US equity markets surged higher in Q1 2021, despite high levels of volatility amid rising bond yields and the implosion of Archegos Capital Management. Upward move was supported by two main factors – greater than expected stimulus and vaccine progress. Below we present three of the biggest winners and losers for Q1.
Best performing stocks in Q1:
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Open real account TRY DEMO Download mobile app Download mobile app1. L Brands, Inc.
xStation STC - LB.US
xStation EquityCFD - LB.US
Sector - Retail
L Brands, Inc. is an American fashion retailer based in Columbus, Ohio. Its flagship brands include Victoria's Secret and Bath & Body Works. The retailer’s stock rose more than 61% in Q1 and haa market cap of $16.6 billion. Last week stock rose sharply after the company raised its profit outlook for the first quarter, citing a boost from government stimulus and from loosened Covid-related restrictions. Retailer seen “unusual shifts in consumer spending patterns,” which increased sales.Still, the company noticed that the retail environment “remains uncertain, and there is no assurance that these improved trends will continue.” L Brands expects an adjusted profit of 85 cents to $1 per share, compared with its previous forecast of 55 cents to 65 cents.
2. Marathon Oil
xStation STC - MRO.US
xStation EquityCFD - MRO.UK
Sector - Energy
Marathon Oil Corporation is an American petroleum and natural gas exploration and production company headquartered in the Marathon Oil Tower in Houston, Texas. Company is involved in prolific oil-producing resource plays, including the Eagle Ford in Texas, the Bakken in North Dakota, the STACK and SCOOP in Oklahoma, and the Permian Basin in New Mexico. Also, it has international production and operations in Equatorial Guinea, located on the west coast of South Africa. Stock rose more than 57% in the first quarter of 2021. This week's upward move accelerated after the company announced that it sent an irrevocable notice of its intention to fully redeem its currently outstanding $500 million aggregate principal amount of 2.8% Senior Notes Due 2022 (the "Notes") on April 29, 2021 (the "Redemption Date"). This transaction will reduce gross debt by $500 million and annual cash interest expense by $14 million. This move is in line with the company's objective to continue improving its investment-grade balance sheet through gross debt reduction and sustainable free cash flow generation.
3. Applied Materials
xStation STC - AMAT.US
xStation EquityCFD - AMAT.US
Sector - Technology
Applied Materials is an American corporation that supplies equipment, services and software for the manufacture of semiconductor (integrated circuit) chips for electronics, flat panel displays for computers, smartphones and televisions, and solar products. The company also supplies equipment to produce coatings for flexible electronics, packaging and other applications. The company's stock rose nearly 54% in the first quarter amid upbeat earnings report, but also from strong results from peers and customers that forecast heavy spending on semiconductor equipment this year. Investors also welcomed recent news that Applied Materials approved a new $7.5 billion stock buyback authorization which supplements the previous authorization, which has about $1.3 billion remaining. Also this week the company canceled plans to acquire the Japanese company Kokusai Electric for $3.5 billion and some analysts expect that some of these funds may also be used for share buyback. More volatility is expected during the company's investor day on April 6th during which company will provide more details on its "longer-term market outlook, opportunities, strategies, product and technology road maps, and financial targets."
Worst performing stocks in Q1:
1. Enphase Energy
xStation STC - ENPH.US
xStation EquityCFD - ENPH.US
Sector - Renewable energy
Enphase Energy is a NASDAQ-listed energy technology company headquartered in Fremont, California. Enphase designs and manufactures software-driven home energy solutions that span solar generation, home energy storage and web-based monitoring and control. The company's stock fell more than 20% since the beginning of the year as the general rotation out of the renewable energy sector began after it outperformed most sectors in 2020. Also news that company's President & CEO Badrinarayanan Kothandaraman sold 27,394 shares worth $4million on 03/30/2021 at an average price of $146.31 a share also weighed on market sentiment. However it is worth taking into account that Enphase Energy has earned almost $134 million last year and was in fact profitable unlike its competitors like Plug Power and Bloom Energy. Enphase also recently announced a strategic partnership to grow its solar technology business in South Africa.
2. Paycom Software
xStation STC - PAYC.US
xStation EquityCFD - PAYC.US
Sector - Technology
Paycom Software, Inc. is an American online payroll and human resource technology provider based in Oklahoma City, Oklahoma. It is attributed with being one of the first fully online payroll providers. Company sells human capital management software to organizations and generates a bulk of its revenues from payroll processing. Paycom had a difficult first quarter and its stock fell more than 17%. However the U.S. labour market has been recovering in recent months amid easing business restrictions, falling coronavirus infection rates, a fast vaccine rollout and continued support from the government. Rising economic activity should benefit employment services businesses as the labor participation rate improves and furloughed employees return to work, which should increase demand for Paycom services.
3. Advanced Micro Devices
xStation STC - AMD.US
xStation EquityCFD - AMD.US
Sector - Technology
Advanced Micro Devices, Inc. is an American multinational semiconductor company based in Santa Clara, California, that develops computer processors and related technologies for business and consumer markets. AMD's main products include microprocessors, motherboard chipsets, embedded processors and graphics processors for servers, workstations, personal computers and embedded system applications. Company' shares rose sharply during last year however bulls failed to uphold momentum during the first quarter of 2021 and stock dropped nearly 15%. However when we look at the numbers, the situations don't look so bad. In January the company posted upbeat Q4 2020 earnings. Chipmaker expects that this year sales will increase 37% to $13.4 billion with a 47% gross margin. In 2020, it had $9.8 billion in sales and 45% gross margins. Given operating profits were about 38% of its gross profit, AMDs operating profit should increase by 44% to $2.39 billion. On the other hand, stock is still one of the most expensive among other semiconductors companies, and the acquisition of Xilinx,which has clearly weighed down the stock during the first quarter of the year, may negatively affect the existing shareholders of AMD,
For comparison, below we present the performance of the companies that our analysts chosen at the beginning of this year.
Source: XTB
The entire report is available for download after completing the form, which can be found at this link https://en.xtb.com/top-10-markets-2021?hs_preview=xDpGBWPj-40184913888
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