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Costco Wholesale Corporation Ranked Among This Week’s Trending Stocks Amid Mixed Jobs Data, Vaccine Mandates, And More

Every week, we here at Q.ai recap the best trending stocks from the previous week’s sessions. Whether these stocks made the biggest moves, most extraordinary blunders, or just deserve an extra shout-out for their consistent performance, each has earned its place on our weekly trending list. 

Last week’s stock sessions were fueled by the Federal Reserve’s Jackson Hole symposium announcements. Of particular interest was Chairman Jerome Powell’s statements that the central bank would not taper stimulus or tighten its fiscal policies until “substantial slack” was reigned in on the labor markets. 

And in the midweek, as the calendar flipped into September, the markets buzzed near their record highs as August marked the seventh straight month of benchmark gains. But with the delta variant fueling fears in both the securities and labor markets, several major companies announced that they were considering rollbacks of their return-to-work plans, including Alphabet, Facebook, Apple

AAPL
, and Amazon

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. And for those that aren’t, vaccine mandates (or financial penalty alternatives) are cropping up like West Coast wildfires. 

The end of the week brought a pair of juxtaposed market reports to light. The first was the previous week’s jobless claims, with just 340,000 new claims filed. Unfortunately, Friday ended the week on a sour note as the Labor Department noted just 235,000 nonfarm payroll jobs filled in the month of August compared to 720,000 expected. That said, the unemployment rate fell in line with expectations, dropping from 5.4% to 5.2%. 

Q.ai runs daily factor models to get the most up-to-date reading on stocks and ETFs. Our deep-learning algorithms use Artificial Intelligence (AI) technology to provide an in-depth, intelligence-based look at a company – so you don’t have to do the digging yourself. 

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Netflix, Inc (NFLX)

Netflix, Inc closed up 0.3% Friday to $590.53 with 2.7 million trades on the docket. The stock sits up 9.2% for the year and $48 over its 10-day price average. Currently, Netflix trades at 55x forward earnings. 

Netflix made our trending lists last week after announcing that a famous “show about nothing” – “Seinfeld” – would debut on its platform in October. Though the company secured rights to the show’s 180 episodes in 2019, the delayed release has proven incidentally beneficial for a company that has been hemorrhaging content as company after company, from Disney

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to NBC, has reclaimed their titles for their own streaming platforms. 

Management likely hopes that the popular show’s appearance will reduce churn and expand earnings as viewers binge the classic favorite. And from the investors’ point of view, Seinfeld is already a win, as Netflix shares have marched onward to new highs. 

On the other hand, it’s not like Netflix is hurting too badly. Over the last three fiscal years, Netflix’s revenue soared from $15.8 billion to $25 billion, with operating income skyrocketing 279% from $1.6 billion to $4.6 billion. In the meantime, per-share earnings jumped up 260%, closing out the last fiscal year at $6.08 compared to three years prior. Return on equity also ticked upward in the period from 27.5% to 29.6%. 

At this time, Netflix is expected to see its revenue grow around 6.5% in the next year. Our AI rates this trending stock B in Growth and Low Volatility Momentum, C in Quality Value, and D in Technicals. 

Costco Wholesale Corporation (COST)

Costco Wholesale Corporation nicked up 0.3% to $462.55 per share on the back of 1.3 million trades. The stock sits up almost $12 from its 22-day price average and 22.8% for the year. At this time, Costco trades at 40.9x forward earnings. 

Costco made our trending lists last week twice. The first occurred when Fratelli Beretta USA, Inc. – a purveyor of ready-to-eat food trays – recalled 862,000 pounds of uncured deli meats following two salmonella outbreaks across 17 states. 

The second came about on news that wasn’t much cheerier, as the company confirmed that “some warehouses may have temporary item limits” due to the delta variant’s resurgence. (And thus, the resurgence of panic buying trends.) Although the warehouse chain has not indicated which items it will limit, if last year repeats itself, consumers may expect to find shelves barren of pandemic necessities such as cleaning solutions, toilet paper, and hand sanitizer. 

Since them, Costco has trended on the back of its August sales growth report, which found that adjusted comparable sales – sans gasoline inflation and currency movements – rose 9.1%, with U.S.-based sales up 10.1%. The company is expected to release its Q4 and fiscal year 2021 earnings reports on 23 September. 

