Moderate and Mellow Market Methods

Sector Spotlight

DIY Downswing

Last year, as we eased out of the pandemic and people returned to the office, DIY home projects saw a decline. Now, DIY sales continue to slump as consumers feel the continued effects of inflation and increased interest rates. This could mean that the bathroom you were planning on redoing, or the deck that you were planning on building is on hold for the foreseeable future. Home improvement retailer Home Depot (NYSE:HD) is feeling the effects as its stock fell this week, following its forecast of a fiscal-year profit decline, along with plans for a US $1 billion wage investment for hourly workers.

Home-improvement executives have preached that higher home borrowing costs would prevent people from moving and encourage them to invest in renos, but that hasn’t necessarily been the case as consumers continue to feel the pressure of inflation. Retailers are taking these factors into account when forecasting the year ahead, including retail giant, Walmart (NYSE:WMT), where shares slid following a disappointing forecast.

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Meme Stock Stalkers

Not so Fast

Meme stock AMC (NYSE:AMC) found itself in hot waters with investors this week as shareholders filed a lawsuit in Delaware accusing the movie theater chain of bypassing them in a bid to increase the number of shares. This comes just a few weeks after AMC announced it is looking to increase its share count tenfold, but instead of putting this to shareholders in a standalone vote for approval, it has bundled it with a separate proposal to convert its deeply discounted preferred stock into common stock.

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The issue here is that this is a great deal for owners of AMC’s preferred shares, but not so great for owners of AMC’s common stock. Allegheny County Employees’ Retirement System said in the proposed class action filed on Monday that the company and several of its directors violated state law to “eviscerate” the voting power of common stockholders, who had not supported issuing new shares. They’re not wrong either as there are 1.8 preferred shares for every common share of AMC, meaning that owners of the preferred stock can easily overpower owners of the common stock. The shareholder vote is slated to go down in March, but this lawsuit may put the proposed plan on hold for the time being.

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ESG

All Aboard the Energy Transition Train

Stocks with a focus on energy transition are all the rage according to the latest edition of the TSX Venture 50 list, a yearly ranking done by the TMX Group which highlights 50 upcoming companies on the TSX Venture Exchange. Everything from lithium to hydrogen to solar power has a presence on the list of top performers on Canada’s main venture exchange in 2022, which was released by the Toronto Stock Exchange on Tuesday.

“As the world’s really thinking about and grappling with energy transition, critical minerals – things like copper, lithium — are obviously increasingly important,” said Loui Anastasopoulos, CEO of the Toronto Stock Exchange, in an interview. Anastasopoulos added that “things like electric vehicle batteries, to solar and wind power installations – the demand continues to grow. And I think you’re seeing that in some of the performance here.” The companies are ranked by their 2022 performance using three key measures: market capitalization growth, share price appreciation, and trading volume.

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Financial Jargon Word of the Week: Channel Stuffing is a shady business tactic used by a company to inflate its sales by purposely sending retailers in its distribution channel more products than they will be able to sell. The key part of this strategy is that the company then records these shipped products as sales figures for the quarter. It often happens right before the end of the quarter or fiscal year end in an effort to prop up results. Companies who do this can be prosecuted for securities fraud, accounting fraud and even for tax fraud. This is an area of expertise for forensic accountants! New crime show possibilities, anyone? In a sentence, please! I will never invest or trust that company after they got caught channel stuffing. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Discover your Investor Profile and get customized free, action items specific to the way you invest! Every week, we will be talking about the latest market news and strategies, aligned to keep you sharp and armed for opportunity and volatility. This newsletter is geared to YOU, based on your own Finliti Investor Profile! We believe that every investor is unique and therefore, should be aware of their actual risk tolerance. If you’d like to know yours, please find out here: Finliti Investor Profile. Get actionable insights into your personalized faction once you discover your inner wealth warrior! Understanding your personal risk tolerance is one of the key first steps before embarking on an investment or trading strategy. It tells you your location on the GPS tracker to your financial destiny! Thank you for joining the Finliti Community! Finliti Disclaimer 1. Finliti’s newsletter is published as an information service to our subscribers and may contain references to stocks, bonds, mutual funds, ETFs, cryptoassets, etc., but this should not be construed as direct or indirect advice or recommendation to any reader to buy or sell these assets. 2. Finliti believes the sources it quotes to be reliable, but does not guarantee their accuracy or completeness. 3. Finliti is not paid by any company to recommend its stocks. 4. Employees or publishers of Finliti’s newsletter may own the assets discussed in the publication for their own investment purposes. 5. Past results are not necessarily indicative of future performance. 6. The information provided is for general information services to our readers as a convenience the materials are not a substitute for obtaining professional advice vis-a-vis your personal situation. 7. Given the time critical nature of the market, the information in this article may become outdated and Finliti has no obligation to change the article. 8. Finliti Corporation is not a registered Investment Advisor or Broker Dealer. This newsletter relies on the “publisher’s exclusion” from the definition of Investment Advisor under Section 202(a)(11)(D) of the Investment Advisors Act of 1940and its corresponding state securities laws and on the exemption from registration under Section 34 (1) (1) of the Securities Act (Ontario) and its equivalents in Canada. Tell your friends about us! Unsubscribe | Update your profile