Month: June 2023

Bassett Furniture (BSET) – Navigating Through Rough Waters

Posted on by cpereira@noblefcm.com


Friday, June 30, 2023

Bassett Furniture Industries, Incorporated manufactures, markets, and retails home furnishings in the United States. The company operates in three segments: Wholesale, Retail, and Logistical Services. It is involved in the design, manufacture, sourcing, sale, and distribution of furniture products to a network of company-owned and licensee-owned Bassett Home Furnishings (BHF) retail stores, as well as independent furniture retailers; and wood and upholstery operations. As of September 16, 2017, the company operated a network of 91 company-and licensee-owned stores. It also provides shipping, delivery, and warehousing services to customers in the furniture industry. In addition, the company owns and leases retail store properties. It also distributes its products through other multi-line furniture stores, Bassett galleries or design centers, specialty stores, and mass merchants. Bassett Furniture Industries was founded in 1902 and is based in Bassett, Virginia.

Joe Gomes, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.

Joshua Zoepfel, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Mixed 2Q Results. Bassett missed our top line projections, with revenue of $100.5 million compared to our estimate of $102 million and down 22% y-o-y from $128.7 million. Operating income for the quarter was $2.7 million compared to $11.0 million last year. The Company beat our bottom line projection, however, with net income reported at $2.1 million compared to our estimate of $0.3 million, but down from last year’s $47.1 million. Excluding $39.4 million from discontinued operations, however, net income for last year would be $7.7 million.

Still a Challenging Environment. Higher cost inventory and soft demand is continuing to plague the environment for Bassett, as wholesale orders were down 18% y-o-y and written orders declined 17%. The Company did a price cut strategy on its Club Level motion inventories at the end of the first quarter to move inventory and are not expecting any further cuts.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

1·800·Flowers.com, Inc. (FLWS) – Amends Credit Agreement & Leadership Change

Posted on by cpereira@noblefcm.com


Friday, June 30, 2023

For more than 45 years, 1-800-Flowers.com has offered truly original floral arrangements, plants and unique gifts to celebrate birthdays, anniversaries, everyday occasions, and seasonal holidays, and to deliver comfort during times of grief. Backed by a caring team obsessed with service, 1-800-Flowers.com provides customers thoughtful ways to express themselves and connect with the most important people in their lives. 1-800-Flowers.com is part of the 1-800-FLOWERS.COM, Inc. family of brands. Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS.

Michael Kupinski, Director of Research, Equity Research Analyst, Digital, Media & Technology , Noble Capital Markets, Inc.

Jacob Mutchler, Research Associate, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Enters into a new credit agreement. The amended credit agreement increases the outstanding term loan from $150 million to $200 million, and reduces its revolving credit facility from $250 million to $225 million. The agreement extends the maturities of both the revolving credit facility and term loan until June 27, 2028, which we view favorably. 

Terms of the agreement. The conditions of the term loan stipulate that once optional and mandatory prepayments of the loan are made, the funds may not be reborrowed. Notably, the amended revolving credit facility is subject to an aggregate seasonal borrowing limit of $125 million from January 1 to August 1. However, the revolving credit facility allows for prepaid funds to be reborrowed. The term loan and revolving credit facility mature on June 27, 2028.


Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Will the AI Revolution Eliminate the Need for Wealth Managers?

Posted on by phoffman@channelchek.com

Can Investment Advisors and Artificial Intelligence Co-Exist

Are investment advisors going to be replaced by machine learning artificial intelligence?

Over the years, there have been inventions and technological advancements that we’ve been told will make investment advisors obsolete. This includes mutual funds, ETFs, robo-advisors, zero-commission trades, and trading apps that users sometimes play like a video game. Despite these creations designed to help more people successfully manage their finances and invest in the markets, demand for financial advisors has actually grown. Will AI be the technology that kills the profession? We explore this question below.

Increasing Need for Financial Professionals

According to the US Bureau of Labor Statistics (BLS), “Employment of personal financial advisors is projected to grow 15 percent from 2021 to 2031, much faster than the average for all occupations.” Some of the drivers of the increased need include longevity which is expanding the years and needs during retirement, uncertain Social Security, a better appreciation toward investing, and an expected wealth transfer estimated to be as high as $84 trillion to be inherited by younger investors. As birthrates have decreased over the decades in the US, the wealth that will be passed down to younger generations will be shared by fewer siblings, and for many beneficiaries, it may represent a sum far in excess of their current worth.

With more people living into their 90s and beyond, and Social Security being less certain, an understanding of the power of an investment plan, and a lot of newly wealthy young adults to occur over the next two decades, the BLS forecast that the financial advisor profession will grow faster than all other professions, is not surprising.

Will AI Replace Financial Planners?

Being an investment advisor or other financial professional that helps with managing household finances is a service industry. It involves reviewing data, an immense number of options, scenario analysis, projections, and everything that machine learning is expected to excel at within a short time. Does this put the BLS forecast in question and wealth managers at risk of seeing their practice shrink?

For perspective, I reached out, Lucas Noble of Noble Financial Group, LLC (not affiliated with Noble Capital Markets, Inc. or Noble Financial Group, Inc. – creator of Channelchek). Mr. Noble is an Investment Advisor representative (IAR), a Certified Financial Planner (CFP), and holds the designations of Accredited Estate Planner (AEP), and Chartered Financial Consultant (ChFC). Noble believes that AI will change the financial planner’s business, and he has enthusiastically welcomed the technology.

On the business management side of running a successful financial advisory business, Noble says, “New artificial intelligence tools could help with discussions and check-ins so that clients are actually in closer touch with his office, so he becomes aware if they need anything.” He has found that it helps to remind clients of things like if they have a set schedule attached to their plan, he added, “the best plan in the world, if not implemented, leaves you with nothing.” AI as a communications tool could help achieve better results by keeping plans on track.

On the financial management side of his practice, he believes there will never be a replacement for human understanding of a household’s needs. While machine learning may be able to better characterize clients, there is a danger in pigeonholing a person’s financial needs too much, as every single household has different needs, and the dynamics and ongoing need changes, drawn against external economic variations, these nuances are not likely to be accessible to AI.

Additionally, he knows the value of trust to his business. People want to know what is behind the decision-making, and they need to develop a relationship with someone or a team they know is on their side. He knows AI could be a part of decision making and at times trust, but doesn’t expect the role of a human financial planner is going away. Lucas has seen that AI  instead adds a new level of value to the advisor’s services, giving them the power to provide even more insightful and personalized advice to help clients reach their financial goals. Embracing proven technology has only helped him better serve, and better retain clients.

