5 Best Gold Stocks to Buy for Portfolio Diversification

In this article, we will be taking a look at the 5 best gold stocks to buy for portfolio diversification.

5. Wheaton Precious Metals Corp. (NYSE:WPM)

Wheaton Precious Metals Corp. (NYSE:WPM) sells precious metals, primarily gold, silver, palladium, and cobalt. It is based in Vancouver, Canada.
Ingrid Rico, an analyst at Stifel, holds a Buy rating on Wheaton Precious Metals Corp. (NYSE:WPM) shares as of April 20.

In the fourth quarter, Wheaton Precious Metals Corp. (NYSE:WPM) generated revenues of $236.05 million, beating the previous quarter’s revenues of $218.84 million. With 10 Buy ratings and two Hold ratings placed on the stock, analysts on Wall Street consider it a Strong Buy.

Out of the 943 hedge funds tracked by Insider Monkey in the fourth quarter, 28 hedge funds were long Wheaton Precious Metals Corp. (NYSE:WPM). Their total stake value was $672 million.

4. Rio Tinto Group (NYSE:RIO)

Number of Hedge Fund Holders: 29
Rio Tinto Group (NYSE:RIO) explores, mines, and processes mineral resources, including gold, diamonds, and copper. It is based in London, United Kingdom.

On March 30, Richard Hatch at Berenberg reiterated a Buy rating on Rio Tinto Group (NYSE:RIO) shares.

An average price target of $95.64 has been placed on Rio Tinto Group (NYSE:RIO) shares by analysts on Wall Street. The shares were trading at $63.29 on April 27. This gives the stock an upside potential of 51.21%.

There were 29 hedge funds long Rio Tinto Group (NYSE:RIO) in the fourth quarter, with a total stake value of $2.6 billion.

3. Barrick Gold Corporation (NYSE:GOLD) 

Number of Hedge Fund Holders: 40

Barrick Gold Corporation (NYSE:GOLD) explores, produces, and sells gold and copper properties. The company is based in Toronto, Canada.

Analysts at Barclays hold an Overweight rating on Barrick Gold Corporation (NYSE:GOLD) shares as of April 21.
With seven Buy ratings and four Hold ratings placed on Barrick Gold Corporation (NYSE:GOLD), analysts consider the stock to be a Moderate Buy. They have placed an average price target of $22.73 on the shares, which were trading at $19.07 on April 27. This gives them an upside potential of 19.25%.

Barrick Gold Corporation (NYSE:GOLD) had 40 hedge funds long its stock in the fourth quarter, with a total stake value of $721 million.
Old West Management, an investment management company, mentioned Barrick Gold Corporation (NYSE:GOLD) in its fourth-quarter 2022 investor letter. Here’s what the firm said:

“Barrick Gold Corporation (NYSE:GOLD) is the second largest gold miner in the world, with operations in the U.S., Canada, Africa, South America and more. Barrick is also a major copper producer. Former Goldman Sachs executive John Thornton took control of the company in 2012 and quickly realized he wanted someone with a mining background to run the company. Mark Bristow, at that time CEO of Randgold, was considered one of the best gold mining executives in the world. Thornton wanted Bristow so badly Barrick bought Randgold in 2018. Bristow who is South African, had extensive experience operating mines throughout Africa, and in fact would fly his own single engine plane to visit mines. He has his PhD in Geology, and he has flourished running Barrick the past five years.

Barrick is estimated to have $1.6 billion of net income this year on $11.5 billion of revenue. Net Income has been growing 15% per year. The stock trades at $19.00 per share which is 16 times forward earnings, and the stock has a 3.15% dividend yield. Barrick has a fortress balance sheet with $5.7 billion in cash and $5 billion of long term debt, which is only one time EBITDA”

2. Agnico Eagle Mines Limited (NYSE:AEM) 

Number of Hedge Fund Holders: 41

Agnico Eagle Mines Limited (NYSE:AEM) explores, develops, and produces mineral properties, primarily gold deposits. It is based in Toronto, Canada.

An Overweight rating was reiterated on Agnico Eagle Mines Limited (NYSE:AEM) on April 21 by Matthew Murphy at Barclays.
Agnico Eagle Mines Limited (NYSE:AEM) generated revenues of $1.38 billion in the fourth quarter. This represented an increase of 45.9%. The company’s EPS for the quarter was $0.41, in line with estimates.
A total of 41 hedge funds were long Agnico Eagle Mines Limited (NYSE:AEM) in the fourth quarter. Their total stake value was $613 million.
Old West Management, an investment management company, mentioned Agnico Eagle Mines Limited (NYSE:AEM) in its fourth-quarter 2022 investor letter. Here’s what the firm said:

Agnico Eagle Mines Limited (NYSE:AEM) is the third largest gold miner in the world with mines in Canada, Australia, Finland, and Mexico. Although we have long respected the company, we became shareholders when they acquired our portfolio holding, Kirkland Lake Gold. Agnico chairman Sean Boyd is one of the most respected executives in the mining industry. He was appointed CEO in 1998 and was recently appointed Executive Chairman. Boyd is a large shareholder and perfectly fits our owner/manager role. This year the company is projected to make nearly $1 billion in net income on $5.8 billion in revenue with $758 million of free cash flow. Net income has been growing 15% per year for several years. Agnico has a fortress balance sheet with $1.3 billion of long term debt, which is only 2 times EBITDA, and $820 million cash in the bank. The stock trades at $55 per share, which is 26 times earnings with a 2.9% dividend yield.”

1. Newmont Corporation (NYSE:NEM)

Number of Hedge Fund Holders: 50
Newmont Corporation (NYSE:NEM) produces and explores gold. It is based in Denver, Colorado.

Mike Parkin, an analyst at National Bank, holds an Outperform rating on Newmont Corporation (NYSE:NEM) shares as of April 18.
The average price target placed on Newmont Corporation (NYSE:NEM) shares by analysts on Wall Street is $58.06, with a high forecast of $67. The shares were trading at $47.94 on April 27. This gives them an upside potential of 21.13%.

Newmont Corporation (NYSE:NEM) was found among the 13F holdings of 50 hedge funds in the fourth quarter, with a total stake value of $991 million.

Source: www.insidermonkey.com

 

Hindenburg Research Picks Carl Icahn as Next Target


You either die an activist investor hero or live long enough to see yourself become the target of younger activist investors.

Nathan Anderson and his crack team of muckraking short-sellers at Hindenburg Research have selected their latest quarry: Carl Icahn, the legendary financier who knows a thing or two about torturing executives with allegations of corporate malfeasance. 

When You Come at the King... 

Hindenburg is riding high after its bombshell report alleging widespread corporate fraud wiped out nearly $110 billion from the Adani Group, one of India's largest conglomerates. Now it's going after Icahn Enterprises (IEP), the publicly traded investment firm controlled by Carl that takes equity stakes or outright buys other companies like Xerox and Pep Boys. Icahn owns 85% of IEP. 

As with its prior victims, the aptly named Hindenburg released an extensive report Tuesday detailing why IEP is overvalued -- perhaps suspiciously so -- in hopes of spurring a share price meltdown, creating some profit for Hindenburg's now public short position on IEP shares. The abstract summary of this particular term paper argues that Icahn's company is overvalued by a premium of some 200% compared to the reported value of its assets. And, in typical Hindenburg fashion, there's practically a line-item analysis of how the financial sleuths arrived at this conclusion: 

  • Hindenburg states that IEP reported the value of its "Automotive Parts" unit at $381 million in December -- even though a key subsidiary, Auto Plus, filed for bankruptcy a month later. Hindenburg also says IEP valued the 90% ownership stake it has in meat packager Viskase Companies at $243 million, despite its market cap being only around $89 million at the time.
  • In total, Hindenburg estimated IEP's net asset value to be around $4.4 billion, or 22% lower than the $5.6 billion that IEP reported at the end of last year.
IOU: Perhaps most damning, Hindenburg also flagged the 181 million units, or roughly 60% of Icahn's holdings in the company, that the activist investor has pledged as collateral in personal loans. "Overall, we think Icahn, a legend of Wall Street, has made a classic mistake of taking on too much leverage in the face of sustained losses: a combination that rarely ends well," Hindenburg wrote in its research note. Icahn responded in kind, releasing a statement saying "We believe the self-serving short seller report published by Hindenburg Research today was intended solely to generate profits on Hindenburg's short position at the expense of IEP's long-term unit holders." Not that Carl Icahn would know anything about that kind of thing.

Source: www.fool.com

 


Half of America’s banks are potentially insolvent – this is how a credit crunch begins

The twin crashes in US commercial real estate and the US bond market have collided with $9 trillion uninsured deposits in the American banking system. Such deposits can vanish in an afternoon in the cyber age.
The second and third biggest bank failures in US history have followed in quick succession. The US Treasury and Federal Reserve would like us to believe that they are “idiosyncratic”. That is a dangerous evasion. 

Almost half of America’s 4,800 banks are already burning through their capital buffers. They may not have to mark all losses to market under US accounting rules but that does not make them solvent. Somebody will take those losses.
“It’s spooky. Thousands of banks are underwater,” said Professor Amit Seru, a banking expert at Stanford University. “Let’s not pretend that this is just about Silicon Valley Bank and First Republic. A lot of the US banking system is potentially insolvent.” 

The full shock of monetary tightening by the Fed has yet to hit. A great edifice of debt faces a refinancing cliff-edge over the next six quarters. Only then will we learn whether the US financial system can safely deflate the excess leverage induced by extreme monetary stimulus during the pandemic. 

A Hoover Institution report by Prof Seru and a group of banking experts calculates that more than 2,315 US banks are currently sitting on assets worth less than their liabilities. The market value of their loan portfolios is $2 trillion lower than the stated book value.
These lenders include big beasts. One of the 10 most vulnerable banks is a globally systemic entity with assets of over $1 trillion. Three others are large banks. “It is not just a problem for banks under $250bn that didn’t have to pass stress tests,” he said. 

The US Treasury and the Federal Deposit Insurance Corporation (FDIC) thought they had stemmed the crisis by bailing out uninsured depositors of Silicon Valley Bank and Signature Bank with a “systemic risk exemption” after these lenders collapsed in March.
The White House baulked at a blanket guarantee for all deposits because that would look like social welfare for the rich. Besides, the FDIC has only $127bn of assets (and less very soon) and may ultimately require its own bailout. 

The authorities preferred to leave the matter vague, hoping that depositors would discern an implicit guarantee. The gamble failed. Depositors fled First Republic Bank at a fast and furious pace last week despite an earlier infusion of $30bn from a group of big banks.
White knights probing a possible takeover of First Republic recoiled once they examined the books and discovered the scale of real estate damage. The FDIC had to seize the bank, wiping out both shareholders and bondholders. It took a $13bn subsidy along with $50bn of loans to entice JP Morgan to pick up the pieces. 

“No buyer would take First Republic without a public subsidy,” said Krishna Guha from Evercore ISI. He warns that hundreds of small and mid-sized banks will batten down the hatches and curb lending to avoid the same fate. This is how a credit crunch begins.
The share price of PacWest, the next on the sick list, fell 11pc in late trading on Monday. That will be the bellwether of what happens next. 

The US authorities can contain the immediate liquidity crisis by guaranteeing all deposits temporarily. But that does not address the greater solvency crisis. 

The Treasury and the FDIC are still in the denial phase. They blame the failures on reckless lending, bad management, and over-reliance on foot-loose uninsured depositors by a handful of banks. This has a familiar ring. “They said the same thing when Bear Stearns went down in 2008. Everything was going to be alright,” said Prof Seru. 

First Republic lends to technology start-ups, but it chiefly came unstuck on commercial real estate. It will not be the last on that score. Office blocks and industrial property are in the early stage of a deep slump. “Where we stand today is a nearly perfect storm,” said Jeff Fine, real estate guru at Goldman Sachs. 

“Rates have gone up 400 to 500 basis points in a year, and financing markets have almost completely shut down. We estimate there’s four to five trillion dollars of debt in the commercial (property) sectors, of which about a trillion is maturing in the next 12 to 18 months,” he said. 

Packages of commercial property loans (CMBS) are typically on short maturities and have to be refinanced every two to three years. Borrowing exploded during the pandemic when the Fed flooded the system with liquidity. That debt comes due in late 2023 and 2024.
Could the losses be as bad as the subprime crisis? Probably not. Capital Economics says the investment bubble in US residential property peaked at 6.5pc of GDP in 2007. The comparable figure for commercial property today is 2.6pc. 

But the threat is not trivial either. US commercial property prices have so far fallen by just 4pc to 5pc. Capital Economics expects a peak to trough decline of 22pc. This will wreak further havoc on the loan portfolios of the regional banks that account for 70pc of all commercial property financing. 

“In a worst case scenario, it could create a ‘doom loop’ which accelerates a real estate downturn that then feeds back into the banking system,” said Neil Shearing, the group’s chief economist.
Silicon Valley Bank’s travails were different. Its sin was to park excess deposits in what is supposed to be the safest financial asset in the world: US treasuries. It was encouraged to do so under the risk-weighting rules of the Basel regulators. 

Some of these debt securities have lost 20pc on long maturities – a theoretical paper loss only until you have to sell them to cover deposit flight.
The US authorities say the bank should have hedged this Treasury debt with interest rate derivatives. But as the Hoover paper makes clear, hedging merely transfers losses from one bank to another bank. The counterparty that underwrites the hedge contract takes the hit instead. 

The root cause of this bond and banking crisis lies in the erratic behaviour and perverse incentives created by the Fed and the US Treasury over many years, culminating in the violent lurch from ultra-easy money to ultra-tight money now underway. They first created “interest rate risk” on a galactic scale: now they are detonating the delayed timebomb of their own creation.
Chris Whalen from Institutional Risk Analyst said we should be wary of a false narrative that pins all blame on miscreant banks. “The Fed’s excessive open market intervention from 2019 through 2022 was the primary cause of the failure of First Republic as well as Silicon Valley Bank,” he said. 

Mr Whalen said US banks and bond investors (i.e. pension funds and insurance companies) are “holding the bag” on $5 trillion of implicit losses left by the final blow-off phase of the Fed’s QE experiment. “Since US banks only have about $2 trillion in tangible equity capital, we have a problem,” he said.
He predicts that the banking crisis will keep moving up the food chain from the original outliers to mainstream banks until the Fed backs off and slashes rates by 100 basis points. 

The Fed has no intention of backing off. It plans to raise rates further. It continues to shrink the US money supply at a record pace with $95bn of quantitative tightening each month.
The horrible truth is that the world’s superpower central bank has made such a mess of affairs that it has to pick between two poisons: either it capitulates on inflation; or it lets a banking crisis reach systemic proportions. It has chosen a banking crisis.

Source: finance.yahoo.com

 

Biotech Buying Bonanza: Iveric Bio Snags $5.9 Billion Deal From Astellas Pharma


Astellas Pharma (ALPMY) snapped up Iveric Bio (ISEE) for $5.9 billion in cash, the companies said Monday in an announcement that sent ISEE stock flying. 

Three months from now, the Food and Drug Administration will make a decision on whether to approve Iveric's avacincaptad pegol, or ACP. The company tested ACP in patients with the eye disease known as age-related macular degeneration. The condition can lead to permanent vision loss. 

Astellas Chief Executive Naoki Okamura says Iveric has "capabilities across the entire value chain in (the) ophthalmology field."
"We believe that this acquisition will enable us to deliver greater value to patients with ocular diseases at high risk of blindness," Okamura said in a written statement. 

On today's stock market, ISEE stock surged 15.7% to close at 38.05. Astellas stock climbed 1.6% to 15.26.
ISEE Stock: Huge Premium

Both boards have already approved the deal, which values ISEE stock at 40 per share. That's a 64% premium to the closing price on March 31 and a 75% premium to the 30-day volume-weighted average price as of the same date. The companies expect the deal to close in the second quarter. 

Astellas will fund the deal with a mix of debt and cash on hand, Wedbush analyst David Nierengarten said in a report. He downgraded ISEE stock to a neutral rating and raised his price target to 40 from 35. 

Iveric is also working on treatments for eye diseases called Stargardt disease, Leber congenital amaurosis type 10 and Usher syndrome. The latter affects both vision and hearing. 

