An e-zine that keeps you informed on the hottest trends on Wall Street, provides you with the key information to make you filthy rich (*your results may vary)
by Joseph Hargett | January 6, 2022
‘Sup, Great Ones? Mr. Great Stuff here again.
I know today is “officially” the Great Stuff Team’s day to run Thursday Throwdown … but I’m not done giving away free stock picks for 2022!
I know, I know … I didn’t give you any hints yesterday that another pick was coming. Mea culpa.
But the crazy thing is, that didn’t stop one particularly bold and daring Great One from predicting today’s stock pick. Jeff F., you wild and crazy guy…
Now, I know he might just be a day behind on your Great Stuff reading … but I’m choosing to believe that Jeff is a madman who likes living on the edge or making predictions like Air Supply makes love “out of nothing at all.”
Unfortunately, Jeff, I’m not recommending a cybersecurity stock today. That said, if you Great Ones like taking the same kinds of risks that Jeff just dove headfirst into … today’s fourth Great Stuff Pick for 2022 is right up your alley.
Before we begin, here are the previous three Great Stuff Picks for 2022:
• 2022 Picks Part 1: Chips For The Dip
• 2022 Picks Part 2: The N-Vigorating Boogaloo
• 2022 Picks Part 3: The Crypto Jubilee!
And now for the main event…
2022 Great Stuff Pick: ChargePoint
I’m going to tell y’all right upfront, ChargePoint (NYSE: CHPT) is a medium- to high-risk investment. If you aren’t a young’un — or if you’re trading with money you can’t afford to lose — you might want to skip CHPT stock.
This one’s going to take some patience and time … to do it, to do it, to do it right.
Point taken. We’ll use caution. But what exactly is ChargePoint?
Well, if you’d read the November 13 edition of Great Stuff, you’d know that ChargePoint develops, builds, sells and maintains electric vehicle (EV) charging stations.
It’s currently the biggest EV charging station company in the world by revenue and install locations — of which ChargePoint has more than 30,000, with more than 163,000 active charging ports.
Now, ChargePoint isn’t like the other EV charging companies, but not in an “I’m not like the other girls” kinda way.
Competitors like EVgo (Nasdaq: EVGO) and Blink Charging (Nasdaq: BLNK) own their charging stations, pay rent for the location and placement of those stations, and make money by charging a premium for electricity.
ChargePoint, on the other hand, sells its charging stations directly to corporations and businesses.
And while it does make a pretty penny selling those charging stations — making up about 90% of ChargePoint’s revenue as of the third quarter — the real revenue growth potential comes from the company’s “Charging as a Service” (CaaS) packages.
Charging as a what? What’chu talkin’ ‘bout, Mr. Great Stuff?
You see, ChargePoint knows that making money by charging for electricity is a pain. Drivers aren’t good customers … just ask any gas station owner, and they’ll tell you that gasoline doesn’t make them squat.
What’s more, selling charging stations is all well and good, but what happens when the market is saturated? You’ll sell a few here and there for replacements, but your revenue growth will crater.
ChargePoint’s solution to this conundrum is to sell CaaS packages.
For example, the ChargePoint Assure package includes things like professional installation, activation and configuration, charging station maintenance, charging station software management, an extended warranty, on-site repair and 24-7 station health monitoring, just to name a few.
Wanna charge a premium for electricity at your ChargePoint station?
You’re free to do that, but it’s much, much easier with CaaS software management and configuration.
And you know what? Service packages like this will make ChargePoint a much more profitable company in the long run.
All right, all right … I’m starting to see the point. But why now? Weren’t you cautious on ChargePoint back in November?
I was, Great Ones. I was. But there are two factors that changed my mind:
1. The $1.2 trillion infrastructure bill and the $7.5 billion earmarked for EV charging stations.
2. CHPT stock’s price action in the past month.
First … back in November, I noted that ChargePoint would likely rake in the biggest chunk of that $7.5 billion for EV charging stations.
After all, businesses that take advantage of this government spending can buy a ChargePoint station and use some of the same funds to pay for CaaS. Furthermore, those same businesses can make money on top of the government cash by up-charging for electricity.