AI Investing for IAs

Will AI ever be able to call the markets? Noble says, it’s “crazy to assume that it is impossible.” In light of the advisors’ role of meeting personally with clients, counseling them on their own finances, and plans, perhaps improving on budgets, and deciding where insurance is a preferred alternative, AI can’t be ignored in the role of a financial planner.

Picking stocks, or forecasting when the market may gain strength or weaken, doesn’t help without the knowledge to apply it to individuals whose situation, expectations, and needs are known to the advisor.

Take Away

Artificial intelligence technology has been finding its way into many professions. Businesses are finding new ways to streamline their work, answer customers’ questions, and even know when best to reach out to clients.

The business of financial planning and wealth management is expected to grow faster than any other profession in the coming decades. Adopting the technology for help in running the communications side of the business, and as new programs are developed, scenario analysis to better gauge possible outcomes of different plans, could make sense to some. But this is not expected to replace one-on-one relationships and the depth of human understanding of a household’s situation.

If you are a financial advisor, or a client of one that has had an experience you’d like to share, write to me by clicking on my name below. I always enjoy reader insight.

Paul Hoffman

Managing Editor, Channelchek

A special Thank you to Lucas J. Noble, CFP®, ChFC®, CASL®, AEP®, Noble Financial Group, Wakefield, MA.

Sources

https://www.bls.gov/ooh/business-and-financial/personal-financial-advisors.htm#:~:text=in%20May%202021.-,Job%20Outlook,on%20average%2C%20over%20the%20decade.

https://money.usnews.com/careers/best-jobs/financial-advisor#:~:text=with%20their%20clients.-,The%20Bureau%20of%20Labor%20Statistics%20projects%2015.4%25%20employment%20growth%20for,50%2C900%20jobs%20should%20open%20up.

https://www.forbes.com/sites/forbesfinancecouncil/2023/03/09/the-great-wealth-transfer-will-radically-change-financial-services/?sh=e7f9e7c53393

https://www.cerulli.com/press-releases/cerulli-anticipates-84-trillion-in-wealth-transfers-through-2045

Melania’s New NFT Collection is Waking Up the NFT Marketplace

Posted on by phoffman@channelchek.com
“Proclaim Liberty” from Melania Trump’s new NFT releases ($50.00)

NFT Investments Benefit from Increased Activity

Do you remember Beeple? He’s the graphic artist who kicked off the non-fungible token (NFT) frenzy. More important than starting an NFT gold rush, the $69.3 million his piece auctioned for alerted many investors and businesspeople to other uses of tokens and blockchain technology beyond cryptocurrency. While the frenzy has simmered, the blockchain-reliant art form is still finding its place. Melania Trump, who owns an NFT company, released a freedom-themed collection in time for America’s birthday. The Ethereum based tokens will be watched closely, compared in price to previous releases, and may help rejuvenate some lost enthusiasm for NFT art.

Background

Non-fungible tokens are unique digital assets stored on a blockchain. Beyond art, NFTs can represent medical records, shipping records, music, videos, and can be adapted to most transactions that benefit from proof of something occurring. In art, the technology allows creators to monetize their digital creations and provide collectors with a method to own and invest in unique digital assets.

As with most art, value is subjective. As with any investment that is new, wild swings can be expected as a market value will be determined by the few initially involved. And these will include those that are extremely bullish and bid up prices, those that know that new thinly traded markets can be elevated by hype, and those that serve as the opposite of hype, they are openly negative on anything new or different. NFTs are no different – for example, nothing has yet openly sold for as much as Beeple’s piece.

Melania’s Place in the NFT Market

In December 2021, Melania Trump, less than one year out of the White House as First Lady, began her own NFT art provider. The themes have been beauty and patriotism and have been popular among collectors. However, since then, the prices of pieces sold and then resold have fluctuated widely in a market that has lost the world’s attention, and is far from maturity.

The Current NFT Release

Some say Melania Knavs, born in communist Slovenia, has gotten to live “the American Dream,” and can appreciate it more than most. Others say Melania Trump understands how capitalism works and is using it to make a buck off of her famous name. As it relates to NFTs, investors should probably focus most on the truth that Melania has brought attention back to this market and investors in NFTs themselves, or the blockchain technology that supports it, benefit. After all, anytime there is an increase of buyers and sellers in a marketplace, liquidity rises, and prices become more rational.

One week before USA Independence Day on July 4, the former first lady announced she is selling “The 1776 Collection,” a tranche of three thousand digital tokens priced at $50 each. Investors are asked to use their digital wallets or more traditional methods, including a credit card, to purchase digital creations.

Image: On December 16, 2021, @MELANIATRUMP tweeted this announcement.

Previous releases included the “Trump Digital Trading Cards” collection, which featured cartoonish images of the former president in unlikely scenarios, like standing on the moon. Her first edition of her collection generated more than 14,200 ETH ($26.3 million) in trading activity so far in 2023. The second edition has generated about $2.7 million over the same period.

NFT Investor’s Dream

The presence of high profile people are good for the maturation of the NFT market, and Melania Trump’s name certainly has been attached to NFT art. At the release of her third and latest collection, her June 29 announcement proclaimed it gives “collectors the ability to celebrate our nation’s independence while acknowledging America’s Founding Fathers’ vision of life, liberty, and the pursuit of happiness.” The announcement explained that “Each collectible represents an aspect of Americana and was deliberately designed to acknowledge the foundations of American ideals.”

Paul Hoffman

Managing Editor, Channelchek

Release – 1-800-FLOWERS.COM, Inc. Announces Leadership Change

Posted on by aweinsoff@channelchek.com

Research News and Market Data on FLWS

Jun 29, 2023

JERICHO, N.Y.–(BUSINESS WIRE)– 1-800-FLOWERS.COM, Inc. (NASDAQ: FLWS), a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships, today announced CEO Christopher McCann will be stepping down for personal health reasons, effective July 3, 2023. To ensure continuity going forward, Jim McCann will resume his role as CEO and remain Chairman. Jim McCann served as CEO for the organization from inception through 2016. Christopher McCann will remain on the Company’s Board of Directors and continue to serve on the board and as an officer of various subsidiaries of the Company as he now serves.

“I want to thank Chris for all of his contributions to the company over the many years, as he played an integral role in overseeing our rapid growth and enhancing our market-leading position in the industry,” said Jim McCann, Chairman and Chief Executive Officer of 1-800-FLOWERS.COM, Inc.

