Information is one of the most valuable commodities. No one can tell you with absolute certainty where any stock is headed. But sometimes you just need to know where, at what point, and why are investors taking the most positions to try to take advantage of the volume and volatility yourselves. We bring you a summary of this week’s top 3 most traded CFD stocks at Purple Trading. What is behind their popularity and what is the outlook for the future? You can find answers to these questions in today’s article.
Uber
Shares of the notoricaly loss-making taxi service are under a lot of pressure this year. They have lost more than half their value since January. Uber is now selling more than 50% below the price it was when it entered the stock markets in 2019. Comparing it to its all-time high of $63.18 in early January 2021 is even more dismal. The big drop in Uber stock isn't too surprising in the context of the company's financial results from the first quarter of the year. While Uber's revenue grew 136% year-over-year to $6.9 billion, its net loss came in at $5.9 billion due to failed investments in Grab, Aurora, and DiDi.
Chart 1: Uber shares on the MT4 platform on the M15 timeframe along with the 500 and 100 day moving averages
Uber has become the focus of investor attention in recent days due to leaked information about lobbying high-profile politicians such as French President Emmanuel Macron. The revelations of the scandal have made Uber shares very volatile, which traders have taken advantage of.
The outlook for the coming months is not very positive for the company - high fuel prices are making Uber's services more expensive and a possible recession could significantly affect the company's revenues. Uber's business can be described as rather cyclical and in times of recession the company could suffer as a result. Nor should we underestimate the impact of the growing coronavirus, which is once again beginning to plague the entire world.
However, Uber’s relatively low valuation (it is now trading near an all-time low) and its positive cash flow outlook for 2022 is what’s playing into Uber’s hands. The company will publish its 2Q earnings in early August, and no matter the outcome, Uber shares are likely to remain popular among traders.
Palantir
Uber has become the focus of investor attention in recent days due to leaked information about lobbying high-profile politicians such as French President Emmanuel Macron. The revelations of the scandal have made Uber shares very volatile, which traders have taken advantage of.
The outlook for the coming months is not very positive for the company - high fuel prices are making Uber's services more expensive and a possible recession could significantly affect the company's revenues. Uber's business can be described as rather cyclical and in times of recession the company could suffer as a result. Nor should we underestimate the impact of the growing coronavirus, which is once again beginning to plague the entire world.
However, Uber’s relatively low valuation (it is now trading near an all-time low) and its positive cash flow outlook for 2022 is what’s playing into Uber’s hands. The company will publish its 2Q earnings in early August, and no matter the outcome, Uber shares are likely to remain popular among traders.
Chart 2: Palantir shares on the MT4 platform on the M15 timeframe along with the 50 and 100 day moving averages
Investors still have no idea where to classify Palantir - is it an army contractor or an IT company? The stock's performance so far this year would point more towards an IT company. Military contractors like Lockheed Martin and Raytheon Technologies have had a great year so far, outperforming the S&P 500 index significantly. Palantir's CEO visited Ukraine in June in an effort to expand the company's operations. This obviously pleased investors, but potential expansion is difficult to quantify.
Moreover, the company's capitalization is still more than 10 times its annual revenue, a giant number compared to its competitors. Competitor Booz Allen Hamilton is currently selling for about 1.5 times annual sales, and the company's stock is near this year’s low. The company has a long track record of growing sales and, unlike Palantir, is profitable. Palantir's 2Q earnings are due in the first half of August. The company is expecting 25% year-on-year revenue growth. However, in the same period a year ago, the company grew revenue by 49%. Thus, any surprise in the earnings could cause high volatility. Palantir is definitely a stock to watch.
Moderna
Seeing the famous vaccine producer among this week’s most traded companies in our CFD stock offering is not much of a surprise. Yet, back in mid-June, things were not looking good for Moderna shares - as this company was about 50% below the price we could see at the beginning of the year. However, the last month has been great for Moderna and its shares have soared almost by 50%. The reasons for this steep rise are clear - the coronavirus is once again on the rise globally. Since the beginning of June, the number of daily covid cases have practically doubled globally. The World Health Organisation has warned that the pandemic is far from over. This is just more water on the mill for companies such as Moderna and BioNTech. In addition, Moderna's actions were also helped by the June approval of a vaccine for American children and adolescents aged 6 months to 17 years.
Chart 3: Shares of Moderna in the MT4 platform on the M15 timeframe along with the 50 and 100 day moving averages
After the outbreak of the coronavirus pandemic, Moderna was the darling of investors for obvious reasons. Shares thus reached an all-time high of almost USD 500. Since last September, however, it has gone south sharply. Looking at the P/E ratio (the ratio of share price to earnings per share), Moderna looks very attractive - the ratio is now around 5, which is a great number for a pharmaceutical company. In addition, Moderna is well funded - the selling of coronavirus vaccines have given it very interesting liquidity.
The biggest concern for investors, however, is the future of the company and its earnings once the coronavirus has passed. Apart from the vaccines mentioned above, at this moment the company does not sell any other products to the public. It has several other products in the testing phase, but their final approval and sales are uncertain. Thus, Moderna's stock may continue to thrive in the coming months thanks to further covid waves. In the long term, however, the company will need more products if it is to prosper.
