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May 2021 Stock Picks

TOP 25 STOCKS May-21 UPDATED

RANK TICKER NAME SECTOR INDUSTRY 1 ASML ASML Holding NV (ADR) 57 - Technology 57101020 - Semiconductor Equipment & Testing 2 ADBE Adobe Inc 57 - Technology 57201020 - Software 3 NVDA NVIDIA Corporation 57 - Technology 57101010 - Semiconductors 4 MSFT Corporation 57 - Technology 57201020 - Software 5 GOOGL Alphabet Inc 57 - Technology 57201030 - Online Services 6 AMD Advanced Micro Devices, Inc. 57 - Technology 57101010 - Semiconductors 7 BLDR Builders FirstSource, Inc. 53 - Consumer Cyclicals 53203020 - Construction Supplies & Fixtures 8 AMZN .com, Inc. 53 - Consumer Cyclicals 53402010 - Retailers - Department Stores 9 AAPL Apple Inc 57 - Technology 57106020 - Phones & Handheld Devices 10 MA Mastercard Inc 57 - Technology 57201030 - Online Services 11 ISRG Intuitive Surgical, Inc. 56 - Healthcare 56101010 - Advanced Medical Equipment & Technology 12 V Visa Inc 57 - Technology 57201030 - Online Services 13 GM General Motors Company 53 - Consumer Cyclicals 53101010 - Auto & Truck Manufacturers 14 COST Wholesale Corporation 53 - Consumer Cyclicals 53402020 - Retailers - Discount Stores 15 SBUX Corporation 53 - Consumer Cyclicals 53301020 - Restaurants & Bars 16 GS Goldman Sachs Group Inc 55 - Financials 55102010 - Investment Banking & Brokerage Services 17 BAC Bank of America Corp 55 - Financials 55101010 - Banks 18 HD Home Depot Inc 53 - Consumer Cyclicals 53403020 - Retailers - Home Improvement Products & Services 19 MAR Marriott International Inc 53 - Consumer Cyclicals 53301010 - Hotels, Motels & Cruise Lines 20 Uber Technologies Inc 57 - Technology 57201030 - Online Services 21 DIS Walt Disney Co 53 - Consumer Cyclicals 53302020 - Broadcasting 22 AAL American Airlines Group Inc 52 - Industrials 52406010 - Airlines 23 BA Boeing Co 52 - Industrials 52101010 - Aerospace & Defense 24 EXPE Group Inc 53 - Consumer Cyclicals 53301040 - Leisure & Recreation 25 PSX Phillips 66 50 - Energy 50102030 - Oil & Gas - Refining and Marketing

As of April 29th, 2021 - Subject to change. May 2021 Growth Stock Picks

As of April 29th, 2021. Subject to change. May 2021 Growth Stock Picks

As of April 29th, 2021. Subject to change. May 2021 Growth Stock Picks

As of April 29th, 2021. Subject to change. American Airlines Group Inc. (AAL)

American Airlines Group Inc., through its subsidiaries, operates as a network air carrier. It provides scheduled air transportation services for passengers and cargo. As of December 31, 2019, the company operated a mainline fleet of 942 aircraft. It serves 365 destinations in approximately 61 countries, principally from its hubs and gateways in Charlotte, Chicago, Dallas/Fort Worth, London Heathrow, Los Angeles, Miami, New York, Philadelphia, Phoenix, and , D.C. American Airlines Group Inc. has strategic partnership with JetBlue Airways Corp. The company was formerly known as AMR Corporation and changed its name to American Airlines Group Inc. in December 2013. American Airlines Group Inc. was founded in 1930 and is headquartered in Fort Worth, Texas.

Source: FinViz.com, January 2021 American Airlines Group Inc. (AAL) POSITIVES: As coronavirus keeps majority of the customers away from air travel, the airline has permanently eliminated change fees for both domestic and long-haul international flights (in case travel originates from North or South America) to attract passengers. The offer is valid for all tickets, except Basic Economy. Thanks to significant reduction in costs, American Airlines’ average daily cash burn in the September quarter was $44 million per day, comparing favorably with the June-quarter’s figure of $58 million. The carrier expects average daily cash burn rate to be at the high end of $25-$30 million for the December quarter. Moreover, the current scenario of low fuel costs is a positive for the company. The second coronavirus relief package of $900 billion provides a big respite to American Airlines. Of the total amount, airlines are set to receive more than $12 billion as payroll support. As a condition to receiving the financial assistance, airlines are prohibited from laying off employees or reducing pays through Mar 31, 2021, as was the case with the first round of coronavirus aid worth $25 billion, approved in March, when airlines were barred from furloughing workers through Sep 30, 2020. With the U.S. Department of Transportation (DOT) having cleared American Airlines’ previously announced strategic partnership with JetBlue Airways, the key features of the alliance are set to be launched in the first quarter of 2021. The alliance is a major development for American Airlines and is expected to provide growth opportunities for the company by significantly expanding connectivity in the Northeast. Possible concerns: The sharp drop in air-travel demand is hurting passenger revenues, which comprise majority of its top line. The carrier incurred a loss in each of the first three quarters of 2020, mainly due to the 64.2% drop in passenger revenues in the first nine months of 2020. American Airlines expects system capacity for the December quarter to nosedive more than 50% year over year. Long-haul international capacity is estimated to be down roughly 75% in the final quarter of 2020. Fourth-quarter 2020 results are set to be released on Jan 28.

Source: Zacks Research, January 2021 Apple Inc. (AAPL)

Apple Inc. designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. It also sells various related services. The company offers iPhone, a line of smartphones; Mac, a line of personal computers; iPad, a line of multi- purpose tablets; and wearables, home, and accessories comprising AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch, and other Apple-branded and third-party accessories. It also provides AppleCare support services; cloud services store services; and operates various platforms, including the App Store, that allow customers to discover and download applications and digital content, such as books, music, video, games, and podcasts. In addition, the company offers various services, such as Apple Arcade, a game subscription service; Apple Music, which offers users a curated listening experience with on-demand radio stations; Apple News+, a subscription news and magazine service; Apple TV+, which offers exclusive original content; Apple Card, a co-branded credit card; and Apple Pay, a cashless payment service, as well as licenses its intellectual property. The company serves consumers, and small and mid-sized businesses; and the education, enterprise, and government markets. It sells and delivers third-party applications for its products through the App Store. The company also sells its products through its retail and online stores, and direct sales force; and third-party cellular network carriers, wholesalers, retailers, and resellers. Apple Inc. was founded in 1977 and is headquartered in Cupertino, California.

Source: FinViz.com, June 2020 Apple Inc. (AAPL) POSITIVES: Apple’s Services and Wearables businesses are expected to drive top-line growth in fiscal 2021 and beyond. Although Apple’s business primarily runs around its flagship iPhone, the Services portfolio has emerged as the company’s new cash cow. Apple’s endeavors to open up its ecosystem, through partnerships with the likes of Samsung and Amazon, are positive for the Services segment. The subscription-based video streaming, news and gaming services are expected to benefit from Apple’s strong installed base. Robust App Store sales coupled with solid adoption of Apple Pay and Apple Music helped Apple double its 2016 Services revenues six months ahead of its targeted 2020-end. Moreover, its wearables and hearables business is expected to be driven by solid demand for Apple Watch and Airpods. Apple currently has more than 585 million paid subscribers across its Services portfolio. The App Store continues to draw the attention of prominent developers from around the world, helping the company offer appealing new apps that drive App Store traffic. Apple Pay, designed on the basis of a contactless payment (NFC) technology, has been expanded to 49 markets. Further, Apple Music has more than 60 million paid subscribers. The service offers more than 60 million songs, with world class music experts and taste makers curating thousands of playlists and daily selections in 115 countries. Apple Music’s availability on Amazon Echo devices is expected to expand the iPhone maker’s footprint against Spotify, which is currently the dominant player in the paid, premium music streaming market. Apple is encouraging developers to use artificial intelligence (AI) and machine learning in their apps. Apple’s focus on autonomous vehicles and augmented reality/virtual reality (AR/VR) technologies presents growth opportunity in the long haul. These are fast emerging as lucrative business opportunities. Apple has a strong balance sheet and generates significant cash flow. Possible concerns: Lackluster demand for iPhone due to Coronavirus, lack of a 5G-supported device, stiff competition, slowing economy in China and increasing regulatory hassles are major headwinds.

Source: Zacks Research, January 2021 Adobe Inc. (ADBE) Adobe Inc. operates as a diversified software company worldwide. Its Digital Media segment provides tools and solutions that enable individuals, teams, and enterprises to create, publish, promote, and monetize their digital content. Its flagship product is Creative Cloud, a subscription service that allows customer to download and access the latest versions of its creative products. This segment serves content creators, experience designers, app developers, enthusiasts, students, social media users, and creative professionals; and marketing departments and agencies, companies, and publishers. The company's Digital Experience segment offers products, services, and solutions for creating, managing, executing, measuring, monetizing, and optimizing customer experiences from analytics to commerce. This segment serves marketers, advertisers, agencies, publishers, merchandisers, merchants, web analysts, data scientists, developers, marketing executives, information management and technology executives, product development executives, and sales and support executives. Its Publishing and Advertising segment offers products and services, such as e-learning solutions, technical document publishing, web conferencing, document and forms platform, web application development, and high-end printing, as well as publishing needs of technical and business, and original equipment manufacturers (OEMs) printing businesses. The company offers its products and services directly to enterprise customers through its sales force and local field offices, as well as to end users through app stores and through its website at adobe.com. It also distributes products and services through a network of distributors, value-added resellers, systems integrators, software vendors and developers, retailers, and OEMs. The company was formerly known as Adobe Systems Incorporated and changed its name to Adobe Inc. in October 2018. The company was founded in 1982 and is headquartered in San Jose, California.

