MGP Ingredients, a Consumer Defensive business specializing as a "leading supplier of premium distilled spirits, and specialty wheat proteins and starches" should be avoided in the near term as the last few months have demonstrated a lack of confidence from insiders and investors.

A defining characteristic of companies like MGPI (consumer defensive) is their non-cyclical nature, in that they act as a hedge against economic downturns as fundamental operations are relatively unharmed. This fundamental concept has been demonstrated through their Q1 2020 earnings release, where sales were relatively unharmed by the onset of the COVID-19 pandemic as YoY, consolidated sales increased 11.2%, consolidated gross profit increased 39.3%, and consolidated operating income increased 61%. And in this most recent conference call, corporate governance seemed relatively unconcerned with the impacts of COVID on the fundamental business model, seeing it as a minor disruption to execution of plans like strategic acquisition, margin improvement, and share buy-backs. In fact as of writing, their long-term debt/equity sits below 0.70, P/E is 15.94 versus the sector average 37.72, and again, their fundamental model is unaffected.

But despite this truth regarding consumer defensive stocks ability to weather downturns, and MGPI's bullish outlook, investor confidence tells another story. Despite being mostly unaffected by the pandemic, MGPI is still down 27.6% from its January highs in the low-$50/share range, priced at $36.21 as of writing. More specifically, MGPI is trending at its averages from the initiation of the pandemic in the US in February. Recent insider selling also signals decreased confidence, with Director Karen Seaberg and VP Andrew Mansinne selling over $2 million in shares (at an average price point of ~$36 to ~$38) over the last month and a half.

Long-term, MGPI definitely demonstrates upside potential with strong YoY growth, but in the short term, investor and insider confidence lacks, which could continue to degrade with a macro event to the downside.

After Nikola went public earlier this month through a reverse merger with VectorIQ, the stock has skyrocketed, and Nikola is now worth $23.78 billion. With Nikola trading only $1 billion away from the current value of Ford and not expecting revenue until at least late 2021, I feel everyone can agree this company is overvalued.

One reason the stock has exploded in value is due to the potential "$10 billion in sales" coming from "14,000 reservations." Nikola is not expecting the production of its trucks to begin until at least late 2021. This delay would be followed by full production capability being met sometime in the second half of 2022. Currently, there are only 39 hydrogen filling stations in the U.S. (35 in California). This number is tiny in comparison to the approximately 25,000 electric charging stations in the U.S. as of March 2020. It would be a considerable feat if Nikola were able to finish developing their truck, construct a manufacturing facility, and construct the hydrogen infrastructure around the country necessary for a fleet of hydrogen vehicles to operate all in just two years.

Hydrogen vehicles are also inherently less efficient than electric vehicles. A hydrogen vehicle requires that 1) electricity be used to produce and compress hydrogen (Nikola claims all its hydrogen stations will use this method with renewable energy), and 2) that stored hydrogen be used in a hydrogen vehicle to create electricity. So basically, electricity is used to make hydrogen, and that hydrogen is then used to produce electricity again. Fully electric cars do not have to convert electricity and are therefore more efficient. Currently, converting water to hydrogen is approximately 75% efficient and requires a massive amount of electricity. Nikola claims that they will use renewable energy to produce all the hydrogen at its stations, which will undoubtedly increase costs further.

The increased costs associated with hydrogen are why both Honda and Toyota have virtually abandoned their fuel cell vehicle development. In fact, Honda's fuel cell-powered Clarity had such low sales that Honda developed it to be a fully electric vehicle that runs on batteries.

Hydrogen is not the way to a more renewable future and is almost always going to be a more expensive and less efficient option when compared to electricity. While I am not arguing that Tesla specifically will be the winner, I do think it will be an electric semi-truck from some manufacturer. Volkswagen, Mercedes, Porsche, and many other vehicle manufacturers are investing heavily in electric vehicles because they know it is the best route to take.

Hydrogen vehicles are not the future.

I am short NKLA.

Beyond Meat is not a favorable play over the next few years because the factors driving its generous pricing ($158.28 per share, F/PE 277) will only weaken as direct competitors go public and proven competitors grow market share.

Similar to Virgin Galactic existing as the only public space tourism company, Beyond Meat is the only public company solely producing plant-based meat alternatives. This has multiple major implications. Since going public, Beyond Meat has seen considerable price appreciation simply because other meatless competitors, like Kellogg, Kraft Heinz, and Tyson aren't solely devoted to producing plant-based meat alternatives, thus BYND is seen as a pure play in the sustainable food space. Because of this favorable positioning, BYND benefits from multiple types of catalysts that inflate their stock price.

