By: The Economics Club
The stock market has been going through some big ups and downs as it goes through a tumultuous summer. Several stocks have improved exponentially while others dropped. Below is a compilation of stocks to buy and others to avoid along with predictions of the stock’s performance in the following months.
Snapchat’s stock has continued to drastically decline. Although Snapchat is a social media base many know and love, it’s stock decreased by 17.3% in August and another 10.9% in September, according to CNBC. Snapchat has become a middle-of-the-road stock due to its competition against Instagram, FaceBook and more. Instagram has successfully managed to copy the ideas of Snapchat, leading to Snap’s downfall. I advise against investing in the stock in the coming months because I predict its downfall will continue.
Twitter, another well-known social networking service, has been falling in its stock performance over the past month. Twitter has been dropping from the beginning of July and has been proven to be an unreliable stock over the past couple of months. Twitter’s fall started on July 8th, when the stock went down more than 5% in trading value according to NASDAQ. Following this decrease, on July 28th, Twitter shares fell 21%, the second-biggest loss for Twitter’s stock since 2013. According to Marketwatch, Twitter’s decrease in stock value is associated with Twitter “purging about a million fake accounts a day”. In other words, Twitter has been deleting many accounts to compensate for the huge amount of users. Although Twitter has not been as atrocious of a stock as in previous months, it is still a stock that will not offer you a profit due to its current circumstances.
Tesla is an American electric car company which debuted their first vehicle in 2008, “the Roadster 1.0” and has continuously continued to innovate new modern electric vehicles for customers who are willing to take a chance with electric vehicles. Tesla’s stock has been dropping during the past month. The trend started on August 27th when CEO Elon Musk threatened to make the company private on his social media account. If Musk was to make the company private, investors would no longer have the chance to invest in Tesla. After the initial panic, Tesla’s stock continued its downward trend and many Tesla shareholders are selling shares. However, the American auto giant is aiming to produce 6,000 vehicles a week and sales of their new budget “Model 3” vehicle are ramping up so the future of Tesla is looking fruitful.
IBM used to be the principal company in America. They sent people to the moon, but have been recently been struggling. Despite this, in September their stock increased by 5% because of two things. A strong US economy in general because of an increase in exports and a large amount of spending because of tax cuts, and a general gain in cloud computing, which is their main business. Will they continue to gain and regain their place as the world’s most important company? Due to their troubles and despite this growth, buying this stock is unwise because of IBM’s reliance on one industry and failure to grow in the last couple of years.
Tencent, a Chinese multinational investment holding conglomerate, has not been performing well. Since its peak from $60.96 in January 2018, the stock has dropped a whopping 36.14% (11.48% in the last month), to $38.93 as of October 10, 2018. One reason for this drastic change is due to Chinese regulators blocking the company’s widely popular game, Monster Hunt, which is roughly 40% of the company’s revenue. Additionally, the company has not been able to receive approval to acquire earnings from its mobile game, PlayerUnknown’s Battlegrounds, nor for the introduction of the desktop version of the game. Despite these setbacks, this massive gaming and social-media company is unlikely to disappear from the market anytime soon. According to The Motley Fool, WeChat, just one of the social media platforms owned by Tencent, has a monthly active user base of 1 billion, 71% of China’s population of 1.4 billion. Not only is Tencent a noteworthy part of the average Chinese consumer’s life, but the sheer size of it also gives Tencent the inertia it needs in order to recover from these obstacles.
Sears, a clothing line that sells all types of clothes, has been dropping for almost 3 years now, from going from a price of originally $40 to now a price of only $0.38. It has been decreasing because of all the other competition in the clothing line, like Nike, Adidas, and Under Armor, which has been dominating the industry for years now. However, according to CNN Money, analysts think that the SEARS stock will improve by a whopping %155.38 increase compared to its current price of $0.38 because of its good sales, which are 2.5B, and because they are using a new sale tactic, which has been working for now. Let’s shed some tears for Sears and hope they come back from this sad price of $0.38.
Chevron, an American multinational energy corporation and one of the world’s largest oil producers, has been rapidly appreciating over the course of the last year. Last month alone, its stock price increased by 3.22%. Chevron is doing well because oil demand has outpaced oil production. This is mainly due to fundamental drivers such as the global financial crisis in 2008 which led oil companies to underinvest in new oil exploration and production projects. The recent acceleration of the rate of economic growth in the United States has led to increased demand, depleted oil inventories, and higher oil prices. Moreover, President Trump’s recent sanctions on Iran, an important oil-producing state, have further strained the global oil supply. The increased oil prices have generated much higher revenue for oil companies and fast top-line growth is the main driver of a stock price. Finally, Chevron faces very limited competition as barriers to entry into the oil market is very high and they maintain a loyal customer base. Based on the further projected increase in the price of oil, I predict that Chevron’s stock will continue to increase by as much as 2 percent over the course of the month of October.
Netflix, a popular television streaming service, has been steadily improving over the course of September. It went from $341.18 at the beginning of September to $381.41 by the end of the month. It has almost recovered after a massive drop of over $100 from July to August. This increase is most likely due to the new movies and television shows that Netflix has been producing, like Nappily Ever After and Alias Grace. It has risen significantly this year and looks to keep on the same trend for the coming months.
The stock price of Apple, a major American technology company, has been consistently improving for a decade now, and with the popularity of recent Apple products such as the iPhone X and the iPhone XS, it comes as no surprise that the company has been doing better than ever. Although the price of Apple’s stock has dropped slightly during the past week, it’s still a smart investment. In fact, Apple hit its all-time high of $232.07 earlier this month on October 2.
Walt Disney, a billion dollar company that is known for their fun resorts like the Magic Kingdom and producing movie classics, has been doing very well last month. From September 11th, the stock has been improving at a very steady rate, reaching an all-time high at an impressive $117.66 on Tuesday, October 2. This is most likely due to the fact that during the summer thousands flood to Disney World/Land increasing profits exponentially. I predict this streak will only improve with the time to come, making this a very good stock to buy.
During this summer, many industries have flourished while others suffered resulting in a diverse list of stocks to buy with others to avoid.