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The Zacks Analyst Blog Highlights: Shopify, Trade Desk and Mettler-Toledo

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For Immediate Release

Chicago, IL – January 05, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Shopify Inc. (SHOP - Free Report) , The Trade Desk, Inc. (TTD - Free Report) and Mettler-Toledo International Inc. (MTD - Free Report) .

Here are highlights from Monday’s Analyst Blog:

Getting Bubblicious? Global Week Ahead

Yes. A New Year brings new possibilities.

More prosaically, it also brings fresh nonfarm payroll macro data.

But for this first Global Week Ahead of 2021, we must discuss $1,000+ share prices.

My concerns come to you in two table forms.

  • - Issue One: I have concerns about the intense day-trading of selected momentum/growth stocks
  • - Issue Two: I have concerns about tech stock index accomplishments that were so concentrated in a few stocks last year

Here is the common rub both share: How much further can fancy "momo" stocks run?

To grapple with this, consult the next 2 tables.

The first table (below) shows 20 amazing single tech stock performances from last year.

20 big tech stock gains in 2020:

(1) Tesla       +740%
(2) Etsy        +306%

(3) Peloton   +439%

(4) Zoom      +414%
(5) Pinterest +254%
(6) Snap        +200%
(7) Shopify    +189%
(8) Zillow       +183%
(9) Teladoc    +139%
(10) Nvidia     +123%
(11) PayPal    +114%
(12) Spotify    +113%
(13) Apple      +83%
(14) Amazon  +77%
(15) Uber        +76%
(16) Twitter     +68%
(17) Netflix      +63%
(18) Microsoft  +41%
(19) Facebook +33%
(20) Google     +31%

A second table (below) shows the percentage of the Nasdaq gains that 6 individual stocks claimed.

60% of 2020 Nasdaq Index gains came from 6 stocks:

(1) AAPL        +19.87%
(2) AMZN       +13.70%

(3) TSLA        +13.03%
(4) MSFT        +9.56%
(5) NVDA        +4.13%
(6) PYPL         +3.46%

Worry a bit, folks. Or at least take some profits!

Don't ignore these 2020 annualized share price facts -- entering 2021.

Next are Reuters' five world market themes, reordered for equity traders—

(1) As COVID Vaccinations in 2021 Go, So Goes Everything Else

All hopes for this year — everything from stock market returns to restaurant bookings — are bound up with the view that vaccines will gradually restore normality to a pandemic-ravaged world.

The end of the holiday season should lend momentum to vaccine rollouts. The United States, Russia, Britain and the European Union have started inoculations, while developing countries are testing storage and transport facilities.

But there could be more pain before the gains kick in.

As hospitals from London to Los Angeles overflow amid the emergence of a fast-spreading COVID-19 variant, tighter lockdowns, travel bans and remote schooling look inevitable, meaning the setbacks seen to economic growth at the end of the year could extend into January.

(2) Non-Farm Payroll Data Comes Out Friday

The first major U.S. data point of 2021 will be Friday's jobs numbers, which could show a slowdown in the pace of hiring.

November data already indicated the employment market was losing steam, with 245,000 new jobs added, the fewest in six months. For December, expectations are for an even smaller 159,000 gain.

By November, the economy had recouped only 12.4 million of the 22.2 million jobs lost in March and April.

Bank of America analysts forecast non-farm payrolls growth of just 50,000, leaving unemployment unchanged at 6.7%. They note "concerning signs" in the labor market, attributing them to renewed pandemic-linked restrictions on businesses.

(3) Keep an Eye on Georgia's Senate Election

Joe Biden won Georgia's 16 Electoral College votes to cement his U.S. presidential election victory. Now his fellow Democrats Raphael Warnock and Jon Ossoff are hoping to win the two Senate seats up for grabs in the state on Jan. 5.

If the Republicans win one or both seats, they will retain their Senate majority, enabling them to block Biden's legislative goals.

Markets interpreted the Nov. 5 election outcome -- a Democratic presidency and Congress, or lower house, alongside a Republican Senate, or upper house -- as the best of both worlds, allowing big-ticket stimulus while blocking tax hikes and tighter regulation.

Many fret that a Democrat win in Georgia will disrupt that balance, threatening the Santa Claus Rally. The Santa rally -- equity moves in the last five trading days of December and the first two of January -- has lifted Wall Street in 55 of the past 74 years.

