Verizon, Crocs And Salesforce Are Top Trends For July

It’s been a busy month. Then again, when is it not these days? Inflation has continued to be a hot topic as it hit 8.6% in the U.S., which is the fastest rate of increase since 1981. The Fed has been reluctant to act on the rising inflation figures, over expectations that it was ‘transitory’ and that an overbearing interest rate rise could nudge the economy towards a recession.

Despite these fears, they elected to make a major move in interest rates, putting the base rate up by 0.75 percentage points to 1.75%. Markets initially responded well to the move, with hopes that action against inflation would help take some of the pressure off companies who are feeling the impact of rising prices themselves.

Crypto continued its dramatic fall, with a number of high profile casualties including the DeFi platform Celsius, which suspended withdrawals and transfers and crypto hedge fund Three Arrows Capital who were ordered to liquidate by a court in the British Virgin Islands. Another DeFi platform, BlockFi, also looks likely to be taken over by crypto exchange FTX for cents on the dollar from their last valuation.

The stock market hasn’t been immune, with the S&P 500 officially entering a bear market last month and many sectors continuing to see big drawdowns in their stock prices. One of the few bright spots has been energy producers, who have been the beneficiaries of record high oil prices.

We also had some worrying comments from high profile people including Elon Musk, who stated that he had a “super bad feeling” about the economy and that Tesla would be reducing their head count by around 10%.

Trends and themes can be important investing tools, and we pull data from multiple sources to find out what’s hot. This includes analytics from Google Trends, but we go a lot deeper than that.

We assess popularity and sentiment for various stocks across social media platforms such as YouTube, Instagram and Reddit. This helps us find out what people are talking about—and whether it’s positive or negative. It’s an ace up the sleeve for investors.

Here are our current trending stocks from this data and analysis.

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Qualcomm Inc (QCOM)

Microchip and wireless technology manufacturer Qualcomm is this month’s first trending company, as the global microchip shortage continues to cause headaches in many industries, from consumer electronics to auto makers.

Chips have been in hot demand since the outbreak of the Covid-19 pandemic. The mass shift to working from home sent demand for laptops and computers through the roof. With manufacturing of new chips slowing down at the same time due to lockdowns, it created a perfect storm for a massive mix up in the supply chain.

As a result, Qualcomm managed to increase their revenue by 16.98% in the last fiscal year. Operating income has been even better, increasing by 30.95% in the last fiscal year and 58.63% over the last three years. Earnings per share also went up, growing a whopping 171.88% over the last three fiscal years.

Qualcomm’s share price has been dragged down by the overall market, but over the past few weeks between June 16th and July 6th, it’s up 5.16%.

We identified the global microchip shortage as a potential trend to take advantage of, which is why we created the Global Microchip Shortage Kit. Our AI rebalances this Kit all the time, but it currently holds a position in Qualcomm as part of the trade.

Analysts expect revenue to grow by 5.92% over the next 12 months, and Qualcomm currently trades at 9.79 times forward earnings.

Salesforce (CRM)

Despite a gloomy economic backdrop, Salesforce as a business has been performing very well. The company released their Q1 2023 figures at the end of May, which revealed revenue of $7.41 billion, an increase of 24% year on year.

It’s a continuation of the trend we’ve seen from Salesforce for a while. Revenue grew 5.46% in the last fiscal year and has increased 63.41% over the last three years. Salesforce has been around for a long time now, but that’s stopping the company from seeking new areas of growth.

They purchased workplace ccollaboration platform Slack in mid-2021 and they’re currently piloting their own marketplace for minting and selling NFT’s. Salesforce’s share price has fallen this year in line with the rest of the tech sector, but has recently begun to make a turnaround and is up over 11% since May 19th.

Revenue has increased from $17.1 billion three years ago to $26.49 billion in the last fiscal year and analysts predict further growth of 4.04% over the next 12 months. The company is currently trading at 34.01 times their forward earnings.

Salesforce is a position we currently hold in our Forbes Kit. For this Kit, we take the trending data a step further, utilizing our relationship with Forbes to find companies that are the subject of positive news stories. Our AI uses this multiple datasets and sentiment analysis to balance the popularity of these companies with the risk/return tradeoff and rebalances every week.

Verizon (VZ)

Another holding in our Forbes Kit and it’s a rare company whose stock price has held up well to this year’s stock market volatility. Yes, it is still down. But at just -0.87% to the market close on 6th July, that’s significantly better than the S&P 500 as whole which is down 19.33% over the same period.

Verizon’s revenue has been flat over recent years. It hit $133.6 billion last fiscal year, which represents a slight increase over the figure from three years ago of $131.8 billion. Likewise for operating income, which has decreased slightly from $29.9 billion three years ago to $29.1 billion in the last fiscal year.

Looking forward, revenue growth is expected to continue to be muted, with analysts predicting growth of just 0.55% over the next 12 months.

However, our AI has obviously included Verizon in our sentiment-based Forbes Kit for a reason, because recently the stock has bounced. From its recent low on May 2nd, it’s increased by 11.42% to the end of the day on July 6th.

Crocs (CROX)

Now this is an interesting one. We all know and love Crocs, and it’s not really a surprise that the company has been trending given that we’re now into summer. The company has come a long way over the years, and it’s a business with solid financials.

Revenue growth has been great for Crocs, increasing by 8.65% last fiscal year and an impressive 104.25% over the last three fiscal years. In dollar terms, that’s an increase to $2.3 billion from $1.2 billion three years ago.

Operating income and earnings per share (EPS) growth has been even better, with operating income growing 470.55% over the last three fiscal years and EPS increasing from $1.66 to $11.39 over the same timeframe.

With financials like this, it’s not surprising that Crocs is currently a position in our Value Vault Kit. In this Kit, our AI looks for companies with stable financials and relatively inexpensive valuations. With a share price that has fallen 53.61% year to date, Crocs is now trading at a low forward price earnings ratio of just 4.98.

Exxon Mobil (XOM)

Our final top trending stock is another from our Forbes Kit. Energy producers in general have been in the news a lot so far this year. With sky high oil prices, Exxon Mobil has performed incredibly well, in contrast to the wider market.

The oil price has started to moderate in recent months as OPEC and non-OPEC producers have agreed to increase supply to compensate for the constraints related to the war in Ukraine. The price for West Texas Intermediate crude oil is hovering around $100 a barrel at the moment, and it is expected to continue to trend downwards over the next 12 months.

Despite a recent pullback, the stock is still up 36.10% so far this year and the financials of the company have been very healthy. Operating income in particular has been very strong over the past three years, up to $26.78 billion from $15.54 billion three years ago.

Likewise, earnings per share growth has been enviable, increasing by 79.55% over the last three fiscal years.

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