Starbucks, General Motors And More Thematic Stock Highlights This Week

Every week, we here at Q.ai round up our top stocks to provide you with insights into what’s moving and shaking on Wall Street. And now, we’re bringing you the next step in retail investments: Thematic stock highlights, courtesy of the Forbes AI Investor platform. At the start of every week, we’ll dive into a thematic portfolio to discover what’s hot – and what’s not.

This week, we’re focusing on consumer stocks; in particular, consumer discretionary investments. Without further ado, let’s dive in.

Q.ai runs factor models daily 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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O’Reilly Automotive, Inc (ORLY)

First up this week is O’Reilly Automotive, Inc
ORLY
(or more colloquially, O’Reilly’s). The stock closed up 0.38% to $554.96, significantly above its 22-day price average of $526.46 and bringing it up over 22% YTD.

The auto industry is big business, and even a global pandemic hasn’t kept people off the roads. In fact, O’Reilly’s 28 April earnings report indicated that the company beat EPS and revenue estimates across the board, with its 2021 guidance reflecting confidence in their continued growth.

On the whole, revenue grew by almost 5.3% in the last year to $11.6 billion, far and wide beating its $9.5 billion performance three years ago. At the same time, operating income rose over 47% in the last three years from $1.8 billion to $2.4 billion. EPS has risen, too, from $16.1 three years ago to $23.53 in the last fiscal year, while its ROE is up nearly 652% in the last year alone. Currently, O’Reilly’s is trading with a forward 12-month P/E of 22.32.

While its status as an essential business kept O’Reilly’s doors open throughout the pandemic, the public’s desire to take their first vacation in a year will likely boost their bottom line as we head into the summer months. Based on their potential for continued growth – as well as their past financial performance – Q.ai has rated O’Reilly’s A in Low Volatility Momentum, C in Growth, and B in Technicals. The company has earned its Top Buy status for the month of May.

Starbucks (SBUX)

Starbucks
SBUX
closed up just over 1% to $115.72 after a week of lackluster performance following its mixed Q2 report last week. While it’s maintaining a solid volume of 5 million trades, its prices have stagnated, as evidenced in the 10-day price average of $115.58. Still, the stock is up 12.7% for the year.

You probably know Starbucks as the place you go for your daily pick-me-up of sugar with a splash of coffee (or maybe the other way around). But investors know it as a stock floating near record levels, largely thanks to a solid digital demand and a reopening economy. And as countries around the world open up and lift their service restrictions, fan favorites like Starbucks are well poised to make a solid comeback.

Still, the company’s Q2 report last week gave some investors pause. While earnings topped Wall Street estimates, its revenue has been dogged by slow recovery in international markets, growing less than 1.4% in the last year. At the same time, Starbucks’ operating income expanded by 16.6%, though at $1.6 billion, it’s still below its $3.8 billion operating income three years ago.

There’s some good news on the horizon, however. The company’s EPS grew almost 7.5% in the last year, and forward 12-month revenue is expected to grow by 5.3%. Currently, Starbucks is trading with a forward 12-month P/E of 33.53.

Due to its rising performance and potential for even greater success, Q.ai has rated Starbucks D in Technicals and B in Growth, Low Volatility Momentum, and Quality Value. Starbucks is a Top Buy for the month of May.

John Wiley & Sons, Inc (JW.A)

John Wiley & Sons
JW.A
, Inc closed up almost 4.3% to $59.38, ending the day on volume over 364,000 trades. The company’s stock has been steadily ticking upward for the past few months, with continuing growth evidenced in their 10- and 22-day price averages of $57.44 and $56.70, respectively. Already, this stock is up almost 30% YTD.

If you haven’t heard of John Wiley & Sons, don’t despair – many people haven’t. John Wiley’s, colloquially “Wiley’s,” is an American multinational publishing company for academic and instructional niches. From books to encyclopedias, they’re responsible for making sure that the school-going populace stays well-informed with up-to-date materials.