When you look at it that way, it’s a no-brainer for businesses to go with ChargePoint over its competitors.
Second … since the infrastructure bill was signed, CHPT stock has plummeted more than 35%. That’s the exact opposite reaction you’d expect for a company that was basically handed free government cash. In fact, CHPT’s decline has nothing to do with ChargePoint’s business. It’s all broad market fears and inflation worries.
In other words, CHPT stock is trading at a massive discount to the company’s growth potential. I mean, Wall Street’s average consensus price target is nearly double CHPT’s current trading range near $17.70. The stock is hovering near a 52-week low and is badly oversold. That’s what fear does, after all.
So, we have an extremely cheap entry price for a stock in a red-hot EV market that’s about to collect some government greenbacks. What’s not to like?
Well, about that… There’s this other bill that Wall Street is waiting on. The “Build Back Better” infrastructure bill has provisions for increased EV tax credits, among other things. Money for building out EV charging stations is one thing, but if hardly anyone has an EV to charge, it won’t make quite as much of a difference.
Those EV tax credits could go a long way toward addressing the biggest issue for ChargePoint … a lack of EVs on the road that need charging.
That’s also the biggest risk for ChargePoint investors. Last quarter, revenue skyrocketed 79% to $65 million, but ChargePoint still posted a loss of $0.14 per share. Until consumer EV adoption hits critical mass, ChargePoint is going to struggle to realize a profit.
Yes, ChargePoint is what Wall Street likes to call a “pre-revenue” company. If that bothers you, and you don’t have the stomach for risk or volatility, CHPT stock isn’t for you.
I’m a bit of a risk-taker, though, Great Ones. And I see massive potential here for CHPT stock, especially at current prices.
The bottom line: Buy CHPT stock.
And by the way… President Biden’s “Build Back Better” bill isn’t the only thing tipping the scales for further EV adoption.
A stunning new technology is about to cut the cost of EV batteries in IN HALF … meaning by next year, EVs could cost the same as gas-powered cars … and demand could go through the roof.
To discover the company behind this new technology, click here for the full story.
Huh, what’s that? It must fiiiinally be time for the rest of Team Great Stuff to take over and dish out the latest, well, Great Stuff!
Thanks “Mr. Great Stuff.” Jeez, we get one day all to ourselves, and he just can’t let that be. Whatever … at least all you Great Ones got a stock pick out of it.
Now that we’ve kicked him out for the day, it’s time for your regularly scheduled Thursday Throwdown!
Do Electric Trucks Dream Of Digital Mud?
This year has kicked off with so much EV news, I’m starting to think EV Days got renewed for a second season.
Wall Street’s electrifying soap opera continued today as General Motors (NYSE: GM) unveiled its long-awaited Chevy Silverado EV.
GM’s electric truck (electruck?) has a range of 400 miles and, once charged, can charge whatever junk you hook up to its outlets … heck, even other EVs! It features an info panel screen that’s bigger than my first TV, and the thing even runs on Linux.
Oh yes. And, importantly, it looks like a real truck … not the kind of truck a toddler would draw in crayon (*cough Elon cough*).
Combined with Ford’s striking Lightning announcement earlier this week, it seems there are now two clear trains of thought with EV design: You either go full-on “kindergarten creation” à la the Cybertruck and Canoo … or you go with traditional styling like Ford and GM. (And if you get stuck halfway, you end up with an axolotl-esque monstrosity like Rivian.)
But GM didn’t stop after announcing the Silverado EV: It also showed off the new Equinox EV SUV, which, in drastic contrast to other EV SUVs, doesn’t look like the ultra-sterile clone facility on Kamino.
I don’t speak for all car-buyers — which is why you should let me know your thoughts in the inbox — but most people want conventional. That’s … why it’s called “conventional.” But all those aesthetics are mere side notes compared to the real meat of GM’s EV matters: The new SUV starts at $30,000.
