JUMP REPORT

Broker-favorite stocks like Big Lots (BIG), Bed Bath & Beyond (BBBY), AAR (AIR), Owens & Minor (OMI) and Beazer Homes (BZH) should be on an investor's watchlist in the quest for handsome returns.

The ratings on six P&I classes were affirmed because the transaction’s key metrics, including Moody’s loan-to-value (LTV) ratio, Moody’s stressed debt service coverage ratio (DSCR) and the transaction’s Herfindahl Index (Herf), are within acceptable ranges. The rating on the IO class was affirmed based on the credit quality of its referenced classes.

An Instacart IPO (Initial Public Offering) could be on the way. The shopping service app is talking to bankers about an Initial Public Offering. Source: Piotr Swat/Shutterstock.com Meanwhile, it has gotten another $200 million in private funding which values it at $17.7 billion. The latest round brings total investment to $2 billion. Instacart has been one of the pandemic’s big winners. It sends gig workers to stores on behalf of shoppers, then delivers the groceries to peoples’ doors. “Instacart has gone from a convenience to a lifeline for millions of people,” the company crowed in announcing the funding from Valiant Peregrine Fund and D1 Capital Partners.InvestorPlace – Stock Market News, Stock Advice & Trading Tips The news leaves two key questions. Can you get in on this, and should you get in on this? The Instacart Story If you are an accredited investor on a site like EquityZen, which specializes in pre-IPO listings, you may be able to buy some Instacart now. You’ll need to prove a net worth over $1 million, or income over $300,000, and will have to hold the shares until after the IPO. 7 Value Stocks To Buy in an Overvalued Market Instacart was founded in 2012 by a former Amazon (NASDAQ:AMZN) engineer, Apoova Mehta, and some friends. It now serves 500 retailers and 40,000 locations. During the pandemic it has hired 750,000 “shoppers,” gig workers who pick orders, stage them, or deliver them to customers. The company’s valuation has more than doubled in 2020.  Instacart has given stores like Publix, Sprouts and Bed, Bath & Beyond (NASDAQ:BBBY) the ability to compete not only with Amazon and Alphabet’s (NASDAQ:GOOGL) Google Express, but with chains that have stood up their own delivery services, like Walmart (NYSE:WMT), Kroger (NYSE:KR) and Target (NYSE:TGT). Walmart is currently the market leader. In reporting on Instacart’s latest funding round Bloomberg estimated sales made through the site will exceed $35 billion this year.  That puts it third behind Amazon and Walmart. Second Measure, which tracks credit card data, estimates the company’s volume rose 234%, year over year in August. Even if growth slows, the company has other ways of making money. It’s working with packaged goods companies on advertising, and continuing to add delivery partners like 7-Eleven and RiteAid (NYSE:RAD). Instacart charges $6-8 per delivery, depending on how fast you want it, and offers a $149 membership plan with free two-hour delivery on orders over $35. Instacart is also offering a deal with MasterCard (NYSE:MA), 14 months of membership when you buy 12. The company also launched a phone-based “senior” service for consumers over 60, although today’s 60 year-olds were 35 when the Web was spun in the mid-1990s. The Instacart Risks Will Instacart continue to grow after the pandemic? The company’s valuation is now equal to that of AirBnB, but the latter’s post-pandemic growth trajectory may look better. There are also labor risks. Instacart’s delivery people are gig workers. They lack the benefits of real employees. The company is fighting to maintain that advantage, pushing literature on those workers for California’s Proposition 22, which would maintain the fiction. How many gig workers will be available after the labor market opens back up? How much will Instacart eventually have to pay workers to keep them loyal? What will Instacart’s pricing look like after that happens? The Bottom Line Investors looking to profit need to look beyond the pandemic. Instacart, like other gig companies such as Uber (NASDAQ:UBER) and Lyft (NASDAQ:LYFT), is going to have labor problems. The gig economy creates a permanent underclass, and November’s election looks likely to go against that kind of two-tier economy. While Instacart promotes “smaller” businesses like Rite Aid, it’s not supporting small business. That could be a huge opportunity when the economy comes back. We will know much more when the S-1 emerges, and after the fire of the pandemic ebbs. On the date of publication, Dana Blankenhorn held a long position in AMZN. Dana Blankenhorn has been a financial and technology journalist since 1978. His latest book is Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, essays on technology available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. More From InvestorPlace Forget The Election… Pick These Stocks for the Win in 2021 Why Everyone Is Investing in 5G All WRONG America’s #1 Stock Picker Reveals His Next 1,000% Winner Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company The post Instacart IPO: The Next Big Unicorn You Can Buy appeared first on InvestorPlace.

