Nasdaq Stocks

After reaching highs in 2021, several EV stocks are trailing the broader market due to slowing consumer spending and tepid demand. However, the pullback provides investors a chance to buy the dip and gain exposure to a rapidly expanding addressable market, given the worldwide transition towards EVs. One beaten-down EV stock is Lucid Group ( NASDAQ:LCID ), trading 95% below its high. I'm bullish on LCID due to its expanding manufacturing capabilities, stellar growth estimates, and widening vehicle portfolio. An Overview of Lucid Group Lucid is a technology and automotive company operating in the luxury electric vehicle segment. Its first vehicle, called the Lucid Air, is the longest-range, fastest-charging car on the market today. The Lucid Air is a battery-powered luxury sedan with an estimated range of 516 miles on a single charge. Lucid Group sells vehicles to consumers through a retail sales network as well as online. It ended 2022 with 31 studios and service centers in North America, three in Europe, and another in the Middle East. It owns and operates a vehicle service network consisting of service centers in major metropolitan areas and a fleet of mobile service vehicles. In addition to in-house capabilities, Lucid has an approved list of trained collision repair shops that serve as repair hubs for its mobile offerings. A Focus on Expansion Lucid began vehicle deliveries in late 2021 and expects to launch additional vehicles in the next few years. It has already commenced the design and engineering work for Lucid Gravity, a luxury sports utility vehicle that should be launched this year. It now plans to expand its manufacturing advancements to develop higher-volume vehicle segments. The Lucid Air is manufactured at the company’s greenfield electric vehicle manufacturing facility in Casa Grande, Arizona. Once the manufacturing facility is fully built this year, it will have an annual output capacity of 90,000 vehicles, up from a capacity of 34,000 in 2022. Lucid is also building an EV manufacturing facility in Saudi Arabia, where it expects to ship 155,000 units each year on competition. In fact, Saudi Arabia’s public investment fund has invested $5.4 billion in Lucid since 2018 while agreeing to purchase 100,000 vehicles over a 10-year period.   Lucid’s expansion should help it achieve operational efficiencies. Further, its focus on vertical integration should shore up its profit margins over time. How Did Lucid Group Perform in 2023? Lucid Motors produced 8,428 vehicles in 2023 and delivered 6,001 vehicles. However, it was much lower than the company’s initial production estimates of 12,000 vehicles at the midpoint of its guidance. Lucid Group manufactured 1,550 vehicles and delivered 1,457 vehicles in Q3 2023, raking in $137.8 million in sales. Comparatively, its capital expenditures totaled $192.5 million in the September quarter. In the last three quarters, Lucid’s net losses totaled over $2 billion due to its high cash burn rates. To lower operating costs, the company was forced to slash its workforce by 18% and recently announced the resignation of Sherry House, Lucid’s CFO. Lucid Group Stock Will Remain Volatile The automobile manufacturing industry is extremely capital-intensive. Further, Lucid Motors will have to expand its manufacturing capabilities multifold to benefit from economies of scale and deliver consistent profit margins. For instance, Tesla ( NASDAQ:TSLA ) reported its first quarter of positive operating income in Q3 2018 where it ended the year with 245,200 vehicle deliveries. Comparatively, Lucid Motors ended 2023 with less than 9,000 vehicle deliveries. It suggests that the company will have to allocate significant resources before it churns out consistent profits. Further, while Tesla enjoyed a first-mover advantage, Lucid Group will have to wrestle with competition from new and legacy EV manufacturers such as NIO ( NYSE:NIO ), Ford ( NYSE:F ), and General Motors ( NYSE:GM ). Also, while Lucid ended Q3 with $5.5 billion in total liquidity, it will have to raise capital multiple times in the upcoming decade. If it raises equity, it will result in shareholder dilution, while debt will weaken the balance sheet. Given these factors, investors should be ready for a bumpy ride with Lucid stock in 2024 and beyond.   What is the Target Price for LCID Stock? Out of the nine analysts covering LCID stock, none recommend a Buy, eight recommend a Hold, and one recommends a Sell, giving it a Hold consensus rating. The average LCID stock price target is $5.09, 51% above the current price. The Final Takeaway It's evident that Lucid Motors is a high-risk, high-reward investment. The EV manufacturer will have to raise production and delivery numbers, improve profit margins, and navigate an uncertain macro environment to regain investor confidence. Still, it's trading at a significant discount to consensus estimates and should benefit from multiple secular tailwinds in the next two decades, making it worth consideration. Disclosure