Jim McCann continued, “Our rich history of innovation and embracing new technology will continue to play a vital role in solving the gifting needs of our millions of customers. As we look ahead, we have a talented management team and I look forward to working with them as we continue to execute our strategy to be a top destination for our customers’ celebratory and gifting occasions.”

Since its founding, 1-800-FLOWERS.COM, Inc. has continuously evolved its business. More recently it has transformed from a floral-based specialty retailer with multiple-brand add-ons into an Ecommerce gifting platform built for growth. From Fiscal 2019 through Fiscal 2022, the Company grew revenue by more than 75%, and it has a demonstrated ability to grow the company both organically and through acquisitions. 1-800-FLOWERS.COM, Inc. will continue to execute on its strategic plan that is centered on helping its customers build more and better relationships with all the important people in their lives.

About 1-800-FLOWERS.COM, Inc.

1-800-FLOWERS.COM, Inc. is a leading provider of gifts designed to help inspire customers to give more, connect more, and build more and better relationships. The Company’s e-commerce business platform features an all-star family of brands, including: 1-800-Flowers.com®, 1-800-Baskets.com®, Cheryl’s Cookies®, Harry & David®, PersonalizationMall.com®, Shari’s Berries®, FruitBouquets.com®, Things Remembered®, Moose Munch®, The Popcorn Factory®, Wolferman’s Bakery®, Vital Choice®, Stock Yards® and Simply Chocolate®. Through the Celebrations Passport® loyalty program, which provides members with free standard shipping and no service charge across our portfolio of brands, 1-800-FLOWERS.COM, Inc. strives to deepen relationships with customers. The Company also operates BloomNet®, an international floral and gift industry service provider offering a broad-range of products and services designed to help members grow their businesses profitably; Napco℠, a resource for floral gifts and seasonal décor; DesignPac Gifts, LLC, a manufacturer of gift baskets and towers; and Alice’s Table®, a lifestyle business offering fully digital livestreaming and on demand floral, culinary and other experiences to guests across the country. 1-800-FLOWERS.COM, Inc. was recognized among the top 5 on the National Retail Federation’s 2021 Hot 25 Retailers list, which ranks the nation’s fastest-growing retail companies, and was named to the Fortune 1000 list in 2022. Shares in 1-800-FLOWERS.COM, Inc. are traded on the NASDAQ Global Select Market, ticker symbol: FLWS. For more information, visit 1800flowersinc.com or follow @1800FLOWERSInc on Twitter.

Investor Contact:

Andy Milevoj

(516) 237-4617

amilevoj@1800flowers.com

Media Contact:

Cherie Gallarello

cgallarello@1800flowers.com

Source: 1-800-FLOWERS.COM, Inc.

Release – Comstock Releases Content From Investor Day For On-Demand Viewing

Posted on by aweinsoff@channelchek.com

Research News and Market Data on LODE

THE PROGRAM, TITLED UPLODE 23: NEW GROUND, SHOWCASES THE COMPANY’S LATEST TECHNOLOGICAL INNOVATIONS

VIRGINIA CITY, NEVADA, June 29, 2023 – Comstock Inc. (NYSE: LODE) (“Comstock”, and the “Company”), a first-of-its kind systemic technology company whose mission is to enable systemic decarbonization, hosted its first digital investor summit on Wednesday, June 28, 2023, via live-stream. Footage and video content from the program will be available for on-demand viewing today at https://comstock.inc/uplode23.

In addition to a keynote presentation by Corrado DeGasperis, Executive Chairman and Chief Executive Officer of Comstock Inc, content includes four presentations, each accompanied by a fireside chat, and bonus video detailing the impact of the company’s technology on the future of fuels, metals, mining, and material science. Viewers can expect to learn about the profitable opportunities the company’s technology is creating to drive sustainability and carbon neutrality.

“Comstock, Inc. is an emerging technology company making brave strides toward the next industrial revolution by providing breakthrough commercial solutions that demonstrate decarbonization is not only possible, it’s profitable.” – William McCarthy, Chief Operating Officer

To view some or all of the program, visit https://comstock.inc/uplode23.

About Comstock
Comstock (NYSE: LODE) commercializes technologies that enable systemic decarbonization by efficiently converting under-utilized natural resources into renewable energy products, and by leveraging physics based artificial intelligence for more efficient and effective mineral and materials discovery.

To learn more, please visit www.comstock.inc.

Forward-Looking Statements 

This press release and any related calls or discussions may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, are forward-looking statements. The words “believe,” “expect,” “anticipate,” “estimate,” “project,” “plan,” “should,” “intend,” “may,” “will,” “would,” “potential” and similar expressions identify forward-looking statements but are not the exclusive means of doing so. Forward-looking statements include statements about matters such as: future market conditions; future explorations or acquisitions; future changes in our research, development and exploration activities; future financial, natural, and social gains; future prices and sales of, and demand for, our products and services; land entitlements and uses; permits; production capacity and operations; operating and overhead costs; future capital expenditures and their impact on us; operational and management changes (including changes in the Board of Directors); changes in business strategies, planning and tactics; future employment and contributions of personnel, including consultants; future land and asset sales; investments, acquisitions, joint ventures, strategic alliances, business combinations, operational, tax, financial and restructuring initiatives, including the nature, timing and accounting for restructuring charges, derivative assets and liabilities and the impact thereof; contingencies; litigation, administrative or arbitration proceedings; environmental compliance and changes in the regulatory environment; offerings, limitations on sales or offering of equity or debt securities, including asset sales and associated costs; business opportunities, growth rates, future working capital, needs, revenues, variable costs, throughput rates, operating expenses, debt levels, cash flows, margins, taxes and  earnings. These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical and current trends, current conditions, possible future developments and other factors they believe to be appropriate. Forward-looking statements are not guarantees, representations or warranties and are subject to risks and uncertainties, many of which are unforeseeable and beyond our control and could cause actual results, developments, and business decisions to differ materially from those contemplated by such forward-looking statements. Some of those risks and uncertainties include the risk factors set forth in our filings with the SEC and the following: adverse effects of climate changes or natural disasters; adverse effects of global or regional pandemic disease spread or other crises; global economic and capital market uncertainties; the speculative nature of gold or mineral exploration, and lithium, nickel and cobalt recycling, including risks of diminishing quantities or grades of qualified resources; operational or technical difficulties in connection with exploration, metal recycling, processing or mining activities; costs, hazards and uncertainties associated with precious and other metal based activities, including environmentally friendly and economically enhancing clean mining and processing technologies, precious metal exploration, resource development, economic feasibility assessment and cash generating mineral production; costs, hazards and uncertainties associated with metal recycling, processing or mining activities; contests over our title to properties; potential dilution to our stockholders from our stock issuances, recapitalization and balance sheet restructuring activities; potential inability to comply with applicable government regulations or law; adoption of or changes in legislation or regulations adversely affecting our businesses; permitting constraints or delays; challenges to, or potential inability to, achieve the benefits of business opportunities that may be presented to, or pursued by, us, including those involving battery technology and efficacy, quantum computing and generative artificial intelligence supported advanced materials development, development of cellulosic technology in bio-fuels and related material production; commercialization of cellulosic technology in bio-fuels and generative artificial intelligence development services; ability to successfully identify, finance, complete and integrate acquisitions, joint ventures, strategic alliances, business combinations, asset sales, and investments that we may be party to in the future; changes in the United States or other monetary or fiscal policies or regulations; interruptions in our production capabilities due to capital constraints; equipment failures; fluctuation of prices for gold or certain other commodities (such as silver, zinc, lithium, nickel, cobalt, cyanide, water, diesel, gasoline and alternative fuels and electricity); changes in generally accepted accounting principles; adverse effects of war, mass shooting, terrorism and geopolitical events; potential inability to implement our business strategies; potential inability to grow revenues; potential inability to attract and retain key personnel; interruptions in delivery of critical supplies, equipment and raw materials due to credit or other limitations imposed by vendors; assertion of claims, lawsuits and proceedings against us; potential inability to satisfy debt and lease obligations; potential inability to maintain an effective system of internal controls over financial reporting; potential inability or failure to timely file periodic reports with the Securities and Exchange Commission; potential inability to list our securities on any securities exchange or market or maintain the listing of our securities; and work stoppages or other labor difficulties. Occurrence of such events or circumstances could have a material adverse effect on our business, financial condition, results of operations or cash flows, or the market price of our securities. All subsequent written and oral forward-looking statements by or attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. Except as may be required by securities or other law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. 

