Moil August output up 17% y/y

Moil August output up 17% y/y

In August 2023, the large-cap stock market saw significant performance gains, with several companies leading the way. According to data from [1], the top three large-cap stocks for the month were EchoStar, Bloom Energy, and Reddit.

EchoStar (NASDAQ:SATS) topped the list, experiencing a remarkable 90% surge in stock price during August. The primary driver behind this performance was a deal EchoStar struck with AT&T (NYSE:T) to sell some of its spectrum for $23 billion. This transaction not only satisfied regulatory concerns from the Federal Communications Commission (FCC) but also provided a significant cash infusion to pay down debt and enhance its network capabilities. The stock's median price target of $63 per share suggests a 2% increase over the current price, with a year-to-date (YTD) gain of 170%. Despite its inconsistent profitability, EchoStar's reasonable price-to-sales ratio and low price-to-book value have analysts rating it a consensus hold.

Bloom Energy (NYSE:BE) was the second-best performer in August, returning about 41.6% for the month. The company's strong earnings report, which saw revenue climb 20% year-over-year and a reduction in net loss, significantly boosted its stock price. Analysts have upgraded the stock's price targets post-earnings. Bloom Energy's technology, which focuses on solid oxide fuel cell (SOFC) technology for clean electricity and green hydrogen, has seen increased demand in manufacturing and data centers. Despite its impressive YTD gain of 138%, the stock has an astronomical P/E ratio of 481 with a forward P/E of 96. Analysts have a median price target of $40 per share, suggesting a potential 24% drop in the coming 12 months.

Reddit (NYSE:RDDT) rounded out the top three, with a return of 40.2% in August. The social media company reported a strong quarter with revenue increasing 78% and net income of $78 million, up from a $10 million net loss in the same quarter a year ago. Reddit expects revenue to jump 7% in Q3 over Q2 levels. The stock has a high P/E ratio of 100 and is rated a buy by analysts, with a price target of $213, suggesting low growth over the next 12 months.

These performances highlight the diverse drivers of stock performance, including regulatory compliance, technological advancements, and strong earnings reports. Historical backtesting shows that when Bloom Energy and Reddit beat earnings expectations, their stocks have demonstrated positive market reactions, supporting the current month's gains. Investors should closely monitor these companies' progress and consider the broader market trends when making investment decisions.



References:
[1] https://www.investing.com/analysis/the-top-3-largecap-stocks-in-august-200666214