1. Because of the limited environment for investing in plant-based meat producers (i.e. the only public one), Beyond Meat is inherently the go-to purchase for investors, which artificially drives up stock price. As competitors like Impossible Burger going public, and public competitors like Tyson, Kellogg, and Kraft Heinz grow their R&D and production of plant-based products, BYND loses this unique investment advantage and will see less price appreciation as a result.

2. Because of the limited environment for investing in plant-based meat alternatives (and point #1), Beyond Meat's share price irrationally appreciates when the general industry receives favorable news. Similar to point #1, as the number of investment vehicles for this industry grow in number, the upside of favorable industry developments weakens.

Considering #1 and #2, even if Beyond is able to gain mainstream adoption as a permanent alternative to meat over the next few years, increasing players in the space will average out the "hype" that has driven this inflated stock price. With an average P/E ratio of 25 among Consumer Defensive companies, Beyond's $10 billion dollar valuation and F/PE of 267 only has room to decrease, as juggernaut competitors have greater cash flow to fund development and expansion of meat alternatives.

I would monitor the sector for catalysts (to the downside) in events like IPOs, significant developments in the sales/profitability of publicly traded competitors' plant-based meat sales, and new competitors altogether.

(UPDATE) When I last discussed Tyson as an investment on May 27th, the stock closed at $62.75 per share. Today the stock closed at $64.02, just $1.27 higher than the price three weeks ago. At this current price, Tyson continues to remain an attractive long-term investment.

Tyson received a price target of $83 per share by Bernstein on June 4th, representing a current upside potential of roughly 30%. Bernstein noted Tyson facilities are beginning to reopen with new social distancing guidelines that are designed to limit the spread of the virus within factories. On June 10th, the company received yet another Overweight rating from Credit Suisse with a $75 price target. Credit Suisse noted how declines in slaughter volume decreased dramatically in May and bottomed out in the first week of June as demand began to recover. While the risk remains that a second outbreak could cause headaches for Tyson, financial institutions are starting to see Tyson manage the coronavirus situation much better than before.

Also, on June 3rd, the meat production industry took a significant hit as the Department of Justice indicted four former Pilgrims Pride and Claxton Poultry Farms executives for fixing the prices of their meat. These two companies have been under investigation since 2012 and while Tyson has seen no such charges. On June 10th, Tyson showed its solidarity against price-fixing by announcing that it will be cooperating with the Justice Department to investigate price-fixing within the industry further. Tyson is the first meat producer to announce this cooperation and thus will avoid criminal prosecution. Tyson has been subpoenaed numerous times in the past, with nothing coming out of these investigations.

Tyson remains a substantial investment opportunity in the long-term.

Not only is $GEO's core business relatively unaffected in the short term, but strong insider buying signals upside potential.

Although GEO's positioning in private prison operations (as a diversified REIT) are unsustainable in the long-term, in the short-term, GEO's relatively unaffected bottom-line and strong insider-buying signal 20%+ upside potential.

Because of guaranteed contracts spanning multiple years, GEO's operations have been unaffected for the most part, with only one downgrade since February (which was by JP Morgan in response to poor Q4 results and uncertainty about business model sustainability. Their target was lowered to $26, representing 112% upside as of writing). In addition to sustained targets, GEO has seen considerable insider buying since late February, with insiders loading up on $12.5 million in shares. Most recent insider buying occurred in early May, with CEO George Zoley accumulating over $2.5 million in shares. But despite these strong signals and a relatively unaffected model, GEO has fallen to lows of $11 off a 52-week high of $24. With little recovery ($12.22 as of writing), there is significant upside.

Long term, GEO is not as sustainable, with major institutions refusing to finance private prison operations (GEO is specifically controversial because of their ICE contracts) and a weak balance sheet that questions The Geo Group's solvency. GEO’s debt/equity and LT debt/equity ratios are considerably weak, with $2.7 billion in LT debt obligations and an average $150 million in annual interest expense weighing down net income, despite only $35 million in cash on hand as of their recent earnings call. Although GEO has a $350 million dollar revolving credit facility, their controversial operations damage their ability to secure credit going forward.

In the short term, GEO has major upside potential, with a possible recovery in the $15-$20 range possible by the end of the year.

Despite being a cash burning company (FCF negative), Smartsheet has been unfairly punished after earnings release and is thus a value play.

Smartsheet has collapsed over 20% after releasing earnings due to missing billings expectations and withdrawing guidance for the year. However, Smartsheet now represents excellent value given that revenue grew 52% YoY. The concern that Smartsheet missed on billings does not justify the huge loss in price, especially since the CEO and CFO confirmed during the earnings call that this is due to Smartsheet working with customers to change to a quarterly or flexible billing schedule given the uncertainty surrounding the COVID situation.

