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Visualizing an Internet Minute: Zacks NOV Market Strategy

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One can’t deny the phenomenal transformative power of the social media revolution. It continues to reshape global communications. 
 
All of the firms driving it are publicly listed U.S. stocks.
 
I. What happens in an Internet minute?
 
I found this to be an important article. Inspect the facts. It was published on March 13th, 2019 by Jeff Desjardins. He is with the www.visualcapitalist.com 
 
When it comes to gauging the epic scale of the Internet, it would seem each minute leans closer to the extraordinary side of the spectrum. 
 
Aggregate the online activity of billions of people globally -- in 2019 -- to see what an internet minute looks like:
 
 
How is it possible 188 million emails are sent every minute?
 
How does Google process 3.8 million search queries in such a short span of time? Simply put, the number of actions packed into just 60 seconds is extraordinary. 
 
Platforms such as Instagram and Netflix continue to grow at a blistering pace, while new categories such as smart speakers quickly build a strong foundation for the future. 
 
In 2018, for example, only 67 voice-first devices were being shipped per minute – and in 2019, there are now 180 smart speakers being shipped in the same window of time. What will this look like in 2020?
 
II. How to handle this social media explosion is very different inside Mainland China
 
On Oct. 27th, 2019, this came out of a local Chinese publication:
 
It was republished in China’s Global Times: “A villager in Northern China’s Inner Mongolia has been detained for 8 days for disturbing social order, by claiming a company’s chemical fertilizer was substandard in a 50-member WeChat group, without providing any evidence or purchasing the company’s products.”
 
Here is a good list of websites currently banned in Mainland China --
 
 
“A single spark can start a prairie fire,” observed Mao Zedong in 1930, as he tried to convince his followers that revolution was possible in China. 
 
Almost a century later, Mao’s observation comes to mind as little sparks set off mass demonstrations across the world. Consult this GZero chart on that…
 
 
III. To finish, turn to excerpts from “Leaderless Rebellion: How Social Media Enables Global Protests”
 
It was published in the Financial Times, October 25th, 2019. Here are a few excerpts:
 
“Across the world, demonstrators are using similar technologies to organize and spread their messages. Messaging services that offer end-to-end encryption — such as Telegram — are hard to spy on and are very popular. Facebook groups and Twitter allow amorphous protest movements to crowdsource ideas and articulate grievances.
 
In Lebanon, the trigger for protests was a tax on WhatsApp messages
In Chile it was a rise in metro fares
In France, the gilets jaunes protests that began last year were set off by a rise in petrol taxes
Elsewhere, the roots of popular revolt are more clearly political:
 
In Hong Kong, it was an attempt to allow extradition of criminal suspects to China
In Algeria, where mass protests have been going on for most of the year, it was an announcement that Abdelaziz Bouteflika, the ailing president, intended to run for a fifth term
The mass protests that have broken out during the past year in Asia, Europe, Africa, Latin America and the Middle East share other important characteristics.
 
They are usually leaderless rebellions, whose organization and principles are not set out in a little red book or thrashed out in party meetings, but instead emerge on social media. 
 
These are revolts that are convened by smartphone and inspired by hashtags, rather than guided by party leaders and slogans drafted by central committees. The rallying power of social media is a crucial enabler for leaderless movements.
 
Social media also allows a movement in one place to take inspiration from news of revolts in another.
 
The occupation of the airport in Barcelona last week was a tactic borrowed from Hong Kong. 
 
Hong Kong demonstrators have been seen carrying the Catalan flag. 
 
The Sudanese and Algerian uprisings this year borrowed each other’s imagery and slogans — in a similar fashion to the Arab Spring revolts of 2011.”
 
In sum, we have the U.S. social media firm explosion, a Chinese authoritarian approach to suppressing it, and a kaleidoscopic use of the tool for any number of leaderless rebellions across the globe.
 
All of this, taken together, must be watched closely -- by astute stock investors.
 
Zacks Sector/Industry/Company Telescope
 
Entering November, I see Info Tech is back at the top of our sector ranks. A surprise industry upgrade landed on the much-watched Semiconductor space. It that a foreshadowing of a positive turn in global trade events? We shall see.
 
