Connect with us

Articles

The Story’s Not Changing Anytime Soon for Clover Stock

What’s the latest with Clover Health (NASDAQ:CLOV) stock? To be honest, not much. Since I last wrote about CLOV stock on Sept. 16, the situation with…

Share this article:

Published

on

This article was originally published by Investor Place

What’s the latest with Clover Health (NASDAQ:CLOV) stock? To be honest, not much. Since I last wrote about CLOV stock on Sept. 16, the situation with the meme stock favorite hasn’t changed. The Medicare Advantage plan provider’s key issue, its challenges to become profitable, is still CLOV’s biggest challenge.

Source: Shutterstock

Along with this, the stock’s dynamic continues to be one of retail bulls versus sell-side bears. Despite continued downgrades from Wall Street’s sell-side, many individual investors still want to believe that a comeback for the stock, down big from its June short-squeeze, is possible.

The problem? Many retail traders are staying bullish. But it’s a pool of investors that’s shrinking, not expanding. That’s clear from the declining levels of conversation about it on Reddit’s r/WallStreetBets subreddit. This points to low chances of a third round of meme stock madness sending it to the moon once more.

Worse yet, this stock, trading for around $7.40 per share, could be set to get a lot cheaper. As of this writing, investors are shrugging off the latest correction fears. However, the risk of a market downturn isn’t exactly off the table. Changes in monetary policies could still sink stocks, especially speculative growth plays with many fleas, like CLOV stock.  So avoiding it is likely your best move.

CLOV Stock’s Big Profitability Problem

As I discussed in my previous Clover article, the main issue with the company is its uncertain path to profitability. With a Medical Care Ratio (MCR) above 100%, it’s paying out more in claims than it’s taking in for premiums. So far, it’s been able to justify these high costs, by pointing to the post-lockdown “recovery” as the reason behind it. This makes sense, as many Americans delayed medical appointments during the height of Covid-19’s lockdowns.

However, in the quarters ahead, recovery will no longer work as a justification (or excuse). If Clover’s MCR remains above 100%, it’ll become more apparent that this company really can’t manage its costs, an issue that Citi analyst Ralph Giacobbe pointed out as a concern, in his coverage of CLOV stock. Sure, you may think that, with management’s outlook calling for $1.4 billion-$1.5 billion in sales this year, more than double its top-line for 2020 ($672.9 million), the company’s apparent scaling up means today’s profitability concerns are overblown.

But as my InvestorPlace colleague Mark Hake recently argued, high revenue growth by itself isn’t going to save the day for CLOV stock. If it can’t bring its MCR down to 80-85% (which is necessary to cover both claims costs, as well as overhead costs), operating losses for Clover are going to widen, not narrow.

High Downside Risk for Clover

As short-squeeze attempts have continued to fizzle out (most recently in early September), the number of meme traders bullish on CLOV stock has fallen. Expect this to continue. Market uncertainty will convince more still holding CLOV “with diamond hands” to finally throw in the towel and cash out.

What do I mean? The market’s dipped in the past few weeks, but it’s yet to capitulate. That may soon change, if a combination of rising bond yields, Federal Reserve tapering, and slowing economic growth becomes too great for investors to shrug off as “no big deal.”

Stocks across the board could experience an extended sell-off. Speculative plays in particular, like this one, could get hit even harder. The retail traders (who skew young) that are long CLOV have grown accustomed to a runaway bull market. How will they react to a bear market? Chances are, if the market makes a complete move from “risk on” to “risk off,” newbie traders will panic sell whatever they still hold among the riskier meme names.

In turn, CLOV stock, down nearly 73% from its all-time high, could still see another double-digit percentage move lower.

The Music Stopped for CLOV Stock Months Ago

Earlier this year, Clover may have been a popular meme stock, able to move higher on factors outside its fundamentals. Today, that meme stock status has largely faded, and those still holding it as a “to the moon” play could soon make their exit.

As fixing its profitability problem remains a work-in-progress, and as a market downturn will likely send it plummeting once more, avoiding CLOV stock is still your best move.

On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Thomas Niel, a contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.

More From InvestorPlace

The post The Story’s Not Changing Anytime Soon for Clover Stock appeared first on InvestorPlace.

