3 Stock Highlight: March 2022 Edition

By: Jake Sheckter  |  March 13, 2022
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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 Amazon.com Inc. (AMZN), Exxon Mobil Corp. (XOM), and CrowdStrike Holdings Inc. (CRWD).

Amazon.com Inc. (AMZN)

Finally, we get to who is arguably the king of the (business) world right now: Amazon. The corporate titan has become more than just a household name for much of the world as purchasing from the site has become a daily/weekly routine for many of us. Shares of Amazon stock rose roughly 7% to $2,969 in after-hours trading on March 9, 2022. This follows Amazon’s board approving a 20-for-1 stock split and authorizing the e-commerce giant to repurchase up to $10 billion of its common stock. 

According to Investopedia, “A stock split is when a company increases the number of its outstanding shares to boost the stock’s liquidity. Most investors are more comfortable purchasing, 100 shares of aamaz $10 stock as opposed to 1 share of a $1,000 stock. So when the share price has risen substantially, many public companies end up declaring a stock split to reduce it. Although the number of shares outstanding increases in a stock split, the total dollar value of the shares remains the same compared with pre-split amounts, because the split does not make the company more valuable.”

The stock split and share repurchase still depend on shareholder approval at Amazon’s annual shareholder meeting, scheduled for May 25, 2022. All of Amazon’s current shareholders (as of May 27, 2022) would have 19 additional shares for every one share they owned in June. Trading is expected to be adjusted for the split on June 6, 2022. Amazon’s stock closed on March 9 at $2,785, which was up 2.4% for the day. Through the end of Wednesday, however, shares were down 9% over the last year

This also isn’t Amazon’s first split, but it is the first in many of our lives. This Amazon stock split is the fourth in its history, but the last split came in September 1999. While Amazon’s stock split technically doesn’t change the fundamentals of the company, it could provide younger, amateur, and more unsure investors with an opportunity to get involved at a much lower price, and therefore, with much less risk. 

The e-commerce giant represents a large part of the Nasdaq, and this recent announcement may suggest that the company might be making a move to try and persuade the managers at S&P Dow Jones Indices to include Amazon in the 30 stocks that make up the Dow Jones Industrial Average. To make room for Amazon, the Dow would need to remove one of its current components. With relatively lower prices, there is speculation that Intel (INTC) and Cisco Systems (CSCO) could be possible candidates in the tech world. On the other hand, given the fact that Amazon occupies space in both the internet-retail and the communications-infrastructure industries, replacing a few Dow participants like Verizon Communications (VZ) or Walgreens Boots Alliance (WBA) might be potential options worth looking at as well.

Exxon Mobil Corp. (XOM)

If you own a car or have spoken to someone who owns one in the last two weeks, you’ll know what’s driving everyone crazy: gas prices. Regular-grade gas prices reached a record high of $4.17 on Tuesday, March 8, 2022, which adds up to a 55 cent increase from a week ago, according to the American Automobile Association. The average retail gas prices are currently over $4.346 in over 10 states, including California, which maintains a sad average of $5.44 at the pump. On the other hand, it is worth mentioning that while gas prices are steadily climbing, these figures do not account for inflation. With regards to the actual cost to us, the daily consumers, current prices are pretty similar to what they were in the 2010s (when gas prices last reached $4 per gallon). This also doesn’t mention the fact that fuel efficiency for passenger vehicles has also increased by a few miles per gallon over the years, which also might help to mitigate part of the cost. The U.S. imports 8% of its oil from Russia, and when compared to the European Union (EU), which imports 27% of its crude oil from Russia, the U.S. is significantly less dependent on Russian oil.

On Tuesday, March 8, 2022, President Biden announced that the U.S. will target “the main artery of Russia’s economy” by banning the import of Russian energy products. “We’re banning all imports of Russian oil and gas and energy,” Biden said in remarks from the White House. “That means Russian oil will no longer be acceptable at U.S. ports and the American people will deal another powerful blow to Putin’s war machine.” The president did warn that the move would most likely continue to pump up gas prices in the U.S. but still remained steadfast in his stance that the U.S must continue to add sanction pressure on Russia’s economy.

Exxon Mobil’s stock has seen a boost in the price of its shares, which is most likely as a direct result of the gas and oil shortage we are experiencing in the immediate short run. Towards the end of February 2022, Exxon’s stock price sat at around $75 before soaring up to $90 a week and a half later (a week into March 2022), and finally settling down to its current price of $85 a share. Overall, the S&P 500 index is down over 13% this year, having every single sector in the red- except energy, which is currently up 40% over the year as a result of rising oil and gas prices. As scary and horrid as the gas prices are currently, we are unfortunately not near the top yet and will likely continue to see the tragic increase in price until an equilibrium can be established. You win this time, electric car owners. 

CrowdStrike Holdings Inc. (CRWD)

As for another stock in the spotlight due to the Russia/Ukraine conflict; introducing CrowdStrike. A growing concern currently arising from the conflict in Ukraine is cybersecurity. As the turmoil continues and begins to change and adapt, there are rumors whispering that Russia may try to strong-arm the U.S into easing sanctions by potentially disrupting or damaging key technology infrastructures such as financial system networks and emergency-medical networks through cyberattacks. CrowdStrike states that they provide “cloud-delivery endpoint protection for its customers, shielding them against cyberattacks on or off the network. CRWD is responsible for creating the first multi-tenant, cloud-native, intelligent security solution capable of protecting workloads across all areas.” 

Now, let’s talk about stock price news. The price of shares of CrowdStrike’s stock has decreased 6% year-to-date, but CRWD surged 12.5% Thursday, March 10, 2022 following the release of their 4th quarter earnings, with the stock reaching close to $200 (Wednesday’s closing price for the stock was $170). Annual recurring revenue (or ARR), a very sticky part of CrowdStrike’s business, remains one of its most crucial strengths. ARR for the firm grew 65% year over year to $1.7 billion, with $431 million in quarterly sales topping the estimate of $412 million by 4.5%. The company attributes its record-breaking sales numbers to the recent expansion of its cloud and identity protection services. CrowdStrike beat earnings estimates in each of its last four quarters. The company earned $0.30 a share (beating the $0.20 estimate) in their 4th quarter report.

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