Neither this press release nor any related calls or discussions constitutes an offer to sell, the solicitation of an offer to buy or a recommendation with respect to any securities of the Company, the fund, or any other issuer.

Contact Information:

For press inquiries or questions, contact
Zach Spencer
Comstock Inc.
Tel (775) 847-7532
questions@comstockinc.com

For investor inquiries, contact
RB Milestone Group
Tel (203) 487-2759
ir@comstockinc.com

Comstock Inc. (LODE) – Big Ideas Lead to Big Opportunities

Posted on by cpereira@noblefcm.com


Thursday, June 29, 2023

Comstock (NYSE: LODE) innovates technologies that contribute to global decarbonization and circularity by efficiently converting under-utilized natural resources into renewable fuels and electrification products that contribute to balancing global uses and emissions of carbon. The Company intends to achieve exponential growth and extraordinary financial, natural, and social gains by building, owning, and operating a fleet of advanced carbon neutral extraction and refining facilities, by selling an array of complimentary process solutions and related services, and by licensing selected technologies to qualified strategic partners. To learn more, please visit www.comstock.inc.

Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

UPLODE 2023. Comstock Inc. recently hosted its UPLODE23 investor summit which provided an opportunity to hear directly from business leaders associated with Comstock Inc., Comstock Fuels, Comstock Metals, Comstock Mining, and Quantum Generative Materials (GenMat). The event introduced a newly transformed Comstock and its business units to existing and prospective investors. Each Comstock business unit presented a detailed look at market opportunities, their business model, and strategies to create long-term value for shareholders. More broadly, the event underscored the value of innovating new break-through technologies to improve business outcomes and accelerate the commercialization of decarbonization technologies.

Bench strength matters. Each of the business unit leaders demonstrated relevant experience and a compelling vision for moving their businesses forward. Following UPLODE23, investors may have a better appreciation of Comstock’s management bench strength and greater confidence in their ability to advance the company’s strategies to commercialization.


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Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Exceeding the “Speed Limit” of Semiconductor-Based Transistors

Posted on by phoffman@channelchek.com
The author’s lab’s ultrafast optical switch in action. Mohammed Hassan, University of Arizona, CC BY-ND

The Digital Future May Rely on Ultrafast Optical Electronics and Computers

If you’ve ever wished for a faster phone, computer or internet connection, you’ve encountered the personal experience of hitting a limit of technology. But there might be help on the way.

Over the past several decades, scientists and engineers have worked to develop faster transistors, the electronic components underlying modern electronic and digital communications technologies. These efforts have been based on a category of materials called semiconductors that have special electrical properties. Silicon is perhaps the best-known example of this type of material.

But about a decade ago, scientific efforts hit the speed limit of semiconductor-based transistors. Researchers simply can’t make electrons move faster through these materials. One way engineers are trying to address the speed limits inherent in moving a current through silicon is to design shorter physical circuits – essentially giving electrons less distance to travel. Increasing the computing power of a chip comes down to increasing the number of transistors. However, even if researchers are able to get transistors to be very small, they won’t be fast enough for the faster processing and data transfer speeds people and businesses will need.

This article was republished with permission from The Conversation, a news site dedicated to sharing ideas from academic experts. It represents the research-based findings and thoughts of Mohammed Hassan, Associate Professor of Physics and Optical Sciences, University of Arizona.

My research group’s work aims to develop faster ways to move data, using ultrafast laser pulses in free space and optical fiber. The laser light travels through optical fiber with almost no loss and with a very low level of noise.

In our most recent study, published in February 2023 in Science Advances, we took a step toward that, demonstrating that it’s possible to use laser-based systems equipped with optical transistors, which depend on photons rather than voltage to move electrons, and to transfer information much more quickly than current systems – and do so more effectively than previously reported optical switches.

Ultrafast Optical Transistors

At their most fundamental level, digital transmissions involve a signal switching on and off to represent ones and zeros. Electronic transistors use voltage to send this signal: When the voltage induces the electrons to flow through the system, they signal a 1; when there are no electrons flowing, that signals a 0. This requires a source to emit the electrons and a receiver to detect them.

Our system of ultrafast optical data transmission is based on light rather than voltage. Our research group is one of many working with optical communication at the transistor level – the building blocks of modern processors – to get around the current limitations with silicon.

Our system controls reflected light to transmit information. When light shines on a piece of glass, most of it passes through, though a little bit might reflect. That is what you experience as glare when driving toward sunlight or looking through a window.

We use two laser beams transmitted from two sources passing through the same piece of glass. One beam is constant, but its transmission through the glass is controlled by the second beam. By using the second beam to shift the properties of the glass from transparent to reflective, we can start and stop the transmission of the constant beam, switching the optical signal from on to off and back again very quickly.

