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RRSP Investors: This Market Crash Is Your Chance to Retire Wealthy!

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Over the past few weeks, Canadians have seen their RRSP balances decline thanks to a bear market that’s sending stocks into a death spiral. While no data on average RRSP losses is available, the TSX is down 37% since February 19.

Most likely, the average RRSP portfolio is down less than that, as most investors hold a mix of stocks, bonds and cash. However, it’s clear that most Canadian investors have seen the equity portion of their RRSPs decline recently.

That’s all the more reason to stay the course.

While it’s always scary to see your investments decline, bear markets are the best times to buy. With stocks cheaper than were a month ago, they’re set to soar the minute the coronavirus panic is over. Nobody knows when that will be, but the bull market that comes afterward will be unprecedented.

Stocks are getting cheaper than before

One undeniable fact about this crisis is that we’re seeing stocks get much cheaper than they were before. In terms of raw prices alone, Canadian stocks are down 37%. They’re also down relative to earnings.

If you look at Air Canada (TSX:AC)(TSX.AC.B) for example, it was trading at just 2.73 times earnings at market close Tuesday. That’s one of the lowest P/E ratios we’ve seen on a major TSX stock in a long time.

Of course, AC’s P/E relative to forward earnings is almost certainly higher. We’ve already seen enough flight cancellations this year to hit AC in the pocketbook–and who knows how much longer they’ll go on.

However, even if this year’s earnings are 50% lower than last year’s, we’ll have a P/E of just 5.5 based on today’s stock prices, which is still extremely cheap.

Not all stocks will be affected

Stocks like Air Canada will bounce back from this crisis sooner or later — that’s one piece of good news. An even better piece of news is that some stocks won’t likely be affected much in the first place.

While non-essential businesses are shutting down, essential businesses are still open, including grocery stores, pharmacies, railroads and real estate firms. Stocks in these industries could be good buys.

Fortis Inc (TSX:FTS)(NYSE:FTS) is a great example. Down 21% since March 6, it has fallen much less than the TSX. However, it’s still fallen enough to give it a super low 12.5 P/E ratio.

Fortis is one of those businesses that’s perfectly positioned to thrive in the current environment. As a utility, it’s unlikely to lose money as a result of the crisis. Heat and light are among the basic necessities of life, similar to groceries.

As a result, customers will keep paying for them even when times are tough. While many people are feeling the financial squeeze right now, enough government aid will be coming through to keep the lights on nationwide. The same is the case in other regions in which Fortis operates, such as the U.S. and the Caribbean.

In the 2008/2009 financial crisis, Fortis managed to increase its earnings for two years in a row. It was a testament to the power of utilities to drive shareholder value in tough economic times. It’s also a solid reason to consider holding FTS in your portfolio today.

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Fool contributor Andrew Button has no position in any of the stocks mentioned.

The post RRSP Investors: This Market Crash Is Your Chance to Retire Wealthy! appeared first on The Motley Fool Canada.



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The Rise of Zoom- How to Spot Stocks with Growth Potential

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Zoom Video Communications (NASDAQ: ZM) took off like a rocket since it went public in 2019.  The videoconferencing site Zoom has become essential for workers during the coronavirus (COVID-19) crisis.  With the rise of videoconferencing to keep up with friends, families, and co-workers, Zoom shares climbed 20% over the past few weeks.  Along with Zoom, there are four other strong growth stocks in this article that are still solid investments in the midst of a volatile stock market. During this bear market, these stocks can potentially be a savvy investor’s source for low-risk investments.

Growth stocks are stocks that are growing much faster than other equities on Wall Street. Many of them have higher-than-average valuations. Investors can look closely at these five stocks on Trading Sim that could pump up their portfolios. This article will also tell investors what traits to look for to find stocks that have great growth potential like Zoom.  The conclusion of the article will also warn about a stock that doesn’t have the same growth potential as stocks like Zoom and is cratering- retailer J.C. Penney( NYSE:JCP). The article will also note how Trading Sim can help investors find the next growth stock.

How did Zoom get its start?

The latest prominent growth stock, Zoom, got its start in 2011. Eric S. Yuan started the company in his native China. He saw Zoom as a way for companies to communicate with each other. He worked on the idea when he was a corporate vice-president of engineering at Cisco once he immigrated to the U.S. During an interview in 2017,  Yuan presciently said that Zoom would help make it easier for workers to telecommute.

“Zoom gives organizations and individuals a faster way to communicate relative to audio-only, chat, and email meetings, and it’s not restricted by geography, so employees have more flexibility to work from home. Because it lets people meet face-to-face, and provides support for screen sharing, it’s truly a collaboration catalyst, and helps build teams across geographies,” said Yuan.

The company grew in a cluttered field of videoconferencing apps like Skype and GoToMeeting. Zoom grew because Yuan would personally call dissatisfied customers. In addition to Zoom’s dedicated customer service, Zoom grew because it offered a  free version of the app on smartphones. into a company with a $9 billion valuation. The valuation was 48 times its sales when Zoom went public in April 2019.

How has Zoom stock performed since it went public?

After the debut of Zoom’s IPO (initial public offering), Zoom shared climbed 72% above its listed $36 IPO price. Though the stock experienced volatility in the year after going public, its last earnings report showed strength. Even before the coronavirus global outbreak, Zoom’s Q4 2020 revenue soared year-over-year to $188.3 million. The stock currently sells for 58 times revenue.

