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Dollar Tree’s Rocky Upward Climb

Posted on May 10th, 2021

Dollar Tree Inc. (DLTR) has seen steady growth over the past year, with the stock rising by about 23%. The company was added to the WhaleWisdom Whale Index on February 18, 2021. While Dollar Tree underperformed the S&P 500’s gain of approximately 30.0%, the stock continues to rise.

Dollar Tree operates discount variety stores across North America under the names of Dollar Tree, Family Dollar, and Dollar Tree Canada. Dollar Tree’s stores offer an assortment of merchandise at the base price of one dollar, from seasonal decorative items to everyday groceries. Understandably, the company had a boost in its appeal at the start of the coronavirus pandemic. The retailer’s grocery inventory initially allowed it to remain open as an essential store during a time when many retailers were forced to close doors amidst government pandemic orders. Even when other retailers could reopen their doors, Dollar Tree still benefited by being affordable and maintained its elevated appeal across multiple consumer income brackets. The company met changing consumer needs when many faced reduced incomes, often combined with job losses as the pandemic continued.

(WhaleWisdom)

Mixed Results from Hedge Funds and Institutions

Looking at fourth-quarter activity by hedge funds, the aggregate 13F shares held decreased to about 49.2 million from 51.0 million, a decrease of approximately 3.5%. Of the hedge funds, 33 created new positions, 61 added to an existing holding, 23 closed out their position, and 53 reduced their stake. In contrast to hedge funds, institutions were buying, though at a slow rate. Overall, institutions increased their aggregate holdings by about 0.1% to approximately 209.4 million from 209.2 million.

Positive Estimates

Analysts expect to see a positive trend continue through to 2023, with estimated year-over-year revenue growth of approximately $27.6 billion by January 2023, up from $26.3 billion in 2022. These year-over-year estimated increases could bring earnings per share to $6.92 by 2023, up from its predicted value of $6.16 in 2022.

(WhaleWisdom)

Strategic Partnerships and Increased Demand Bring Optimism

Recently, the retailer announced the launch of a retail media network called Chesapeake Media Group. Dollar Tree established partnerships with Swiftly Systems and Aki Technologies to support this endeavor, with Swiftly supporting digital media placements and Aki providing personalized advertising across various forms of media.

While proposed federal minimum wage increases have the potential to impact Dollar Tree’s profit margin, they do not appear to outweigh increased consumer demand. However, even with an underperform rating, Dollar Tree made Bank of America Corp.’s high-conviction list an encouraging designation.

Fair Outlook

Dollar Tree’s growth remains slow and steady as demand continues to rise for this affordable retailer. Investors may be encouraged by future earnings estimates and the opportunities that Dollar Tree’s new retail media network offer.

CrowdStrike Holdings, Inc. (CRWD) continues its forward momentum, significantly outperforming the S&P 500. The cybersecurity technology company’s stock rose by approximately 318.1% as of April 30, 2021, compared to the S&P’s gain of about 30.4% since the start of 2020. CrowdStrike also impressively climbed the WhaleWisdom Heatmap to a ranking of 5, up from 30.

CrowdStrike provides cloud-based workload and endpoint security for its customers, including services such as threat intelligence and cyberattack response. American businesses have experienced a push toward remote work and online collaboration during the Coronavirus pandemic. They have seen more applications moving to the cloud, contributing to a growing demand for CrowdStrike’s services.

Hedge Funds Are Buying

Fourth-quarter results showed that the aggregate 13F shares held by hedge funds increased to about 54.1 million from 49.9 million, an increase of approximately 8.5%. Hedge funds created 48 new positions, 88 funds added to an existing holding, 17 exited, and 50 reduced their stakes. Institutions were also buying the stock and aggregate holdings increased by about 7.6% to approximately 142.8 million from 132.7 million.

(WhaleWisdom)

Positive Multi-year Estimates

Analysts predict earnings per share will rise in the coming years, increasing to $0.63 by 2023, up from $0.29 in 2022. Strong performance is anticipated to bring revenue to approximately $1.8 billion by 2023, up from $1.3 billion in 2022.

(WhaleWisdom)

Analysts Are Bullish

Analysts are predominantly bullish on the stock, with most rating CrowdStrike a Buy. Berenberg Capital Markets analyst Joshua Tilton initiated coverage of CrowdStrike with a Buy rating and a price target of $260. Tilton cited the company’s superior technology and meaningful market opportunities. Similarly, Deutsche Bank analyst Patrick Colville gave CrowdStrike a Buy rating and a $265 price target, noting the rising rate of cloud adoption and the importance of cybersecurity.