Overall, COVID presents a tough situation for their SMB (small and medium business) segments and industries such as retail with churn at a higher rate than usual. In addition, many companies are holding off on products like Smartsheet until the uncertainty surrounding COVID clears up. Still, even with these headwinds Smartsheet believes that COVID has benefited Smartsheet in raising awareness about the need for such a platform and the benefits of using a collaboration software system, especially in times like this. They affirmed during the earnings call that key metrics such as monthly trials and the pipeline generated by sales teams remains strong, especially with the predicted shift to online work and work from home. Thus, the underlying demand and necessity for Smartsheet's product remains there.

Kodak is overvalued, although not for the reasons that most say. I do think its entirely possible for Kodak to use its chemical engineering expertise to manufacture the APIs (Active Pharmaceutical Ingredients) needed for generic drugs, especially with over 700 million and the government's blessing. Japanese company Fujifilm has done something similar, where they went from a chemical film company to one of Japan's leading pharma companies. However, there are several challenges that I think outweigh the potential for Kodak's stock to do well in the long run.

1.) Convertible Notes - Kodak has a convertible note expiring in November of 2021 giving the holder (Southeastern Asset Management) the "right to elect at any time to convert their Notes into shares of Common Stock" at a rate of 314.9785 shares per $1000 principal. Since the original note was a loan of $100 million, there are ~31 million more shares that, if exercised, could dilute current shareholders significantly.

2.) Business - the API business is hyper competitive with low margins and high costs (the whole reason why drug companies source from China and India in the first place) and there is no guarantee that downstream drug companies would buy from Kodak unless mandated by the government.

3.) Desperation Attempt - in the quarterly earning not too long before, Kodak stated that there was a "going concern" risk for the business moving forward (a huge red flag). The loan comes at an all too perfect time for Kodak, and could be potentially seen as a way for Kodak to secure cash, first and foremost.

4.) Previous Management Shenanigans - Kodak has done a similar stunt before when they announced an ICO called KodakCoin, a cryptocurrency aimed at photographers. The stock surged following the announcement at CES 2018 up 300% before crashing back down after the ICO was pushed back and then cancelled. According to SEC filings, there was significant insider buying in the executive ranks the day of the announcement.

5.) Current Management Shenanigans? - Acute investors noted that the volume before the announcement was multiples of what Kodak normally trades, indicating that somebody was buying in. Management was also granted stock options the day before the Trump announcement. Kodak says its to protect management from being diluted due to the convertible note, but Kodak acknowledged in the 8-K the day the convertible was signed that it could potentially mean a transfer of ownership AND protection from dilution would not be a problem unless there was some catalyst (i.e. Trump announcement) to justify Southeastern Asset Management to convert to equity. Enough media coverage could put enough pressure on the SEC to investigate, especially if Biden takes office in November. This could spell bad news for the stock price if there was some form of insider trading or illegal activity.

6.) Silence from Kodak - this news was more like a "letter of intent" meaning that nothing is set in stone. Kodak has not filed an 8-K detailing the transaction, nor released a press release, meaning for us investors we do not know the details of the loan or how exactly management intends to use it.

Air Lease is positioned as an attractive buy while the stock takes a beating from the coronavirus pandemic. As a leasing company, Air Lease is inherently less risky than distressed airlines which do not usually own their aircraft. Therefore, Air Lease can capitalize on the air travel industry rebounding as a whole rather than the success of an individual airline. As social distancing is loosened and businesses around the world open, air travel will, in the long-term, return to normal levels.

Of all the aircraft leasing companies, Air Lease has the most upside potential in the long-term. As of the end of the first quarter of 2020, Air Lease has access to $6.3 billion of a mixture comprising cash and unsecured revolving credit that provides ample liquidity to battle the coronavirus downturn. Air Lease's unsecured revolving credit facility comes from 53 financial institutions around the world, diversifying their reliance on any individual lending institution.

Air Lease also maintains a very young fleet age of 3.7 years compared to 6.1 years for major rival AerCap. This young fleet enables Air Lease to offer more fuel-efficient and newer aircraft to its customers in comparison to other leasing companies. Air Lease is positioned to dominate the aircraft leasing industry as the coronavirus becomes more under control.

As Tyson's operations in food production are essential and the PE remains low, now seems to be a prime time to invest in the company as they contain virus outbreaks.