Yuan noted that the company performed well because of a “unique combination of high total revenue growth of 78% at a scale of $188 million, GAAP( generally accepted accounting principles) income from operations of $11 million, non-GAAP income from operations of $38 million, and operating cash flow of $37 million.”

Why is Zoom stock “quarantine-friendly?”

Zoom stock jumped 200% since the stock went public. The Renaissance IPO ETF noted that work-from -home apps like Zoom have survived the coronavirus-caused massive sell-off.

“Quarantine-friendly companies like remote work-enablers Slack (NYSE:WORK; +23% in February) and Zoom Video (ZM; +20%) and telemedicine provider Teladoc (TDOC; +23%) have also outperformed the broader market,” noted Renaissance.

Zoom’s popularity is because of its reliability. In contrast to other videoconferencing apps that have glitches and buffering problems, Zoom mostly manages to avoid prolonged outages. So, while there may be awkward moments of kids interrupting meetings, the livestream will always come through very clearly.

Zoom is growth stock because of accessibility

Zoom stock is also surging because of the app’s accessibility in many areas. Apple’s FaceTime is exclusively on iOS and Apple devices. However, Zoom is widely available on Android and any Apple or PC. Zoom also is not just being used by workers, but by schools to help with digital learning.  The corporation has eliminated the 40-minute limit on free calls so students and teachers can remain in contact with each other. The company’s CFO, Kelly Steckleberg, noted that reliability and easy access for students makes Zoom an attractive option for customers.

“The usability and the reliability of Zoom is what has led to this incredible adoption, combined with, honestly, the generosity of Eric and his willingness to open it up especially to the schools,”  said Steckelberg.

Why is Zoom stock a growth stock?

Zoom stock is also a high-growth stock because of its potential revenue growth. Bernstein’s Zane Chrane and Michelle Issacs note that if Zoom’s free users convert to paid users, there could be an explosion in revenue for the company.

“If we … assume that 75% of the active users added YTD are incremental purely due to CV [coronavirus], the massive spike in usage YTD would suggest that Zoom could get as much as $140M in incremental revenue if customers that convert to a paid plan are retained for at least a year,” said Chrane and Isaacs.

Even after the coronavirus crisis abates, Zoom stock could still a long-term option for investors. More workers are working from home, so Zoom is becoming an option for many investors.  This TradingSim chart shows that Zoom stock has steadily risen and should continue to remain a buy for investors.

Zoom stock the week of March 9

 

Why Teledoc stock is a growth stock possibility for investors

In addition to Zoom, another tech stock booming in the wake of coronavirus is Teledoc (NYSE: TDOC). The computer software company’s stock has steadily risen in the past few days. Similar to Zoom, Teledoc has been a necessary health resource for many people who want to check their health through a mobile device.  The subscription-based telemedicine company was founded in 2002. The company offers virtual consultations with doctors and the stock has exploded during the recent coronavirus outbreak.

The corporation’s stock grew 30% over the past month and 400% since Teledoc went public in 2015.  During the company’s Q4 2019 earning call Teledoc’s CEO, Jason Gorevic, said that Teledoc’s physicians would work with clients to weather the current pandemic. With many people under quarantine, Teledoc has been the perfect way for people to safely interact with doctors to monitor their health.

“Our clinical teams, thousands of physicians around the world, are actively working along with our commercial teams and clients to ensure that members have the most timely and relevant access to the latest information during this unfolding situation, and access to care if and when they need it,” said Gorevic. This Trading Sim chart shows mostly steady growth for Teledoc stock.

 

Teledoc stock the week of March 12

Teledoc hopes to increase customers to increase stock growth

Even before the COVID-19 crisis, Teledoc stock looked attractive because of the corporation’s partnerships with (NYSE: CVS)  and hundreds of hospital systems.  This growth shows that Teledoc will have a wide reach to a larger number of customers.  During a recent conference call, Teledoc noted the potential to expand its customer base.

“Our existing health plan clients and self-insured clients associated with these health plans currently purchase our solution for only a small percentage of their beneficiaries in the aggregate, and we estimate this provides us the opportunity to grow our membership base by more than 75 million individuals in the United States by expanding our penetration within our existing clients alone,” noted Teledoc.

Teledoc’s profile rises with coronavirus pandemic

Lew Levy, MD, Teladoc’s chief medical officer, noted that telemedicine companies like Teledoc are vital during this current health crisis.

“We are seeing more patients, and more of those patients are experiencing upper respiratory issues. As we saw during the flu epidemic of 2018, a community’s healthcare system can become overwhelmed and virtual care can help provide needed relief,” said Levy.

During the coronavirus crisis, Teledoc is working closely with the Center for Disease Control to provide information to clients.

Levy noted that Teledoc has  a “unique ability to immediately connect with the CDC and other government agencies to add the right screening tools and clinical quality protocols to our system, and most importantly, to keep patients — particularly those most at risk with underlying health conditions — out of care settings where they can face exposure.”

Netflix stock benefits from quarantine life

Teledoc benefitted from patients increasing as a result of coronavirus. Similarly to Teledoc, Netflix (NASDAQ: NFLX) stock has jumped as a result of ” stay at home” orders. The streaming service’s stock surged 8.2% over the past week.  Baird Equity Research said Netflix would outperform because of two strengths. Netflix is the go-to home entertainment for quarantined Americans. The corporation is also part of a growing trend of customers abandoning cable.

