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3 Oversold Mid-Caps Having a January Sale

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Based on their daily charts, approximately 40% of the U.S. mid-cap universe is flashing a relative strength indicator (RSI) reading under 30. The RSI is a commonly used technical analysis threshold that suggests oversold conditions have set in.

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With the S&P 400 mid-cap index down 8% year-to-date, this means that many stocks have suffered double digit percentages losses despite the end of January trading still a few days away.

In some cases, the selloffs seem justified such as with highflying, high P/E technology companies in a rising yield environment. In other cases, it has been a classic case of a sinking tide dragging all boats down.

This has made certain mid-caps with good long-term growth potential downright bargains. Here are three sub-30 RSI stocks that appear to have much more upside than downside.

Is Cleveland-Cliffs Stock Undervalued?

Cleveland-Cliffs (NYSE: CLF) has tumbled down the mountain to the tune of 22% so far this year. The iron ore miner fittingly has a matching 22 RSI reading which makes it one of the most oversold mid-caps around.

Yet while its share price has somewhat fallen off a cliff, Cleveland-Cliff’s growth trajectory has not. In 2021, its three U.S. mines fed a fast-recovering appetite for iron ore pellets from steelmakers and for its own steel products from automakers, construction companies, and various industrials. Analysts are forecasting earnings per share (EPS) to come in just shy of $6.00 after the company posted a small loss in 2020.

Growth off this elevated base is expected to be far more modest in 2022, but even single-digit profit growth would be no small feat and keep Cleveland-Cliffs firmly in recovery mode. With a pair of major acquisitions under its belt since 2020, it is now a fully integrated steel machine with exposure to a range of growing end markets.

Cleveland-Cliffs is a play on the auto industry rebound, infrastructure spending, and the domestic manufacturing revival wrapped in one. 2022’s performance won’t be as impressive as last year’s, but there’s a longer-term growth trend here. At 4x earnings, this deep value play is a steal.

Will Toll Brothers Stock Keep Going Up?

Homebuilders have taken it on the chin this month and Toll Brothers (NYSE: TOL) is no exception. The prospects for rising interest rates have been perceived as a threat to homebuilding activity. In turn, Toll Brothers stock has slumped 19% year-to-date giving it a depressed sub-20 RSI reading.

This has created an attractive entry point for a stock that was as red-hot as the housing market last year. While the average 30-year fixed mortgage rate has trended higher in recent weeks and stands to rise further, at 3.56%, it is still well within striking distance of historic lows. So, while this could deter some would-be homebuyers from building an upscale home, demand should remain strong. Plus, with the existing home supply still limited relative to demand, homebuilding remains a viable housing solution and a sound investment.

Since the pandemic started, Americans’ view of the home has changed dramatically. It is not only a sacred place to spend time with family, but a place to work, and even a place to exercise. This means, people are willing to spend more on housing, renovations, and repairs. And with these trends likely to have staying power, Toll Brothers should be a beneficiary of a healthy housing environment for several years to come. At 10x earnings, it’s a great time to build a position.

Should I Sell Badger Meter Stock?

Badger Meter (NYSE: BMI) climbed to an all-time intraday high of $112.36 last month but has since seen nearly $23 trimmed from its share price. The slide has accelerated in recent days and the RSI briefly dipped below 10 for the first time since December 2018. Absent any company-specific news, this is good news for investors in search of an oversold mid-cap.

Having been in the business for over a century, the phrase water technology and Badger Meter are synonymous these days. The company sells a range of equipment that helps customers measure water flow and quality, the latter of which has become an increasingly important need post-Covid. And with a growing focus on water sustainability and many companies wanting to enhance their ESG-friendly status in the market, Badger Meter’s products should be a hot commodity this decade.

On January 28th, Badger Meter will present fourth-quarter earnings. If it goes as analysts expect, management will deliver EPS of $0.47 for the quarter and $1.96 for the full year which translates to 17% annual profit growth. Bottom line growth is expected to revert to the high single digits in 2022, but this is consistent with the company’s steady track record of growth.

Technologies like automated meter reading and remote-controlled water flow restriction are becoming mainstream. This is why existing Badger Meter shareholders should feel comfortable just going with the flow.

