“The stock market is designed to transfer money from the active to the patient.” ~ Warren Buffett
Dear Trader,
Welcome to today’s edition of Wall Street Connected.
With the coronavirus pandemic having changed in-store shopping as we know it, one could say that China’s largest e-commerce company having an antitrust case launched against it three days before Christmas is about as poor as timing can get for a well-established business in the internet retail industry.
To the surprise of many traders and investors, that’s what happened to Alibaba (BABA) this past Thursday, and the stock continues to struggle as a result.
While the pandemic has caused furloughs and significant declines in business for many retailers such as Macy’s (M), well-established e-commerce companies have been doing better than ever by revenue, which plays a direct role in determining the market cap of a company.
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For example, Amazon (AMZN) actually had to limit consumer orders in 2020 due to an overwhelming amount of demand for online shopping, and the company’s CEO, Jeff Bezos, became the richest man in the world as a result of all-time high revenues.
Alibaba also witnessed an incredible increase in business as China’s largest e-commerce company, and despite the stock’s recent decline in price-per-share, their market cap remains north of six hundred billion dollars.
Due to online shopping becoming “the new normal” for many consumers all around the world and their recently launched antitrust probe, it may come as no surprise that Alibaba ranked #5 in top-searched stocks by financial professionals with $1B+ AUM last week.
We find it interesting that while Amazon and Alibaba are giants in their industries, internet retail was the fifth highest-ranking industry by searches amongst financial professionals last week.
This could be due to the fact that with the holidays upon us, consumer spending can reach annual highs, and in-store retailers continue to struggle as a result of the coronavirus pandemic.
To the surprise of many, there are a handful of companies who were formerly known for in-store retail which have been dedicating a significant amount of time to improving consumer online shopping experience.
Three companies which you may know who have been doing this are Walmart (WMT), Target (TGT) and Best Buy (BBY). All three saw record-breaking online sales in 2020.
A reflection of these businesses e-commerce improvements and increasing sales can be as simple as the performance of their stocks. Walmart, Target, and Best Buy all reached new all-time highs in 2020, while many brick and mortar retailers reached five-years lows.
TrackStarIQ Data
Here are some highlights from FA searches last week…
| RANK | TOP SEARCHES BY FAs (Total Traffic) Previous Week [STOCKS] | TOP SEARCHES BY FAs w/ AUM>$1B (Total Traffic) Previous Week [STOCKS] | TOP INDUSTRY SEARCHES BY FAs (Total Traffic) Previous Week [EQUITIES] | TOP INDUSTRY SEARCHES BY FAs w/ AUM>$1B (Total Traffic) Previous Week [EQUITIES] |
|---|---|---|---|---|
| 1 | EVT | KTEL | Biotechnology | Communication services, misc |
| 2 | OCGN | IWSY | Software – Application | Prepackaged software |
| 3 | KTEL | WFC | Auto Manufacturers | Banks – Diversified |
| 4 | TSLA | LCA | Conglomerates | Conglomerates |
| 5 | LEN | BABA | Internet Retail | Internet Retail |
| 6 | AAPL | XL | Drug Manufacturers – Specialty & Generic | Insurance – Property & Casualty |
| 7 | BABA | UAVS | Semiconductors | Aerospace & Defense |
| 8 | FUBO | UMC | Software – Infrastructure | Semiconductors |
| 9 | NIO | WSM | Internet Content & Information | Specialty Retail |
| 10 | JAGX | LMND | Diagnostics & Research | Diagnostics & Research |
| 11 | SNDL | AMD | Specialty Retail | Semiconductors |
| 12 | ALPP | QEPC | Electrical Equipment & Parts | Cutlery, Handtools & General Hardware |
| 13 | FCEL | AAPL | Residential Construction | Consumer Electronics |
| 14 | GME | BBRW | Consumer Electronics | Medical and hospital equipment |
| 15 | MVIS | SNDL | Specialty Chemicals | Drug Manufacturers – Specialty & Generic |
| 16 | SRNE | NIO | Scientific & Technical Instruments | Auto Manufacturers |
| 17 | NNDM | FCEL | Aerospace & Defense | Electrical Equipment & Parts |
| 18 | XL | CRWD | Medical Devices | Software – Application |
| 19 | AMD | TREP | Entertainment | Services-Advertising |
| 20 | MARA | MVIS | Insurance – Property & Casualty | Scientific & Technical Instruments |
What Traders Are Reading:
- How much damage did the pandemic do to certain sectors?
- IKT falls below IPO price in the first trading day.
- S&P ekes out gain for the holiday session.
What Traders Are Watching:
Tesla (TSLA) has been a hot topic on Wall Street in 2020.
From launching new products to being listed on the S&P 500, this company has received no shortage of attention.
But what if you could filter out the noise from the sound?
You can do that by watching this video.
-InvestingChannel
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