Weekly Wrap Up + Top Performers: Mixed Martial Arts Stock Jumps 100%+ on Move into Software
Stocks turned in an excellent performance this week, with major indexes sitting at all-time records at the time of this writing. After a week of strong earnings set a bullish pace, the U.S. Federal Reserve kept the party going with a dovish policy announcement this morning, indicating that they don’t see the need for anything more than gradual rate hikes. The announcement provides major fuel for bulls, with the Fed seeing inflation as tame for the foreseeable future.
Netflix (NASDAQ:NFLX): Surging on Buy Recommendations
Netflix has been a huge contributor to the NASDAQ’s record-breaking performance this week. The TV/Movie streaming site has had an excellent year but had fallen slightly from highs over $400 earlier in the summer. Multiple analysts place a “Buy” rating on the stock, arguing that the recent dip placed the stock in solidly undervalued territory.
Investors have taken note, driving the stock to gains above 4.5% at the time of this writing.
Lowes (NYSE:LOW) Posts Blowout Earnings Report
Lowes posted Q2 earnings before the start of Wednesday trading. Despite sales numbers that failed to keep pace with a gangbusters quarter from competitor Home Depot, Lowes beat analyst expectations on both revenue and overall earnings. They continue efforts to trim costs (99 “Orchard Supply” Branded Hardware stores will close this year) and improve logistical management techniques, and investors appeared enthused by their efforts. The stock surged over 10% in the day following the announcement and remains up nearly 8% at the time of this writing.
Alliance MMA (NASDAQ:AMMA) Martial Arts Stock Doubles on Move into…Healthcare SaaS
Alliance MMA is a sports management company in the Mixed Martial Arts space. In recent years, they’ve scaled back operations to focus on representing pro MMA clients. This stock is not the first one you might expect to post dramatic gains on news of plans to acquire a healthcare software stock!
This sort of transaction (and the ensuring profits for News Quantified users…) actually isn’t that uncommon. Firms don’t always ride unprofitable operations all the way to bankruptcy or sale. As with AMMA, companies often see the writing on the wall and scale back operations long before burning through their capital. This leaves them with the opportunity to reset and decide on the most profitable alternative use of their funds. Sometimes, this involves a move to another industry entirely (last year, for instance, we’d see unprofitable copper mining stocks suddenly transform into bitcoin firms).
Notably, investors may consider the new industry in question to have a completely different valuation. That certainly seems to be the case for this move. This morning, Alliance MMA announced it will be acquiring SCWorx Corp (which was privately held) in an all-stock transaction (eg. SCWork Shareholders will receive shares in the new AMMA in return, owning a controlling stake in the combined firm). SCWork focuses on “data content and services related to the repair, normalization, and interoperability of information for healthcare providers and big data analytics for the healthcare industry.” Their interest in AMMA’s NASDAQ listing seems to have driven the transaction.
AMMA is up over 176% at the time of this writing.
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