Snap Inc. (SNAP)

It's losing money. Just because it's cheap doesn't make it a buy.

Ad spending is a leading indicator of the wider economy and it is weakening. Snap (and Twitter) is a small player, so not a good indicator of the wider economy.

It reports Thursday. It was clubbed after its last quarter when it triggered this whole tech sell-off. It remains down in the dumps.

Square crushed the numbers recently, but its stock went down. Snap didn't crush the numbers, so its shares are going down even more.

No one is worried about megacap tech stocks and that's a worry. Snap, Twitter and Pinterest, also Lyft have slid around 25% from their highs, and these are buying opportunities in the coming months.

In the past month and half, this has rebounded hard after May's lows. They will put up strong numbers whatever the FEd does with interest rates. However, the stock went out of fashion in February when Wall St. rotated out of tech, and now this is reversing. SNAP recently bounced off its 50-day moving average and broke out of last week's highs. This is a classic inverse head and shoulders pattern--a very bullish signal with the neckline at $65. Once it breaks above that, it's a breakthrough. This could have a lot more room to run. But this on any breakout--this stock has momentum. A technical analyst he likes believes this will hit $80.

He expects a great quarter from them, based on strong growth. They've gotten religion about getting good customers/advertisers.

Allan Tong’s Discover Picks SNAP stock earnings are -$0.65 and well below the industry average of $3.84. Cash flow at -$0.59 also lags its peers. The PE is sky high, while price/sales and price-book also exceed industry averages. Essentially, SNAP is not a profitable company and carries a negative ROE. So, am I trashing SNAP and telling you to run away screaming from this stock? Millennials and kids love this social media platform. Stockchase’s research division recently noted that revenues have surged over 60% and daily users have leapt 22%. Business is so good that SNAP management revised revenue forecasts to up to $740 million vs. the street’s $703 million. Even though the U.S. is reopening, I don’t expect usage of this app will fall off, since people will continue to use their apps out of sheer habit. Read 3 Promising Stock Upgrades: SNAP, Uber, Corus for our full analysis.