Week of 6/1/2020
I have always been very interested in the stock market. From a young age I recognized my natural draw to making money and the idea that my money could make me more money. I have been very busy, as of recent, starting a landscaping company in an effort to build some other equity and revenue streams. Because of this, I haven’t had as much time as I’d like to write. I am going to change that by starting a series I am calling, “Ree$e’s ‘Pieces’”. In this series, every week, on Monday morning before opening bell at 9:30am ET I will be releasing a summary and synopsis of two stocks that I think are either a good opportunity to buy or sell, and I will continue updating my previous positions of stocks from previous posts.
Summary and Synopsis will be purely my opinion developed from my 3+ years trading in the stock market and the research I do daily. I have used Robinhood as my trading platform since 2017, because of their 0$ commission fees. Robinhood has its flaws, like limited day trading options, but overall I have been more than pleased with their services. I conduct my research using platforms including but not limited to, Yahoo Finance and various news outlets like the Wall Street Journal. I have given financial advice to my family and friends for years and I hope not to come off too confident, but my advice has yielded them and myself great returns. I am not claiming to be an expert or a certified financial advisor, but I feel I have enough knowledge on the subject to give “pieces” of advice to people that can help them be more educated on opportunities to make money in the stock market. Hence, the “Pieces” name of the series ha-ha.
DISCLAIMER* anything you read as a part of this series should not be listened to blindly. Do your due diligence, contact a personal certified financial advisor before making your BUY/SELL decisions.
In the first installment of this series I am going to be doing a review of Best Buy (BBY) and Draft Kings (DKNG).
Best Buy Co. - BBY
6/3/2020 10:03am current price - $81.29
1 Year Target Stock Price - $85.20
I am rating Best Buy Co. a BUY. This company is a retail technology company that has just recently come across my radar. I just recently purchased 6 shares of this stock a couple days ago based on a couple of criteria. For me, I like to see short run resilience and a catalyst for long term growth. This company showed me both. Let me explain. Before the corona-virus pandemic Best Buy’s stock price was floating around $88-$90. Public panic and sell off cause it to tank briefly to almost as low as $50. The stock quickly started bouncing back as the market did as a whole. In a market of uncertainty that we have been dealing with, Best Buy has persevered its stock price from going dangerously low and maintained a “On-Sale” price. I say it is on-sale because you can buy the same share in the company that was previously $90 for around $81 today. Sounds like a sale to me. My philosophy as an investor is that any stock can be a buy if you BUY LOW and SELL HIGH. Furthermore, the reason I stated that Best Buy had a catalyst for l
ong term growth was its entrance to smart home technology. As almost all of you know, we have an aging demographic in this country and with this in mind, it is easy to understand an increase in demand for household technology products that will make elderly life more enjoyable is coming. This could increase revenue and growth immensely which would send Best Buy’s stock price through the roof. One last thing that makes this buy so sweet is Best Buy pays dividends, sending portion of their profits to their shareholders, quarterly. I am very fond of dividends because it is typically a safer long term investment strategy, which is why most of my personal investment portfolio is dividend stocks.
I don’t have many cons for this stock because I am biased as a shareholder in the company, but if I have to come up with one it would be competing for market share with other Tech-giants like Amazon, Microsoft, and Apple. These companies and others are also preparing for the future and its a race to innovation. Its likely that one of them beats best buy to the best product and sends Best Buys shares into a downward trend. Also, according to the “Motley Fool”, Best Buy’s annual revenue fell this year by 6%, along with profits shrinking 38% this year. This is troubling to say the least, if the company is bringing less money its a bad sign, and an even worse sign if they are less profitable on the less money they are bringing in.
Draft Kings - DKNG
6/3/2020 9:39am current price - $40.21
1 Year Target stock price - $50.45
Draft Kings is a stock that I am rating as a BUY. For those of you who don’t know, this company is a sports gambling app that allows users to place a massive variety of wagers. Things like players’ prop bets, score differentials, and future league champions or losers. I am attracted to this stock because of how well it has done in the corona-virus economy. With little to no sports during this time, I expected to see Draft Kings fall to close to its 52 week low trading price of around $10 ( much lower than its current $40 trading price). However, the stock price’s resilience has proven to me that the public and private investment corporations are firm in their belief sports gambling is going to come back more prominent than ever, once sports become a part of our lives again. In addition, according to Yahoo Finance, Draft Kings has recently expanded its partnership with “Sportradar” a sports streaming company. This partnership will allow for users of Draft Kings to watch live stream sports on the platform while placing wagers on the streams they are watching. With more and more states legalizing sports betting the more people will have access to using Draft Kings’ services. Not to mention, the hungry gamblers who miss throwing thousands of dollars on nightly sports games have not been able to bet as often as they want, and when sports open up, these hungry folks will be unleashed.
In contrast, I do see risk in this buy, as there is risk with any stock that you buy, stemming from the reduced overall strength of the US economy. According to the podcast “Marketplace” by NPR, the savings rate in the US has jumped from around 8% to 13%. This increase in savings means people are fearful of a recessed economy post-corona virus and may be hesitant to place wagers. This also could slow the overall growth of the economy. With people saving more money, the flow of money into new business and old business will be reduced, putting a toll on GDP and other economic indicators. If people are skeptical about the condition of the economy they will surely be somewhat skeptical about placing their hard earned money into Draft Kings rather than their savings accounts.