Energy & Critical Metals

Trading with Focus – Started with 50 cents, got rich, have 50 cents again

Riding the mixed fortunes of the spec market. … Read More
The post Trading with Focus – Started with 50 cents, got rich, have 50 cents again appeared…

Share this article:

50 Cent aka Curtis Jackson. What a story…

As a young’n he made a mixtape and in that mixtape he mumbled some lines – naming local drug dealers – in a ‘song’. So they shot him nine times. Nearly died, as you can imagine…

Then Eminem found him. Introduced him to Dr Dre. They bought some beats off Nas. Then Dre (who is a true master) took Fiddy’s very average mumblings, a phat beat and produced it into one of the most iconic songs of the time.

Yep, Fiddy takes the win and the glory.

Nearly dead, then almost immediately rich.

His ‘In Da Club’ song (?) has over a billion views on YouTube alone. Even just clicking on it momentarily today, I immediately get cast back to images of a hen’s party group of ‘chubbier and older than they should be, to be doin that, in here’ ladies called Tarryn and Britenay trying to dance provocatively. Shudder…

Mr Cent made over $261m USD between 2007 and 2019, and yet in 2015 he declared bankruptcy with debts of $30m.

Then… again… he bounced back as he still had famous and wealthy friends – and America just be like that.

Now, he is a parody. Well, in my eyes anyway. But in reality, he leveraged the fame, reinvented and staged a comeback each time he looked beat. Acting, directing, helping other mumble rappers. Probably clothing. I only skimmed the rest…

All companies start small. Some of them start small on the stockmarket, and some of them come to the stockmarket after they’re already big. Often it depends on whether they are Curtis Jackson already, and already dropped a mixtape and are already hanging out with Marshall and Dre – or whether they need the money and the fame that an ASX listing can bring to try and become 50 Cent.

Welcome to the Casino end of the market. The shell game. Where previously failed companies and their directors and shareholders want to find something else to do, rather than admitting defeat.

Fortescue was put into a shell once upon a time, as was Afterpay. So were pretty much all of the lithium plays, as the need for industrial lithium in large volumes is very new and future demand is currently thought to probably be more than current expectations of supply probably will be (aka a whole lot of probably’s).

I mean, seriously, look at Lake Resources since 2001!

(Lakes Resources chart from 2001 to 2021 – Source: Marketech Focus)

 

This stock has had so many different projects, different management teams, capital raisings, it has to be the King of the Phoenixes!

Yet, like Fiddy, it rose again. It found another ‘right project at the right time’ and has gone to new all-time highs on the back of lithium. You can’t scroll in on the photo above (because this is just a snapshot from the Marketech Focus trading platform), but at one time you could have had your fill of shares at almost the lowest price-tick of them all!

It traded at 0.2c, but you wouldn’t have got many. However on the 16th of September 2014 you could have bought 2.3m shares in Lake Resources at 0.5c, which is about $11500 plus bro.

That shareholding would have been worth almost $700,000 by the end of 2017. Nice.

Not quite ‘rich’, but as Fiddy would say “isnvtbungg plibbertng sma”, which in non-mumble translates to ‘yeah but I aint dead yet’.

What would you have done? Sold it? Hung on because you didn’t want to pay the tax?

(Lakes Resources chart from 2011 to 2021 – Source: Marketech Focus)

 

The next step for our Lake Resources shareholder/almost millionaire was another re-reinvention, and sadly, another dip.

By the end of 2019, that shareholding had shot up from $11500 to $700,000, but then shot back down to $50k. Still a tidy profit, but damn.

What would you have done then? Sheesh!!

Anyways, like Fiddy, Lake Resources rose again. Recently, they peaked at 68 cents. So that shareholding would now be worth $1.64m!!!!!

(Lakes Resources chart from 2020 to 2021 – Source: Marketech Focus)

From $11,000 to $700,000, back to $50,000 and now $1.6m – now that, my friends, that…is a wild ride!!

So where to now for Lake Resources and our maybe-plucky millionaire?

Well on one hand, according to financial services lore – historical returns are not a good indicator of future returns. And on the other hand, 50 Cent is still grinding, still hustling, and maybe he’s not ready to stop reinventing his brand, taking on the big risks, putting it all on the line, so maybe Lakes has a few more surprises for us all too.

At Marketech our platform is about technology, providing you the tools and technology to trade.  We encourage our high-function trading platform to get you live pricing, live charts, live market depth to ensure you have the tools and trading capability at your fingertips, and on your mobile phone or PC.

