BJ’s Wholesale Club (BJ)
Entry: Unlock
Price target: 104.00-106.00
Second PT: Unlock
Analysis done on hourly timeframe. Costco and Sam’s Club may dominate the membership warehouse landscape, but BJ’s Wholesale Club has steadily carved out its own niche since its founding in 1984. Headquartered in Massachusetts, BJ’s operates 263 clubs across 21 states and serves over seven million paid members. The company experienced its strongest growth during the pandemic, which drove a surge in memberships, particularly among younger consumers. Online sales also soared, contributing to a 17% revenue increase in 2020. Since then, BJ’s has continued to expand its top line, reaching nearly $20 billion in annual revenue by 2023, with expectations to surpass that figure this year. This growth has been accompanied by rising net income, a testament to effective management that has also delivered a healthy free cash flow of $380 million.
With a market cap of just $12.2 billion, BJ’s appears undervalued within this thriving sector. Its price-to-earnings (P/E) ratio of 21.8x sits comfortably within the ideal range of 15-25x. As net income continues to grow, this valuation metric could decline further, making the stock even more appealing to investors.
BJ’s recent decision to increase membership fees for the first time in seven years was a standout factor in earning the company a spot on our watchlist. Following Costco’s lead, this move could serve as a significant catalyst, potentially driving a rally in the stock over the coming weeks or months.
Please note that this may take beyond this week to come around to price targets.
Teladoc Health (TDOC)
Entry: Unlock
Price target: 13.40-13.60
Second PT: Unlock
Analysis done on daily timeframe. Looking for a highly shorted company in a niche industry with significant upside? Look no further than Teladoc Health. A pioneer in telemedicine, Teladoc made a name for itself during the pandemic by accelerating the shift from traditional in-office doctor visits to virtual healthcare.
Teladoc Health specializes in telehealth services, a rapidly growing sector in the digital age. It offers medical and mental health services, the latter through its BetterHelp segment. The company experienced its biggest revenue surge in 2020, with annual revenue growing 97% to surpass $1 billion for the first time. Since then, it has maintained steady growth, reaching $2.6 billion in revenue in 2023. Alongside revenue growth, Teladoc has built a strong balance sheet, with assets nearly doubling its liabilities.
The main challenge—and opportunity—for Teladoc lies in its profitability. Despite its impressive revenue growth, the company has yet to turn a profit, likely due to heavy investments in expansion and development. While this makes Teladoc a high-risk, high-reward play, its trajectory is promising. Continued growth could position the company as a dominant force in telehealth or make it an attractive acquisition target for a larger player looking to capitalize on its value.
With a market cap of just $1.67 billion, Teladoc appears undervalued relative to its potential. Additionally, a short float of 15% creates the possibility of a significant price surge if the right catalyst emerges, potentially propelling its shares back into double-digit territory.
Please note that this may take beyond this week to come around to price targets.
Tencent Music Entertainment Group (TME)
Entry: Unlock
Price target: 13.40-13.50
Second PT: Unlock
Analysis done on hourly timeframe. Chinese companies have faced challenges sustaining a rally this year, primarily due to the risks associated with investing in them. However, as interest rates decline and investors' risk tolerance increases, these firms could see a long-anticipated resurgence.
Despite concerns about potential delisting, Chinese firms continue to offer valuable exposure to the world’s second-largest economy. Every investment comes with risks, and some might argue that buying American stocks at current elevated valuations poses greater risk than acquiring Chinese stocks trading at deeply discounted multiples. Tencent Music Entertainment (TME) is a compelling example, with a market value of just $18 billion and a P/E ratio of 20x. The music streaming giant boasts nearly 120 million active users, generating $1 billion in quarterly revenue and delivering impressive net income. With a lean cost structure, TME consistently achieves strong profit margins. Furthermore, its management has demonstrated exceptional financial competence, growing assets to $12 billion while maintaining just $2 billion in liabilities, indicative of sound financial health.
While fears of delisting surged during Trump’s first presidential term, these concerns lingered for years without materializing. The reality is that delisting Chinese firms would result in significant financial losses for Wall Street, making such a scenario highly unlikely. Meanwhile, China is actively addressing its economic challenges, introducing measures to stimulate spending and guide its economy toward recovery.
For perspective, if investors are willing to pour billions into high-risk assets like cryptocurrencies, then Chinese equities, while not without risk, remain a viable and attractive opportunity for those seeking value and growth potential.
Please note that this may take beyond this week to come around to price targets.
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here for more information.
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here for more information.
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here for more information.
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here for more information.
You've reached the end of our complimentary public watchlist. Unlock for the full list by becoming a member of our Hyper Stocks community. Click here for more information.
___________________________________
The stocks posted above are the preliminary stocks and set ups we’ll be watching this week. All price points are subject to change based on market performance and sector health. Please do your own research and analysis on these companies/charts before taking on any set ups. Trade at your own risk and as always, good luck! Let’s have a fantastic week.