Best Stocks: The unique internet retailer that's cheap, trending higher and a possible trade war winner
(This is The Best Stocks in the Market , brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.) Josh: You know who's not raising prices on their customers? eBay . The trade war should have next to no impact on their business and it may even make the site a more desirable shopping location. More on that in a moment. First, here's a one-year chart of eBay, which just hit the Best Stocks in the Market list this week: Best Stock Spotlight: eBay Inc (EBAY) Josh: EBay is a slow grower, but it's been incredibly consistent and resilient in both good economic conditions and bad. When times are good, people are buying more merchandise. When the economy softens, there is an increase in people wanting (or needing) to sell things. As you can see in the chart below, eBay is now approaching multi-year highs: Sean: EBay is the 6th best performer in the consumer discretionary sector this year, up 13%, outperforming 89% of sector constituents in 2025. EBAY trades at a trailing 17x price-to-earnings ratio and a forward 12x price to earnings, making it one of the cheapest consumer discretionary stocks within the S & P 500. While EBAY trades at these valuations, the consumer discretionary sector trades at a 20x P/E, EBAY's industry classification (internet retail) trades at a 23x P/E, and the S & P 500 in its entirety trades at a 24x trailing PE, according to YCharts data. Ebay has been assigned a discount relative to its peers due to its slow growth. EBAY hasn't reported double digit revenue growth YoY since Q2 of 2021. However, it has reported 9 straight quarters of single digit, positive revenue growth YoY. EBAY is a consistent, mature tech platform with a big U.S. bias in terms of its revenue and costs. EBAY reported earnings at the end of April, beating on the top and bottom lines. On that earnings call, the CEO Jamie Iannone had some encouraging things to say about their ability to navigate tariffs, via Quartr: "Our Greater China to U.S. quarter makes up about 5% of total GMV for us. And China overall is a little less than 10%. But about 3/4 of that business of the 5% coming from China to the U.S. is forward deployed to the end markets. So it's already subject to tariffs and so wouldn't be subject to any changes in de minimis based on the cost of the items. On the other half of the inventory or the 1 quarter that's not forward deployed, about 50% of that uses a shipping solution that we've helped create, which is called SpeedPAK. And what that does is it really incorporates all of the tariff complexity and customs complexity right into the shipping solution." The CEO here is explaining that the trade corridor from Greater China to the U.S. represents about 5% of eBay's total Gross Merchandise Volume (GMV), and all of China accounts for a little less than 10% of GMV for EBAY. Of the 5% GMV from China to the U.S., about three-quarters is "forward deployed," meaning the inventory is already in the U.S. and has already been subject to tariffs, the buyer/seller doesn't have to worry about those costs. Therefore, this portion would not be affected by any future changes to the "de minimis" threshold — the value below which imports are exempt from certain tariffs. And for the remaining one-quarter of China-to-U.S. inventory that is not "forward deployed", about half uses eBay's SpeedPAK shipping solution. SpeedPAK is designed to handle the complexities of tariffs and customs, making the process smoother for sellers and buyers. Amazon doesn't report gross unit volume, but looking at revenue on a geographic basis, China accounts for 21% of total revenues while EBAY's revenues from China account for 11% of revenue, according to Quartr. In sum, most of eBay's China-to-U.S. shipments are already compliant with current tariff rules, and for the rest, eBay has solutions in place to manage customs and tariff complexities. EBAY's price is reflecting durability - EBAY is now 13% below all time highs, and climbing. The stock has been forming support along its rising 50 day moving average, while remaining a value stock in a growing sector. Risk Management Josh: Look for the rising 200-day moving average to act as support as it has the whole way up. EBAY quickly broke below its 200-day moving average on April 6, responding to the tariff announcements but recovered overnight. As long as the price is above that level, EBAY is risk on. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL'S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. ASSUMPTIONS MADE WITHIN THE ANALYSIS ARE NOT REFLECTIVE OF THE POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC" TO THE END OF OR OUR DISCLOSURE. Click here for the full disclaimer.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