While not all analysts raised price targets, they all appear to see CrowdStrike’s opportunities for continued market growth. JMP Securities analyst Erik Suppiger maintained an Outperform rating on the shares but lowered CrowdStrike’s price target to $265 from $295. While Suppiger acknowledged CrowdStrike’s momentum and business expansion opportunities beyond the endpoint security market, his price target adjustment reflected recent compression in valuation multiples across the market. Sterling Auty from JPMorgan Chase & Co maintained a Neutral rating on CrowdStrike’s shares but raised the firm’s price target to $210 from $205. Auty referenced cloud market opportunities and the company’s strategic decision to partner with Amazon Web Services Marketplace.

Great Expectations

CrowdStrike continues to see growth and receives favorable feedback from analysts, many of whom view the company as a Buy with excellent market potential. The company is understandably closely followed by technology investors; it addresses the demand for protection against increasing cyber threats and has made strategic moves to expand its reach to consumers. Hedge funds are buying, and future estimates for 2022 and 2023 should be encouraging for investors.

Enphase Energy Soars On Green Energy Push

Posted on April 26th, 2021

Enphase Energy, Inc. (ENPH) has navigated a bumpy road over the past year. However, despite the negative impact of the coronavirus pandemic on business, this energy technology company had a WhaleWisdom Heatmap ranking of 34 and has shown considerable growth. Enphase significantly outperformed the S&P 500, rising by approximately 515.7% as of April 23, 2021, compared to the S&P’s gain of about 28.0% since the start of 2020.

Enphase designs and manufactures software-driven home energy solutions, delivering semiconductor-based microinverter technology globally for the solar industry with a platform for intelligent energy management. The company’s solar energy generation and storage solutions connect through the intelligent platform. Enphase saw a slowdown in solar installation during the pandemic but has more recently regained market share as solar power popularity continues to rise.

Mixed Results from Hedge Funds and Institutions

Hedge funds are selling, in contrast to institutions. Looking at fourth-quarter activity by the top hedge funds, the aggregate 13F shares held decreased to about 14.2 million from 21.0 million, a decrease of approximately 32.3%. Of the hedge funds, 44 created new positions, 35 added to an existing holding, 17 exited, and 46 reduced their stakes. In contrast to hedge funds, institutions increased their aggregate holdings by about 0.5% to approximately 94.0 million from 93.5 million.

(WhaleWisdom)

Impressive Multi-Year Estimates

Analysts anticipate that earnings per share will continue to rise from 2021 through to 2023, with year-over-year growth ranging from 29.8% to 49.3%. These significant year-over-year estimated increases for earnings could bring them to $3.62 per share in 2023, up from an estimated $2.05 for 2021. Revenue predictions are also quite promising, with revenue estimated to grow to approximately $2.2 billion in 2023, up from $1.3 billion in 2021.

Analysts Take Varied Stances

Despite impressive growth and optimistic estimates for the next few years, not all analysts raised price targets. JPMorgan Chase & Co. analyst Mark Strouse sees a buying opportunity for the stock. Strouse gave Enphase an Overweight rating as U.S. President Biden’s infrastructure plan would be favorable for the energy stock in addition to benefits of an investment tax credit extension for solar power and storage. James West of Evercore ISI gave the stock an Outperform rating and $184 price target, noting the company’s dominant position in the U.S. residential microinverter market. Barclays Investment Bank analyst Moses Sulton lowered the firm’s price target on Enphase to $214 from $256, maintaining an Overweight rating.

Optimistic Outlook

After historic highs, energy stocks like Enphase may have undergone market corrections, but the company’s upward momentum continues. Enphase’s U.S. presence stands to benefit from President Biden’s climate-based goals. While some analysts may be cautiously optimistic, there is long-term promise in the solar energy market.

Nvidia’s (NVDA) stock saw growth in the past year, as hedge funds were actively buying. The company outperformed the S&P 500, rising by approximately 174.3% compared to the S&P’s gain of about 29.1%. Despite a solid performance, Nvidia experienced a disappointing decline on the WhaleWisdom Heatmap to a ranking of 46, down from 4.