With this method, we can switch the glass properties much more quickly than current systems can send electrons. So we can send many more on and off signals – zeros and ones – in less time.

The author’s research group has developed a way to switch light beams on and off, like those passing through these optical fibers, 1 million billion times a second.

How Fast are We Talking?

Our study took the first step to transmitting data 1 million times faster than if we had used the typical electronics. With electrons, the maximum speed for transmitting data is a nanosecond, one-billionth of a second, which is very fast. But the optical switch we constructed was able to transmit data a million times faster, which took just a few hundred attoseconds.

We were also able to transmit those signals securely so that an attacker who tried to intercept or modify the messages would fail or be detected.

Using a laser beam to carry a signal, and adjusting its signal intensity with glass controlled by another laser beam, means the information can travel not only more quickly but also much greater distances.

For instance, the James Webb Space Telescope recently transmitted stunning images from far out in space. These pictures were transferred as data from the telescope to the base station on Earth at a rate of one “on” or “off” every 35 nanosconds using optical communications.

A laser system like the one we’re developing could speed up the transfer rate a billionfold, allowing faster and clearer exploration of deep space, more quickly revealing the universe’s secrets. And someday computers themselves might run on light.

Signs We May Be Witnessing the End to the Indexed-Fund Stranglehold

Posted on by phoffman@channelchek.com

Dominance of Indexed Funds May Be Giving Way to a Preference for Diversification

Not many years ago, the most widely followed stock market index was the Dow Jones Industrial Average, or Dow 30 (DJIA). This practice slowly changed and a broader benchmark, the S&P 500, became the new gauge of market moves. Both have the same purpose, to provide a big-picture view of whether stock prices generally are moving up, down, or sideways over a period – and by how much. The DJIA has fallen out of favor as investors grew more sophisticated and came to realize the Dow only tracks 30 stocks. So it was considered not representative of the entire stock market – which includes thousands of different companies. With only 30 stocks impacting its price, it was not disperse enough to be the preferred stock market index. After all, the DJIA’s performance can be significantly influenced by the performance of the 30 stocks, which at times can veer far from indicative of the broad market.

The S&P 500, which is weighted by market capitalization, is beginning to feel the impact of its own loss of diversity. As of June 2023, the top 10 companies in the S&P 500 account for over 25% of the index’s total market capitalization. That is, the weight of 25% of market moves impacting the index comes from just 10 stocks and these can all be considered technology stocks. For portfolios it means that investors who believe the S&P 500 reflects the market, might actually be more accurate if they went back to the index with 30 stocks in a wider array of industries.

I’m not suggesting that we should all start following the Dow. Instead, I am suggesting that there is risk to index investors that are looking to participate in the overall market and are using the S&P 500. Portfolio managers looking to spread risk may want to purposefully add diversity to their holdings.

In contrast to the upper 25%, the lower 25% of the S&P 500 is a diverse group of industries, with no single industry accounting for more than 20% of the weight. This means that the performance of the lower 25% of the S&P 500 is not as dependent on the performance of any single industry. From “stock market 101,” we know that the risk (not necessarily return) is greater in the top 25%. Focusing on risk-adjusted return is how most managing their portfolio do well over time.

Over the past several years, including last year’s down draft, tech has, on average, been the leader. Carrying companies that make up the top 25% in large cap indexes, MSFT, AAPL, META, GOOGL, etc. have been additive to performance. This has helped, as not only has it lifted large-cap indexed funds returns, but it sent more money into these indexed funds, which served to further increase the perfomranc of the funds including ETFs.

Ongoing, above-average growth in one sector, even tech, or a market cap segment (megacap), is as unsustainable as a Ponzi scheme. So while activity is sustaining movement into these stocks, performance is satisfying. But investor money is finite and investor behavior is fickle. So the above average performance must at some point should give way to these stocks being a drag on performance.

Apple’s market capitalization exceeds that of all the publicly traded companies on these stock markets; where would growth in share price come from?

Are We Seeing the End?

According to data from Morningstar Direct through June 20, actively managed stock mutual funds and exchange-traded funds beat their passive peers across categories, except in the large blend category, which is less heavily weighted to one sector. The report data shows that as we reach mid-year 2023, small- and large-cap stock pickers had a strong first half of 2023. As reported by Barron’s, “The next six months may prove favorable for active managers if dispersion—the spread of returns in an index—or market breadth—which reflects how many stocks participate in a rally—increase, allowing other sectors and stocks to catch up to the mega-caps.” Stockpickers are beginning to win, as a wider dispersion of selected investments, on average, beat the “just buy the index” investment style.

Active managers’ improving performance versus index funds is building on 2022, which was the best year for active U.S. equity fund managers since 2009. Anu Ganti, senior director of index investment strategy at S&P Dow Jones Indices, said while S&P doesn’t yet have midyear performance data, one potential tailwind for active managers this year was high dispersion. “If you’re a stockpicker, and if you have skill, and if you make the call right, there’s greater potential to add value from stock selection when dispersion is higher,” she said. “What we saw in May is that the S&P 500 stock level dispersion rose to its highest level since March 2020.” 

The Investment Advisors Association (IAA) Active Managers Council advocates for a more balanced narrative on passive versus active portfolio management among advisors. “Active and passive management are critical and play different roles in a broader portfolio,” said Apurva Schwartz, a member of the Active Managers Council’s research task force and a portfolio specialist at Harding Loevner. “Active management allows investors to navigate complexity, customize portfolios, manage risks, capitalize on specific skills, or try to profit from market inefficiencies. Passive management can help reduce costs and that’s important, especially in efficient market segments.” Over the years, there has been an overriding emphasis on passive funds among advisors, the Council seeks, through statistics and education, to provide a more balanced view.

Take Away

Over any period of time one sector or another may outperform. The one style of management that has provided solid performance is a diversified portfolio with an eye on risk-adjusted return. This style has faded as investors placed money in a large-cap indexed fund, believing the underlying assets were well diversified and had a positive risk/reward potential.

So far in 2023, large-cap indexed funds are underperforming managed funds. This outcome follows on top of late last year when managed money’s comparative performance improved. The underperformance is even highere when one nets out the higher fees associated with managed money.

Obviously there is no way to track non-professional, self-directed stock picker’s performance the way Morningstar ranks funds by category. But it is not a stretch to expect that a carefully selected portfolio with the help of  high-quality research and basic diversification across market-cap and industry characteristics, could do even better than just paying fees and parking assets in a fund.

