Where To Invest as Earnings Season Ramps Up

Thursday, April 29, 2021

Most people would describe this week as one of the most important investment weeks of the year. Roughly a third of the S&P 500 index will report first-quarter earnings this week. That includes most of the big names in tech.

Tesla Inc. (Nasdaq: TSLA) on Monday, Microsoft Corp. (Nasdaq: MSFT) on Tuesday, Facebook Inc. (Nasdaq: FB) and Apple Inc. (Nasdaq: AAPL) on Wednesday, Amazon.com Inc. (Nasdaq: AMZN) on Thursday…

This time last year, the entire world had been shut down for six weeks. Investors were waiting to see what companies had planned. Ad budgets were being pulled. Companies were pivoting their businesses and working to come up with a plan to navigate the rest of the year.

Since all the companies above trade on the Nasdaq, I decided that I wanted to take a look at the ratings of all companies listed on the Nasdaq. None had an “A” rating, but four had a “B+” rating. So, let’s take a look …

First up, we’ve got KLA Corporation (Nasdaq: KLAC). This industry leader provides equipment and services that enable innovation throughout the electronics industry. We’re talking about the company behind the equipment that manufactures and inspects chips, wafers and other electronic components.

KLA offers subscription-based services, training, software applications and other solutions for integral tech companies. It uses its vast arsenal of solutions to tailor-make strategies for its customers. That could be anything from ramping up production to be faster, yield more or just maintain all current processes.

I know I’ve mentioned the supply crunch in semiconductors before. Demand is skyrocketing across every technology sector, and semiconductor companies are quickly working to expand. This will mean more purchases from KLA for many years to come.

Shares of KLA are up 69% over the past six months and 104% over the past year. Plus, the company currently pays a dividend of 90 cents a quarter for a yield of 1% based on current prices.  

Next up is Microsoft. This is the only company listed above that has a “B+” rating, though others do have a “buy” rating.

Microsoft is a household name and doesn’t really need more explanation. But it is worth mentioning that the company is on the verge of hitting a $2 trillion market cap.

Shares are up 22% over the past six months and 51% over the past year. Plus, the company currently pays a dividend of 56 cents per quarter for a yield of approximately 0.8%.

Third, we’ve got Medpace Holdings, Inc. (Nasdaq: MEDP). This company provides clinical research-based drug and medical development services. This means it can support the clinical development process from Phase I to Phase IV for both biopharmaceutical and medical device companies.

When it comes to the clinical development process, time is money. A few hours could be the difference between a company being the first to market … or seeming like a knockoff. By integrating the services of Medpace Holdings, clinical trials can be streamlined and deliver higher-quality devices. The company also offers supporting laboratory services, including central laboratory, bioanalytical, ECG core lab and imaging core labs.

Shares are up 77% in the past six months and up 124% in the past year.  

Last but not least, we have Academy Sports and Outdoors Inc. (Nasdaq: ASO). Academy is one of the nation’s largest sporting goods and outdoor stores. It’s headquartered in Texas with over 259 stores and a mission to provide “fun for all.”

When looking at consumer spending over 2020, there was an incredible demand for supplies for outdoor activities. And Academy was clearly set up for this trend. The company announced record sales and earnings for the fourth quarter and fiscal year 2020.

It even decided last year that it would go public. Shares began trading on the Nasdaq at the beginning of last October. Over the past six months, shares are up 111%.

There are plenty of other companies listed on the Nasdaq with a solid “B” buy rating. These are just the top four, all holding “B+” ratings. I’ll certainly be following the rest of the earnings this week, but when it comes to buying, I’ll always turn to the Weiss Ratings.


Kelly Green

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