Shares of Apellis Pharmaceuticals (APLS) was down on the news, falling a fraction to 82.92. Apellis makes the only approved geographic atrophy treatment, known as Syfovre. The FDA approved Astellas' drug in February. 

ISEE stock has been on a run since March 31. Shares rocketed more than 35% over the month of April. The stock has a best-possible Relative Strength Rating of 99. This means ISEE stock ranks in the top 1% of all stocks when it comes to 12-month performance, according to IBD Digital.

Source: www.investors.com

 

First-ever "Grand Africa Voyage", circumnavigating the continent in 90 days, operates by Seabourn

Seabourn, the leader in ultra-luxury voyages and expedition travel, is inviting travelers to explore the exotic and dynamic lands of Africa with its first-ever "Grand Africa Voyage." Departing November 30, 2024, Seabourn Sojourn will circumnavigate the continent and sail more than 17,000 miles during a 90-day roundtrip adventure from Barcelona, Spain. The journey will offer a world of experiences for guests, visiting 44 marquee and off-the-beaten path ports and cities throughout 26 countries, with six overnight stays on the itinerary. Open for sale now, the full itinerary and additional details are available on Seabourn's website.

The only ultra-luxury ship to sail around the entire continent, Seabourn Sojourn will visit a blend of historically profound destinations on its Grand Africa Voyage. Highlights include Alexandria, Cairo, Tel Aviv and Jerusalem; luscious, tropical paradises such as the Seychelles and Bom Bom Island; lands with breathtaking, diverse landscapes and wildlife such as Kenya, Madagascar and Zanzibar; and culturally rich destinations such as Cape Town, Morocco and Mozambique. In addition to renowned destinations, guests can discover Africa's lesser-known gems such as Luanda, the "Paris" of Africa, and Cape Verde, the "Gateway to the West."
"Seabourn guests are accomplished, extraordinary people who are seeking once-in-a-lifetime experiences. Our new Grand Africa Voyage is the result of our commitment to offering unforgettable 'Seabourn Moments' in some of the world's most unique and exotic destinations," said Natalya Leahy, president of Seabourn. "This voyage is the perfect opportunity for our guests to discover Africa's stunning natural wonders and diverse cultures, while enjoying the uncompromising luxury and intuitive, genuine service that can only be experienced on Seabourn."

Once-in-a-lifetime travel experiences available on the Grand Africa Voyage are endless. Guests can explore Africa's natural beauty via safari, hikes, scuba, snorkeling and other enriching cultural experiences, such as a visit to a camel milk farm, botanical gardens, living archaeological museums, and more. In addition, several optional multi-day Seabourn Journeys will be available at various destinations, offering in-depth opportunities to explore treasured sites on land that cannot be accessed on single-day excursions from the ship, including a gorilla sanctuary, Victoria Falls and more.

Featured destinations on the Grand Africa Voyage include:

Alexandria (Cairo), Egypt – Guests will get a glimpse into Egypt's rich past and present while spending an evening in Cairo, Egypt's second-largest city and epicenter of cultural and historical significance, offering a fascinating blend of ancient landmarks, stunning architecture, and vibrant markets. Guests will have the option to join an excursion to see the Pyramids at Giza.

Safaga (Luxor), Egypt - Located on the Egyptian side of the Red Sea, Safaga is the gateway to some of Egypt's most memorable destinations: Luxor, Karnak and Thebes. Luxor has often been called the world's greatest open-air museum, and the number and preservation of the monuments in the area are unparalleled anywhere else in the world.

Mombasa, Kenya – Guests can experience Kenya's wildlife up close in Mombasa with overnight Seabourn Journeys, including Tsavo National Park Safaris, a Masai Mara National Reserve Safari and a Rwanda Gorilla Trek. Mombasa, a vibrant coastal city with beautiful beaches, warm climate, rich history and delicious cuisine, has a blend of African, Arabic, and European cultures.

Cape Town, South Africa – Known as the "Mother City" of South Africa, Cape Town is a cosmopolitan metropolis of breathtaking natural beauty, with iconic landmarks such as Table Mountain, pristine beaches, and a rich cultural heritage that reflects its unique blend of African, European, and Asian influences. It's also a hub for adventure tourism, offering a range of thrilling outdoor activities to enjoy, including catamaran sailing, kayaking and more.

Bom Bom Island, Sao Tome & Principe – Seabourn guests will enjoy a beach BBQ on Bom Bom Island, a hidden gem of natural beauty and tranquility. With its pristine beaches, lush tropical forests, and crystal-clear waters, visitors can expect a serene and unforgettable experience in one of Africa's most enchanting destinations.

Casablanca, Morocco – Guests will spend an evening in Casablanca, the vibrant economic hub of Morocco. With its bustling souks, stunning architecture, and vibrant nightlife, it offers visitors a unique and authentic taste of Moroccan life, steeped in history, culture, and tradition.

Guests who book the full 90-day Grand Africa Voyage will receive a value-packed menu of complimentary benefits and amenities, including:

  • Gala Bon Voyage dinner & overnight hotel stay at Hotel Majestic prior to departure in Barcelona
  • An exclusive Grand Cruise event in Cape Town
  • Special Grand Cruise pillow gifts
  • Roundtrip business-class air
  • $2,000USD Shipboard Credit per oceanview and veranda suite ($1,000USD shipboard credit per person
  • $3,000USD Shipboard Credit per Penthouse and premium suite ($1,500USD shipboard credit per person)
  • Private car transfers door-to-door between home and airport
  • Personal Valet® luggage shipping service between home and ship in Barcelona
  • Unlimited laundry, dry cleaning and pressing on board
  • Visa package (U.S. citizens only)

In addition, guests who book the Grand Africa Voyage and pay in full by July 26, 2023, will receive an additional 10% savings off the cruise-only fare.

For reservations or more details, please contact a professional travel advisor; call Seabourn at 1-800-929-9391 or visit www.seabourn.com.

About Seabourn:
Seabourn represents the pinnacle of ultra-luxury ocean and expedition travel and operates a suite of six modern ships with one under construction. The all-inclusive, boutique ships offer all-suite accommodations with oceanfront views; award-winning dining; complimentary premium spirits and fine wines available at all times; renowned service provided by an industry-leading crew; a relaxed, sociable atmosphere that makes guests feel at home; a pedigree in expedition travel through the Ventures by Seabourn program and two new ultra-luxury purpose-built expedition ships, including Seabourn Venture that launched in 2022 and Seabourn Pursuit scheduled to enter service in 2023. Seabourn takes travelers to every continent on the globe, visiting more than 400 ports including marquee cities and lesser-known ports and hideaways. Guests of Seabourn experience extraordinary offerings and programs, including partnerships with leading entertainers, dining, personal health and wellbeing, and engaging speakers.

For more details about Seabourn, or to explore the worldwide selection of Seabourn cruising options, contact a professional travel advisor, call Seabourn at 1-800-929-9391 or visit www.seabourn.com.

Seabourn is a brand of Carnival Corporation and plc (NYSE/LSE: CCL and NYSE: CUK).

Seabourn is consistently ranked among the world's top travel choices by professional critics and the discerning readers of prestigious travel publications such as Departures, Travel + Leisure and Condé Nast Traveler. Its stylish, distinctive cruising vacations are renowned for:
  • Intimate ships with a private club atmosphere
  • Intuitive, personalized service provided by staff passionate about exceeding guests expectations
  • Curated voyages to all seven continents delivering award-winning experiences
  • All ocean-front suites, luxuriously appointed
  • Complimentary premium spirits and fine wines available on board at all times
  • Welcome Champagne and complimentary in-suite bar stocked with your preferences
  • Tipping is neither required, nor expected
  • Finest resort at sea that is masterfully designed
  • World-class dining, further enhanced through a culinary partnership with Chef Thomas Keller
  • All dining venues are complimentary, dine where, when and with whom you wish
  • Seabourn Conversations, connecting with visionary experts
  • Ventures by Seabourn™, optional shore excursions, enhance and extend your experience in select destinations*^
  • Spa & Wellness with Dr. Andrew Weil, featuring an exclusive mindful living program*

An evening entertainment experience in collaboration with Sir Tim Rice, produced exclusively by Belinda King Creative Productions †
Committed to environmental stewardship and sustainability


Source: finance.yahoo.com

 

First Republic bank. Steps to secure rescue deal after plunge in share 


The embattled Californian lender First Republic was scrambling to secure a rescue deal on Wednesday night after a fresh plunge in its share price reignited concerns about the health of the US banking system. 

Bosses at the regional lender reportedly approached regulators with a plan for First Republic to raise fresh capital, but White House officials were said to be unwilling to intervene in the rescue process.
The San Francisco-headquartered company’s share price dropped as much as 36pc in early trading on Wednesday, after slumping by more than half the previous day. 

Its steep fall triggered concerns that a wider sell-off could take hold again, a month after markets were roiled by the collapse of Silicon Valley Bank (SVB) and emergency rescue of Credit Suisse.
First Republic revealed earlier this week that it had suffered $100bn (£80bn) of customer withdrawals between January and March, sparking concerns about its financial health. 

First Republic is said to have pitched a plan where the US government would pay above market value for bonds held by the bank, allowing it to raise money, according to CNBC. 

However, US government officials were reportedly waiting to see whether a rescue deal engineered by the private sector would materialise. Wall Street lenders deposited $30bn at the bank in March in an attempt to restore confidence.
Jaret Seiberg, an analyst at TD Cowen, said that while “regulators do not act based on stock prices”, a steep fall “could raise questions on the ability of a bank to raise fresh capital.” 

He added: “We believe there will have to be a broader restructuring of First Republic led by the biggest banks, which have deposited $30 billion in the bank.” 

Meanwhile, major US banks are also reportedly reluctant to intervene and take losses on asset purchases or snap up the lender and deal with its issues in the long-term. 

First Republic said on Tuesday it was considering selling off between $50bn to $100bn worth of securities and mortgages to balance the books. 

The bank also plans to cut up 25pc of its workforce, which totalled around 7,200 employees at the end of last year.
First Republic was hit after wealthy customers and businesses pulled their money from small and medium sized lenders following the failure of SVB in March. 

Customers were also worried that rising interest rates had eroded the value of their assets, forcing customers to move cash elsewhere.
Concerns around withdrawals at First Republic, which caters to wealthy individuals, and similar-sized peers, had partly stemmed from a large proportion of its customers having balances in excess of $250,000, at which point they were no longer covered by federal insurance. 

The pressure on the lender has reignited fears of a wider US banking crisis and raised doubts about whether the US Federal Reserve will raise interest rates next week.
The bank’s predicament is rattling confidence in the global finance industry. 

Clifford Bennett, chief economist at ACY Securities, said: “From a banking crisis still hovering just beneath the surface to the realisation Russia has long-range missiles that are incredibly accurate that no one has the capacity to stop, to the sharply higher China-US tensions, more sanctions against both Russia and China, and the likely further unravelling of global trade and the re-emergence of higher inflation, risks are huge.” 

However, investors have not sold off bank shares at a similar rate as last month following the collapse of SVB, suggesting the fallout from First Republic could be contained. 

Shares in PacWest, another regional US lender that came under pressure last month, rallied by more than 10pc on Wednesday. 

First Republic's advisers have reportedly lined up potential purchasers of new shares providing they can fix the bank's balance sheet.
Earlier this week, Mike Roffler, First Republic’s chief executive, said: “Though we faced challenges and uncertainties with the stabilization of our deposit base and the strength of our credit quality and capital position, we continue to take steps to strengthen our business.”

Source: finance.yahoo.com

 

The UK Blocks Microsoft Deal. Buy or Sell Activision Blizzard After it?

The deal spread on Microsoft Corp.’s proposed takeover of Activision Blizzard Inc. is blowing out, with traders worrying their $69 billion merger could sputter after UK antitrust regulators vetoed the combination.

Shares of the video-game maker slumped as much as 12% to $76.65 on Wednesday, moving further away from Microsoft’s $95-per-share offer. That has widened the gap relative to the takeover bid price to $18.35 — compared with $8.26 Tuesday.
Although Microsoft is expected to appeal the decision, many traders and analysts see the UK ruling as a deal-ender. 

“Essentially, there has never been a successful appeal in the UK on an antitrust decision,” said Aaron Glick, a merger arbitrage strategist at TD Cowen. “There does not appear to be a path forward for Microsoft.” 

“We think trading in Activision is reflecting market views of fair value,” Glick said. That means the market currently prices in zero to low probability the deal will close. 

The UK Competition and Markets Authority isn’t alone in disputing the takeover bid. The US Federal Trade Commission has already sued to block, and it still needs clearance from the European Commission and China. The deal’s closing deadline is July 18.
Antitrust scrutiny is seen as a major regulatory hurdle for Microsoft’s takeover. In March, the UK narrowed the scope of its probe, lifting traders’ optimism and sending the deal spread to its lowest since the merger announcement. 

The deal has been the center of attention for the merger arbitrage community since it was announced in January 2022. It is the largest pending transaction in the US, standing out at a time when traders have been facing a market stuck in the doldrums, with mostly smaller and private equity deals announced this year. 

Investors are now shifting focus to Activision’s standalone value. The company released its first quarter earnings on Wednesday, earlier than scheduled, with results showing net bookings and adjusted earnings per share above estimates. 

Among other transactions under review by the UK antitrust agency, VMware Inc. — which agreed to sell to Broadcom Inc. — fell 2.9%, while IRobot Corp. — which is being targeted by Amazon.com Inc. — slid 5.4%.

Source: finance.yahoo.com

 


TSMC Just Fired a Warning Shot for Semiconductor Stocks. Should Nvidia Investors Be Worried?


Foundry giant Taiwan Semiconductor Manufacturing (TSM -2.78%), popularly known as TSMC, released its first-quarter 2023 results on April 20, and the semiconductor bellwether's quarterly performance and outlook clearly point toward a slowdown for the chip industry, at least in the near term. 

TSMC's Q1 revenue was down 5% year over year to $16.7 billion, driven by a 14% decline in wafer shipments over the prior-year period on account of weak chip demand. Earnings fell to $1.31 per share from $1.40 per share in the year-ago period. TSMC missed Wall Street's revenue expectations by a small margin, and the guidance suggests that the weakness is here to stay.
The Taiwanese giant anticipates $15.6 billion in revenue this quarter, along with an operating profit margin of 40.5% at the midpoint of its guidance range. The revenue guidance points toward a 14% year-over-year decline, while the operating margin would also contract substantially from the prior-year period's reading of 49.1%. Also, TSMC has trimmed its 2023 revenue outlook. It now expects annual revenue to decline in the low to mid-single digits as compared to the prior expectation of a slight improvement over 2022 levels.
Investors in Nvidia (NVDA -2.96%), which is one of TSMC's top five customers, are likely to get worried following the latter's results and guidance. After all, Nvidia is trading at an extremely rich valuation following 117% gains in the last six months, and any sign of weakness in the company's business is likely to send the stock down big time. So, does this mean Nvidia investors should hit the sell button and book profits?

TSMC's results point toward a strong quarter for Nvidia

A closer look at TSMC's performance last quarter suggests that the company saw solid growth in demand for its 5-nanometer (nm) chips. More specifically, 31%, or $5 billion, of the company's quarterly revenue came from selling 5nm chips last quarter. That's an improvement over the prior-year period when a fifth of TSMC's total revenue came from 5nm chips -- translating into $3.5 billion in revenue. 

So, TSMC's 5nm chip revenue jumped an impressive 43% over the prior-year period. Nvidia may have played a key role in this terrific growth as the company has been witnessing solid demand for its Hopper H100 graphics processing units (GPUs) amid the generative artificial intelligence (AI) boom. These chips are based on TSMC's 4N process, which is a custom 5nm manufacturing process that's specific to Nvidia. 

The 5nm Hopper chips are being used by the likes of OpenAI to run ChatGPT, Stability AI to run its text-to-image generative AI boom, and Meta Platforms to power the Grand Teton AI supercomputer. Meanwhile, the likes of Oracle, Amazon, and Microsoft are also powering up their cloud infrastructure with Hopper-powered instances. 

That's not surprising, as Nvidia's H100 Hopper GPUs are substantially more powerful in AI training as compared to the prior-generation A100 GPUs. Also, CEO Jensen Huang pointed out last month that generative AI is accelerating the demand for its data center chips, which explains why Nvidia may have ramped up orders for TSMC's 5nm chips. 

