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Joe Cotton: Some surprises in the market last week; Stock of Week pick is Nerdwallet, risky, speculative


Market Assessment- As of Saturday, December 11 at 7:45 p.m.

Last week, the DOW, to my surprise, rallied strongly about 1300 points, crossing easily above its critical 50-Day Moving Average. So, at present we ARE NOT in a Bear Market.

Joe Cotton

However, the High Priced, High PE Stocks with little or no earnings are definitely in a Bear Market. It is dangerous to own those stocks, and as you can see below. The High Priced Everbridge (EVBG) $63.00 stock, with no earnings to speak of, lost almost half its value as it plunged 52 points Friday after the company issued revenue growth estimates of 20-23% for 2022 (less than street expectations) and also reported that its CEO was resigning. Another casualty, Wayfair (W) 202.04, the home furnishings darling, which sports a PE Ratio of 229, lost 32 points on Friday, and could go a lot lower.

On a brighter note, it looks like a lot of 2nd tier speculative stocks have bottomed (how could they go any lower ?) and are making bases for an up-move. . .which would include Our Stock of the Week, Nerdwallet, Inc. CAUTION IS ADVISED.

Our “Stock of The Week” is Nerdwallet Inc. (NRDS) $16.18. We gave it a Buy Rating at $14.39 in our Market Letter on Monday 12/06/21. It operates a digital platform that provides consumer-driven advice about personal finance by connecting individuals and small and mid-sized businesses with financial products providers.

The company’s platform offers value across various financial products, including credit cards, mortgages, insurance, personal loans, banking, investing and student loans. Shares of the company soared 55% to $26 in their Initial Public Offering priced at $18 on November 4th. It has declined substantially since then. On November 29, Bank of America initiated coverage of the stock with a Buy Rating and $40.00 Price Target. Analyst Nat Schindler had this to say: ”We believe strong revenue and margin growth, vertical growth initiatives, international expansion, new financial services partnerships, and penetration of a large market opportunity will drive upside to the current stock price.”

We like the stock, think it will double within 3 months and will be buying it on Monday 12/13/21. It is a Speculative and RISKY, stock.

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


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