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Marriott International, Inc. (MAR) faced challenges in 2020 but has slowly regained momentum in recent months after declines last spring. Still, the stock has underperformed the S&P 500, falling by approximately 15% compared to the S&P’s overall gain of almost 18% since January 2020. Despite the hospitality company’s challenging year amidst the coronavirus pandemic, it was added to the WhaleWisdom 100 Index on November 16, 2020.

Marriott operates as a multinational hospitality company that manages and franchises a broad portfolio of hotels and other lodging facilities, in addition to rental properties. Pandemic induced fear of travel and government restrictions dramatically curbed leisure demand in 2020, adversely affecting Marriott’s bookings.
While the pandemic has had a severe impact on Marriott’s business, the company took measures to adapt and reduce costs while waiting out the storm. Marriott also elevated its commitment to cleanliness to meet the coronavirus challenges and fostered goodwill by donating hotel stays to medical professionals in support of their efforts to battle the virus throughout the United States. The recent release and continued research of coronavirus vaccines worldwide offer additional hope for a rainbow to come for this industry. Marriott anticipates a gradual rise in bookings, and analysts predict a multi-year recovery towards pre-virus demand.

Optimistic Long-term Estimates

Beginning in 2021, analysts are more optimistic with estimates. Forecasts call for revenue to fall in 2020 by about 48.7%, and then increase in 2021 by approximately 35.9% to about $14.7 billion. Overall, Marriott is expected to see revenue growth ranging from 35.9% to 9.5% from 2021 through 2024. Between 2020 and 2024, revenue could very likely grow from $10.8 billion to about $24.6 billion.

Earnings per share are initially expected to decline to a loss of $0.21 in 2020 and rebound in 2021 to about $2.35. Profits are then expected to nearly double in 2022, bringing earnings per share to an estimated $4.56. Moderate growth is expected to continue in 2023 and 2024, and by December 2024, earnings per share are predicted at about $7.46.

Analysts Predict Recovery

Argus Research Co.’s analyst, John Staszak, moved Marriott’s stock to a Buy rating from a Hold and believes that the industry is in the early stages of another multi-year upturn. Staszak reduced loss estimates for 2020 to $0.10 from $0.18 and raised earnings per share estimates for 2021 to $3.15, noting that the company has an adaptive global operating model that allows it to expand room capacity anywhere in the world.

Citigroup, Inc. turned bullish on the stock, influenced by the start of coronavirus vaccine distribution around the world. Citi upgraded Marriott to a Buy rating with an overweight position and a $150 price target. Vaccine distribution restores confidence for many.

Favorable Long-term Outlook

Being realistic of the disruptive effect of the pandemic on the hospitality industry and tourism, Marriott’s financial recovery will not happen overnight. However, recent news concerning vaccines for the coronavirus has resonated positively. Once travelers feel safe again, both personal and business trip bookings are likely to rebound. Marriott’s business strategies improved revenue estimates, and continued growth may encourage investors.

Netflix, Inc. (NFLX) saw steady growth in 2020 and early 2021, after a brief dip around March 2020. The stock has outpaced the S&P 500, increasing by about 57.4% compared to the S&P 500’s gain of approximately 18.4% over the past year. However, despite healthy growth, the entertainment service company slid on the WhaleWisdom Heatmap to a ranking of 23 from 12.

Netflix has an online entertainment business that provides subscription services, streaming movies and television shows, and DVDs by mail. Netflix benefitted considerably from coronavirus pandemic related shutdowns in television and movie production, in addition to stay-at-home government orders that had customers around the world looking for alternative in-home entertainment. The pandemic helped to expand its customer base and increase viewer engagement as binge-watching became an excellent distraction for many. While growth leveled off in recent months as pandemic restrictions lifted, Netflix established new fans.

Hedge Funds Are Selling

Looking at third quarter activity by the top hedge funds, Netflix saw a decrease in its aggregate share value. Aggregate 13F shares held fell to about 60.1 million from 63.0 million, a decrease of approximately 4.6%. Of the hedge funds, 39 created new positions, 117 added to existing holdings, 32 exited, and 136 reduced their stakes. Institutions were also selling and decreased their aggregate holdings by about 1.1%, to approximately 352.0 million from 355.9 million.

(WhaleWisdom)

Analysts Are Optimistic

Analysts are optimistic about the stock, raising price targets, and acknowledging opportunities. Royal Bank of Canada (RBC) maintained an outperform rating on the stock. It gave Netflix a price target of $630, noting that Netflix’s stock price does not reflect its future growth and profitability potential. Cowen and Co.’s analyst, John Blackledge, raised its price target on Netflix to $650 from $625, due to optimism about the fiscal fourth quarter. Blackledge expects to see substantial subscriber numbers, especially with seasonal pandemic related shutdowns bolstering viewership.

