Joe Cotton: Stocks of the week — Netflix, Daftkings, Riot Blockchain, Advernum Biotechnologies
Market assessment – From and including Wednesday 20 July 2022 at 12:14 p.m
We hope you read our July 4, 2022 market review and that you had the courage and good sense to take advantage of the incredibly cheap prices that abounded at the bottom of the Bear Market that we said just ended. There was a big “Follow Thru Move” yesterday and the DOW went up 754.44 points and we expect it to continue as more investors realize that the “Bottom is in” and that they can still take advantage of these prices once in a lifetime, if they act fast.
We have 4 stocks that we still consider good buys – although Netflix, which we rated a buy at $189.11 in our market letter on Monday 07/18/22, rose 10.71 points today. They are: 1) Netflix, 2) Draftkings, 3) Riot Blockchain and 4) Advernum Biotechnologies.
Joe Cotton
STOCK #1- NETFLIX, INC. (NFLX) 201.63.
Netflix is a leader in streaming services and has around 222 million paid members in 190 countries. The company announced its results for the second quarter after the market closed on Wednesday. The results, compared to Wall Street consensus estimates, were as follows: Revenue – $7.97 billion vs. $8.05 expected; Adjusted profit per
Share- $3.20 vs. $2.98 expected; Subscribers – Loss of 970,000 against expected loss of 2 million users. The company is partnering with Microsoft to also offer its service for free to subscribers – with ad content. The share is sold at a historically low price-earnings ratio of just 17.09. The stock was strong in the aftermarket after the earnings report was published when the market closed. Analysts are split in their ratings for July 2022…from neutral to buy. We think it’s a bargain.
WAREHOUSE #2- DAFTKINGS, INC. (DKNG) $13.49. This is a growing digital sports entertainment and gaming company. It offers multi-channel sports betting and gaming technologies, powering sports and gaming entertainment for operators in 17 countries. It operates Internet gaming (iGaming) through the Draftkings brand in 5 states and Golden Nugget Online Gaming in 3 states. Its Sportbook is live with mobile and/or retail in the US in 18 states. It was the Online Gaming Hot Stock “Darling” of 2021, trading above $70 per share in March. Citigroup gave it a buy rating on 7/7/22, Barclays gave it an equal rating on 6/29/22 and JMP Securities gave it an outperform rating on 6/28/22. We like the stock, and bought some last week, and more
today and expect it to go to $25.00. They were a very visible sponsor at the Wimbledon matches.
STOCK #3 – RIOT BLOCKCHAIN (RIOT) $6.98. This is a very speculative stock. It is one of the largest bitcoin mining companies operating in North America. In June, they produced 421 BTC, an increase of about 73% compared to June 2021 production of 243 BTC. As of June 30, 2022. Riot had approximately 6,654 BTC, all produced by the company’s self-mining operations…worth approximately 125,000,000. Bitcoin has crashed in value over the past 8 months from around $67,500 in November to around $18,800 in late May. It rose sharply today to around $23,500. All bitcoin stocks rose strongly today, including (Symbols): MARA, BITF, HUT, APLD, etc. Three analysts gave the stock a Buy Rating in June. We are going to buy the stock.
STOCK #4 – ADVERNUM BIOTECHNOLOGIES (ADVM) $1.71. What’s exciting about this Very Speculative Stock is that it has a gene therapy drug that has been shown to be effective in treating age-related macular degeneration with just 1 injection that reportedly has a 2-3 year lasting response. The current standard of care is monthly or bimonthly injections into the eye. This is a huge deal. They expect the Phase 2 trials to start in Q3 2022. We like the stock and have taken a position in the stock and also the August 19, 2022 $2.50 CALL options. We think it could go to $25.00 or more by the end of the year.
Joe Cotton has won three national stock picking contests with annual percentage wins in excess of 96%. His winner of Wall Street’s Best Stocks of 2020 was Inovio Pharmaceuticals (Symbol INO) with a 742% 1-year return.
This article is not investment advice, nor should it be construed as investment advice in any way. For investment advice, contact a registered investment advisor or a certified financial planner. Joe Cotton’s website is www.cottonstocks.net. NKY’s Joseph W. Cotton is publisher of the market newsletter Cotton’s Technically Speaking. He is a graduate of Xavier University, a former bank manager and credit analyst, and a former registered investment representative of Fidelity Investments. Contact him at [email protected]
