Beam Global, Generac, One Stop Systems, QuickLogic and CyberOptics highlighted as Zacks Bull and Bear of the Day
Beam Global, Generac, One Stop Systems, QuickLogic and CyberOptics highlighted as Zacks Bull and Bear of the Day
For Immediate Release
Chicago, IL – December 23, 2021 – Zacks Equity Research Shares of Beam Global BEEM as the Bull of the Day, Generac Holdings Inc. GNRC as the Bear of the Day. In addition, Zacks Equity Research provides analysis on One Stop Systems, Inc. OSS, QuickLogic Corporation QUIK and CyberOptics Corporation CYBE.
Here is a synopsis of all five stocks:
Beam Global is a Zacks Rank #2 (Buy) that sports an F for Value and for Growth as well. This EV play has a massive short position and the potential for a huge squeeze play is in the making. Is this the next Tesla style “Mother Of All Short Squeezes”? It very well could be so let’s explore more about that idea in this Bull Of The Day article.
Beam Global produces patented infrastructure products for the electrification of transportation. It produces products for electric vehicle charging, outdoor media and energy security. Beam Global, formerly known as Envision Solar, is based in San Diego California.
Squeeze Me, Come On and Squeeze Me!
The most important part of a squeeze play is making sure the shorts are in the stock in a big way.
The next step is outlining why the shorts are barking up the wrong tree.
Once they realize the retail holders are not selling, but rather increasing their position, the squeeze will start.
One word of advice to the shorts, if you are going to panic, do so early.
BEEM has 8.9M shares outstanding and roughly 7.5M shares in the float. Of the shares in the float, about 34% of those shares are sold short.
The data we get on shares sold short has a lag. It’s a big lag actually, but when we look at the last two readings of the number of shares short we see the covering has already begun.
Currently there are 2,560,000 shares sold short while the prior reading came in at 2,670,000. That is a decrease of 4%... and there is plenty more covering to come.
Short sellers have a way of all targeting the same stock at the same time. They did this same thing with Tesla too, as they piled into short sales and then long put positions.
The problem with this is that there are too many shares sold short. When the shorts start to cover and the price starts to soar, the exits will be jammed and it will be that much harder to exit this short position.
The Thing Shorts Hate To See
In a word, the thing that shorts hate to see is GROWTH. I love growth, after all, I am the aggressive growth stock strategist here at Zacks Investment Research.
BEEM has posted some nice growth numbers already and they are only going to get bigger.
The most recent quarter saw topline growth of 63%. That probably drove more than a few shorts to cover as they recalled that November 2019 earnings report from Tesla. That was the start of a titanic run that crushed the shorts thanks to the solid growth they posted.
For the full year 2021, analysts are expecting topline growth of about 41%. That is good, but it is the growth expectation for next year that is going to cause some weakness in the knees of the shorts.
Sales growth of 156% is expected for 2022 and that is the type of thing that strikes fear in the heart of all the shorts. There are few things in the investing world like a growth story that has a big short position present already.
When I look at a stock, the one of the first things I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
For BEEM, I see a bad history of beating the Zacks Consensus Estimate. There is one beat over the last four quarters.
The silver lining to that storm cloud is the most recent quarter was the beat.
Earnings Estimates Revisions
The Zacks Rank tells us which stocks are seeing earnings estimates move higher. For BEEM, I see annual estimates moving higher.
Over the last 60 days, I see a few increases.
This quarter has increased by two cents.
The full year 2021 has moved from a loss of $0.78 to a loss of $0.72.
Next year has held still at a loss of $0.60.
There is no trailing or forward earnings multiple for BEEM. The price to book multiple is 6.5x which is still reasonable for a growth story that has a long road ahead of it. The price to sales multiple checks in at 23x, but that number will come down as the sales start to ramp.
Near the start of November, this stock was testing the $40 level. It has since been nearly cut in half and trades around $21.
The whole EV space is probably going to participate in a Santa Claus rally on 12/23/21. I say this after Tesla rallied for 6.8% a day ago as CEO Elon Musk noted that he is done selling shares and one other item of note.
Generac Holdings is a Zacks Rank #5 (Strong Sell) following an earnings miss back in the start of November. The stock was trading just over $500 before the print, but it has tumbled down to the $360 level. Let’s take a deeper look at this stock in this Bear of the Day article.
Generac Holdings Inc. designs, manufactures, and sells power generation equipment, energy storage systems, and other power products for the residential, and light commercial and industrial markets worldwide. The company offers engines, alternators, transfer switches, and other components fueled by natural gas, liquid propane, gasoline, diesel, and bi-fuel; and batteries and inverters. It also provides residential automatic standby generators ranging in output from 7.5kW to 150kW.
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of GNRC, I see three beats and one miss of the Zacks Consensus Estimate over the last year. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For GNRC I see estimates moving lower.
This quarter has fallen from $3.01 to $2.40.
Next quarter dropped from $3.14 to $2.51.
The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is mixed for those numbers.