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Rumors confirmed, Street Fighter 6 kicks off in June 2023

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Fighting Game fans are excited now that Capcom announced that Street Fighter 6 is coming to PS5, PS4, Xbox Series X/S and PC on June 2, 2023. The game was initially announced in February 2022, but that reveal did not include a specific release date beyond 2023.

The trailer at The Game Awards focused on new mini games and the international setting. In addition to the 18 previously announced fighter, the trailer also confirms that several new fighters — Dee Jay, Manon, Marisa and JP — that will join the game’s roster.

Notably, the June 2 release date for Street Fighter 6 may be a strategic choice for Capcom. June is the very beginning of Q3.

The last installment of the franchise — Street Fighter V — released nearly seven years ago so fans have been eager for another installment. A day before The Game Awards, the game’s June release date was leaked via the PlayStation Store.

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5 Things to Do Now to Propel Your Business in 2023

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Opinions expressed by Entrepreneur contributors are their own.

Entrepreneurship is a daily leap of faith. In times of economic uncertainty, that leap may feel like a dive off a cliff. We are in one of those times. It likely will take months to fully re-adjust to the forces that have pummeled the world’s economy, and to entrepreneurs, months can feel like years.

With the right playbook, entrepreneurs can survive and thrive in whatever economic scenario. Here are five things you can do to propel your business ahead now and through the difficulties of business cycles for years to come.

1. Learn the lessons of more challenging times

A rocky economy presents a unique opportunity to make tough decisions about the business plan. Everything is open to reexamination. How has the market changed? Are your customers facing challenges that create new opportunities for your solutions? How do new conditions change your assumptions, and what actions do you need to take in response?

Critically evaluate your product roadmap. Is this the time to pivot or become more aggressive with your current plans? Prioritize the highest margin features that are achievable in the next twelve months. Push out projects that don’t make that list, and re-assign resources accordingly. Re-assess pricing. Even as inflation tiptoes back from the highest levels in forty years, raw material and transportation costs remain way up. What will impact your customers if you adjust the pricing or add surcharges to offset these costs, at least temporarily?

It’s been a rough year for hiring. Many companies took the talent they could get. If there are employees or gig workers who would fare better in a different job, now is the time to let them go. Make tough-minded corrections that will pay off overall — corrections that might be avoidable in less challenging times.

Related: How to Turn Inflation and Recession into Your Largest Business Opportunity

2. Tighten your grip on cash

Venture capitalists are pulling back. In the third quarter, Crunchbase reported that funding for startups in U.S. and Canada fell 50% year-over-year. Valuations are down across the board. If you are fortunate enough to be a later-stage startup that benefited from VC largess in 2021, make your last raise last longer than intended.

Keep your dry powder dry, and put off going for another round until the markets even out. Reemphasize the basics for early-stage companies with less market validation and greater distance between now and a potential exit. Delay all capital expenditures. Leverage the hybrid work model if possible, to reduce rent and other office expenses. Continue with Zoom or Google Meet. Now is not the time to rack up travel costs. Re-negotiate fees and terms with service providers. Seek credit terms with key suppliers, in a word, bootstrap.

3. Talk to customers, in person. Now.

How have the business needs of your customers — whether paying or beta — changed over the last 18 months? Are there benefits to your solution that have more recognized value now? Nearly every business, for example, from corporates to startups, has been forced to re-learn the lessons of supply chain management. Startups that can help their customers make better business decisions based on artificial intelligence (AI), reduce costs by improving inventory management or protect against out-of-stock scenarios by identifying and building relationships with new, more local sources of supply will have an edge.

Related: Finding Validation in Serving Customers

4. Non-dilutive capital

According to PitchBook, venture capitalists are showing greater interest in portfolio companies “whose satellite, robotics and software tools can do double duty” in military and commercial markets. International conflicts are one reason, of course.

Another is that the defense and military security industries are generally viewed as recession-proof. Our firm routinely encourages portfolio companies to consider non-dilutive funding from the Small Business Administration — grants to support cutting-edge technologies range from $150,000 to more than $1 million.

Navigating the application process isn’t for the faint of heart. A startup must be realistic about the work involved, but in many states, there are resources to help. Besides the funding, severe responses to agency requests for proposals are reviewed and evaluated by technologists. At a minimum, this can be terrific feedback and a great source of industry contacts.

5. Blue-chip cultures attract blue-chip talent

Company culture can be an asset or a liability. An inclusive, rich culture helps key hires say yes. Finding stakeholders that believe what you believe and are aligned with your team’s values significantly improves the odds that they will stick with you in good times or bad.