Over the last three fiscal years, Costco’s revenue has soared almost 32%, rising from $141.6 billion to $166.8 billion. In the same period, operating income leapt 55.1% to $6 billion compared to $4.5 billion three years prior. Meanwhile, EPS gained $2 to $9.02 for growth of 50%, though return on equity actually fell from 26.3% to 23.7%. 

Currently, Costco is expected to see around 4.8% revenue growth in the next 12 months. Our AI rates this wholesale company A in Low Volatility Momentum and C in Technicals, Growth, and Quality Value. 

Wells Fargo & Company (WFC)

Wells Fargo & Company slipped 0.9% Friday to close out the session with 21.7 million shares traded. The stock sits $4 below the 22-day price average of $48.06, though it remains up 46.4% YTD. Currently, Wells Fargo trades at 13x forward earnings. 

Wells Fargo’s name hit our trending lists last week after the Consumer Financial Protection Bureau (CFPB) and Office of the Comptroller and Currency (OCC) stated their dissatisfaction with the bank’s efforts to rectify its fraudulent accounts scandal from five years ago. Speculation abounds that Wells Fargo may face further action thanks to delaying improvements in its regulatory infrastructure, not to mention victim compensation payouts. 

To make matters worse for the beleaguered bank, OCC officials are slated to begin testimony against former bank executives later this month as the bank remains under sanction and regulation by ten different agencies and offices.  

Thanks to said sanctions – including a $2 trillion asset cap that has yet to be lifted – Wells Fargo’s revenue has plunged from $85 billion to $58 billion over the last three years, with operating income plummeting to $2.1 billion compared to $28.5 billion. In the same period, per-share earnings dropped from $4.28 to 41 cents as return on equity saw a similar decline from 11.3% to 1.9%. 

At this time, our artificial intelligence grades Wells Fargo A in Technicals, C in Growth and Low Volatility Momentum, and D in Quality Value. 

Microsoft Corporation (MSFT)

Microsoft Corporation closed flat Friday, ending the week at $301.14 with 14.75 million trades seen on the day. The stock sits $4 over its 22-day price average and up 35.4% YTD. At this time, Microsoft trades at 34.3x forward earnings. 

Microsoft topped our trending lists last week when the company announced that select software subscriptions would see raised prices in the coming months. For the most part, these hikes apply to the company’s commercial services, including Office 365 subscriptions, which will see raises anywhere from 9% to 25% depending on the tier of service. This news has delighted investors who foresee the move bolstering Microsoft’s already large profit margins on software products. 

Since then, Microsoft has continued to trend because, well, that’s what it does. With good news in the rearview and a slew of software and hardware rollouts on the horizon, Microsoft remains popular with consumers, corporations, and investors alike. 

Over the last three fiscal years, Microsoft’s revenue has surged 34% from $125.8 billion to $168 billion, while operating income grew 63% from $43 billion to $70 billion. At the same time, per-share earnings leapt from $5.06 to $8.05 as return on equity gained from 42.4% to 47%. 

Currently, our AI grades Microsoft A in Low Volatility Momentum, B in Quality Value, and C in Technicals and Growth. 

PayPal Holdings, Inc (PYPL)

PayPal Holdings, Inc gained 1.3% on Friday, closing out the session with 5.3 million trades at $289.13 per share. The stock sits $7 over its 10-day price average and up 23.5% for the year. Currently, PayPal trades at almost 57x forward earnings. 

PayPal claimed a spot on our trending lists last week after news outlets reported that the payments company is making headway on its plans to open a stock-trading platform for its U.S. customers. To wit, PayPal hired Rich Hagen as CEO of its proposed “Invest at PayPal” division. 

PayPal first announced the potential for an investment platform earlier this year during its 2021 Investor Day. Other avenues of exploration include high-yield savings accounts, bill payment opportunities, and of course, cryptocurrency trading. The company hopes these tools and products will help it reach its goal of growing to 750 million active users within five years.  

In the last three fiscal years, PayPal’s revenue has exploded, surging 54.3% from $15.5 billion to $21.5 billion. Operating income saw almost double the growth from $2.2 billion to $3.4 billion as per-share earnings climbed from $1.71 to $3.54. Return on equity also nearly doubled from 13% to 22.7%. 

At this time, our AI rates PayPal as an average investment opportunity with a B in Quality Value and Cs in Technicals, Growth, and Low Volatility Momentum. 

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