By: The Economics Club
Throughout the month of October, there have been a variety of stocks ranging in popularity where some have improved and others have plummeted. Here are some stocks that we advise to invest in and others to avoid along with future predictions of the stock’s performance in the following months.
Although many people use Fitbits regularly in their daily life, they are no longer as popular as they once were. Fitbit stocks have decreased in value by around 15%, each share currently worth 4.40 USD. Fitbit is not performing well over this month, and will most likely continue to decline. Perhaps they were just a fad, as it appears some people have given up on their New Year’s resolutions.
Barnes & Noble had a rocky start this October, starting with +6.26% on October 1st, but then dropping to +0.90% two days later. However, it made a comeback and hit +34.35% on October 10th. After the 10th, Barnes & Noble began a slow and steady descent and is beginning to plateau at +17.55%. As the weather drops in temperature, the demand for stay-at-home activities increases, leaving more people looking for activities to do that allow them to stay cozy in their homes.
We’re also diving deeper into the school year, meaning that students need books to study from. Based on how Barnes & Noble is performing right now, I believe that it will continue to plateau for a short period of time and then start to increase as the temperature continues to plummet and the school year progresses.
Macy’s, everyone’s favorite clothing store, has been performing shockingly bad lately. Macy’s has been plummeting from October 1st and dropped to an all-time low on Wednesday, October 17th at 31.84 USD. Stores like Kohls, whose stocks are rising, have been overtaking Macy’s in the past month. Hopefully, in the near future, the stock of Macy’s will improve.
One of the oldest candy companies, Hershey’s stock has recently been performing well. This is no surprise because Halloween has just passed by and people are stocking up on candy for the annual holiday. Hershey’s is one of the most famous candy brands and thus people are craving the wonderful chocolates. Over the past month, the stock price has increased by eight dollars and has gone from a price of approximately $100 to $108. With all of this said, I predict after the month of October the stock price of Hershey’s will drop back to the price it was during September ($100).
The stock price of JC Penney, an American department store chain, has been consistently decreasing for a decade now. Just last month on October 26th, it hit an all-time low of $1.32 per share. In fact, share prices have fallen 46% lower this year, and 79% over the past three years. With this in mind, it would be a wise choice not to invest in the JC Penney stock.
Kohl’s, a popular clothing line, has been successful for the past couple weeks because of its recent increase from a price of $70.84 to $75.73. Even though Kohl’s had a massive drop of $79.07 to $35.74 in 2016, it recovered and rose to $75.73, while competing against other popular clothesline brands such as Nike, Adidas, and Under Armor. According to Business Insider, one of the major reasons Kohl’s is performing well is because it is taking advantage of other closing clothesline businesses by purchasing them and taking them as their own.
Raytheon, a popular industrial company focused on making the necessities to defend our country, is having a terrible month when it comes to their stock. Despite the fact that revenue grew to $5.8 billion, which was 9% better than last year and 6% better than what analysts had predicted, it has been more than two years since Raytheon last generated free cash flow superior to reported net income. Even though Raytheon’s stock declined over October, I would advise buying its stock because the company has been performing well over the past week and its overall stock has performed well all of last year with the exception of September.
Walmart is an international corporation that dominates the competition in the field of efficient and cost-effective retail. For over 50 years, Walmart’s stock has steadily risen, experiencing minor fluctuations and drops in performance along with its journey to success. Over the past month, Walmart’s stock has reached a high of $101.17, while its monthly low was $99.72. Walmart’s stock is expected to steadily increase, as the global demand for efficient yet cheap goods and retail items will never cease to exist.
General Electric, an American multinational conglomerate company, has been rapidly depreciating over the course of the past year. Last month alone, its stock price decreased by 26.62 percent. General Electric has made several investment mistakes over the course of the past few years. The company invested heavily in the financial service business in 2007 and in the oil and gas industry in 2014 when crude oil prices were at their peak, acquiring several oil and gas equipment suppliers. In both cases, they sustained major losses after the market was hit by the Global Financial Crisis of 2008 and when oil prices dropped by more than 70 percent.
More recently, General Electric has faced several changes of leadership including new CEO Lawrence Culp. As part of Culp’s plan to restructure the multinational company, General Electric cut their dividend price from 12 cents to 1 cent a share on a quarterly basis. This move will allow the company to reallocate 3.9 billion dollars in annual cash flow to fund deleveraging. As General Electric is an established value company, investors purchase GE stock for the dividend. Lowering the dividend discourages traditional value investors. Finally, General Electric, which is exposed to numerous business lines, has overextended their resources to multiple different markets including oil and gas and financial services instead of focusing on their core areas of expertise, power generation, healthcare, and transportation. Based on past events, I predict that General Electric’s stock will continue to decrease over the course of the month of November as the company incurs more costs through the process of restructuring.
Amazon, a monopolistic company with branches in various fields of production, has fallen approximately 19%, making each share worth $1598.01 as of today. One factor of this drastic decrease was due to the release of third-quarter earnings, which influenced the slowing of Amazon’s business. Amazon’s stocks will most likely continue its decline, however, the purchasing of this stock is still advised due to the fact that it will most likely bounce back.
GameStop, a video game, consumer electronics, and wireless services retailer, has around 7,100 stores throughout America, Europe, Australia, and New Zealand. In the past month, GameStop has suffered many losses throughout October, reaching a monthly low of -10.27% on October 26th, 2018 at 13.71 USD. Even though the price has gone up in the last day, Gamestop stock will continue to decrease because most people now buy their gaming equipment and games online through other sources. Gamestop can’t compete with people downloading content online and have closed many branches including the one at Cobb’s Corner over the summer.
All in all, this collection of stocks represents the variance in the stock market and how different stocks can perform at different levels. We hope this list assists you in making decisions in what stocks should be invested in and which ones should be avoided.