Offices Are Needed
By Mon, Sep 28, 2020
Hey Scoopers,
It seems the market volatility is here to stay. — More on that in the “Overall Market” section.
Beyond the overall market, one stock’s 9,863.87 price-to-sales ratio makes it hard for investors to identify its value. In contrast, investors worry about how long a giant retail store can keep growing. — More on that in the “What’s Up?” and “What’s Down?” sections.
Oh, by the way, it seems Google still needs its office buildings. — More on that in the “Water Cooler” section.
But, first, here is a recap of what happened in the market yesterday:
Market Recap
- U.S. markets: All three indices wrapped the week on high notes. Scroll down to the “Overall Market” section to read more.
- Cryptocurrency: Bitcoin’s price stayed somewhat stable under the $11,000 mark.
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Volatility Is Here To Stay
Despite the recovery on Friday, only Nasdaq was able to turn its 5-day return positive. As we discussed a few times in the last few weeks, the combined forces of the COVID-19 pandemic, election, economic recovery, and the U.S.-China conflict would be fueling a period of market volatility. Therefore, weeks like last week won’t be too unlikely to reoccur in the coming weeks and months.
How To Evaluate This?
So, what happened?
Shares of Workhorse Group (Ticker: WKHS) were up more than 12% on Friday. The company is among the EV startups that has brought so much excitement to the market. Friday’s jump seems to come after a drastic decline earlier in the week. The volatility isn’t operationally driven. Instead, traders are betting for and against the company as the market tries to price the EV startups with small or no sustainable revenue. While Workhorse has some revenue, but at a 9,863.87 price-to-sales ratio, there is no way to use traditional pricing metrics to identify the company’s fair value.
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Can It Keep Growing?
So, what happened?
Shares of Costco (Ticker: COST) were down by more than 1% on Friday. The company announced its latest quarter earnings report and put up a staller quarter. Revenue, number of paying household members, and earnings were both up and higher than a year ago. Yet, the stock was down on Friday. While the drop wasn’t much, it seems investors are worried about how long the company can keep up such a growth rate.
Google Needs Its Offices
So what happened?
COVID-19 pandemic has convinced many people that there is no more need for office buildings, and people can permanently and flexibly work from their homes. It seems Sundar Pichai, Alphabet’s (Ticker: GOOG / GOOGL) CEO disagrees with that. The company’s CEO speaks about a hybrid model where employees would get together in the office but have more flexibility to work from home when it’s needed. So, the office spaces are needed, after all. They just need to morph into new spaces for a more flexible office-home working model.
Let us know if you have any feedback, question, or suggestions by emailing us at members@tradestocks.com.
Disclosure: Authors of this Scoop own shares of Alphabet (Ticker: GOOG / GOOGL).
About the Author
The authors of this Scoop are the editorial team at Stock Card, led by Hoda Mehr. Hoda Mehr is CEO and Co-founder of Stock Card and the host of Renegade Investors podcast. She runs a community of 40,000 stock market investors and manages Stock Card's successful flagship portfolio, Roll with Our CEO, on Stock Card Portfolio Store. Hoda is an Economist with an MBA from Concordia, John Molson School of Business. She applies behavioral economics, data journalism, and storytelling to all aspects of her work. Before starting Stock Card, Hoda worked as a strategy and insights lead at technology companies including Symantec, Aimia and Sony. Create a free account to do your stock market research easily and mistake-free: Stock Card Stock Card
