FA Alpha Weekly Digest - 07 25 2022

Wall Street’s stock picks can’t be trusted and the advertising bias of the mainstream financial media makes their news only sensationalist-driven. In this week's digest, you'll learn which metrics are useful in evaluating a firm’s actual performance.

We bring you the FA Alpha Weekly Digest, a roundup of FA Alpha’s unique and unparalleled equity, credit, and macroeconomic insights over the past week.

In today’s digest, we featured the 1946 Inflation, RH (RH), Tesla, Inc. (TSLA), Emerson Electric Co. (EMR), and SPDR Communications Services Fund (XLC).

We are looking to post-war America to understand inflation in 2022

The mainstream financial media paints inflation as a monster that’s eating away Americans’ savings. Examine how today’s market climate mirrors the 1946 inflation to determine if the Fed’s inflationary risk controls will send the economy into a tailspin.

The market rush away from the home has left behind a few gems

As consumers spend more money on trips rather than on their homes, many stocks that boomed during the “At-Home Revolution” (AHR) have consequently fallen. Find out why investors should not discount RH (RH), an upscale furniture company that benefitted from the AHR, as an average stock leveling off.

While Nikola Tesla may have gone bankrupt, there is little chance his namesake will

At a market cap above $700 billion and a revenue of $62 billion in the last twelve months, Tesla has continuously been successful in dominating the electric vehicle industry. Despite this, credit rating agencies are saying that there is a 10% chance that the company is at risk of default. Investigate the company’s real creditworthiness through the Credit Cash Flow Prime.

Solid supply chains are a must, and Emerson Electric can be the solution

Because the COVID-19 pandemic caused supply chain deficiencies in the past years, companies are investing heavily in their supply chains. Even though this creates a massive opportunity for Emerson Electric Co. (EMR), a company that specializes in solutions for companies in industrial, commercial, and consumer markets, investors might not be too excited about its prospects. Inspect why the company’s as-reported metrics may make investors uninterested in its name.

Has this critical sector lost its magic, or is this an opportunity to buy in at a discount?

As the world becomes more digital, communication services become more crucial. However, communication services companies have recently been sluggish as end markets mature and become saturated. Unravel the real profitability and performance of the SPDR Communications Services Fund (XLC), which includes the biggest names in the communication services industry.

We hope you find this week’s FA Alpha Daily articles insightful.

See you next Monday as we talk about the 1947 inflation and another set of interesting names.

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