Paul Hoffman

Managing Editor, Channelchek

Source

https://www.barrons.com/articles/active-managers-outperform-passive-index-funds-23723641?mod=hp_LEAD_1

https://www.cnbc.com/2023/05/10/apple-vs-the-world-apples-bigger-than-entire-overseas-stock-markets-.html

https://investmentadviser.org/active-managers-council/

Release – GeoVax Announces Gedeptin® Presentation at the AACR-AHNS Head and Neck Cancer Conference

Posted on by aweinsoff@channelchek.com

Research News and Market Data on GOVX

 

Atlanta, GA, June 28, 2023 – GeoVax Labs, Inc. (Nasdaq: GOVX), a biotechnology company developing immunotherapies and vaccines against cancers and infectious diseases, today announced that an abstract regarding GeoVax’s gene therapy candidate, Gedeptin®, has been selected for poster presentation at the American Association for Cancer Research (AACR) and the American Head and Neck Society (AHNS) joint Head and Neck Cancer Conference, being held from July 7-8, 2023 at the Palais des congrès de Montréal in Montréal, QC, Canada.

Presentation Details:

 Abstract Title:Phase 1/ 2 study of Ad/PNP with fludarabine for the treatment of head neck squamous cell carcinoma (HNSCC)
 Abstract Authors:                   A. Dimitrios Colevas1, Eric J. Sorscher2, William Parker3, Roan Courtney Raymundo1, Jeong S. Hong2, Regina Rab2, Camilo Henao4, Nikki Schmitt2, Madison Stallings2, Kelly T. McKee, Jr.5, Eben Rosenthal6, Joseph Curry4
 1Stanford Cancer Institute, Stanford University 2Emory University School of Medicine 3PNP Therapeutics, Inc. 4Thomas Jefferson University 5GeoVax Labs, Inc. 6Vanderbilt University
 Date and Time:    Friday, July 7, 4:30 p.m.-6:00 p.m. ET
 Presenting Author:  Kelly T. McKee, Jr., M.D., MPH, Chief Medical Officer, GeoVax

About Gedeptin®

Gedeptin is a novel patented product/technology for the treatment of solid tumors through a gene therapy strategy known as Gene-Directed Enzyme Prodrug Therapy (GDEPT). In GDEPT, a vector is used to selectively transduce tumor cells with a nonhuman gene, which expresses an enzyme that can convert a nontoxic prodrug into a very toxic antitumor compound in situ.

The ongoing Phase 1/2 trial (ClinicalTrials.gov Identifier: NCT03754933) is evaluating the safety and efficacy of repeat cycles of Gedeptin therapy in patients with recurrent head and neck squamous cell carcinoma (HNSCC), with tumor(s) accessible for injection and no curable treatment options. The protocol entails up to five treatment cycles, each consisting of three intra-tumoral injections of Gedeptin over two days followed by infusion of a prodrug, fludarabine phosphate, once a day for three days. A completed Phase 1 dose-ranging study demonstrated that treating a tumor with a single cycle of Gedeptin, followed by fludarabine infusions, was well tolerated, with evidence of a reduction in tumor size in patients with solid tumors.

The current study is being funded in part by the FDA pursuant to its Orphan Products Clinical Trials Grants Program. The FDA has also granted Gedeptin orphan drug status for the intra-tumoral treatment of anatomically accessible oral and pharyngeal cancers, including cancers of the lip, tongue, gum, floor of mouth, salivary gland, and other oral cavities. GeoVax anticipates completion of the current trial by year-end 2023, after which expanded development of Gedeptin is anticipated, both as mono-therapy and as potential combination therapy in conjunction with Immune Checkpoint Inhibitors.

About GeoVax

GeoVax Labs, Inc. is a clinical-stage biotechnology company developing novel therapies and vaccines for solid tumor cancers and many of the world’s most threatening infectious diseases. The company’s lead program in oncology is a novel oncolytic solid tumor gene-directed therapy, Gedeptin®, presently in a multicenter Phase 1/2 clinical trial for advanced head and neck cancers. GeoVax’s lead infectious disease candidate is GEO-CM04S1, a next-generation COVID-19 vaccine targeting high-risk immunocompromised patient populations. Currently in two Phase 2 clinical trials, GEO-CM04S1 is being evaluated as a COVID-19 vaccine for immunocompromised patients such as those suffering from hematologic cancers and other patient populations for whom the current authorized COVID-19 vaccines are insufficient. In addition, GEO-CM04S1 is in a Phase 2 clinical trial evaluating the vaccine as a more robust, durable COVID-19 booster among healthy patients who previously received the mRNA vaccines. GeoVax has a leadership team who have driven significant value creation across multiple life science companies over the past several decades. For more information, visit our website: www.geovax.com.

Forward-Looking Statements

This release contains forward-looking statements regarding GeoVax’s business plans. The words “believe,” “look forward to,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Actual results may differ materially from those included in these statements due to a variety of factors, including whether: GeoVax is able to obtain acceptable results from ongoing or future clinical trials of its investigational products, GeoVax’s immuno-oncology products and preventative vaccines can provoke the desired responses, and those products or vaccines can be used effectively, GeoVax’s viral vector technology adequately amplifies immune responses to cancer antigens, GeoVax can develop and manufacture its immuno-oncology products and preventative vaccines with the desired characteristics in a timely manner, GeoVax’s immuno-oncology products and preventative vaccines will be safe for human use, GeoVax’s vaccines will effectively prevent targeted infections in humans, GeoVax’s immuno-oncology products and preventative vaccines will receive regulatory approvals necessary to be licensed and marketed, GeoVax raises required capital to complete development, there is development of competitive products that may be more effective or easier to use than GeoVax’s products, GeoVax will be able to enter into favorable manufacturing and distribution agreements, and other factors, over which GeoVax has no control.

Further information on our risk factors is contained in our periodic reports on Form 10-Q and Form 10-K that we have filed and will file with the SEC. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. 