The Avantis U.S. Small Cap Value ETF ( NYSEARCA:AVUV ) is a unique, differentiated ETF utilizing small-cap stocks to generate big-time returns.  I’m bullish on this $9.2 billion fund based on its differentiated strategy, which combines the benefits of index investing (such as a highly-diversified portfolio and low turnover) with elements of active management, its reasonable expense ratio, and the stellar returns it has generated over the past three years.  What is the AVUV ETF’s Strategy? According to the fund’s sponsor, Avantis (a subsidiary of American Century Investments), AVUV “invests in a broad set of U.S. small-cap companies and is designed to increase expected returns by focusing on firms trading at what we believe are low valuations with higher profitability ratios.”  The fund offers many of the benefits of index investing, such as strong diversification and low turnover, but combines this “with the ability to add value by making investment decisions using information” on current prices.  The fund utilizes “efficient portfolio management and trading process(es)” that are “designed to enhance returns while seeking to reduce unnecessary risks and costs for investors.”   The fund’s managers seek to boost returns by overweighting stocks with higher profitability and value characteristics and those with smaller market caps versus other stocks in the fund’s investment universe. The fund’s managers define profitability mainly as "adjusted cash from operations to book value ratio” and value characteristics mainly as "adjusted book/price ratio.” So, how is this strategy playing out? It turns out it's going pretty well, as we’ll discuss below.  Excellent Three-Year Performance AVUV’s strategy has translated into excellent returns over the past few years. As of December 31, 2023, AVUV generated an annualized three-year total return of 18.4%. This phenomenal return crushed its benchmark, the Russell 2000 Value Index, which returned 7.9% on an annualized basis over the same time frame, validating AVUV’s strategy. These results also compare favorably to the S&P 500 ( SPX ). For example, the Vanguard S&P 500 ETF ( NYSEARCA:VOO ) returned an annualized 10.0% over the same three-year time frame. While it’s not a direct comparison, it’s interesting to note that AVUV's results even beat those of the highly-touted Invesco QQQ Trust ( NASDAQ:QQQ ), which also returned an annualized 10.0% over this same three-year time horizon.       AVUV has generated a 16.6% annualized return since its launch in 2019. The fund hasn’t been around for a long time yet, so it will be interesting to see if it can keep producing these types of results, but for now, AVUV looks like a clear winner. It has beaten its benchmark, the broader market, and even the most prominent Nasdaq 100 ( NDX ) ETF.    A Diversified and Carefully Selected Portfolio AVUV provides investors with great diversification, investing in 748 small-cap value stocks across a variety of sectors and industries. Its top 10 holdings account for just a minuscule 8.7% of assets, meaning that there is negligible concentration risk here. In fact, top holding Boise Cascade Company ( NYSE:BCC ) has a weighting of just 1.0%, making it the only holding in the fund with a weighting of more than 1.0%.  