Wednesday, June 9th, 2021
1/ Biden administration’s big vaccine announcement
2/ Poised for a trend change
3/ Investors respond to the results
4/ The bottom line
1/ Biden Administration’s Big Vaccine Announcement
While investors continue to hesitate at buying up higher share prices, at least one company’s stock price jumped higher on anticipation of a new round of customers. Pfizer Pharmaceuticals (PFE) closed higher by more than 2% on expectations that the Biden administration will announce that half a billion new vaccine doses will be distributed worldwide.
The chart below shows that PFE jumped higher. That’s not a big surprise. But what is a surprise is that the other two companies known for producing COVID-19 vaccines have such a different price action preceding this news. Johnson & Johnson (JNJ) and Moderna (MRNA) also jumped 2% higher on the news. The move curtailed J&J’s recent downward trend but came after MRNA had already made a substantial upward swing.
The uneven price action suggests that not all three of these companies will benefit the same from any governmental activity that gets announced tomorrow.
2/ Poised For a Trend Change
Thor Industries (THO), a recreational vehicle maker, has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average rise for the last two quarters was 44.58%. Reported earnings for this quarter had a surprise of over 40% above expectations. What’s interesting to note is that the stock sold off despite the beat.
Previously THO’s earning’s per share (EPS) of +6.65% suggested that analysts had grown bullish on its near-term earnings potential. Even though THO beat estimates, coming in at $3.39 per share against the estimated $2.34, investors have taken this opportunity to sell the news.
Thor Industries has seen plenty of overhead resistance over the past three months, and it isn’t keeping up with State Street’s Consumer Discretionary Sector ETF (XLY). This makes a good explanation of why THO shares sold off although earnings were surprisingly positive.
3/ Investors Respond To the Results
The Lovesac Company (LOVE) is a technology-driven, omnichannel company that designs, manufactures and sells furniture. The rapid consumer shift to e-commerce has dramatically benefited Lovesac’s millennial-oriented furniture business. Now, as retail stores are beginning to reopen, Lovesac is well positioned.
LOVE announced earnings today after market close. There was an expected loss of $0.58 per share. The stock moved higher today as these key numbers topped expectations coming in at +$0.13 per share.
Although the stock has outpaced XLY, it will be interesting to see if it sustains an uptrend in the post-pandemic world.
4/ The Bottom Line
Stocks related to the COVID-19 vaccine rose unevenly today suggesting that not all will benefit with the increase of available doses. Thor beat earnings but sold off anyway while Lovesac held onto its upward trend.
Originally posted on 9th June, 2021
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