1 share to buy, 1 to throw away when markets open: Academy Sports, New Oriental

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Wall Street stocks rallied on Friday, with major averages all coming to an end in light of their recent highs. This, after the latter has boosted optimism a bit about the US economic recovery.

The blue chips and the benchmark climbed around 0.7% and 0.6%, respectively, on the week for their second consecutive weekly gain. The tech-heavy, meanwhile, rose about 0.5% over the same period to record its third consecutive winning week.

Daily charts Dow, SP, NASDAQ

This week is shaping up to be another busy economic week with bigger earnings reports from companies like GameStop (NYSE :), Chewy (NYSE 🙂 and Stitch Fix (NASDAQ :), as well as big data, for example, the expected report, which should also be published.

Regardless of how the markets react, we’ve highlighted one stock that is likely to be in demand, and one that, unfortunately, could see lower further south.

Remember though, our timeline is only for the coming week.

Stock to buy: Sports and Outdoor Academy

Academy Sports Outdoors Inc. (NASDAQ 🙂 will be the center of attention this week, as investors await the latest news from one of the nation’s leading sportswear retailers, ahead of Tuesday’s opening bell.

Consensus estimates project earnings per share (EPS) of $ 0.82 for the first quarter, while revenue is expected to reach $ 1.58 billion, when Academy only produces profit for the third time as a company. public. As such, it faces no year-to-year comparison.

Beyond the high and low numbers, same-store sales and online sales growth for the company will be closely watched, after increasing 16.1% and 60.7% respectively in the previous quarter.

Additionally, investors are hopeful that Academy’s management will maintain their optimistic outlook on its outlook for fiscal 2021, as the sporting goods retailer continues to benefit from favorable consumer trends and customer demand.

ASO daily chart

The Katy, Texas-based sporting goods store chain, which currently operates 259 stores located in 16 states, primarily in the southeast and midwestern United States, has thrived this year amid growing demand. clothing and equipment for sports and leisure.

In addition to selling sportswear, shoes and exercise equipment, the popular Texas chain also carries a wide assortment of products and equipment for the outdoors, such as hunting, fishing, boating, boating and kayaking.

Since the start of the year, Academy – which debuted on NASDAQ in October after going public at $ 13.00 per share – has seen its stock skyrocket 79%, easily making it the one of the biggest retail winners of 2021.

ASO stock, which has gained 185% since it started trading, closed at $ 37.12 on Friday, a little below its all-time high of $ 37.90 reached on June 2. At current levels, the sporting goods retailer has a market cap of around $ 3.5. billion.

Stock to throw: new oriental education group

Shares of New Oriental Education & Technology (NYSE :), which provides online tutoring services for elementary and secondary school students in China, are expected to lag behind in the coming days.

Although it has already lost almost half of its value so far this year, investors continue to worry about the negative impact of several factors plaguing the Beijing-based for-profit education giant. .

Opinion towards the once-for-profit China-based online education service has recently taken a massive hit amid a growing crackdown on the industry.

EDU stock closed Friday’s session at $ 9.22, more than 53% below its all-time high of $ 19.97 reached on February 16, earning the Chinese education giant a valuation of about $ 15.8 billion.

EDU daily chart

The latest negative news came after China’s State Administration for Market Regulation last week fined 15 private tutoring companies $ 36.5 million ($ 5.73 million) for false advertising and price fraud.

Companies penalized included the aforementioned New Oriental Education, as well as New York-listed peers TAL Education Group (NYSE 🙂 and OneSmart International Education Group Ltd (NYSE :).

Despite the fines, lingering fears persist that Chinese authorities will further step up attempts to quell the country’s burgeoning market for private tutoring services.

Indeed, previous media reports said that China’s education ministry was drafting new regulations that could be implemented as early as the end of June.

Ultimately, market participants fear that the ongoing crackdown could lead to an outright ban on tutoring services for preschoolers, which, if confirmed, would have a negative impact on preschoolers. New Oriental activities.

Highlighting these fears, GSX Techedu (NYSE 🙂 announced late last month that it would be shutting down preschool operations in response to increased regulatory scrutiny, causing its stock to drop to new lows.

In view of this, EDU’s actions are expected to remain on the defensive in the days to come as the after-school tutoring service provider continues to face difficult challenges.


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