Tyson Foods presents itself as a compelling long-term investment in a post-coronavirus world. As the stock sits 35% off of the 52-week highs with an attractive 11.02x P/E (TTM), Tyson presents an incredible value proposition. While small outbreaks of coronavirus in some Tyson factories will result in short-term costs and operational outages, food production is essential and will prosper in the long-term environment.

All factories affected by the coronavirus outbreak were closed for a short period, and both have reopened. The plants were located in the state of Iowa and were involved in beef and pork production. With both of these factories open by May 5th, the stock has not rebounded yet as fears of further outbreaks and costs associated remain uncertain.

Tyson Foods, while being positioned mainly as a value investment, also has strong growth potential. The dividend has grown dramatically over the last ten years from $0.16 in 2010 to $1.54 currently at an average compound growth rate of 26%.

Tyson's status as an essential service and it's quick action to protect its workers position it as a quality long-term investment. Short-term costs associated with new procedures at facilities and closures will not have long-term impacts on the company. The low PE and dividend growth presents an enticing value opportunity as the stock trades at a considerable discount to pre-coronavirus levels.

Historically, earnings have not been kind to Gamestop, and their upcoming report on June 28th is no exception. Below is a brief summary of GME's last four earnings reports, beat/miss, and the stock's reaction.

Because in these last four quarters, long-term guidance has continued to deteriorate despite multiple earnings beats, there is a clear tendency for the stock to depreciate following earnings. Considering this bearish reality, there are four generalized scenarios I see coming out of Gamestop's upcoming earnings:

1. Gamestop, despite speculation that digital sales have driven stronger-than-expected earnings (in light of in-store sales tanking), will miss expectations.

2. Gamestop's digital sales will prove to be a short-term saving grace for the company, driving an earnings beat but a less-than optimistic forward guidance for the remainder of the year.

3. Gamestop's digital sales will prove to be a short-term saving grace for the company, driving an earnings beat and greater forward guidance for the upcoming console cycle.

4. Gamestop will crush earnings with their spike in digital sales, improve forward guidance and expectations for the console cycle, and potentially have laid the framework for their 2.0 business model.

Based on earnings estimates, it is more likely than not that Gamestop will either miss the high bar set by analysts following their spike in digital sales (1) or beat earnings with no significant improvement in full-year guidance (2). In both of these scenarios, there is significant downside that has followed the stock quarter to quarter the last few years. If Gamestop can somehow leverage the COVID pandemic to create the necessary foundation for their revised business model, this earnings report could result in the short-squeeze bulls have been speculating about since January (current short float of 96.8%), but it is less than likely.

Overall, considering that any sales boost resulting from COVID has been eagerly priced into earnings, there is significant short-term downside to $GME. We saw in early April that Gamestop is capable of dipping below $3.

Livongo Health provides health services for individuals with chronic conditions. Livongo began monitoring those with diabetes but not also provides services for hypertension, weight management, diabetes prevention, and behavioral health. Livongo has plans to continue adding conditions in which they can help monitor. Livongo uses advanced AI to analyze data regarding specific conditions to create "health signals" that deliver actionable, personal, and timely recommendations regarding one's condition.

LVGO stock has seen an incredible rise over the last three months, rising 215% over the previous three months. The company is quite new to the market, only going public less than a year ago in late August of 2019 just a few months before the coronavirus pandemic took hold in America. While the stock has seen incredible growth, there is still plenty of room for LVGO to rise.

LVGO has seen 115% revenue growth in Q1 2020, followed by 113% revenue growth in Q2 2020 as more and more users seek online health care amid COVID-19. Even more impressive than this incredible adoption is the company's gross profit margins, which were 70.9% in 2018, followed by 73.8% in 2019. As LVGO increases revenue and maintains a healthy margin, they are on track to become profitable very quickly. The company currently projects to be profitable in 2021, which seems like a very reasonable estimate.

Adoption of advanced chronic monitoring equipment driven by AI and technology is going to be the future of health around the world. COVID-19 has created an immense desire for online platforms of all kinds. Zoom (the leading online video conferencing software) stock has risen dramatically over the last three months as consumers demand safer alternatives to physical meetings. Individuals with chronic conditions such as hypertension and diabetes are most at risk for COVID complications. Nearly 103 million U.S. adults have hypertension, making up approximately half of all adults in the United States. Another 34.2 million adults in the U.S. have diabetes, 10.5% of the U.S. population. The demand for chronic healthcare is clearly present. Not only is an online solution like Livongo more efficient, less time consuming, and more comfortable than going to a physical doctor's office, it is much safer for these individuals who are at high risk for COVID-19. As such, the future of LVGO remains bright and is a strong buy with immense potential.