The markets have been shaky today following the release of the whistleblower complaint related to the impeachment inquiry of the president as well as the ongoing trade war.
In other news, McDonald’s (NYSE:MCD) announced that it will be testing Beyond Meat (NYSE:BYND) burgers at a handful of its Canadian locations, and the U.S. is most likely not going to extend the waiver that allows some U.S. firms to continue selling to China’s Huawei Technologies.
With such a news-filled week, let’s see what’s trending with InvestorPlace readers today.
What Do Chairman Mao and Nike Have in Common?
Earlier this week Nike (NYSE:NKE) released earnings for the its fiscal first quarter of 2020. The results blew expectations out of the water and took the Nike stock price higher. Josh Enomoto partially credits the Chinese for Nike’s recent success, citing Chairman Mao Zedong’s passion for the sport of basketball. Thanks to Mao, Enomoto argues, “basketball has become a part of the Chinese cultural DNA.”
Not even the Cultural Revolution could abate China’s enthusiasm for the quintessentially Western sport. Mao made an exception for basketball and it has endured in Chinese culture ever since. And in this case, it’s to the benefit of Nike stock.
“And while Nike is associated with many sports, it has a dominating presence with basketball. Particularly, the company’s Air Jordan models have become as iconic as a can of Coca-Cola (NYSE:KO). But the distinguishing factor for Nike, and by extension, Nike stock, is demand: The Chinese consumer loves Air Jordans and anything to do with basketball.”
Trade war? What trade war? The Cultural Revolution let basketball slip into China and Chinese culture, so it comes as no surprise that Chinese consumers are still buying Nikes amidst the U.S.-China trade war. Capitalism finds a way.
ACB Stock a Buy Now
Though the cannabis sector has recently been plagued by overproduction and vaping crisis news, Luke Lango thinks Aurora Cannabis (NYSE:ACB) is grossly undervalued right now.
“In the long-run, a handful of these cannabis companies will turn into $20 billion-plus cannabis titans. At this point, it looks increasingly likely that Aurora will be one of those titans. Consequently, Aurora Cannabis stock should be bought on its recent weakness.”
While ACB may currently trades at 50% off its 2019 highs, the patient investor stands to gain a lot over the long term.
Analysts Cozy Back up to AMD Stock
Advanced Micro Devices (NASDAQ:AMD) has been slowly picking up market share in part due to the release of its new 7nm processing chips. InvestorPlace’s Mark Hake says AMD’s financials are turning around, referring to the fact that its revenues are up 20% and that the company gave an outlook that “sales in the next quarter would be 18% higher and up 9% year-over-year.”
Is this the beginning of a comeback for AMD stock? Though some analysts maintain a Neutral rating on AMD stock and the delay of the Ryzen 9 3950X, there are signs of upside potential.
Taking a Risk With NBEV Stock
Luke Lango asserts that New Age Beverages is on the road to becoming a multi-bagger stock. Volatility is certainly in the cards, but NBEV stock has the potential to increase by over 400% over the next five years.
“New Age Beverages — a stock that has been stuck in a secular decline for the past 12 months — could end up rising by three-, four-, or even five-fold from current levels.”
In addition to their trendy product portfolio consisting of everything from kombucha to coconut water, Lango attributes this possible rise to Tuesday’s news that NBEV was given the all-clear from Japan to sell its CBD products there.
Nothing is set in stone, of course, as Lango points out:
“…some CBD upside is clearly priced into the stock. Shares rose 18% in response to the Japan approval. As we’ve seen with the major pot stocks — Canopy Growth (NYSE:CGC), Aurora Cannabis (NYSE:ACB), and Cronos Group (NASDAQ:CRON), to name a few — nothing is certain in this world. As such, the stock hanging its hat on CBD upside is a risky situation.”
On top of that, NBEV has yet to be profitable. It’s a risky stock, but one with potentially high rewards.
That’s it for today’s commentary. Please feel free to drop us a note at editor@investorplace.com to let us know what we got right and what we got wrong. Happy investing!