Investor Relations Contact:

Rich Cockrell

CG Capital

404-736-3838

govx@cg.capital

Media Contact:

Susan Roberts

sr@roberts-communications.com

202-779-0929

Release – ZyVersa Therapeutics Announces Publication in Clinical Immunology Demonstrating Association Between Renal NLRP3 Inflammasome Activation and Lupus Nephritis Disease Activity

Posted on by aweinsoff@channelchek.com

Research News and Market Data on ZVSA

Jun 28, 2023

  • Lupus Nephritis (“LN”) is characterized by inflammation in the kidney, protein leakage into the urine (“proteinuria”), and progressive kidney damage
  • NLRP3 inflammasomes were extensively activated in the kidneys of LN patients, with higher levels of activation in patients with more severe forms of the disease
  • Inflammasome activation was positively correlated with clinicopathological indices of LN
  • ZyVersa is developing Inflammasome ASC Inhibitor IC 100, which can inhibit up to 12 different inflammasomes (including NLRP3 inflammasomes) and their associated ASC specks which perpetuate damaging inflammation

WESTON, Fla., June 28, 2023 (GLOBE NEWSWIRE) — ZyVersa Therapeutics, Inc. (Nasdaq: ZVSA, or “ZyVersa”), a clinical stage specialty biopharmaceutical company developing first-in-class drugs for treatment of inflammatory and renal diseases, announces publication of an article in the peer-reviewed journal, Clinical Immunology, demonstrating the role of inflammasome NLRP3 activation in lupus nephritis.

In the paper titled, “Renal NLRP3 Inflammasome activation is associated with disease activity in lupus nephritis,” the authors evaluated renal biopsy tissue of patients with biopsy proven LN in comparison to control tissue. Data demonstrated that renal NLRP3 inflammasome activation positively correlated with LN severity and clinicopathological indices of LN. Following are key findings reported in the paper:

  • Expression patterns of NLRP3, ASC, caspase-1, IL-1β, and IL-18 in the glomeruli and tubulointerstitum of LN patients were significantly higher in LN patients versus controls
  • Levels of NLRP3, ASC, caspase-1, IL-1β, and IL-18 were higher in patients with proliferative (more severe) LN than in patients with non-proliferative LN
  • Levels of NLRP3, ASC, caspase-1, IL-1β, and IL-18 were positively correlated with several clinicopathological indices, including, proteinuria, renal pathological activity indices, and systemic lupus erythematosus disease activity index (SLEDAI) scores

The authors stated, “We comprehensively evaluated the activation patterns of the NLRP3 inflammasome pathway in the renal tissues of LN patients. NLRP3 was extensively activated in various renal intrinsic cells and infiltrating cells, and was closely associated with disease activity, which needs further explorations.” To read the article, Click Here.

“The research published in the Journal of Clinical Immunology demonstrated that renal NLRP3 inflammasome activation is associated with lupus nephritis disease activity, providing support for inflammasome inhibition as a promising treatment for LN. Unlike NLRP3 inhibitors, which only inhibit formation of the NLRP3 inflammasome to block initiation of the inflammatory cascade, Inflammasome ASC inhibitor IC 100 inhibits formation of multiple types of inflammasomes, and it uniquely inhibits ASC specks to block perpetuation of damaging inflammation,” commented Stephen C. Glover, ZyVersa’s Co-founder, Chairman, CEO and President. To review a white paper summarizing the mechanism of action and preclinical data for IC 100, Click Here.

About Inflammasome ASC Inhibitor IC 100

IC 100 is a novel humanized IgG4 monoclonal antibody that inhibits the inflammasome adaptor protein ASC. IC 100 was designed to attenuate both initiation and perpetuation of the inflammatory response. It does so by binding to a specific region of the ASC component of multiple types of inflammasomes, including NLRP1, NLRP2, NLRP3, NLRC4, AIM2, Pyrin. Intracellularly, IC 100 binds to ASC monomers, inhibiting inflammasome formation, thereby blocking activation of IL-1β early in the inflammatory cascade. IC 100 also binds to ASC in ASC Specks, both intracellularly and extracellularly, further blocking activation of IL-1β and the perpetuation of the inflammatory response that is pathogenic in inflammatory diseases. Because active cytokines amplify adaptive immunity through various mechanisms, IC 100, by attenuating cytokine activation, also attenuates the adaptive immune response.

About ZyVersa Therapeutics, Inc.

ZyVersa (Nasdaq: ZVSA) is a clinical stage specialty biopharmaceutical company leveraging advanced, proprietary technologies to develop first-in-class drugs for patients with renal and inflammatory diseases who have significant unmet medical needs. The Company is currently advancing a therapeutic development pipeline with multiple programs built around its two proprietary technologies – Cholesterol Efflux Mediator™ VAR 200 for treatment of kidney diseases, and Inflammasome ASC Inhibitor IC 100, targeting damaging inflammation associated with numerous CNS and other inflammatory diseases. For more information, please visit www.zyversa.com.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this press release regarding matters that are not historical facts, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These include statements regarding management’s intentions, plans, beliefs, expectations, or forecasts for the future, and, therefore, you are cautioned not to place undue reliance on them. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected. ZyVersa Therapeutics, Inc (“ZyVersa”) uses words such as “anticipates,” “believes,” “plans,” “expects,” “projects,” “future,” “intends,” “may,” “will,” “should,” “could,” “estimates,” “predicts,” “potential,” “continue,” “guidance,” and similar expressions to identify these forward-looking statements that are intended to be covered by the safe-harbor provisions. Such forward-looking statements are based on ZyVersa’s expectations and involve risks and uncertainties; consequently, actual results may differ materially from those expressed or implied in the statements due to a number of factors, including ZyVersa’s plans to develop and commercialize its product candidates, the timing of initiation of ZyVersa’s planned preclinical and clinical trials; the timing of the availability of data from ZyVersa’s preclinical and clinical trials; the timing of any planned investigational new drug application or new drug application; ZyVersa’s plans to research, develop, and commercialize its current and future product candidates; the clinical utility, potential benefits and market acceptance of ZyVersa’s product candidates; ZyVersa’s commercialization, marketing and manufacturing capabilities and strategy; ZyVersa’s ability to protect its intellectual property position; and ZyVersa’s estimates regarding future revenue, expenses, capital requirements and need for additional financing.

New factors emerge from time-to-time, and it is not possible for ZyVersa to predict all such factors, nor can ZyVersa assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements included in this press release are based on information available to ZyVersa as of the date of this press release. ZyVersa disclaims any obligation to update such forward-looking statements to reflect events or circumstances after the date of this press release, except as required by applicable law.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.

Corporate and IR Contact:
Karen Cashmere
Chief Commercial Officer
kcashmere@zyversa.com
786-251-9641

Media Contacts
Tiberend Strategic Advisors, Inc.
Casey McDonald
cmcdonald@tiberend.com
646-577-8520

Dave Schemelia
dschemelia@tiberend.com
609-468-9325

Goldman’s Model Shows 14% Growth In Small-Caps Coming

Posted on by phoffman@channelchek.com

On the One Hand, the Russell 2000 Should Outperform, on the Other Hand…

A Goldman Sachs report released Wednesday, June 28 projects that the Russell 2000 should gain 14% over the next 12 months and could outperform the S&P 500 in the coming year. The economic headwinds that companies represented in the index would have to overcome were discussed in the report. Each should come as no surprise. The forecast is based on Goldman’s research using expected economic growth and current valuations.