Leaving Q3 earnings season, Zacks Industry Ranks shows the defensive sector Health Care and Utilities in 2nd and 3rd place. That is a more cautionary sign.
 
The big fall-off may be in the Consumer Discretionary area. If the consumer continues to hold off big ticket purchases, it may be a big mark against the U.S. growth rate. Finance fell back this month too. The other worry is charge-off from consumers who shouldn’t have been given credit.
 
Global economy-exposed sectors like Industrials and Materials are at the very back of the bus. I see the business cap-ex weakness in the Industrial niches, particularly.
 
(1) Info Tech stays Very. Attractive. Electronics, Misc. Tech. and Computer - Software Services are looking good again. Importantly, Semis are upgraded to Attractive from Neutral.
 
Zacks #1 Rank Stock --
 
Power Integrations, Inc. (POWI - Free Report) : This semi chip company with a $2.7B market cap is a supplier of high-performance electronic components used in high-voltage power-conversion systems:
 
Their integrated circuits and diodes enable compact, energy-efficient AC-DC power supplies for a vast range of electronic products including mobile devices, TVs, PCs, appliances, smart utility meters and LED lights. 
 
Their SCALE IGBT drivers enhance the efficiency, reliability and cost of high-power applications such as industrial motor drives, solar and wind energy systems, electric vehicles and high-voltage DC transmission. 
 
Since its introduction, Power Integrations' EcoSmart energy-efficiency technology has prevented billions of dollars' worth of energy waste and millions of tons of carbon emissions. 
 
Reflecting the environmental benefits, Power Integrations' stock is a member of clean-tech stock indices sponsored by Cleantech Group LLC and Clean Edge.
 
(2) Health Care moves a notch to Attractive from Very Attractive. The three groups: Drugs, Medical Care and Medical Products look the same.
 
Zacks #1 Rank Stock –
 
Tenet Healthcare Corp. (THC - Free Report) : This is an investor-owned health care services company with a $3.0B market cap. 
 
The company owns and operates general hospitals and related health care facilities for urban and rural communities in numerous states, and has offices in CA and FL. 
 
The company has investments in other health care companies and is one of the largest investor-owned health care delivery systems in the U.S.
 
The company was founded in 1967. It is headquartered in Dallas, TX,
 
(3) Utilities move to Attractive from Unattractive. Electric Utilities pop (colder weather?)
 
Zacks #1 Rank Stock --
 
AquaVenture Holdings LLC (WAAS - Free Report) is a provider of Water-as-a-Service solutions. Hence, the slickly-chosen stock ticker WAAS. 
 
It offers clean drinking and processed water. The market cap is $676 million, making it a small cap stock in a defensive industry space.
 
The company's operating platform consists of:
 
Quench, a U.S.-based provider of Point-of-Use, filtered water systems and related services to institutional and commercial customers and 
Seven Seas Water, a provider of desalination and wastewater treatment solutions to governmental, municipal, industrial and hospitality customers. 
AquaVenture Holdings LLC is based in Tampa Bay in the United States.
 
(4) Consumer Discretionary falls to Market Weight from Very Attractive. Consumer Electronics and Apparel, and Non-food Retail/Wholesale held up well. All others look weak.
 
(5) Communication Services is a Market Weight sector. Telco Services are OK.
 
(6) Energy stays a Market Weight. Drilling (surprisingly) is the top industry.
 
(7) Financials get to Unattractive from Market Weight. A strong spot is Finance. Consumer spending is showing some fatigue, and it has reached the banks.
 
(8) Industrials get back to Unattractive from Very Unattractive. There are two domestic Very Attractive industries: Business Products and Construction-Building Services. That’s trade war uncertainty for you. Railroads and Airlines, Machinery and Machinery-Electrical all look awful.
 
(9) Consumer Staples falls to Very Unattractive from Market Weight. The best you can do is play Misc. Staples categories.
 
(10) Materials remain Very Unattractive. There are no strong sectors.
 
That’s it for me.
 