(4) A January 4th OPEC Meeting. Whither Oil Prices?

Vaccine optimism has propelled crude prices 6%-8% higher in December, in a positive end to a year that actually saw U.S. futures turn negative in April. Now the focus is on the (virtual) Jan. 4 meeting of OPEC+, the Organization of the Petroleum Exporting Countries and its allies.

Having implemented a record 7.7 million barrels-per-day supply cut to stabilize prices, OPEC+ backed away in December from plans for a 2 million-bpd output boost. Instead, it upped production by 500,000 bpd and agreed that further monthly adjustments would not exceed that amount.

Russia has indicated that it will support another 500,000 bpd production increase from February, despite concerns from some other members in the alliance the move was premature.

The latest pandemic wave has not hit oil prices significantly but expect the supply (and demand) issue to be hotly debated.

(5) Brexit Has Its "Big Bang" Moment

On Monday, Europe will see its biggest transfer of share trading in over two decades after Britain's automatic access to the European Union's financial markets ended on Dec. 31.

While the Brexit trade deal agreed on Christmas Eve set rules for industries such as fishing and agriculture, it did not cover Britain's finance sector, which will soon get its first taste of the new regime.

Years of preparations since the 2016 Brexit referendum mean the transition of euro-denominated shares and derivatives from Britain should go smoothly. Still, it will be a test for the interest rate derivatives market — the Bank of England has warned of disruptions to swaps trading worth $200 billion.

Regulators have mostly downplayed risks, but they will be on high alert nonetheless. Once the "big bang event," as described by one industry executive, is out of the way, markets can focus on the longer-term implications for the City of London.

The rally hasn't faltered yet. But as the Georgia vote nears, investors may judge it wise to take some chips off the table.

Top Zacks #1 Rank (STRONG BUY) Stocks

Let's look into above $1,000 a share stocks this week.

Yes. I wrote that correctly.

(1) Shopify: This stock has an incredible $1,163 a share price tag. That makes the stock carry a hefty market cap of $122.9B. I see an obvious Zacks Value score of F, a Zacks Growth score of C, and a Zacks Momentum score of B.

(2) The Trade Desk: This stock has an incredible $818 a share price tag. That allows for a $38.4B market cap. I see an obvious Zacks Value score of F, but it comes with a Zacks Growth score of A, and a Zacks Momentum score of A.

(3) Mettler Toledo: This stock has an incredible $1,133 a share price tag. That makes for a $27.0B market cap. I see a Zacks Value score of F, a Zacks Growth score of C, and a Zacks Momentum score of F.

This level of overvaluation, on a few stocks, is worrisome, folks.

Conclusion

Central governments — the world over — are in a variety of straits, attempting to vaccinate their populations.

A. Consider the European situation, as a proxy.

The BBC stated that the E.U. began vaccinating with Pfizer/BioNTech doses on December 27th.

So far, the E.U. has only authorized the Pfizer/BioNTech vaccine, which presents logistical challenges as it has to be stored at -70C. It is made at a factory in Puurs, Belgium.

By Sunday morning about 240,000 had been vaccinated in Germany. The German government expects the Moderna vaccine to get E.U. authorization on Wednesday, the DPA news agency reports.

France? That country had done just 516 vaccinations by January 1st.

The U.K. has become the first country in the world to start giving people the Oxford- AstraZeneca coronavirus vaccine. About a million people have already been vaccinated with the Pfizer/BioNTech drug in the U.K.

B. The U.S. is moving a bit faster.

On January 2nd, the New York Times said that 4.2 million U.S. citizens had been vaccinated. 13 million doses had been delivered inside the USA.

C. Israel is best-in-class.

To learn why, click this link to the Jerusalem Post on Jan 3rd 2020:

Nine Reasons Why Israel Leads the World in Vaccine Distribution

For all of you that remain bullish on the vaccine distribution story?

Recall another old storyline: "Buy the rumor. Sell the News."

Happy New Year!

Regards,

John Blank

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


In-Depth Zacks Research for the Tickers Above


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MettlerToledo International, Inc. (MTD) - free report >>

Shopify Inc. (SHOP) - free report >>

The Trade Desk Inc. (TTD) - free report >>