I’ll say it again for those of you in the back: It costs $30K. GM is setting the bar at a game-changing, competitive price point compared to brand-new gas-powered cars — and that’s before any potential EV subsidies. (BBB bill when?)
Congrats, GM and Ford: You have finally joined the EV wars. For real this time.
Walgreens Boots Were Made For Walking
And walking is what they do.
But in its earnings report today, Walgreens Boots (Nasdaq: WBA) walked all over you … that is, if you’re one of the pessimistic analysts expecting less from the pharmacy chain.
The company just dropped a banger of a report on the Street, though you wouldn’t know it from WBA’s 1% drop today.
Walgreens’ sales and earnings both beat expectations by a country mile (which also happens to be the length of the checkout line literally every time I’m there). Same-store sales shot up 10.6% year over year for Walgreens and 16.3% over at Boots in the UK.
Better still, digital sales were up a whole 88% last quarter as more customers used Walgreens’ same-day pickup service for quick trips. Walgreens also highlighted rising sales in at-home COVID tests, cold and flu meds and beauty items for its dazzling double beat.
I may be sick, but I’ll be pretty, dammit.
I’m Just A Poor Wayfairing Stranger
Wayfair’s (NYSE: W) stock was lonesome as a Johnny Cash cover this morning after getting downgraded by a Wedbush analyst for “red flags” cropping up in its business.
According to Wedbush, supply chain issues were just one of several problems that faced the home-furnishing flipper toward the end of the year:
We have repeatedly pointed to “yellow flags” in KPIs [key performance indicators] that have been trending below pre-pandemic levels, namely in gross and net customer adds, customer acquisition costs and orders per customer.
Those yellow flags have become red flags for many investors, contributing to W shares declining -27% since 3Q21.
Order backlogs on furniture items that are predominately made in other countries are one thing … I mean, we are still in the middle of a global pandemic, after all.
But struggling to cajole customers to your website to buy those overpriced furniture items in the first place? That’s a big red flag indeed — especially when you consider how much moolah Wayfair has dumped into marketing the past few years. And this is a hole Wayfair could struggle to get out of with Omicron on the rise.
For their part, Wayfair investors took the downgrade in stride.
After falling more than 2% when the market opened for trading, W stock has since regained nearly all its losses on the day. It’s currently trading for $172 per share … which is way above Wedbush’s new price target of $170 per share … but also wayyyyyy below its prior target of $290.
Keep walking that line, Wayfair … oh wait, wrong song.
I know that you know that I’m not the biggest Bed Bath & Beyond (Nasdaq: BBBY) fan. Let’s be honest: Anything The Great Beyond sells, Target (NYSE: TGT) sells for half the price … and without all the packaging pockmarks.
But after being brought before a jury of its market peers this morning, Bed Bath & Beyond was found wanting by investors other than me.
Not only did the retailer report a revenue dud in its fiscal third quarter — to the tune of $276 million in net losses — but it also missed earnings by a full $0.26 per share. Rounding out the triumvirate, same-store sales fell by 7% in the latest quarter. Yikes.
You’d think after all that, someone high up in the Bed Bath & Beyond camp would try to deescalate the overwhelming sense of disappointment and dread that BBBY investors must feel. But nope. CEO Mart Tritton said last year’s supply chain crunches would likely extend into the new year and negatively impact the store’s outlook for 2022.
At first, BBBY investors sent the stock a full 10% lower in premarket trading. But then they remembered that sentiment rules the market roost these days and not things like … I don’t know, sales, profits or anything else that used to matter.
As such, BBBY is now trading 8% higher … and I guess them’s the breaks.
What do you think, Great Ones? Have you ever found the fabled “beyond” section at Bed Bath & Beyond? What do you think about GM’s new EVs? And are you invested in any EV-charging stocks like ChargePoint?
GreatStuffToday@BanyanHill.com is your home for hot takes and spit takes, investing questions and random market tomfoolery too. Whatever you want to write, we want to read!
In the meantime, here’s where you can find our other junk — erm, I mean where you can check out some more Greatness:
Until next time, stay Great!
Editor, Great Stuff