Taiwan-based daily newspaper Digitimes also points out that Nvidia has stepped up orders for both A100 and H100 chips with TSMC. So, there is a strong likelihood that Nvidia's results for the first quarter of fiscal 2024 (for the three months ending April 30, 2023), which will be released on May 24, could turn out to be better than expected and give the stock a shot in the arm. 

Investors can get an opportunity to buy Nvidia on the cheap 

Nvidia's hot rally this year sent the stock's price-to-earnings ratio to 155. That's quite expensive considering the Nasdaq-100's average earnings multiple of 27. The forward earnings multiple of 60 is rich as well, though it points toward a sharp jump in earnings.
TSMC's weak results and guidance could weigh on shares of Nvidia over the next month until the latter releases its quarterly report. This could open an opportunity for savvy investors to buy the high-flying tech stock at a relatively attractive valuation -- one they should consider grabbing with both hands as the AI catalyst could accelerate Nvidia's growth by unlocking a multibillion-dollar revenue opportunity. 

The semiconductor giant generated $27 billion in revenue last fiscal year. Growth drivers such as AI could help Nvidia multiply its top line significantly in the coming years and boost the company's market cap by a big margin. As such, it would make sense for investors to take advantage of any pullbacks in Nvidia stock caused by TSMC's tepid quarterly report.

Source: fool.com

 

Regional banks aren't collapsing. That doesn't mean everything is fine.

Western Alliance (WAL) lost $6 billion in deposits amid the chaos that roiled the banking world in the first quarter. Profits at the Phoenix-based lender dropped 41% from a year earlier.
And yet its stock rose 24% the day after announcing those results.
Investors have been looking for any signs that the crisis that saw three US banks fail in a matter of days back in early March is over. They're particularly keen for signals from the regional banks most vulnerable to the panic that cascaded through the financial system in the weeks that followed. 

Reports over the past week from more than 15 regional lenders offered plenty of those signs, as multiple executives said the deposit outflows they saw in March had since stabilized or even reversed.
Horizon Investments head of portfolio strategy Zach Hill called the earnings results this past week "better than feared."
The banking crisis "does feel like it's largely contained," added Quant Insight head of analytics Huw Roberts.
Wedbush analyst David Chiaverini told Yahoo Finance the theme dominating this earnings season so far is "less than feared."
At Western Alliance, deposits rose by $2 billion in the first two weeks of April.

"The waters are now calmer," Western Alliance CEO Ken Vecchione told analysts this week. 

This doesn’t mean, however, that all is fine for the many mid-sized banks that lack the power or diversity of industry giants such as JPMorgan Chase (JPM) and Bank of America (BAC). 

Many of these smaller institutions said they now expect to earn less on their loans and pay more for their deposits, thus lowering expectations of revenue and profits in the future. Some also said they expect stricter federal banking regulations that could force them to raise more capital.
On Friday Moody's reinforced this challenging outlook by downgrading ratings for 11 regional lenders, including a two-notch cut for Western Alliance, citing "a deterioration in the operating environment and funding conditions for US banks."
"Some of the immediate problems have gone away but the reality is with interest rates higher the banks’ business model is going to have to change, and that’s going to play out over months and quarters and even years," Commonwealth Financial Network CIO Brad McMillan told Yahoo Finance. 

Higher costs, lower profits 

Their problems start with a critical source of funding for smaller institutions: deposits. Even before the failure of Silicon Valley Bank, bank customers who were earning little interest from their accounts had begun moving their money to higher-yielding alternatives such as certificates of deposit or money market funds.
That outflow accelerated in March. Comerica (CMA), a regional bank in Dallas, said its deposits fell 9% during the first three months of the year. Zions (ZION), a Salt Lake City lender, said they dropped 3.4%.
That forced many regional lenders to start paying more to keep depositors or attract them back. Deposit costs for Comerica rose 2,850% from a year ago, to $118 million. At Zions, these costs were up 1,266%, to $82 million. At Cincinnati lender Fifth Third (FITB) and Cleveland lender KeyCorp (KEY), the increases were 4,245% and 2,400%, respectively. Comerica and Zions were among the banks that received downgrades from Moody's on Friday. 

Those higher costs, in turn, are beginning to cut into a key measure of profitability known as net interest income, which is the difference between what a bank earns on its loans and pays out on its deposits. Many regional banks said their net interest income dropped from the fourth quarter of 2022 and they expect it to drop again in the second quarter of this year as the Federal Reserve keeps interest rates high. 

KeyCorp and Fifth Third were among the banks that reduced their net interest income expectations. Comerica said it expects that number to drop 11-13% in the three months ending June 30.
But Comerica executives also said they expect some of the deposits they lost to come back. Much of the outflows in March, they said, happened because long standing customers decided to move some excess amounts elsewhere. Because those relationships are strong, customers may return.
"I don’t think we are going to have to pay up for it," senior executive vice president Peter Sefzik told analysts Thursday. 

'No crisis inside our four walls' 

Several executives from regional banks said some concerns about their corner of the industry were overhyped. After all, recent data shows that deposit outflows among banks below $250 billion in assets have slowed since March. These institutions even regained $20 billion in the two weeks ending April 12, according to Fed data released Friday.
Fifth Third CEO Tim Spence told analysts Thursday his institution is particularly well situated to benefit from a recent surge in manufacturing jobs across his regions in the Midwest. 

"Markets have been trading on narratives over fundamentals," he said, adding that "there was no crisis inside our four walls."
Western Alliance's CEO, Vecchione, admitted that depositors withdrew $8 billion from his bank in one day during March but said deposits began returning within a week. After gaining back $2 billion during the first two weeks of April it expects to pull in another $2 billion per quarter this year. 

"We've returned to a lot more calm," Vecchione said.
Some of that new industry calm could get tested again next week as more regional banks report results. Plenty of investors will be paying close attention to one specific name that was at the center of last month’s crisis, First Republic (FRC), which is scheduled to release first-quarter earnings Monday. In March the San Francisco lender took a $30 billion deposit infusion from 11 rival banks in a bid to restore confidence. It was also among the banks that received downgrades from Moody's on Friday, specifically on its preferred-stock rating. 

A lot of money is riding on its fate. Everyday investors have bet $245 million on First Republic stock since the fall of Silicon Valley Bank, according to Vanda Research, the third highest inflow to a specific bank stock behind Bank of America and Charles Schwab (SCHW). It also has one of the highest levels of interest among so-called short sellers betting on the stock to decline, according to analytics firm S3 Partners, accounting for $480 million in such bets over the last 30 days. 

First Republic "will be a bellwether of sentiment for the sector" Vanda said in a note this past week.
Western Alliance’s CEO told analysts Wednesday that his bank had proved it was now in a different category than First Republic.
"There was a point where whatever happened to them affected us. But I think we've now separated ourselves."

Source: finance.yahoo.com

 

The Era Of Electric Pickups Is Almost Here


Worksport Ltd. (NASDAQ: WKSP)(NASDAQ: WKSPW) proudly revealed today that its advanced, industry-leading folding soft tonneau covers for light-duty trucks should be available in the next four weeks in a range of sizes and configurations adjusted for pickup trucks from nine automotive manufacturers. These manufacturers are Chevrolet, Jeep, Dodge, RAM, Ford Motor (NYSE: F), Nissan Motor Co Ltd (OTC: NSANY), Honda Motor Co (NYSE: HMC), Hyundai Motor Company (OTC: HYMTF) and Toyota Motor Corporation. 

Specifics
General Motors (NYSE: GM)-owned GMC is in for 14 covers as Worksport will be equipping the Chevrolet Silverado and Chevrolet Colorado trucks. Chevrolet just revealed it is launching a diesel-powered pickup Silverado along with its electric Silverado this year. On April 18th, General Motors confirmed that its entire EV lineup will be eligible for the full $7,500 tax credit under the Inflation Reduction Act. Moreover, General Motors will have the most EVs eligible for tax incentive. is undergoing a serious EV transformation. General Motors has been speeding up its EV shift lately and diving deeper into the EV design process, but unlike its peers who are ratcheting production, GM is increasing production slowly and expecting significant U.S. production in the second half of the year.
As for Stellantis NV (NYSE: STLA), Worksport will be making two covers for its Jeep Gladiator trucks, also two covers for Dodge Dakota trucks, and as many as 10 covers for RAM trucks.
As for Ford, there will be 21 configurations for the F-150, America’s best-selling pickup, along with the Super Duty, Ranger, and Maverick models.

As for Asia, Worksport has developed 11 distinct configurations for the Nissan Frontier and Titan brands. It will be providing 14 units to the Toyota Tundra and Tacoma ranges. Two will be developed for the Honda Ridgeline series while the Hyundai Santa Cruz is in for a distinctive cover which will help Hyundai achieve its aim to become one of the top three global EV manufacturers by the end of the decade. 

Stellantis-owned Jeep Unveiled Its 2024 Wrangler SUV
As part of the next stage of off-road sales battle with Ford Bronco, Jeep unveiled it is updating its flagship SUV with more capability, technology and features in an effort to attract off-road buyers with a plug-in hybrid electric version, or PHEV, that the brand named “4xe.” Jeep is playing an important part in electrification plans of its parent company Stellantis. Stellantis committed to spend more than $32.7 billion by the end of 2025 under its electrification strategy as it targets selling 5 million EVs by the end of the decade, with 50% of them being passenger vehicles and light duty trucks in the U.S. 

RAM’s Smaller Electric Pickup Possibly Underway
RAM CEO Mike Koval Jr. has hinted that a smaller electric truck could be on the way during the New York Auto Show, with the vehicle being crucial if the brand wishes to expand to Europe where larger vehicles don’t sell as well.

Ford Continues On Its Electrification Path
On Tuesday, Ford revealed it is intensifying its electrification strategy as it will be committing about $1.3 billion to transform its Oakville Assembly Plant in Ontario, Canada into a new electric vehicle hub, renaming it the Oakville Electric Vehicle Complex. This will be the place where the Blue Oval will be building its next-generation EVs that are due to hit market around 2025. Moreover, it is the first time that Ford will be completely retooling a North American facility that produces ICE-powered vehicles into one that manufactures EVs. 

Nissan Unveiled An Electric SUV For The Chinese Market
On Monday, Nissan revealed its electric SUV concept at the Shanghai Auto Show named the Arizon. The vehicle is due to be built on a platform that Nissan is sharing with Renault SA (OTC: RNLSY), Mitsubishi Corporation (OTC: MSBHF) and Infiniti. Under its Nissan Ambition 2030 plan, the automaker has recently accelerated its EV efforts in Europe and Japan, but not in the U.S.

Honda continues stepping up its EV efforts with SUVs
At the beginning of the year, Honda has launched a new business unit to accelerate its EV progress. Having lagged behind competitors, it is now stepping up its game as it revealed three new electric SUVs that will be launched in China next year. These two pre-production prototypes and one concept model were revealed at the Auto Shanghai 2023.

Toyota’s Leadership Shift Remains Committed To Hybrids
The newly elected CEO, Koji Sato, who took charge on April 1st has a hard task of taking Toyota to the electric era. Despite doubling its EV efforts, Toyota is not giving up on hybrids as it works on a new EV-only platform, according to Reuters. On April 7th, Reuters reported that the new leadership revealed ten new EV models are planned to be rolled out by 2026 along with the 2026 sales goal of 1.5 million EVs. This sales target is drastically different from Toyota’s global 2022 EV sales of 24,000 vehicles, which was a far cry from its total 2022 car sales that amounted to 10.5 million.

Electric Pickups Could Be The Game Changer In The EV Universe
Undoubtedly, China, Europe and the U.S. are powering ahead towards an EV future. The features of these vehicles are all about tech and software, while combustion engine vehicles were all about the mechanics and hardware. But, electric pickups go even further than that, perhaps because they promise to redefine the way we think about pickups in general. these vehicles promise to boost the self-confidence of inexperienced drivers as they will be the perfect companion both on and off-roads. With Worksport’s Terravis solar powered covers and COR portable battery, pickup drivers will be able to power remote locations and upgrade their camping trips in an emissions-free manner. Without components of internal combustion engines, pickups will offer massive storage spaces. Therefore, perhaps it’s not an overstatement to say that this year’s EV success rests on the shoulders of electric pickups as 2023 has already been dubbed as the year of the electric pickup and for good reason.

Source: finance.yahoo.com


 

Vipshop Holdings Limited (VIPS) Outpaces Stock Market Gains: What You Should Know

Vipshop Holdings Limited (VIPS) closed at $15.49 in the latest trading session, marking a +1.11% move from the prior day. This move outpaced the S&P 500's daily gain of 0.09%. At the same time, the Dow lost 0.03%, and the tech-heavy Nasdaq lost 2.51%.
Coming into today, shares of the company had gained 4.29% in the past month. In that same time, the Computer and Technology sector gained 4%, while the S&P 500 gained 6.17%.

 
Vipshop Holdings Limited will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.39, up 18.18% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.77 billion, down 5.3% from the prior-year quarter.

 
VIPS's full-year Zacks Consensus Estimates are calling for earnings of $1.65 per share and revenue of $15.57 billion. These results would represent year-over-year changes of +6.45% and +1.83%, respectively.
Any recent changes to analyst estimates for Vipshop Holdings Limited should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

 
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

 
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 2.52% higher within the past month. Vipshop Holdings Limited is holding a Zacks Rank of #1 (Strong Buy) right now.

 
Digging into valuation, Vipshop Holdings Limited currently has a Forward P/E ratio of 9.28. For comparison, its industry has an average Forward P/E of 36.91, which means Vipshop Holdings Limited is trading at a discount to the group.
The Internet - Delivery Services industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 17, which puts it in the top 7% of all 250+ industries.

 
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Source: finance.yahoo.com

 

Gamida Cell’s Allogeneic Cell Therapy Omisirge® (omidubicel-onlv) Receives FDA Approval

Omisirge is approved by the FDA as a new donor source for allogeneic stem cell transplant.

Global, randomized Phase 3 clinical trial showed faster neutrophil recovery and reduced bacterial and fungal infections as compared to standard cord blood

Omisirge may increase access to stem cell transplant, including among patients from diverse backgrounds

Gamida Cell Ltd. (Nasdaq: GMDA), a cell therapy pioneer working to turn cells into powerful therapeutics, today announced that the U.S. Food and Drug Administration (FDA) has approved Gamida Cell’s allogeneic cell therapy, Omisirge® (omidubicel-onlv), for use in adult and pediatric patients 12 years and older with hematologic malignancies planned for umbilical cord blood transplantation following myeloablative conditioning to reduce the time to neutrophil recovery and the incidence of infection.

Omisirge received breakthrough therapy designation, priority review and orphan drug designation from the FDA, reflecting the unmet need for additional donor sources for stem cell transplant. It is the first allogeneic stem cell transplant therapy to be approved on the basis of a global, randomized Phase 3 clinical study. Please see the accompanying full Prescribing Information for more information.

"FDA approval of Omisirge is a major advancement in the treatment of patients with hematologic malignancies that we believe may increase access to stem cell transplant and help improve patient outcomes," said Abbey Jenkins, President and Chief Executive Officer of Gamida Cell. "We are grateful to all the clinicians, patients and the entire Gamida Cell team without whom this approval would not have been possible. We also acknowledge the key role the FDA has played in supporting the development of Omisirge and other innovative and potentially life-saving cell therapies for patients with cancer and other serious diseases."

In a global, randomized Phase 3 clinical study, Omisirge demonstrated a median time to neutrophil recovery of 12 days in the intent to treat population, compared to 22 days for standard cord blood (p<0.001).1 Incidence of Grade 2/3 bacterial or Grade 3 fungal infections through 100 days following transplantation occurred in 39% of patients in the Omisirge arm and 60% of patients in the standard cord blood arm.1 The full Phase 3 clinical study results are available in Blood, the official journal of the American Society of Hematology. The safety profile for Omisirge is consistent with the expected adverse events of allogeneic hematopoietic stem cell transplantation following myeloablative conditioning. Among 117 patients who received Omisirge for any disease, infusion reactions occurred in 47% of patients (Grade 3 or 4 in 15%), acute graft-versus-host disease (GvHD) in 58% (Grade III-IV in 17%), chronic GvHD in 35% and graft failure in 3%.2

More than 40% of the patients in the Omisirge Phase 3 study were racially and ethnically diverse,1 underscoring the degree to which Omisirge may help address health disparities in stem cell transplantation.

