I took a look at three stocks to avoid last week, and two of them moved sharply lower. One investment rose 1% for the week, but the other two declined 11% and 12%. None of the three stocks kept up with the market’s 2% advance, a return well ahead of the average decline of 7% for my bear basket.
It’s a new week, and I see…
One of this week’s more problematic earnings reports will come from Live Nation. The concert promoter is in a bind these days, and that’s not breaking news. The pandemic has called off live music shows and other performances, so of course Live Nation is going to be in a world of hurt.
Analysts predict a sharp loss on a brutal 92% plunge in revenue for the second quarter, which Live Nation will discuss shortly after Wednesday’s market close. No one is holding out for a strong report, yet somehow the stock has more than doubled off its mid-March post-pandemic low. The future isn’t promising. Live shows are going to be slow to return, and even with a vaccine there will be general skittishness and social distancing norms that will take a long time to shake.
I love a good comeback story as much as the next hopeless romantic, but there’s a good reason why Kodak’s stellar rise last week turned heads. The stock was a 10-bagger — yes, a 10-bagger — over the course of last week’s five trading days after the former camera pioneer was awarded a government loan for $765 million to help producing generic drug ingredients.
There’s no denying that this is a favorable development for Kodak. It has seen its revenue decline for 15 consecutive years, rarely squeezing out an annual operating profit along along the way. Anything that gives it a fighting chance is worth celebrating. However, grabbing a government loan under the Defense Production Act to dabble in a cutthroat industry with razor-thin margins doesn’t seem like a recipe for a 10-bagger here. Kodak should be worth more than it was a week ago, but speculators ran wild with the thin float here. This rarely ends well.
Another one of last week’s short-lived winners was Kandi Technologies, a small Chinese maker of…
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