 - Between 2019 and 2021, three well-known companies shared three things in common.
- Two of those things involved the price action of their stock.
- But the third was harder to spot … and perhaps the most important for investors to understand.
|
You’ve probably heard of Carvana Co. (NYSE: CVNA), Beyond Meat Inc. (Nasdaq: BYND) and Wayfair Inc. (NYSE: W).
All three have a few things in common.
The first is obvious.
Even the second is obvious.
But the third factor isn’t as “in your face.” And learning how to identify it will make you a better investor as you look for stocks to buy and sell.
Let’s get into it… The Ups and Downs Looking at a chart of the price action of CVNA, BYND and W will show you the first two things they all have in common:  (Click here to view larger image.) The chart above plots each stock from its initial public offering (IPO) to today.
All three experienced a big pop in their share prices at some point in time.
From a low of $29.35 in March 2020 to its all-time high in August 2021, Carvana stock jumped an incredible 1,131%.
Beyond Meat went from its post-IPO price of $65.75 in May 2019 to $234.90 in July 2019 — a 257% jump in just two months!
And Wayfair went from a low of $23.52 in March 2020 to a high of $342.40 in August 2020. That’s an increase of 1,355% in five months!
The chart also shows the second common trait for these stocks … massive drops following those impressive gains.
Wayfair fell 81% from its August 2020 high to today … Carvana tanked almost 87% from its high to today … and Beyond Meat dropped more than 95% from its all-time high!
Some investors who bought and held these stocks saw impressive, short-term gains. But that didn’t last.
And it’s the third thing these companies have in common that tells us why.
 | Our CEO is making a big move… He’s put 100% of his IRA into Adam O’Dell’s brilliant new AI-driven system — Infinite Momentum. We’ve already invested $5 million in this technology … tested it against 24 years of data … and witnessed its power to beat the market by 300-to-1. Now you can discover how to reap the windfall. Details here… |
In Stocks … Quality Matters Quality is one of the six factors we use in Adam O’Dell’s proprietary Green Zone Power Ratings system.
It measures a company’s profitability, margins, debt and cash flows to show how “healthy” it is.
Overall, our Quality factor is built on 27 individual metrics and boils it down to one simple number from 0 to 100.
It’s an effective way to filter out “junk” companies — or ones that we should steer clear of.
I’m picking on Carvana, Beyond Meat and Wayfair because they show low Quality in action. All three of these companies struggle with profitability. For reference, CVNA scores a 17 on the Quality factor, BYND scores a 12 and W scores a 4!
Wayfair has negative returns on assets and investments along with negative net and operating margins. It’s the same for Beyond Meat and Carvana:
 (Click here to view larger image.) These numbers show why these stocks had fast upswings, but just as fast downturns.
Investors bought hype and headlines but it was too good to be true.
I know two of these stocks have had strong runs this year, but they are still off their high points and the other shoe could drop at any time because they are still not profitable.
Quality helps us weed through the hype and headlines to uncover stocks that can not only grow, but weather market headwinds.
It’s why Quality is a key metric in Adam’s brand-new Infinite Momentum Alert. He uses Quality alongside Value and Momentum (and an AI-powered algorithm running in the background) to unlock unlimited potential by trading just 10 stocks every month.
The system is simple to follow and sticking to it produced massive results in back testing. Adam’s strategy obliterated the S&P 500 300-to-1 with 35% annualized gains since 1999.
The news is out on his Infinite Momentum Alert and now is the perfect time to get on board and realize the massive potential. Click here to find out more…
Bottom line: Stock charts can show you patterns and tell you how a stock has moved.
But quality is one way you can determine whether stocks can maintain big upswings or weather downturns in the market. As we see with Carvana, Beyond Meat and Wayfair, unprofitable, low-quality companies can’t do either.
Safe trading,
Matt Clark, CMSA®
Chief Research Analyst, Money & Markets
Check Out More From Stock Power Daily: |
Privacy Policy
The Money & Markets, P.O. Box 8378, Delray Beach, FL 33482.
To ensure that you receive future issues of Money & Markets, please add info@mb.moneyandmarkets.com to your address book or whitelist within your spam settings. For customer service questions or issues, please contact us for assistance.
The mailbox associated with this email address is not monitored, so please do not reply. Your feedback is very important to us so if you would like to contact us with a question or comment, please click here: https://moneyandmarkets.com/contact-us/
Legal Notice: This work is based on what we've learned as financial journalists. It may contain errors and you should not base investment decisions solely on what you read here. It's your money and your responsibility. Nothing herein should be considered personalized investment advice. Although our employees may answer general customer service questions, they are not licensed to address your particular investment situation. Our track record is based on hypothetical results and may not reflect the same results as actual trades. Likewise, past performance is no guarantee of future returns. Certain investments carry large potential rewards but also large potential risk. Don't trade in these markets with money you can't afford to lose. Money & Markets permits editors of a publication to recommend a security to subscribers that they own themselves. However, in no circumstance may an editor sell a security before our subscribers have a fair opportunity to exit. Any exit after a buy recommendation is made and prior to issuing a sell notification is forbidden. The length of time an editor must wait after subscribers have been advised to exit a play depends on the type of publication.
(c) 2023 Money & Markets, LLC. All Rights Reserved. Protected by copyright laws of the United States and treaties. This Newsletter may only be used pursuant to the subscription agreement. Any reproduction, copying, or redistribution, (electronic or otherwise) in whole or in part, is strictly prohibited without the express written permission of Money & Markets. P.O. Box 8378, Delray Beach, FL 33482. (TEL: 800-684-8471)
Remove your email from this list: Click here to Unsubscribe | | | | | | |
Post a Comment
Post a Comment