By Jake Sheckter, Business Editor
Each month’s edition of the YU Observer will include a “3-Stock Highlight” on a few stocks that have been in the news lately, have fascinating stories, or provide for an interesting read. On behalf of the YU Observer, we’d like to remind everyone that these stock picks are for educational purposes only and are not to be taken as financial advice or used for investing any real cash. This month, we will be highlighting Twitter Inc. (TWTR), CVS Health Corp. (CVS), and Roku Inc. (ROKU).
On April 4, 2022, investors and social media users everywhere were shocked by the news regarding a company many of us use every single day: Twitter. It was announced that business titan turned richest man in the world, Elon Musk, bought a 9.2% stake in the company for roughly $3 billion dollars, making him the largest shareholder. Through a seeming ripple effect a few other social media stocks such as Snap and Meta were trading higher that morning. Twitter’s stock price that day had soared over 29% before 2pm EST.
As many of us know, this is not the first time we’ve had at least some type of controversy surrounding Elon Musk and Twitter. In fact, some might call Elon and Twitter a dynamic duo of sorts as a result of his use of the platform in the past. Elon Musk has mentioned and even endorsed cryptocurrencies on social media in the past, such as Bitcoin and Dogecoin. And through a series of announcements, tweets, and “Saturday Night Live” jokes in May 2021, the Tesla company and its CEO have thrown the value of several cryptocurrencies on some crazy rides. Some might then wonder whether all those nods add up to market manipulation. In 2018, Elon was ordered to pay a $20 million dollar fine to the U.S. Securities and Exchange Commission due to “misleading tweets” about Tesla stock. Musk has also had loose ties with Twitter’s (outgoing) CEO, Jack Dorsey. In early 2020, Dorsey was being attacked by Elliott Management and an activist campaign, and we witnessed Musk come out and tweet his support for Dorsey. It is also important to keep in mind, the circles these individuals occupy often overlap. They are roughly the same age. Elon Musk created PayPal and Dorsey created his own fintech startup Block/Square. It just makes sense that the familiarity and connection is there. “Oh hi lol,” was Musk’s only tweet on the day of the announcement. The next day, Musk tweeted, “Looking forward to working with Parag & Twitter board to make significant improvements to Twitter in coming months!” Musk remains one of Twitter’s most popular users, with over 80 million followers. He also often surprises Twitter users by using his account to share funny memes and updates on his life and companies.
Recently, CVS made what many are calling a “pioneering move” into the digital world of the Metaverse. In addition to all the possible uses and applications of the Metaverse, the healthcare giant proposes ambitious plans to offer its products and services, including the ever-growing industry of telehealth, in the virtual world.
“CVS is looking to trademark its logo and to provide an online store as well as downloadable virtual goods.” These “virtual goods” could include health products, prescription drug products, and beauty products. These redeemable virtual products, as well as offering non-emergency services, nutritious and wellness counseling, will hopefully help CVS pivot to a more tech-forward position going forward. In addition, CVS is also trying to bring the health services it provides in its in-store clinics and its telehealth platform to the virtual setting, reported CNBC.
Essentially, it will be extremely interesting to see what this looks like in practice; that CVS is trying to not only patent virtual versions of the products that you can easily find in its various store locations. But also somehow make this transition for its telehealth services into the metaverse. Again, expanding this whole idea of being what could healthcare look like in the metaverse? Could it again democratize access for consumers?
“CVS recently reported their full-year results for 2021. This is not a super high-growth stock, although… it pays a really nice dividend of about 2%, which is just a little bit higher than the average stock trading on the S&P 500.” said Rachel Warren, a long-term investor, contributor, and show host for The Motley Fool. During 2021, CVS increased its revenue 8.7% compared to 2020. At the end of the day, CVS proves itself time and time again to be one of those classic healthcare stocks you can check out for slow but steady growth. One aspect of CVS that particularly grabs my attention is their acquisition of Aetna a couple years ago, and that additional healthcare benefits segment brings in a ton of revenue growth in just its healthcare segment alone, which has been up almost 9% year-over-year in 2021. General pharmacy services were also up 8% revenue-wise for the 2021 year.
Shares of media-streaming technology expert, Roku, are on an extreme sale these days. Yet, the company’s future prospects are still brighter than ever. Being the worldwide leader in streaming video platforms, this company succeeds as long as the digital media sector is growing, and it only seems to be growing exponentially. This is where one of Roku’s strongest aspects lies: Roku investors don’t care which streaming service might be winning or losing the content wars, because all those rivals rely on Roku’s proven hardware and software solutions for getting their content in front of consumers. Furthermore, Roku is also diversifying and introducing new revenue streams such as its own string of original shows, on-screen shopping tools, and more.
On Monday, April 4, 2022, Roku’s stock price was up 5% after the company landed a multi-year extension of its distribution agreement with Amazon. “Customers can continue to access the Prime Video and IMDb TV apps on their Roku devices,” Roku said in a release on its website. Having popular apps such as Prime Video and YouTube being built into devices such as Roku TV’s and media streaming devices is a significant selling point for the hardware. The company had also struck a multi-year pact with YouTube in early December.