Category: Penny Stocks

Carvana Co. is a “true disruptor,” with an online platform and customer experience that positions it to gain market share in the large but fragmented used-car market.

That’s from UBS analyst Joseph Spak, who on Monday started covering Carvana’s stock CVNA with a buy rating and a price target of $450, implying a 18% upside from Monday’s share price.

With the U.S. government now reopened, the flow of economic data will resume over the next few weeks. The first major release was the September employment report, published last Thursday, while the White House has signaled the October data will likely only be partially released. That makes September’s report the only full labor-market reading the Federal Reserve will receive before its December meeting. What does it show, and where does it leave the Fed?

What we know about employment

September nonfarm payrolls rose 119,000, more than expected, rebounding from a downwardly revised loss of 4,000 in August. The pattern of downward revisions continued, with 33,000 jobs removed from prior months. This leaves the three-month average at 62,000, up from 18,000 in August but far below the 232,000 pace at the start of the year. Given the persistent revision pattern, the 119,000 figure is likely to be revised down as well.

Small-cap stocks have lagged behind their larger counterparts for more than 20 years, leaving beleaguered small-cap investors to wonder if smaller stocks will finally start to outperform the large-caps. They offer what I call a “snapback” hypothesis for why small caps should now outperform: Large caps’ outperformance is stretched so thin it’s like a rubber band — ready to snap back.

Supporting this hypothesis is well-respected, as peer-reviewed academic research in the 1980s and 1990s found that, except for relatively short periods, small-cap stocks could be counted on to beat the large-cap S&P 500 SPX over the longer term.