Most traded stocks of the week

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Josh Warner
By : ,  Market Analyst

What are the most traded stocks of the week?

Below is a list of the 20 most traded stocks among StoneX Retail clients during the five trading sessions to the end of play on Thursday June 30. Exchange-Traded Funds (ETFs) have been excluded.

 

1

Tesla

11

Netflix

2

Cowen Inc

12

Hellofresh

3

AMC Entertainment

13

Apple

4

Salvatore Ferragamo

14

NIO

5

Meta

15

NVIDIA

6

Sainsbury

16

Alibaba

7

DBS Group

17

Bank of America

8

THG

18

SVB Financial

9

Wells Fargo

19

PLUS500

10

Unilever

20

Valero Energy

 

Tesla shares have remained the most popular stock with clients this week and continued to lose ground, sparking debate about whether the selloff in 2022 has been justified or present an attractive entry point. Markets are bracing for second quarter delivery numbers to be released sometime in the first week of July, when the extent of the damage caused by Covid-19 lockdowns in China, supply chain disruption and other headwinds in the period will be revealed. Tesla is forecast to deliver 282,291 vehicles in the second quarter, according to consensus numbers from Bloomberg. That will be down from the record 310,048 vehicles that were shipped in the first quarter of 2022, but still over 40% higher than what was sold the year before. While the second quarter will be tough, markets believe Tesla can swiftly recover from the severe disruption, with analysts forecasting deliveries to hit a new record of 385,873 vehicles in the third quarter before experiencing another jump to over 449,000 in the fourth. If achieved, Tesla is on course to grow annual deliveries by 52% to over 1.4 million in 2022.

Chinese electric vehicle maker NIO has also been under the spotlight this week after dismissing allegations levelled at the company by short seller Grizzly Research. The short seller has accused the company of inflating revenue through battery sales to a related party and having poor corporate governance. NIO said the ‘report is without merit and contains numerous errors, unsupported speculations and misleading conclusions and interpretations regarding information relating to the company’. The allegations appear to centre on a discrepancy between the number of batteries being sold and the number of users/vehicles. Other analysts have reviewed the research and largely supported the company, although remained cautious. JPMorgan remained positive on NIO while Daiwa Capital Markets said this presented an opportunity to accumulate NIO shares. Citi was more cautious, stating it is awaiting further clarity from the company.

Big Tech stocks have stayed under pressure this week as fears of a recession continue to grow, further weakening the growth outlook that is already being weighed down by rampant inflation and rising interest rates.

Apple has lost ground over concerns that demand for devices could suffer during a downturn, although Wedbush said this week that it believes iPhone demand has held up slightly better than expected despite the widely-reported supply chain problems stemming from China and believes the iPhone growth cycle is set to take off in 2023. Meanwhile, there were also reports that Qualcomm will remain the exclusive supplier of 5G chips in iPhones through 2023 after Apple struggled to develop its own alternative in-house. That would be significant considering Qualcomm was expected to only supply enough chips to go into around 20% of new iPhones made in 2023.

Meta shares are in play today as it too starts to succumb to tougher conditions. News broke this morning that CEO Mark Zuckerberg has told employees to brace for ‘one of the worst downturns that we’ve seen in recent history’ as he announced Meta would slow the recruitment rate of new engineers by 30%. The company now plans to hire 6,000 to 7,000 engineers in 2022, down from the initial plan of 10,000. It is also sharpening its focus on performance of existing staff to find waste. ‘If I had to bet, I'd say that this might be one of the worst downturns that we've seen in recent history,’ Zuckerberg said in a Q&A session with staff, according to Reuters. That follows on from its chief product officer warning Meta needs to have ‘leaner, meaner and better executing teams’.

Netflix shares have come back onto the radar this week as speculation continues about its plans to unleash a cheaper, ad-supported version of its video streaming service as it tries to revive growth following the first drop in user numbers in over a decade. The stock has been the worst performer in the S&P 500 in 2022 after losing over 70% of its value. JPMorgan said Netflix could look to launch an ad-supported version in tandem with efforts to reduce account sharing by users, but said there was a wide range of outcomes and that visibility remains limited going into the second half of 2022 and into 2023.

Semiconductor stocks have been volatile this week and have ultimately lost ground, with NVIDIA sliding more than 8% and hitting its lowest level in over a year. That fall came as the Philadelphia semiconductor index sank to its lowest level since November 2020 amid broader pressure on chip stocks as markets fret over future growth prospects and pricing power if supply squeezes ease and demand falls later this year.

