In this article, we take a look at five stocks that are trending today. If you want to take a look at some more stocks that are making headlines on Wednesday and the latest market situation, go to 10 Stocks Making Headlines Today.
5. JPMorgan Chase & Co. (NYSE:JPM) has lost 2.66% of its value as of 12:52 PM ET after the bank’s CEO Jamie Dimon asked investors to brace themselves for an economic hurricane. The CEO made these comments during an investment conference in New York on Wednesday. While speaking to analysts and investors, Dimon highlighted that inflation might not be easing anytime soon as the Ukraine war continues to impact the commodity prices. He anticipates crude oil prices to hit $150 to $175 per barrel. Furthermore, the Federal Reserve has also decided to reverse its emergency bond-buying initiative and contract its balance sheet. JPMorgan Chase & Co. (NYSE:JPM) stock is down 19.42% YTD.
JPMorgan Chase & Co. (NYSE:JPM) was discussed in the Q4 2021 investor letter of Ariel Investments. Here’s what the firm had to say about the company:
“In our view, inflation will not just be a 2021 phenomenon. Inflationary expectations are only now working themselves into the labor market with historically low unemployment, resurgent labor unions, and higher wages. These labor cost pressures are only starting to show up in the Consumer Price Index. The most recent Producer Price Index showed a +9% year over year increase, the highest since it was created in 2010. Higher input prices generally lead to rising consumer prices.
“In our view, inflation will not just be a 2021 phenomenon.”
Consumer balance sheets are in excellent shape with lower unemployment and banked stimulus checks. A recent analysis from JP Morgan Chase (JPM) showed average checking accounts have 50% higher balances than pre-Covid. The U.S. money supply as measured by M2 (a calculation that includes cash, checking accounts, and “near cash” such as money market securities) is up +38% versus year-end 2019. Higher consumer cash holdings and higher money supply mean more spending and demand for goods. Some emphasize supply issues to explain current inflation. Going forward, we see very strong demand as well, too much money chasing too few goods.”
Of the 912 hedge funds in Insider Monkey’s database, 110 funds held a stake in JPMorgan Chase & Co. (NYSE:JPM) as of Q1 2022.
4. JOYY Inc. (NASDAQ:YY) has declined 13.21% as of 12:52 PM ET after the Singapore-based social media platform was downgraded from an Overweight to an Equal Weight rating by Alex Poon at Morgan Stanley. The analyst also lowered the price target on JOYY Inc. (NASDAQ:YY) from $50 to $45. Poon shared that following JOYY Inc.’s (NASDAQ:YY) Q1 results, he sees restricted “visibility into a growth inflection.” He expects Huya to contribute to JOYY Inc.’s (NASDAQ:YY) losses in 2022 and sees a limited improvement in the company’s margins for the remaining year.
Here’s what Tao Value said about JOYY Inc. (NASDAQ:YY) in its Q1 2021 investor letter:
“We exited YY after 3.5 years near all-time high. The annualized return (13~%) yet is below expectation, especially compared to founder CEO David Xueling Li’s net worth (mainly in YY shares) ballooning from $1.1B in 2018 to $2.3B in 2021. On value realization, I think YY did a good job, acquiring Bigo, spinning off then selling Huya & selling YY Live to Baidu. But as a minority shareholder, we were treated unfairly. E.g. the Bigo deal (for buying shares from executives including Li) was done by YY stock when the price was severely depressed, causing significant dilution for our ownership. We learned our lessons and will evaluate more rigorously in management’s partnership mindset in the future.”
JOYY Inc. (NASDAQ:YY) was held by 17 hedge funds at the end of Q1 2022.
3. GoodRx Holdings, Inc. (NASDAQ:GDRX) has plummeted 7.21% as of 12:52 PM ET after the Santa Monica, California-based telemedicine platform was downgraded from an Outperform to a Neutral rating by Vikram Kesavabhotla at Baird. The analyst slashed the price target on GoodRx Holdings, Inc. (NASDAQ:GDRX) by 30% to $7. The first-quarter results of GoodRx Holdings, Inc. (NASDAQ:GDRX) highlighted disruption associated with a certain grocer, understood to be The Kroger Co. (NYSE:KR). The company is also the provider of a free-to-use website and mobile app that tracks the price of prescription medicines across the US. Kesavabhotla highlighted his concern about GoodRx Holdings, Inc.’s (NASDAQ:GDRX) ability to recover this volume as the world is recovering from the pandemic.
In its Q2 2021 investor letter, Saga Partners discussed its stance on GoodRx Holdings, Inc. (NASDAQ:GDRX). Here’s what the investment management firm said:
“The Saga Portfolio first bought GoodRx at the end of 2020 and has added to it throughout 2021. As it has become a larger position in the Portfolio, it makes sense to explain the investment thesis in more detail.