"The approval of Omisirge is a significant development in hematopoietic stem cell transplantation," said Steven M. Devine, M.D., Chief Medical Officer at the National Marrow Donor Program® (NMDP)/Be The Match®. "Patients who are Black or African American have just a 29% chance of finding a match via the donor registry vs. a 79% chance for patients who are White.3 Adding Omisirge as a new donor source may help increase access to stem cell transplant for patients from racially or ethnically diverse backgrounds who struggle to find a fully matched donor in the registry."

Allogeneic hematopoietic stem cell transplantation offers a potentially curative option for hematologic malignancies including acute myeloid leukemia, acute lymphoblastic leukemia, chronic myeloid leukemia and myelodysplastic syndromes. Allogeneic transplant uses cells from a donor other than the recipient.

Omisirge is manufactured to enhance and expand the number of progenitor cells utilizing proprietary nicotinamide (NAM) technology. This process produces enriched hematopoietic progenitor cells, leading to preservation of their stemness, homing to the bone marrow and retained engraftment capacity.

Omisirge is manufactured in Gamida Cell’s state-of-the-art, fully licensed GMP manufacturing facility in Kiryat Gat, Israel. Omisirge is expected to be delivered to transplant centers within 30 days after the start of manufacturing. Gamida Cell Assist, a key resource for scheduling the manufacturing of Omisirge, will provide support to patients, caregivers and the hospital’s transplant team at each step of the process.

Omisirge is now available in the United States for transplant centers to order for appropriate patients. Onboarding of transplant centers is underway. As discussed in the company’s March 27 earnings call, Gamida Cell is pursuing strategic partnerships to support the launch and commercialization of Omisirge. The company also announced that is has retained Moelis & Company LLC to assist in the exploration of partnerships or broader strategic alternatives that would provide additional resources to support the launch of Omisirge and associated commercial activities in the United States and rest of world.

Conference Call
Gamida Cell will host a conference call to discuss the FDA’s approval of Omisirge Tuesday, April 18, at 8 am ET. To access the conference call, please register here and be advised to do so at least 10 minutes prior to joining the call. A live webcast of the conference call can be accessed in the "Investors & Media" section of the Gamida Cell website at www.gamida-cell.com. A replay of the webcast will be available approximately two hours after the event, for approximately 30 days.

Omisirge Indication
Omisirge is a nicotinamide modified allogeneic hematopoietic progenitor cell therapy derived from cord blood indicated for use in adults and pediatric patients 12 years and older with hematologic malignancies who are planned for umbilical cord blood transplantation following myeloablative conditioning to reduce the time to neutrophil recovery and the incidence of infection.

Important Safety Information for Omisirge

BOXED WARNING: INFUSION REACTIONS, GRAFT VERSUS HOST DISEASE, ENGRAFTMENT SYNDROME, AND GRAFT FAILURE

  • Infusion reactions may be fatal. Monitor patients during infusion and discontinue for severe reactions. Use is contraindicated in patients with known allergy to dimethyl sulfoxide (DMSO), Dextran 40, gentamicin, human serum albumin or bovine material.

  • Graft-versus-Host Disease may be fatal. Administration of immunosuppressive therapy may decrease the risk of GvHD.

  • Engraftment syndrome may be fatal. Treat engraftment syndrome promptly with corticosteroids.

  • Graft failure may be fatal. Monitor patients for laboratory evidence of hematopoietic recovery.

Contraindications

OMISIRGE is contraindicated in patients with known hypersensitivity to dimethyl sulfoxide (DMSO), Dextran 40, gentamicin, human serum albumin, or bovine products.


Warnings and Precautions


Hypersensitivity Reactions

Allergic reactions may occur with the infusion of OMISIRGE. Reactions include bronchospasm, wheezing, angioedema, pruritis and hives. Serious hypersensitivity reactions, including anaphylaxis, may be due to DMSO, residual gentamicin, Dextran 40, human serum albumin (HSA) and bovine material in OMISIRGE. OMISIRGE may contain residual antibiotics if the cord blood donor was exposed to antibiotics in utero. Patients with a history of allergic reactions to antibiotics should be monitored for allergic reactions following OMISIRGE administration.


Infusion Reactions

Infusion reactions occurred following OMISIRGE infusion, including hypertension, mucosal inflammation, dysphagia, dyspnea, vomiting, and gastrointestinal toxicity. Premedication with antipyretics, histamine antagonists, and corticosteroids may reduce the incidence and intensity of infusion reactions. In patients transplanted with OMISIRGE in clinical trials, 47% (55/117) patients had an infusion reaction of any severity. Grade 3-4 infusion reactions were reported in 15% (18/117) patients. Infusion reactions may begin within minutes of the start of infusion of OMISIRGE, although symptoms may continue to intensify and not peak for several hours after the completion of the infusion. Monitor patients for signs and symptoms of infusion reactions during and after OMISIRGE administration. When a reaction occurs, pause the infusion and institute supportive care as needed.


Graft-versus-Host Disease

Acute and chronic GvHD, including life-threatening and fatal cases, occurred following treatment with OMISIRGE. In patients transplanted with OMISIRGE Grade II-IV acute GvHD was reported in 58% (68/117). Grade III- IV acute GvHD was reported in 17% (20/117). Chronic GvHD occurred in 35% (41/117) of patients. Acute GvHD manifests as maculopapular rash, gastrointestinal symptoms, and elevated bilirubin. Patients treated with OMISIRGE should receive immunosuppressive drugs to decrease the risk of GvHD, be monitored for signs and symptoms of GvHD, and treated if GvHD develops.


Engraftment Syndrome

Engraftment syndrome may occur because OMISIRGE is derived from umbilical cord blood. Monitor patients for unexplained fever, rash, hypoxemia, weight gain, and pulmonary infiltrates in the peri-engraftment period. Treat with corticosteroids as soon as engraftment syndrome is recognized to ameliorate symptoms. If untreated, engraftment syndrome may progress to multiorgan failure and death.


Graft Failure

Primary graft failure occurred in 3% (4/117) of patients in OMISIRGE clinical trials. Primary graft failure, which may be fatal, is defined as failure to achieve an absolute neutrophil count greater than 500 per microliter blood by Day 42 after transplantation. Immunologic rejection is the primary cause of graft failure. Monitor patients for laboratory evidence of hematopoietic recovery.


Malignancies of Donor Origin

Two patients treated with OMISIRGE developed post-transplant lymphoproliferative disorder (PTLD) in the second-year post-transplant. PTLD manifests as a lymphoma-like disease favoring non-nodal sites. PTLD is usually fatal if not treated. The etiology is thought to be donor lymphoid cells transformed by Epstein-Barr virus (EBV). Serial monitoring of blood for EBV DNA may be warranted in patients with persistent cytopenias. One patient treated with OMISIRGE developed a donor-cell derived myelodysplastic syndrome (MDS) during the fourth-year post-transplant. The natural history is presumed to be the same as that for de novo MDS. Monitor life-long for secondary malignancies. If a secondary malignancy occurs, contact Gamida Cell at (844) 477-7478.


Transmission of Serious Infections

Transmission of infectious disease may occur because OMISIRGE is derived from umbilical cord blood. Disease may be caused by known or unknown infectious agents. Donors are screened for increased risk of infection, clinical evidence of sepsis, and communicable disease risks associated with xenotransplantation. Maternal and infant donor blood is tested for evidence of donor infection. See full Prescribing Information, Warnings and Precautions, Transmission of Serious Infections for list of testing performed. OMISIRGE is tested for sterility, endotoxin, and mycoplasma. There may be an effect on the reliability of the sterility test results if the cord blood donor was exposed to antibiotics in utero. Product manufacturing includes bovine-derived reagents. All animal-derived reagents are tested for animal viruses, bacteria, fungi, and mycoplasma before use. These measures do not eliminate the risk of transmitting these or other transmissible infectious diseases and disease agents. Test results may be found on the container label and/or in accompanying records. If final sterility results are not available at the time of use, Quality Assurance will communicate any positive results from sterility testing to the physician. Report the occurrence of transmitted infection to Gamida Cell at (844) 477-7478.


Transmission of Rare Genetic Diseases

OMISIRGE may transmit rare genetic diseases involving the hematopoietic system because it is derived from umbilical cord blood. Cord blood donors have been screened to exclude donors with sickle cell anemia, and anemias due to abnormalities in hemoglobins C, D, and E. Because of the age of the donor at the time cord blood collection takes place, the ability to exclude rare genetic diseases is severely limited.


ADVERSE REACTIONS

The most common adverse reactions (incidence > 20%) are infections, GvHD, and infusion reaction.


About Gamida Cell

Gamida Cell is a cell therapy pioneer working to turn cells into powerful therapeutics. The company’s proprietary nicotinamide (NAM) technology leverages the properties of NAM to enhance and expand cells, creating allogeneic cell therapy products and candidates that are potentially curative for patients with hematologic malignancies. These include Omisirge®, an FDA-approved nicotinamide modified allogeneic hematopoietic progenitor cell therapy, and GDA-201, an intrinsic NK cell therapy candidate being investigated for the treatment of hematologic malignancies. For additional information, please visit www.gamida-cell.com or follow Gamida Cell on LinkedIn, Twitter, Facebook or Instagram.


Cautionary Note Regarding Forward Looking Statements


This press release contains forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995, including with respect to the potentially life-saving or curative therapeutic and commercial potential of Gamida Cell’s product, Omisirge® (omidubicel-onlv) and with respect to potential increased access to stem cell transplant. Any statement describing Gamida Cell’s goals, expectations, financial or other projections, intentions or beliefs is a forward-looking statement and should be considered an at-risk statement. Such statements are subject to a number of risks, uncertainties and assumptions including those related to clinical, scientific, regulatory and technical developments and those inherent in the process of developing and commercializing product candidates that are safe and effective for use as human therapeutics. In light of these risks and uncertainties, and other risks and uncertainties that are described in the Risk Factors section and other sections of Gamida Cell’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (SEC) on March 31, 2023, and other filings that Gamida Cell makes with the SEC from time to time (which are available at http://www.sec.gov), the events and circumstances discussed in such forward-looking statements may not occur, and Gamida Cell’s actual results could differ materially and adversely from those anticipated or implied thereby. Although Gamida Cell’s forward-looking statements reflect the good faith judgment of its management, these statements are based only on facts and factors currently known by Gamida Cell. As a result, you are cautioned not to rely on these forward-looking statements.

Source: finance.yahoo.com

 

Digital Turbine (NASDAQ:APPS) in five years have delivered you a 593% stock price gain


While Digital Turbine, Inc. (NASDAQ:APPS) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 26% in the last quarter. But that does not change the realty that the stock's performance has been terrific, over five years. In that time, the share price has soared some 593% higher! So it might be that some shareholders are taking profits after good performance. The most important thing for savvy investors to consider is whether the underlying business can justify the share price gain. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 69% drop, in the last year. We love happy stories like this one. The company should be really proud of that performance!
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the five years of share price growth, Digital Turbine moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
While the broader market lost about 8.8% in the twelve months, Digital Turbine shareholders did even worse, losing 69%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 47%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Source: finance.yahoo.com

 

JPMorgan, Citigroup Wells and Fargo. What you need to know about the Earnings


Analyzing Q1 Bank Earnings: Good or Bad?
The market liked what it saw in the quarterly releases from JPMorgan, Citigroup and even Wells Fargo. There was plenty to like in these results, with higher interest rates helping these big players expand their margins while demand for loans remained strong, helping loan portfolios grow.
The bank worries that took center stage in the wake of the Silicon Valley Bank fiasco didn't pertain to these big players. JPMorgan, Citi, and Wells Fargo, which reported Friday morning, and Bank of America, which is scheduled to report Tuesday morning (April 18th), regularly go through the Fed's stress tests and are perceived as very safe.
The diminished confidence in the banking space is specifically centered on the small and mid-sized regional banks that will start reporting results this week. The flight to safety among depositors has forced these banks to offer much higher deposit rates to stem the tide. This will show up in net-interest margin pressures relative not only to what came through from the likes of JPMorgan, Citi, and Wells Fargo Friday morning but also relative to what these same banks had reported in the preceding period.
Returning to the group's Q1 results, the fact that the investment banking business was weak during the period was no surprise for the market. We knew that advisory fees would, at best, be about two-thirds of what they were in the year-earlier period, as tighter monetary policy and other macroeconomic headwinds have been weighing on deal-making.
JPMorgan's net interest income jumped +49%, as average loans increased +5% and net-interest margin expanded to 2.63% from 1.67% in the year-earlier period. Margins expanded for Citigroup and Wells Fargo as well, as funding costs (the rates offered to depositors) didn't go up by that much. The market liked JPMorgan's raised guidance for net interest income this year, though management has stated that 2023 will mark the high watermark on this count over the next few years.
Lending remained strong in Q1 but started to soften towards the end of the quarter in the wake of the Silicon Valley Bank failure, a trend that has carried into the current period and will likely remain a negative factor over the coming quarters as well.
Many in the market see the resulting tightening in financial conditions as reflected in the aforementioned diminished lending outlook becoming a significant growth headwind for the U.S. economy, which was already under severe strain due to the Fed's extraordinary monetary policy tightening.

Partly driving the market's favorable reaction to these big bank results is a sigh of relief in a way, which follows an almost indiscriminate sell-off for the group since early March when the Silicon Valley Bank issue took center stage. The JPMorgan, Citigroup, and Wells Fargo results were undoubtedly good, but sentiment on the group had weakened so much that market participants found the results reassuring. Bank stocks had been leading the market this year through early March but have struggled since March 6th.
The issue with the bank stocks isn't so much their current earnings power but rather how their profitability will shape up in the coming economic slowdown. Bank investors are wary of the group's track record of making a lot of money during the good times, which the group then gives back during the bad times.
The question is how 'bad' will the coming 'bad times' be for the economy and what will that do to bank earnings.
Regarding the Finance sector scorecard for Q1, we now have results from 18.5% of the sector's market capitalization in the S&P 500 index. Total earnings for these companies are up +25.3% from the same period last year on +17.3% higher revenues, with 83.3% beating EPS estimates and 100% beating revenue estimates.
Looking at the Finance sector as a whole, total Q1 earnings for the sector are expected to be up +4.2% on +7.7% higher revenues.
For the Zacks Major Banks industry, which includes all of the aforementioned banks and accounts for roughly 40% of total Finance sector earnings, total Q1 earnings are on track to be up +16.4% from the same period last year on +12.3% higher revenues.
As noted earlier, skeptics of the banking industry argue that the group ends up giving away all the profits that it had accumulated during the good times when the macro environment turns south. The Covid downturn was an anomaly in that respect, but there is some truth to the allegation.
We will see how the economic picture unfolds in the coming quarters, but the credit quality metrics in the reported Q1 results do not point toward any imminent deterioration.
The earnings growth picture for the Finance sector is expected to improve in 2023 as we turn the page on tough comparisons, even though the economic growth pace is expected to moderate under the cumulative weight of the Fed's tightening. Finance sector earnings are expected to be up +11.3% in 2023 on -1.9% lower revenues, which would follow the -15.9% earnings decline on +7.7% higher revenues in 2022.

 
2023 Q1 Earnings Season Scorecard
Including Friday morning's bank results, we now have Q1 earnings from 30 S&P 500 members. Total earnings for these 30 index members are up +7% from the same period last year on +10% higher revenues, with 83.3% beating EPS estimates and 73.3% beating revenue estimates.
Banks and other financial operators dominate this week's reporting docket, but we also have a slew of blue-chip operators from Johnson & Johnson and Procter & Gamble to Netflix, Tesla, and many others.