Throughout 2020, Bed Bath & Beyond (NASDAQ:BBBY) stock has been one of the market’s best turnaround stories, with its shares surging more than 600% off their coronavirus-induced March lows. Source: Shutterstock That’s partly because consumer spending has risen since then and partly because Bed Bath & Beyond’s management is doing everything right to turn this sinking ship around. Guess what?InvestorPlace – Stock Market News, Stock Advice & Trading Tips Consumer spending is only going to keep improving into 2021. At the same time, the retailer’s management will keep doing everything right for the foreseeable future to improve Bed Bath & Beyond’s value proposition, relevance and profitability. Consequently, despite its 600%-plus rally over the past seven months, BBBY stock will keep pushing higher. Within the next few years, I believe that it can soar close to $40. So stick with BBBY stock.  Its rally isn’t over just yet. Improving Macro Trends The external environment surrounding Bed Bath & Beyond has steadily improved over the past few months and will continue to do so for the foreseeable future. 7 Value Stocks To Buy in an Overvalued Market When the Covid-19 pandemic first struck back in March, consumer spending dried up as everyone stayed at home and stopped doing things. Since then, however, the world has adapted to the pandemic. We’ve gone back outside, but we are wearing masks. Stores have reopened, but they’re enforcing social distancing rules. Restaurants are open, but they’re mostly restricted to outdoor dining. Thanks to these innovative adaptations, the world has been able to reduce the negative impact of the virus over the past few months, while also undergoing a healthy economic recovery and progress towards normalcy. The backbone of this recovery has been a strong and steady rebound of consumer spending, which today sits only 5% lower year-over-year (versus a 41% drop in late March). As consumer spending has rebounded, Bed Bath & Beyond’s sales trends have increased, too. Net sales at the home goods retailer dropped 49% YOY in the first quarter of 2020, but they declined just 1% YOY in Q2. External conditions will continue to improve for Bed Bath & Beyond, mostly because consumers, businesses and legislators alike are only getting better and better at the Covid-19 balancing act. As consumer spending continues to recover over the next few quarters, Bed Bath & Beyond’s sales trends will follow suit. Of course, this sustained sales rebound will provide continued support for BBBY stock. Improving Internals More important than the improving external conditions, the internal operating environment at Bed Bath & Beyond has markedly improved over the past few quarters — and will only continue to rebound into 2021. Long story short, a new management team led by the widely-respected Mark Tritton — who was the former chief merchandise officer at Target (NYSE:TGT) — has come in and changed everything in order to help Bed Bath & Beyond turn into the preferred omni-channel destination for home goods. Some of those changes include revamping stores, rightsizing the real estate footprint, and investing in e-commerce. The retailer has also built omni-channel capabilities like BOPIS (buy-online, pick-up-in-store), while significantly reducing its operating expenses, and retooling the supply chain to improve its gross margins. As shown by the company’s second-quarter earnings report, these changes are working. For the first time in several years, Bed Bath & Beyond reported positive comparable sales and meaningfully grew its profits year-over-year. Management is not resting on this early success or slowing down; instead, it continues to push full-speed ahead when it comes to modernizing and improving Bed Bath & Beyond. Most recently, the company struck separate deals to sell its Christmas Tree Shops retail banner, its Linen Holding business and a distribution center in New Jersey. Those deals cumulatively netted the company about $250 million, a sizable chunk which will go towards improving the firm’s core business. Bed Bath & Beyond’s management is doing everything right to turn the sinking ship that was Bed Bath & Beyond for most the 2010s, into a strong omni-channel home-goods retailer in the 2020s. As long as it keeps doing everything right amid this transition, BBBY stock will keep flying higher. Bed Bath & Beyond Can Climb Much Higher My estimates indicate that BBBY stock could rise to $40 within the next few years as the company’s big turnaround plays out. The U.S. furniture and homeware market is expected to grow by 2% to 3% per year over the next few years. For years, Bed Bath & Beyond has seen its share of that market eroded by mismanagement of its business. The new management team should help the company stabilize its market share, leading to 2%-3% sales growth. Gross margins should improve as its pricing strategies and demand improve and consumers use fewer coupons. Its operating-spending rate should fall as the company closes underperforming stores, invests in automation technology and leans more into e-commerce sales. Bed Bath & Beyond’s  profit margins, therefore, should expand meaningfully over the next few years. If they do, then its 2% to 3% sales growth will translate into roughly 10% annualized profit growth after the pandemic. Based on that assumption, my modeling suggests that Bed Bath & Beyond is on track to generate earnings per share of about $3 by 2025. The current turnaround of Bed Bath & Beyond reminds me a lot of the turnaround that Best Buy (NYSE:BBY) staged over the past few years. During that turnaround, BBY stock normally traded at  a forward price-earnings multiple of 13 times. Let’s say that BBBY stock does the same. A 13-times forward earnings multiple on 2025 earnings per share of $3 results in a 2024 price target for BBBY stock of nearly $40. The Bottom Line on BBBY Stock I’m exceptionally bullish on  Bed Bath & Beyond’s turnaround. The company’s core home-goods market is supported by non-cyclical growth drivers, while the brick-and-mortar component of that market has long-term staying power. Bed Bath & Beyond is a leading physical player in that space, but its brand and business were mismanaged for years. Now they are being managed perfectly, and the company’s growth trends today look about as good as they have in five years. As long as the retailer’s management team keeps executing flawlessly, Bed Bath & Beyond’s growth trends will continue to meaningfully improve, and BBBY stock will keep pushing higher. On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.  The New Daily 10X Stock Report: 98.7% Accuracy – Gains Up to 466.78%.  InvestorPlace’s brand-new and highly controversial newsletter… is rocking the industry… delivering one breakthrough stock recommendation each and every trading day… delivered straight to your inbox. 98.7% Accuracy to Date – Gains Up to 466.78%. Now for a limited time… you can get in for just $19. Click here to find out how. More From InvestorPlace Forget The Election… Pick These Stocks for the Win in 2021 Why Everyone Is Investing in 5G All WRONG America’s #1 Stock Picker Reveals His Next 1,000% Winner Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company The post BBBY Stock Will Keep Pushing Higher Because Its Management Is Doing Everything Right appeared first on InvestorPlace.

Viasat, CSG Systems, Bed Bath & Beyond, Masco Corp and Brunswick Corp highlighted as Zacks Bull and Bear of the Day