Happy Sunday to everyone on The Street.

There’s something fishy going on with the S&P 500… the index has never been as concentrated as it is right now.

If we look under the hood of the S&P 500, 40% of the stocks in the index are 10% below their highest level this year. But, in the first half of 2024, the S&P 500 has surged 15% and continues pushing into record territory.

This means that the S&P 500’s stellar performance lies in the hands of just a handful of mega-cap stocks, like Nvidia, Microsoft, and Apple.

So, while the stock market may appear to be chugging along just fine, many economists fear it’s on uncertain footing. That’s because high levels of concentration can cause problematic volatility — if Nvidia and other dominant stocks saw sharp declines, it would cause a world of hurt for the overall market.

There’s your heads-up, investors. Stay vigilant, as this bull market is certainly vulnerable to severe fluctuations.

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ICYMI: Here’s what drove the markets last week and what to keep an eye out for in the coming week.

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A Rebound

Investec (INVP-GB) likes what it sees from a British gift shop and thinks its stock could more than double over the next 12 months. 

Card Factory (CARD-GB) is a long way from its glory days. In 2019, the stock traded at around twice its share price today. Its valuation plummeted in March 2020 and it hasn’t made up the lost ground since. 

Analysts at Investec are eyeing a rebound. They wrote in a note to clients that the company is steadily restoring its balance sheet and operations.

A Card Stuffed With Cash

Card Factory paused its dividend about five years ago and had to liquidate real estate to stay afloat.

But executives recently announced that they were resuming the dividend in a big way with a 6.5% yield, well above the average stock payout. 

Investec says Card Factory has attractive profitability and margins when compared to competitors. The bank’s analysts don’t just think Card Factory is undervalued; they’re calling it “materially undervalued.”

Pump the Brakes

Not everyone shares the same enthusiasm as the analysts at Investec. 

UBS tells investors it's “cautious” regarding the gift retailer. In a note to clients, an analyst at the bank wrote about concerns over “market uncertainty.” Voters in the UK head to the polls in early July, which could cause volatility for London-listed stocks.

Even with its caution, UBS still lists a price target roughly 25% above Card Factory’s current levels. 

Investors would love to see Card Factory’s stock go back to 2019 levels, but even optimists have to acknowledge it’s been a frustrating five years for the stock.

Gaining Ground

When it comes to hybrids, South Korean automakers Hyundai (HYMTF) and Kia (KIMTF) are among the most popular in America. The companies are intertwined, as Hyundai is Kia’s largest shareholder, with a 34% stake.

Both companies have consistently increased their share of the US market, which has been a major growth tailwind. According to Goldman Sachs (GS), together they control around 10% of the US market, and their North American revenue has doubled in the past five years. 

Now, the geopolitical climate is helping them step on the gas.

Business Abroad

China is having a tough time selling its EVs in America, which has helped keep the Korean companies' competition low. 

India’s auto market continues to emerge. Hyundai and Kia have been transitioning production out of China and into India as diplomatic relations between Korea and China decline. 

Combined, the South Korean car companies are currently the second largest automaker in India. Their EV arm is a potential area of growth, as EVs made up around 2% of their sales in India last year, a figure that has doubled since 2023.

Low Multiples

Hyundai shares are up 44% in the past 12 months. Kia shares are up 51% over the same period. Both companies saw record earnings last year and since 2022 they have increased their operating profits by over 50%. 

The stocks currently trade around 5 times forward earnings, well below their counterparts. Their relatively cheap valuations and growth potential could provide an opportunity for investors.

Shifting Energy Sources

The world is turning away from coal and toward natural gas. According to Argus, American energy company Williams Companies (WMB) could benefit greatly from this trend.  

Analyst Bill Selesky noted that natural gas demand should rise because of hot weather and the shift away from coal. This could be the perfect storm for a big jump in natural gas prices.

Increasing Demand

Williams’ domestic gas network consists of more than 30,000 miles of pipeline, allowing it to supply gas to regions where demand is greatest. Increased domestic manufacturing, AI, and a shift towards EVs could also help increase demand in the coming decades.

According to the energy company’s CEO Alan Armstrong, gas prices are currently low, which could offer investors a discount on companies like Williams that are projected to see demand growth over the next few years.

Supply and Demand

Currently, 50% of Wall Street analysts covering the stock give it a buy rating. Of the other half, 45% give it a hold rating. The stock is up around 20% YTD and about 35% over the past 12 months. Argus has given the stock a $47 price target, about a 12% upside from Wednesday’s close.

Natural gas prices are sitting at around $3 per thousand cubic feet, well above an April low of about $1.5 per thousand cubic feet. However, production is set to decrease 1% in 2024. 

Demand is increasing and supply is decreasing, which could mean big bucks for companies like Williams. Investors might want a piece of the positive energy.

TOGETHER WITH BEVERLY HILLS MD

Looking younger was once thought to be a luxury that only women who had access to plastic surgery and costly professional treatments could enjoy. 

So while the rich and famous stayed ‘ageless’ — the rest of us just learned to accept our lines, wrinkles, and sagging skin as an inevitable part of life. 

A Game-Changing Discovery is finally leveling the playing field, as more women learn to fight back against their body’s “aging switch.” 

You read that right. According to experts, not only is it possible to slow down the appearance of aging — but most women can easily do it themselves. 

That’s why the latest anti-aging trend isn’t plastic surgery or expensive creams, but a simple daily ritual that takes less than a minute to perform.

(In fact, if you’ve noticed one of your friends looking suspiciously more youthful and rejuvenated in recent months — there’s a good chance they’re already doing it at home.)

However, if you’re interested in looking significantly younger without the cost and hassle of seeing a professional, this science-backed “shortcut” is certainly worth trying at home.

Watch the video below to see how it's done

Are you bullish or bearish on Chinese stocks over the next 12 months?

🟨🟨🟨🟨⬜️⬜️ 🐂 Bullish

🟩🟩🟩🟩🟩🟩 🐻 Bearish

Are you bullish or bearish on Eli Lilly (LLY)?

🟩🟩🟩🟩🟩🟩 🐂 Bullish (65)

🟨⬜️⬜️⬜️⬜️⬜️ 🐻 Bearish (20)

Which stock will perform the best over the remaining summer months?

🟩🟩🟩🟩🟩🟩 Broadcom (AVGO)

🟨🟨⬜️⬜️⬜️⬜️ Toast (TOST)

🟨⬜️⬜️⬜️⬜️⬜️ Arista Networks (ANET)