Top 10 US Stocks Traded on POEMS in July 2020August 6, 2020
In this article, we will look at July’s top 10 traded US stocks on Phillip’s Online Electronic Mart System (POEMS), based on their gross market values traded. We hope this data will bring you some useful insights in terms of liquidity, consumer trend and a quick overall macroeconomic view that are affecting these popular traded stocks.
We saw a steady rise in 3 US major indexes: Dow Jones, S&P 500 and NASDAQ in early July, which retraced slightly before moving sideways in the second half of July. Many of the tech stocks hit a new all-time high as well during that period. Precious metals, Gold and Silver outperformed the market in late July as Central Banks around the world continue to work on more stimulus plans.
Without further ado, let’s count down the top 10 list:
10th: Fastly Inc (NYSE: FSLY)
At the 10th position is Fastly, a provider of edge cloud computing and content delivery network (CDN). Cloud computing has been outperforming the market extremely well due to various restrictions implemented amid the COVID-19 pandemic. Fastly shares doubled in June and went on to hit its all-time high at USD 102.95 on 9 July, about 10 folds from market bottom in March.
While this is a promising and growing industry, Fastly is relatively a smaller-scale company as compared to its much larger and well-known rivals. There is still much room for Fastly to work on and further its growth.
9th: Sorrento Therapeutics Inc. (NASDAQ: SRNE)
One of the key players in developing vaccine and treatment to counter the COVID-19 virus, Sorrento Therapeutics claimed the 9th spot. Its share price jumped 24.4% in June and spiked further after announcing the positive results achieved in its preclinical data of vaccine in the first week of July.
While the preclinical data is encouraging, Sorrento is lacking behind some of its competitors which are already at their later stage of clinical trial in vaccine developments. If these rivals are able to complete the trial stage and make it to the market at the right time, Sorrento will likely be left out of the race. Nevertheless, volatility is expected to continue among the bio tech companies as the vaccine race will go on for a period of time.
8th: Amazon.com Inc (NASDAQ: AMZN)
The trillion-dollar company and tech giant, Amazon, is the 8th top traded stocks on POEMS in July. Amazon made it to the list as the stock crossed the USD 3,000 mark for the first time on 6 July and hitting a new all-time high on 13th July at USD 3344.29.
With the strong growth in e-commerce space despite the COVID-19 pandemic, Amazon is aggressively restructuring its operation by automating its processes. For example, it is diligently expanding the use of its Scout robot in new locations for the last mile delivery.
Besides, Amazon India is currently in talks to acquire a strategic stake in Reliance retail arm in India. JioMart, the e-commerce venture of Reliance which is controlled by Asia’s richest man, Mukesh Ambani was launched in May to challenge Amazon and Walmart’s Flipkart.1
7th: Facebook Inc (NASDAQ: FB)
Dropping from the 6th position in the previous month, Facebook claimed the 7th spot on the list in July. Facebook does not seem to have been impacted much from the hate speech campaign that happened towards the end of June. Its share price recovered to hit an all-time high of USD 250.15 on 13 July.
In addition to the advertisement boycott, Facebook has been involved in multiple privacy lawsuits and antitrust investigation. The EU antitrust probe is temporarily halted as Facebook claimed that the data requested had invaded its employees’ privacy. Together with Facebook, Amazon, Apple and Google, the big 4 tech firms’ executives in the United States testified before congress on 29 July that their businesses did not stifle competition.2
6th: Alibaba Group Holding Ltd (NYSE: BABA)
Similar to Facebook, Alibaba slipped to 6th top traded counter from 5th position in the previous month. As one of the largest tech companies in the world, Alibaba also hit its all-time high at USD 268 on 9 July.
Intense uncertainty remains due to the COVID-19 pandemic and Alibaba’s chairman’s emphasis of digitalisation as the new norm in his letter to its shareholders. The key focus of the company is to drill towards the development of digital solutions in various areas such as work, education, daily life or even public services. As what Microsoft did before, Alibaba will also be looking into cloud computing as the company’s new growth engine and to power its digital economy.3
5th: Boeing Co (NYSE: BA)
The month of July has seen the commercial aerospace giant drop from the top spot in June to become the fifth-most traded stock on POEMS. The global drop in demand for commercial jets could see Boeing’s new flagship, the 777X push back to 2022.4
However, the company’s defence, space and security business segments managed to secure several multimillion dollar contracts to deliver defence and weapon systems to the Saudi Arabian and Moroccan army during the second quarter of 2020. The business unit has also been witnessing consistent order flow from the Pentagon, NASA and Congress for its varied products5.