an hour ago
- CNBC
International stocks are ahead of the U.S. so far this year—how to add them to your portfolio
For investors, the U.S. has been the place to be in recent years. Over the past decade and a half, the S&P 500 — a measure of the broad U.S. stock market — has returned an annualized 14.2%. The MSCI ACWI ex-USA index, which measures the performance of stocks from pretty much everywhere else, logged a return of 6.5% over the same period. Since the start of 2025, however, investors are eschewing U.S. stocks in favor of international names. So far this year, the ACWI ex-USA index has returned 15.7%, trouncing the 1.5% return in the S&P. "In 2025 thus far, there are some clear indications that investors are adopting the 'ABUSA' ('Anywhere But the USA') mindset," says David Rosenstrock, a certified financial planner and director of financial planning and investments at Wharton Wealth Planning. "This shift is partly driven by concerns over market volatility in the U.S., uncertainty regarding policies and relatively weaker performance compared to global counterparts," he says. So is it time to invest in foreign stocks? Yes and no, say financial pros. You shouldn't make any wholesale changes to your portfolio mix based on short-term market results, they say. But if you have little or no foreign exposure, diversifying is likely a savvy move over the long term. Here's why. If you were born in the 90s, you may have never been invested during a sustained period during which foreign stocks outperformed domestic names, as they did in the back half of the 80s and much of the early 2000s. If that's the case, you may be tempted to continue ignoring foreign stocks, even after the recent uptick. "The problem is those trends tend to tend to reverse over time," says Amy Arnott, a portfolio strategist at Morningstar. "So even if the U.S. is outperforming over a very long period, like it did [in the 15 years] through 2024, eventually that trend reverses." While it may feel like the U.S. has dominated stock markets forever, it wasn't that long ago that foreign firms were delivering better returns. From 2001 to 2010, for instance, the ACWI ex-US index submitted a cumulative total return of 71.5% compared with a 15% gain in the S&P 500. Adding some foreign stocks to your portfolio can help guarantee at least some exposure to whichever side is performing better over the many years you're likely to invest. "True diversification means tapping into different economic cycles, monetary policies and growth drivers. It offers exposure to unique industries," says Marcos Segrera, a CFP and principal at Evensky & Katz/Foldes Wealth Management. "Furthermore, owning foreign stocks is a crucial way to diversify away from U.S.-specific risks." If you're looking to invest in foreign stocks, the most effective way to do it is by adding a low-cost index mutual fund or exchange-traded fund, says Arnott. "That way, you can get international diversification in one package and get exposure to a large number of companies and countries outside of the U.S.," she says. Market watchers generally divide foreign stocks into two camps: those that come from "developed" economies, such as those in Japan, Australia and several European countries, and emerging markets, such as China, India and much of Latin America. You can buy funds which invest in either, but "to keep things simple," owning a "total international stock" fund — such as one that tracks the MSCI ACWI ex-USA or something similar — will get you exposure to both, says Arnott. And while you may have powerful convictions about the future of a particular country and its economy, you'd be wise to avoid tilting your foreign exposure too much in that direction, Arnott says. Putting all your eggs in one country or region's basket, she says, can result in big swings in your portfolio. "It can be tempting to do that when there's a lot of excitement about Asia Pacific stocks or Latin America, or things like that," she says. "But it's difficult to use those types of funds in a portfolio just because they are more volatile, more narrowly defined, and people unfortunately have a tendency to sometimes see performance over the past few years and buy in at the wrong time."