 
The Earnings Big Picture
To get a sense of what is currently expected, 2023 Q1 earnings are predicted to be down -9.4% on +1.9% higher revenues. This would follow the -5.4% earnings decline in the preceding period (2022 Q4) on +5.9% higher revenues.
Embedded in these 2023 Q1 earnings and revenue growth projections is the expectation of continued margin pressures, which has been a recurring theme in recent quarters.
Estimates for Q1 came down as the quarter got underway, in-line with the trend that had been in place since the start of 2022. That said, the magnitude of negative revisions to Q1 estimates was smaller relative to what we had seen in the preceding two periods.
Estimates for full-year 2023 have also been coming down as well, as we have been pointing out consistently in these pages.
As we have been pointing out all along, 2023 earnings estimates peaked in April 2022 and have been coming down ever since. Since the mid-April peak, aggregate earnings have declined by -13.1% for the index as a whole and -14.8% for the index on an ex-Energy basis, with the declines far bigger in a number of major sectors.
You have likely read about the roughly -20% cuts to S&P 500 earnings estimates, on average, ahead of recessions.
Many in the market interpret this to mean that estimates still have plenty to fall in the days ahead. But as the aforementioned magnitude of negative revisions in excess of -14% on an ex-Energy basis show, we have already traveled a fair distance in that direction. Importantly, some key sectors in the path of the Fed's tightening cycle, like Construction, Retail, Discretionary, and even Technology, have already gotten their 2023 estimates shaved off by a fifth since mid-April.
We are not saying that estimates don't need to fall any further. If nothing else, estimates for the Finance sector will need to come down in the wake of the ongoing banking industry issues. But rather that the bulk of the cuts are likely behind us, particularly if the coming economic downturn is a lot less problematic than many seem to assume or fear.
Please note that the $1.893 trillion aggregate earnings estimate for the index in 2023 approximates to an index 'EPS' of $213.38, down from $221.05 in 2022.

Source: finance.yahoo.com

 

JPMorgan, Citigroup Wells and Fargo. What you need to know about the Earnings


Analyzing Q1 Bank Earnings: Good or Bad?
The market liked what it saw in the quarterly releases from JPMorgan, Citigroup and even Wells Fargo. There was plenty to like in these results, with higher interest rates helping these big players expand their margins while demand for loans remained strong, helping loan portfolios grow.
The bank worries that took center stage in the wake of the Silicon Valley Bank fiasco didn't pertain to these big players. JPMorgan, Citi, and Wells Fargo, which reported Friday morning, and Bank of America, which is scheduled to report Tuesday morning (April 18th), regularly go through the Fed's stress tests and are perceived as very safe.
The diminished confidence in the banking space is specifically centered on the small and mid-sized regional banks that will start reporting results this week. The flight to safety among depositors has forced these banks to offer much higher deposit rates to stem the tide. This will show up in net-interest margin pressures relative not only to what came through from the likes of JPMorgan, Citi, and Wells Fargo Friday morning but also relative to what these same banks had reported in the preceding period.
Returning to the group's Q1 results, the fact that the investment banking business was weak during the period was no surprise for the market. We knew that advisory fees would, at best, be about two-thirds of what they were in the year-earlier period, as tighter monetary policy and other macroeconomic headwinds have been weighing on deal-making.
JPMorgan's net interest income jumped +49%, as average loans increased +5% and net-interest margin expanded to 2.63% from 1.67% in the year-earlier period. Margins expanded for Citigroup and Wells Fargo as well, as funding costs (the rates offered to depositors) didn't go up by that much. The market liked JPMorgan's raised guidance for net interest income this year, though management has stated that 2023 will mark the high watermark on this count over the next few years.
Lending remained strong in Q1 but started to soften towards the end of the quarter in the wake of the Silicon Valley Bank failure, a trend that has carried into the current period and will likely remain a negative factor over the coming quarters as well.
Many in the market see the resulting tightening in financial conditions as reflected in the aforementioned diminished lending outlook becoming a significant growth headwind for the U.S. economy, which was already under severe strain due to the Fed's extraordinary monetary policy tightening.

Partly driving the market's favorable reaction to these big bank results is a sigh of relief in a way, which follows an almost indiscriminate sell-off for the group since early March when the Silicon Valley Bank issue took center stage. The JPMorgan, Citigroup, and Wells Fargo results were undoubtedly good, but sentiment on the group had weakened so much that market participants found the results reassuring. Bank stocks had been leading the market this year through early March but have struggled since March 6th.
The issue with the bank stocks isn't so much their current earnings power but rather how their profitability will shape up in the coming economic slowdown. Bank investors are wary of the group's track record of making a lot of money during the good times, which the group then gives back during the bad times.
The question is how 'bad' will the coming 'bad times' be for the economy and what will that do to bank earnings.
Regarding the Finance sector scorecard for Q1, we now have results from 18.5% of the sector's market capitalization in the S&P 500 index. Total earnings for these companies are up +25.3% from the same period last year on +17.3% higher revenues, with 83.3% beating EPS estimates and 100% beating revenue estimates.
Looking at the Finance sector as a whole, total Q1 earnings for the sector are expected to be up +4.2% on +7.7% higher revenues.
For the Zacks Major Banks industry, which includes all of the aforementioned banks and accounts for roughly 40% of total Finance sector earnings, total Q1 earnings are on track to be up +16.4% from the same period last year on +12.3% higher revenues.
As noted earlier, skeptics of the banking industry argue that the group ends up giving away all the profits that it had accumulated during the good times when the macro environment turns south. The Covid downturn was an anomaly in that respect, but there is some truth to the allegation.
We will see how the economic picture unfolds in the coming quarters, but the credit quality metrics in the reported Q1 results do not point toward any imminent deterioration.
The earnings growth picture for the Finance sector is expected to improve in 2023 as we turn the page on tough comparisons, even though the economic growth pace is expected to moderate under the cumulative weight of the Fed's tightening. Finance sector earnings are expected to be up +11.3% in 2023 on -1.9% lower revenues, which would follow the -15.9% earnings decline on +7.7% higher revenues in 2022.

 
2023 Q1 Earnings Season Scorecard
Including Friday morning's bank results, we now have Q1 earnings from 30 S&P 500 members. Total earnings for these 30 index members are up +7% from the same period last year on +10% higher revenues, with 83.3% beating EPS estimates and 73.3% beating revenue estimates.
Banks and other financial operators dominate this week's reporting docket, but we also have a slew of blue-chip operators from Johnson & Johnson and Procter & Gamble to Netflix, Tesla, and many others.

 
The Earnings Big Picture
To get a sense of what is currently expected, 2023 Q1 earnings are predicted to be down -9.4% on +1.9% higher revenues. This would follow the -5.4% earnings decline in the preceding period (2022 Q4) on +5.9% higher revenues.
Embedded in these 2023 Q1 earnings and revenue growth projections is the expectation of continued margin pressures, which has been a recurring theme in recent quarters.
Estimates for Q1 came down as the quarter got underway, in-line with the trend that had been in place since the start of 2022. That said, the magnitude of negative revisions to Q1 estimates was smaller relative to what we had seen in the preceding two periods.
Estimates for full-year 2023 have also been coming down as well, as we have been pointing out consistently in these pages.
As we have been pointing out all along, 2023 earnings estimates peaked in April 2022 and have been coming down ever since. Since the mid-April peak, aggregate earnings have declined by -13.1% for the index as a whole and -14.8% for the index on an ex-Energy basis, with the declines far bigger in a number of major sectors.
You have likely read about the roughly -20% cuts to S&P 500 earnings estimates, on average, ahead of recessions.
Many in the market interpret this to mean that estimates still have plenty to fall in the days ahead. But as the aforementioned magnitude of negative revisions in excess of -14% on an ex-Energy basis show, we have already traveled a fair distance in that direction. Importantly, some key sectors in the path of the Fed's tightening cycle, like Construction, Retail, Discretionary, and even Technology, have already gotten their 2023 estimates shaved off by a fifth since mid-April.
We are not saying that estimates don't need to fall any further. If nothing else, estimates for the Finance sector will need to come down in the wake of the ongoing banking industry issues. But rather that the bulk of the cuts are likely behind us, particularly if the coming economic downturn is a lot less problematic than many seem to assume or fear.
Please note that the $1.893 trillion aggregate earnings estimate for the index in 2023 approximates to an index 'EPS' of $213.38, down from $221.05 in 2022.

Source: finance.yahoo.com

 

XP Inc. (XP) moves 12.4% Higher: Will This Strength Last?

XP Inc. (XP) shares soared 12.4% in the last trading session to close at $12.30. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's no gain, no loss over the past four weeks.

XP Inc witnessed a rise in share price for the second consecutive day on Nasdaq. As a provider of capital markets related services, the company is well placed in the current situation. Given the turmoil in the equity market over the past month, demand for financial products and services have risen substantially. Thus, investors are bullish on the company’s prospects, driving the XP stock higher.
This company is expected to post quarterly earnings of $0.31 per share in its upcoming report, which represents a year-over-year change of +10.7%. Revenues are expected to be $643.45 million, up 7.7% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For XP Inc., the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on XP going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold).
XP Inc. is part of the Zacks Financial - Miscellaneous Services industry. Forge Global Holdings, Inc. (FRGE), another stock in the same industry, closed the last trading session 4.1% lower at $1.63. FRGE has returned 5.6% in the past month.
For Forge Global Holdings, Inc. , the consensus EPS estimate for the upcoming report has changed -2% over the past month to -$0.15. This represents a change of +42.3% from what the company reported a year ago. Forge Global Holdings, Inc. currently has a Zacks Rank of #4 (Sell). 

Source: finance.yahoo.com

 

Riot Platforms, Marathon Digital, and Hut 8 Mining Stocks showing great performance in March 2023

Shares of Riot Platforms (RIOT 9.47%) rose 59.8% in March 2023, according to data from S&P Global Market Intelligence. Dramatic price drops or bloodcurdling crashes are common events for this volatile crypto-mining stock. But even for veteran Riot observers and shareholders, last month's surge was a market move of unusual size.

Riot's moves led the charge across the crypto-mining industry at large.

The company shared various business reports near the start of March, including February's Bitcoin (BTC 1.98%) mining production and the full financial results of the fourth quarter and full fiscal year 2022. Market makers quickly glanced at these documents, brushed them off, and moved on; Riot's stock barely moved on the news.

From there, the stock followed along as Bitcoin's price gains picked up speed, with a week-long pause around the collapse of a few banks with close ties to the cryptocurrency sector. Bitcoin's price chart pumped the brakes, and Riot followed suit. So did fellow crypto-mining companies such as Marathon Digital (MARA 15.98%) and Hut 8 Mining (HUT 15.62%). Their charting lines were nearly identical for a couple of weeks, bundled around Bitcoin's pace-setting price trend:

The bundle separated a bit in the last 10 days of March. Bitcoin held fairly steady from March 21 onward, and the other two crypto-mining experts fell back slightly. But Riot Platforms gained 10.1% over the same period, catching fire while its peers ran out of steam. Marathon closed the month 22.8% higher, and Hut 8 recorded a 12.1% gain. The Bitcoin inspiration stopped at a 19.2% increase, priced at $28,041 per digital coin.

Sure, it makes sense when crypto-mining stocks move in tandem with the all-important Bitcoin price. But why did Riot amplify last month's Bitcoin action much more than Hut 8 or Marathon did?

That's a lesson in short-term stock-price fluctuations versus long-term market trends. If you measure the price changes of Marathon, Riot, and Hut 8 from the end of 2021 to the start of March 2023, you'll find that their price drops stayed within a range of 72% and 79%. They separated from time to time along the way, similar to Riot's industry-leading jump last month, but always came back together again.

These three companies run similar but subtly different business plans. Riot and Hut 8 focus exclusively on Bitcoin mining, while Marathon also offers data-center hosting services. Riot also stands out due to its full stack of in-house power generation and mining-facility operations, while the others rely on third parties for these functions.

But in the end, it all comes down to what Bitcoin is doing and where its price is going. Times are good right now, and I do believe that cryptocurrencies will become more important and valuable over time, and the digital mining stocks reflect that upswing. They are also exposed to massive risks when the crypto market cools down. Since they have fixed business expenses measured in U.S. dollars, crypto miners face serious financial risks when the crypto winter stays cold for too long.

So it's amazing to see Riot soaring 60% higher in March and 74% last July, but it also lost more than 25% in five of the last 12 months, and so did Marathon and Hut 8. Bitcoin only recorded one month with more than 25% price drops over the same period.
I know what you're thinking. These stocks are more volatile than Bitcoin? Inconceivable!
That's a great word, but I do not think it means what you think it means. Bitcoin miners add extra layers of financial risk on top of the inherently unpredictable foundation of Bitcoin's short-term price changes. Of course, that results in even more volatility and investor risk. That gamble might serve investors well in the long run, but I don't dare to invest cold, hard cash in that idea. In my view, Bitcoin itself has plenty of price swings and long-term promise, and I'm not comfortable with the mining specialists' even wilder risk profiles.

Source: fool.com

 

The New Gold Stock was shining today, Senior Management Appointments and Strengthens Technical Leadership Team

   Shares of New Gold (NGD 14.29%) were moving higher today after the gold miner posted strong operating results in its first-quarter earnings report. The company also named a new chief operating officer and received a positive analyst note.

As a result, the gold stock was up 9.8% as of 10:12 a.m. ET.

In the report, the company said it produced 104,857 ounces of gold equivalent, up 20% from 87,696, and it saw solid increases at both its New Afton mine and the Rainy River mine.

Management said that the quarter represented its strongest start to the year in four years, and said that Rainy River had its best first quarter ever, saying it achieved an increase in production and delivery of nearly 13% from the quarter a year ago

Separately, the company also announced several new hires and promotions, including Yohann Bouchard as COO and executive vice president, and Ankit Shah as executive vice president, strategy and business development.

Bouchard was most recently the COO at Yamana Gold and brings more than 25 years of technical and operations experience to New Gold.

New Gold has struggled with high production costs, which explains why the stock is trading in penny stock range. But at least one analyst thinks the company is turning the corner.

Scotiabank resumed coverage on the stock with a sector perform rating and a $1.25 price target, which might not sound particularly favorable, but the analyst said the company was reaching a free-cash-flow inflection point, and expected FCF to improve in 2024.

We'll learn more when New Gold reports its full first-quarter earnings report on April 26. Analysts are expecting revenue to fall 6.8% to $162.8 million and see break-even earnings per share, down from a $0.02 adjusted earnings per share in the quarter a year ago.

New Gold Inc. ("New Gold" or the "Company") (TSX: NGD) (NYSE American: NGD) is pleased to announce the appointment of Yohann Bouchard as Executive Vice President and Chief Operating Officer, and the promotion of Ankit Shah to Executive Vice President, Strategy and Business Development. New Gold also announces the appointment of Luke Buchanan as Vice President, Technical Services and Jean-François Ravenelle as Vice President, Geology.

"I am very pleased to have Yohann join our team. He brings an impressive record of operational excellence, technical knowledge, and a strong commitment to health and safety and growth to New Gold during an exciting time for our Company," stated Patrick Godin, President and CEO. "In addition, Luke's broad technical knowledge and strategic vision and Jean-François' extensive knowledge in structural geology and exploration, will be assets to our team as we continue to advance growth opportunities and sustained production at our operations."

"I am also pleased to have Ankit join our senior leadership team. He has been instrumental in the transformation of the Company in recent years, including the divestment of the Blackwater project, as well as executing the strategic partnership with the Ontario Teachers' Pension Plan at the New Afton Mine. Ankit will continue to have responsibility for the Company's strategy, business development and capital markets activities, including investor relations," added Mr. Godin.

"Our mission of being a leading intermediate gold and copper producer remains unchanged. With the additional bench strength and experience, I am confident our team can help lead our operations and our Company towards our goal of increased production at lower costs, delivering sustained free cash flow over the coming years," added Mr. Godin.

Yohann Bouchard, Executive Vice President and Chief Operating Officer

Yohann Bouchard brings with him more than 25 years of progressive technical and operations experience in the mining industry. Most recently, Mr. Bouchard was Senior Vice President and Chief Operating Officer at Yamana Gold ("Yamana"). Mr. Bouchard joined Yamana in October 2014 and was responsible for Yamana's mining operations in the Americas, and overseeing the key operational groups across the company. Prior to joining Yamana, Mr. Bouchard occupied key operating and technical positions with Primero Mining Corporation, IAMGOLD Corporation, Breakwater Resources Ltd. and Cambior Inc. Mr. Bouchard oversaw precious and base metal operations in the Americas and in Africa. Mr. Bouchard holds a Bachelor of Mining Engineering degree from École Polytechnique of Montréal. He is registered as a professional engineer with Professional Engineers Ontario.

