♒ Bankrupt stocks are beating the market??

This is MM, the only newsletter that chews up stock market news and spits out raw ~insight~ for you, like a momma bird feeding its young. Talk about information diet.

BANKRUPT STOCKS HOT RN🔥

Everyone loves a good underdog story. Rocky, young Tom Brady, Honey Boo Boo. There’s something about the people that no one else believes in that somehow makes them that much more loveable. Apparently, this goes for #MemeStocks as well.

It started with GameStop in 2021, when traders on Reddit noticed the tremendous short interest in the struggling stock and ape-squeezed it to the heavens. It mooned more than 2000% almost overnight, and became an instant cultural phenomenon.

It was a fun way to stick to the man, and a lot of folks got rich quick. More importantly, it was cool as hell. Traders were hooked, on a tireless pursuit to pile into stocks that were written-off by the big trading firms. AMC, Tilray, Bed Bath & Beyond.

But then things changed. The market cooled off, inflation hit hard, and the economy began trending toward recession. Many of these underdog darlings are now *legitimately* on the brink of bankruptcy… but that hasn’t stopped meme-traders from banding together to try and squeeze out another moonshot. In fact, it’s made it easier.

So far in 2023, the meme trend seems to be: 1) find stocks most closely associated with bankruptcy, 2) buy ‘em up without thinking twice. And somehow, it’s working:

In a bastardized evolution of events, the stocks mentioned alongside the word ‘bankruptcy’ in news coverage this year are beating the market… by like a lot. 

In fact, of the eight stocks with the highest amount of bankruptcy chatter this year, their average return is +22.8% year-to-date, while the S&P 500 is up only +2.5%.

It’s like an Uno reverse on classic investment theory. Jack Bogle is probably rolling in his grave at the thought of it. Has there ever been a time in the history of public markets when bankrupt-trending stocks have performed this well? Doubtful.

I have so many questions… like are the people buying these stocks just God-tier at diversifying their portfolios, and simultaneously dollar-cost-averaging into long-term bonds? Maybe I’m just a silly little boy, but I don’t understand. Help me out here.

Austerity might be dead in 2023, but at least it’s entertaining. 🤷

NEWS NUGGETS🥔

Top trending commentary parsed from news coverage

Top Bullish News Snippets:

| source: MarketWatch | sentiment: 🟢 | clinical trials 💉

“Moderna on Tuesday announced strong results from a large trial of its respiratory syncytial virus vaccine, adding new drama to what’s shaping up to be a clash of the biopharmaceutical titans, as both Pfizer and GSK prepare to launch competing jabs.”

| source: Yahoo Finance | sentiment: 🟢 | acquisition news 🤝

“NRG Energy is a utility and energy giant that sits at a potentially attractive longer-term entry point. NRG Energy said on December 6 that it agreed to buy Vivint Smart Home, Inc. for $12 per share or $2.8 billion in an all-cash deal.”

| source: Investing.com | sentiment: 🟢 | analyst commentary 🗣️

“Adobe has developed a sizable competitive moat for its platform as the company has been well positioned to capitalize on strong digital transformation tailwinds, the increasing need for creative content, and shifting consumer preferences toward digital interactions.”

Top Bearish News Snippets:

| source: 247WallSt | sentiment: 🔴 | debt payment 🔨

“Bed Bath & Beyond’s debt is so high that creditors will own all its assets, and this could happen within a matter of weeks.”

| source: TipRanks | sentiment: 🔴 | debt payment 🔨

“Virgin Galactic is printing stock and issuing debt to stay afloat, and this is set to continue for quite some time as there is no near-term catalyst to bring in revenues. The company would need to find nearly 1,000 people willing to spend $450,000 each just to cover its losses, let alone turn a meaningful profit.”

| source: SeekingAlpha | sentiment: 🔴 | acquisition news 🤝

“Oak Street Health fell 6.8% on a report that CVS Health is unlikely to acquire the primary care service provider.”

Earnings This Week:

| source: Zacks | sentiment: 🌑 | earnings today 🗓️

“Analysts increased estimates right before earnings — with the most up-to-date information possible — which is a good indicator for the stock. Netflix is expected to post earnings decline of 66.2% and a modest revenue growth of 1.7% for the to-be-reported quarter.”

| source: MarketBeat | sentiment: 🟢 | earnings today 🗓️

“UBS Group raised their price target on PPG Industries from $144.00 to $150.00 and gave the stock a "buy" rating in a report on Wednesday, January 11th.”

| source: Reuters | sentiment: 🟢 | earnings tomorrow 🗓️

Following Moscow's invasion of Ukraine, world's largest oilfield firm SLB has boosted its business in Russia by cherry-picking service and equipment contracts from rivals who left, according to company documents and people familiar with its operations.

FLUB AWARDS 🏆

best (or worst) things seen on stock market news sites

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

SENTIMENT KEY: 🟢=bullish, 🌑=neutral, 🔴=bearish