Tags: barron’s | snap | chipotle | stocks | rally

Barron's: Snap, Chipotle, and 11 More Stocks Set to Rally

Barron's: Snap, Chipotle, and 11 More Stocks Set to Rally

(Raymond Gregory | Dreamstime.com)

By    |   Friday, 19 July 2019 11:53 AM

Snap, Planet Fitness, and RH are stocks that seem poised to rise during the rest of the year this year, Barron's reported, citing financial research platform startup Sentieo’s latest predictions.

Sentieo scans companies’ filings, analyst reports, Google Trends, Twitter mentions, and more "to identify products and businesses that are doing better than the market appreciates—and whose stocks are primed to pop when the data becomes public," Barron's explained.

Twice a year, Sentieo publishes a list of stock recommendations combining insights from its trend-spotting tool, called Mosaic, with company fundamentals, macro data, and Sentieo co-founder and CEO Alap Shah and his team’s own judgment.

In 2018, its 16 recommended stocks rose 25.4% on average, handily beating the S&P 500 ’s 6.2% decline. In the first half of 2019, its 11 picks returned 38.2% on average since the list was published on Jan. 10, versus 17.3% for the index.

The top performer was Roku, which has soared 160% since Sentieo’s recommendation. Other first-half winners included LendingTree, up 73%, and Chipotle Mexican Grill, up 49%.

Sentieo’s 13 recommendations for the second half of 2019 bring back six stocks from the first half of the year’s list:

  • Lululemon (LULU)
  • Twitter (TWTR)
  • Crocs (CROX)
  • Chipotle Mexican Grill (CMG)
  • LendingTree (TREE)
  • Roku (ROKU)

New to the list are:

  • Coupa Software (COUP)
  • Wix.com (WIX)
  • GoPro (GPRO)
  • Dropbox (DBX)
  • RH (RH)
  • Planet Fitness (PLNT)
  • Snap (SNAP)

Mosaic uses alternative data such as search trends, social media data, website visits, and other mentions of companies or products online to gauge consumer-facing businesses’ traffic, sales, and eventual earnings ahead of their official release, Barron's said.

High-end furniture retailer RH—formerly known as Restoration Hardware —has a particularly good set up, Shah told Barron's. “We’re seeing strong trends in the data, as evidenced by a nice beat last quarter,” Shah says. “And short interest is quite high, which we love to see, because it’s like rocket fuel once [the market] sees the data turning.”

However, investor attitude on the stock market has been skittish, at best.

To be sure, Bloomberg reported that investors have pulled $150 billion from global equity funds this year and new stock issuance remains muted, with AB InBev shelving an initial public offering of its Asian operations just last week.

Despite a stellar stock rally that’s added almost $10 trillion in value this year, market participants remain cautious amid growth concerns as the U.S. and China dither on trade.

For his part, Arizona State University professor Hendrik Bessembinder, a 62-year-old researcher in financial market design, and his team sifted through about 62,000 stocks traded in more than 40 countries between 1990 and 2018.

Their finding: about 60% were such duds they did worse than one-month U.S. Treasury notes. The proportion was even greater than in the initial study, which focused on the U.S., Bloomberg said.

The findings have implications for everything from wealth creation to the math measuring investor skill, but got the most notice in the active-vs-passive debate. Since big gains are so rare and yet so crucial to overall returns, it helps explain why stock pickers struggle to keep up with indexes.

“It is historically the norm in the U.S. and around the world that a few top-performing companies have great influence over how the market does overall,” Bessembinder, a professor at the W.P. Carey School of Business at Arizona State, said by phone. “It’s the norm and I expect it to be the case in the future.”

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Snap, Planet Fitness, and RH are stocks that seem poised to rise during the rest of the year this year, Barron's reported, citing financial research platform startup Sentieo’s latest predictions.
barron’s, snap, chipotle, stocks, rally
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2019-53-19
Friday, 19 July 2019 11:53 AM
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