Netflix has always been able to set trends since launching in 1998. The company evolved from DVD rentals to streaming entertainment in 2007. Since producing original content in 2013, the hundreds of original shows currently offered have helped  Netflix 167 million subscribers worldwide. So, watching Love is Blind may actually be a smart move to boost Netflix stock.

Since going public in 2002, Netflix stock has grown 3,000%. Even with competition from Disney + (NYSE:DIS) and Hulu, Netflix subscribers grew in Q4 2019 by 20%. Netflix was a pioneer in streaming entertainment. By being first and have more options for viewers, Netflix remains a strong growth stock for investors.

Analysts see Netflix stock as growth stock

Many analysts are bullish on the stock, like Credit Suisse analyst Douglas Mitchelson. Data from Credit Suisse found that quarantined people in countries hard hit by COVID-19 are becoming devoted subscribers.

“The data in both Hong Kong and Korea present a strong case Netflix is seeing increased demand, as first-time app downloads inflected positively starting in January and continued into March,” said Mitchelson. This Trading Sim chart shows Netflix stock rising on March 11.

 

Netflix stock the week of March 12

Rob Drury, vice-president of client partnerships for media and TV at CSM Sports and Entertainment, also believes that the global quarantine and growing customer base makes Netflix stock a growth stock.

“I‘m bullish on the impact this will have for Netflix. Their business is driven primarily by renewal rates, and on a global scale people are experiencing first-hand the benefit of Netflix’s content library. Social distancing is adding an entirely new dimension to content bingeing.”
Social distancing has been difficult for many during the coronavirus pandemic. The economic downturn has also led people to cut cable packages to only have streaming services for entertainment. However, the social distancing and cord-cutting have been beneficial for Netflix stock.

Lowe’s stock solid because of quarantine orders

Lowe’s (NYSE:LOW) stock is a safe option for beginning traders.  The home improvement store has been Like Netflix, the concern about COVID-19 has helped this company’s stock rise. As more people stay at home, many are taking up home improvement projects. That desire to do DIY projects has benefitted Lowe’s shares. Wall Street experts predict that Lowe’s will have a growth stock.  High earnings per share usually is a hallmark of a growth stock. Earnings per share rose to $0.94 a share in Q4 2019.  Sales also jumped 2.4% to $16.03 billion.  Financial analysts predict that Lowe’s earnings per share will skyrocket 15.8% over the next five years. 

If investors want short-term returns,  Lowe’s stock has a lot to offer investors.  Lowe’s shares have grown 20% since its recent earnings report. Lowe’s stock is not only growing, but its dividend is a steady 2% payout to investors. This Trading Sim chart shows the growth of Lowe’s stock during the week of March 12.

Lowe’s stock the week of March 11

In addition to stock growth, Lowe’s store sales performed well over the last month. CEO Marvin Ellison touted the store sales growth in the company’s last earnings report.

“I’m very pleased with the strength and productivity of our brick and mortar stores. There are very few large retailers in America delivering a 2.6% comp growth almost exclusively from the brick and mortar stores. This underscores the sales productivity improvement of our physical stores and our opportunity to unlock additional growth when Lowe’s.com sales accelerate,” said Ellison.

The stores’ sales grew as customers purchased large appliances like refrigerators to store large quantities of food. Lowe’s sales also increased as Ellison started “seeing people start to work down that to-do list and get those things done in their homes.”

Lowe’s CEO buys company shares to show confidence in stock

Ellison also said that he bought Lowe’s shares to show his confidence in the company. “I’m a believer in my company. “I’m here for the long term.”

“We think that we will create a great value and we’ll create a great opportunity for shareholder value over the long term. As CEO, if I don’t have confidence in the company, then I don’t know who will,” said Ellison.

Lowe’s stock could be a growth stock because of the current need the corporation serves during this coronavirus crisis.  Big purchases like freezers and even small purchases like toilet paper have made Lowe’s a shopping destination. Lowe’s stock is also a potential growth stock because of its impending expansion into online sales.

Amazon stock a growth stock during coronavirus

Even though Lowe’s is just making a dent in online sales, Amazon( NASDAQ: AMZN) has been an online giant for years. The company has been able to adapt to change since its founding in 1996. Since Jeff Bezos founded the company as an online bookstore, Amazon has grown into an e-commerce and cloud computing behemoth. From Amazon Prime Video to its Amazon Web Services, the corporation is a tech powerhouse.

Just as Lowe’s has seen growth through sales of necessities, Amazon stock has increased through coronavirus checklist item sales. Amazon was already a powerhouse stock because of its dominance in e-commerce. Now with COVID-19 spreading worldwide, shoppers are buying supplies on the site. Popular items like cleaning supplies and even toilet paper are selling out on Amazon.com in the wake of the coronavirus pandemic.

Amazon stock is also increasing because of its grocery delivery service. Amazon owns Whole Foods, which offers free delivery to Amazon Prime subscribers. Many customers are buying groceries from Amazon Fresh, the company’s food delivery service.

Jim Kelleher, an analyst at Argus, noted that Amazon will benefit from the worldwide quarantine.

