TradeSmith Snippets: Cathie Wood’s Latest Gamble, Kellogg Appoints a New Cereal King, and Amazon Gets Plugged In

[TradeSmith Daily]( TradeSmith Snippets: Cathie Wood’s Latest Gamble, Kellogg Appoints a New Cereal King, and Amazon Gets Plugged In I hope you had a relaxing weekend and are ready to start the investing week off strong. In TradeSmith Snippets for today, my team will be letting you know about Cathie Wood’s $68.25 million shopping spree, updating you on a spinoff profit opportunity, and detailing how one company may have hit a defining moment in its history. Enjoy your Monday — Keith Kaplan, CEO, TradeSmith RECOMMENDED LINK [Stock Picker’s New Interview Dripping with Controversy]( Some know Mike Burnick as the “Inflation Assassin”... If you haven’t seen his appearances on Fox Business, Barron’s, or on CNBC... Then you’ll likely be hearing about his controversial new interview in [this episode of ‘Armchair Millionaire’ (video)](. Mike just took the internet by storm with his new prediction: “An imminent ‘Flatline Shock’ is coming. Fail to prepare, and you could have 86% LESS money in your account.” [Click here to watch his free presentation right now]( Snippet No. 1: Cathie Wood Buys the Dip Overview Cathie Wood’s ARK Innovation ETF (ARKK) purchased 713,062 shares of Zoom Video Communications Inc. (ZM) this week. The Breakdown In its earnings report on Aug. 22, Zoom announced revenue of $1.1 billion, which missed the company’s previous forecast range of $1.115 billion and $1.12 billion. For the fiscal year, Zoom projects revenue will be between $4.385 billion and $4.395 billion, down from a previous forecast of revenue between $4.53 billion and $4.55 billion. Opening at $98.20 the day of the earnings report, the price of ZM dropped by 13.89% to $84.56 at the start of the next trading day. Wood, basing her investing philosophy on being in a deflationary environment, decided to buy the dip for ARK, and her ARK Next Generation ETF (ARKW) also bought 126,239 shares. The TradeSmith Takeaway While you may be hearing anecdotally about more folks returning to offices, a data collection project found that only 49% of workers who were asked to return full-time are showing up all five days of the workweek. And hybrid workforces aren’t going away, making Zoom a lasting fixture of everyday business in the post-pandemic world. But Zoom has a growing list of competitors in Alphabet Inc. (GOOGL), Microsoft Corp. (MSFT), Cisco Systems Inc. (CSCO), and other platforms that offer workplace communication tools. And our tools are saying not to follow Wood’s lead. Zoom has been in the Red Zone for the past 11 months, and with a Volatility Quotient of 50.44%, it poses sky-high risk. For everything that Wood has done right as CEO of Ark Invest, she’s also made a few critical errors; you can find out how to avoid them [here](. Snippet No. 2: Kellogg Names New Cereal Czar Overview Ahead of its three-way spinoff in 2023, Kellogg Co. (K) announced who will run its North America Cereal business: Gary Pilnick. The Breakdown Pilnick has been with Kellogg for 22 years, and he’s currently the company’s chief legal officer and vice chairman of corporate development. He helped the company with the acquisition of Pringles in 2012, and he is credited with being a key architect of Kellogg’s 2018 “Deploy for Growth Strategy,” which involved consolidating product offerings and teams and investing in areas of growth to improve focus and sales. That sounds like ideal experience for executing a successful spinoff. The TradeSmith Takeaway A spinoff is normally treated as a news event, and investors are left at a disadvantage when one happens, for three reasons: - The company tends not to offer a lot of communication about the spinoff outside of an initial press release and a small mention in earnings reports that the spinoff is still on track. - Index funds often can’t hold the new stock formed from a spinoff. - Some analysts stop covering the company because they don’t know how to value it anymore. But our team knows that a spinoff is a clue for a profit opportunity. Deloitte and Edge Consulting Group found that between 2000 and 2014, spinoff stocks generated a 22% return in the first 12 months of trading. That’s even better than the 14% return of the parent company that performed the spinoff. While cereal may not be the most exciting business in the world, it still generated $2 billion in sales for Kellogg last year, and operating on its own could allow it to unlock even more value. Kellogg is currently in our Green Zone, and we have a full report about its spinoff [right here](. RECOMMENDED LINK [Market Wizard who made $95 million for his clients in 2008 – and predicted the 2022 collapse back in January – reveals his strategy:]( The One-Ticker Retirement Plan How to make all the money you need – in any market – using a single stock. [Click here for the name of the ticker...]( Snippet No. 3: Amazon Gets Plugged In Overview Amazon.com Inc. (AMZN) just inked a hydrogen supply deal with Plug Power Inc. (PLUG), a company that produces, stores, and delivers green hydrogen energy. The Breakdown To reach its goal of being net-zero carbon by 2040, Amazon has signed a deal with Plug Power to receive 10,950 tons of liquid green hydrogen starting in 2025. The deal would allow 1,000 to 2,000 heavy-duty trucks to be fueled for a year, according to a Barron’s estimate. Plug Power believes the deal will help it reach its revenue goal of $3 billion by 2025. As a reference point, the company generated $502 million in revenue in 2021. The TradeSmith Takeaway Over the last year, PLUG has proven to be able to wheel and deal, generating investments and new partnerships to help revenue growth. - In January 2021, Plug Power announced a $1.5 billion investment from SK Group, South Korea’s second-largest conglomerate, which operates in the energy business. - Also in January, Plug announced a joint venture with Renault – a French automobile maker — to promote hydrogen fuel cell electric vehicles. - In February, Plug announced a 50-50 joint venture with Acciona — the largest 100% renewable power retailer in Spain — to provide multiple markets in Spain and Portugal with green hydrogen. But winning a “stamp of approval” from Amazon is the biggest win yet, and it brings mainstream attention to the company. Right now, PLUG does have sky-high risk of 73.19%, but it’s also in our Green Zone as a “buy.” We’ll have more on green hydrogen and the profit opportunities in the space in an upcoming issue of TradeSmith Daily, so be on the lookout for that to hit your inbox soon. Take care, Team TradeSmith P.S. Do you own the No. 1 most popular retirement stock? Believe it or not, it’s the one investment EVERYONE should sell. It’s true; the most widely held stock in 401(k) portfolios is currently threatening to undo YEARS of gains. [Click here to avoid this “savings killer”]( and to learn how to catch a stock on the “flip” for a chance at outsized returns of up to 30 times your money. P.P.S. You’re invited to join our Product Education Specialist, Kristin Magenst, for her free Beginner Bootcamp training session. Today’s webinar will offer a look at how the Position Size tool helps you determine how many shares to buy of any asset according to your risk or investment allocation amount. Kristin will also discuss how to incorporate equal-risk position sizing in multiple assets or baskets. The Position Size tool is available to members who hold a TradeStops by TradeSmith, Trade360, Crypto by TradeSmith, or TradeSmith Platinum account. However, all are welcome to attend! [Click here to register]( for today’s webinar. Best of TradeSmith The chart below represents the best-performing open positions over the last two years, as recommended by our software. [Download now on the Apple Store]( [Get It On Google Play]( [866.385.2076](tel:+866-385-2076) | support@tradesmith.com ©TradeSmith, LLC. All Rights Reserved. You may not reproduce, modify, copy, sell, publish, distribute, display or otherwise use any portion of the content without the prior written consent of TradeSmith. TradeSmith is not registered as an investment adviser and operates under the publishers’ exemption of the Investment Advisers Act of 1940. 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