VRTS - 3 Fintech Stocks to Sell in July Before They Crash & Burn
2024-07-08 09:19:58 ET
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Investors should always be aware of their current positioning in the market cycle, especially when considering fintech stocks to sell. AI greatly propelled market expansion, so much so that just 10 top stocks in the S&P 500 make up 34% of the index, breaking the previous market concentration record all the way back in the 1920s.
This leaves investors wondering if the market is past the peak point heading for contraction. Gauging the Wilshire 5000 to GDP ratio, as the total value of all publicly traded stocks divided by Gross Domestic Product (GDP), it seems that a contraction is likely.
By their very nature, fintech companies rely on consumer transaction volumes to churn out revenue. And what happens after a sustained decline in job openings as LinkUp and Indeed data suggests?
To get ahead of the fintech devaluation spree, here are the three fintech stocks to sell.
Fidelity National Information Services Inc. (FIS)
Fidelity National Information Services Inc. (NYSE: FIS ) has a global reach across payment processing, wealth management, consulting, retail and institutional banking. Generating revenue from both fintech licensing, transaction processing and consulting, FIS is also known to consolidate.
One of the company’s biggest purchases was Worldpay (NYSE: WP ) in 2019 worth $43 billion, followed by Virtus Partners (NYSE: VRTS ), Payrix, Bond Financial Technologies and Torstone Technology this February as SasS post-trade platform.
Combined with Fidelity’s push to integrate emerging technologies, such as AI and blockchain, FIS stock performed well year-to-date, returning 23.4% of shareholder value. However, adjusted net earnings for May’s Q1 showed flatlined $768 million vs $767 million in the year-ago quarter.
Although FIS tracked a fifth consecutive quarter of beating its outlooks, the positive stock performance can be largely attributed to increased stock buyback program, at $4 billion for full-year 2024. Overall, FIS stock is a solid candidate as one of fintech stocks to sell on a good note.
After all, increased market volatility is likely to turn up the pressure, enough to exceed the boost from the buybacks. Presently priced at $75.23, FIS stock is high above the 52-week low of $46.91 but neck and neck with its 52-week high of $78.73, paving the road for an excellent exit point.
Robinhood Markets (HOOD)
Robinhood Markets (NASDAQ: HOOD ) has become synonymous with retail stock trading, and especially meme stock trading. The brokerage firm has gone to great lengths to make finance accessible, even to the point of gamification.
The surge in retail stock trading during 2024 has brought HOOD stock to levels last seen in November 2021, having returned 81% value year-to-date. This makes HOOD one of the strongest fintech stocks to sell before the all-too-familiar market downturn.
In May’s Q1 earnings , Robinhood reported a 59% YOY increase in transaction-based revenue, delivering a $157 million net income compared to a $511 million net loss in the year-ago quarter. This once again reveals that Robinhood is tightly aligned with market cycles.
In line with its strategy to expand in digital assets, Robinhood recently announced its largest acquisition, purchasing crypto exchange Bitstamp for $200 million . This deal, expected to close in the first half of 2025, is key in enhancing Robinhood’s digital asset presence.
HOOD stock, priced at $22.46, is near its 52-week high of $24.28 and nearly double its 52-week average of $13.75. This is as close to the ideal exit point as one could wish for.
JanOne (JAN)
JanOne (NASDAQ: JAN ) is a curious case of a unique penny hybrid stock. Having started in Minnesota but moved to Las Vegas, JanOne’s biotech angle is pain treatment without causing opioid addictions. The company’s flagship candidate is JAN101 tackling peripheral artery disease (PAD) alongside diabetic neuropathy, having shown promise in Phase 2a clinical trial.
By 2030, PAD is forecasted to affect 23.8 million people in the US. Following mass “COVID-19” vaccinations, this figure is likely to increase considering its ties with acute coronary syndromes . Of course, the promise of JanOne’s solutions is a gambit as with most biotech firms.
But, JanOne is also a fintech company, following the acquisition of Alt 5 Sigma, a blockchain firm enabling cryptocurrency payment gateways for global merchants. In June, Alt 5 reported 91% YOY transaction volume increase to $289 million for the months of April and May.
JAN stock, having gained massive 232% returns YTD likely faces correction as an inherently volatile penny stock. Presently priced at $2.02, JAN stock is still above the 52-week average of $1.42 per share. Even though this is a good exit, the cheap stock should be considered as “buy the dip” later on after the price correction and depending on further clinical trial news.
On the date of publication, Shane Neagle did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines .
On the date of publication, the responsible editor did not have (either directly or
indirectly) any positions in the securities mentioned in this article.
Shane Neagle is fascinated by the ways in which technology is poised to disrupt investing. He specializes in fundamental analysis and growth investing.
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