Yahoo
an hour ago
- Yahoo
Trump-Musk induced Tesla slide points to market risks from massive stocks
By Lewis Krauskopf NEW YORK (Reuters) -The rift between President Donald Trump and Tesla chief Elon Musk has captivated the world as a political drama, but it has also become a Wall Street spectacle, highlighting the risk to equity markets from the world's biggest stocks. Tesla shares slid 14% on Thursday as Musk and Trump feuded largely on social media, including the president threatening to cut off government contracts to Musk's companies. Although the stock modestly rebounded on Friday, Thursday's decline dragged down some of the most closely followed equity indexes, which are more heavily influenced by companies with the largest market values. Tesla's fall accounted for about half of Thursday's declines for both the S&P 500 and the Nasdaq 100, which fell 0.5% and 0.8% respectively, on the day. The S&P 500 is generally considered the benchmark for the U.S. stock market while the tech-heavy Nasdaq 100 is the basis for the Invesco QQQ Trust, one of the most popular exchange-traded funds. "It's a widely held stock," said Robert Pavlik, senior portfolio manager at Dakota Wealth. "When this big-name company that represents a sizable portion of the index sells off, it has an overall effect on the index, but it also has a psychological effect on investors." Tesla's decline points to the risk that many investors have long warned about, of indexes being heavily influenced by a handful of megacap stocks. Tesla is the smallest by market value of a group of massive tech and growth companies known as the "Magnificent Seven," which overall drove equity index gains in 2023 and 2024. The group has had a rockier 2025 so far, but more recently has been rebounding. The Magnificent Seven, which include Apple, Microsoft and Nvidia, had a combined weight of nearly one-third in the S&P 500 overall as of Thursday's close. "If you're an investor and you own the S&P or the Nasdaq 100 ... you just need to be aware that you own a lot of exposure to a very small cohort of names," said Todd Sohn, ETF and technical strategist at Strategas. Tesla's decline on Thursday knocked about $150 billion off its market value, while its weights in the S&P 500 and Nasdaq 100 stood at 1.6% and 2.6%, respectively. Tesla shares rebounded somewhat on Friday, up about 5% in mid-day trade, putting its market value around $970 billion. Microsoft and Nvidia, whose market values exceed $3 trillion, held weights of 6.9% and 6.8% in the S&P 500 as of Thursday. Tesla shares are down some 37% since mid-December, a period that has seen the S&P 500 fall about 1%, meaning its influence in the index has also declined over that time. The shares hold a broad influence among ETFs. Tesla has a varying presence in about 10% of the total universe of about 4,200 ETFs, according to Sohn. Those include the Consumer Discretionary Select Sector SPDR Fund, which sank 2.5% on Thursday, and the Roundhill Magnificent Seven ETF, which dropped 2.6%. "It's very important to know holistically what is in all your ETFs, because a lot of them are overlapping," Sohn said. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
an hour ago
- Yahoo
Why ABM Industries Stock Is Down Today
ABM delivered a quarter roughly in line with expectations, but the full-year forecast suggested some downside to expectations. Given the macro headwinds, investors seem to see more downside potential than upside from here, leading to a sell-off in the stock. 10 stocks we like better than Abm Industries › ABM Industries (NYSE: ABM) largely met Wall Street expectations for the quarter, but costs are on the rise and full-year guidance implies some risk of weakness compared to estimates. Investors are on the defensive, sending ABM shares down 13% as of noon ET. ABM supplies cleaning, parking, and other services to a wide range of facilities from office buildings to factories and airports. The company earned $0.86 per share in its fiscal second quarter ending April 30, a penny shy of expectations, on revenue that was in line at $2.1 billion. The quarter marked a return to organic revenue growth thanks to strength in the prime commercial office market. ABM also secured $1.1 billion in new bookings in the first half of its fiscal year, up 11%. Revenue growth was 3.4%, compared to a 3% rise in operating expenses and a 9% rise in selling, general, and administrative expenses. "We remain constructive on the outlook for our core markets, particularly high-quality office buildings, manufacturing and distribution facilities, commercial aviation, and microgrids," CEO Scott Salmirs said in a statement. "Further, projects delayed in the second quarter are expected to be realized in the third quarter." The quarter was fine, but investors appear to be reacting to the company leaving in place full-year guidance for earnings of $3.65 to $3.80 per share. At the midpoint that's below the $3.77 consensus. Investors came into this earnings season looking for more of an acceleration than what ABM could deliver and given the broader macro uncertainty there appears to be more downside risk than upside in the months to come. A slowdown in manufacturing, or layoffs that eat into office building occupancy, could hit results. Given the uncertainty, investors are likely wise to move to the sidelines right now. Before you buy stock in Abm Industries, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Abm Industries wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $674,395!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $858,011!* Now, it's worth noting Stock Advisor's total average return is 997% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool recommends ABM Industries. The Motley Fool has a disclosure policy. Why ABM Industries Stock Is Down Today was originally published by The Motley Fool Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