Meme stock favourite AMC Entertainment has surged over 11% this week, although its value has still almost halved since the start of 2022. Notably, the rally has come soon after AMC was added to the Russell 1000 Index, having been promoted from the Russell 2000 Index in the latest reshuffle. Discussion on social media threads remains rife as investors hope the strong performance by the latest Top Gun film, which has already topped $1 billion at the box office, can help provide some momentum even if the outlook for leisure and hospitality looks uncertain.

The rally in Alibaba shares has stalled this week, although it has recouped over one-fifth of its value in the past month as investors warm to the idea that China’s regulatory clampdown is easing and the country’s strict policy toward Covid-19 is loosening. Notably, Masayoshi Son, the CEO of Softbank, which has around a 25% stake in Alibaba, said he believes the company only has one or two investments within its portfolio that have the potential to exceed Alibaba.

Valero Energy Group is a new entry this week as analysts flagged the company is uniquely positioned to structural shifts in the refining market, with Bloomberg Intelligence forecasting free cashflow could exceed $6 billion in 2022 from just $1.3 billion in 2021.

US banks have been under the spotlight this week following the latest stress tests carried out by the Federal Reserve, which provided clarity on capital buffers and allowed the industry to adjust dividend payments for investors. While most major banks passed the tests and were told their buffers were adequate, others including JPMorgan, Bank of America and Citigroup were told they need to put more money aside to ensure they have enough capital to survive any sudden downturn. That unleashed a wave of dividend hikes for the latest quarter from banks including Goldman Sachs, Wells Fargo, Morgan Stanley and State Street, with some also launching fresh buybacks.

Meanwhile, SVB Financial was this week downgraded to Neutral from Outperform by Wedbush, which warned the stock will be impacted by slower growth during any recession and that it could take a bigger hit than its peers due to its VC-backed companies operating in the high-tech and biotech spaces. That came as Wedbush warned any downturn could be 18 to 24 months long.

Financial services outfit Cowen Inc, which boasts a market cap of around $650 million, is a new entry this week and is grabbing attention despite no news out from the company. The firm is involved in investment banking, investment management and research.

In Singapore, bank DBS Group has remained the most popular stock with clients. Reports surfaced this week that said the company was potentially interested in buying IDBI Bank in India and had held talks with India’s finance ministry, but DBS swiftly denied it and said the claims were ‘baseless’.

Sainsbury’s shares have continued to falter this week and sank to its lowest level since November 2020. The supermarket is set to release a first quarter trading update next week but has already warned that shoppers are changing their habits amid the cost-of-living crisis, resulting in fewer visits, smaller baskets and a shift to frozen food. It said it expects things to get worse in the autumn. That came as the latest data out from Nielsen suggested overall UK grocery volumes fell 5.5% in the four weeks to June 18, but jumped 1.5% in terms of value as price hikes start to bite. Notably, Sainsbury’s is due to hold its annual general meeting on July 7, just two days after its trading update, which could be notable considering proxy advisory firm PIRC has told investors to vote against the remuneration report.

Unilever has been under the spotlight this week as it sold the Ben & Jerry’s ice cream business in Israel to a local licensee for an undisclosed sum. The company said last year it would stop selling the brand in occupied Palestinian territories but it will now be available across all regions following the sale.

THG shares struggled to gain ground this week but remain above the all-time lows seen in June. The stock has tanked this year after takeover interest from several parties fell away. It rejected a bid valuing the company at £2 billion last month after stating it significantly undervalued the business, but today the company is worth just half of that. However, management clearly see an opportunity after reports that chairman Charles Allen, who previously led ITV and joined the company in March, snapped-up over 1.1 million shares in the company at 86p each.

In Europe, food delivery giant Hellofresh had its target price cut by numerous brokers this week. Morgan Stanley cut its target price to EUR46 from EUR78, Barclays to EUR70 from EUR 90, and Deutsche Bank to EUR70 from EUR89. Deutsche Bank said the company’s valuation multiples are ‘unjustifiably low’ on the belief it can deliver its guidance even if consumer budgets are squeezed. It said the company revealed order rates and retention rates have both remain unchanged at a recent event and is on course to deliver 21% sales growth at constant currency in 2022. It also said that management confirmed that it plans to pass higher costs to consumers in the form of higher prices carefully, adding this will allow it to contain the impact of food inflation.

In Italy, luxury fashion brand Salvatore Ferragamo has been in play as markets speculate on how quickly the industry can recover now that China has eased lockdown rules, with the company having to shut its retail stores in Shanghai throughout April and May. Notably, reports said sales specialist OnTheList held a sale of Salvatore Ferragamo clothing last weekend, signalling that it could be looking to offload inventory. That will be a concern considering the company is focused on achieving full price for its goods, but will help lower inventory levels. The company’s new CEO Marco Gobbetti is accelerating an overhaul of the business and stepping up investment, which is expected to hit profitability before leading to gains after 2023.

 

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