Ankit Shah, Executive Vice President, Strategy and Business Development

Ankit Shah is a mining finance executive with over 15 years of experience in strategy, corporate development, capital allocation and investor relations, primarily in the mining industry. Mr. Shah joined the Company in 2010 with the primary focus of working with the corporate development and investor relations teams. Mr. Shah was promoted to Vice President, Strategy and Business Development in September 2019. Since that time, he has taken on progressively more responsibility for many facets of the business. Prior to joining New Gold, Mr. Shah worked for both Ernst & Young and KPMG within their Assurance and Financial Advisory practices. Mr. Shah is both a Chartered Accountant and Chartered Professional Accountant.

Luke Buchanan, Vice President, Technical Services

Luke Buchanan has over 18 years of experience as a mining engineer overseeing mine planning, technical studies and mineral resources and reserves, and most recently was the Senior Vice President, Technical Services at Yamana. Prior to joining Yamana, Mr. Buchanan held progressively senior operating and technical positions at Newmont Corporation, AMC Consultants and Primero Mining Corporation in both Australia and Canada. Mr. Buchanan holds a Bachelor of Mining Engineering degree from the University of New South Wales.

Jean-François Ravenelle, Vice President, Geology

Jean-François Ravenelle has over 20 years of experience in structural geology applied to precious and base metal deposits for both brownfield and greenfield projects, and most recently was the Structural Geology Practice Lead for Metals Exploration at BHP Group Limited ("BHP"). Prior to BHP, Mr. Ravenelle was the Director of Geology at Yamana, where he focused on optimizing operations, exploration projects, and corporate development. Preceding Yamana, he held the role of Principal Consultant with SRK Consulting, Canada. Mr. Ravenelle began his career as a field geologist for the Geological Survey of Canada, Goldcorp, Virginia Gold Mines, and Freewest Resources. He holds a Ph.D. in Structural and Economic Geology from the Institut National de la Recherche Scientifique and is a registered professional geologist in Ontario and Quebec.

About New Gold


New Gold is a Canadian-focused intermediate mining Company with a portfolio of two core producing assets in Canada, the Rainy River gold mine and the New Afton copper-gold mine. The Company also holds Canadian-focused investments. New Gold's vision is to build a leading diversified intermediate gold company based in Canada that is committed to the environment and social responsibility. For further information on the Company, visit www.newgold.com.

Cautionary Note Regarding Forward-Looking Statements

Certain information contained in this news release, including any information relating to New Gold's future financial or operating performance are "forward-looking". All statements in this news release, other than statements of historical fact, which address events, results, outcomes or developments that New Gold expects to occur are "forward-looking statements". Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the use of forward-looking terminology such as "plans", "expects", "is expected", "budget", "scheduled", "targeted", "estimates", "forecasts", "intends", "anticipates", "projects", "potential", "believes" or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "should", "might" or "will be taken", "occur" or "be achieved" or the negative connotation of such terms. Forward-looking statements in this news release include, among others, statements with respect to: the intended responsibilities of the Executive Vice President, Strategy and Business Development; progressing the Company's goals, including increased production at lower costs and delivering sustained free cash flow over the coming years; and the anticipated Company-wide and operational benefits the technical additions are expected to bring.

All forward-looking statements in this news release are based on the opinions and estimates of management that, while considered reasonable as at the date of this news release in light of management's experience and perception of current conditions and expected developments, are inherently subject to important risk factors and uncertainties, many of which are beyond New Gold's ability to control or predict. Certain material assumptions regarding such forward-looking statements are discussed in this news release, New Gold's latest annual management's discussion and analysis ("MD&A"), its most recent annual information form and technical reports on the Rainy River Mine and New Afton Mine filed on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. In addition to, and subject to, such assumptions discussed in more detail elsewhere, the forward-looking statements in this news release are also subject to the following assumptions:

(1) there being no significant disruptions affecting New Gold's operations;

(2) political and legal developments in jurisdictions where New Gold operates, or may in the future operate, being consistent with New Gold's current expectations;

(3) the accuracy of New Gold's current Mineral Reserve and Mineral Resource estimates and the grade of gold, copper and silver expected to be mined;

(4) the exchange rate between the Canadian dollar and U.S. dollar, and to a lesser extent the Mexican peso, and commodity prices being approximately consistent with current levels and expectations for the purposes of 2023 guidance and otherwise;

(5) prices for diesel, natural gas, fuel oil, electricity and other key supplies being approximately consistent with current levels; (6) equipment, labour and material costs increasing on a basis consistent with New Gold's current expectations;

(6) the results of the life of mine plans for the Rainy River Mine and the New Afton Mine being realized;

(7) there being no material disruption to the Company's supply chains and workforce at either the Rainy River Mine or New Afton Mine due to cases of COVID-19 or otherwise that would interfere with the Company's anticipated course of action at its operations.

Forward-looking statements are necessarily based on estimates and assumptions that are inherently subject to known and unknown risks, uncertainties and other factors that may cause actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements.

Such factors include, without limitation:

  • price volatility in the spot and forward markets for metals and other commodities;

  • discrepancies between actual and estimated production, between actual and estimated costs, between actual and estimated Mineral Reserves and Mineral Resources and between actual and estimated metallurgical recoveries;

  • equipment malfunction, failure or unavailability;

  • accidents;

  • risks related to early production at the Rainy River Mine, including failure of equipment, machinery, the process circuit or other processes to perform as designed or intended;

  • the speculative nature of mineral exploration and development, including the risks of obtaining and maintaining the validity and enforceability of the necessary licenses and permits and complying with the permitting requirements of each jurisdiction in which New Gold operates, including, but not limited to: uncertainties and unanticipated delays associated with obtaining and maintaining necessary licenses, permits and authorizations and complying with permitting requirements;

  • changes in project parameters as plans continue to be refined;

  • changing costs, timelines and development schedules as it relates to construction;

  • the Company not being able to complete its construction projects at the Rainy River Mine or the New Afton Mine on the anticipated timeline or at all;

  • volatility in the market price of the Company's securities;

  • changes in national and local government legislation in the countries in which New Gold does or may in the future carry on business;

  • compliance with public company disclosure obligations;

  • controls, regulations and political or economic developments in the countries in which New Gold does or may in the future carry on business;

  • the Company's dependence on the Rainy River Mine and New Afton Mine;

  • the Company not being able to complete its exploration drilling programs on the anticipated timeline or at all;

  • disruptions to the Company's workforce at either the Rainy River Mine or the New Afton Mine, or both, due to cases of COVID-19 or otherwise;

  • the responses of the relevant governments to any disease, epidemic or pandemic outbreak, including the COVID-19 outbreak, not being sufficient to contain the impact of such outbreak; disruptions to the Company's supply chain and workforce due to any disease, epidemic or pandemic outbreak, including the COVID-19 outbreak;

  • an economic recession or downturn as a result of any disease, epidemic or pandemic outbreak, including the COVID-19 outbreak, that materially adversely affects the Company's operations or liquidity position;

  • there being further shutdowns at the Rainy River Mine or New Afton Mine; significant capital requirements and the availability and management of capital resources;

  • additional funding requirements;

  • diminishing quantities or grades of Mineral Reserves and Mineral Resources;

  • actual results of current exploration or reclamation activities;

  • uncertainties inherent to mining economic studies including the Technical Reports for the Rainy River Mine and New Afton Mine; impairment;

  • unexpected delays and costs inherent to consulting and accommodating rights of First Nations and other indigenous groups;

  • climate change, environmental risks and hazards and the Company's response thereto;

  • tailings dam and structure failures;

  • ability to obtain and maintain sufficient insurance;

  • actual results of current exploration or reclamation activities;

  • fluctuations in the international currency markets and in the rates of exchange of the currencies of Canada, the United States and, to a lesser extent, Mexico;

  • global economic and financial conditions and any global or local natural events that may impede the economy or New Gold's ability to carry on business in the normal course;

  • inflation;

  • compliance with debt obligations and maintaining sufficient liquidity;

  • taxation;

  • fluctuation in treatment and refining charges;

  • transportation and processing of unrefined products;

  • rising costs or availability of labour, supplies, fuel and equipment;

  • adequate infrastructure;

  • relationships with communities, governments and other stakeholders;

  • geotechnical instability and conditions;

  • labour disputes;

  • the uncertainties inherent in current and future legal challenges to which New Gold is or may become a party;

  • defective title to mineral claims or property or contests over claims to mineral properties;

  • competition;

  • loss of, or inability to attract, key employees;

  • use of derivative products and hedging transactions;

  • reliance on third-party contractors;

  • counterparty risk and the performance of third party service providers;

  • investment risks and uncertainty relating to the value of equity investments in public companies held by the Company from time to time;

  • the adequacy of internal and disclosure controls;

  • conflicts of interest;

  • the lack of certainty with respect to foreign operations and legal systems, which may not be immune from the influence of political pressure, corruption or other factors that are inconsistent with the rule of law;

  • the successful acquisitions and integration of business arrangements and realizing the intended benefits therefrom;

  • and information systems security threats.

In addition, there are risks and hazards associated with the business of mineral exploration, development, construction, operation and mining, including environmental events and hazards, industrial accidents, unusual or unexpected formations, pressures, cave-ins, flooding and gold bullion losses (and the risk of inadequate insurance or inability to obtain insurance to cover these risks) as well as "Risk Factors" included in New Gold's most recent annual information form, MD&A and other disclosure documents filed on and available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Forward looking statements are not guarantees of future performance, and actual results and future events could materially differ from those anticipated in such statements.

All forward-looking statements contained in this news release are qualified by these cautionary statements. New Gold expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, events or otherwise, except in accordance with applicable securities laws.

Source: fool.com , finance.yahoo.com

 

Caterpillar Inc. (CAT) Is a Trending Stock: Facts to Know Before Betting on It

Caterpillar (CAT) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this construction equipment company have returned -7.9%, compared to the Zacks S&P 500 composite's +3.1% change. During this period, the Zacks Manufacturing - Construction and Mining industry, which Caterpillar falls in, has lost 15.6%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

 
Earnings Estimate Revisions
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
For the current quarter, Caterpillar is expected to post earnings of $3.74 per share, indicating a change of +29.9% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.8% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $15.72 points to a change of +13.6% from the prior year. Over the last 30 days, this estimate has changed +0.3%.
For the next fiscal year, the consensus earnings estimate of $16.67 indicates a change of +6.1% from what Caterpillar is expected to report a year ago. Over the past month, the estimate has changed +0.3%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Caterpillar is rated Zacks Rank #2 (Buy).

 
Revenue Growth Forecast
While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Caterpillar, the consensus sales estimate of $15.09 billion for the current quarter points to a year-over-year change of +11.1%. The $63.72 billion and $64.23 billion estimates for the current and next fiscal years indicate changes of +7.2% and +0.8%, respectively.
Last Reported Results and Surprise History
Caterpillar reported revenues of $16.6 billion in the last reported quarter, representing a year-over-year change of +20.3%. EPS of $3.86 for the same period compares with $2.69 a year ago.
Compared to the Zacks Consensus Estimate of $15.89 billion, the reported revenues represent a surprise of +4.43%. The EPS surprise was -2.28%.
Over the last four quarters, Caterpillar surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.

 
Valuation
Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Source: finance.yahoo.com

 

Pfizer (PFE) Gets FDA Acceptance for Braftovi + Mektovi sNDAs



Pfizer PFE announced that the FDA has accepted its supplemental new drug applications (sNDAs) seeking approval of its cancer drugs Braftovi + Mektovi in BRAF V600E-mutant metastatic non-small cell lung cancer (NSCLC).

The sNDAs were given a standard review, with the FDA’s decision expected in the fourth quarter of 2023.

At present Braftovi + Mektovi is approved for BRAF-mutated metastatic melanoma, while Braftovi, as a monotherapy, is approved for BRAF-mutated metastatic colorectal cancer.

The sNDAs were based on data from the PHAROS study, which evaluated Braftovi plus Mektovi in patients with BRAF V600E-mutant metastatic NSCLC. In the study, PHAROS met its primary endpoint of objective response rate.

In the past year, Pfizer’s stock has declined 22.6% against an increase of 2.3% for the industry.

Braftovi and Mektovi were added to Pfizer’s oncology portfolio with the acquisition of Array Biopharma in 2019.

Pfizer’s top line is expected to decline in 2023 due to potentially steep declines in revenues from its COVID-19 products, the Comirnaty vaccine and Paxlovid oral pill, on lower demand. However, Pfizer has the largest number of new product and indication launches planned for 2023. In the next 18 months, Pfizer expects to launch up to 19 new products or indications (all non-COVID indications), which are expected to generate around $20 billion in sales by 2030. Two-thirds of these products have blockbuster potential, according to Pfizer.


Zacks Rank and Stocks to Consider

Pfizer currently has a Zacks Rank #4 (Sell).

Some better-ranked drugmakers/biotech companies are Novo Nordisk NVO, Innoviva INVA and Roche RHHBY. While Novo Nordisk has a Zacks Rank of 1 (Strong Buy), Innoviva and Roche have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Estimates for Novo Nordisk’s 2023 earnings per share have increased from $4.20 to $4.48. Estimates for 2024 have jumped from $4.90 per share to $5.26 in the past 60 days. Novo Nordisk’s stock has surged 35.4% in the past year.

Novo Nordisk beat earnings expectations in three of the trailing four quarters. The company delivered a four-quarter earnings surprise of 3.00%, on average.

Estimates for Roche’s earnings per share have remained stable for both 2023 and 2024 at $2.59 and $2.82 per share in the past 60 days. Roche’s stock has declined 31.3% in the past year.

Estimates for Innoviva’s 2023 earnings per share have increased from $1.04 to $1.37. Estimates for 2024 have jumped from 52 cents per share to $1.25 in the past 60 days. Innoviva’s stock has declined 40.6% in the past year.

Innoviva missed earnings expectations in three of the trailing four quarters. The company delivered a four-quarter negative earnings surprise of 50.78%, on average.

Source: finance.yahoo.com

 

Snowflake's Cool AI Solutions. Why the Stock Is Gaining in a Down Day for the Market?


Is Snowflake's AI-powered future worth the high valuation risk? Let's find out.

 
As the frosty chill of winter gives way to spring, Snowflake (SNOW 3.62%) is heating things up in the data warehousing industry. Specifically, the company recently announced a flurry of advancements related to artificial intelligence (AI).
Investors need to understand how these developments could impact Snowflake's position in the market, weighing their long-term business promise against the risks that come from Snowflake's high valuation.

 
Water and snow: Snowflake and H2O.ai
Earlier this year. Snowflake announced a partnership with H2O.ai, a privately held AI cloud company, to bring automated machine learning to their Telecom Data Cloud.

This collaboration aims to help telecommunications service providers accelerate digital transformation, enable superior customer experiences, and maximize operational efficiency. H2O.ai's pre-built suite of applications helps businesses use machine learning to maximize customer profitability and minimize churn, with predictions available to applications built on top of Snowflake.
And if you're not terribly impressed by Snowflake partnering up with a company that hasn't even entered the stock market yet, you should know that H20.ai comes with a sterling pedigree of early investors. The company has raised more than $250 million from in pre-IPO funding deals, suggesting an off-market valuation of at least $1.7 billion.

 
The company has collected large funding bets from mega-banks Goldman Sachs (GS -1.19%) and Wells Fargo (WFC -2.41%), as well as high-performance semiconductor designer Nvidia (NVDA -1.83%). All three of these household names have invested in H20.ai more than once. In the long run, Goldman, Wells Fargo, and Nvidia expect to make a profit on their early funding moves. This cloud-based machine learning expert looks like a future giant in business-oriented machine learning, and Snowflake includes its robotic smarts in its big data analytics services for telecom customers. Other industries may follow over time.

