• 7 hours COVID Vaccine Distribution Would Be A Big Win For Amazon
  • 2 days Under COVID, The Rich Got Richer
  • 4 days Will Biden Lift Sanctions On Venezuela?
  • 4 days How To Play The Next Stage Of The Marijuana Boom
  • 5 days India Looks To Import More Venezuelan Oil Under Biden
  • 5 days 3 Unstoppable Stocks With A Biden Boost
  • 5 days The Biggest Biotech Story Of 2021?
  • 6 days Biden Looks To Rejoin Paris Climate Agreement
  • 6 days Capital One Fined Again For Money-Laundering Failure
  • 6 days The Star-Studded Fund Backing Clean Energy Startups
  • 7 days The Unexpected Retail Segment On Track To Hit $68B
  • 10 days Oil Demand Falters On New Wave Of Lockdowns
  • 10 days Signal, Telegram Gain Ground As Social Censorship Breaks Headlines
  • 11 days Investors Should Be Worried About Tech Stocks
  • 13 days Battle For Market Share Intensifies In COVID Streaming War
  • 15 days Censorship Is Now Private, And That’s Scary
  • 18 days Markets Hit ‘Ignore’ Over Capitol Coup
  • 19 days Tesla’s China Strategy Is Yet Another ReasonTo Double Down
  • 20 days NYSE Reverses China Company Delisting Plans … For Now
  • 22 days The Dollar Could Remain Weak For Years To Come
Tom Kool

Tom Kool

Writer, Safehaven.com

Tom majored in International Business at Amsterdam’s Higher School of Economics, he is now working as news editor for Oilprice.com and Safehaven.com

Contact Author

  1. Home
  2. Investing
  3. Stocks

3 Stocks To Watch On Monday Morning

Stocks

Friday was a breakeven day on the markets, with U.S. retail sales for July coming in below Wall Street's expectations and shaving points off the Dow early in the day, while it pared those losses in midday trading and other drivers, including stimulus deadlock and the China trade deal, are keeping the major indexes in a state of limbo.

While retail sales for July recorded their third consecutive monthly rise, coming in at 1.2% higher, this was below the ~2% rise analysts were expecting. The only sales that beat expectations were cars and gasoline. But July is generally a low-volume time when it comes to retail, so the market isn’t reading too much into this.

The bigger drivers will be the stimulus deadlock, which is now on pause until the Senate returns after Labor Day.

Against this backdrop, it’s also earnings season, and these are our top three stocks to watch right now:

#1 DraftKings (NASDAQ:DKNG)

This is one of the hottest gambling stocks of the year. DraftKings is one of those pandemic darlings: It’s a daily fantasy sports contest and sports betting provider, which makes it a potential winner when it comes to social distancing.

DraftKings beat revenue estimates but missed earnings estimates, so is it a buy right now, or not?

The company grew revenues 23.6% year-over-year, but reported a loss of 55 cents a share.

Buying on the dip might be a good play here because the stock shed 6% on its missed earnings, but full-year revenue guidance was better than expected. 


Two notes of caution buying on the dip:

First, the pandemic is messing with the scores of professional and college sports leagues, so DraftKings will have to adjust. This isn’t an all-out pandemic-proof stock--yet. But as long as it’s digital, there are tons of avenues of growth here, particularly with the rapid rise of esports and sports betting in general, which doesn’t necessarily have to have traditional sports to survive in the future.

Second, there’s a bit of a wet rag here in the form of the IRS. The IRS has ruled that daily fantasy sports companies must pay federal excise tax on their entry fees (every wager), which has rather wide implications for this industry and its bottom line.

#2 Tencent

Hong Kong-listed Tencent--the Chinese tech giant--had a bit of a scare last week when Trump announced a ban on TikTok and WeChat in the United States. Tencent, the owner of WeChat, saw its shares dive on the news and its stock lose $66 billion overnight, but they rebounded when investors realized that this isn’t a deal-breaker for giant Tencent as WeChat represents only about 10% of its portfolio.

And it was all but forgotten when Tencent released its earnings Wednesday, completing crushing expectations.

Tencent’s biggest revenue-earner is online gaming, and that grew 40% year-on-year to 38.29 billion yuan. Overall revenue was up 29% year-on-year, and profit was up 37% year-on-year.

These numbers indicate that Tencent may not take much of a hit with a WeChat ban in the U.S. This stock rallied 60% in the past 12 months, and all the evidence suggests that there’s still plenty of room to run. 

#3 MGM (NYSE:MGM)

MGM is a casino monolith, and the pandemic has hit it hard. But while this stock hit a low of $5.60 in Q1 2020, June saw it work its way back to $23 before paring some of those gains to around the $15 range. Now, it’s trading back up over $21. 

The catalyst was a $1-billion investment injection on Monday by billionaire Barry Diller’s InterActive Corp. (IAC). That gave IAC a 12% stake in MGM, and shares soared 14% on the news. 

It was a lifeline for a gambling company that had reported a 91% revenue drop in its latest quarter and whose shares had lost more than 35% in 2020. 

By Tom Kool for Safehaven.com 

More Top Reads From Safehaven.com

Back to homepage

Leave a comment

Leave a comment