Find the time! Delve into the rest of this interesting report’s details.
The following is an excerpt from Zacks Chief Strategist John Blank’s full Nov Market Strategy report To access the full PDF, click here
 
One can’t deny the phenomenal transformative power of the social media revolution. It continues to reshape global communications. 
 
All of the firms driving it are publicly listed U.S. stocks.
 
I. What happens in an Internet minute?
 
I found this to be an important article. Inspect the facts. It was published on March 13th, 2019 by Jeff Desjardins. He is with the www.visualcapitalist.com 
 
When it comes to gauging the epic scale of the Internet, it would seem each minute leans closer to the extraordinary side of the spectrum. 
 
Aggregate the online activity of billions of people globally -- in 2019 -- to see what an internet minute looks like:
 
 
How is it possible 188 million emails are sent every minute?
 
How does Google process 3.8 million search queries in such a short span of time? Simply put, the number of actions packed into just 60 seconds is extraordinary. 
 
Platforms such as Instagram and Netflix continue to grow at a blistering pace, while new categories such as smart speakers quickly build a strong foundation for the future. 
 
In 2018, for example, only 67 voice-first devices were being shipped per minute – and in 2019, there are now 180 smart speakers being shipped in the same window of time. What will this look like in 2020?
 
II. How to handle this social media explosion is very different inside Mainland China
 
On Oct. 27th, 2019, this came out of a local Chinese publication. It was republished in China’s Global Times:
 
“A villager in Northern China’s Inner Mongolia has been detained for 8 days for disturbing social order, by claiming a company’s chemical fertilizer was substandard in a 50-member WeChat group, without providing any evidence or purchasing the company’s products.”
 
Here is a good list of websites currently banned in Mainland China --
 
 
“A single spark can start a prairie fire,” observed Mao Zedong in 1930, as he tried to convince his followers that revolution was possible in China. 
 
Almost a century later, Mao’s observation comes to mind as little sparks set off mass demonstrations across the world. Consult this GZero chart on that…
 
 
III. To finish, turn to excerpts from “Leaderless Rebellion: How Social Media Enables Global Protests”
 
It was published in the Financial Times, October 25th, 2019. Here are a few excerpts:
 
“Across the world, demonstrators are using similar technologies to organize and spread their messages. Messaging services that offer end-to-end encryption — such as Telegram — are hard to spy on and are very popular. Facebook groups and Twitter allow amorphous protest movements to crowdsource ideas and articulate grievances.
  • In Lebanon, the trigger for protests was a tax on WhatsApp messages
  • In Chile it was a rise in metro fares
  • In France, the gilets jaunes protests that began last year were set off by a rise in petrol taxes
"Elsewhere, the roots of popular revolt are more clearly political:
  • In Hong Kong, it was an attempt to allow extradition of criminal suspects to China
  • In Algeria, where mass protests have been going on for most of the year, it was an announcement that Abdelaziz Bouteflika, the ailing president, intended to run for a fifth term
"The mass protests that have broken out during the past year in Asia, Europe, Africa, Latin America and the Middle East share other important characteristics.
 
"They are usually leaderless rebellions, whose organization and principles are not set out in a little red book or thrashed out in party meetings, but instead emerge on social media. 
 
"These are revolts that are convened by smartphone and inspired by hashtags, rather than guided by party leaders and slogans drafted by central committees. The rallying power of social media is a crucial enabler for leaderless movements.
 
"Social media also allows a movement in one place to take inspiration from news of revolts in another.
 
"The occupation of the airport in Barcelona last week was a tactic borrowed from Hong Kong. 
 
"Hong Kong demonstrators have been seen carrying the Catalan flag. 
 
The Sudanese and Algerian uprisings this year borrowed each other’s imagery and slogans — in a similar fashion to the Arab Spring revolts of 2011.”
 
In sum, we have the U.S. social media firm explosion, a Chinese authoritarian approach to suppressing it, and a kaleidoscopic use of the tool for any number of leaderless rebellions across the globe.
 
All of this, taken together, must be watched closely -- by astute stock investors.
 
Zacks Sector/Industry/Company Telescope
 
Entering November, I see Info Tech is back at the top of our sector ranks. A surprise industry upgrade landed on the much-watched Semiconductor space. It that a foreshadowing of a positive turn in global trade events? We shall see.
 
