🔋 Picking EV Parts Manufacturers

Plus, here's how much economic impact the World Cup will generate.

Happy Thursday afternoon to everyone on The Street. Here's a snapshot of where markets ended the trading session, plus tomorrow's trade idea delivered to you today.

  • 🟩 | US stocks moved higher Thursday. Lower Treasury yields gave equities a bump after a rocky start to the week. All major averages finished in the green.

  • 📈 | One Notable Gainer: JFrog's stock jumped by 28% after surpassing Wall Street's fourth-quarter estimates. Most of the company’s staff is based in Israel, so the beat was notable given the fact the company has a war on its doorstep.

  • 📉 | One Notable Decliner: Deere's stock plummeted by 5% after the agricultural machinery manufacturer revised its 2024 profit forecast downwards due to high borrowing rates impacting demand.

  • 🔋 | Tomorrow's Trade: Picking EV Parts Manufacturers. Scroll down for more.

Plus, don't miss out on this FREE opportunity to learn how to scan and find explosive trades using A.I.

S&P 500 Heatmap. Credit: Finviz

All stocks on US exchanges. Credit: Finviz

Global ADR snapshot. Credit: Finviz

MARKET MOVERS

TWLO: Twilio's stock plummeted by 15% after issuing disappointing guidance for the first quarter.

APP: Applovin witnessed a 22% surge in its stock following robust fourth-quarter results and guidance for the current quarter that surpassed Wall Street's estimates.

SHAK: Shake Shack's stock soared by 26% following a stronger-than-anticipated fourth-quarter report. People are apparently hungry for burgers and spicy fries.

COIN: Coinbase saw a 3% rally after JPMorgan upgraded its shares to neutral, citing the recent surge in cryptocurrency prices.

PENN: Penn Entertainment witnessed a more than 14% decline in its shares after missing Wall Street estimates for the fourth quarter, attributed to higher-than-expected spending on promotions and advertising for ESPN Bet.

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OVERHEARD ON THE STREET

Axios: OpenAI on Thursday announced Sora, its first tool that can turn a text prompt into a video of up to one minute in length.

Reuters: Target said on Thursday it will offer some everyday essentials at prices starting less than a dollar as part of the retailer's new private-label brand.

US News & World Report: Marco Rubio has asked the SEC to block Shein’s bid to list publicly in New York unless the e-tailer makes additional disclosures about its business operation, per Reuters

ABC: An overwhelming majority of Americans — 86% — think President Joe Biden is too old to serve another term, according to a new ABC News/Ipsos poll.

YF: Small business owners' confidence level dropped in January, the National Federation of Independent Business said. 20% of business owners cited inflation as their top concern, while 39% blamed labor issues.

TOMORROW’S TRADE IDEA, TODAY

iphone tesla GIF by Product Hunt

The Road Less Traveled

According to Morningstar, when it comes to EV stocks, it isn’t all about vehicle producers like Tesla (TSLA). Its analysts believe a slightly different approach could pay off mightily for investors. 

Companies like Tesla (TSLA) and its Chinese competitor BYD (BYDDY) grab headlines. But Morningstar’s analysts have a hunch that it could be the parts manufacturers, not the vehicle manufacturers, that will grab the lion’s share of the EV boom.

The firm is also bullish on lithium battery makers since they play a crucial role in the production of EVs.

Can’t Build It Without the Parts

Morningstar’s Chief Markets Strategist David Sekara highlighted one parts stock in particular: BorgWarner (BWA). 

BorgWarner is a supplier for Ford (F) and Volkswagon (VWAGY). According to Sekara, it has “the best product portfolio for electric vehicles” out there. That’s why Morningstar has given the stock a five-star rating, its highest. 

The stock is down 26% over the past twelve months, but 11 of 19 analysts list it as a “buy” with a projected 23.8% upside. The stock can currently be had at around $31 per share, well below its $40 price target.

Don’t Forget the Batteries

Sekara also believes that the lithium industry, which has been on a decline, has reached its bottom and is primed for a bounce-back. 

That belief, coupled with the fact that the IEA is estimating that more than 60% of global vehicle sales will be electric by 2030, has analysts bullish on the industry as a whole. 

He believes that supply will not be able to meet demand and lithium prices will skyrocket. That puts battery producers like Albemarle (ALB) in a great position and is why its stock also has a 5-star rating from Morningstar. Its share price is down 55.5% over the past 12 months, and analysts feel it is undervalued with a 30% upside. 

There’s no doubt that the shift towards EVs will play a major role in the stock market moving forward. If you ask Morningstar, the lesser-known parts markers could be the real prize for investors.

Which company do you think will outperform in 2024?

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TOGETHER WITH VANTAGEPOINT

Witness the revelation of the Godfather of A.I. Market Forecasting as he unveils his breakthrough.

When A.I. was still a distant concept, he pioneered its use in market forecasting, setting the stage for VantagePoint's legacy as the original A.I. for market forecasting over 40 years ago.

His foresight and innovation have validated VantagePoint's unparalleled accuracy (documented and verified up to 87.4%), cementing its status as a trailblazer in the realm of market intelligence.

Whether you're a stock trader, options trader, swing trader, or day trader, this A.I. “Brain” is predicting market movements days in advance.

This analysis can be applied to all types of trading, allowing you to find new strategies to make informed trades.

Don't miss out on this FREE opportunity to learn how to scan and find explosive trades using A.I.

ON OUR RADAR

Reuters: Britain's economy entered a recession in late 2023, with a 0.3% GDP contraction in Q4 following a 0.1% decline in Q3, challenging Prime Minister Rishi Sunak's growth promises ahead of the expected election.

FOX Business: Fred Smith, FedEx founder and executive chairman, joined business leaders warning about America's rising national debt, labeling it "unsustainable".

WSJ: South Korea has launched a $57 billion initiative to encourage corporate investment, offering affordable loans and favorable financing through state and commercial banks.

FOX: For the first time, the World Cup will be held in three countries—the U.S., Mexico, and Canada—across 16 cities, with an expected $5 billion economic impact.

Mish Talk: Rent increased by at least 0.4% for the 29th consecutive month, while the broader shelter category rose by 0.6% and food prices increased by 0.4%.

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