Pre-Halloween scaries are in full effect. September is well-known as possibly the worst month for the stock market. True to form, the S&P 500 fell almost 2% since August 31st. Further, short-term prospects don’t seem much better.
A slew of economic data drops Monday. Traders with collective breath for news on whether rate hikes will continue. Uncertainty drives fear, and investors are skittish as the remainder of 2023’s interest rate prospects remain unknown. At the same time, bad news abounds as strikes spread to new industries and inflation begins ticking upward again.
All things considered, these three stocks are primed to move this week and are worthy of a watchful eye. Whether they’re worth investing in, though, is up to you.
General Motors (GM)
Car manufacturers are in the hot seat, and General Motors (NYSE:GM) is near the top of the list.
The United Auto Workers (UAW) union remains steadfast in its commitment to improved pay, pension, and benefits packages. The deliberation between the union and automakers already took a toll on their stock, as GM fell nearly 20% since its mid-July high.
On Friday, 13,000 workers walked away from work sites. The walkoff has downstream effects beyond simple labor loss, as manufacturers like GM tell their workers to stay home as part of temporary layoffs. Because manufacturing labor is so specialized, walkoffs in one sector mean workers dependent upon that portion’s completion can’t continue.
On the other hand, some expect the overall production delays to buy crucial time for GM to hash out problems related to electric vehicle manufacturing. Delivery and supply issues slowed planned 2023 releases, but unavoidable delays on the production line could give GM some much-needed breathing room as they try to meet ambitious forecast goals.
Arm Holdings (ARM)
Arm Holdings (NASDAQ:ARM) hit markets hard last week with a strong IPO performance before slumping into the weekend. Shares in Arm were the fifth most traded stock last Thursday, with analysts pinning much of the enthusiasm on retail traders.
Arm, a semiconductor company, seeks to displace Nvidia (NASDAQ:NVDA) from its vaunted “most overvalued chip company” position. After IPO, the company traded at nearly 170x price to earnings. With Nividia trading at a slim 109x, Arm’s price is premium. But can it deliver on its newfound market cap?
Analysts seem doubtful. Nvidia’s sky-high valuation is based on rapid growth, as the company’s revenue doubled last quarter, and management expects the trend to continue. However, Arm’s revenue and net income dipped slightly in the same period. Underwhelming performance and underdelivery don’t bode well for this AI stock play. If you’re buying Arm to round out your semiconductor stock portfolio, go for it. But wait for a dip, and don’t expect it to displace the king of chipmaking.
SharkNinja (SN)
SharkNinja (NYSE:SN) is poised to continue its winning streak after a fresh Wall Street rating sent the stock soaring.
After hitting markets in July, the consumer discretionary stock’s first rating from Jefferies pins a fair price at $67 per share. The stock surged on the news but, at around $40 per share today, remains about 70% below Jefferies’ target. Whether SharkNinja continues its run is anyone’s guess, but the home appliance stock has solid long-term prospects.
SharkNinja’s shining performance in “light recession” is particularly notable. Even as consumer budgets shrank, SharkNinja’s sales remained steady. In fact, sales have risen 20% annually since 2008. Bucking broader industry trends, SharkNinja’s management expects to end the year with $4 billion in revenue.
SharkNinja’s stock climbed 50% since its IPO. Still, there may be more upside this week as more investors notice this stock that’s flown under the radar.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