Source: FinViz.com, January 2021 Adobe Inc. (ADBE) POSITIVES: Adobe continues to be the market leader in the Digital Media space. The company provides one of the best solutions in most categories of digital media design and publishing, including Internet and video. In fiscal first quarter, total Digital Media ARR (Annualized recurring revenue), the key cloud performance measure, grew to $7.07 billion. This indicates strong growth in the Creative Cloud and Document Cloud businesses. As advertising, entertainment and other content-creation markets are becoming increasingly digitalized, Adobe is well positioned to benefit from this trend and should enjoy above-average long-term growth. Adobe entered the digital marketing space with the acquisition of Omniture. This is an area where corporate spending is on the rise. A number of trends are spurring this trend, including the increased adoption of cloud computing, social media and mobile devices, as well as the emergence of big data analytics. Acrobat is one of the company’s most successful product lines with a huge installed base of satisfied customers. Through Acrobat.com, the company offers a set of a cloud-based document and collaboration subscription services which include PDF creation, centralized online file sharing and contract signing solutions. There are currently many drivers of the Acrobat business. A portion of the business has historically been dependent on GDP growth. This business has responded to the improving economic conditions and stronger IT spending in the U.S. and Europe. Management expects the gradual uptick in enterprise spending to be an overall positive for the Acrobat business. Using its new cloud-based platform, Adobe is also diversifying into digital marketing services, offering data mining services, which help businesses to measure page views, purchases and social media sites. Adobe Marketing Cloud enables marketers to deliver personalized web experiences across multiple devices, manage multichannel campaigns and optimize media monetization. These services help businesses streamline marketing and products for targeted consumer groups, including chief marketing officers, chief revenue officers, advertising agencies, publishing executives and digital marketers. It is expected that Creative Cloud customers will be wooed to purchase products from the Marketing Cloud, accelerating Adobe’s revenue growth in both the segments simultaneously. Possible concerns: Lower end-market demand as a result of weak global economic conditions could impact results. Also, significant exposure to Europe remains a major concern.

Source: Zacks Research, January 2021 Advance Micro Devices, Inc. (AMD) Advanced Micro Devices, Inc. operates as a semiconductor company worldwide. The company operates in two segments, Computing and Graphics; and Enterprise, Embedded and Semi-Custom. Its products include x86 microprocessors as an accelerated processing unit, chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs, and development services; and server and embedded processors, and semi-custom System-on-Chip (SoC) products, development services, and technology for game consoles. The company provides x86 microprocessors for desktop PCs under the AMD Ryzen, AMD Ryzen PRO, Ryzen, Threadripper, AMD A-Series, AMD FX, AMD Athlon, AMD Athlon PRO, and AMD Pro A-Series processors brands; microprocessors for notebook and 2-in-1s under the AMD Ryzen, AMD A-Series, AMD Athlon, AMD Ryzen PRO, AMD Athlon PRO, and AMD Pro A-Series processors brands; microprocessors for servers under the AMD EPYC and AMD Opteron brands; and chipsets under the AMD trademark. It also offers discrete GPUs for desktop and notebook PCs under the AMD Radeon graphics and AMD Embedded Radeon brands; professional graphics products under the AMD Radeon Pro and AMD FirePro graphics brands; and Radeon Instinct and AMD Instinct accelerators for servers. In addition, the company provides embedded processor solutions under the AMD Opteron, AMD Athlon, AMD Geode, AMD Ryzen, AMD EPYC, AMD R-Series, and G-Series processors brands; and customer- specific solutions based on AMD CPU, GPU, and multi-media technologies, as well as semi-custom SoC products. It serves original equipment manufacturers, public cloud service providers, original design manufacturers, system integrators, independent distributors, online retailers, and add-in-board manufacturers through its direct sales force, independent distributors, and sales representatives. Advanced Micro Devices, Inc. was founded in 1969 and is headquartered in Santa Clara, California.

Source: FinViz.com, May 2021 Advance Micro Devices, Inc. (AMD)

POSITIVES: AMD is well-poised to benefit from strong demand for its x86-based microprocessors, semi-custom chips, and embedded processors, and GPUs driven by increasing adoption of AI and ML techniques. In order to diversify its business beyond the slowing, transitioning PC market, AMD is enhancing its semi-custom chip business, which has been performing well till date. AMD plans to expand its semi-custom business into other high-growth markets such as the semi-custom ultra-low power client, embedded, dense server and professional graphics markets, where it can offer differentiated products that use its APU and graphics IP. The company’s release of Vega-based GPUs and increasing demand for in both gaming and blockchain industries are key catalysts. The number of Ryzen 5000-powered notebook set to be launched in 2021 is 50% higher than the ones launched in 2020. Despite its late entry, AMD has attained the position of a major player in the microprocessor and graphics processing markets. The company started small, targeting the low-end segment and gradually built a position for itself. AMD has had a very rough time because of the strength and market position of its two primary competitors Intel and NVIDIA. While Intel remains supreme in the microprocessor segment and has also notably strengthened its graphics capabilities, NVIDIA remains strong in the graphics market. AMD combined its own engineering talent with that of ATI to develop capabilities in both these areas. Considering the might of its competitors, AMD has done well to hold its own in the face of significant changes in the markets it serves. Moreover, increasing demand for cryptocurrency mining has been a key catalyst for AMD’s GPU sales in recent times. Per Gartner’s preliminary data, PC shipments in fourth-quarter 2020 increased 10.7% year over year to 79.4 million units. Going by the IDC report, shipments were up 26.1% on a year-over-year basis to 91.6 million in the quarter. The improving trend in PC shipments, driven by work-from-home and online learning wave, is likely to positively impact PC-makers that eventually bode well for AMD’s growth prospects. Possible concerns: Intensifying competition in the traditional PC market and GPU segment, and customer concentration remain headwinds.

Source: Zacks Research, April 2021 Amazon.com Inc. (AMZN) Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS). It sells merchandise and content purchased for resale from third-party sellers through physical and online stores. The company also manufactures and sells electronic devices, including Kindle, Fire tablets, Fire TVs, Rings, and Echo and other devices; provides Kindle Direct Publishing, an online service that allows independent authors and publishers to make their books available in the Kindle Store; and develops and produces media content. In addition, it offers programs that enable sellers to sell their products on its Websites, as well as its stores; and programs that allow authors, musicians, filmmakers, skill and app developers, and others to publish and sell content. Further, the company provides compute, storage, database, and other AWS services, as well as fulfillment, advertising, publishing, and digital content subscriptions. Additionally, it offers Amazon Prime, a membership program, which provides free shipping of various items; access to streaming of movies and TV episodes; and other services. The company also operates in the food delivery business in Bengaluru, India. It serves consumers, sellers, developers, enterprises, and content creators. The company also has utility-scale solar projects in China, , and the . Amazon.com, Inc. has a strategic relationship with NXP Semiconductors N.V. to deliver a cloud compute solution for vehicles that enable cloud- powered services. The company was founded in 1994 and is headquartered in , Washington.

Source: FinViz.com, January 2021 Amazon.com Inc. (AMZN) • POSITIVES: Amazon.com is one of the largest e-commerce companies in the world. Although the primary product line was books at first, the company rapidly diversified into a host of other product categories. The current focus is on building video content, primarily for Prime subscribers because the growth prospects in that market are considerable. Product selection, a superior user experience, bargains and customer feedback have helped the company build a strong position for itself in the fast-growing ecommerce market. The growth of the e-commerce industry with consumers increasingly buying things online has proved to be favorable for the company. While the big brands may build their own online stores over time, a platform like Amazon allows discovery by new buyers. Smaller players are far more dependent on Amazon as they don’t have the resources that Amazon has to invest in technology and fulfilment to generate the kind of reach that Amazon can deliver. Moreover, considering opportunities in international markets, the company’s high growth rates are likely to be sustained over the next few years. Amazon keeps its retail business very hard to beat on price, choice, and convenience with the help of a solid loyalty system in Prime and its FBA strategy. The company continues to push advantages exclusively to Prime members, thus encouraging them to spend more on Amazon. The current focus is on building video content, primarily for Prime subscribers because the growth prospects in the market are considerable. Prime members are much more loyal and spend double the amount spent by non-Prime members. Amazon’s strategy of gradually merging online and offline retail looks promising. It will not only reshape the retail landscape but also help it fend off competition, if it could manage a first mover advantage. • Possible concerns: There is a downside to a growing international business in the current economic environment. While expansion opportunities automatically increase, currency also starts playing a bigger role. Prime’s saturation in the U.S. market is apparent, because Amazon has very high penetration rates in the country. The competition in online retail is heating up. Traditional retailers have always provided the strongest competition and a number of them are running e-commerce sites as well. Most retail businesses tend to be seasonal and Amazon’s is no different.

Source: Zacks Research, January 2021 ASML Holding N.V. ASML Holding N.V. develops, produces, markets, sells, and services advanced semiconductor equipment systems consisting of lithography, metrology, and inspection related systems for memory and logic chipmakers. The company provides extreme ultraviolet lithography systems; and deep ultraviolet lithography systems comprising immersion and dry lithography solutions to manufacture various range of semiconductor nodes and technologies. It also offers metrology and inspection systems, including YieldStar optical metrology solutions to measure the quality of patterns on the wafers; and HMI e-beam solutions to locate and analyze individual chip defects. In addition, the company provides computational lithography and software solutions to create applications that enhance the setup of the lithography system; and mature products and services that refurbish used lithography equipment and offers associated services. It operates in Japan, South Korea, Singapore, Taiwan, China, the Netherlands, Europe, the Middle East, Africa, the United States, and rest of Asia. The company was formerly known as ASM Lithography Holding N.V. and changed its name to ASML Holding N.V. in 2001. ASML Holding N.V. was founded in 1984 and is headquartered in Veldhoven, the Netherlands

