Update - July 13, 2021

Getting Ready for Big Moves

The market is about to show us its hand.

Now that the first half of the year is in the books, companies are starting to reveal their profit figures, showing us what they’ve got.

It will make for an interesting few weeks.

The big banks will get most of the attention this week. In fact, JPMorgan Chase (JPM) kicked things off this morning with a solid earnings beat. Goldman Sachs (GS) followed with plenty of good news of its own.

The overall theme? Things are less bad than expected. JPMorgan was able to reclaim some $3 billion in loan loss provision. Money it once thought would go unpaid will now make its way into the bank’s earnings stream.

It’s a common theme across the nation as the economy tries its hardest to put the pandemic behind us.

For one stock in our Modern Asset Portfolio, the idea creates a bit of a mixed bag.

The figures from Qiagen (QGEN) yesterday were good. While not yet official, the company’s second quarter results came in better than expected. The medical testing company saw sales rise 28% – well above estimates.

Even better, profit expectations for the quarter came in at $0.67, solidly beating best guesses of $0.64.

The beat comes thanks to strong sales in the company’s non-COVID-19 testing lineup. The news there was quite good. This is the business unit that will drive the company forward.

Within the COVID-focused side of Qiagen’s operations, business was brisk during the second quarter, but the outlook for the rest of the year has left investors a bit skittish. The news is bittersweet.

Rapid vaccinations will lead to less testing. It’s a good thing for the overall economy… but not so great for a company that makes a lot of money from developing COVID tests.

Despite strong profit figures, this is the number that investors focused on yesterday. Shares sold off – ending the day down 3%.

After a month that pushed the stock more than 10% higher, the move is not all that surprising. I expect the trend to be short-lived.

And I don’t say that based on a hunch. There’s more critical news from the company this week that I haven’t mentioned.

Qiagen announced a new $100 million share buyback program. This is on top of the plan of a similar size launched in November.

Looking at the data from last year’s program, we can see management is not messing around with its buybacks. In the weeks immediately following the announcement, as many as 437,553 shares were bought by the company and removed from the market.

It tells us that the next few weeks could see strong upside pressure on the stock.

If you don’t own shares of Qiagen, grab them now before the frenzy starts.

I’ll keep you updated on the portfolio as this exciting earnings season heats up.