Leaving Q3 earnings season, Zacks Industry Ranks shows the defensive sector Health Care and Utilities in 2nd and 3rd place. That is a more cautionary sign.
 
The big fall-off may be in the Consumer Discretionary area. If the consumer continues to hold off big ticket purchases, it may be a big mark against the U.S. growth rate. Finance fell back this month too. The other worry is charge-off from consumers who shouldn’t have been given credit.
 
Global economy-exposed sectors like Industrials and Materials are at the very back of the bus. I see the business cap-ex weakness in the Industrial niches, particularly.
 
(1) Info Tech stays Very. Attractive. Electronics, Misc. Tech. and Computer - Software Services are looking good again. Importantly, Semis are upgraded to Attractive from Neutral.
 
Zacks #1 Rank Stock --
 
Power Integrations, Inc. ((POWI - Free Report) ): This semi chip company with a $2.7B market cap is a supplier of high-performance electronic components used in high-voltage power-conversion systems:
 
Their integrated circuits and diodes enable compact, energy-efficient AC-DC power supplies for a vast range of electronic products including mobile devices, TVs, PCs, appliances, smart utility meters and LED lights. 
 
Their SCALE IGBT drivers enhance the efficiency, reliability and cost of high-power applications such as industrial motor drives, solar and wind energy systems, electric vehicles and high-voltage DC transmission. 
 
Since its introduction, Power Integrations' EcoSmart energy-efficiency technology has prevented billions of dollars' worth of energy waste and millions of tons of carbon emissions. 
 
Reflecting the environmental benefits, Power Integrations' stock is a member of clean-tech stock indices sponsored by Cleantech Group LLC and Clean Edge.
 
(2) Health Care moves a notch to Attractive from Very Attractive. The three groups: Drugs, Medical Care and Medical Products look the same.
 
Zacks #1 Rank Stock –
 
Tenet Healthcare Corp. ((THC - Free Report) ): This is an investor-owned health care services company with a $3.0B market cap. 
 
The company owns and operates general hospitals and related health care facilities for urban and rural communities in numerous states, and has offices in CA and FL. 
 
The company has investments in other health care companies and is one of the largest investor-owned health care delivery systems in the U.S.
 
The company was founded in 1967. It is headquartered in Dallas, TX,
 
(3) Utilities move to Attractive from Unattractive. Electric Utilities pop (colder weather?)
 
Zacks #1 Rank Stock --
 
AquaVenture Holdings LLC ((WAAS - Free Report) ) is a provider of Water-as-a-Service solutions. Hence, the slickly-chosen stock ticker WAAS. 
 
It offers clean drinking and processed water. The market cap is $676 million, making it a small cap stock in a defensive industry space.
 
The company's operating platform consists of:
  • Quench, a U.S.-based provider of Point-of-Use, filtered water systems and related services to institutional and commercial customers and 
  • Seven Seas Water, a provider of desalination and wastewater treatment solutions to governmental, municipal, industrial and hospitality customers. 
AquaVenture Holdings LLC is based in Tampa Bay in the United States.
 
(4) Consumer Discretionary falls to Market Weight from Very Attractive. Consumer Electronics and Apparel, and Non-food Retail/Wholesale held up well. All others look weak.
 
(5) Communication Services is a Market Weight sector. Telco Services are OK.
 
(6) Energy stays a Market Weight. Drilling (surprisingly) is the top industry.
 
(7) Financials get to Unattractive from Market Weight. A strong spot is Finance. Consumer spending is showing some fatigue, and it has reached the banks.
 
(8) Industrials get back to Unattractive from Very Unattractive. There are two domestic Very Attractive industries: Business Products and Construction-Building Services. That’s trade war uncertainty for you. Railroads and Airlines, Machinery and Machinery-Electrical all look awful.
 
(9) Consumer Staples falls to Very Unattractive from Market Weight. The best you can do is play Misc. Staples categories.
 
(10) Materials remain Very Unattractive. There are no strong sectors.
 
That’s it for me.
 
Find the time! Delve into the rest of this interesting report’s details.
 

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