Time to buy the dip?

[CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS]( Hello investor, Time to buy the dip? As the market sells off, some Wall Street analysts believe that the time to buy the dip is close. David Kostin, the chief US equity strategist at Goldman Sachs, said there is still room for investors to boost their equity holdings, especially if a soft landing continues to be the main forecast for the economy. Moreover, he sees that cash holdings at mutual funds are falling, which indicates that they may be buying again. - “We find that US investors have room to further increase their exposure to equities,” Kostin said in a note. “Should the US economy continue on its path to a soft landing, we believe the recent decrease in equity length will be short-lived.” (Source: Bloomberg) What’s more, hedge funds and other big dogs narrowed their net-short positions in S&P futures to the smallest in 14 months. And of course, there’s the FOMO effect. Doug Ramsey, Leuthold Group’s chief investment officer, said a lot of investors are dying to get in after missing the big rally. So, they might scoop up shares if there’s more pullback ahead. In fact, he said he wouldn’t be surprised if the S&P 500 reaches a new record high over the next few months. Jay Hatfield of Infrastructure Capital Management believes the FOMO effect will bring in buyers soon if stocks pull back. - “There are a lot of buyers who missed out on a good portion of this rally and will step in, so I don’t think there is going to be an Armageddon September, October sell-off,” said Jay Hatfield, CEO at Infrastructure Capital Management. - “You have people on the sidelines, strategists and portfolio managers, who are poised to step in if they see a pullback,” he said. “There’s a lot of dry powder.” However, David Bianco of DWS Group Americas believes the bond market will drag down the stock market. The reason is simple – the yields are very attractive. Treasuries are trading at 5%. That’s a risk-free return. So, stocks will need to have phenomenal earnings growth to attract investors away from the bond market. - “I think the dip you saw last week was the beginning of more to come,” said David Bianco, New York-based chief investment officer at DWS Group Americas. - “The bond market is putting up a really attractive alternative to equity investors—unless somebody believes that the S&P 500 is gonna go from the no earnings growth it’s been stuck in for about two years now to really strong earnings growth.” David Bianco, New York-based chief investment officer at DWS Group Americas (Photo: CNBC)  The “Amazon-Proof” E-Commerce Stock To Own Today’s Stock Pick: Chewy, Inc. ([CHWY]() Virtually every e-commerce company is terrified of Amazon, but Chewy has proven to be a formidable competitor in the pet industry. Chewy has the focus advantage where it can offer customer experience exclusively for pet owners. As a result, it offers wide-ranging products and services: pet food, telehealth, insurance plans, and generic and specialty medications. And the company is fully aware that it is difficult to master fulfillment. Rather than outsourcing, Chewy built a strong fulfillment center network with more than a dozen centers in operation. Notably, fourof them are automated. CEO Sumit Singh said the company could save between 18% to 20% on items shipped from its automated fulfillment centers versus its traditional fulfillment network. That’s a huge competitive advantage that almost any competitor would have a difficult time matching. You simply can’t build an automated fulfillment center overnight. It takes years of investments and trials and errors to master the process. And this would lead to lower prices on Chewy’s products. Plus, the company has a very nice gross margin of 28.4% for an e-commerce company: (Source: Chewy.com) Expanding product lines: Once a company builds a relationship with customers, there is plenty of opportunities to expand its offerings. Chewy recently announced an expansion in its CarePlus program (partnered with Lemonade) where customers can purchase insurance products for their pets. Vibeful is the first private brand in pet wellness that Chewy launched. It is a line of products that include multivitamins to hip and joint supplements. The company said the non-prescription pet health and wellness category has an estimated TAM of over $2.4 billion, thus bringing a huge opportunity for the company to tap into. Lastly, Chewy just launched the beta version of its sponsored ads program. Like Amazon, it allows vendors to purchase dedicated product placements on Chewy.com. This is a high-margin business that could boost Chewy’s revenue for many years to come. Predictable revenue: Believe it or not, 74.7 percent of Chewy’s sales were from Autoship customer sales. By selecting Autoship, customers would re-order products automatically and bring more predictable revenue to Chewy. This is absolutely essential for a stock to rise over time. In the graph below, you’ll see how revenue grew steadily over the years. It had just $2 billion revenue in 2018 and the company grew it to $10 billion in 2022. (Source: MacroTrends) Bottom line: Chewy operates in a fast-growing pet industry, and it would be difficult for any competitor to penetrate its e-commerce advantage. Fulfillment centers are notoriously expensive and tough to build. With over 74% of its revenue coming from Autoship, Chewy has the foundation to become a compounding stock that could pay off handsomely for many years to come.   [CLICK HERE JOIN OUR LIVE TRADING & TRAINING SESSIONS](     © All Rights Reserved, Trade Alliance If you no longer want to receive these messages, you may [click here]( to unsubscribe.