“As more and more businesses shutter or move to online operations, and more and more consumers shelter in their homes, we expect traffic on the Amazon site to increase. Certain counties with COVID-19 clusters are implementing stay-at-home policies with varying degrees of stringency. Even in communities with low or no cases, consumers are prudently minimizing interactions, including trips to retail stores,” said Kelleher.

Amazon adjusts to help workers amid COVID-19 pandemic

Amazon’s business has grown so much that it is hiring thousands of temporary workers to keep up with demand.  The corporation will hire part-time and full-time warehouse workers to fulfill the high demand for shoppers’ needs.

“Because of high demand, Amazon is hiring 100,000 new workers. In addition to the 100,000 new roles we’re creating, we want to recognize our employees who are playing an essential role for people at a time when many of the services that might normally be there to support them are closed,” noted Amazon.

Bezos noted that Amazon is getting its warehouses ready to combat coronavirus.

“We’ve changed our logistics, transportation, supply chain, purchasing, and third party seller processes to prioritize stocking and delivering essential items like household staples, sanitizers, baby formula, and medical supplies. We’re providing a vital service to people everywhere, especially to those, like the elderly, who are most vulnerable. People are depending on us, ” noted Bezos.

Amazon stock still strong despite Wall Street volatility

Amazon stock recently dropped 11%, which is disappointing. However, it’s less than the overall 28% decline in the S &P. The Trading Sim chart below shows the volatility of Amazon stock.

 

Amazon stock the week of March 19

Amazon is also a growth stock because of its dominance in varied industries. The world’s largest retailer controls most of e-commerce. The corporation is also making inroads into cloud computing with Amazon Web Services. More workers are telecommuting, so Amazon Web Services (AWS) benefits. Work-from-home apps like Zoom depend on AWS cloud computing to run, so Amazon is well-positioned as a growth stock.

Analysts say Amazon is safe haven stock

Economic analyst Jim Cramer also believes that Amazon’s stock could rise over 30% to the $3,000 range in this current climate because “Amazon Web Services must be just crushing it.”

Stock analyst Jason Helfstein noted that Amazon is a stock that will outperform other equities. He noted that Amazon’s grocery and e-commerce delivery sector will help quarantined customers.

“COVID-19 is driving widespread demand for essentials, combined with increased e-commerce usage from ‘social distancing’ and ‘shelter-in-place’ programs. While some items are taking longer to be delivered, and grocery delivery capacity is strained, we think Amazon is seeing record consumer demand, with share gains likely to remain post virus,” noted Helfstein.

Amazon is a growth stock because of the company’s versatility. Amazon is able to adapt to any online shopper’s needs and to provide cloud computing to stay-at-home workers.

How to spot growth stocks like Zoom

Growth stocks aren’t just trendy pump-and-dump stocks that are here today and gone tomorrow. Many growth stocks that trade as much as 10 times their IPO price can follow current trends, like Zoom. However, Zoom stock is likely to be a growth stock even after the stay-at-home orders come to a close. Zoom is part of a technology that is a staple in work life, so that corporation’s stock is likely to increase. Growth stocks often start as trends, but grow into blue-chip stocks to add to portfolios.

Growth stocks fulfill new needs as game changers

Stocks with high growth potential can outperform more established stocks by fulfilling needs or creating innovative products. Corporations like Teledoc are meeting a need for telemedicine in this time of people being socially distant from each other.  Just as Amazon created a new world of e-commerce, many growth stocks evolve from unfamiliar new technology to a pivotal need for consumers. Even established brands like Lowe’s can have shares become growth stocks by rising during seasonal events.

While many investors may see tech stocks as the main growth stocks, online retail can see growth as well. With many people abandoning physical stores, many shoppers are turning to tailored subscription services like Stitch Fix (NASDAQ:SFIX). Any company in an industry that has any innovation or generates interests from consumers is sure to earn a look from investors.

Growth stocks have high earnings- and higher P/E’s

In addition to filling needs for consumers, companies with growth stocks have good earnings reports to please investors.  Many growth stocks have high price-to-earnings ratios above 16. Netflix’s price-to- earnings(P/E) ratio is well above that. The streaming service’s stock is valued at 87 times its past year earnings. Amazon’s Q4 2019 sales surged 21% year-over-year to $87,4 billion. On the strength of diversified services the retailer offers customers, Amazon stock is the epitome of a growth stock with its explosive expansion over the past 20 years. Growth stocks usually have two or more consecutive positive earnings reports that show that a corporation has the potential for expansion.

If investors can’t afford Amazon stock, they still shouldn’t invest in risky cheap stocks like penny stocks unless they can withstand the volatility.  Investors shouldn’t see penny stocks as growth stocks unless they want to start with low-cost stocks to add to their portfolios.

Many growth stocks have positive cash flow

Growth stocks like Zoom also have a lot of available cash on hand. Zoom has $855 million in cash and investments in reserve. Many growth stocks may have debt, but have a large cash reserve.  In its Q4 2019 earnings report, Zoom’s operating income increased 292% from Q4 2018 to $38.4 million. Many growth stocks have to have available cash to weather any storms in the volatile stock market.

Even though Netflix is in millions of dollars in debt to pay for original content, the corporation still has billions on hand. As of  Q4 2019, Netflix had $5 billion in available cash. That’s a 32% year-over-year increase.

While growth stocks usually don’t pay a dividend to investors to increase growth, some do both. Lowe’s pays dividends to investors unlike many other growth stocks. However, like many other growth stocks, Lowe’s participates in stock buybacks to reinvest in their companies.

