names to follow suit *cough* TLRY & SNDL *cough*.
Reddit traders receive a lot of heat (and abuse from mainstream media) when it comes to their stock-picking abilities. However, they are some of the world's best stock market sleuth's and will be the first to report on many different trends or SEC findings. A lot of this stuff is "out there" and not always reliable. Remember, these guys usually use out-dated sources of data and do not have access to a Bloomberg terminal, so take everything with a handful of grains of salt.
Here's what I found.
First and foremost it seems the man Ryan Cohen himself has been making his own purchases of shares.
2. Borrow fee rate, according to this post, has sky-rocketed making it harder to find shares and more expensive to short.
3. Other directors of the company have recently made significant share purchases.
So what's next for GME? Let's take a look at the SwaggyStocks sentiment chart for the ticker over the last year.
This spike in mentions is the 2nd highest volume over the last 12 months while the share price has been obliterated. Even after this 100% move to the upside over the last 2 weeks the share price is still down almost 60% from recent highs and 40% from one year ago.
Still room to run? Maybe... but large spikes in social volume have usually lead to a "cooling off" period where the stock tanks for some time. Let's see where this ends up.
During my highly sophisticated Reddit research I also came across this post, that I thought was an interesting read and some food for thought. Remember what I said about taking anything you read from Reddit with a grain of salt.
Sentiment Report
In today's sentiment report I want to highlight three names that have recently received great scores in terms of SwaggyStocks earnings sentiment and whose charts also seem to be aligned with a favorable risk/reward. The 3 names are: Adobe (ADBE), DLocal Limited (DLO), and SentinelOne (S).
Why did I choose these 3 names? I headed over to the SwaggyStocks Earnings Sentiment page and noticed that ADBE, DLO, and S had some of the highest earnings sentiment scores from the last 30 days (98%, 83%, and 99%, respectively).
Disclosure: I currently own shares of ADBE, and may look to enter a long position on S and DLO in the next 72 hours.
Here are their earnings sentiment vs share price chart (all very similar).
Some Thoughts To Ponder
One thing I noticed over the last 6 months and this market-downturn is that there were many names that still showed a great performance and continued to report solid numbers on both top and bottom line.
It is well known at this point that the main reasons for this contraction in valuations across the board have been to the increasing risk of (continued) inflation and the raising of rates, which is now underway.
Most tech and growth names, although still trading at a relatively rich valuation...
ADBE: P/E of 40x, and Price/Sales of 12x
S: Price/Sales of 50x
DLO: P/E of 120x, and Price/Sales of 35x
... are also trading at a huge discount relative to 6 or 12 months ago. At some point many growth names, now down between 40-80%, will provide strong compounding returns over the next several years.
GRIT is going big or going home on the 20% of our “high-risk” portfolio where we know these investments could go to zero…or 10x! Subscribe to our new CRYPTO NEWSLETTER to follow us along this journey and see what we’re buying, why we’re buying it, what we’re paying, and what else is on our radar!
The Crypto Scene
SHIB and DOGE have made it back into the top 7 of crypto coins ranked by social volume. With the crypto market finally starting to stabilize, keep an eye on the performance of the main stores of value (BTC and ETH), and the meme-coins as well.
Meme Stocks
This week was all about GameStop and the short-squeeze names. Weed-stocks also saw some action with TLRY joining the pump. Another weed stock, Sundial Growers (SNDL), was trending on the top penny-stocks list.
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