The current year 2021 consensus number has dropped 52 cents to $9.54
The next year has dropped from $12.29 to $11.73 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a majority of stocks in the Zacks universe are seeing positive earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
Worried About Big Tech Regulation? Bet on These 3 Smaller Stocks
The U.S. Technology sector continues to witness intensifying scrutiny over antitrust issues, data usage, privacy, and the use of advanced technologies like AI and anti-competition practices. These have been taking a toll on tech bigwigs for quite some time.
Big Tech companies are currently facing various lawsuits, federal and state legislations, and strict regulatory activities in other regions like Europe and the Asia Pacific.
The growing public distrust on these companies due to rising concerns over consumer data privacy is boosting the demand for tech sector regulation.
Furthermore, a bipartisan movement is going on in the tech sector. Both Republicans and Democrats believe that tech giants are very powerful and agree on 'big tech regulation.'
A bipartisan bill has been introduced by lawmakers of the Senate, Platform Competition and Opportunities Act, which aims at limiting these companies from making acquisitions that disturb market competition. The bill has been passed by the House Judiciary Committee as well.
Apart from this, the House introduced five bills, focusing on strictly scrutinizing tech monopolies. The bills might ask bigwigs to sell off parts of their businesses, restrict them from practicing preferred ranking of their products and services, and stop acquisition of nascent companies.
Challenges Faced by Tech Giants
The bills along with the enforcement of stringent policies pose serious challenges to the above-mentioned companies.
Alphabet's division Google has been accused of antitrust violations abroad and faces antitrust lawsuits from many state attorney generals in the United States. Recently, a lawsuit was filed against Google for abusing its power over app developers on the Play Store.
Both Google and Apple continue to face strict regulatory pressure against their unfair trade practices with small local businesses. Both companies have exploited small app makers by charging a significant chunk of their sales and discarding the apps anytime.
Apart from this, Apple is accused of abusing its control over its mobile devices, harming competition and inflating prices via iPhone app sales.
Meanwhile, Amazon was questioned whether it uses third-party seller data in an anti-competitive way. Recently, the company was accused in India of copying sellers' products on its marketplace for its in-house brands and putting its home brand products at the top of search results.
Amazon has also been alleged to enjoy a monopoly over third-party sellers on its e-commerce platform.
Meanwhile, Meta has been facing allegations of squashing competition illegally by acquiring its potential rivals. The company's Instagram and WhatsApp buyouts remain the perfect examples of the same.
Further, Meta, which houses vast consumer data, is persistently facing lawsuits against data privacy issues worldwide.
Bet on These 3 Stocks
Given the challenging scenario for tech bigwigs, investors looking for bigger returns can consider the following companies with strong fundamentals.
One Stop Systems is riding on the growing momentum across the media and entertainment markets on the back of improving sales of its ruggedized servers. Solid demand for the company's differentiated military AI transportable data processing and storage products remains another tailwind. It is continuously gaining traction among new applications within key accounts, which remain other positives.
The Zacks Rank #1 (Strong Buy) company has returned 14.3% on a year-to-date basis. It designs and manufactures ultra-dense high-performance computing systems for learning, oil and gas exploration, financial trading, media and entertainment, defense, and traditional HPC applications.
We believe that its expanding customer base along with its well-performing European subsidiary, Bressner, will likely aid its financial performance in the days ahead.
Notably, One Stop Systems has a Growth Score of A. Further, it has a market cap of $85.3 million.
QuickLogic is gaining from the growing demand for its IP-related products. Further, its strength in sensor processing, display and visual enhancement, and smart connectivity is aiding business growth. Additionally, its recent partnership with onsemi to integrate AI and ML algorithms in a bid to implement a wide range of industrial IoT applications remains a major positive. Further, its partnership with Rubidium to expand its offerings of voice recognition solutions is expected to drive its momentum across IoT edge applications.
The Zacks Rank #2 (Buy) company, which develops ultra-low power multi-core voice-enabled SoCs, embedded FPGA IP, and Endpoint AI solutions, has returned 34.9% on a year-to-date basis. The company's well-performing new products as well as mature products are likely to continue driving top-line growth.
Notably, QuickLogic has a Growth Score B. Further, it has a market cap of $60.3 million.
CyberOptics is benefiting from the solid adoption of CyberOptics' high precision 3D Multi-Reflection Suppression-based optical sensors for inspection and metrology in key vertical markets like Surface Mount Technology and semiconductor. Its solutions boost customer yields, throughput and operating efficiency, thereby, saving time and expenses. The company has solid growth potential in the market for Micro LED inspection, advanced packaging and metrology.
The Zacks Rank #2 company is a leading provider of sensors and inspection systems, which provide process yield and throughput improvement solutions for the global electronic assembly and semiconductor capital equipment markets. It has returned 85.2% on a year-to-date basis.
Further, CyberOptics has a Growth Score B. Further, it has a market cap of $309.1 million.
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QuickLogic Corporation (QUIK): Free Stock Analysis Report
Generac Holdings Inc. (GNRC): Free Stock Analysis Report
CyberOptics Corporation (CYBE): Free Stock Analysis Report
One Stop Systems, Inc. (OSS): Free Stock Analysis Report
Beam Global (BEEM): Free Stock Analysis Report
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