Wiley’s will likely continuing trending this week due to their 4 May Q3 2021 earnings call, wherein the company reported nothing but good news and solid results. The Vice President of Investor Relations, Brian Campbell, noted that digital products and services generated 83% of its revenue in the last year, up 7% in the last 12 months. Additionally, while their Hindawi acquisition put them out several million dollars – overall, quarter-end debt balance is $163 million higher than last year – the company is expecting consistent growth due to their customer-centric strategies in research and education.

Furthermore, revenue is up by 2.6% in the last fiscal year, while operating income has grown almost 14%. However, their EPS is down almost 30.7% in the last year to $1.32 in per-share earnings. Still, Wiley’s is hopeful that that good things are on the horizon, with forward 12-month revenue expected to growth by 3.6%. Currently, the company is trading with a forward 12-month P/E of 22.18.

Thanks in large part to Wiley’s pandemic-driven performance this year, our AI has rated the company A in Quality Value, B in Low Volatility Momentum, C in Technicals, and D in Growth. Wiley’s is rated a Top Buy for the month of May.

General Motors (GM)

General Motors
GM
 closed down 0.12% to $57.15 on back of almost 11.5 million trades. While the stock is up significantly over the last year – even above five-year highs – it’s beginning to slip some, with a 10-day price average of $57.41 reflecting some stagnation. Still, GM is up over 41% for the year – not bad for a car retailer in the midst of a worldwide pandemic.

General Motors will open Wednesday with its Q1 2021 earnings report on the books. Until then, at least, it maintains a spot as a Q.ai Top Buy for the month of May, as well as a top stock in our consumer discretionary theme.

In the first months of 2021, GM’s U.S. sales took a squeeze as the result of a global semiconductor shortage that left many vehicle retailers high and dry – right as the post-pandemic market began clamoring for new vehicles. As such, GM sacrificed its limited inventories on high-profit retail sales while driving fleet deliveries down 35%. However, with its overseas lines being overhauled and bringing in both luxury and affordable market consumers, the future of GM is still looking up this year.

GM is also supported by robust revenue in the face of the pandemic, though its $12.2 billion earnings are far below its $14.7 billion mark three years ago. However, its operating income is up from $6.3 billion to $8.6 billion, while its ROE hit 13.22% in the last year. However, GM sees limited room for growth in its stock in the face of high earnings, with a forward 12-month P/E of 10.51.

Q.ai has graded General Motors B in Growth and C’s in Technicals, Low Volatility Momentum, and Quality Value. And unless its earnings report has something shocking to say, GM is a Top Buy for the Month of May.

Molson Coors Beverage Co (TAP)

Molson Coors Beverage Co closed up 4% to $57.14 on the back of over 2.7 million trades. The company has had less than a banner five years, though over the course of the pandemic, it’s looking like it’s beginning to make headway on some of its losses. Currently, the company is up over 25% for the year.

Coors reported its Q1 2021 results last week, largely beating expectations – though both its top and bottom lines declined year-over-year. The company was hit hard in the Texas storms when a power outage in Fort Worth knocked out their system for 11 days in March. At the same time, the company has experienced a close of on-trade channel in Canada and the U.K. as a result of government restrictions, which proved to be impactful in their international performance.

Furthermore, declining sales, overall lower financial volume, and a higher cost of goods in the pandemic drained their bottom line. However, the company hopes to make it up with a favorable brand mix, and the absence of last year’s keg reimbursements bolstered the company in its time of need.

Still, the company is prime position to be a Top Buy for the month of May (and it is!) due to its lagging performance, which gives investors a leg up in seeking long-term gains. The company’s operating income grew 14.6% last year, while its EPS shrank by 21.3%. AT the same time, its revenue was down to a measly $9.65 billion. Still, the company is looking to be positive but realistic, with forward 12-month revenue growth of 2.5% expected, and a forward 12-month P/E of 13.51.

Q.ai has graded Coors with B’s in Technicals and Growth and C’s in Quality Value and Low Volatility Momentum. And, as we noted, it’s earned its Top Buy rating for the month of May.

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