Below is an overview of AVUV’s top 10 holdings from TipRanks’ holdings tool.  As you can see, most of the top holdings have market caps in the range of $4 billion to $5 billion. Many of the fund's smaller holdings have market caps of below $1 billion. Because these are smaller stocks, many of the holdings aren't household names with investors. However, many investors will likely be familiar with top 10 holdings like Abercrombie & Fitch ( NYSE:ANF ), Goodyear Tire & Rubber ( NASDAQ:GT ), and Ryder System ( NYSE:R ).  As you can see from the chart, AVUV’s management team has done a good job of selecting and overweighting small-cap stocks that have performed well, helping drive the fund’s strong performance. For example, Boise Cascade, a wood products and building materials company, has a yearly gain of 104.9%. Meanwhile, its second-largest holding, Alpha Metallurgical Resources ( NYSE:AMR ), a coal company, posted an even better gain of 136.8%. Lastly, clothing retailer Abercrombie & Fitch has gained a phenomenal 276.2% over the past year.  The fact that AVUV harnessed these strong performances from a retailer and a coal company, stocks from two industries many investors have left for dead, shows that there is still plenty of room for stock picking and active management, and AVUV’s portfolio managers have done a great job of this.  The fund is fairly diversified across sectors, with financials making up 28% of holdings, consumer discretionary accounting for 21%, and industrials weighing in at 17%. Energy has a 15% weighting. The Information technology sector has a lower rating of just 5%, which is perhaps unsurprising, as many tech stocks have larger market caps and often trade at higher valuation multiples.  How Much Does It Cost to Own AVUV? AVUV features a reasonable expense ratio of 0.25%. This means that an investor will pay $25 in fees on a $10,000 investment annually. If AVUV goes up 5% per year and the expense ratio remains 0.25%, this investor putting $10,000 into the fund will pay $319 in fees over a 10-year time span.   Is AVUV Stock a Buy, According to Analysts? Turning to Wall Street, AVUV earns a Moderate Buy consensus rating based on 396 Buys, 317 Holds, and 36 Sell ratings assigned in the past three months. The average AVUV stock price target of $95.73 implies 6.9% upside potential from current levels. The Takeaway: AVUV Looks Like a Good Fit for Investors' Portfolios AVUV has used its unique strategy of investing in small-cap stocks and combining elements of both indexing and active management to generate superior returns for investors over the past three years, beating its benchmark, the broader market, and even the popular QQQ ETF in the process. I’m bullish on this ETF based on this differentiated strategy, strong three-year track record, and modest expense ratio.  An additional positive about AVUV is that it pays a quarterly dividend and currently yields 1.7%. While this isn’t necessarily the most exciting dividend yield, it helps add to the fund's total returns.  Disclosure