After months of “great resignation” fever, the over-heated demand for talent may be cooling off. Maybe offers aren’t as fast or grand as they were a year ago. Maybe Twitter won’t be the only advanced technology business to let people go. Regardless, the search for great talent isn’t a faucet that a young company turns off and on. A startup might modulate the timing or the number of hires but stand at the ready to recruit and filter for culture fit.

Related: 3 Ways to Stay Competitive in the War for Talent

With the right mindset and intentional approach, an entrepreneur can make 2023 a year to strive and thrive. As Yogi Berra, my favorite baseball player of all time, said, “Swing at the strikes.” In business, like baseball, the right swing can turn even the most challenging pitch into a hit.

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Akros Technologies, an AI-powered asset management platform, raises funding from Z Holdings • TechCrunch

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Artificial intelligence is taking over almost every industry. The investment and finance industry is no exception. In Deloitte’s 2019 report, the firm reveals that AI is transforming the financial ecosystem to reduce costs and make operations more efficient by providing automated insights and alternative data, analysis and risk management.

Technology such as AI has digitized the finance sector, ranging from payments and remittances to lending. However, asset management is still in the nascent stage of digitization, according to the chief strategy officer and co-founder of Akros Technologies, Jin Chung.

Akros Technologies wants to disrupt the current asset management industry via its AI-driven asset management software platform that mines market data for stocks. Akros just raised $2.3 million from Z Venture Capital, the corporate venture capital wholly owned by Z Holdings, which also owns the Japanese messaging app Line and internet portal Yahoo Japan.

Akros intends to strengthen strategic ties with Z Holdings via strategic investment, the startup said. The latest funding, which brings Akros’s total amount raised to $6.1 million since its 2021 inception, will help Akros to scale its software platform and asset management products and ramp up its users, including local and global financial institutions and fintech companies.

The outfit is already in discussions with potential partners to expand its AI-powered product called portfolio management as a service, or PMaaS, an all-in-one operating system for portfolio management. Chung explained to TechCrunch that PMaaS “enables B2B clients such as financial institutions, fintech startups and robot-advisors to launch their own exchange-traded funds (ETFs) without having to set up ETF teams and infrastructure.”

He added that it expects to secure more than five B2B clients in the first quarter of 2023.

The startup claims that its AI-powered portfolio management platform can reduce “the overall cost structure [of] the traditional fund development,” including management fees and unnecessary fees involved in the investment process, by more than 80%. The outfit aims to maximize the finance management performance of data-driven ETFs and offer a portfolio management solution via the PMaaS for Akros’s users to help them compete with global ETF institutions like Vanguard or JPMorgan.

In August, Contents Technologies launched Korean pop music, also known as K-pop, and Korea Entertainment ETF, on the NYSE Arca Exchange under the ticker KPOP, using Akros’s PMaaS solution to develop the ETFs. In addition, Akros listed an AI-driven target income ETF, called Akros Monthly Payout ETF (ticker: MPAY), on the NYSE in May with monthly distributions at an annualized target rate of 7%, according to the startup.

To build a slew of investment strategies that lower the cost of portfolio modeling and generate scores of investment portfolios, Akros applies a generative AI model based on a decision transformer, which predicts future actions through the sequencing model, Chung said, adding the company also employs GPT-3 natural language processing (NLP) to analyze unstructured language data.

Akros plans continuously to enhance its engineering technology by bolstering its business to disrupt the asset management market and attract new partners across the globe, including Japan, Singapore and the U.S., co-founder and chief executive officer Kyle Moon said in a statement.

Founded by CEO Moon, CSO Jin and chief marketing officer Justin Gim, Akros employs seven people.

Co-founders of Akros Technologies: (Left to right) Justin Gim, Kyle Moon and Jin Chung. Image Credits: Akros Technologies

Moon previously worked for Qraft Technologies as head of AI research and CSO and had experience listing four ETFs on NYSE. Before co-founding Akros, Gim had more than nine years of experience in the asset management industry; Chung did research work for Bayesian deep learning in autonomous driving cars at Oxford Robotics Institute.

In March, Akros raised $3.75 million in funding from PeopleFund, a South Korean peer-to-peer lending platform. The company declined to provide its valuation when asked.

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