Tom Plumb, money manager at Wisconsin Capital Management, says that tech companies with a lot of cash on hand will have profitable stocks.

“The companies taking in a lot of cash because of their disruptive business models and technologies and their focus on how money is spent and where it is spent, are showing no signs of abating,” he said.

Growth stocks start in U.S., but expand globally

While many growth stocks started in California’s Silicon Valley, but expand around the world. Netflix has 167 million subscribers, but only about 60 million of them are in the U.S. Out of the hundreds of shows offered, many are from India and Nigeria. Those two countries have billions of potential new customers. Netflix is expanding its global outreach to increase the value of its stock.

Amazon is moving to expansion in Brazil and Canada to increase profits.  Many growth stocks expand globally after first starting in the U.S. to reach new consumers. By reaching out to international customers,  growth stocks have increased potential.

Even before the coronavirus pandemic, Teledoc purchased a French telehealth company to help reach more patients.  Now the global expansion is helping Teledoc stock soar. Carlos Nueno, president of Teledoc Health International, touted the acquisition of MedicinDirect.

“With a continued focus on our global expansion, we will now become the market leader in France with the ability to have an immediate impact on healthcare delivery in the country. On the successful foundation built by MédecinDirect, we will bring our full suite of virtual care services to multinational clients who have been eager to expand,” said Nueno.

Growth stocks test an investor’s patience

Growth stocks tend to be focused on the future potential of stocks.  While value stocks can capture a company’s current value, investors that focus on growth stocks tend to focus on potential growth.  While value stocks are profitable today, many investors think growth stocks will continue to be profitable in the future.

As opposed to value stocks that are undervalued, growth stocks can be overvalued. Investors will likely have to wait out the volatility of growth stocks, some of which are often new to the Dow Jones.

If investors need the money in the stock market within five years, then growth stocks are not for them. Growth stocks tend to require more patience, so investors need to let the money from growth stocks stay in their portfolio in the long run.

Exercise caution when investing in growth stocks

While growth stocks may want investors to rush in, they should be cautious. They shouldn’t invest only in growth stocks. By diversifying, investors don’t have to depend on growth stocks to increase an investor’s profits. A mixture of growth and value stocks can make a more well-rounded portfolio.

Investors also shouldn’t pour too much money into growth stocks because of their volatility. Investors should start small and only invest up t0 3% of their portfolios on growth stocks. Economic expert Tom Engle noted, “If this company is the next great growth stock, then a little is all I need. If it’s not, then a little is all I want.”

While investors may want to go full- speed ahead on a growth stock, it’s best to slowly wade into investing in the stock. If there is volatility in the stock’s industry or on Wall Street, investors can withstand it with their portfolios intact

Why J.C. Penney is the opposite of a growth stock- it stayed behind trends

While Zoom is a cutting-edge stock with huge growth potential, J.C. Penney is on the exact opposite end of the spectrum. Zoom is a relative newcomer to Wall Street, while J.C. Penney has been offering stock for almost a hundred years. The retailer has been struggling for years because of its inability to adapt to change.

The store took too long to offer e-commerce to consumers. As a result, other brick-and-mortar competitors like Target ( NYSE: TGT) scooped up shoppers looking for sales online.  Growth stocks often are looking for what’s new, now, next- but J.C. Penney was still stuck in the past. Instead of investing in online sales, J.C. Penney spent millions on stores in malls. But who shops in malls anymore? Everyone gets their favorite pants (or dress) from online retailers like Amazon now.  J.C Penney is the exact opposite of a growth stock because the company didn’t have any innovation in its sales strategy or business model. Amazon evolved to cater to shoppers’ needs, unlike the brick-and-mortar retailer.

Companies with growth stocks listen to consumers- J.C. Penney didn’t

Unlike tech stocks that conduct focus groups that listen to consumers, J.C. Penney made many changes without consulting consumers. By abandoning loyal bargain shoppers and not offering coupons anymore, J.C. Penney lost a lot of customers. Zoom often listens to its customers and asks customers for feedback.

As Zoom noted when it reached 10 million participants in 2014, customer service is key to create a growth stock.

“We have a relentless focus on making the best product with the best user experience. This is ultimately what every customer wants. Toward this end, we spend much of our time listening to customers and fine-tuning our software to fit their needs,” said Zoom.

Companies with growth stocks often reach out to customers and stay loyal to their main customer base.  J.C. Penney didn’t listen to its customers- and the stock suffered as a result.

Growth stocks have a clear niche unlike J.C.Penney

Growth stocks like Amazon have a clear identity of being the world’s online retailer. With competition from Amazon, J.C .Penney lost its niche as a retailer.

Neil Saunders, an analyst at GlobalData Retail said that the rise of Amazon led J.C. Penney to have a  “lack of understanding about what it is, what it stands for, and who it wants to serve”.

Bob Phibbs from the Retail Doctor, also said J.C. Penney lost its identity by neglecting its core shoppers- moms ( or dads) on a budget.

“These companies are so busy trying to figure out who their shoppers are — Is it moms? Is it millennials? — that they’ve lost their most loyal shoppers. Plus the customer experience is forgettable. Nobody is going into a J.C. Penney and saying, ‘You’ve got to see this place. It’s great.’ ”

This Trading Sim chart shows how far J.C. Penney stock has fallen since its last earnings report.

