Market Movers: Twitter’s Best Week Ever

Market Movers: Twitter’s Best Week Ever

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Happy Saturday folks!

Looking at this week’s winners, it’s obvious to see why Twitter is sitting atop the pile, thanks to a certain electric vehicle mogul. Elsewhere though, some interesting moves flew under the radar. 

Let’s take a look.

Here were the biggest movers in the MyWallSt shortlist this week:

Moving Up ⬆️

Twitter (TWTR) +22.2%

Costco (COST) +5.6%

Casey's (CASY) +4.8%

Constellation Brands (STZ) +3.8%

FactSet (FDS) +3.6%

Moving Down ⬇️

Upstart Holdings (UPST) -12.6% (BILL) -11.5%

Datadog (DDOG) -10.6%

Redfin (RDFN) -10.2%

Ford Motor Company (F) -10.2%

The Winners

Twitter (TWTR) +22.2%

Unless you’ve been living under a rock this past week, you’ll probably know that Tesla CEO Elon Musk has taken a hefty stake in Twitter. Known for his controversial tweeting habits, the eccentric billionaire now owns a 9.2% share of the social media site, and has also been added to the company’s board for good measure. 

In the words of MyWallSt Analyst Mike this week

“For Twitter shareholders, it probably isn’t a bad thing that one of the world’s most successful creators of value has become invested in the success of the company. However, I’m sure it will come with its fair share of headaches and headlines too. Considering the stock has been stagnant since its IPO in 2013, any shake-up like this should be welcome.”

It seems that Musk’s influence is already paying dividends for users, with the much-fabled ‘Edit Button’ confirmed as being in the works, mere days after Musk himself conducted a poll concerning the topic, resulting in unanimous support of the idea. 

For now, Twitter investors may as well embrace the sheer surrealism of the world’s richest man owning almost 10% of the company and simply hope that the hype translates into gains. 

Costco (COST) +5.6%

Stepping away from digital la-la-land for a moment and into the very real world of retail, Costco is shoving inflation fears to the side and plowing on. 

The wholesaler released some impressive-looking March stats that gave investors a lot of confidence. Same-store sales jumped 17.2% in the five weeks ended April 3, led by a 19.1% increase in U.S. sales alone, while e-commerce jumped 9%, proving that its dual sales structure of physical stores and online sales continues to pay off. 

This comes as a welcome boost for many retail investors who have been flooded with unending reports of inflation, conflict-induced price hikes, and an impending apocalyptic-scale recession. Amidst all this doom and gloom, Costco, our Stock of the Month from February, can be a shining beacon of hope. 

Constellation Brands (STZ) +3.8%

Down almost 5% year-to-date (YTD), things could be both better and worse for the alcohol producer and cannabis investor. However, a late surge of bullish activity following Thursday’s earnings report sent the stock into positive territory for the week. 

Constellation Brands reported an earnings beat of $2.37 per share and revenue of $2.1 billion, whilst analysts expected earnings of $2.10 per share and revenue of $2.02 billion. Outlook for fiscal 2023 was also positive, with earnings per share (EPS) of between $11.20 - $11.50 expected alongside a free cash flow projection of $1.3 - $1.4 billion.

To add to this was the announcement that Constellation was performing an accelerated share repurchase agreement to buy back $500 million of its Class A common stock, a strong sign of confidence from the business as it appears to view its stock price as undervalued.

Overall, Constellation has disappointed investors of late as other alcohol stocks rebounded hard and fast from COVID-19 restrictions, so this return to winning ways is very much welcomed. 

The Losers

Upstart Holdings (UPST) -12.6%

For a company that’s down more than 30% YTD, this week was not what Upstart investors needed. As a company that specializes in artificial intelligence software for financial lending, the current economic climate is a volatile one.

With the Federal Reserve looking likely to raise interest rates soon in order to shrink its massive balance sheet in a bid to bring down inflation, lenders look more and more likely to experience defaulting payments and limited ability to provide capital. 

However, Upstart’s dip is not necessarily the worst thing in the world, as its entry point looks a lot more attractive than six months ago, now trading at roughly 40 times forward earnings and 5.6 times forward revenue.

Not cheap, by any means, but for risk-tolerant investors, this might be a good opportunity. 

Ford Motor Company (F) -10.2%

Motor sales at traditional auto manufacturers are facing their old nemeses once more: inflation, supply constraints, and recession fears.

Ford was at the forefront of an onslaught on its stock price this week after releasing its Q1 sales report, which showed deliveries of 432,132 vehicles — down 17% on the year-ago quarter. Rising gas prices, reduced spending, and semiconductor shortages remain the primary culprits, but there’s no need to panic. 

There are some positive signs heading into Q2, as noted by Vice President of Sales, Andrew Frick:

“While the global semiconductor chip shortage continues to create challenges, we saw improvement in March sales, as in-transit inventory improved 74% over February.”

The company is also dealing with strong demand for some of its newer vehicles, with sales of its Maverick pick-up truck increasing by 115% from February to March alone. On top of that, the firm’s new EV strategy appears to be paying dividends as the world moves toward more widespread adoption of battery-powered vehicles. With the company expecting to have a third of its sales come from its EV arm by 2026, this year’s growth so far should be viewed favorably by shareholders.