Source: FinViz.com, April 2021 ASML Holding N.V • POSITIVES: ASML is the world's top producer of photolithography machines for manufacturing chips. The company offers DUV and EUV lighting solutions that are imperative for semiconductor manufacturing. ASML's photolithography machines are used to etch circuit patterns onto silicon wafers. The world's top foundries, including Taiwan Semiconductor Manufacturing, Samsung, and Intel, all use ASML's EUV (extreme ultraviolet) machines to manufacture their smallest and most advanced chips. ASML holds a near-monopoly in this crucial market. It will launch a new generation of EUV machines, called high-NA machines, to produce even smaller chips over the next few years. The world's top foundries will all increase their capex this year to deal with the global chip shortage, and a lot of that cash should be spent on ASML's lithography systems. ASML's gross margin expanded year over year during the quarter, rising from 45.1% to 53.9%, as it sold more higher-margin EUV machines. EUV orders accounted for 49% of its total bookings, which increased 54% year over year to 4.74 billion euros ($5.7 billion). ASML's annual gross margins have continuously expanded over the past few years because the company doesn't have any meaningful competitors. Its near-monopoly in lithography systems, which has been reinforced by over two decades of continuous research, should enable it to maintain its pricing power. Secular mega trends like 5G, AI and HPC also fueled demand at both advanced and mature nodes in logic and memory. Guidance was also increased to 30% revenue growth in the current year. • Possible concerns: The global semiconductor shortage is causing headaches for many industries. Manufacturers of PCs, mobile devices, gaming consoles, vehicles, networking devices, and industrial machines are all scrambling to buy enough chips to use in their products amid surging demand for those same products. The Biden administration recently proposed spending $50 billion to strengthen America's chipmaking sector, but fresh cash probably won't resolve the current chip shortage. That's because most of the global semiconductor market still relies on overseas companies like the Dutch semiconductor equipment maker ASML (:ASML), Taiwan's TSMC, and South Korea's Samsung -- which are all arguably more important than most American chipmakers. Competition is high. Source: Zacks Research, April 2021 The Motley Fool, April 2021 The Boeing Company (BA) The Boeing Company, together with its subsidiaries, designs, develops, manufactures, sales, services, and supports commercial jetliners, military aircraft, satellites, missile defense, human space flight and launch systems, and services worldwide. The company operates through four segments: Commercial Airplanes; Defense, Space & Security; Global Services; and Boeing Capital. The Commercial Airplanes segment develops, produces, and markets commercial jet aircraft and provides fleet support services principally to the commercial airline industry. The Defense, Space & Security segment engages in the research, development, production, and modification of manned and unmanned military aircraft and weapons systems for strike, surveillance, and mobility, including fighter and trainer aircraft; vertical lift comprising rotorcraft and tilt-rotor aircraft; commercial derivative aircraft, such as anti-submarine and tanker aircraft; strategic defense and intelligence systems consisting of strategic missile and defense systems, cyber and information solutions, and intelligence systems, as well as command, control, communications, computers, intelligence, surveillance, and reconnaissance products; satellite systems, including government and commercial satellites, and space exploration. The Global Services segment offers various products and services comprising supply chain and logistics management, engineering, maintenance and modifications, upgrades and conversions, spare parts, pilot and maintenance training systems and services, technical and maintenance documents, and data analytics and digital services to commercial and defense customers. The Boeing Capital segment offers financing services and manages financing exposure for a portfolio of equipment under operating and finance leases, notes and other receivables, assets held for sale or re-lease, and investments. The Boeing Company was founded in 1916 and is based in Chicago, Illinois.

Source: FinViz.com, January 2021 The Boeing Company (BA) POSITIVES: Boeing remains the largest aircraft manufacturer in the United States in terms of revenue, orders and deliveries, and is one of the largest aerospace and defense contractors. Furthermore, its revenue exposure is spread across more than 90 countries around the globe. Although its commercial business outlook for the near term appears grim, over the long run, the jet maker holds immense growth prospects. Per the latest Boeing market outlook (BMO), the company anticipates that the world will need 48,400 new planes, worth $8.5 trillion between 2020 and 2039. This estimated figure indicates a 9.9% improvement over the company’s prior 20-year forecast for jetliner demand. While Boeing’s commercial business has not been performing well for the past couple of quarters on account of lower 737 deliveries, the outlook for the aerospace giant’s defense business remains optimistic. In particular, the current U.S. government’s inclination toward strengthening the nation’s defense system should act as a growth catalyst for defense players like Boeing. Boeing’s cash and cash equivalent at the end of third quarter of 2020 was $10.56 billion, compared with $19.99 billion at the end of June 2020. On the other hand, the company’s short-term debt and current portion of long-term debt was worth $3.63 billion as of Sep 30, 2020, while its long-term debt is $57.33 billion.

Possible concerns: Boeing’s commercial business has been suffering since March 2019, following the two fatal crashes involving 737 Max jets, which resulted in the subsequent grounding of these jets. On top of that, the COVID- 19 impacts on Boeing’s commercial customers continue to be devastating, as airlines have cut back operations dramatically. Risks related to lower 737 deliveries and increasing competition with Airbus raise concerns.

Source: Zacks Research, January 2021 Bank of America Corporation (BAC)

Bank of America Corporation, through its subsidiaries, provides banking and financial products and services for individual consumers, small- and middle-market businesses, institutional investors, large corporations, and governments worldwide. It operates in Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking, and Global Markets segments. The Consumer Banking segment offers traditional and money market savings accounts, CDs and IRAs, noninterest- and interest-bearing checking accounts, and investment accounts and products; and credit and debit cards, residential mortgages, and home equity loans, as well as direct and indirect loans, such as automotive, recreational vehicle, and consumer personal loans. The GWIM segment offers investment management, brokerage, banking, and trust and retirement products; and wealth management solutions, as well as customized solutions, including specialty asset management services. The Global Banking segment provides lending products and services, including commercial loans, leases, commitment facilities, trade finance, and real estate and asset-based lending; treasury solutions, such as treasury management, foreign exchange, and short-term investing options; working capital management solutions; and debt and equity underwriting and distribution, and merger-related and other advisory services. The Global Markets segment offers market-making, financing, securities clearing, settlement, and custody services, as well as risk management, fixed-income, and mortgage-related products. As of May 7, 2020, it served approximately 66 million consumer and small business clients with approximately 4,300 retail financial centers; approximately 16,900 ATMs; and digital banking platforms with approximately 39 million active users. The company was founded in 1784 and is headquartered in Charlotte, North Carolina.

Source: FinViz.com, January 2021 Bank of America Corporation (BAC)

• POSITIVES: Bank of America continues to align its banking center network according to the customer needs. The bank is on track to open 500 new centers in new cities and redesign 2,500 centers with technology upgrades by 2021. The company is opening fully automated branches that will feature automated telling machines (ATMs) and video conferencing facility, allowing customers to communicate with off-site bankers. Further, the company plans to add 2,200 more ATMs to its network. These initiatives, along with the success of Zelle and Erica, has enabled the company to improve digital offerings, and cross sell several products including mortgages, auto loans and credit cards. Bank of America remains focused on acquiring the industry's best deposit franchise and strengthening the loan portfolio. Despite a challenging operating environment, deposits and loan balances have remained strong over the past several years. Further, Bank of America’s balance sheet position remains solid. As of Dec 31, 2020, the company had total debt of $523.9 billion, and cash and cash equivalents worth $308.5 billion. Amid the coronavirus-induced economic slowdown, the Federal Reserve had restricted dividends and share repurchases by major banks in order to conserve liquidity. Thus, Bank of America is paying the current dividend of 18 cents per share and did not resume buybacks till December end. Nonetheless, following the Fed's second round of stress test and subsequent approval, it will resume repurchases in first-quarter 2021 and has authorized $2.9 billion for the same. • Possible concerns: Near-zero interest rates and coronavirus-related economic slowdown will hamper Bank of America’s financials in the upcoming quarters. Further, subdued loan demand is a major near-term concern.

Source: Zacks Research, January 2021 Builders FirstSource, Inc. (BLDR) Builders FirstSource, Inc. manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers in the United States. The company operates through four segments: Northeast, Southeast, South, and West. It offers lumber and lumber sheet goods comprising dimensional lumber, plywood, and oriented strand board products that are used in on-site house framing; manufactured products, such as wood floor and roof trusses, steel roof trusses, wall panels, stairs, and engineered wood products; and windows, and interior and exterior door units, as well as interior trims and custom products under the Synboard brand name. The company also offers gypsum, roofing, and insulation products, including wallboards, ceilings, joint treatments, and finishes; and siding, metal, and concrete products, such as vinyl, composite, and wood siding products, as well as exterior trims, other exteriors, metal studs, and cement products. In addition, it provides other building products and services, such as cabinets and hardware, as well as turn-key framing, shell construction, design assistance, and professional installation services. The company was formerly known as BSL Holdings, Inc. and changed its name to Builders FirstSource, Inc. in October 1999. Builders FirstSource, Inc. was founded in 1998 and is headquartered in Dallas, Texas.

Source: FinViz.com, January 2021 Builders FirstSource, Inc. (BLDR)

POSITIVES: Builders FirstSource is a leading supplier and manufacturer of structural and related building products for residential new construction in the United States. Manufacturing facilities include plants that manufacture roof and floor trusses, wall panels, stairs, aluminum and vinyl windows, custom millwork and pre- hung doors. Builders FirstSource also distributes windows, interior and exterior doors, dimensional lumber and lumber sheet goods, millwork and other building products. According to a report from the U.S. Commerce Department, construction of new U.S. homes reached its highest level in 13 years in December 2019. U.S. home construction boom should have legs across 2020, going all the way to the end of 2021. This is a Zacks #1 Rank (STRONG BUY) stock with a share price of $27. In early 2019, this was just a $12 stock. At these elevated prices, analysts see the market cap is $3.1B. However, the forward P/E still looks good at 12.14. For its third quarter, earnings per share of 72 cents beat the Zacks Consensus Estimate by 20%. That was the fifth straight quarter that topped analysts’ expectations. The average surprise over the past four quarters is over 28%. Revenue was more than 6% better than the Zacks Consensus Estimate at $1.98 billion. Over the past three months, earnings estimates have been on the rise. The Zacks Consensus Estimate for the year ended last month has jumped 11.5% in that time to $2.04. For the year ending December 2020, analysts revised their estimates higher by 10.7% over the past three months to $2.18. This suggests year-over-year improvement of about 7%. Possible concerns: Its Chief Executive Officer has decided to retire after 20 years of service with the Company. Mr. Crow will retire during 2020 after assisting the Board of Directors in hiring his replacement. Mr. Crow has agreed to continue with the Company in a consulting capacity for a period of time following the appointment of a new Chief Executive Officer to ensure a seamless transition.

Source: Zacks Research, June 2020 Costco Wholesale Corporation (COST) Costco Wholesale Corporation, together with its subsidiaries, engages in the operation of membership warehouses in the United States, Puerto Rico, , the , Mexico, Japan, Korea, Australia, Spain, , Iceland, China, and Taiwan. It offers branded and private- label products in a range of merchandise categories. The company provides dry and packaged foods, and groceries; snack foods, candies, alcoholic and nonalcoholic beverages, and cleaning supplies; appliances, electronics, health and beauty aids, hardware, and garden and patio products; meat, bakery, and deli products, as well as produce; and apparel and small appliances. It also operates pharmacies, optical dispensing centers, food courts, and hearing-aid centers, as well as 615 gas stations; and offers business delivery, travel, same-day grocery, and various other services online in various countries. As of October 07, 2020, the company operated 796 warehouses, including 552 in the United States and Puerto Rico, 102 in Canada, 39 in Mexico, 29 in the United Kingdom, 27 in Japan, 16 in South Korea, 13 in Taiwan, 12 in Australia, 3 in Spain, 1 in Iceland, 1 in France, and 1 in China. It also operates e-commerce websites in the United States, Canada, the United Kingdom, Mexico, South Korea, Taiwan, Japan, and Australia. The company was formerly known as Costco Companies, Inc. and changed its name to Costco Wholesale Corporation in August 1999. Costco Wholesale Corporation was founded in 1976 and is based in Issaquah, Washington.