Snowballing AI powers through buyouts
The company is also expanding its AI in-house powers through straight-up acquisitions.
In January, Snowflake picked up Myst AI, a time series forecasting platform provider. This buyout gives Snowflake's machine learning capabilities expertise an instant shot of adrenaline, furthering the company's strategy to build machine learning features into its data cloud.
Meanwhile, Snowflake's financial engines are running on heavy fuel. Q4 results showed a 54% year-over-year growth in product revenue, with the company guiding for 40% growth in FY 2024. That's a dramatic slowdown, but even the lower growth rate is quite impressive.
Despite the high-octane growth, Snowflake's stock remains pricey, trading at 22 times sales. That's roughly in line with Nvidia's price-to-sales ratio of 25 -- the highest reading among all S&P 500 components today. These stocks are hovering in rarefied air, folks.
With valuation ratios this high, the exact rate of revenue growth often matters less than whether the growth is accelerating or slowing down. That's why Snowflake's stock price is down 35% over the last year and 67% from its all-time highs in November 2021. Snowflake is approaching larger clients with stricter budget requirements nowadays, and the risk-averse mood of the economy also holds back spending patterns in IT departments everywhere.

 
Snowflake's chill-inducing valuation
While Snowflake has set ambitious goals for its AI-infused data warehousing services, including $10 billion in annual product revenue by fiscal 2029, its slowing revenue growth rate and high valuation may limit the stock's upside potential.
The high valuation might seem reasonable given the rambunctious top-line growth trend, but the stock's upside is weighed down by macroeconomic factors. High-priced growth stocks are not exactly market darlings right now and investors want to see the end of both raging inflation and inflation-fighting interest rate hikes before they can rotate back from value stocks toward higher-growth tech plays again.

So Snowflake is stuck in a weird limbo right now. Its evolving package of AI tools could boost the company's annual sales from $2 billion to $10 billion over the next six years, but the stock price has plunged in recent months due to an inflation-based slowdown.
Snowflake's AI-driven partnerships and acquisitions are reshaping the data warehousing industry and showcasing the company's innovative approach to integrating AI into its offerings. However, that doesn't necessarily turn the stock into a no-brainer buy right now. Investors should be cautious as the high valuation and lower top-line growth rate may temper the stock's performance for the foreseeable future.

 
A slippery slope: weighing Snowflake's prospects
Buying Snowflake shares right now, you should expect plenty of unexpected twists and turns as the market evolves while the economy gets back on its feet. If sudden jumps and crashes make you reach for the nearest bottle of hypertension reducers, Snowflake probably isn't the stock for you.
Whether you're adding Snowflake to your portfolio right away or waiting for a better price, there's no denying that the company is interesting and its long-term prospects look quite robust. If nothing else, you should keep a close eye on Snowflake as they continue to incorporate AI into their solutions and navigate the ever-changing economic landscape.

Source: finance.yahoo.com

 

Top Gold Stocks for Q2 2023


Gold prices rose 7% in March as investors flocked to safe havens after the collapse of multiple mid-size banks shook markets.1 That strength was reflected in some of the precious metal sector's stocks.
Top-performing gold industry stocks heading into the second quarter include Snowlike Gold Inc., Lundin Gold Inc., and Alamos Gold Inc., whose share prices rose in the past year even as the VanEck Gold Miners ETF (GDX), a key sector benchmark, fell 17% and the Russell 1000 Index dropped by 15%.
Here are the top gold stocks in each of three categories: best value, fastest growth, and most price momentu m. All data below is as of March 21.2

Best Value Gold Stocks
Value investing is a factor-based investing strategy that involves picking stocks that you believe are trading for less than what they are worth, usually by measuring the ratio of the stock's price to one or more fundamental business metrics. A widely accepted value metric is the price-to-earnings (P/E) ratio. Value investors say that if a business is cheap compared with its intrinsic value—in this case, as measured by its P/E ratio—then the stock price may rise faster than that of others as the price comes back in line with the worth of the company.
These are the gold stocks with the lowest 12-month trailing P/E ratio.


Best Value Gold Stocks
 Price ($)Market Capitalization (Market Cap) ($B)12-Month Trailing P/E Ratio
Sibanye Stillwater Ltd. (SBSW)8.546.05.3
Torex Gold Resources Inc. (TXG.TO)CA$21.10CA$1.87.5
Victoria Gold Corp. (VGCX.TO)CA$8.79CA$0.69.2
Calibre Mining Corp. (CXBMF)0.900.49.7
Perseus Mining Ltd. (PRU.TO)CA$2.04CA$2.810.0


Sibanye Stillwater Ltd.: Sibanye Stillwater is a company that mines and processes precious metals. It is a leading producer of platinum group metals such as palladium, rhodium, and platinum from mines in North America and South Africa. The company also owns other precious metal mines globally.
Torex Gold Resources Inc.: Torex Gold is an intermediate gold producer that explores, develops, and operates its 100%-owned Morelos Gold Property in the Guerrero Gold Belt in Mexico.
Victoria Gold Corp.: Victoria is the 100% owner of the Dublin Gulch property in central Yukon, which includes the Eagle Gold Mine, with a reserve of 2.6 million ounces of gold.3 Victoria Gold also trades over-the-counter (OTC) in the U.S. under the ticker VITFF. On Feb. 22, the company reported fourth-quarter earnings and full-year results; net income fell by 77%, along with declining revenue. The decrease in sales was due to a lower average price for gold and fewer ounces sold in 2022.4
Calibre Mining Corp.: Calibre Mining develops properties with precious metal deposits such as silver, gold, and copper. The company has properties within Central America in the El Limón and La Libertad gold mines.
Perseus Mining Ltd.: Perseus is an Australian gold mining company focused on properties in Ghana and Côte d’Ivoire. The company produced more than 500,000 ounces of gold in 2022.5 Shares of Perseus Mining also trade OTC in the U.S. under the ticker PMNXF.

Fastest Growing Gold Stocks
These are the top stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-on-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth.
Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.

Fastest Growing Gold Stocks
Price ($)Market Cap ($B)EPS Growth (%)Revenue Growth (%)
Sandstorm Gold Ltd. (SAND)5.631.733329
AngloGold Ashanti Ltd. (AU)21.048.8153 18
Alamos Gold Inc. (AGI)11.214.44314
Agnico Eagle Mines Ltd. (AEM)50.2622.91046
B2Gold Corp. (BTG)3.613.91513


Sandstorm Gold Ltd.: Sandstorm Gold is a royalty company that provides financing for gold miners in exchange for the right to a percentage of the gold produced from mines. The company has a portfolio of 250 royalties. Sandstorm sold about 82,400 gold equivalent ounces in 2022.6
AngloGold Ashanti Ltd.: AngloGold is a South Africa-based gold mining company. Its largest mine is in Geita, Tanzania, near Lake Victoria. The company also operates mines in Central America, South America, and Australia. On March 16, AngloGold proposed a joint venture with Gold Fields Ltd., a gold producer in South Africa, to combine Gold Fields's Tarkwa Mine and AngloGold's Iduapriem Mine, which are both located near each other in western Ghana.7
Alamos Gold Inc.: Alamos is a gold producer operating three mines in Canada and Mexico, with additional development projects in Canada, Mexico, Turkey, and the U.S.
Agnico Eagle Mines Ltd.: Agnico Eagle is a Canadian gold mining company whose largest mining operation is in northwestern Quebec. The company also has mining properties in Finland and Mexico. On Feb. 16, Agnico Eagle released 2022 fourth-quarter earnings results. Net income increased by 102% on a 46% advance in revenue.8
B2Gold Corp.: B2Gold is a Canadian gold producer which operates three mines in Mali, the Philippines, and Namibia. B2Gold announced on Feb. 13 its acquisition of the gold mining company Sabina Gold & Silver Corp, giving it access to Sabina's Back River Gold District in Nunavut, Canada.9

Gold Stocks with the Most Momentum
Momentum investing is a factor-based investing strategy that involves buying a stock whose price has risen faster than the market as a whole. Momentum investors believe that stocks that have outperformed the market will often continue to do so because the factors that caused them to outperform will not suddenly disappear.
In addition, other investors seeking to benefit from the stock’s outperformance will often purchase it, further bidding its price higher. These are the stocks that had the highest total return over the past 12 months.

Price ($)Market Cap ($B)12-Month Trailing Total Return (%)
Snowline Gold Corp. (SGD.CN)CA$2.71CA$0.4177
Lundin Gold Inc. (LUG.TO)CA$14.8CA$3.546
Alamos Gold Inc. (AGI)11.214.437
Dundee Precious Metals Inc. (DPM.TO)CA$9.94CA$1.933
Torex Gold Resources Inc. (TXG.TO)CA$21.10CA$1.832
VanEck Gold Miners ETF (GDX)N/AN/A-17
Russell 1000N/AN/A-15


Snowline Gold Corp.: Snowline Gold is a gold exploration company with multiple properties located in the Yukon in northwestern Canada.
Lundin Gold Inc.: Lundin Gold is a mining company that operates the Fruta del Norte gold mine in southeast Ecuador, a multimillion-ounce, high-grade gold property. The company also has shares that trade OTC in the U.S. under the ticker LUGDF. Lundin reported fourth-quarter earnings on Feb. 23, with a net loss of 68 million. Total revenue grew by 13% year-over-year, reflecting better-than-expected gold production. The quarter's net loss was due to the early repayment of $208 million to a credit facility established to develop the Fruta del Norte mine.1011
Alamos Gold Inc.: See company description above.
Dundee Precious Metals Inc.: Dundee Precious Metals acquires, develops, and processes precious metal properties. The company owns and operates multiple mines in Bulgaria and a specialty smelting operation in Namibia. On Feb. 16, the company declared a first-quarter dividend of 4 cents a share, payable on April 17 to shareholders of record on March 31.12
Torex Gold Resources Inc.: See company description above.

Impact of the U.S. Dollar on Gold Stocks
The U.S. dollar, or greenback, has had a longstanding relationship with gold dating back to the introduction of the gold standard in the 1880s, through which paper money was directly linked to a specific amount of the yellow metal. Although former President Franklin D. Roosevelt removed the gold standard in 1933, the greenback still closely correlates with gold—and subsequently gold stocks—as the metal is priced in U.S. dollars.13
Typically, a strong U.S. dollar means weaker gold prices as demand for the precious metal eases from buyers using foreign currencies. Conversely, demand increases when the greenback loses value, making gold cheaper for offshore buyers.14 Although the U.S. dollar and gold often have an inverse relationship, both can move in the same direction. For example, during periods of global uncertainty, both assets may rise as investors flock to save-haven investments. Due to its finite supply, gold is seen as a hedge against inflation, while the dollar's status as the global reserve currency makes it sought after during times of risk aversion.

Advantages of Holding Gold Stocks in Your Portfolio
Key advantages of holding gold stocks include leveraged upside and liquidity.
Leveraged Upside and Diversification: Buying gold stocks allows investors to effectively make a leveraged bet on gold's price, as miners can increase production and grow their sales when gold rises in value.15 Because gold stocks closely follow the commodity's price, the sector also provides a partial hedge against inflation, helping to diversify a "risk-on" equity portfolio.
Gold Discoveries: Large discoveries can significantly increase gold mining stocks' prices, particularly if a junior miner has a small market cap. For instance, Canadian junior explorer Enduro Metals Corp. (ENDMF) announced that it had intersected gold in one of its mines in May 2021.16 Shares of the small miner more than doubled over the next year.17
The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Source: investopedia.com

 

Intel Corporation (INTC) is Attracting Investor Attention: Here is What You Should Know


Intel (INTC) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this world's largest chipmaker have returned +22.5% over the past month versus the Zacks S&P 500 composite's +2.3% change. The Zacks Semiconductor - General industry, to which Intel belongs, has gained 17% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings Estimates
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Intel is expected to post a loss of $0.15 per share for the current quarter, representing a year-over-year change of -117.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.2%.
The consensus earnings estimate of $0.55 for the current fiscal year indicates a year-over-year change of -70.1%. This estimate has changed -0.7% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $1.82 indicates a change of +229.5% from what Intel is expected to report a year ago. Over the past month, the estimate has changed +0.7%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Intel. 

Revenue Growth Forecast
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Intel, the consensus sales estimate of $11.05 billion for the current quarter points to a year-over-year change of -39.8%. The $50.83 billion and $59.6 billion estimates for the current and next fiscal years indicate changes of -19.4% and +17.3%, respectively.

Last Reported Results and Surprise History
Intel reported revenues of $14.04 billion in the last reported quarter, representing a year-over-year change of -28.1%. EPS of $0.10 for the same period compares with $1.09 a year ago.
Compared to the Zacks Consensus Estimate of $14.46 billion, the reported revenues represent a surprise of -2.9%. The EPS surprise was -50%.
Over the last four quarters, Intel surpassed consensus EPS estimates two times. The company topped consensus revenue estimates just once over this period.

Valuation
No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Intel is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Intel. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Source: finance.yahoo.com

 


Is Most-Watched Stock Delta Air Lines, Inc. (DAL) Worth Betting on Now?

Delta Air Lines (DAL) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this airline have returned -15.3% over the past month versus the Zacks S&P 500 composite's +0.3% change. The Zacks Transportation - Airline industry, to which Delta belongs, has lost 10% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings Estimates
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Delta is expected to post earnings of $0.33 per share, indicating a change of +126.8% from the year-ago quarter. The Zacks Consensus Estimate has changed +2.5% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $5.14 points to a change of +60.6% from the prior year. Over the last 30 days, this estimate has changed -0.3%.
For the next fiscal year, the consensus earnings estimate of $6.79 indicates a change of +32.1% from what Delta is expected to report a year ago. Over the past month, the estimate has changed +0.3%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Delta.
Projected Revenue Growth
While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Delta, the consensus sales estimate of $12.44 billion for the current quarter points to a year-over-year change of +33%. The $56.23 billion and $58.29 billion estimates for the current and next fiscal years indicate changes of +11.2% and +3.7%, respectively.
Last Reported Results and Surprise History
Delta reported revenues of $13.44 billion in the last reported quarter, representing a year-over-year change of +41.9%. EPS of $1.48 for the same period compares with $0.22 a year ago.
Compared to the Zacks Consensus Estimate of $13.03 billion, the reported revenues represent a surprise of +3.11%. The EPS surprise was +14.73%.
Over the last four quarters, Delta surpassed consensus EPS estimates two times. The company topped consensus revenue estimates three times over this period.
Valuation
Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Delta is graded A on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Delta. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Source: finance.yahoo.com 

 

Alibaba Leads China Tech Gains as Breakup Spurs Recovery Bets

Alibaba Group Holding Ltd.’s massive overhaul plan boosted Chinese tech stocks, with investors betting the sector is in for an overdue revaluation as the regulatory environment improves.

Shares of Alibaba surged 12% in Hong Kong on Wednesday, the most since November and tracking gains in its American Depositary Receipts. Among its peers, Meituan rallied 4% while Tencent Holdings Ltd. and Baidu Inc. advanced slightly less than 2%.
Alibaba’s plan to split its $250 billion empire into six business units promises to yield several initial public offerings, while allowing quicker response to a rapidly-changing market environment. Analysts say the plan, which came in the wake of Jack Ma’s return to China after more than a year abroad, offers another indication that the crackdown may be done and dusted.

“Investors could get hyped on the positive side in the short term,” said Willer Chen, senior research analyst at Forsyth Barr Asia Ltd. “Alibaba’s shakeup plan may also lead investors to think of the potential for other tech firms like Tencent to follow suit.”

The plan comes as Chinese regulators vow to boost support for private enterprises after a years-long crackdown, which has burned investors and hurt market sentiment. Since the abrupt halt of Ant Group Co.’s initial public offering in November 2020, foreign investors in particular have deemed the sector as fraught with risks, leading to huge valuation discounts.

Alibaba’s forward earnings multiple rates the stock cheaper than utility firm CLP Holdings Ltd. and on par with China Telecom Corp.

Affiliates of Alibaba also rallied on Wednesday. Alibaba Health Information Technology Ltd. and Alibaba Pictures Group Ltd. both advanced 5.2%.

Chinese authorities are keen to boost growth as the world’s second-largest economy emerges from Covid restrictions. However, multiple pledges to support private enterprise for that purpose have failed to fundamentally reverse investor wariness.

The Hang Seng Tech Index closed 2.5% higher.

“The big tech platforms, which have been under pressure over the last couple of years and shedding staff, are key to helping the government boost employment,” Vey-Sern Ling, managing director at Union Bancaire Privee, said in a Bloomberg TV interview. “So from that angle, I think it is possible to assume that the government can be more supportive of these platforms going forward.”

