Top 3 Under-The-Radar Stocks To Watch In October 2020
Many tech stocks have managed to survive and reach new heights throughout 2020. Technology is always advancing in our society, and plenty of platforms are transitioning to the digital world. From newspapers to shopping, a digital world seems to be the future for all of us. This includes the future of transportation evolving. You’ve seen how Tesla Inc. (TSLA Stock Report) has changed the way we travel entirely, by mainstreaming electric vehicles. You’ve seen the rapid growth of Amazon Inc. (AMZN Stock Report), which has changed the way we shop forever.
So what about transportation stocks? Well, the issue for many of these stocks is that traveling is at an all-time low in 2020. People are afraid of catching the virus, and there are many places with closed borders and strict restrictions. This has caused transportation companies to operate on a much smaller scale. This includes a lesser amount of people using digital transportation services, like the ones we will discuss in this article. Let’s take a look at these under-the-radar stocks and how they are performing throughout 2020.
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Top Under-The-Radar Stocks To Buy [Or Avoid] In October 2020: Uber Technologies Inc.
Unless you’ve been sleeping under a rock, then you have heard of Uber Technologies Inc. (UBER Stock Report). Uber is an app that offers ride-sharing, food delivery under Uber Eats, and micro-mobility in more than 63 countries across the world. In regards to micro-mobility, this refers to rentable bikes and scooters in many major cities. Currently, Uber has more than 110 million users. The company has a 67% market share in the ride-sharing industry. Uber’s Uber Eats also holds more than a 25% market share in the food delivery industry. That makes this one of the largest companies in this sector.
Uber released second-quarter results on August 6th that was worse than expected. It reported revenue of $2.2 billion, a 29% decline year over year. Its gross bookings declined 35% to $10.2 billion. Its adjusted net revenue fell 33% year over year. The company’s delivery segment is improving despite its other services struggling.
The CEO of the company, Dara Khosrowshahi stated, “Our team continues to move at Uber speed to respond to the pandemic’s impact on our communities and on our business, leading our industry forward with new products and safety technologies, and harnessing the strong tailwinds driving exceptional growth in Delivery, with Gross Bookings growing 122 percent year-over-year excluding exited markets.”
Despite its 73% decline in gross bookings, its mobility segment generated $50 million. Uber’s performance should go up as soon as the pandemic has come to a close. That is why UBER stock is on this list of transportation tech stocks to watch.
Top Under-The-Radar Stocks To Buy [Or Avoid] In October 2020: Lyft Inc.
Now let’s talk about the primary competitor of Uber, Lyft Inc. (LYFT Stock Report). Lyft is the second-largest ride-sharing company in the US after Uber. Lyft possesses a 28% market share of the ride-sharing industry. The company offers ride-sharing, bicycle-sharing, and food delivery as well. LYFT stock, as expected, fell when the market crashed. Before the pandemic began LYFT stock price was around $45 a share on average. Then, LYFT stock fell to around $16 a share at its low in March. Since this fall, LYFT stock price has managed to go up to an extent. As of September 25th, LYFT stock has reached $27 a share on average.
Lyft additionally launched its second-quarter earnings report on August 12th. Revenue of $339 was reported against $867.3 million the previous year, a 61% decrease. Its net loss was $437.1 million against a $644.2 million net loss year over year.
The Co-Founder and CEO, Logan Green said, “While rideshare rides in the quarter were down significantly year-over-year, we are encouraged by the recovery trends we are beginning to see, with monthly rideshare rides in July up 78% compared to April.”
Lyft is another company that could see a great benefit from the pandemic going away. Both of these transportation tech stocks would see positive momentum from a coronavirus vaccine being widely distributed. That is why LYFT stock has made it on to this list of tech stocks to watch in October 2020.
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Top Under-The-Radar Stocks To Buy [Or Avoid] In October 2020: Hertz Global Holdings Inc.
Your first thought maybe, why is one of the most underperforming stocks of 2020 on this list? Well while Hertz Global Holdings Inc. (HTZ Stock Report) is performing poorly, some investors see this as an opportunity to dive in. Hertz is one of the largest rental car providers in the United States. As a company whose primary customer is travelers, the pandemic has tanked HTZ stock on a very large level. HTZ stock price was at $20 a share before the pandemic began. By May, HTZ stock had dropped as low as $0.59 a share. Hertz managed to perform worse than its rental car counterparts in the process.
The company’s second-quarter was not much better than its first. But the CEO of the company, Paul Stone, is hoping that things will get better as soon as travel returns to normal.
He is quoted as saying, “In the second quarter, like so many companies whose revenues have sharply declined due to the pandemic’s significant impact on global travel, we had to make difficult but necessary decisions to strengthen and position the company for growth for many years to come.”
These decisions included cutting employees, and reducing car purchases. As of September 25th, the HTZ stock price is $1.22 per share. Currently, Hertz is negotiating with creditors for a loan to bolster operations, after funding itself for many months. The company is pitching two tentative offers of $1 billion to $1.5 billion. It will be interesting to see if Hertz is able to survive the damage from this year and recover at some point. That is why it has made it on to this list of stocks to watch in October 2020.