Source: FinViz.com, January 2021 Costco Wholesale Corporation (COST) POSITIVES: Decent Comparable Sales Performance: Costco’s growth strategies, better price management, decent membership trends and increasing penetration of e-commerce business have been contributing to its upbeat performance. Thanks to its status of “essential retailer,” the company has been benefiting from coronavirus-induced spike in demand. A Dominant Warehouse Retailer: We believe that Costco continues to be one of the dominant retail wholesalers based on the breadth and quality of merchandise offered. The company’s strategy to sell products at heavily discounted prices has helped it to remain on a growth track as cash-strapped customers continue to reckon Costco as a viable option for low-cost necessities. In the wake of the fast-spreading coronavirus, the company has been witnessing increasing demand for toilet paper, disinfectants, packaged water and related food staples. A differentiated product range enables Costco to provide an upscale shopping experience for its members, resulting in market share gains and higher sales per square foot. Notably, Costco registered an increase of 16.9% in net sales to $42,347 million during 12-week first quarter ended Nov 22, 2020. Additionally, we note that net sales for the month of December rose 12.3%. This followed an improvement of 15.1%, 15.9% and 16.9% in the months of November, October and September, respectively. Increasing E-Commerce Penetration: The company is also gradually expanding its e-commerce capabilities in the United States, Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia. To drive its online sales, the company launched CostcoGrocery to deliver non-perishable items to buyer’s home, and expanded same day grocery delivery service in collaboration with Instacart. Enough Liquidity: Even with a long-term debt of $7,529 million, as of Nov 22, 2020, Costco looks quite comfortable from liquidity point of view. The company’s cash & equivalents (including short term investments) were $14,423 million at the end of the first quarter of fiscal 2021, which showcased an increase of 8.4% on a sequential basis. Possible concerns: Stiff competition from both brick-and-mortar stores and online retailers and cautious consumer spending may hurt Costco's performance. Moreover, it remains prone to currency fluctuations.

Source: Zacks Research, January 2021 The Walt Disney Company (DIS) The Walt Disney Company, together with its subsidiaries, operates as an entertainment company worldwide. The company's Media Networks segment operates domestic cable networks under the Disney, ESPN, Freeform, FX, and National Geographic brands; and television broadcast network under the ABC brand, as well as eight domestic television stations. This segment is also involved in the television production and distribution. Its Parks, Experiences and Products segment operates theme parks and resorts, such as Walt Disney World Resort in Florida; Disneyland Resort in California; Disneyland Paris; Hong Kong Disneyland Resort; and Shanghai Disney Resort; Disney Cruise Line, Disney Vacation Club, National Geographic Expeditions, and Adventures by Disney and Aulani, a Disney resort and spa in Hawaii, as well as licenses its intellectual property to a third party for the operations of the Tokyo Disney Resort in Japan. The company's Studio Entertainment segment produces and distributes motion pictures under the Walt Disney Pictures, Twentieth Century Studios, Marvel, Lucasfilm, Pixar, Searchlight Pictures, and Blue Sky Studios banners; develops, produces, and licenses live entertainment events; produces and distributes music; and provides post-production services through Industrial Light & Magic and Skywalker Sound. Its Direct-To-Consumer & International segment operates international television networks and channels comprising Disney, ESPN, Fox, National Geographic, and Star; direct-to-consumer videos streaming services consisting of Disney+/Disney+Hotstar, ESPN+, and Hulu; and operates branded apps and Websites, such as Disney Movie Club and Disney Digital Network, as well as provides streaming technology support services. The company was founded in 1923 and is based in Burbank, California.

Source: FinViz.com, January 2021 The Walt Disney Company (DIS)

POSITIVES: Disney completed the acquisition of Twenty-First Century Fox. The majority of Fox’s assets acquired contribute to Disney’s content portfolio. Fox’s television business is expected to help the company strengthen its TV slate globally, which has been facing some issues in terms of distribution or subscribers. Disney’s international footprint will increase substantially post the acquisition. Notably, Fox Networks International operates above 350 channels in 170 countries, while Star India has 69 channels serving 720 viewers per month. Disney’s Studio Entertainment segment has an impressive line-up of big budget movies slated to be released over the next 18 months. Additionally, following Fox’s acquisition, the company’s slate of movies releases have increased. The movies scheduled to release till Christmas include Maleficent: Mistress of Evil, from Disney; Frozen 2 from Disney Animation; and Star Wars: The Rise of Skywalker as well as Stuber, The Art of Racing in the Rain, Ready or Not, Ad Astra, Woman in the Window, Ford V. Ferrari, and Spies in Disguise from the Fox Studios. Disney plans to launch its own direct-to-consumer service by November this year in the United States. The service called Disney+ is expected to be launched in European markets in the near future. Notably, Disney+ will feature exclusive content from Disney, Pixar, Marvel, Star Wars, National Geographic content and Lucasfilm. Additionally, users will have access to the company’s film and television library content, including all the theatrical releases starting with the 2019 slate. Further, to support its direct-to-consumer (DTC) business, Disney is looking to boost FX network’s production capacity. The company is also working with National Geographic to bring its content to its DTC platforms. Disney acquired 21st century Fox and got hold of Fox’s production, animation and television assets on March 20, 2019. National Geographic channel, FX Networks and international networks were also part of the deal. Possible concerns: Adverse impact of Coronavirus on major businesses, higher programming costs at ESPN, heavy investments in ESPN+ and Disney+ and softness in tourism in China are factors that may hamper growth.

Source: Zacks Research, June 2020 , Inc. (EXPE) Expedia Group, Inc. operates as an online travel company worldwide. It operates through four segments: Core Online Travel Agencies, , Vrbo, and Egencia. Its brand portfolio include Brand Expedia, a full-service online travel brand with localized websites; Hotels.com for marketing and distributing lodging accommodations; Vrbo, an online marketplace for the alternative accommodations; Expedia Partner Solutions, a business-to-business brand that provides travel offerings for various airlines and hotels, online and offline travel agencies, loyalty and corporate travel companies, and various consumer brands; and Egencia, which provides corporate travel management services. The company's brand portfolio also comprise , , and CheapTickets travel Websites; ebookers, a full-service travel brand; Hotwire, an online ; Expedia Group Media Solutions that provides media partnerships and digital marketing solutions; trivago, an online hotel metasearch platform; and Expedia Local Expert, a provider of online and in-market concierge services, activities, experiences, and ground transportation. In addition, its brand portfolio consists of CarRentals.com, an online car rental booking service; Classic Vacations, a luxury travel specialist; Expedia CruiseShipCenters, a provider of advice for travelers booking cruises and vacations; and SilverRail, a provider of a rail retail and distribution platform connecting rail carriers and suppliers to online and offline travel distributors. Further, the company provides online travel services through its Wotif.com, lastminute.com.au, travel.com.au, Wotif.co.nz, and lastminute.co.nz brands; loyalty programs; and advertising and media services. It serves leisure and corporate travelers. The company was formerly known as Expedia, Inc. and changed its name to Expedia Group, Inc. in March 2018. Expedia Group, Inc. was founded in 1996 and is headquartered in Seattle, Washington.

Source: FinViz.com, January 2021 Expedia Group, Inc. (EXPE)

POSITIVES: A solid travel booking platform, a stronger travel market, contribution from a series of acquisitions and management execution are positives. At the foundation of Expedia’s business is its technology and diversity. The company has an effective quantitative model that helps to study customer behavior and spending patterns, as well as the company’s success rates. These success rates are in turn used for winning suppliers, further increasing the choices offered to consumers. The wealth of choices helps attract more customers, which in turn generates revenue growth and margin expansion. It is this platform that hotels and other travel providers are attracted to, and for which they are willing to pay a handsome commission. Further, the company has a very strong position in the domestic market and continues to consolidate its strengths here, making it all the more important for hotels to share inventory with it. Expedia has been snapping up companies to increase its penetration in existing markets, expand in others and also eliminate competition. The buyouts of Bodybuilding.com, Wotif, Travelocity, Orbitz and HomeAway will continue to drive growth in the online travel space. Wotif continues to aid the company's presence in Australia and New Zealand. The Travelocity acquisition appears to have been brewing for some time since Expedia was already powering Travelocity sites in the U.S. and Canada. Orbitz has added some important flights technology, particularly on the business side and helped the company consolidate its leading position in the domestic market. The acquisition of HomeAway has added vacation rental apartments to the company's hotels portfolio. This is a completely new area with significant growth prospects, as it is relatively disorganized. Strengthening HomeAway will continue to perform well and drive the gross bookings and stayed room nights. This will in turn, boost the top-line growth of the company. Possible concerns: We think that increasing competition across geographies and litigation issues remain major concerns.

Source: Zacks Research, June 2020 General Motors Company (GM) General Motors Company designs, builds, and sells cars, trucks, crossovers, and automobile parts worldwide. The company operates through GM North America, GM International, Cruise, and GM Financial segments. It markets its vehicles primarily under the Buick, Cadillac, Chevrolet, GMC, Holden, Baojun, and Wuling brand names. The company also sells trucks, crossovers, and cars to dealers for consumer retail sales, as well as to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies, and governments. In addition, it offers safety and security services for retail and fleet customers, including automatic crash response, emergency services, crisis assist, stolen vehicle assistance, roadside assistance, and turn-by-turn navigation, as well as connected services comprising mobile applications for owners to remotely control their vehicles and electric vehicle owners to locate charging stations, on- demand vehicle diagnostics, smart driver, marketplace in-vehicle commerce, connected navigation, SiriusXM with 360L, and 4G LTE wireless connectivity. Further, the company provides automotive financing services; and operates an online new vehicle store. General Motors Company was founded in 1908 and is headquartered in Detroit, Michigan.

