Do You Have These Top Stocks On Your Watchlist In May?
One of the major financial stories in the stock market this year would be Bill Hwang’s Archegos Collapse earlier in March. In fact, it was the first big scandal to hit the family office industry. In case you’re not familiar, Archegos fell apart during the last week of March after amassing large leveraged positions in a concentrated portfolio of U.S. and Chinese companies.
Generally, hedge funds are a type of investment partnership that utilizes pooled funds to invest. They may have fairly flexible and aggressive investing styles. Therefore, it is no surprise that many would consider them to be high-risk investments. Borrowing heavily to invest in a booming stock market is certainly an attractive option for many hedge funds over the past year. But when share prices continue to fall (which they did), many banks called in their loans and Archegos defaulted. This has led to a domino effect that has cost nearly $20 billion to date and Archegos’s own implosion. But this sell-off may also have created an opportunity for investors to buy on dips.
Turning Challenges Into Opportunities
According to a 13F filing, Geoge Soros reportedly snapped up stocks that took a hit amid the collapse of Archegos in March. Amongst them include Vipshop Holdings Ltd (NYSE: VIPS) and Tencent Music Entertainment Group (NYSE: TME). Now, it is not clear if Soros has sold those stocks recently, but it’s helpful to know that he considered those stocks attractive at those prices. The liquidation of these stocks in massive blocks allows retail and institutional investors to buy in at steep discounts. During the “Front Row” interview on Bloomberg TV, Dawn Fitzpatrick, Chief Investment Officer of Soros Fund Management said, “When there’s a dislocation, we’re prepared to not just double down but triple down when the facts and circumstances support that.”
Against the backdrop of a lackluster stock market today, investors are searching for cheap stocks to buy. Keep in mind though, that we’ve seen plenty of trends come and go in the stock market. But it’s worth pointing out that those stocks that Soros snapped up have yet to fully recover. Thus, if those names are good enough for the man who broke the Bank of England, could they be good enough for you too? Here are three stocks to watch.
Top Stocks To Watch This Week
- Discovery Communications (NASDAQ: DISCA)
- Baidu (NASDAQ: BIDU)
- ViacomCBS (NASDAQ: VIAC)
Discovery Communications
Discovery Communications is an upcoming name in the streaming industry right now. For the uninitiated, Discovery is a mass media company that boasts a massive portfolio of unscripted content. This ranges from wildlife documentaries to lifestyle improvement programming. Earlier today, AT&T (NYSE: T) and Discovery announced that they will combine AT&T’s media unit, WarnerMedia, with Discovery to create a premier, standalone global entertainment company.
Both Discovery and WarnerMedia have dived into streaming not long ago. Discovery debuted the global launch of Discovery+ earlier this year, which has a vast array of unscripted reality shows. Meanwhile, AT&T has made a big bet on HBO Max, which launched a year ago and includes HBO programming and movies from AT&T’s Warner Bros. studio.
Such a tie-up could potentially create a new streaming contender that would have better products to compete with top streaming stocks like Walt Disney (NYSE: DIS) and Netflix. This deal would reshape Hollywood, which has already witnessed dramatic contraction after Disney’s acquisition of much Rupert Murdoch’s entertainment empire back in 2019. Should this deal go through, it would represent a major win for Discovery. Could this piece of news make DISCA stock worth adding to your watchlist now?
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Baidu
Baidu is a Chinese tech company specializing in Internet-related services and artificial intelligence (AI). The company’s core online marketing business remains weak with revenues declining in recent years. But the company expects its advertising business to recover this year as China’s economic growth stabilizes.
In fact, some consider Baidu to be among the most prominent AI and internet companies worldwide. As its advertising business recovers, it will continue to work on Apollo. For the uninitiated, Apollo is an open-source software platform for autonomous vehicles. Remarkably, Baidu will be the first company in the region to test out AV-based monetization mechanisms. For investors looking to bank on these growing automotive trends, BIDU stock would be a go-to at the moment.
The company is reporting its first-quarter 2021 on May 18 before the market opens. For the first quarter, the company expects revenues to come in between $4.0-4.4 billion. This represents an approximately 30% increase from the year-ago quarter when revenue came in at $3.22 billion. Considering BIDU stock has been under pressure due to the liquidation from Archegos and recent tech sell-off, could now be a good time to bet on BIDU stock?
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ViacomCBS
Viacom is a diversified multinational mass media conglomerate that is headquartered in New York City. In essence, the company delivers premium content to audiences across traditional and emerging platforms worldwide. It operates over 170 networks and reaches approximately 700 million subscribers in over 180 countries. The company reported its first-quarter results earlier this month.
Diving in, its global streaming revenue grew by 65% year-over-year, fueled by strong increases in user and product monetization. It also added 6 million global streaming subscribers to reach 36 million total subscribers in the quarter. Total revenue for the quarter was a whopping $7.41 billion, a 14% increase year-over-year. Viacom also reported a diluted earnings per share of $1.42 for the quarter. During the quarter, the company achieved a free cash flow of $1.59 billion.
For income investors, VIAC stock is a more compelling investment compared to other streaming stocks such as Netflix (NASDAQ: NFLX). That’s because Viacom makes regular dividend payments while at the same time focusing on growth. With a dependable dividend and exciting growth prospects, will you consider buying VIAC stock for the long run?
