After months of stocks soaring on the back of tech companies benefiting from a new remote “normal,” the stock market experienced its first losing month, since March. September ended with the S&P 500 down 3.9%, the Dow Jones Industrial Average down 1.2%, and the Nasdaq Composite index down 5.2%…
Most S&P 500 index sectors were down for the month, with energy and communications services leading the way. The SPDR Select Energy ETF (XLE) was down 14.6% for the month. The lone sector up for the month was Utilities, as the SPDR Select Utilities ETF (XLU) was up 1.1%.
The question is, where do we go from here? Investors are most likely cautious due to several factors, such as failed stimulus talks, a highly contested election, and a possible second wave of the virus that could send the economy off the cliff. While I don’t have a crystal ball that predicts the market’s direction, I can tell you that I expect big moves from the following stocks next month: Penn National Gaming (PENN), Pfizer (PFE), Apple (AAPL), and Tesla (TSLA).
Penn National Gaming (PENN)
PENN is up a whopping 186.9% so far this year compared to a 24.7% loss for the Dow Jones U.S. Gambling Index. So, what gives? Well, for starters, it’s one of the most popular stocks on the Robinhood Top 100 list. And second, the rise of online sports betting is driving the price up of gaming stocks such as PENN. While the company’s revenue fell 77% over the second quarter due to the pandemic, it cut operational costs to weather the storm.
Since then, the uncertainty of sports being played has been quelled as all four major sports leagues are back in action. This opened up a huge revenue stream. Recently, the company announced a public offering of 14 million shares, which has the potential to raise $1 billion in capital. This should help them build out their partnership with Barstool Sports. PENN recently launched a Barstool-branded mobile betting app. This should see massive growth due to Barstool’s mega fan base.
While there is some uncertainty as to whether the NFL can make it through a full season as the some Titans players recently testing positive, I believe the season will continue at least through October, with online gambling revenue piling up. The stock is rated a “Strong Buy” in our POWR Ratings system. It has a grade of “A” in Trade Grade, Buy & Hold Grade, and Peer Grade, three of the four components that make up the POWR Ratings. PENN is also the #2 ranked stock in the Entertainment – Casinos/Gambling industry.
Keep an eye out for on October 29th as PENN is expected to announce its latest results.
Out of all the pharmaceutical and biotech companies working on a COVID vaccine, PFE seems to have the best shot, at least according to Bill Gates. And you know what, I tend to agree with him. The company, which has been working on a vaccine with BioNTech (BNTX), believes it will know if its vaccine will be effective by the end of this month. If it is, it will send it to the FDA for review. PFE already signed up multiple buyers, including the U.S., Canada, Japan, and the U.K.
While the COVID vaccine is the company’s most significant near-term growth catalyst, it isn’t the only one. The company’s biopharma segment recorded revenue of $9.8 billion last quarter. This was due to its anticoagulant drug Eliquis’s revenue jumping 17% year over year. Its cancer drug Ibrance grew 7% to $1.3 billion during the same quarter. PFE is also running 89 clinical trials, with 23 in phase 3. This pipeline of new drugs will add even more top-line growth over the coming years.
PFE is also in the middle of spinning off its Upjohn unit, which focuses on manufacturing and…
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