Source: FinViz.com, January 2021 General Motors Company (GM)

POSITIVES: General Motors Co. is one of the biggest automotive companies not only in the US but also globally that specializes in designing, manufacturing, and selling cars, trucks, and automobile parts. GM and Honda unveil “Origin”, an all-electric, driverless shuttle, that can seat up to 6 people in the car ofRecently, General Motors and Honda announced to team up on new models for North America, foreseeably sharing platforms for electric and internal combustion vehicles with a variety of body styles. There’s no question that EVs will continue to storm the auto market. General Motors plans to have 30 fully electric models available by 2025, with 40% of its vehicles available in the U.S. being EVs by the end of that year. President-elect Joe Biden has said that he favors the continued tightening of fuel economy standards for internal combustion (ICE) vehicles. Ever- increasing pressure on ICE vehicle manufacturers from governments around the world, as well as tax incentives for EVs, mean the writing is on the wall, even if the transition in the U.S. is a long one. Earlier this year, GM unveiled the design of the ultimate ride-sharing driverless car in San Francisco.

Possible concerns: General Motors had aimed to launch a commercial, self-driving vehicle service in San Francisco last year. However, it ran into testing issues when the car had trouble identifying whether objects were in motion.

Source: Insider Monkey, December 2020 Market Watch, December 2020 InvestorPlace, December 2020 Alphabet Inc. (GOOGL) Alphabet Inc. provides online advertising services in the United States, Europe, the Middle East, Africa, the Asia-Pacific, Canada, and Latin America. It offers performance and brand advertising services. The company operates through Google and Other Bets segments. The Google segment offers products, such as Ads, Android, Chrome, Google Cloud, Google Maps, Google Play, Hardware, Search, and YouTube, as well as technical infrastructure. It also offers digital content, cloud services, hardware devices, and other miscellaneous products and services. The Other Bets segment includes businesses, including Access, Calico, CapitalG, GV, Verily, Waymo, and X, as well as Internet and television services. The company has an agreement with to develop an artificial intelligence-driven technology platform for travel. Alphabet Inc. was founded in 1998 and is headquartered in Mountain View, California.

Source: FinViz.com, January 2021 The Alphabet Inc. (GOOGL) POSITIVES: Google has shown good execution to date. Its dominant search market share is a positive. Alphabet is showing increased appetite in the Home Assistant space. The company made its foray into this market in 2016 with the launch of Google Home. Google Home performs an array of tasks such as playing music, reading books, managing calendars, answering queries, searching places, calling over cabs, controlling smart home devices and so on. It runs on Google’s new voice assistant. Alphabet focuses on innovation, launching products and services for multiple industries. The development and enhancements of its search technology over time has created win-win situations wherein buyers, sellers and the public at large were benefited. The success of this strategy led to very strong growth since inception. Google has been growing rapidly in this fast-growing highly- competitive cloud market. The company has signed many partnerships and has been opening data centers to extend its cloud footprint worldwide. Alphabet and Cisco announced a partnership per which the duo will deliver an open hybrid cloud solution. The solution will enable usage and management of applications and services across on-premises setups and the Google Cloud Platform. Google has also partnered with Nutanix for hybrid cloud computing. The Google search engine is advanced, simple and adaptable, all at once. This is the main reason for its leading search market share. A Jul 2016 global desktop search market share report from netmarketshare.com says that Google had 72.5% of market share, followed by Bing’s 10.4%, Yahoo’s 7.8% and Baidu’s 7.2%. In mobile, Google was even more dominant with a 94.9% share of the search market globally, compared to Yahoo’s 3.0% and Bing’s 1.1%. Although the desktop was the most popular computing device in the past, mobile search is now equally if not more popular. Alphabet has a number of mobile initiatives. First, it is leveraging its Android OS not just to build search market share but also to drive sales of apps and digital products through Google Play. The company continues to bring improvements with each version of the OS, at the same time spurring app development. Online and mobile video consumption is soaring and Alphabet remains strongly positioned here with the YouTube platform. Possible concerns: Alphabet’s diversification strategy involves significant investment in mobile, cloud, devices and digital goods. Growing competition and legal hassles are other headwinds.

Source: Zacks Research, January 2021 Goldman Sachs Group Inc. (GS) The Goldman Sachs Group, Inc. operates as an investment banking, securities, and investment management company worldwide. It operates in four segments: Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management. The company's Investment Banking segment provides financial advisory services, including strategic advisory assignments related to mergers and acquisitions, divestitures, corporate defense activities, restructurings, and spin-offs; and middle-market lending, relationship lending, and acquisition financing, as well as transaction banking services. This segment also offers underwriting services, such as equity underwriting for common and preferred stock and convertible and exchangeable securities; and debt underwriting for various types of debt instruments, including investment-grade and high-yield debt, bank and bridge loans, and emerging- and growth-market debt. Its Global Markets segment is involved in client execution activities for cash and derivative instruments; credit products; mortgages; currencies; commodities; and equities; and provision of equity intermediation, and equity financing services, as well as offers clearing, settlement and custody services. The company's Asset Management segment manages assets across various asset classes, including equity, fixed income, hedge funds, credit funds, private equity, real estate, currencies, and commodities; and provides customized investment advisory solutions, and financing services, as well as invests in corporate, real estate, and infrastructure entities. Its Consumer & Wealth Management segment offers wealth advisory and banking services, including financial planning, investment management, and lending; private banking and lending services; unsecured loans; and saving and time deposits. The company serves corporations, financial institutions, governments, and individuals. The Goldman Sachs Group, Inc. was founded in 1869 and is headquartered in New York, New York.

Source: FinViz.com, January 2021 Goldman Sachs Group Inc. (GS) POSITIVES: The key source of Goldman’s earnings stability is its business diversification. Within traditional banking, a diversified product portfolio has better chances of sustaining growth than many other banks, which have exited some of these areas. Notably, Goldman has been undertaking initiatives to boost the GS Bank’s business with its acquisition of the online deposit platform of GE Capital Bank in April 2016. Though Goldman recorded 8% decrease in investment banking revenues in the first nine months of 2019, affected by weak underwriting business, revenues recorded a three-year (2016-2018) CAGR of 12% providing a decent support to Goldman’s top-line growth despite lower industry-wide transactions in 2016. Nevertheless, M&A activities were strong in 2018, with the execution of many large transactions. Steady economic growth and low interest rates in the emerging economies, along with growth in corporate earnings on tax reforms, are likely to keep the momentum alive in the quarters ahead. Moreover, Goldman’s solid position in worldwide announced and completed M&As will likely give it further edge over its peers. Goldman has benefited for the past few years from its successful expense-reduction initiatives. Backed by a solid capital position, Goldman has consistently enhanced shareholders’ value with steady capital-deployment activities. The company’s approved 2019 capital plan includes up to $7 billion in repurchases and $1.8 billion in total common stock dividends beginning third-quarter 2019 through second-quarter 2020. Organic growth, cost management, solid capital position and steady capital deployment activities continue to aid Goldman’s growth prospects. Also, business diversification remains a key strength. Possible concerns: Muted trading activities aided by low client activity may hinder top-line growth of Goldman. Further, legal hassles and higher dependence on overseas revenues remain other headwinds for the company.

Source: Zacks Research, January 2021 The Home Depot, Inc. (HD) The Home Depot, Inc. operates as a home improvement retailer. It operates The Home Depot stores that sell various building materials, home improvement products, lawn and garden products, and decor products, as well as provide installation, home maintenance, and professional service programs to do-it-yourself and professional customers. The company also offers installation programs that include flooring, cabinets and cabinet makeovers, countertops, furnaces and central air systems, and windows; and professional installation in various categories sold through its stores and in-home sales programs, as well as acts as a general contractor to provide installation services to its do-it-for-me customers through third-party installers. In addition, it provides tool and equipment rental services. The company primarily serves home owners; and professional renovators/remodelers, general contractors, handymen, property managers, building service contractors, and specialty tradesmen, such as electricians, plumbers, and painters. It also sells its products online. As of August 4, 2020, the company operated 2,293 retail stores in 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, 10 Canadian provinces, and Mexico. The Home Depot, Inc. was founded in 1978 and is based in Atlanta, Georgia.

Source: FinViz.com, January 2021 The Home Depot, Inc. (HD) POSITIVES: Robust Q3 Results: Home Depot posted strong third-quarter fiscal 2020 results, wherein earnings and sales beat the Zacks Consensus Estimate and improved year over year. Earnings growth of 25.7% year over year was driven by 23.2% increase in sales on strong demand. During the quarter, the company witnessed continued strong demand for home improvement projects as customers spent more time at home during the coronavirus pandemic. The company is effectively adapting to the high-demand environment, driven by investments in its business over the years and the dedication of its associates to serve customers. The company's overall comps grew 24.1%, with a 24.6% improvement in the United States. Comps were aided by a 10.1% rise in average ticket and a 13% increase in customer transactions. Moreover, the company witnessed strong double-digit growth from both the pro and DIY customers. Integrated Retail Strategy Aids Amid Coronavirus: Home Depot is witnessing significant benefits from the execution of its “One Home Depot” investment plan. Amid the pandemic, customers have been blending of the physical and digital elements of the shopping experience more than ever before making the company’s interconnected One Home Depot strategy the most relevant. Financial Flexibility: Home Depot enjoys strong financial status. The company’s cash and cash equivalents at the end of third-quarter fiscal 2020 of $14,652 million increased 3.6% from $14,139 million at the end of the fiscal second quarter. Sustained Shareholder Returns: Home Depot has a disciplined capital allocation strategy, supported by solid free cash flow generation capability. This allows management to undertake shareholder-friendly moves. Focus on Home Improvement Projects Aid DIY Sales: The increased stay-at-home trends have led to a rise in repairs and home remodeling projects. Consequently, customer engagement for home improvement projects increased significantly in the fiscal third quarter. Notably, the company witnessed increased demand for strong demand for exterior and interior projects like garden seasonal categories, garage and organization, ceiling fans, vanities, and power tools. Possible concerns: Home Depot incurred $355 million in the fiscal third quarter to provide incremental benefits to its associates, including weekly bonuses for hourly associates in stores and distribution centers.

