Robintrack Newsletter (7/20/2020)
Betting on a cure and tech is still tech (shockingly).
Good evening! Happy Monday. Thanks for your patience during our week off—we’re back this week to touch on the stocks and movers in the world of Robinhood trading. We’re specifically highlighting the increased inflows to stocks associated with COVID-19 vaccines and drugs—even though many of these vaccines are a huge gamble. Then, we’re taking a closer look at Tesla and the warning flashing in the tech sector.
Betting On a Cure
The market has caught a case of infatuation with pharmaceutical and biotech startups this week. Of the top 10 ‘most popular stocks’ of the week, half of them were companies from the drug-making sector. The biggest riser of the week was Moderna ($MRNA), which saw 90,393 positions added.
Moderna has risen steeply since the start of the year, mostly as investors have piled into pandemic-resistant positions. Companies like iBio ($IBIO), Rigel Pharmaceuticals ($RIGL), AstraZeneca ($AZN), and VBI Vaccines ($VBI) also compose the list of companies attacking coronavirus through vaccines or drugs. However, despite all of the recent renewed interest coming after optimistic trial data? It is important to keep perspective: there are a lot of companies in this space trying to produce a vaccine on an extremely accelerated schedule. In many ways, these investments read as a 'heat of the moment’ kind of thing—there are no done deals.
In Other News: Tech Is Still Tech
As we’ve covered in past weeks, the biggest winners in the last few weeks have been companies in the tech and communication services sector. This awesome visualizer puts that into perspective as it pertains to S&P 500 companies in any given day. The increase in these sectors has presented a question—are we looking at a valuation bubble?
This past week, stocks like Amazon and Microsoft roared to new heights—posting record highs. Automaker Tesla also joined this basket of stocks, rising nearly 20% while investors sit in anticipation of Q2 earnings. Of course, conditional on a positive Q2 earnings, Tesla would then join the S&P 500. All of these bits and pieces add up—Tesla’s valuation is astronomical in the grand scheme of things, but it is the most-bought stock of the month.
That last point desires additional underscoring. It’s not uncommon for these segments to be on fire. But at what point do investors pack up and take profit? Is that hypothetical point where the investors pack up going to take place under the current pretense, or will it have to wait until the pandemic subsides? Food for thought this week.
That’s a wrap for this week! If you enjoyed the content of this newsletter, we’d greatly appreciate if you share it or subscribe ($5/mo or $50/yr) to help support Robintrack. Supporting Robintrack will also enable us to move towards our goal of producing a podcast version of the podcast, producing a daily newsletter, or tackling more niche topics like venture and private equity!
In the meantime, best of luck this week. Take care and see you soon!
The Robintrack newsletter is a weekly digest produced for informational purposes only. It is not intended to serve as investment advice. The digest is produced with the intent to provide a data-centric analysis of how digital communities, millennials, and Gen Zers are trading stocks. Robintrack is not affiliated with Robinhood in any way, but all popularity data is sourced from Robinhood directly via a public API.