For those who don’t care to understand the prescription drug value chain, feel free to skip over this section. While few readers may really care about the fairly complicated prescription drug value chain, it is important to review in order to understand the role that GoodRx plays within the ecosystem. This is my best attempt in trying to explain it in a few paragraphs.
Like many other parts of the U.S. healthcare system, prescription drugs suffer from complex and non-transparent pricing with access largely controlled by health plan payers. The majority of people in the U.S. have insurance provided by either their employer or a government program such as Medicare or Medicaid. Consumers largely rely on third parties to determine which drugs are covered by their health plan, and therefore which drugs may or may not be affordable.
Pharmacy benefit managers (PBMs) play a significant role and sit in the middle of three different parties. They are the intermediary between health insurers, pharmacies, and drug manufacturers. Health insurers hire PBMs to manage prescription drug plans for their covered population. PBMs negotiate on behalf of the health insurer with pharmacies. Pharmacies enter pricing contracts with PBMs in an effort to drive more demand to the store…” (Click here to see the full text)
GoodRx Holdings, Inc. (NASDAQ:GDRX) was held by 24 hedge funds as of Q1 2022.
2. Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) has fallen 7.98% as of 12:53 PM ET after the West Jordan, Utah-based online and offline retailer of camping, fishing, outdoor, and recreational shooting gear provided weak guidance for Q2 2022. The company revealed that it was experiencing “lower demand across multiple categories.” Sportsman’s Warehouse Holdings, Inc.’s management (NASDAQ:SPWH) stated that the company was not able to make up the numbers from the prior period as, during this time last year, the consumers had received the stimulus cheque from the federal government. The management also highlighted that the uncertain macroeconomic environment would surely impact the business, but it is confident about its pricing and inventory management.
Merion Road Capital Management shared its stance on Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) in its Q1 2022 investor letter:
“During the quarter I added to Sportsman’s Warehouse (“SPWH”). SPWH is an outdoor sporting goods retailer with about half of their revenue coming from hunting & shooting products (guns, ammo). I initiated our position back in December following their failed merger with Great Outdoors on the grounds of anti‐trust concerns. It appeared that the stock was being sold off indiscriminately by merger arbitrageurs and valuation seemed attractive, particularly after adjusting for the receipt of a $55mm termination payment and unwind of excess inventory.
While the dust has largely settled from an investor base perspective, SPWH remains attractively priced with a few upcoming catalysts. Fundamentally the company is well positioned. Following the tragic Parkland school shooting two large competitors to SPWH, Dicks Sporting Goods and Walmart, made the decision to exit the category; their absence makes the competitive landscape for SPWH a lot more favorable than in prior years. Furthermore, it is no surprise that gun and ammo sales during covid experienced tremendous growth. Unlike prior cycles, however, this wave saw an increase in new gun buyers rather than purchases by existing owners. SPWH estimates that over the past 18 months the industry created 12mm new firearm owners; using a prior base of 100mm, thisimplies an increase to their addressable market of 12%. The company is executing on many other internal initiatives including store expansion, omni‐channel growth (e‐comm up to 15% of revenues), loyalty programs (at 3mm members) and new co‐branded credit cards…” (Click here to see the full text)
Out of the 912 hedge funds in Insider Monkey’s database, 19 funds held a stake in Sportsman’s Warehouse Holdings, Inc. (NASDAQ:SPWH) at the end of Q1 2022.
1. Tempur Sealy International, Inc. (NYSE:TPX) is down 5.92% as of 12:54 AM ET after the Lexington, Kentucky-based designer, manufacturer, and distributor of bedding products and furniture goods was downgraded from an Overweight to a Neutral rating by Peter Keith at Piper Sandler. The analyst also cut down the price target on Tempur Sealy International, Inc. (NYSE:TPX) from $36 to $28. Keith saw a weak selling period during the Memorial Day long weekend through the retail checks. The revised target price represents a slim upside potential of 6.1% from the previous closing price.
In its Q1 2021 investor letter, Vulcan Value Partners shared its stance on Tempur Sealy International, Inc. (NYSE:TPX). Here’s what it said:
“Tempur Sealy International is the leading designer, manufacturer, and distributor of mattresses globally. The company has recognizable brands across all price points. Approximately 80% of the company’s revenue is derived from its wholesale channel with roughly 5,400 retail partners. The remaining 20% of revenue comes from its retail stores and e-commerce site, Tempur-Pedic.com. Its iconic brand portfolio, world-class manufacturing facilities, and go-to-market omni channel strategy are all competitive advantages. We are pleased to be able to own the company in the portfolio again.”
As of Q1 2022, Tempur Sealy International, Inc. (NYSE:TPX) was held by 31 hedge funds.
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