You trade your own stock on your individual HIN. It is your cash in your own Macquarie account where you keep the competitive interest you earn.

Our subscribers get access to brokerage starting at $5, and then 0.02 per cent for trades over $25k.  If you want to trade the market you need immediate access wherever you are and the seamless Marketech mobile app means you are live anywhere anytime.

Go to www.marketech.com.au to set up a free trial – you will be astounded by the simplicity and tools that this technology gives you.  No spin, just low-cost trading and the tools that give you advantage over hype.

This article was developed in collaboration with Marketech Stockbroking Pty Ltd (AFSL 486148), a Stockhead advertiser at the time of publishing. This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

 

The post Trading with Focus – Started with 50 cents, got rich, have 50 cents again appeared first on Stockhead.

Continue Reading

Precious Metals

Aya Gold & Silver Produces 338,624 Silver Ounces In Q3 2021, Increases 2021 Guidance To 1.55 Million Ounces

Aya Gold & Silver Inc. (TSX: AYA) shared today its quarterly production results for Q3 2021 at the Zgrounder Silver
The post Aya Gold & Silver…

Share this article:

Aya Gold & Silver Inc. (TSX: AYA) shared today its quarterly production results for Q3 2021 at the Zgrounder Silver mine in Morocco, recording silver production of 338,624 ounces. This is a decrease from Q2 2021’s silver production of 439,149 ounces but an increase from Q3 2020’s silver production of 113,655 ounces.

The quarterly silver production had an average grade of 242 g/t silver, compared to last quarter’s 297 g/t silver and last year’s 217 g/t silver.

“The better than anticipated operational performance and execution gives us the confidence to increase Zgounder’s production guidance by 29% to 1.55 million ounces for the year,” said Aya Gold & Silver CEO Benoit La Salle.

The mining company also noted a dip in the silver recovery rate, reaching 81% this quarter from 82% last quarter. The firm said this is primarily due to due to lower freshwater intake and excess evaporation in the tailings dam during the summer months. The plant availabilities for the flotation and cyanidation plants are at 87% and 89% this quarter, respectively.

Aya Gold & Silver Inc. last traded at $9.12 on the TSX.


Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Aya Gold & Silver Produces 338,624 Silver Ounces In Q3 2021, Increases 2021 Guidance To 1.55 Million Ounces appeared first on the deep dive.

Continue Reading

Precious Metals

Endeavour Silver Beats BMO’s Production Estimates By 30%

Last week, Endeavour Silver Corp. (TSX: EDR) announced their third quarter production highlights. For the third quarter, ending September 30th,
The post…

Share this article:

Last week, Endeavour Silver Corp. (TSX: EDR) announced their third quarter production highlights. For the third quarter, ending September 30th, 2021, the company produced 1,305,399 silver ounces and 10,541 gold ounces, up 39% and 3% year over year respectively. Third quarter 2021 throughput also increased by 8% to 222,461 tonnes.

The company also increased management production guidance for 2021 to 7.7 to 8.0 million ounces of silver equivalents due to higher than expected grades and tonnage milled, saying that “Silver equivalent production at each mine is on track to meet or exceed 2021 production plans.”

Endeavour Silver has 7 analysts covering the stock with an average 12-month price target of C$7.05, or a 33% upside. Out of the 7 analysts, 2 have buy ratings while the other 5 have hold ratings. The street high sits at C$8.78 from H.C Wainwright, while the lowest comes in at C$5.25.

BMO Capital Markets in their note reiterated their C$5.25 12-month price target and Market Perform rating on Endeavor Silver, saying that the third quarter showed solid production numbers out of the Bolanitos and Guanacevi mines.

For the quarter, BMO forecasted silver production would come in at 1 million ounces. Both gold and silver production was beaten by roughly 30%, thanks to higher than expected tonnage, and grades at Guanacevi.

BMO notes that the company selling 699 thousand ounces of silver, is “well below” their production which is forecasted to impact third quarter sales, but BMO believes this will help the company’s fourth quarter results.

Below you can see BMO’s updated estimates.


Information for this briefing was found via Sedar and Refinitiv. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

The post Endeavour Silver Beats BMO’s Production Estimates By 30% appeared first on the deep dive.

Continue Reading

Trending