J.C. Penney stock the week of March 19

While bargain-hunting shoppers knew to turn to Amazon or  Target, J.C.Penney was forgotten and its stock had plummeted to only about $1  a share.  Companies with growth stocks often fill a specific niche and know how to stand out among competitors. J.C. Penney doesn’t have that advantage. J.C Penney’s stock is down so low, it might be delisted from the New York Stock Exchange. Not having a clear identity confuses consumers and investors.

J.C. Penney has no cash available to grow stock

As J.C. Penney tried to get customers back, it burned through a lot of cash- a warning sign that a stock is bound to fail. Many growth stocks have a lot of cash on hand to reinvest back into the corporations. However, stocks that are tanking often are in too much debt with no chance at profitability. J.C. Penney is about $4 billion in debt and has had to close hundreds of stores nationwide. J.C. Penney only has $386 million of available cash. In contrast, growth stocks have a lot of cash on hand to weather Wall Street volatility.

Growth stocks like Netflix has debt, but also has a positive net income of $1.9 billion in 2019. While there is no one magic way to predict a growth stock, the contrast between J.C. Penney shares and other stocks show a clear contrast. Investments in innovation, growth in profits, and of course, a rising stock.

J.C Penney is a cautionary tale about stocks and corporations. Companies have to innovate or serve a niche need in order to increase their influence with investors.  Corporations like Zoom are shaping the present and are building a strong future. On the other hand, dinosaur retailers like J.C. Penney are falling because it fell behind the times and couldn’t turn a profit.

Research is key to picking growth stocks

If investors want to learn more about how to pick the best growth stocks, thorough research is best. Investors can investigate earnings reports, stock price movements, and more through Trading Sim. With Trading Sim’s expert analysis and platforms to analyze stocks, investors can make wiser stock picks. Investors may even be able to spot the next growth stock with Trading Sim’s guidance and analysis.

Zoom and other growth stocks show that by being innovative leaders or filling niche needs, investors can see an increase in their portfolios.

Tracking growth stocks can be complicated, but studying Trading Sim’s charts can help investors keep track of which stocks are rising like Zoom and which ones are plummeting like J.C. Penney.  By simulating trades first, investors can test out Trading Sim’s theories about what creates a growth stock. Trading Sim’s trading platforms can help investors possibly find the next potential growth stock.

The post The Rise of Zoom- How to Spot Stocks with Growth Potential appeared first on – Tradingsim.



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I Put Together A New Swing Set

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After peak news flow over the weekend, along with the state of Louisiana shutting down, I decided to take the day off and build a swing set for my two little girls. This was my first build of any sort of playground set and I was a little terrified going into the project. I heard horror stories of grown men putting together these contraptions, and promised myself I would always pay labor for that task.

Being that we are in unprecedented times, with the state shutting down and the government mandate to shut down my small businesses, I said, “What the hell, I’m going to build a swing set as if was a giant outdoor puzzle and take my precious time with it.”

And, that’s exactly what I did. I took my 4×4 Ford to Academy, put the swing-set box in my truck like superman, and drove back to my residence before the whole state shut down.

Upon arriving, my girls were excited. I one-armed the swing set box (I’m 6’4 225lbs) out of my truck and threw it in the garage. Then, I opened the box and realized what a grave mistake I just made. This was worse than a 10,000 piece puzzle. I remained calm.

Long story short, this was just the therapy I needed to get away from the news flow. I sashayed in and out my backyard to office, taking my time with each wood board while buying every dip in $AAPL.

The news flow was too negative. I was damn near attacked on Twitter for even the thought of buying shares in $AAPL. This gave me big confidence in the trade, so much confidence that I went back outside and built my girl’s playground like I was Bob fucking Vila.

Here are some pictures from the project. Don’t believe the hype, with time and a clear head, these things can be a lot of fun to put together with your family. Just as investing can be.

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The swingset is complete and so is my new swing long in $AAPL.

The end result to my day: PRICELESS. Go build something.



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Why Your Trading Chat Room Is Key

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Your trading chat room is key … The right chat room can help you learn to trade smarter.

There’s no denying the coronavirus pandemic is scary. But it’s also creating massive opportunities in penny stocks.

For example…

I’d just finished my Trading Challenge webinar on March 16 when a student alert in the chat room caught my eye.

I’d already had a decent trade that morning on Waitr Holdings Inc. (NASDAQ: WTRH). I wasn’t looking to trade again … Just as I was exiting the webinar, my student schultzy sent out an alert about No Borders (OTCPK: NBDR)…

This stock had coronavirus news about an at-home test and was spiking. I acted fast. At 1:38 p.m. schultzy commented, and I entered the position minutes later.

I put in a little over $1,000 and made over $1,000 in minutes.*

(*Please note: my results are not typical. I’ve spent years developing exceptional skills and knowledge. Always remember trading is risky. Never risk more than you can afford.)

I’ll break this all down in more detail in a bit. First, let me say…

Learn From This Coronavirus Sector Run

© 2020 Millionaire Media, LLC

The uncertainty and fear around the coronavirus pandemic have created a level of opportunity I haven’t seen in several years.

The sector momentum of coronavirus plays has lasted far longer than people expected. The closest comparison, in recent memory, is the bitcoin run in 2017.