Source: Zacks Research, January 2021 Intuitive Surgical, Inc. (ISRG) Intuitive Surgical, Inc., together with its subsidiaries, designs, manufactures, and markets da Vinci surgical systems, and related instruments and accessories in the United States and internationally. The company's da Vinci Surgical System include surgeon's consoles, patient-side carts, 3-D vision systems, da Vinci skills simulators, da Vinci Xi integrated table motions, and Firefly fluorescence imaging products that enable surgeons to perform various surgical procedures, including gynecologic, urologic, general, cardiothoracic, and head and neck surgical procedures. It also manufactures EndoWrist instruments, such as forceps, scissors, electrocautery tools, scalpels, and other surgical tools, which incorporate wrist joints for natural dexterity for various surgical procedures. In addition, the company offers EndoWrist Stapler, a wristed stapling instrument for resection, transection, and creation of anastomoses; and EndoWrist One Vessel Sealers that are wristed single-use instruments for bipolar coagulation and mechanical transection of vessels up to 7mm in diameter and tissue bundles that fit in the jaws of the instrument. Additionally, the company sells various accessories comprising sterile drapes for ensuring sterile field during surgery; and vision products that include replacement 3D stereo endoscopes, camera heads, light guides, and other items that facilitate use of the da Vinci Surgical System, as well as Ion endoluminal system for biopsies. Intuitive Surgical, Inc. was founded in 1995 and is headquartered in Sunnyvale, California.

Source: FinViz.com, January 2021 Intuitive Surgical, Inc. (ISRG) POSITIVES: Growing adoption of the company’s da Vinci system, increasing procedure volumes, continuous innovation and solid recurring revenue base are key catalysts. Intuitive Surgical’s robot-based da Vinci surgical system enables minimally-invasive surgery that reduces the trauma associated with open surgery. The da Vinci System is powered by robotic technology which has provided the company with a solid exposure to medical mechatronics, robotics and AI for healthcare. The company launched an upgrade to its flagship Vinci Xi technology – da Vinci X. Notably, the Xi suite is designed to seamlessly integrate future innovations, such as advanced instrumentation, surgical skills simulation, software upgrades, and other advancements into one dynamic platform. Intuitive Surgical is gradually gaining prominence in markets outside the United States. In the first quarter 2020, international revenues totaled $317.9 million, up 12.7% on a year-over-year basis. The improvement can be attributed to higher instruments and accessory revenues, driven by procedure growth and customer buying patterns. Outside the United States, Intuitive Surgical placed 55 systems in the first quarter compared with 81 in the first quarter of 2019. Of these, 25 were in Europe, 10 in Japan and 9 in China. Intuitive Surgical continuously introduces technologies for surgical systems. The company launched an upgrade to its flagship Vinci Xi technology – da Vinci X recently. The company has also been a constant outperformer in Mature and Growth procedures, especially in general and thoracic surgery. Intuitive Surgical’s business model ensures that it continues to generate revenues from both the initial capital sales of da Vinci Surgical Systems and subsequent sales of instruments, accessories and services.

Possible concerns: Cutthroat competition in the MedTech space and increasing regulatory headwinds are major concerns for Intuitive Surgical at the moment.

Source: Zacks Research, January 2021 Mastercard Incorporated (MA) Mastercard Incorporated, a technology company, provides transaction processing and other payment- related products and services in the United States and internationally. It facilitates the processing of payment transactions, including authorization, clearing, and settlement, as well as delivers related products and services. The company offers integrated products and services for account holders, merchants, financial institutions, businesses, governments, and other organizations, such as programs that enable issuers to provide consumers with credits to defer payments; payment products and solutions that allow its customers to access funds in deposit and other accounts; prepaid payment programs and management services; and commercial payment products and solutions. It also provides value-added products and services comprising cyber and intelligence products, information and analytics services, consulting services, loyalty and reward programs, processing services, and issuer and acquirer processing services. The company offers payment solutions and services under the MasterCard, Maestro, and Cirrus brands. Mastercard has partnership with NMI and Global Payments Inc. to launch its first live cloud tap on phone pilot with computer engineering group.

Source: FinViz.com, January 2021 Mastercard Incorporated (MA) POSITIVES: Mastercard’s shares have outperformed its industry in a year’s time. Given its progress on fundamentals, the stock should keep performing well in the quarters ahead. In 2019, the company acquired several businesses in separate transactions for total consideration of $1.5 billion. Some of the recent acquisitions made by the company are Vyze, Nets, RiskRecon, Finicity among others. During the six months ending Jun 30, 2020, the company acquired businesses worth $185 million in cash. It expects acquisitions to contribute about 1 ppt to revenues for the ongoing year. Organic growth remained a key factor at Mastercard as evident from a revenue CAGR of 13% from 2010-2019. It was, however, down 9% in the first nine months of 2020 due to a decline in transactions and volumes due to the effects of border restrictions and social-distancing measures. The COVID crisis accelerated the use of electronic forms of payment with much greater adoption of digital and contactless solutions. The digital form of payments is expected to sustain beyond the pandemic. Key trends include a preference for contactless transactions, rapid adoption of e-commerce and an increased aversion to cash, merchant requirements for omnichannel acceptance and a need to automate business-to-business payments. Each of these provides an opportunity for the company’s business to expedite the shift to digital forms of payment. The company has been making significant progress in its digital strategy and continuously investing in technology. Some of the company’s digital innovations are MasterPass, investment in tokenization technology with its Mastercard Digital Enablement Service (MDES), which supports contactless payments and Digital Secure Remote Payments. Mastercard has been successfully generating cash flow from operations over the years. Its cash flow generated from operating activities has been increasing since 2009 expect in 2014. The same was up 16.5% year over year in the first six months of 2020. This cash flow enables capital management by way of share buyback and dividend payouts.

Possible concerns: Higher expenses, high rebates and incentives might drag the company's margins. Mastercard continues face a rise in total expenses. The company is accelerating investments in strategic areas such as safety and security, digital and B2B (business-to-business) products.

Source: Zacks Research, January 2021 Marriott International, Inc. (MAR)

Marriott International, Inc. operates, franchises, and licenses hotel, residential, and timeshare properties worldwide. The company operates through North American Full-Service, North American Limited-Service, and Asia Pacific segments. It operates its properties under the JW Marriott, The Ritz-Carlton, Ritz-Carlton Reserve, W Hotels, The Luxury Collection, St. Regis, EDITION, Bulgari, Marriott Hotels, Sheraton, Delta Hotels, Marriott Executive Apartments, Marriott Vacation Club, Westin, Renaissance, Le Meridien, Autograph Collection, Gaylord Hotels, Tribute Portfolio, Design Hotels, Courtyard, Residence Inn, Fairfield by Marriott, SpringHill Suites, Four Points, TownePlace Suites, Aloft, AC Hotels by Marriott, Protea Hotels, Element, and Moxy brand names. As of February 23, 2021, it operated approximately 7,600 properties under 30 hotel brands in 133 countries and territories. Marriott International, Inc. was founded in 1927 and is headquartered in Bethesda, Maryland.

Source: FinViz.com, March 2021 Marriott International, Inc. (MAR) POSITIVES: Solid Brand Position to Drive Long-Term Growth: Marriott is a leading company in the luxury and lifestyle space, which includes brands that own 7,600 properties in 133 countries and territories. The company’s extensive portfolio and a strong brand position allow it to charge a premium room rate in the highly competitive lodging industry. Given its property locations, we believe that the company is well-poised to benefit from the increasing market demand on the back of stepped-up business and leisure traveling in major North American and international locations. However, amid the ongoing pandemic, many countries are still imposing strict travel restrictions. Depending on the stages of reopening, lower pace of improvements are being witnessed in Europe, Middle East, Africa, Caribbean, Latin America, Hong Kong and Macau. Efforts to Drive Growth: With nearly 150 million members globally, the company’s loyalty program Marriott Bonvoy plays a supporting hand in its marketing strategies. Notably, the company is focusing on non-hotel stay experiences such as Eat Around Town and Homes and Villas by Marriott International. Strong Expansion Plans: Marriott is consistently trying to expand presence worldwide and capitalize on the demand for hotels in international markets. Moving ahead, the company plans to significantly expand global portfolio of luxury and lifestyle brands. Strategic Acquisitions to Boost Growth: The company continues to rely on acquisitions in order to expand its footprint globally. In late 2016, it completed the acquisition of Starwood and became the world's largest hotel company. With the completion of this acquisition, Marriott's distribution has more than doubled in Asia and the Middle East & Africa combined. Sufficient Liquidity to Manage Current Scenario: Of late, Marriot has bolstered its liquidity to manage the coronavirus pandemic. As of Dec 31, 2020, the company had a net liquidity of $4.4 billion after paying $600 million of debt, compared with $5.1 billion as of Sep 30. Notably, this represented $800 million in available cash balances and $3.6 billion of unused borrowing capacity under its revolving credit facility. Possible concerns: The coronavirus pandemic, sluggish economy and high competition are likely to hurt company’s performance. Coronavirus Impact: The Hotel and Motels industry is currently grappling with the coronavirus pandemic and Marriott isn’t immune to the trend. Due to the same, the company failed to provide earnings and RevPAR guidance for 2021. It has also suspended its share repurchase and dividend payments until further notice. Markedly, the pandemic is likely to hurt the company’s results in 2021.

Source: Zacks Research, March 2021 Microsoft Corporation (MSFT)

Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. Its Productivity and Business Processes segment offers Office, Exchange, SharePoint, Microsoft Teams, Office 365 Security and Compliance, and Skype for Business, as well as related Client Access Licenses (CAL); Skype, Outlook.com, OneDrive, and LinkedIn; and Dynamics 365, a set of cloud-based and on- premises business solutions for small and medium businesses, large organizations, and divisions of enterprises. Its Intelligent Cloud segment licenses SQL and Windows Servers, Visual Studio, System Center, and related CALs; GitHub that provides a collaboration platform and code hosting service for developers; and Azure, a cloud platform. It also offers support services and Microsoft consulting services to assist customers in developing, deploying, and managing Microsoft server and desktop solutions; and training and certification to developers and IT professionals on various Microsoft products. Its More Personal Computing segment provides Windows original equipment manufacturer (OEM) licensing and other non-volume licensing of the Windows operating system; Windows Commercial, such as volume licensing of the Windows operating system, Windows cloud services, and other Windows commercial offerings; patent licensing; Windows Internet of Things; and MSN advertising. It also offers Surface, PC accessories, PCs, tablets, gaming and entertainment consoles, and other devices; Gaming, including Xbox hardware, and Xbox content and services; video games and third-party video game royalties; and Search, including Bing and Microsoft advertising. It sells its products through OEMs, distributors, and resellers; and directly through digital marketplaces, online stores, and retail stores. It has a strategic collaboration with DXC Technology. The company was founded in 1975 and is headquartered in Redmond, Washington.

