You don’t need to find plutonium to generate 1.21 gigawatts of return.
Photo: Universal Pictures/Everett Collection
Losing money in the stock market? Take Doc Brown’s DeLorean for a spin.
A note out from BTIG analyst Marvin Fong on Monday documented the continued underperformance of e-commerce stocks, many of which have been hit hard after spiking early on in the pandemic.
In response to a number of inquiries as to “how close we are to the end,” Mr. Fong came up with what he called a “Back to the Future” strategy. No, it doesn’t involve building a time machine and giving your younger self a sports almanac, or even a future copy of The Wall Street Journal. It does involve a form of time travel, though—back to pre-pandemic days when people made money in the stock market by buying cheap stocks and not expensive ones. Weird, right?
Year-to-date, stocks currently trading at more than double their pre-Covid enterprise value to sales multiples like Fiverr, Revolve and Shutterstock have underperformed; with positive returns coming from stocks like LendingTree and TrueCar trading well below their pre-Covid multiples.
It might be time to close the Reddit browsers and reboot the old Excel spreadsheet. Just relax, Calvin: You don’t need to find plutonium to generate 1.21 gigawatts of return. You just need to jog your memory a little.
Write to Laura Forman at [email protected]
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Appeared in the January 15, 2022, print edition as ‘OVERHEARD.’