Several of my top students capitalized on that crazy run … but plenty missed it. They weren’t prepared.

But my most dedicated students — those in my Trading Challenge — have learned from previous sector momentum. Many of them are nailing the wild coronavirus run.

If you’re new, you may not nail your first sector run. Most of my top students missed the first few sector runs they encountered. Don’t be discouraged. Study the charts and learn from them. There will always be another hot sector. 

Use this opportunity to learn…

How to Find and Trade Hot Sector Stocks

At the beginning of 2020, I thought biotech stocks would be explosive. Many were beaten down from years of neglect and disappointing drug results.

I’ll be honest … I didn’t think they’d be this HOT. And nobody could have predicted a worldwide pandemic.

I tend to underestimate the spikeabilty of stocks. I like to take a conservative approach and lock in small, predictable gains. But many of my students are more aggressive and report making more money than me the past several weeks.*

My top student, Tim Grittani, recently passed $10 million in total trading profits.* That’s nearly double what I’ve made trading the last 20 years. His dedication and generosity to the community is a gift. If you’re in my Trading Challenge, make sure you check out the special GRITTANI ticker. (Check it out here.)

[*Students’ results are NOT typical. Roughly 90% of traders lose. Always remember trading is risky, and never risk more than you can afford.]

More Than a Chat Room

Get in the right trading chat room. It’s not just traders sharing hot stocks or talking smack. My chat rooms are communities. They’re about traders supporting traders — answering questions, celebrating wins, commiserating over losses, and sharing key tools. Just make sure you follow the rules when you get there.

Here’s an example of how great this community can be…

Lately my students are finding 100%+ runners because of coronavirus press releases. These press releases can be hard to spot if you don’t use the right tools. On March 16, in the wake of the coronavirus market crash, one of my students found a BIG winner in the market, NBDR.

So how did schultzy spot the NBDR spike?

By using StocksToTrade’s news scanner. The company released coronavirus news, which caused the stock to spike 367%.

When’s the last time you saw a large-cap, ‘real’ company spike that much in a day? I never have. Wall Street loves to scoff at these plays. Let ‘em ignore these opportunities. My students and I will keep nailing them.

Because we use the chat rooms to share the key tools that help us find these big runners…

That’s how you can learn to make money in penny stocks in ANY market. While the big traders on Wall Street are panicking because of the historic decline, penny stocks are on fire.

But you gotta be careful and watch for…

Coronavirus Stocks With News

© 2020 Millionaire Media, LLC

I have to give props for the hot stock pick on NBDR.

I would’ve missed this play if it wasn’t for my student schultzy (I hope you’re reading this!). Now, schultzy isn’t one of my top students … But you don’t need to be to take advantage of these plays. Here’s his simple alert from the TimChallenge chat room:

schultzy: “NBDR CV [coronavirus] news.”

I know a lot of people think trading chat rooms are full of noise. But when you have so many people watching stocks and looking for news, it can be a huge edge.

I have two chat rooms — TimAlerts and TimChallenge. All of my top students are in the Challenge. The Challenge chat room is a little different. These students have access to all my DVDs, video lessons, and webinars. They also have access to Grittani’s DVD and webinars.

The Challenge chat is a beautiful community. TimAlerts is awesome too — don’t get me wrong. But the Challenge students have access to all my educational materials, plus there’s a meatier upfront investment. So students tend to be more committed.

PSA to Challenge Students: Appreciate how good the chat room is every day. It’s one reason I think everyone should be a Challenge student. Especially now when we must self-isolate until the pandemic fades away. This is a great time to learn and get ahead in the world.

I understand it’s difficult for everyone to be that dedicated. People have other commitments that can make it difficult to dedicate time every day to study. Ask yourself how bad you want it … What are you willing to sacrifice?

Back to NBDR. Like I said before, I made a little over $1,000 on the play with a small position. It’s crazy how fast these stocks can spike. Within minutes I was up over 100% on my money. I bought NBDR in the $0.02s and sold into the $0.05s. (See my verified trade here.)

NBDR stock
NBDR chart: 10-day, 5-minute candle — courtesy of StocksToTrade.com

And for those of you wondering, here’s…

When I’ll Trade Midday

I don’t usually trade midday. The patterns are riskier. There’s less volume than the morning and afternoon sessions.

I scheduled my weekly webinar with Challenge students midday because of the slower action. My plan was to take time to answer all the Challenge student questions. That way, I’d be focused on the webinar and less tempted to trade.

During the Trading Challenge webinar, one of the most frequent questions was…

When do I trade midday?

When there’s breaking news. I wouldn’t trade anything with news from the morning. There can be so many fake breakouts midday. It’s harder to trade the patterns I talk about in my library of 6,300+ video lessons.

The webinar was great. I love spending time answering all of my student’s questions. And as I was signing off the webinar, I glanced through the thank-you messages coming in from the TimChallenge chat room.

That’s when I noticed schultzy’s comment on NBDR.

Why I Love My Trading Chat Room

My student schultzy reports being up $772 — but he’s a dedicated student. We don’t discriminate based on profits in my chat rooms.

I wish I’d seen the message before I closed the webinar so people could see me trade NBDR live. Watching people trade live is one of the best ways to learn. That’s why being in the Challenge is so important to your trading education.