Source: FinViz.com, January 2021 Microsoft Corporation (MSFT) POSITIVES: Microsoft has a dominant position in the desktop PC market, with its operating systems being used in the majority of PCs worldwide. This is particularly true of the enterprise where the company generates much of its revenue and profits. But enterprise computing is undergoing changes with companies increasingly opting for the BYOD (bring-your-own-device) model. This has allowed competing platforms from Apple and Google with their strong mobile ecosystems to increase penetration at the enterprise. So, Microsoft is introducing new and improved Surface devices that could encourage enterprises to stick with Windows as they move toward BYOD and cloud computing. Microsoft’s advantages in this respect are two-fold. First, the company has a very large installed base of Office users. Most legacy data are based on Office, so enterprises are usually reluctant to use other productivity solutions. Second, the BYOD model is dependent on security and cloud integration, both of which are Microsoft’s strengths. As a result, Microsoft has been largely successful at retaining enterprise customers, which holds promise. Microsoft has doubled down on the cloud computing opportunity. Azure’s increased availability in more than 60 announced regions globally, is expected to have strengthened Microsoft competitive position in the cloud computing market, dominated by Amazon’s Amazon Web Services. Notably, Azure revenues surged 47% at constant currency on a year-over-year basis in first-quarter fiscal 2021, driven by robust growth in consumption-based business. Moreover, ongoing expansion in Microsoft Teams subscriber base is aiding the company in strengthening position in the enterprise communication market against Slack and Zoom. The company has enhanced its workspace communication offering — Teams — with a slew of new capabilities enabling users to work from home seamlessly amid the coronavirus crisis. Microsoft is one of the three largest providers of gaming hardware. Its Xbox console was one of the first gaming devices of its kind. Microsoft supplemented the hardware with a number of popular video game titles. It also introduced the Xbox Live online gaming service, which enabled subscribers to play online Xbox games with each other and download new games directly onto the device. Possible concerns: Microsoft faces stiff competition in the cloud market from Amazon Web Services and its dominant position in the PC market continues to be challenged. Our immediate concern about Microsoft is regarding the softness in the core computing market. The company is dependent on this market for the largest chunk of its revenue. Microsoft continues to be impacted by the tablet and mobile cannibalization of computers.

Source: Zacks Research, January 2021 NVIDIA Corporation (NVDA)

NVIDIA Corporation operates as a visual computing company worldwide. It operates in two segments, GPU and Tegra Processor. The GPU segment offers processors, which include GeForce for PC gaming and mainstream PCs; GeForce NOW for cloud-based gaming; Quadro for design professionals working in computer-aided design, video editing, special effects, and other creative applications; Tesla for artificial intelligence (AI) utilizing deep learning, accelerated computing, and general purpose computing; GRID, which provides power of NVIDIA graphics through the cloud and datacenters; DGX for AI scientists, researchers, and developers; and EGX for accelerated AI computing at the edge. The Tegra Processor segment provides processors comprising SHIELD devices and services designed to harness the power of mobile-cloud to revolutionize home entertainment, AI, and gaming; AGX, a power-efficient AI computing platform for intelligent edge devices; DRIVE AGX for self-driving vehicles; Clara AGX for medical instruments; and Jetson AGX for robotics and other embedded use. The company's products are used in gaming, professional visualization, datacenter, and automotive markets. NVIDIA Corporation sells its products to original equipment manufacturers, original device manufacturers, system builders, add-in board manufacturers, retailers/distributors, Internet and cloud service providers, automotive manufacturers and tier-1 automotive suppliers, mapping companies, start-ups, and other ecosystem participants. NVIDIA Corporation was founded in 1993 and is headquartered in Santa Clara, California.

Source: FinViz.com, June 2020 NVIDIA Corporation (NVDA) POSITIVES: NVIDIA is gaining a decent market share among the gaming service providers. The strong line-up of advanced graphics cards has made it a favorite graphics card provider among the PC makers. A strong uptick in PC gamers, esports players and higher spending on the gaming GPUs are key catalysts. Further, NVIDIA’s Turing GPU and its real-time ray tracing technology are witnessing a massive adoption. To propel wider embracement, NVIDIA is enabling ray tracing backup to several GeForce GTX GPUs, which is likely to lend developers a massive installed base of gamers. Moreover, the launch of GeForce RTX SUPER GPUs is expected to strengthen its leadership in the high end of the market. The company announced that the increasing number of blockbuster AAA titles have pledged support for NVIDIA RTX ray tracing technology. Notably, Microsoft teamed up with NVIDIA to add real-time ray tracing technology to Minecraft. Datacenter presents a solid growth opportunity for the company. Datacenter presents a solid growth opportunity for the company. As more and more businesses are shifting toward cloud, the need for datacenters is increasing. To cater to this huge demand, datacenter operators like Amazon, Microsoft and Alphabet are expanding their operations across the world, which is driving demand for the GPUs. NVIDIA’s GPUs are rapidly benefiting from the proliferation of AI. By applying its GPUs in AI models, the company is expanding its base in the other untapped markets like automotive, healthcare and manufacturing, which will support its earnings and revenues. The company is engaged with a number of organizations including the top cloud server companies like Amazon, Baidu and Facebook, which are infusing AI in various applications. NVIDIA’s foray into the autonomous vehicles and other automotive electronics space is a positive. The company currently is on a firmer footing in the autonomous vehicle market. It is working with more than 320 automakers, tier-one suppliers, automotive research institutions, HD mapping companies and start-ups to develop and deploy AI systems for self-driving vehicles. NVIDIA is a cash rich company with a strong balance sheet. As of Oct 25, 2020, the company had cash and cash equivalents of nearly $10.14 billion, which is significantly higher than its total debt of $6.96 billion. Possible concerns: Adverse impact of coronavirus outbreak on economy, bleak demand for automobile infotainment system, forex headwinds and stiff competition from AMD are major headwinds.

Source: Zacks Research, January 2021 Phillips 66 (PSX) Phillips 66 operates as an energy manufacturing and logistics company. It operates through four segments: Midstream, Chemicals, Refining, and Marketing and Specialties (M&S). The Midstream segment transports crude oil and other feedstocks; delivers refined products to market; provides terminaling and storage services for crude oil and petroleum products; transports, stores, fractionates, exports, and markets natural gas liquids; provides other fee-based processing services; and gathers, processes, transports, and markets natural gas. The Chemicals segment manufactures and markets ethylene and other olefin products; aromatics and styrenics products, such as benzene, cyclohexane, styrene, and polystyrene; and various specialty chemical products, including organosulfur chemicals, solvents, catalysts, and chemicals used in drilling and mining. The Refining segment refines crude oil and other feedstocks into petroleum products comprising gasolines, distillates, and aviation fuels at 13 refineries in the United States and Europe. The M&S segment purchases for resale and markets refined petroleum products consisting of gasolines, distillates, and aviation fuels primarily in the United States and Europe. It also manufactures and markets specialty products, such as petroleum coke products, waxes, solvents, and polypropylene. Phillips 66 was founded in 1875 and is headquartered in Houston, Texas.

Source: FinViz.com, January 2021 Phillips 66 (PSX)

POSITIVES: Phillips 66 is the leading player in each of its operations like refining, chemicals and midstream in terms of size, efficiency and strengths. The company is on track to enhance its potential in every business segment by streamlining its portfolio of assets and by investing in growth developments. Midstream businesses have significant demand in the United States as there is a huge need for pipeline and infrastructure properties in the flourishing shale plays. To capitalize on the trend, the company allocated a significant portion of its capital budget for midstream operations, which will bring high margin and strong-growth. Precisely, with its oil and gas pipeline network expected to reach 24,000 miles by 2020, the company is an industry leader in the midstream business. It completed expansion projects of two new fractionators of 150,000 barrels per day (bpd) each at the Sweeny Hub. The move boosted total fractionation capacity at the site to 400,000 bpd, supported by long-term commitments from clients. Also, its marine export terminal is expected to be completed by first-quarter 2021 and have two deepwater docks with a throughput capacity of up to 800,000 bpd. It will also have a storage capacity of 8.6 million barrels. Moreover, the International Maritime Organization, through the IMO 2020 regulations, has reduced the sulphur content in marine fuels, which increased the demand for distillate fuels. Phillips 66 sits well-positioned for the change in regulations, with its updated refining assets.

Possible concerns: Phillips 66 is being affected by significant decline in worldwide refining margins. The coronavirus pandemic has dented global energy demand. The situation is unlikely to improve in the near term, making the outlook of the company’s energy business gloomy.

Source: Zacks Research, December 2020 Starbucks Corporation (SBUX) Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates through three segments: Americas, International, and Channel Development. Its stores offer coffee and tea beverages, roasted whole bean and ground coffees, single-serve and ready-to-drink beverages, and iced tea; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores, and grocery and foodservice accounts. The company offers its products under the Starbucks, Teavana, Seattle's Best Coffee, Evolution Fresh, Ethos, Starbucks Reserve, and Princi brand names. As of October 29, 2020, it operated approximately 32,000 stores. Starbucks Corporation was founded in 1971 and is based in Seattle, Washington.

Source: FinViz.com, June 2020 Starbucks Corporation (SBUX) POSITIVES: Starbucks’ solid execution of several initiatives in the United States and China, along with best-in-class loyalty programs and digital offerings are expected to drive profits. Starbucks is one of the most recognized coffee brands in the world. From espresso to specialty roast and ground coffee to premium single-serve market, Starbucks commands authority and a leading position in all coffee segments. Further, management focuses on increasing global market share by judiciously opening stores in new and existing markets, remodeling existing stores, deploying technology, controlling costs and aggressive product innovation and brand building. In fiscal 2019, Starbucks added 1,900 net new stores. In 2018 and 2017, the company had added 2,300 and 2,250 net new locations. Although, the coronavirus pandemic is hurting the company’s original store opening program, it still expects to open at least 500 new stores in China in fiscal 2020.New store productivity and Return on Investment (ROI) in the United States and China are high. By fiscal 2021, the company intends to open approximately 12,000 stores globally. This will take the total store count to an estimated 37,000. Notably, Starbucks’ long-term growth targets include 3-4% comps growth, yielding high- single digit revenue growth and EPS growth of at least 12%. Starbucks and the Swiss-based food giant Nestle SA have teamed up to revitalize their coffee domains. Starbucks and Nestle announced a global marketing deal that gives the latter "perpetual rights " to market Starbucks’ products globally outside its coffee shops. This alliance will expand the global reach of Starbucks brands in the consumer-packaged goods (“CPG’) and foodservice categories to nearly 190 countries around the world. The company announced a historic partnership with Alibaba for providing seamless Starbucks Experience to drive growth in China. Starbucks began delivery services in Beijing and Shanghai via Alibaba's Ele.me platform. Recently, the company has also strengthened its relationship with Alibaba. Starbucks lovers in China can now place orders via multiple Alibaba Group apps. Starbucks has introduced its mobile order and pay feature — Starbucks Now — to multiple platforms in the Alibaba Digital Economy, which includes Taobao, Amap, Koubei and Alipay. Starbucks is strengthening its product portfolio with significant innovation around beverages, refreshment, health and wellness, tea and core food offerings. Starbucks is leaning toward fast-growing categories like Cold Brew, Draft Nitro beverages, and plant-based modifiers, including almond, coconut, and soy milk alternatives. Possible concerns: The coronavirus pandemic and operating margin contraction over the past few quarters has been a concern.