Based on US economic growth and a model built on initial valuations, the small-cap index should gain 14% over the next 12 months, according to Goldman. This looks even more favorable compared to the reports projection that  the S&P 500 is expected to climb 9% over the same period.

The research note said this would mark a position change as the S&P 500 has been outperforming the Russell 2000 Small Cap index.

Goldman outlined three near-term macro headwinds facing the Russell 2000 Index:

Rising Interest Rates

The index is more sensitive to monetary tightening because listed companies tend to have a higher debt burden than the S&P 500. As interest rates continue to rise, the cost of servicing debt could gradually put pressure on small caps, as about one-third of Russell 2000’s debt is floating rate.

This could become a complication through the remainder of the year, as the Federal Reserve has signaled the possibility of two more hikes. For its part, Goldman expects another hike in July, and predicts a cut for 2024.

Economic Development

Compared to the S&P 500, the Russell 2000 is more sensitive to US economic performance, wrote Goldman. Even if a recession has been avoided, small-cap stocks struggle to outperform in the later stages of the business cycle as investors turn to companies with larger balance sheets.

The note recognized another possible bump in the road suggesting it appears that the market has already priced in the GDP forecasts, and growth looks unlikely to pick up any further as long as the Fed continues to tighten to tame inflation.

Sector Composition

Goldman said the Russell 2000’s high exposure to cyclical stocks, regional banks, real estate and biotech makes it more vulnerable to slowing growth, rising rates and the re-emergence of financial stability fears.

This means there could be further cuts in earnings forecasts. The note recognized that while earnings revisions among S&P 500 companies have mostly been flat, Russell 2000 revisions are continuing.

Take Away

Goldman’s basic analysis shows the propensity for the small cap sector to begin to outperform in a big way. As is the case with market forecasters, the story starts out “on the one hand this could happen,” and then transitions with, “but on the other hand…”. It is standard to look out into the future and see where a sector could be headed, but also recognize where there may be trouble along the way.

The report did not lay out a scenario where the report may have underestimated where the Russell Small Cap index may be in 12 months, but with all the less-than-knowns surrounding this year, and an election year, it is safe to presume that the analyst could also have undershot where actual performance will be 12 months into the future.

Paul Hoffman

Managing Editor, Channelchek

Source

https://www.cnbc.com/2023/06/28/goldman-sees-small-cap-stocks-up-14percent-in-year-ahead-etfs-to-capture-that-return.html

What Can You Learn From the Short Interest in a Stock?

Posted on by phoffman@channelchek.com

Using Short Interest as an Evaluation Tool

Not everyone involved in the stock market are buying stocks in expectation of them rising. Some market participants are selling, in the expectation that the price will fall. This selling is one of many factors impacting a stocks current price – and could influence future moves. Understanding short interest in a stock that you are active with may provide trading ideas or send warning signs.  Below we define short interest, its impact on stock prices, where to look to find the short interest on a particular company, how the information is used, and of course, risks.

What Short Interest Is

Short interest refers to the total number of shares of a particular stock that have been sold short by investors. In simple terms, when an investor “shorts” a stock, they borrow shares from a broker and sell the borrowed shares in the stock market. If all goes well, they buy the shares back in the future, then return them to the broker along with the interest cost (rebate rate) of the borrowed amount.  

Short interest is expressed as a percentage or a number, indicating the total shorted shares relative to the stock’s total float or outstanding shares.

What it May Do to the Stock Price

There is more than one possible meaning of a stock having high short interest. One is that the high percentage of short stock outstanding could mean that there is a large number of investors betting against the stock’s performance. This suggests a bearish sentiment and potential bearishness regarding the stock’s future price moves. If many market players continue to remain bearish, the high or escalating short interest can put downward pressure on the stock’s price.

Conversely, a low short interest might suggest a positive sentiment among investors or confidence in the stock’s future performance. It shows the stock has limited potential for a short squeeze, where short sellers are forced to cover positions and the buying causes the price to rise.

How to know the Short Interest of a Stock

Investors can find short-interest information through many sources, online brokerage platforms, financial news websites, and some stock market research portals. Notable financial websites often provide this data alongside other relevant stock information. Additionally, the U.S. Securities and Exchange Commission (SEC) requires institutional investors to disclose their short positions in certain cases, making this information publicly available.

Example of Short Interest Reported on a Popular Brokerage Platform

The short interest of GameStop (GME) on this day was 20.78% of outstanding float (Source: TD Ameritrade)

Trading With Short Interest Information

Knowing if the short-interest in a company is trending higher, lower, or is stagnant is more helpful than a snapshot of one day’s percentage.

The short interest data can be traded on in a few ways. High short interest can serve as a contrarian indicator. If an investor believes the company has good prospects and it has a high short interest, a price-moving short squeeze could occur if positive news unfolds or strong financial performance triggers buying. This scenario can push short sellers, that are perhaps faced with margin calls, to cover their positions rapidly, resulting in a sharp upward movement in price.

The use as a gauge in market sentiment toward the company, and which way it is trending, can allow you to understand investor behavior over a period of time toward the stocks. Combine this with other fundamental and technical analysis, and short interest data can aid in improving your probability of either a successful trade or successfully avoiding a potential problem.

Short Interest Not Definitive

While short interest can provide valuable insights, it is crucial to understand the risks involved. Short interest data alone is rarely enough to be the sole basis for an investment decision. It is important to conduct or gather comprehensive research and analysis of the stock’s fundamentals, industry trends, and market conditions. Evaluating short interest comes after higher level filtering of a company’s prospects.

Remember, short interest size and trend might not always accurately reflect the actual market sentiment. Market dynamics can change rapidly, and short sellers might cover their positions quickly, resulting in a shift in the stock’s performance. Therefore, investors should consider short-interest data as just one piece of the puzzle and not solely rely on it for investment decisions.

Take Away

Short-interest statistics hold a role in providing insights into market sentiment and potential investment probabilities. Investors can find short-interest information through various sources, enabling them to assess market sentiment and potential short squeezes. However, it is best to use short-interest data in conjunction with comprehensive research and analysis, as it should not be the sole basis for investment decisions. More informed investment choices, it stands to reason, lead to a higher likelihood of success or avoiding failure. By understanding short interest and its implications, investors can enhance their understanding of either a stock, or even the market in the aggregate.

Paul Hoffman

Managing Editor, Channelchek