Nvidia sells graphics processing units (GPUs) that act as accelerators for CPUs. Nvidia specializes in products for gaming, data centers, professional visualization, and automotive platforms. Nvidia saw varying demand changes across its platforms with a boom in the gaming market. At the same time, the data center sales fell flat. Its professional visualization segment has also seen slow growth. Nvidia’s GPU-accelerated computing platform gives data centers added power needed for endeavors such as high-performance computing and artificial intelligence. However, one of Nvidia’s challenges is a supply chain shortage due to the global microchip storage, negatively impacting GPUs and autonomous driving technology.

Hedge Funds and Institutions Are Buying

Nvidia has seen positive fourth-quarter activity from both hedge funds and institutions. Hedge funds increased their aggregate 13F shares held to approximately 73.4 million from about 72.9 million. Of hedge funds, 51 created new positions, 154 added to existing holdings, 27 exited, and 143 reduced their stakes. Institutions increased their aggregate holdings to about 413.1 million from 408.0 million.

(WhaleWisdom)

Encouraging Revenue Estimates

Analysts expect to see year-over-year revenue growth from 2022 through 2024, of 10.9% to 34.5%. Between January 2022 and 2024, revenue is anticipated to grow to approximately $28.2 billion from $22.4 billion. Earnings estimates are expected to increase to $17.43 per share in 2024, up from a 2022 estimate of $13.55.

(WhaleWisdom)

Favorable Forecasts

Analysts are optimistic about the stock and raising price targets. Rosenblatt Securities raised Nvidia’s price target to $800 from $700. They maintained a Buy rating, noting its strength across all segments and optimistic revenue predictions. Deutsche Bank raised its priced target to $575 from $560, citing great opportunities for the business. Cowen, Inc. also raised price targets to $675 from $665. Cowen was encouraged by Nvidia’s proposed acquisition of Arm Ltd., a semiconductor and software design company. Analyst Chris Caso from Raymond James & Assoc., Inc. is optimistic in both the long and short term and upgraded Nvidia to a Strong Buy while raising the price target to $750 from $700.

Bright Outlook

Nvidia’s impressive 2020 and 2021 year-to-date growth is certainly encouraging for investors, and multi-year estimates speak to the stock’s potential. These estimates are favorable for long-term growth, especially given the lasting popularity of the gaming market for which Nvidia provides graphic cards. Analysts’ ratings and outlooks present an attractive opportunity for investors.

Sea Ltd. (SE) experienced tremendous growth over the past year, dramatically outperforming the S&P 500 and rising by approximately 529.3% compared to the S&P’s gain of about 26.8% as of April 9, 2021. Hedge funds were actively buying in the fourth quarter of 2020. The internet company bounded upward on the WhaleWisdom Heatmap to a ranking of 9, up from 29.

Sea is a consumer internet company based in Asia that serves customers worldwide through its three core businesses: Garena, Shopee, and SeaMoney. Sea uses an integrated internet platform consisting of e-commerce, digital entertainment content, payment processing, and digital financial services. Sea has undoubtedly benefited from a shift in consumer habits during the coronavirus pandemic that increased online purchases and gaming frequency.

Hedge Funds and Institutions Are Buying

Sea has captured the gaze of hedge fund managers and institutions. Looking at activity by the top hedge funds in the fourth quarter, the aggregate 13F shares held increased to about 80.6 million from 72.5 million, an increase of approximately 11.1%. Of the hedge funds, 44 created new positions, 61 added to existing holdings, 23 exited, and 64 reduced their stakes. Institutions were also buying, as aggregate holdings increased by about 8.7% to approximately 262.2 million from 241.3 million.

(WhaleWisdom)

Positive Multi-year Estimates

Analysts expect to see revenue rise over the next few years, with year-over-year growth ranging between 30.6% and 79.3% between 2021 and 2023. This growth could amount to revenue of approximately $14.2 billion in 2023, up from $7.9 billion in 2021. Earnings forecasts are also optimistic, rising to $0.51 per share by December 2023, up from a loss of $2.13 for 2021.

(WhaleWisdom)

Ratings Rise with Favorable Forecasts

CLSA Ltd. analyst Marcus Liu remained bullish on Sea’s long-term prospects and upgraded the equity to Buy with an unchanged price target of $275. Analyst Zhiwei Foo of Macquarie Investment Management also upgraded the stock to an Outperform from Neutral rating. Foo enthusiastically raised Sea’s price target to $280 from $124, noting that the digital finance business is an area of under-valuation.

Positive Outlook

Sea’s phenomenal year of growth and future potential are encouraging factors for investors. Sea’s business model meets the growing demand of shoppers for online payment and entertainment options. At the same time, opportunities for continued future growth offer an attractive entry point for new investors.