Three Stocks to Watch for the Week of October 24th

A solid finish to another volatile week helped boost stocks into the close on Friday after market positive comments from the Federal Reserve. The Wall Street Journal reported Friday that some Fed officials had expressed concerns about overstressing the economy with large rate hikes. These statements, combined with solid earnings reports from a slew of prominent companies, helped ease investor sentiment last week, but will it last? The jury is still out.  

This week market watchers can expect quarterly results from some of the world’s largest companies, including Microsoft (MSFT) and Apple (AAPL). Investors can also expect updates on the housing market, including August home prices and new and pending home sales for September. We’ll get some clarity on the effects of sky-high inflation and an ultra-aggressive central bank on consumer sentiment. An update to the Conference Board’s Consumer Confidence Index is expected Tuesday, and the most recent reading for the University of Michigan’s Consumer Sentiment Index is expected Friday.

One of the greatest challenges associated with clean energy is the intermittency of its sources. The sun doesn’t shine all the time, and the wind doesn’t always blow. Energy storage is the solution that allows excess energy to be stored, enabling continuous power output at all times, and making clean energy as reliable and consistent as fossil fuel. Our first buy recommendation this week is a time-tested major player in the U.S. energy sector that’s focused on striving to meet the renewable energy storage needs of businesses and governments around the globe as the transition toward carbon neutrality progresses.   

Since the U.S. government officially introduced the first-ever tax credit for clean energy storage projects, there have been remarkable positive business developments in the industry. General Electric (GE) is making leaps and bounds to position itself ahead of the pack when it comes to energy storage. Potential buyers may get an attractive entry with quarterly earnings on the way this week.  

Dating all the way back to 1890, GE has been a significant player in the global energy market for 130 years, operating as a high-tech industrial company in Europe, China, Asia, the Americas, the Middle East, and Africa. It operates through four segments: Power, Renewable Energy, Aviation, and Healthcare segments. The company is widely known for its LEAP aircraft engines, heavy-duty gas turbines, Haliade-X and Cypress wind turbines, and healthcare solutions.  

Constantly striving to enhance and innovate its line of products, GE’s latest offering from the renewable segment is its ‘Reservoir’ energy storage system for seamless integration across power grids. The Reservoir enables customers to increase Renewables integration, improve financial performance, enhance grid operations, reduce energy costs, and enable more distributed local generation. GE’s Reservoir condenses 4MWh and 10 years of energy storage experience into a 20’ box –  delivers an estimated 15% improved lifecycle on the batteries, 5% higher efficiency, and reduced installation time and costs.  

The company plans to triple its manufacturing capacity for solar and battery energy storage systems to 9 GW per year by the end of 2022 with the help of its Renewable Hybrids factory in South India this February. The facility, which employs 250 people, manufactures the company’s FLEXINVERTER and FLEXRESERVOIR products, the former a containerized solution for utility-scale solar and storage facilities and the latter a system-integrated battery energy storage solution. 

The new factory will be used to support the growing demand for hybrid projects around the world, a company spokesperson said in an email, adding that “as a result of the growing demand, there is a need to increase capacity across all elements of the supply chain, and we are helping on that front with this facility.”

General Electric is expected to report third-quarter earnings on Tuesday, the 25th of October, before the market open. The consensus EPS forecast is $0.47. EPS for the same quarter last year was $0.57.  

U.S.-based Trulieve Cannabis (TCNNF) stands out as one of the few cannabis companies that have been able to turn a steady, meaningful profit, with four years of consistent quarterly profitability under its belt. That is, until its most recent quarter, when the company reported a net loss on the bottom line of $22.5  million, compared to the net income of $40.9 million reported for the previous year’s quarter. However, much of the loss can be attributed to one-time charges related to Trulieve’s recent acquisition of Harvest & Recreation Health. The quarterly net loss came in at around $1.1 million without the one-time charges.  

While the company’s recent loss might be looked at as a step in the wrong direction, it’s common to see this following a major acquisition. Trulieve’s cannabis revenue has been following a steady upward trajectory since well before the acquisition took place. During the second quarter, revenue increased by 49% year over year to $320.3 million. 

The company has been steadily expanding operations, nearly tripling in size over the past few years. Since June 2020, when it had just 52 dispensaries, all located in the state of Florida, the company has operated 177 market-leading dispensaries throughout 11 states. It has successfully preserved its position as a significant player in this increasingly competitive market.

Trulieve Cannabis garners a 100% Buy rating from the 18 analysts offering recommendations. A median price target of $28.71 represents a 169.62% upside. TCNNF stands as one of the best picks to profit from the cannabis opportunity. Depending on your platform, there may be additional steps and fees when trading over-the-counter (OTC) stocks.  

Technology and high-growth shares have been hit the hardest in 2022. As the market assimilates the central bank’s rate-hike cycle, it could be time to start looking for gems among the beaten-down technology and high-growth shares that have been hit the hardest during the market rout. 

Israel-based Nice Ltd. (NICE) is a provider of enterprise software with more than 27,000 customers (including 85% of the Fortune 100) from 150 countries. Its operating segments consist of Customer Interactions Solutions and Financial Crime & Compliance Solutions. Over the past year, the company generated $2.0 billion in revenue, approximately $1.1 billion was cloud-based revenue. Over the past three years, the company’s revenue grew 22.3%  from $1.57 billion in 2019 to $1.92 billion in 2021.   In terms of profits, its operating profit rose 10.6% to $263.9 million from $238.7 million a year earlier.   

Building on the stellar growth, the company reiterated its ambitious targets when it unveiled its NICE3D strategic plan during its recent investor’s day event. The company outlined its updated financial goals through fiscal 2026, headlined by 30%+ operating margins and double-digit revenue growth. Nice currently trades at 6.74x sales, considerably less than its main competitor Five9  at 10.03x. The current consensus among 12 polled analysts is to Buy NICE. A median price target of $269.48 represents an increase of 40% from Friday’s closing price.