Positive Multi-Year Estimates

Analysts anticipate continued revenue growth through 2022, with a predicted annual rise in a range of approximately 16.7% to 23.8% between 2020 and 2022. This would bring revenue estimates to roughly $24.9 billion in December 2020, later increasing to $34.5 billion by 2022. These encouraging year-over-year forecasts would also ultimately bring earnings up to $12.49 per share in 2022, up from an estimated $6.30 for 2020.

Favorable Outlook

Amidst pandemic lockdowns and social distancing, binge-watching viewers resulted in significant growth for Netflix in 2020. Analysts are bullish on the stock and have raised price targets. While growth may be slower as of January 2021, Netflix is positioned for long-term success. As Netflix maintains its subscriber base and attracts additional subscribers with new series content, investors have an excellent long-term opportunity.

Pinduoduo Thrives During Pandemic

Posted on January 4th, 2021

Pinduoduo Inc. (PDD) has seen steady upward momentum over the past six months, outperforming the S&P 500 and rising by approximately 370.0 % compared to the S&P’s gain of about 16.3%. Despite the Shanghai-based company’s impressive performance, the company recently slid on the WhaleWisdom HeatMap to a ranking of 38, down from 10. Hedge Funds are buying, though, as analysts are raising price targets.

Pinduoduo operates an interactive e-commerce platform and is one of China’s largest online marketplaces, serving customers worldwide. The company appears to be benefitting from changes in shoppers’ habits during the coronavirus pandemic, which has brought higher sales. Pinduoduo boasts a customer to business (C2B) model that allows it to eliminate distributors and ship directly to manufacturers. Additionally, Pinduoduo has shifted a portion of efforts into the online grocery market, which offers further business opportunity as consumers have sought online food shopping opportunities at an increased rate throughout the pandemic.

Hedge Funds Are Buying

Pinduoduo has captured hedge funds’ attention, with aggregate 13F shares held increasing by about 22.4% in the third quarter. This healthy increase brought shares held to about 74.3million from 61.6 million. Of the hedge funds, 24 created new positions, 29 added to existing holdings, 15 closed out their position, and 21 reduced their stakes. In slight contrast to hedge funds, institutions decreased their aggregate holdings by about 2.5%, to approximately 226.8 million from 232.7 million.

(WhaleWisdom)

Favorable Forecasts

Pinduoduo is viewed positively by many prominent investment banks and financial services companies such as Goldman Sachs Group, Inc., Bank of America Corp. (BofA), and Barclays PLC. Pinduoduo may also benefit from a recent regulatory probe into its competitors, which may curb monopolistic conduct and open up Pinduoduo’s options for working with merchants. Analyst Jerry Liu from UBS Securities Ltd. believes the anti-monopoly probe is likely to lower pricing and result in Pinduoduo’s top competitors being less aggressive with merchants. Barclay’s analyst, Gregory Zhao, raised Pinduoduo’s price target to $125 from $79, keeping an equal weight rating on the shares.

Encouraging Multi-Year Estimates

After year-over-year revenue growth of about 80.9% in 2020, analysts anticipate continued growth in revenue from 2021 through 2023. Pinduoduo is forecast to grow revenue in a range of approximately 19% to 81%, which would bring revenue estimates of roughly $12.1 billion in December 2021, later increasing to about $19.8 billion in 2023. Rising year-over-year estimates are predicted for earnings as well, climbing to $3.32 in 2023, up from -$0.37 in 2020.

Bright Outlook

Pinduoduo’s 2020 profit growth helped demonstrate the company as a formidable player in e-commerce. Its multi-year estimates are encouraging for investors. The company has shown positive momentum amidst the coronavirus pandemic and strategically chosen new business ventures with future potential.

The Trade Desk Inc. (TTD) has experienced considerable upward momentum in the past three months and overall had a good year. Trade Desk significantly outperformed the S&P 500, rising by approximately 258.7% compared to the S&P’s gain of about 14.6%. Despite the impressive performance, the company slid on the WhaleWisdom HeatMap to a ranking of 39, down from 17. While its aggressive growth may indicate Trade Desk’s future potential, hedge funds and institutions appear to be taking a conservative investment approach.