Source: Zacks Research, January 2021 Teladoc Health, Inc. (TDOC) Teladoc Health, Inc. provides virtual healthcare services on a business-to-business basis in the United States and internationally. It covers various clinical conditions, including non-critical, episodic care, chronic, and complicated cases like cancer and congestive heart failure, as well as offers telehealth solutions, expert medical services, behavioral health solutions, guidance and support, and platform and program services. The company's platform enables patients and providers to have an integrated smart user experience through mobile, Web, and phone based accessed points. 0It serves health employers, health plans, hospitals, health systems, and insurance and financial services companies. Teladoc Health, Inc. offers its products and services under the Teladoc, Advance Medical, Best Doctors, BetterHelp, and HealthiestYou brands. Teladoc Health, Inc. has alliance with NTT DATA Services to build nucleus for healthcare. The company was formerly known as Teladoc, Inc. and changed its name to Teladoc Health, Inc. in August 2018. Teladoc Health, Inc. was founded in 2002 and is headquartered in Purchase, New York.

Source: FinViz.com, January 2021 Teladoc Health, Inc. (TDOC) POSITIVES: Price Movement: Shares of the company have outperformed its industry in a year's time. Its strong business should continue the rally going forward. Strong 2020 Guidance: For 2020, the company expects revenues between $980 million to $995 million, up from the prior estimate of $800 million and $825 million. It anticipates adjusted EBITDA between $85 million and $92 million, up from the previous estimate of $70 million and $80 million (compared with an EBITDA loss of $41.5 million reported in 2019). Top-line Growth: Teladoc’s revenues have witnessed a CAGR of 64% from 2015-2019 and was up further 63% in the first half of 2020. This revenue growth was driven by an increase in membership and patient visits. The company is witnessing increase in telehealth visits that is outpacing growth in its membership. This signals the fast adoption of telehealth services. Also inclusion of telehealth services in Medicare advantage is a long-term growth driver for the company. For full-year 2020, the company expects revenues between $980 million and $995 million (the mid-point of which indicates a surge of 78.5% from the figure reported in 2019). Acquisitions to Speed up Growth: Teladoc has been banking on acquisitions to boost growth. Since its inception in 2002, the company has completed multiple acquisitions, which have expanded its distribution capabilities, broadened its service offerings and created a global footprint. Its acquisition strategy is centered on acquiring products, capabilities, clinical specialties, technologies and distribution channels that are highly scalable and rapidly growing. Some of its notable acquisitions are Healthiest You, BetterHelp, Consult-a-Doctor, and AmeriDoc. Global Expansion: The acquisitions of Best Doctors Advance Medical, MédecinDirect in recent years have expanded the company’s international operations. Solid Debt Servicing Capacity: Teladoc's cash and cash equivalents of $1.3 billion surged 154.5% in the second quarter from 2019-end, which remains higher than the company’s debt levels. Its debt burden of $948.2 million as of Jun 30, 2020, reflects 73.2% of its shareholders' equity. This implies that the company has sufficient cash reserves to service debt obligations. Growing Telemedicine Market: Telemedicine has been playing a crucial part in the battle against the pandemic. In February, the Centers for Disease Control and Prevention asked healthcare service communities to increase the use of telemedicine in broader ways. Possible concerns: Teladoc's huge expenses and inability to generate positive cash flows bothers. Its debt has increased substantially in the past four years, leading to a spike in interest costs.

Source: Zacks Research, January 2021 Uber Technologies (UBER) Uber Technologies, Inc. develops and operates proprietary technology applications primarily in the United States, Canada, Latin America, Europe, the Middle East, Africa, and the Asia Pacific. It connects consumers with independent providers of ride services for ridesharing services, as well as connect consumers with restaurants and food delivery service providers for meal preparation and delivery services. The company operates through five segments: Rides, Eats, Freight, Other Bets, and Advanced Technologies Group (ATG) and Other Technology Programs. The Rides segment offers products that connect consumers with rides drivers who provide rides in a range of vehicles, such as cars, auto rickshaws, motorbikes, minibuses, or taxis. It also provides Uber for Business, financial partnership services, and vehicle solutions offerings. The Eats segments offering enables consumers to search for and discover local restaurants, order a meal, and either pick-up at the restaurant or have the meal delivered. The Freight segment connects carriers with shippers on the company's platform and enable carriers upfront, transparent pricing, and the ability to book a shipment. The Other Bets segment provides access to rides through various modes, including dockless e-bikes and e-scooters; and other platform related services. The ATG and Other Technology Programs segment engages in the development and commercialization of autonomous vehicle and ridesharing technologies, as well as Uber Elevate. The company was formerly known as Ubercab, Inc. and changed its name to Uber Technologies, Inc. in February 2011. Uber Technologies, Inc. was founded in 2009 and is headquartered in San Francisco, California.

Source: FinViz.com, June 2020 Uber Technologies (UBER) POSITIVES: We are impressed by Uber's efforts to expand its presence across the globe. In line with its expansion initiatives, the company plans to invest $150 million into a joint venture with South Korea’s SK Telecom Co. Uber will have a 51% stake in the joint venture. Subject to regulatory approval, the two companies expect to commence operations in the first half of 2021. In another move, Uber has expanded its ridesharing services throughout the Quebec province in October 2020. Additionally, in August 2020, the company entered into an agreement to acquire Autocab, a U.K.-based taxi-software company. In July 2020, it acquired Routematch, a transit software company providing services to more than 500 transit agencies. The acquisition allows Uber to expand its transit-agency customer base. Additionally, the decision to buy a majority interest in South American online grocery-provider Cornershop is aligned with the company's attempts to expand. A major hurdle has been removed for Uber with the London court granting the company an 18-month license extension to continue operations in the city. In the event of a negative ruling, the company would have lost one of its most important international markets with roughly 45,000 drivers. Additionally, the passage of Proposition 22 by California voters in November 2020 marked a major victory for Uber. Although the coronavirus pandemic is hurting Uber’s ride-hailing business, the same is causing a surge in its Delivery business with online order volumes from homebound customers surging. In the third quarter of 2020, the company’s Delivery business contributed the majority (46.4%) to the top line. Revenues and gross bookings from this segment surged more than 100% year over year in the quarter. This robust growth in the Delivery business is helping to partly offset the downturn in Mobility (rides) operations.

Possible concerns: The Mobility business is expected to remain under pressure unless coronavirus concerns fade. The coronavirus crisis has affected the company’s goal of becoming profitable (on an adjusted basis) in 2020. With coronavirus restricting people to their homes, the company’s Mobility business has taken a significant hit. Although ride volumes have improved from the April 2020 lows (down 80% year over year), it is below 2019 levels.

Source: Zacks Research, January 2021 Visa Inc. (V) Visa Inc. operates as a payments technology company worldwide. The company facilitates digital payments among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a transaction processing network that enables authorization, clearing, and settlement of payment transactions. In addition, the company offers card products, platforms, and value-added services. It provides its services under the Visa, Visa Electron, Interlink, VPAY, and PLUS brands. The company was founded in 1958 and is headquartered in San Francisco, California.

Source: FinViz.com, January 2021 Visa Inc. (V) POSITIVES: Visa continues to benefit from Visa Europe acqusition, increasing business volumes, investment in digital technology and a solid balance sheet. Visa’s shares have outperformed its industry, in a year's time. Given the company’s robust fundamentals, share price is expected to perform well in the coming quarters. Revenues have been growing consistently over the years witnessing 10-year CAGR (2009-2019) of 12.8%. In the first half of fiscal 2020, the same grew 9% year over year. We believe that the company is likely to retain its revenue momentum in the coming quarters on the back of its strong market position and attractive core business that continues to be driven by new deals, renewed agreements, accretive acquisitions, increasing spending via cards, shift to digital form of payments and expansion of service offerings. Though the COVID -19 will likely create some pressure on the revenues, the metric should maintain its rising trend once normalcy returns. Visa acquired Visa Europe in June 2016. Reuniting with Visa Europe was one of its most important long-term growth strategies. The company expects to gain a competitive edge from a robust business model and increased scale with the acquisition of Visa Europe as it projects Europe to be a $3.3 trillion payments market and high growth region in the future. The deal has been accretive to the company, having contributed to its top line by bolstering payments volume, cross-border volume and processed transactions. Possible concerns: Higher client incentives, increase in operating expenses, foreign exchange volatility remain some headwinds for Visa. Visa has been facing increased client incentives, which are paid to financial institutions, merchants and strategic partners to build payments’ volumes, increase Visa’s product acceptance, win merchant routing transactions over its network and drive innovation. Visa has been witnessing an increase in operating expenses over the last few quarters that is weighing on its operating margin expansion.

Source: Zacks Research, January 2021 Lee Johnson Capital Management uses research and investment information from sources that it deems reliable. This information is not a recommendation to buy or sell, but for illustrative purposes. Please consult your advisor before investing in these or like investments, as not all investments are suitable. Each investor has different goals and objectives. LJCM uses our proprietary screening to determine what we consider, the Top 25 Growth Stocks to own in our All In Growth Model. Within this model LJCM will purchase a 4% position of each stock. These stocks are evaluated on a weekly basis and due to market conditions LJCM may make adjustments to the stock percentage and holding positions through out the month.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Lee Johnson Capital Management, LLC), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Please remember to contact Lee Johnson Capital Management, LLC, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services. A copy of the Lee Johnson Capital Management, LLC’s current written disclosure statement discussing our advisory services and fees is available upon request.