Much-maligned Citigroup ( NYSE:C ) stock has rallied more than 40% off of its 52-week low. However, even after this rally, there's still plenty of room for additional upside. I’m bullish on shares of the fourth-largest bank in the United States based on its incredibly cheap valuation, above-average dividend yield, and the steady progress the company is making on reducing expenses. Furthermore, several highly-regarded value investors have positions in the stock and seem to support management and its turnaround plans. Signs That a Turnaround Is Underway Citigroup stock won’t be winning many popularity contests any time soon. While there were plenty of ups and downs, the stock has treaded water over the past five years, ultimately remaining flat during a time frame in which the broader market has surged. Part of the reason for this lackluster performance is that the bank has produced disappointing results. Citigroup’s recently-reported fourth-quarter results followed this trend, as the bank posted a $1.8 billion loss, which arose from a smorgasbord of charges related to overseas risks.  However, there were also signs of life, and overall, investors and analysts had a positive reaction to the report. For one thing, management expects $80-81 billion in revenue, a 4% increase versus full-year revenue for 2023. Furthermore, the company is targeting significant reductions in expenses and making slow but steady progress toward this goal. Management guided for $53.5-53.8 billion in expenses in 2024, which would represent 1% in savings from last year’s $54.3 billion. Further out, the company is targeting a more ambitious reduction to $51-53 billion. The company previously announced a program to cut headcount by approximately 10% and has started making layoffs and eliminating leadership roles, so it’s serious about these goals. The outlook was well-received by analysts. Wells Fargo's ( NYSE:WFC ) Mike Mayo calls Citi his top bank pick in the midst of a "multi-year inflection" and maintains an Overweight rating and $70 price target on the stock. Meanwhile, Bank of America ( NYSE:BAC ) maintained its Buy rating on the stock and increased its price target from $60 to $65. Similarly, Oppenheimer maintained its Outperform rating and increased its price target to a more aggressive $93, up from $85. Big Investors Believe in the Turnaround  Several prominent value investors believe in the management team and the turnaround play. During the most recent quarter, Edgar Wachenheim III’s Greenhaven Associates increased its Citigroup position by 22%, making it the firm’s third-largest holding. As of the 13F filing, shares of Citigroup accounted for nearly 9% of Greenhaven’s portfolio.  Wachenheim recently told Barron’s, “We strongly believe that Citigroup’s shares are deeply undervalued because the bank and its management are much better and stronger than their reputations.” Wachenheim went on to say, “We hear from a number of sources that Jane Fraser is doing an excellent job as Citi’s relatively new CEO.”  That’s a pretty convincing vote of confidence, and Warren Buffett seems to agree. At a recent lunch with Fraser, Buffett reportedly told the new CEO to keep going with her cost-cutting and turnaround plans. Buffett’s Berkshire Hathaway ( NYSE:BRK.B ) is a major shareholder that owns over 55 million shares of the bank as of its last 13F filing.  Resoundingly Cheap In addition to the turnaround efforts, value investors like Wachenheim and Buffett clearly know that shares of Citigroup are incredibly cheap. Not only do they trade at just nine times projected 2024 earnings, a significant discount to the broader market, but they also trade at a massive discount to book value. Shares of the bank trade at a paltry 0.56 times book value. It’s hard to overstate how cheap this is. It means that Citigroup currently trades for slightly more than half of what it would be worth if all of its assets were liquidated today.  Citigroup is also far cheaper than its “big four” banking peers, Bank of America, Wells Fargo, and JPMorgan Chase ( NYSE:JPM ), based on this metric. Bank of America shares trade at its book value, while shares of Wells Fargo and JPMorgan Chase trade above their book values. Some discount to these stocks is certainly warranted as they have produced better results than Citigroup, but the discount illustrates that there is room for upside ahead. This ultra-low price-to-book value ratio gives investors significant potential upside and a nice margin of safety when buying shares. The aforementioned Wachenheim told Barron’s that he believes tangible book value will average $105-$110 in 2026 and that if shares “merely sell at book value and at 10 times normal earnings, an investor can double his or her money over the next two or so years.”  Solid Dividend Play In addition to this staggeringly cheap valuation, Citigroup also looks attractive based on its dividend yield. Shares currently yield 3.9%, more than double the yield of the S&P 500 ( SPX ). Citigroup’s dividend yield is also higher than any of its big four banking peers, all of which yield below 3%.  Citigroup has paid a dividend for 11 years in a row, and the dividend should be safe, as the stock’s dividend payout ratio is a conservative 37.2%.   Is C Stock a Buy, According to Analysts? Turning to Wall Street, Citigroup earns a Moderate Buy consensus rating based on seven Buys, 10 Holds, and one Sell rating assigned in the past three months. The average C stock price target of $60.47 implies 11.75% upside potential. Looking Ahead Citigroup has been an underperformer, but the stock is picking up momentum, and several prominent investors appear to believe in its turnaround potential. I'm bullish on the stock based on these plans, its ridiculously cheap price-to-book ratio, and its above-average dividend yield. Disclosure

