Donald Trump’s booming stock market continues to implode.
On Monday, the S&P 500 lost 2.7%, 130 basis points away from a 10% correction since hitting an all-time high in February. Since winning the election on November 5, the index is down 2.9%, at its lowest since September.
Trump’s presidency regarding the markets is now off to the worst start since Barack Obama’s first term in 2009. Of course, in hindsight, we know what happened shortly thereafter. The S&P 500 bottomed in March of that year and went on a historical bull run through February 2020.
Will Trump’s market do the same? Given the expected damage from tariffs, that’s unlikely. I hope I’m wrong.
Despite the carnage in yesterday’s trading, three stocks in the Barchart Top 100 Stocks to Buy moved up at least 10 spots in the top 25, defying the gravitational pull of scared investors.
The three names could be bought by those who don’t own them or sold by those who do. Here are my two cents.
Compass (COMP)
The first of three names is Compass (COMP), a New York-based tech-driven luxury real estate brokerage with two brands: Compass and Christie’s International Real Estate.
Yesterday, it gained 41 spots to 17th position. Its weighted alpha of 160.64 is 25 percentage points higher than its 12-month return of 135.4%, which indicates that its momentum could continue in the near term. The Barchart Technical Opinion is a Strong Buy.
What does the stock have going for it besides momentum?
For starters, analysts are warming to it. One month ago, the eight analysts covering it gave it a Moderate Buy (3.88 out of 5). Today, it’s still a Moderate Buy, but the average has increased by 25 basis points to 4.13. The mean target is $9.53, 11% higher than its share price.
The business is strengthening despite a historically low resale market.
“We continue to strengthen our balance sheet and ended the quarter with a cash balance of $223.8 million. In Q4 2024, we generated positive operating cash flow of $30.5 million and free cash flow5 of $26.7 million, which made us free cash flow positive in every single quarter in 2024,” stated CFO Kalani Reelitz in its Q4 2024 press release.
Compass is growing its transactions, market share, and revenue. It expects to be free cash flow positive in 2025.
That said, given the uncertainty of the markets, it isn’t a sure thing. Furthermore, it serves the high-end residential real estate market. Except for the uber-rich, transactions will slow if the markets keep heading south.
Consider the Aug. 15 $14 call with a $0.30 ask price (3.5% of the share price). With a delta of 0.015092, you can double your money if the stock appreciates by $1.99 (23%) over the next 158 days and you sell before expiry.
It’s a big task, but the $30 risk makes it a reasonable bet.
Hesai Group (HSAI)
Hesai Group (HSAI) is a China-based manufacturer of LIDAR (light detection and ranging) products for passenger and commercial vehicles.
Yesterday, it gained 14 spots to the 19th position. Its weighted alpha of 151.29 is nearly 47 percentage points lower than its 12-month return of 198.1%, which indicates that its momentum could stall in the near term. The Barchart Technical Opinion is Buy.
Chinese stocks could be a better play in 2025 if the tariffs hurt U.S. companies as is expected. Emerging markets aren’t everyone’s cup of tea, but there’s no question the value proposition is better for Chinese stocks than U.S.-listed companies.
Hesai continues to win contracts from global OEM businesses. In 2024, it shipped 501,899 LIDAR units, generating $285 million in annual revenue, 10.7% higher than in 2023. However, in Q4 2024, its revenues increased by 28.3%, suggesting that it has plenty of growth ahead. Its 2025 guidance for revenues is 56.5% year-over-year at the midpoint.
Of course, its operations are losing money. In 2024, excluding share-based compensation, its operating loss was $12.2 million, down 74% from 2023, so it’s close to profitability.
It has plenty of business in the hopper in 2025. A global recession would hurt that growth, but its business is strengthening overall.
Risk-tolerant investors might consider the Oct. 17 $35 call, which has an ask price of $2.05 at the close. To double your money by selling before expiration, the stock must only appreciate by $6.99 (41%) over the next 221 days, which is 2.4 times better than buying the actual shares at current prices.
Jayud Global Logistics (JYD)
Jayud Global Logistics (JYD) is the smallest of three stocks, with a market cap of just $350 million. It’s tiny relative to the other two. Yesterday, it gained 17 spots to 21st position. Its weighted alpha is 148.90, nearly half of its 12-month return of 267%.
In addition to being the smallest by market cap, it also has the lowest share price, trading in penny-stock territory under $5. In 2024, it received several letters from Nasdaq about not complying with the minimum bid price of $1 and $2.5 million in shareholder equity. While it got back into compliance, this is a red flag for anyone who is risk-averse.
Jayud is a supplier of cross-border logistics solutions for companies in China. Based in Shenzen, it isn’t profitable. According to S&P Global Market Intelligence, its revenues for the six months ended June 30, 2024, were $38.0 million, 60% higher than in the same period in 2023, while it lost $2.6 million from operations, 34% lower than a year earlier.
I can’t find any results on the firm’s website or at the SEC after Q2 2024.
Something is driving the stock higher, but it sure isn’t fundamentals. I wouldn’t touch this with a ten-foot pole.