When I first saw the message I thought…

NBDR? I’ve never heard of this stock… 

Then I pulled the stock up on StocksToTrade. StocksToTrade has awesome news and SEC filters to help traders find the most relevant news. Sure enough … six minutes earlier, NBDR released news about an at-home coronavirus test.

I took a smaller position than I normally would’ve on this trade. I don’t like chasing stocks and I was about six minutes late seeing the news. But the sector is red hot so I thought it was worth the risk.

Watch this video lesson to understand my entire trading thesis on NBDR:

Wall Street mocks these types of trades. I made a little over $1,000 on it. I don’t know about you, but I’ll take that trade any day. Small gains add up over time.

The best part? Anyone can take this trade if they’re prepared. And those who really understand the past know that…

Coronavirus Stocks Aren’t One-Day Wonders

NBDR has been on my radar every day since the company’s first coronavirus press release. As long as this sector stays hot, I’ll keep my eye on any stock with coronavirus news. To date, I’ve taken three additional trades on NBDR.

Stocks in a hot market aren’t one-day wonders. 

People thought NBDR was done once it faded off for a few days with no additional news. I kept the stock on my watchlist and waited for the company to release more news. I’d never buy a stock anticipating the news. I wait until the news is released and the stock starts spiking.

How many times have you seen a company release news only for the stock to dump?

It happens all the time. It’s called “buying the rumor, selling the news.” Too many people fail to understand this basic pattern … study it here.

My patience paid with NBDR. The three additional trades added $1,577 to my profits* and NBDR isn’t done yet…

NBDR daily stock chart
NBDR chart: 1-month, daily candle — courtesy of StocksToTrade.com

Again, the first trade I picked up from a student in the chat room, but the following three were a result of my preparation. Check out all my NBDR trades and thoughts here.

Wall Street’s Wrong About Penny Stocks

Let Wall Street and the big funds laugh about making $1,000 on a trade. My students and I would love more 100%+ trades — especially when they take less than 10 minutes.

I remember one time I was sitting on a stage with big hedge fund managers and traders at a conference. I have a big mouth, so I end up on these stages a lot.

On that specific day of the conference, I made $350. I was satisfied. $350 a day won’t make you rich, but it’s enough money to make a difference in people’s lives. So there I was … on stage talking about my awesome $350 trade … and the other people on the stage started laughing.

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They were making fun of me, thinking I only made $350,000 that day. That’s right, 350 THOUSAND. So I had to emphasize that I made just $350. These big Wall Street players were visibly shocked. Some were completely stunned.

These traders and investors will never understand. To them, penny stocks are a waste of their time. This gives us an advantage.

If Wall Street doesn’t want to touch penny stocks, there are fewer big traders playing these stocks. And if you’re one of my students, you can learn how to ride the momentum of these moves.

Penny stocks offer the best opportunities in the entire stock market. Interested in learning how to take advantage of penny stocks? Apply to my Trading Challenge Today. 

Props to My Students

NBDR wasn’t the easiest trade — you had to be fast. Executions were tough and the spread got crazy once it was up over 300%. But plenty of my students report nailing it. Huge congrats to everyone listed below.

From the Trading Challenge Chat Room

March 16

1:38 PM schultzy: “$NBDR CV news.”

3:56 PM nbn707: “sold some $NBDR at 0.0526 from 0.0436.”

3:59 PM nbn707: “$NBDR sold 3/5 at 0.053 avg from 0.0436, holding remaining o/n.”

4:03 PM Fiona1015: “$NBDR: Holding 7.5K at 0.041 overnight since it is a first green day OTC with great news.”

4:06 PM malquist: “out $nbdr .052 from .0476. nice little 26 dollar gain for my second trade ever.”

March 20

2:23 PM schultzy: “$NBDR news.”

2:30 PM schultzy: “in $NBDR $0.015. Out at $0.0278. wanted to get greedy but forced myself to sell.”

3:03 PM Luke_Fenwick: “also dip bought $NBDR at .022 out at .0231 for small win. bad execution.”

Think you can cut it in my Trading Challenge? Apply today and find out.

More Comments From the TimAlerts Chat Room

March 20

2:30 PM MichaelGoode: “definitely don’t chase $NBDR — poor r/r up here — good sell point.”

2:31 PM Mcisek13: “$NBDR in @.0128 out at .027.”

2:33 PM Mcisek13 → Noncha1ant: “I dip bought it before the PR thinking they’d update something on a Friday. Yikes early sell there for $NBDR but i’ll take my $1400.”

[Students’ results aren’t typical. These students put in the time and dedication and have exceptional skills and knowledge. Most traders lose money. Always remember trading is risky … never risk more than you can afford.]

Conclusion

NBDR is only the latest example of a news-based play. The coronavirus sector is hot right now. There will be more plays — study up and get in my chat rooms.

I would’ve missed this opportunity if it wasn’t for my trading chat room and my student alerting the news. It’s a key lesson that you don’t have to be the fastest or first to a play. As a trader, you simply need to understand the patterns and know when it’s time to place a trade.

Not every news release is worthy of a trade. If you want to find the best plays, you have to be using smart tools like StocksToTrade.

Keep up the great work, everyone. 2020 is turning out to be an incredible year for the penny stock market. Please, stay safe and study up as we ride out this pandemic.

What are you doing to prepare for your next trade? Comment below — I love to hear from my dedicated students! 

The post Why Your Trading Chat Room Is Key appeared first on Timothy Sykes.



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