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M&A drives Vivint to top industrial gainer, while stock offering drags down Chart

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The week ending Dec. 9 saw pressure on stocks ahead of the Federal Reserve meeting this coming week. All 11 S&P 500 sectors finished in the red with the The Industrial Select Sector SPDR (XLI) declining -3.19%. Vivint led industrial stocks (in this segment) which also saw two Chinese airlines as China eased up COVID restrictions following protests.

The SPDR S&P 500 Trust ETF (SPY) fell -3.35% for the week. The Fed is expected to raise rates by 50 basis points but the comments which will be made by Federal Reserve Chair Jerome Powell would be closely watched as it would give an idea where inflation and the health of the economy is heading. The November ISM Services PMI Index turned higher than expected, while factory orders climbed past expectations in October. Labor productivity also rose more than expected in Q3. YTD, SPY is -17.20%, while XLI is -6.37%.

The top five gainers in the industrial sector (stocks with a market cap of over $2B) all gained more than +8% each this week. YTD, four out of these five stocks are in the green.

Vivint Smart Home (NYSE:VVNT) +25.98%. The stock stock shot up (+32.37%) on Dec. 6 after NRG Energy (NRG) said it was acquiring the Provo, Utha.-based smart home and security systems provider in $5.2B deal, which includes debt.

The SA Quant Rating, which takes into account factors such as Momentum, Profitability, and Valuation among others, had a Hold rating on the shares. VVNT has a factor grade of A for Profitability and D for Growth. The average Wall Street Analysts’ Rating was Hold as well, wherein 4 out of 5 analysts tagged the stock as such. YTD, VVNT has risen +21.47%, the most among this week’s top five gainers.

China Eastern Airlines (CEA) +18.46%. The stock rose throughout the week amid news that Commercial Aircraft Corporation of China, delivered its first domestically-developed passenger jet C919 to launch customer CEA. YTD, the shares have climbed +15.95%. The SA Quant Rating on the shares is a Hold, with score of A for Momentum and C+ for Valuation.

The chart below shows YTD price-return performance of the top five gainers and SP500:

Leonardo DRS (DRS) +15.65%. The Arlington, Va.-based company said it received a $39.5M contract award from the U.S. Army which propelled its stock on Monday. The company, which provides sensor and infrared systems, has seen its stock rise +19.21% YTD.

China Southern Airlines (ZNH) +12.94%. The stock made it to the top five gainers for the second week in a row. The shares grew throughout the week, and YTD have risen +10.32%.

Ferguson (FERG) +8.98%. U.K.-based plumbing and heating products distributor Ferguson saw its stock rise after Q1 results beat analysts estimates. The SA Quant Rating on FERG is Hold, with a D- score for Growth and B- for Momentum. The average Wall Street Analysts’ Rating differs with a Buy rating, wherein 3 out of 8 analysts view the the stock as Strong Buy. YTD, the stock has declined -29.14%.

This week’s top five decliners among industrial stocks (market cap of over $2B) all lost more than -11% each. YTD, all these five stocks are in the red.

Chart Industries (NYSE:GTLS) -16.55%. The company’s shares slumped the most on Thursday (-12.45%) after announcing a stock offering. Chart also priced a $1.97B debt offering in the week.

The SA Quant Rating on the GTLS is Sell, with a score of C for Profitability and D for Momentum. The average Wall Street Analysts’ Rating is in complete contrast with a Buy rating, wherein 11 out of 15 analysts tagging the stock as Strong Buy. YTD, the shares have dipped -26.52%.

Avis Budget (CAR) -15.99%. Susquehanna started coverage on the Parsippany, N.J.-based car rental company with a Neutral rating with a cautious view. The stock tumbled in all five sessions, the most on Monday (-9.59%). Avis was the top performing industrial stock of 2021 +455.95% (in this segment), however YTD, the shares have shed -11.97%.

The SA Quant Rating on CAR is Hold, with a score of D for Growth and A- for Valuation. The average Wall Street Analysts’ Rating concurs with a Hold rating of its own, wherein 3 out of 6 analysts see the stock as such.

The chart below shows YTD price-return performance of the worst five decliners and XLI:

Plug Power (PLUG) -15.50%. The Latham, New York-based company was back among worst five performers after three weeks. YTD, PLUG has lost -52.67%, the most among this week’s worst five decliners. The SA Quant Rating on the shares is Sell, with a score of F for Profitability and D- for Momentum. The average Wall Street Analysts’ Rating differs with a Buy, wherein 15 out of 30 analysts tagging the stock as Strong Buy.

Joby Aviation (JOBY) -15.01%. The Santa Cruz, Calif.-based electric air taxi company has taken a spot among the worst five decliners after about two months. YTD, the stock has fallen -51.92%. The SA Quant Rating on the shares is Hold, with a score of C for Valuation and D for Momentum. The rating is in contrast to the average Wall Street Analysts’ Rating of Buy, wherein 4 out of 6 analysts view the stock as Hold.

Mercury Systems (MRCY) -11.83%. The Andover, Mass.-based aero-defense company has seen its stock slip -14.20% YTD. The SA Quant Rating on MRCY is Hold, with Profitability carrying a score of D+ and Growth A. The average Wall Street Analysts’ Rating is Buy, wherein 3 out of 10 analysts tag the stock as Strong Buy.

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