TOP 3 akcie červenec 2023

The results season is in full swing in the USA and there is no shortage of surprises. Over 50% of the S&P 500 companies have already announced their Q2 results. Over 80% of these companies have so far reported better than market expectations. We are seeing an interesting trend among companies that generate over 50% of their revenues in the US. Their profits are up 0.4% year-on-year. By contrast, companies that generate over half of their revenues abroad saw their profits fall by almost 21%. The domestic market appears to be proving very reliable for US companies and all the signs so far point to a soft landing for the US economy. Earnings season traditionally brings with it increased volatility, which active traders are looking to take advantage of. And it was no different among Purple Trading clients. So let's take a look at which 3 titles were among the most interesting over the past month and what to expect from them going forward.

Boeing - a return to the heights?

Boeing has long been the showcase of American industry. It was one of the largest suppliers to the US military and the largest aircraft manufacturer in the world. However, several tragic accidents and a COVID pandemic brought Boeing's shares to their knees and the market even feared at times whether the company would go bankrupt. However, more than three years have passed since then and Boeing seems to be on the right track.

This was indicated by the results for the second quarter of this year. Revenues came in above estimates (USD 19.75 billion vs. USD 18.45 billion) and investors were especially pleased with free cash flow, which was well above estimates at USD 2.58 billion. The market was expecting negative USD 74 million. USD. Boeing also reaffirmed its full-year free cash flow guidance. Despite this, the company again ended the quarter in the red, with a loss of 82 cents per share. However, the market was expecting an even deeper loss of 88 cents per share. Surprisingly, the defense, space & security section also ended in a loss.

_{Boeing shares on the MT4 platform on the H4 timeframe}

However, investors reacted very positively to the results and the stock gained 9% in one day. Since the beginning of the year, Boeing is up more than 21%, outperforming the S&P 500. Boeing was one of the companies most affected by supply chain problems, but fortunately these are now gradually disappearing. The company's production is now stable, with 136 aircraft delivered in the quarter, 15 more than a year ago. Production of the best-selling Max has managed to increase from 31 to 38 aircraft per month. Boeing should deliver between 400 and 450 737s this year. The company should deliver around 80 787 Dreamliners this year. Deliveries of the smallest 737, the Max 7, should then begin next year, slightly later than originally expected.

Boeing is therefore still enjoying strong demand and the improving financial situation could extend the current rally. By the 2025/2026 period, Boeing expects revenues to be around $100 billion per year again, a level the company has only surpassed once before - in 2018, before all the aforementioned problems. Margins should reach 10%, so operating profit could be around $10 billion. While the given target is bold, the company could achieve it.

However, a return of the stock to its original levels (around $450) is certainly not guaranteed. While Boeing is reducing its debt, its debt is still $40 billion higher than 5 years ago. All indications are that free cash flow in the coming period will go mainly to debt reduction. Investors therefore cannot count too much on dividends or share buybacks. This means that, at least in the medium term, Boeing shares will be favoured mainly by speculators.

Investing in Nikola stocks as a play with fire?

Nikola shares have long been popular among Purple Trading clients due to their volatility. Nikola has lived up to its reputation, with its shares up 127% in the last month and more than 300% since the end of May. Yet during May, we were still concerned about the delisting of the company from the stock market, as the price per share had fallen well below $1. What's behind the meteoric rise in the company's stock?

Nikola has signed contracts to supply its trucks to several companies. The latest is J.B. Hunt Transport, which will buy 13 trucks from Nikola. In addition, Nikola has announced several new partnerships in hydrogen supply and fuel infrastructure. Investors were also pleased with moves that will help the automaker strengthen its financial position. A few weeks ago, Nikola announced it would sell its hydrogen center in Arizona to Australia's Fortescue Future Industries to reduce its capital expenditures and raise additional cash. The rise in share price has also brought Nikola back in line with Nasdaq's stock listing requirements, currently hovering over $3.
 

_{Nikola shares in MT4 on the H4 timeframe}

However, there is one more factor behind such a massive growth of shares that should not be underestimated. Nikola's shares have been massively shorted for a long time and there was already a real threat of delisting from the stock exchange. The positive news, however, attracted an army of retail investors who were associated with titles such as AMC and GME. Thus, once again, there was a "short squeeze", i.e., a squeezing out of speculators in a short position. However, despite the recent rise, we have to label Nikola shares as extremely risky. In addition, higher interest rates are making debt servicing more expensive. Nikola can thus raise additional funds by selling its shares again, which may push the capitalisation back down. This would certainly not be a surprising move, and the company could use the current rally to raise new capital. Insiders can then also take advantage of the current higher share price. Thus, Nikola still remains a good stock to speculate in both directions - any positive or negative news can send the company's capitalization up by tens of percent in both directions.

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