Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

1 Stock To Buy, 1 To Dump When Markets Open: Occidental Petroleum, Roblox

By (Jesse Cohen/ MarketsMay 08, 2022 22:39
1 Stock To Buy, 1 To Dump When Markets Open: Occidental Petroleum, Roblox
By (Jesse Cohen/   |  May 08, 2022 22:39
Saved. See Saved Items.
This article has already been saved in your Saved Items

Stocks on Wall Street tumbled on Friday, capping off another tumultuous week, with the benchmark S&P 500 suffering its fifth straight weekly loss as investors continued to worry about the Federal Reserve's plans to raise interest rates.

Dow, S&P 500, NASDAQ Daily Charts
Dow, S&P 500, NASDAQ Daily Charts

The coming week is expected to be another busy one amid more earnings from high-profile companies like Walt Disney (NYSE:DIS), AMC Entertainment (NYSE:AMC), Palantir Technologies (NYSE:PLTR), Peloton (NASDAQ:PTON), Rivian Automotive (NASDAQ:RIVN), and Coinbase Global (NASDAQ:COIN).

This week will also see important economic data, including the latest consumer price inflation report for April.

Given all of the market volatility, investors have recently experienced, below we highlight one stock likely to be in demand and another which could see further downside, no matter which direction the market may take moving forward.

Remember though, our timeframe is just for the upcoming week.

Stock To Buy: Occidental Petroleum

Occidental Petroleum (NYSE:OXY)—which saw its shares jump to their highest level in more than two years on Friday—could see further gains in the week ahead as the thriving energy company is expected to deliver explosive earnings and revenue growth when it releases its latest financial results after the closing bell on Tuesday, May 10.

Consensus calls for the Houston, Texas-based oil-and-gas producer—which has beaten Wall Street estimates for four consecutive quarters—to report first quarter earnings per share of $2.03, improving substantially from a loss of $0.15 per share in the year-ago period.

Meanwhile, revenue is forecast to rise nearly 52% year-over-year to $8.06 billion, as it benefits from its stellar operations in the Permian Basin, while taking advantage of strong crude and natural gas prices.

OXY Earnings
OXY Earnings

Source: InvestingPro

If confirmed, Occidental’s quarterly profit and sales total would mark the highest in its history. As such, we believe Oxy’s management will boost its outlook for the months ahead to reflect the positive impact of soaring crude oil and natural gas prices on its business.

Perhaps of greater importance, market players will be eager to hear if the energy company plans to return more cash to shareholders in the form of higher dividend payouts and stock buybacks. Occidental currently pays a quarterly dividend of $0.52 a share, providing an annual yield of about 0.80%.

OXY Daily Chart
OXY Daily Chart

OXY climbed almost 18% last week to score its biggest weekly gain since late February. It closed Friday’s session at $64.94, a level not seen since April 2019.

Despite the broader market slump, OXY shares have gotten off to one of their best starts ever to a year, soaring by a whopping 124% so far in 2022 thanks to higher commodity prices and improving energy market fundamentals.

At current valuations, the U.S. oil-and-gas giant—which has outperformed other notable names in the booming sector, such as ExxonMobil (NYSE:XOM), Chevron (NYSE:CVX), ConocoPhillips (NYSE:COP), EOG Resources (NYSE:EOG), Pioneer Natural Resources (NYSE:PXD), and Devon Energy (NYSE:DVN)—has a market cap of roughly $60.8 billion.

Stock To Dump: Roblox

Roblox (NYSE:RBLX), which has seen its shares steadily collapse to a series of new record lows in recent sessions, is forecast to suffer another dismal week amid the ongoing impact of various negative factors plaguing the embattled digital entertainment company.

Year-to-date, RBLX shares have lost an astonishing 73% through the first five months of 2022, significantly underperforming the broader market, as investors dumped unprofitable technology companies with expensive valuations due to the Federal Reserve’s aggressive tightening plans.

Higher yields and expectations of tighter Fed policy tend to weigh heavily on highly valued growth names, especially those that are unprofitable or have triple-digit price-to-earnings ratios, as it threatens to erode the value of their longer-term cash flows.

RBLX—which began trading at $64.50 after it went public in a direct listing last March—ended at an all-time low of $27.81 on Friday. At current levels, the San Mateo, California-based company, which has a market cap of approximately $16.4 billion, is about 80% below its record high of $141.60 reached in November 2021.

RBLX Daily Chart
RBLX Daily Chart

Another negative catalyst is expected to arrive when Roblox reports first quarter results after the U.S. market closes on Tuesday, May 10.

Based on moves in the options market, traders are pricing in a sizable swing for RBLX shares following the report, with a possible implied move of about 21% in either direction.

The money-losing gaming platform provider is forecast to post a loss of $0.21 per share for the first quarter. Revenue, meanwhile, is forecast to clock in at $649.3 million, down from $770.1 million in the same quarter last year.

RBLX Earnings
RBLX Earnings

Source: InvestingPro

If confirmed, that would mark the slowest pace of sales growth since the company’s IPO in March 2021 amid cooling demand for its online platform that allows users to easily play and develop video games in 3D virtual worlds.

Beyond the top-and-bottom line numbers, investors will pay close attention to growth in bookings, which is a form of adjusted revenue preferred by videogame analysts. The key metric missed targets in the last quarter, underlining worries over a substantial slowdown in its core business.

Interested in finding your next great idea? InvestingPro+ gives you the chance to screen through 135K+ stocks to find the fastest growing or most undervalued stocks in the world, with professional data, tools, and insights. Learn More »

1 Stock To Buy, 1 To Dump When Markets Open: Occidental Petroleum, Roblox

Related Articles

1 Stock To Buy, 1 To Dump When Markets Open: Occidental Petroleum, Roblox

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Our Apps
© 2007-2022 Fusion Media Limited. All Rights Reserved.
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
  • Sign up for FREE and get:
  • Real-Time Alerts
  • Advanced Portfolio Features
  • Personalized Charts
  • Fully-Synced App
Continue with Google
Sign up with Email