Matt delivered a big win for his subscribers as his tech picks are surging … tech continues to distance itself from other sectors … we’re in a particularly strong period of hypergrowth
When it comes to electric vehicle companies, Tesla and upstart, Nikola, are getting all the attention.
Yet, there’s another company flying under the radar that’s quietly making its investors huge returns … in just weeks.
Workhorse Group is a Cincinnati-based manufacturer of electrically powered delivery and utility vehicles.
Since May 1, while the S&P has inched up 5%, Workhorse has exploded 505%.
Why did we pick May 1st as our start date to evaluate the stock?
That’s the date Matt McCall added Workhorse to his Crisis and Opportunity Portfolio.
Matt’s subscribers already locked in 250% gains on a 1/3rd portion of their Workhorse position last Wednesday.
Yesterday, the remaining 2/3rds portion surged as Workhorse was added to the Russell 3000 Index.
When a stock is added to an index, funds that track the index must buy the stock. This buying pressure often results in a healthy price surge. We saw this yesterday, as Workhorse popped 47%.
Given the strength, Matt recommended selling another 1/3rd this morning, locking in an official 521% gain.
The final 1/3rd position remains open, racking up more gains (Workhorse is up another 27% as I write Tuesday morning).
Now, first, a huge “congratulations” to Matt and his subscribers. But if we pull back, it’s not just Workhorse that’s seeing huge returns. If we look at Matt’s various sub-portfolios, we’re seeing major gains in short periods of time, almost across the board.
This is underscoring the type of market we’re in today — one in which select tech-related stocks are surging, creating a “haves” versus “have nots” dynamic in the market.
Our own Eric Fry coined a name for this dynamic — the Technochasm. But while Eric named it, he’s not the only analyst who’s been making his subscribers big returns from it.
Today, let’s look at the Technochasm through Matt McCall’s eyes.
***We’re in a period of hyper-gains for select sectors and stocks
For any newer Digest readers, the term “Technochasm” references the widening wealth gap that’s taking place thanks in large part due to huge investment gains coming from select, technology investments.
The ability of next-gen tech products to benefit our lives — on a personal and business level — is supporting tremendous earnings growth for select tech companies … and by extension, their investors.
It’s creating a sharp wealth divide — in the socioeconomics of our society, as well as in the stock market.
To get a sense of these gains for select technology stocks, all you have to do is look at some of Matt’s recent winners, as well as his broad sub-portfolio returns.
I’ll start with an update Matt sent last week. I’ve deleted the specific stock names out of respect for Matt’s Early Stage Investor subscribers.
As the recovery road map continues to play out — the Nasdaq hit another all-time high yesterday — several of our Early Stage Investor stocks have hit milestones in the last month. It is now time to ring the register on one of them. Well, one-third of the register.
Let me first congratulate our subscribers on some big gains recently. We’ve been reminded again just how great it is to be an early stage investor.
(STOCK A) announced an acquisition earlier this week and hit a new all-time high yesterday. It has now doubled from its entry price in the 10X Venture Portfolio.
(STOCK B) also hit a new all-time high and became a 3X winner last week.
Our nanocap stock, (STOCK C) hit its best level ever this week as the news flow continues to be positive.
(STOCK D) is up over 115% in less than eight weeks and is also at its best level ever.
(STOCK E) became a 3X winner yesterday as it too hit a new all-time high.
(STOCK F) is another double after hitting a new all-time high this week.
Genetic editing company (STOCK G) is yet another stock that hit a new historic high yesterday.
I could go on and on about the strength in our stocks. And that brings me to the biggest winner in the last week — Workhorse Group (WKHS). It is now up over 215% and higher than it’s been in four years.
***What are the specific sectors these winners belong to?
Well, as noted above, what they share in common is “tech.”
However, tech is driving many sectors and stocks today — not just the highly-visible ones like Amazon, Apple, and Microsoft.
Matt has been focusing on biopharmaceuticals, 5G, genetic testing, artificial intelligence, software, and transportation, to name a few. These are the trends of tomorrow. And remember, Matt is an expert trend investor.
To get a sense of the related gains, let’s look at the returns of some of Matt’s sub-portfolios.
His “Genetic Testing” sub-portfolio, holding four stocks, is up an average of 102%.
His “Future of Healthcare” sub-portfolio, holding four stocks, is up an average of 91%.
The “Artificial Intelligence” sub-portfolio, with three stocks, is up 77% on average.
“Transportation,” with five stocks, is averaging 98% gains.
We’re seeing other strong returns — keep in mind, strong average returns — from Chinese biotechs, 5G, Internet of Things, and two holistic portfolios that include assorted tech sectors.
***While tech stocks will power this entire decade, it’s unclear how long this specific window of tech-hypergrowth will last
Tech-focused stocks are in a sweet spot right now.
First, consider some of the tailwinds driving the broad market (not limited to tech) …
Wall Street appears determined to focus exclusively on positive news. Any rattled nerves about a COVID-resurgence or potential trade war are quickly digested then shaken off.
Underneath this buoyancy is the general belief (whether true or not) that the coronavirus’s impact on the global economy is more of one-time disaster-hit, like a hurricane. While violent and destructive, it’s short. This makes it far more manageable than a prolonged economic sickness caused by toxic fundamentals that would hobble an economy for many years.
Meanwhile, investor optimism is amplified by a belief that Federal Reserve Chairman Jerome Powell has investors’ backs. In other words, it doesn’t matter what problem comes the way of our economy or stock market — the Fed will fix it with trillions of newly-minted dollars.
Now, tack on a slew of headlines in recent weeks that are shaping the broad market narrative … bearish big-name hedge fund managers got it wrong and we’re not headed for a stock market disaster after all … small-time Robinhood traders got it right and are making triple-digit returns in days … there are trillions of investor dollars sitting on the sidelines, waiting to be put to work if the market stumbles … earnings estimates were too negative for Q2 and we’re going to see earnings surprises that will fuel this market surge …
Now, let’s narrow it down to tech.
The most visible tech stocks — the FAANGMs — have led the market’s rebound higher since late March … investors have watched more niche tech stocks, like Zoom, not only make it through the coronavirus unscathed, but come out better than ever … there’s the general, vague awareness that tech (5G, electric cars, driverless cars, smart glasses, trips into space, and so on) are going to massively reshape our world this decade.
Put all this together, and it’s leading to huge demand for elite tech stocks. And that is resulting in today’s tech-hypergrowth market.
While we’re very confident that tech gains will remain strong throughout the 2020s, it’s unclear how long the interplay of above dynamics will continue to fuel today’s immediate surge.
However, for now, the trend is decidedly “up” for elite tech stocks. And as nearly all of the world’s greatest traders will tell you, don’t fight the trend.
We’ll end with another congrats to Matt’s subscribers. Best of all, despite the slew of triple-digit winners so far, Matt is still finding new tech-picks he believes could enjoy Workhorse-sized gains. To learn more, click here.
Yet whether you decide to get Matt’s help or find your own picks, be aware that we’re enjoying a particularly-strong moment in time with tech stocks. Take advantage while you can.
***Actually, let’s return to Eric Fry before we sign off …
Last week, we profiled a trade on semiconductor stock, Micron, based on bullish analysis from Eric. He believed the tech stock would beat earnings yesterday, which would lead to a pop on the news.
Eric was right.
Yesterday, after market close, Micron reported estimate-beating numbers, and the stock is up nearly 7% as I write Tuesday morning. We’ll profile this in more detail in a later Digest, but for now, congrats to Eric, and any Digest readers who took the short-term trade. For more from Eric on the Technochasm, click here.
Bottom-line: tech continues to win …
Have a good evening,