The defence-related revenue sources amount to about 20% of Boeing sales in a non-pandemic year and may help soften the adverse impact caused by the severe decline in air travel.
4th: Moderna Inc. (NASDAQ: MRNA)
Moderna maintained its fourth position for top traded stock on POEMS in July. The biotech company announced the start of the final clinical trial phase of its much anticipated COVID-19 vaccine candidate (mRNA-1273) on 27 July 2020. Without a safe and effective vaccine, the world simply cannot control this pandemic and return to normalcy.
Moderna has already received more than US$1 billion from the US government in a bid to develop the vaccine in record time and the vaccine could be available for widespread use by the end of this year.7
3rd: NIO Inc (NYSE: NIO)
The month of July saw a surprise candidate occupying the third place for the top traded stocks on POEMS. Chinese premium electric vehicle start-up, NIO, has seen its share price rally by about 50% after beating Wall Street’s quarterly delivery forecast and an increased demand for stocks of electric vehicle companies due to Tesla’s share performance.8
Nonetheless, the rising US – China tensions could have implications across the overall economy and result in weakness in the equity market, especially for Chinese companies.
2nd: Microsoft Corporation (NASDAQ: MSFT)
Another trillion-dollar company and tech giant, Microsoft crawled its way up to the second spot in July after missing the top ten placing in June. Microsoft’s successful transition into cloud computing has placed the company in a good position to grow over the long term. The scheduled launch of the Xbox Series X in the holiday season of 2020 will also provide a buffer to Microsoft’s revenue growth. More on the video gaming industry here.
However, the COVID-19 pandemic had a detrimental effect on some of Microsoft’s business units during the last quarter. Given the weak job market, the social network LinkedIn laid off 960 employees or 6% of its global workforce.9
1st: Tesla Inc (NASDAQ: TSLA)
The meteoric rise of Tesla Inc’s share price continued as it overtook Boeing Co (NYSE: BA) to become the top traded stock on POEMS in July. The electric car maker is looking to expand its operations in China by launching a mass recruitment drive to prepare for the manufacturing of its Model Y vehicle.
In addition, Tesla is also planning to establish a research and design centre in China to produce “Chinese-style” cars in order to dominate the world’s largest electric vehicle market.10 Click here to find out more on the electric vehicles (EVs) industry as it grows rapidly and is estimated to reach 10% of global passenger vehicle sales in 2025.
A stark difference from the list in June, the July compilation has a few lesser-known counters such as Fastly Inc. and Sorrento Therapeutics Inc. While there is huge investor interest in the pharmaceutical companies, it is important to know what you need to look out for when investing into them. The surge in trading activities of some of these counters such as Amazon, Facebook and Alibaba propel them to its all-time high.
Which companies do you think will make it to the top traded list next month? Join us in our telegram chat and leave us your comments.
-  https://www.reuters.com/article/us-reliance-amazon-com-stake-idUSKCN24O1BP
-  https://www.cnet.com/news/how-to-watch-apple-amazon-google-facebook-ceos-to-testify-to-congress/
-  https://www.alibabagroup.com/en/news/article?news=p200709a
-  https://www.foxbusiness.com/markets/boeing-to-delay-777x-as-demand-drops-for-big-jets-sources
-  https://finance.yahoo.com/news/defense-deliveries-drive-boeings-ba-145802975.html
-  https://www.nih.gov/news-events/news-releases/phase-3-clinical-trial-investigational-vaccine-covid-19-begins
-  https://www.channelnewsasia.com/news/world/moderna-covid-19-vaccine-ready-use-us-12967246
-  https://www.nasdaq.com/articles/nio-could-head-lower-but-be-careful-going-short-2020-07-24
-  https://www.straitstimes.com/business/companies-markets/linkedin-cuts-960-jobs-as-pandemic-puts-the-brakes-on-corporate-hiring
-  https://www.benzinga.com/news/20/07/16800356/tesla-on-a-hiring-spree-in-china-as-it-readies-for-model-y-production-report
About the author
Joel Lim (ETF Specialist) and Allen Tan (Senior Dealer)
Joel is the ETF Specialist from the ETF desk in Phillip Securities. He helps to provide sales support and trading ideas to retail investors, remisiers, in-house dealers, and fund managers. Joel also works closely with ETF issuers on new product and business development projects. Allen joined Phillip Securities in 2016 as an Equity Dealer in the Global Markets Team. He specialises in the US and Canada market and also supports the UK and Europe market.