Cattle futures gave back the initial triple digit gains on Monday to close 37 to 57 cents weaker. Feb cattle ended the day down by $1.07. Front month feeder cattle also gave back their initial gains on Monday and closed down by as much as $1.12. Cash sales for last...

Old crop corn futures led the way lower with losses of over a percent to start the week. New crop futures also faded through Monday, but ended the day 1 ½ to 2 ¾ cents weaker. The weekly Export Inspections report confirmed 901,958 MT (35.5 mbu) of corn was shipped...

Cotton futures finished the day mixed as old crop closed mostly weaker but within 11 points of UNCH. The new crop cotton market rallied 30 to 51 points to start the week. That left Dec at a 321 point discount to spot futures. NOAA’s update 7-day QPF has more rainfall...

The U.S. wheat markets ended the Monday session with over 1% losses as part of a broad grain market selloff. Chicago futures finished 6 to 7 cents weaker with a sub-$6 close in the March. KC wheat futures gave back 6 ½ to 8 ¼ cents on Monday. MGE wheat...

Lean hog futures found strength in the afternoon portion of Monday’s trade session. That left the board 17 to 35 cents higher for the close. USDA’s National Average Base Hog price was withheld for confidentiality on Monday, after being quoted $1.64 higher at $56.27 for Friday afternoon. The CME Lean...

Beans faded through the first trade day of the week and ended the day just 3c off the session lows. March beans closed under the $12 mark for the first time since June. New crop beans held firmer, but also faded by 2 to 4 ½ cents. Front month Soymeal...

Southern Missouri Bancorp (SMBC) came out with quarterly earnings of $1.07 per share, missing the Zacks Consensus Estimate of $1.12 per share. This compares to earnings of $1.26 per share a year ago. These figures are adjusted for

Celestica (CLS) came out with quarterly earnings of $0.76 per share, beating the Zacks Consensus Estimate of $0.68 per share. This compares to earnings of $0.56 per share a year ago. These figures are adjusted for non-recurring it

Sony scrapped the $10 billion merger of its Indian arm with Zee Entertainment in part because Zee failed to meet some financial terms of the deal and come up with a plan to address them, according to a termination notice reviewed by Reuters.

High Tide Inc. (HITI) came out with quarterly earnings of $0.02 per share, beating the Zacks Consensus Estimate of a loss of $0.03 per share. This compares to loss of $0.06 per share a year ago. These figures are adjusted for non-

What you need to know… The S&P 500 Index ($SPX ) (SPY ) on Monday closed up +0.76%, the Dow Jones Industrials Index ($DOWI ) (DIA ) closed up +0.59%, and the Nasdaq 100 Index ($IUXX ) (QQQ ) closed up +1.01%. Stocks on Monday posted moderate gains, with the...

FinWise Bancorp (FINW) came out with quarterly earnings of $0.32 per share, beating the Zacks Consensus Estimate of $0.30 per share. This compares to earnings of $0.49 per share a year ago. These figures are adjusted for non-recur

Carrols Restaurant Group (TAST) ended the recent trading session at $9.40, demonstrating a +0.11% swing from the preceding day's closing price. This move lagged the S&P 500's daily gain of 0.76%. On the other hand, the Dow reg

Urban Outfitters (URBN) ended the recent trading session at $39.10, demonstrating a +0.46% swing from the preceding day's closing price. This move lagged the S&P 500's daily gain of 0.76%. Elsewhere, the Dow saw an upswing of

Williams Companies, Inc. (The) (WMB) closed the latest trading day at $34.81, indicating a -0.17% change from the previous session's end. This change lagged the S&P 500's 0.76% gain on the day. Elsewhere, the Dow gained 0.59%,

At Holdings Channel, we have reviewed the latest batch of the 22 most recent 13F filings for the 12/31/2023 reporting period, and noticed that Ishares Core Msci Emerging Markets Etf (Symbol: IEMG) was held by 11 of these funds. When hedge fund managers appear to be thinking alik

Looking at the universe of stocks we cover at Dividend Channel, in trading on Monday, shares of Nordstrom, Inc. (Symbol: JWN) were yielding above the 4% mark based on its quarterly dividend (annualized to $0.76), with the stock changing hands as low as $18.97 on the day. Divid