Stocks in Play - January 21st 2025

TLDR Stocks in Play: DHI, SCHW, TEM

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Irish Born Investor
January 21, 2025 • Estimated Reading Time: 5 minutes

Stocks in Play - January 21st 2025

TLDR Stocks in Play: DHI, SCHW, TEM

Welcome to today's Stocks in Play report. Below are the key stocks to watch, along with brief x-ray and analysis. I’m early posting this morning as I have to attend to some personal matters so will likely miss some of the later morning earnings.

If you find this Newsletter helpful and ever want to say thank you then feel free to Buy Me a Coffee. It’ll inspire me to work faster….

A Quick Week Ahead

I did not publish a week ahead email this weekend as I wanted to see what happened and the reaction to the new administration and inauguration. This morning we have some important earnings SCHW, MMM, DHI and tonight we hear from the first heavy hitter NFLX along with UAL, IBKR. Entire earnings list here.

1) DR Horton (DHI) (Rating: B, Single-Day)

Industry Group: Homebuilding Market Cap: $47b,  Float: 285m, Short Interest: 2.3%, Days to Cover: 2.5, Exchange: NYSE

Catalyst: Solid Earnings Report.  Solid EPS Beat ($2.61 vs est. $2.45), Strong Revs Beat. Big Beat on Total Homes Sold KPI 19k vs est. 17.8k. Guidance Reiterated. Increased Stock Buyback. Stock is neglected. Nothing ground breaking here but there is definitely room to the upside here after a few months of negative returns. This stock is capable of a 7 to 10% day on the right day.

2) Charles Schwab (SCHW) (Rating: B, Single-Day)

Industry Group: Investment Brokers Market Cap: $135b,  Float: 1.6b, Short Interest: 0.8%, Days to Cover: 1.7, Exchange: NYSE

Catalyst: Beat on EPS ($1.01 vs est. $0.91) Slight beat on Revs. Revs up 19% YoY. Strong Operating Profit Margins and EPS Growth. Stock has been consolidating for a while. There is room to $84 before resistance and potential to break above that. Again nothing ground breaking here but solid results.

Honorable Mention to: TEM - Nancy Pelosi’s filings revealed a Leap Call Option on this new AI IPO. Generally speaking I think these filings from politicians or notable people are meaningless and overhyped however it has a 50m Float 18% Short Interest with 3 Days to Cover. TSLA - I feel like TSLA is going to be a strong SIP going forward with the Musk Trump connection. Other big tech - AMZN, GOOG, META.

Market Awareness

For all the noise I think that Tariffs were the most important topic yesterday for the overall market. Those tariff threats were somewhat tempered. The market sees these as a negotiating tactic for concessions from Mexico and Canada. We also have Trump signaling a visit to China within his first 100 Days. Both of these are probably at best bullish and at worst not bearish. We are breaking out this morning from the Channel that started in Mid December. We should now watch to see if we can make a higher high.

I am bullish Big Tech after seeing their prominence at yesterday’s event. I don’t think there is any need to over think this. If earnings cooperate then I think we could see a strong run. This morning however I am cautious of a gap up and shakeout fade. NFLX is my main focus of the day with their earnings after hours.

Top Pick Watchlists:

Sources & Services I Use in my Trading:

PS: There are many ways to trade stocks in play. It does not have to be the one that keeps going straight up and sometimes it doesn’t even have to be day one of the catalyst. Everyone must find a setup, timeframe and method that works for them. This list is supposed to educate on the criteria I use and the methods in which I find Stocks in Play. Yours may differ and that is completely okay.

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