Financial News

A sudden volume spike in these 3 stocks could mean something big

Being a successful investor takes a lot of discipline, which is genuinely one of the deepest endeavors anyone can take on. Assuming you are not the average investor (you are here, so it's a safe assumption), you understand that a story without numbers is a fairytale and numbers without a story are a spreadsheet.

That's why MarketBeat does the homework to bring you both sides. Using tools like sorting stocks by their volume of recent shares traded can lead you into a goldmine of ideas. But you have places to be and goals to crush, so here's the time-saver version of your potential next moves.

With the VIX returning to its lowest levels since 2019, it is more important than ever to make sure you find yourself in action (whatever is left of it), which is why looking at names like American Airlines (NASDAQ: AAL), Tesla (NASDAQ: TSLA), and Norwegian Cruise Line (NYSE: NCLH) can be a good use of your time.

Numbers with a story

Anyone can spot the volume breakouts, well, anyone who follows MarketBeat, that is. However, knowing how to read doesn't get you paid; it is knowing how to use the information that counts. 

When it comes to airline stocks, there are only two names that should grab your attention. American Airlines is one of them, but Southwest Airlines (NYSE: LUV) is another for a completely different reason.

Southwest Airlines made it into the Goldman Sachs (NYSE: GS) conviction list, and its financials are genuinely beautiful compared to other names in the space. However, they term it an investment and no big buying spree ever came because markets expect to make money in 3-5 years; they want to get paid now.

American Airlines may be riding the tailwind of a bigger trend out there; you see, money also poured into Norwegian Cruise Line; catch the travel and leisure drift? According to the latest employment reports, around 40 thousand new jobs went to the industry, so there's got to be something there.

Could it have anything to do with oil prices plummeting from $90 a barrel to below $70 in the past quarter? Lower oil prices mean that both cruises and airlines just saw their margins boost significantly, drawing in a new wave of investment dollars.

Shares of American Airlines have rallied by more than 40.0% since they announced their quarterly results in October, and analysts indicate it could go a heck of a lot higher than that. For Norwegian, price action has also been kind, boosting the stock by roughly 52.0% in the same period.

With an earnings growth expectation of 89.6% for the next twelve months, Norwegian analysts say that the stock could be cheap relative to these projections, and markets are investing in the idea.

Now, Tesla may be a bit trickier, but rest assured it will also make sense in just a bit.

Unrefusable offer

Remember the conflicts that took over media headlines? The ones coming from the United Auto Workers (UAW) union. Their resolution ended with a 30-40% salary increase across the board for American car manufacturers like Ford Motor (NYSE: F) and General Motors (NYSE: GM)

These cost increases will only drive the bottom-line earnings lower and make their shares less valuable in the eyes of the market. Now, because Tesla counts on a highly automated and robotized manufacturing process, profits and margins for his pocket of the automotive sector are safe.

This would justify the volume rising to the top of the averages lately, as markets are only waiting for everyone else to realize what analysts already know: Earnings are set to grow by 23.4% in the next twelve months, giving due credit to its operational advantage.

Ford analysts took a cold heart to their projections, seeing a decline in earnings. General Motors also came to face the bitter reality, as they only saw a 2.8% growth rate, far from its former glory.

Okay, now that this one is out of the way, you should wake up to the possibility of this being a hedge situation against oil, too. If oil lowers, American Airlines and Norwegian Cruise are set to boom as spending and margins rise.

If oil rises, then Tesla cars will become even more attractive for their saving properties. The market works in mysterious ways, and this is one of them; follow the money, and you might find yourself with a double-digit upside and a hedged-out position against oil swings.

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.

Use the myMotherLode.com Keyword Search to go straight to a specific page

Popular Pages

  • Local News
  • US News
  • Weather
  • State News
  • Events
  • Traffic
  • Sports
  • Dining Guide
  • Real Estate
  • Classifieds
  • Financial News
  • Fire Info
Feedback