Market Assessment – As of Wednesday, July 20, 2022 at 12:14 a.m.
We hope you read our Market Assessment on July 4, 2022, and had the courage and good sense to take advantage of the incredibly cheap prices that abounded at the bottom of the Bear Market that we said just ended. There was a big “Follow Thru Move” yesterday and the DOW moved up 754.44 points, and we expect it to continue as more investors realize that the ”Bottom Is In”, and that they can still take advantage of these once in a lifetime prices, if they act quickly.
We are featuring 4 stocks that we consider to still be bargains – even though Netflix, which we rated as a Buy at $189.11 in our Monday 7/18/22 Market Letter, moved up 10.71 points today. They are: 1) Netflix, 2) Draftkings, 3) Riot Blockchain and 4) Advernum Biotechnologies.
Joe Cotton
STOCK #1- NETFLIX, INC. (NFLX) 201.63.
Netflix is the leader in the streaming services business and has about 222 million paid members in 190 countries. The company released its 2nd quarter earnings after the Market closed Wedbesday. The results, compared to Wall Street’s consensus estimates were as follows: Revenue- $7.97 billion versus $8.05 expected; Adjusted Earnings Per
Share- $3.20 versus $2.98 expected; Subscribers- Loss of 970,000 versus loss of 2 million users expected. The company is partnering with Microsoft to also offer its service free to subscribers – with ad content. The stock is selling at an historically Low Price Earnings Ratio of only 17.09. The stock was strong in the aftermarket after the earnings report was released when the Market closed. Analysts are divided in their July 2022 Ratings…from Neutral to Buy. We think it is a Bargain.
STOCK #2- DAFTKINGS, INC. (DKNG) $13.49. This is a growth digital sports entertainment and gaming company. It offers multi-channel sports betting and gaming technologies, powering sports and gaming entertainment for operators in 17 countries. It operates Internet Gaming (iGaming) thru its Draftkings brand in 5 states and Golden Nugget Online Gaming in 3 states. Its Sportbook is live with mobile and/or retail betting operations in the U.S. in 18 states. It was the Online Gaming Hot Stock “Darling” in 2021, trading above $70 per share in March. Citigroup Gave it a Buy Rating on 7/7/22, Barclays gave it an Equal Weight Rating on 6/29/22 and JMP Securities gave it an Outperform Rating on 6/28/22. We like the stock, and bought some last week, and more
today, and expect it to go to $25.00. They were a very visible sponsor at the Wimbledon matches.
STOCK #3 – RIOT BLOCKCHAIN (RIOT) $6.98. This is a very speculative stock. It is one of the largest bitcoin mining companies operating in North America. In June they produced 421 BTC, an increase of approximately 73% compared to June 2021 production of 243 BTC. As of June 30, 2022. Riot held approximately 6,654 BTC, all produced by the company’s self-mining operations…worth about 125,000,000. Bitcoin has crashed in value in the last 8 months from about $67,500 in November to about $18,800 in late May. It rallied strongly today to about $23,500. All the bitcoin stocks rallied strongly today, including (Symbols): MARA, BITF, HUT, APLD, etc. Three analysts gave the stock a Buy Rating in June. We will be buying the stock.
STOCK #4 – ADVERNUM BIOTECHNOLOGIES (ADVM) $1.71. What is exciting about this Very Speculative Stock is that it has a gene therapy drug that has shown to be effective in treating Age-Related Macular Degeneration with just 1 injection that reportedly has a 2-3 year durable response. The current standard of care is monthly or bi-monthly injections in the eye. This is a Big Deal. They expect the 2 nd Phase trials to begin in the 3 rd quarter of 2022. We like the stock and have taken a position in the stock and also the August 19 2022 $2.50 CALL Options. We think it could go to $25.00 or more by year’s end.
Joe Cotton has won three National Stock Picking Contests with yearly percentage gains in excess of 96%. His 2020 Wall Street’s Best stock contest winner was Inovio Pharmaceuticals (Symbol INO) with a 742% 1-Year return.
This article is not investment advice, nor is it in any way to be construed as investment advice. For Investment Advice consult a Registered Investment Advisor or a Certified Financial Planner. Joe Cotton’s website is www.cottonstocks.net. NKY’s Joseph W. Cotton is publisher of the market newsletter, Cotton’s Technically Speaking. He is a graduate of Xavier University, a former bank manager and credit analyst, and a former Fidelity Investments registered investment representative. Contact him at cottonstocks@hotmail.com
