Leaders among the giants — stocks of the month?

31.08.2022 15:42|Conotoxia Ltd Analyst Team

August seemed to be a month of high volatility, most likely due to the turbulent economic environment and a relatively good quarterly earnings season. We seem to be in for a very interesting bear market rally, with a possible peak in the middle of last month.

At that time, the S&P 500 and Nasdaq Composite indices fell 3.2% and 3.9%, respectively. They set a peak (in mid-August), gaining 17.4% and 23.3% (the average historical magnitude of a bear market rally) from their local low (mid-June). 

 

Disney (DIS)

The entertainment market giant posted a 1-month gain of 5.9%. The stock had been declining for a year and a half, most likely influenced by extreme pessimism about the company's ability to continue to grow. As a result, the recession and lower consumer spending may have posed an additional threat to revenue from theme parks and streaming platforms. Since its peak in early 2021, Disney shares have fallen by 52.2%. 

A short-term trend reversal occurred when Disney announced solid Q3 results (the financial year starts earlier than the calendar year for Disney). There was a 26% increase in revenue and a whopping 53% increase in net profits year-on-year. Net earnings per share were 10 per cent higher than expected. Among the main reasons for such a phenomenal jump in results is the expansion of owned streaming services, namely Disney+, Hulu and ESPN+.

 

Charles Schwab (SCHW)

SCHW is a leading financial company engaged in brokerage, market making, investment banking, consulting and investment advisory services. Its share price rose by 5.5% last month. As for the stock price of other companies, Q2 results proved to be crucial the previous month. 

The company reported an increase of as much as 31 per cent in interest income, which is the company's primary source of revenue (more than 50 per cent). Thus, SCHW's revenue and net profit increased by 11.7% and 41.7%, respectively. EPS (earnings per share) turned out to be 6.6% higher than Wall Street analysts' expectations. As a result, expectations of further possible interest rate rises and rising volatility (from which the brokerage business may benefit) appear to push the stock even higher.

 

Disney and Charles Schwab may be among the more interesting companies of August due to their phenomenal earnings despite the deteriorating macroeconomic environment. 

Like the article?
Share it with friends!


See also:

Aug 31, 2022 12:47 pm

Avalanche recovers after accusations against the project are met with scepticism

Aug 31, 2022 11:07 am

Dollar with the third month of gains. Gold with the fifth month of declines

Aug 29, 2022 2:53 pm

Bayer’s drug effective - a medical giant with new recommendations from investment banks

Aug 29, 2022 1:04 pm

Crypto on fire - ETH and BTC are approaching price levels last seen in June

Aug 29, 2022 9:13 am

Dollar hits 20 years high. Stock market tumbled

Aug 26, 2022 4:24 pm

Europe's energy crisis is getting worse every day - more record profits for the energy sector?

76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.23% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Trading on CFDs is provided by Conotoxia Ltd. (CySEC no.336/17), which has the right to use the Conotoxia trademark.