Trade Desk is an information technology company that markets an online software platform geared towards digital advertising campaigns. Advertising buyers can purchase these tools to manage their campaigns across social media, mobile devices, and video formats. Additionally, the coronavirus pandemic has positively impacted the Trade Desk. The pandemic-fueled rise in television streaming has resulted in increased and more deliberate advertising spending.

Hedge Funds Sell Despite Recent Gains

Although Trade Desk’s stock has had significant gains in recent months, hedge funds are selling. Looking at third quarter activity by hedge funds, the aggregate 13F shares held decreased to about 5.0 million from 6.2 million, a decrease of approximately 19.6%. Of the hedge funds, 18 created new positions, 29 added to existing holdings, 16 closed them out, and 41 reduced their stakes. Institutions sold off stock at a slower rate than hedge funds with a decrease in aggregate holdings of about 6.9%, to approximately 31.2 million from 33.5 million.

(WhaleWisdom)

Encouraging Multi-year Estimates

Analysts expect to see revenue grow through 2023, ranging from 22.2% year over year for 2020 to 29.8% growth in 2023; this estimate would grow revenue to approximately $1.8 billion by 2023. Earnings estimates are also very optimistic, with year over year estimated increases that would bring earnings to $9.38 per share in 2023, up from $4.97 in 2020.

Analysts Share Optimism on TTD’s Future

Needham & Co. raised its price target on Trade Desk to $1,000 from $750 and maintained a buy rating on the stock, citing the pandemic tailwind that is believed to continue to yield increased demand. Berenberg Capital Markets noted the IT company’s favorable positioning and sustainable competitive advantage in a large market. Berenberg believes that Trade Desk is the “best way to play” connected television (CTV).

Positive Outlook

Trade Desk’s impressive 2020 growth is encouraging for investors. The company is well-positioned to continue to capitalize on the rapid growth of CTV advertising, which got a boost due to pandemic related TV streaming. Analysts’ ratings and multi-year estimates present as an attractive metrics to garner the attention of investors.

RingCentral Shows Steady Momentum

Posted on December 21st, 2020

RingCentral Inc. (RNG) has shown steady growth in 2020, gaining momentum following a brief dip in March. The stock has significantly outperformed the S&P 500, rising by approximately 129.8% compared to the S&P’s gain of about 15.2%. The communication services company has seen a profitable year and rose in ranking on the WhaleWisdom Heatmap to 18 from 32.

RingCentral offers cloud-based internet and telephone communication services with collaboration solutions for mobile and distributed businesses. While many companies had experienced setbacks during the coronavirus, especially when government lockdowns around March impacted so many business sectors. RingCentral has been able to pivot and actually benefit from increased sales during the pandemic.

Hedge Funds Are Buying

RingCentral saw hedge fund managers and institutions buying, though overall institution ownership was down slightly by 0.1%. Looking at activity by the top hedge funds in the second quarter, the aggregate 13F shares held increased to about 23.9 million from 23.1 million, an increase of approximately 3.5%. Of the hedge funds, 23 created new positions, 54 added to existing holdings, 25 exited, and 49 reduced their position. With aggregate holdings increasing by about 1.1% to approximately 77.4 million from 76.5 million, institutions were also buying.

(WhaleWisdom)

Favorable Multi-year Estimates

Analysts expect to see revenue grow rather consistently from 2020 through to 2023, ranging from 23.1% to 30.2% year over year growth. Between December 2020 and 2023, revenue is anticipated to grow to approximately $2.3 billion from $1.2 billion. Earnings estimates are also very optimistic, with year-over-year estimated increases that would bring earnings to $2.15 per share in 2023, up from $0.96 in 2020.

Positive Outlooks from Analysts

Investment firms have responded positively to RingCentral’s new partnership with Vodafone. RingCentral’s services will match nicely with Vodafone’s mobile expertise. Morgan Stanley’s analyst, Meta Marshall, favors the deal, noting that the legacy Unified Communications market was underpenetrated. Marshall gave the stock a $420 price target, up from $300. Marshall initially rated the stock Equal-weight and then later upgraded to an Overweight rating. Raymond James Financial, Inc. raised the stock’s price target to $450 from $355, maintaining a Strong Buy rating.

Bright Outlook

RingCentral’s impressive 2020 growth is certainly encouraging for investors, especially after a rough start to the year near the beginning of the pandemic. The company also appears well-positioned to continue to respond to the pandemic and act upon increased demand for its services, especially given Vodafone’s partnership. Analysts’ ratings and multi-year estimates speak to the stock’s promise, offering investors an attractive opportunity.