It’s been an unusually strong August for the stock market, particularly since the option expiration day on Aug. 20.
But what’s even more interesting is that stocks haven’t been strong across the board. Take Monday’s trading action, which was an illustrative example of what’s been going on lately.
The Russell 2000 index shot up 0.3% in the morning, but then faded through the day, dipping 0.5% by market close. The NASDAQ Composite, however, picked up the Russell 2000’s slack and ended up 0.7% higher for the day.
The reality is that money isn’t leaving the stock market; it’s merely sloshing from one corner to another. In other words, we remain in a washing machine market where what’s up one day is down the next, and vice versa.
However, Americans tend to rally going into a holiday weekend like Labor Day.
Further, I believe the market will refocus on earnings in the second half of September as quarter-ending window dressing approaches and my fundamentally superior stocks typically do very well.
In the meantime, the washing machine market has been in charge.
Take the recent action in three of my Platinum Growth Club recommendations.
I first recommended Digital Turbine, Inc. (NASDAQ:APPS) to my Platinum Growth Club subscribers back in January 2020. The software company offers a Mobile Delivery Platform that enables mobile operators, original equipment manufacturers (OEMs) and application developers to better engage and acquire users.
APPS rocketed nearly 18% today as word spread the stock will be added to the S&P Midcap 400 on September 7. It’s very good news for this strong company, and I expect the stock will be added to more indices in the future.
The company reported its latest financials this morning. During the second quarter, FUTU continued to attract more and more users to its online brokerage and wealth management platform. The company revealed that it now has one million paying clients, which includes 100,000 paying users in Singapore alone. Futu noted that its total number of users jumped 66.8% year-over-year to 15.5 million. Trading volume also surged 104.3% year-over-year to $169.4 billion in the second quarter.
Second-quarter revenue soared 129.3% year-over-year to HK$1.58 billion, while earnings jumped 125.8% year-over-year to HK$533.9 million. In U.S. dollar terms, Futu reported revenue of $203.1 million and earnings of $68.7 million. Adjusted second-quarter earnings came in at $70.9 million, while earnings per ADS were $0.45.
Despite the fantastic results, the company got swept up in the selloff of Chinese stocks, but I’m confident the stock will firm up once the reality of strong sales and earnings kicks in for investors.
The company achieved a significant milestone during its second quarter in fiscal year 2022, reporting its first quarterly revenue of more than $1.0 billion.
For the second quarter, Zoom reported earnings of $415.1 million, or $1.36 per share, on $1.02 billion in revenue. That represented 51.1% year-over-year earnings growth and 54% year-over-year revenue growth. The analyst community was expecting earnings of $1.16 per share on $990.96 million in revenue, so Zoom posted a 17.2% earnings surprise and a 3% revenue surprise.
Looking forward to its third quarter in fiscal year 2022, Zoom expects total revenue between $1.015 billion and $1.02 billion and earnings per share between $1.07 and $1.08. That compares to revenue of $777.2 million and earnings of $0.99 per share in the third quarter of fiscal year 2021. This forecast is slightly lower than analysts’ current expectations for earnings of $1.09 per share and revenue of $1.01 billion.
And that’s why the stock pulled back today.
But overall, this was a stunning second-quarter report, and I expect Zoom’s products and services to remain in top demand as companies continue to work remotely amidst the pandemic.
The fact remains that we’re still in a “Goldilocks” environment, with low interest rates, accommodative central banks and a very strong earnings environment.
It’s why despite the latest market gyrations, I expect the market to firm up come mid-September as stocks remain one of the few assets that provide significant yield.
Choosing the Best Stocks
In fact, right now there are plenty of other fundamentally superior stocks that are worth your time. But if you’re having trouble finding them, then you need look no further than my Platinum Growth Club.
You see, I have more than 100 stocks across all of my services (plus 50 LEAPS call options, or Long-term Equity Anticipation Securities in my Power Options trading service), and each and every one boasts strong earnings and sales growth.
Of course, you don’t have to invest in all 100+ stocks. If you’d rather start small, I’ve got you covered there, too. My Platinum Growth Club service comes with my exclusive Model Portfolio.
I handpick all of my Model Portfolio recommendations from my different stock services — Growth Investor, Breakthrough Stocks and Accelerated Profits — so you can rest assured that you’re always invested in the crème de la crème.
And you couldn’t be joining at a better time as I’m releasing my September Platinum Growth Club Monthly Issue tomorrow. In my latest Platinum Growth Club Monthly Issue, I’ll recommend five brand-new buys that boast superior fundamentals and are well-positioned to climb higher in the months ahead. And in last Friday’s Growth Investor Monthly Issue for September, I unveiled two defensive, high-growth stocks with rock-solid fundamentals, and two elite dividend payers boasting yields of 1.5% and 4.5%, respectively.
In addition to access to my stocks and options recommendations, you can read every single Weekly Update, Monthly Issue, Market Alert and Trade Alert, as well as exclusive podcasts and Live Chat events. Plus, you’ll receive a Platinum Growth Club Monthly Issue at the beginning of each month.
The bottom line: If you want to make sure your portfolio is “locked and loaded” with fundamentally superior stocks that will do well in September and the longer term, then I encourage you to sign up for Platinum Growth Club today.
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
Digital Turbine, Inc. (APPS), Futu Holdings Limited (FUTU), Zoom Video Communications, Inc. (ZM)
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