Source: finance.yahoo.com

 

German business morale unfazed by banking turmoil

German business morale unexpectedly rose in March, adding to signs that Europe's largest economy is stabilizing despite recent turmoil in the banking sector, a survey showed on Monday.
The Ifo institute said its business climate index jumped to 93.3 from a reading of 91.1 in February. A Reuters poll of analysts had pointed to a March reading of 91.0.

The improvement in business morale for the fifth month in a row was driven primarily by business expectations, which rose to 91.2 in March from a revised 88.4 the month before, its highest level in at least a year, according to Ifo.

The managers at 9,000 companies surveyed by Ifo had not changed their positive sentiment, despite the banking sector turmoil, likely because no German bank has so far been affected, Ifo head of surveys Klaus Wohlrabe told Reuters.

"Despite the turbulence in the financial markets, the German economy is starting spring with a good feeling," he said.

The German government has said the economic situation should improve from spring onwards, and in January revised up its economic forecast for 2023, predicting growth of 0.2%.

Analysts welcomed the unexpected increase but warned against being too optimistic about what it means for the months ahead.

"All in all, the business climate is not yet based on anything more than hope," said economist Alexander Krueger at private bank Hauck Aufhaeuser Lampe, adding: "It still doesn't look like a real upswing for 2023."

The European Central Bank's interest rate hikes since last July are taking effect with a time lag of at least four quarters, which argues against economic recovery in the second half, said Commerzbank chief economist Joerg Kraemer.

Despite calls by some investors to hold back on policy tightening until turmoil in the banking sector eases, the ECB raised its refinancing rate by 50 basis points to 3.50% this month, leaving the door open to future hikes as it forecast inflation would remain above its 2% target through 2025.


Source: (www.reuters.com)

 

Morning Brief "Which stocks The Fed gave a reprieve..."

Stocks partially clawed back Wednesday's post-Fed losses on Thurday, with the Nasdaq Composite (^IXIC) notching a gain of of 1.0%, while the Russell 2000 (^RUT) settled in the red, down 0.4%.

On the one hand, investors are weighing Powell's hawkish, inflation-fighting comments. On the other, they're weighing signs that the Fed is de facto entering wait-and-see mode — believing its work is nearly done.

While Powell said the Fed may still have to raise rates further, he came clear saying the Committee was inches away from a no-hike decision on Wednesday.

"We did consider in the days running up to the meeting," he said.

This is the closest yet the Fed has come to a change in its uber-hawkish tone since it began its breakneck pace of rate hikes one year ago.

But don't call it a "pivot," and don't sound the all-clear for investors just yet.

The major U.S. indices have been in rally mode since the Fed created a new liquidity facility a week ago last Monday to backstop regional banks. Tech stocks have been the biggest beneficiary, with the Nasdaq 100 (^NDX) up 7.6%.

Long-term rates crashed over these nine trading sessions, which fueled rallies in megacaps like Amazon (AMZN), Microsoft (MSFT), Tesla (TSLA), Alphabet (GOOGL, GOOG), and Meta (META) — which all rallied double-digits. Chipmakers Nvidia (NVDA) and Advanced Micro Devices (AMD) led the way — up 19% and 23%, respectively.

Yet the rally was not broad-based. Not surprisingly, financials suffered additional damage from the bank panic. The S&P 500 Select Financial SPDR Fund (XLF) erased the last of its pandemic gains Thursday. Meanwhile, the SPDR S&P Regional Bank ETF (KRE) sank to a new crisis low — the lowest level since November 2020.

Putting the narrow breadth of the latest rally aside for a minute, even the technicals on the tech trade are showing some cracks.

Zooming out on the Nasdaq 100 reveals it has been stuck in a giant trading range over the last year — roughly 10,500 to 13,000. And it is once again testing that upper bound, having failed there as recently as early February.

The catalyst of lower rates and a weaker dollar are also approaching some big levels, with the U.S. 10-year Treasury-note (^TNX) hugging the 3.4% level by the 2023 lows.

Even the greatest bellwether stock of all, Apple, is up against some tough technicals that suggest its rally may need a "pause" before rallying materially above $165.

Without a fresh catalyst and narrative, investors chasing momentum and breakouts are more likely to be punished than rewarded.

In the meantime, Kenneth Rogoff, Maurits C. Boas chair of International Economics at Harvard University, has a message for investors who are betting on the banking crisis abating.


"If we're looking at the world as a whole, I believe we're just experiencing the first wave of this, and there are more to come," said Rogoff on Yahoo Finance Live Thursday.


Source: (finance.yahoo.com)

 

Michael Wilson still sees room for improvement in the stock market - an about-face from the Morgan Stanley analyst?

Well-known Morgan Stanley strategist Michael Wilson sees a short-term recovery in the S&P 500 index, which reflects the broad stock market. But does this really mean a turnaround for the prominent Wall Street bear?

After a three-week losing streak, the S&P 500 rallied sharply in the first days of March. Even Michael Wilson, the top U.S. equity strategist at Morgan Stanley, stated in this context according to "Bloomberg" that he currently sees a short-term rally in the index.
Accordingly, Wilson points to the S&P 500 index's resilience at the 200-day moving average. "Equity markets survived a key test of support last week, suggesting that the bear market rally is not over," he is quoted as saying in a note. A bear market rally refers to a market situation in which stock prices initially fall for an extended period of time, followed by a short-term sharp improvement from the negative bear market. The market appears to normalize in the process, but this upward trend can also be deceptive, as prices often collapse again after a brief recovery.

Prominent Wall Street bear
The Chief Investment Officer and top U.S. equity strategist at Morgan Stanley is actually considered a confirmed bear. As recently as late February, for example, the team of strategists led by Michael Wilson warned that March would bring bear market risks for U.S. stocks as they came under pressure from declining earnings and high valuations. "Given our view that the earnings recession is far from over, we believe March is a high-risk month for the next equity decline," the strategists wrote in a note at the time. As Bloomberg reported in February, the Morgan Stanley strategist expects stocks to bottom in the spring. Accordingly, the S&P 500 is likely to fall to 3,000 points in the first half of the year, as Wilson predicts.

A contradiction?
In the meantime, however, the star strategist at Morgan Stanley is saying that he sees a rally in the S&P 500 in the short term. Is this now a contradiction to his previous bearish statements?

Not really, because Michael Wilson remains overriding bearish. For one thing, he already sees the next resistance for the index at 4,150 points. For another, he does not believe that the rally will last long. Instead, he expects share prices to fall in the medium term in view of deteriorating fundamental data.
In particular, the expert at the U.S. investment bank is pessimistic about corporate results and fears that margins will disappoint the current consensus expectations of market participants "many times over." Thus, Wilson writes that "valuations and earnings forecasts remain far too high, in our opinion."

Source: (finanzen.net)

 

TESLA: MEDIUM-TERM RISK-REWARD RATIO IMPROVES

At the beginning of the year, the stock was still under pressure due to concerns about a significant slowdown in growth (increased competition/macro environment/weak demand/oversupply of e-cars). However, Tesla impressed in the fourth quarter with respectable key figures as well as a relatively high margin. The long-term outlook for e-cars as well as the good opportunities in the US remain intact. Both the absolute valuation and the medium-term risk-reward ratio have improved significantly.

From "underdog" to market leader - at least in terms of market capitalization
It is a classic American success story according to the motto "the more utopian, the better". Tesla started with this philosophy less than 20 years ago with the long-term goal of producing affordable electric vehicles for a broad section of the population (sales target of 20 million vehicles p.a.). The basis of this vision was the Nikola Tesla electric motor and the T-Zero, an electric sports car.

After some of the founders left in 2008, visionary Elon Musk established himself as the consistent driver implementing these ideas. Tesla has been listed on the stock market since 2010 (initial listing $17) and is now the world's most valuable automaker by market capitalization (measured in actual units sold, a niche producer). In our view, the group has an attractive product range and promising services.

The double advantage speaks for Tesla in the long term
Tesla benefits from its technological leadership in terms of complete software control of a car through "over-the-air updates" as well as from the above-average range of its e-cars thanks to efficient battery management. Furthermore, it is a clear advantage that the Californians do not have to deal with the structural, cost-intensive legacy of the classic car industry.

The past years proved that Tesla was able to train its algorithms on the "living object" and will continue to do so. The company significantly reduced the cars' former weaknesses by consistently evaluating the driving data of all vehicles sold and in operation. Meanwhile, Tesla is technologically ahead of the competition - on the subject of e-cars - by several years. The efficient production in the gigafactories and the clear digital sales strategy without large marketing expenditures are also further advantages.

Sales growth only possible through high investments
Tesla is highly dependent on sales growth. In a traditionally capital-heavy business model, high investments are thus still necessary to push faster and successful production expansion. Existing factories are being selectively expanded. In addition, new gigafactories are being built (Shanghai and Berlin/Austin under final construction, soon Nevada/Mexico/Indonesia). In addition, there are expenditures for the charging infrastructure, the essential improvement of the service model with increasing demand (for example, expansion of a mobile @home service), and unchanged high expenditures for goodwill repairs.

We expect the highest growth for Tesla in China, where the conditions for e-cars are comparatively attractive. However, the example of China shows the high dependence of e-vehicle sales on subsidies. When subsidies were cut significantly in 2019, demand for e-cars slumped at an above-average rate. This is also currently weighing immensely on the stock, as China is again cutting subsidies for e-vehicles. In the medium term, Tesla is also threatened by sensitive regulation in China with regard to data management, as we believe the Chinese government could adjust the framework conditions in favor of domestic manufacturers.

Despite its technical lead, competition will increase very significantly for Tesla in the future. This is especially true for battery technology, where there are numerous options in terms of performance relative to price. In our view, Chinese manufacturers have caught up significantly in technology (material, range, price/performance).

Moreover, in the segment of affordable small and compact cars, we already consider traditional carmakers to be quite competitive (for example, VW, Renault, Chinese manufacturers). Tesla thus faces the fate of remaining a premium carmaker that produces vehicles for wealthy customers and fails in the mass market. While this is not the worst scenario, it is likely to result in lower profitability or disillusionment with growth rates in the meantime due to a lack of scalability with high investment costs.

For several years now, new Tesla model variants have been postponed until 2023 or later. Since the brand currently only has four models on offer, which are also getting on in years, there is a need for action due to the competitive situation (Model 3 with new design from September 2023). In the second half of 2023, the cyber truck is now to be produced exclusively for the USA at first. Overall, however, the company is very intransparent and unreliable with regard to announcements of new vehicles and the corresponding realization.

Twitter takeover: two jobs for Elon Musk
Shortly before the end of the legal deadline in the Musk/Twitter dispute, the Tesla CEO acquired the short message service for the originally agreed 44 billion US dollars. Financing details are still unclear (for example, further Tesla share sale, Tesla shares as bank collateral). The takeover has ended the legal dispute between Twitter and Tesla, but it remains to be seen to what extent the alleged investigations against Musk will be resolved.

Market participants are critical of the fact that Musk himself runs Twitter (numerous executives from Twitter were fired; experts were removed from Tesla in return), which implies less time for Tesla management. In addition, customers are critical of Musk's political statements, which is why the "Tesla" brand is becoming increasingly polarized. There are currently already signs of the possible "enthronement" of Chinese manager Tom Zhu as CEO Musk's right-hand man, in order to focus more strongly again on the group's ability to act, also externally.

Perspective/valuation
While we consider the growing market for e-mobility to be attractive in the long term due to the global "traffic turnaround," we do not believe that the market will be successful in the long term. Nevertheless, sustainable success depends on regulation and government premiums. Due to currently reduced subsidies as well as relatively high purchase prices in the currently challenging macro environment, demand for e-cars could flatten somewhat in both Europe (plus higher electricity costs) and China over the next two years. Due to the inclusion of subsidies (new: IRA - "Inflation Reduction Act"), the USA is the exception; here the penetration of e-cars will increase in the medium term (despite recessionary trends).

Overall, however, competition for e-cars is increasing noticeably. Chinese manufacturers in particular are convincing with high-quality cars that perfectly meet the needs of domestic customers at a very good price-performance ratio. In order to consolidate its market leadership, Tesla - like other manufacturers - is responding with further price cuts. The increasing oversupply of e-cars and signs of inventory build-up are therefore weighing on the market. However, due to attractive discounts, this is likely to be a temporary effect. Market participants are already anticipating a rather weak first half of 2023 as well as losses in the still above-average margin.

In the course of the year, however, we expect more positive news/news again with the Capital Markets Day (March 1, 2023). We also expect autopilot to reach the next stage of development (hope lies in 4D imaging radar sensors) through the use of improved and lower cost radar technology. This would mean a highly profitable revenue stream. With the delivery of the Cybertruck in the second half of the year and the presumably improved demand later in the year, we expect a return to growth and also a higher gross margin in the core business.

In subsequent years, the manufacturing costs of e-cars are likely to decrease as they scale up (for example, more favorable battery costs/manufacturing depth/innovations). Due to the highly efficient production as well as the numerous purchasing cooperations regarding generally scarce battery raw materials, Tesla has significant competitive advantages in this respect, especially compared to classic carmakers.

Overall, the share has become significantly cheaper in terms of absolute valuation. After the significant share price decline, consensus estimates for 2024 are increasingly settling on valuation parameters that are rationally comprehensible in terms of conceivable growth. In a sector comparison, however, the share is still very highly valued. Thanks to the good brand, increasing cost leadership and supremacy in software/battery management, we believe the stock deserves a valuation premium over the automotive sector.

Despite the recent price increase, the stock is likely to remain highly volatile in a sawtooth pattern, as disinflation (declining prices, the previously very high growth will now be much less dynamic) in a growth segment inevitably leads to high uncertainties in valuation parameters. The turbulence surrounding the person Elon Musk also repeatedly causes price swings.

Increased competition - the "empire" strikes back
As a result of the global climate debate and legal requirements to reduce emissions, the automotive world will change significantly in the coming decades. In the age of the "Green Deals" (EU/USA), experts expect that electric vehicles could replace combustion engines as the market-leading segment from 2030. However, this calculation does not include other possible competing drive alternatives such as hydrogen technology and fuel cells/e-fuels. All automakers are now involved in the competition for the most climate-friendly powertrain.

Source: (ideas-magazin.de)

 

Samsung's crypto business: Samsung and Ledger launch "NFT Starter Pack

Samsung has long since taken to the Web3 and now also offers its customers a crypto package in cooperation with Ledger and well-known NFT artists.

  • Crypto package: Galaxy smartphone and Ledger Wallet.
  • Free NFT and Amazon voucher as additional incentives.
  • Samsung's departure into the web3
South Korean industry leader Samsung is taking another step in its collaboration with Ledger hardware wallets. The company had already introduced a blockchain wallet in 2019 and since 2021, Galaxy smartphones can now be connected to Ledger Nano S and X. Now the two companies are taking another step in the crypto universe: "Samsung and Ledger are thus opening a new gateway into the blockchain-based, decentralized Web3 and Metaverse as early movers," the press release states. Existing Samsung crypto wallets can be integrated.

Incentivizing cryptocurrency and NFT purchases, Samsung plans to offer free artwork from the "Samsung MX1 Genesis NFT" series, created by well-known NFT artists Jaiden Stipp, Plastic Pen, Specter or Thomas Fleck. The bundle can also be used to mine artwork from "NFT OG" starting in February. Nano-X wallets are designed to provide users with easy and secure access to cryptocurrencies and NFTs, transferring them via Bluetooth. The interface is formed by the "Ledger Live App."


Samsung and Ledger collaboration: easy and secure connection to Web3.
"There is an incredible fascination emanating from Web3. Our starter bundle with Ledger is aimed at anyone who is open-minded and curious about the inspiring world of NFTs and digital art, or simply wants to trade cryptocurrencies," Mario Winter, marketing vice president at Samsung, said in the press release. The main motivation for the collaboration, he said, is easier and safer access to the world of digital artworks and other digital collectibles. "In 2023, part of good customer service is providing the best possible security. For Samsung, security and user experience is as important as it is for Ledger. Ledger is a great fit for Samsung's smartphones because the Ledger Live app provides an easy and secure way to connect to Web3, NFTs and cryptocoins," Ledger CEO Ian Rogers said, according to the press release.

Galaxy Unpacked event
Until February 1, users in Germany were also able to pre-register for the bundle on the pre-registration website exclusively at Amazon, and then also received an Amazon voucher worth 100 euros. The slogan "Get ready for the future" was used at the same time to advertise the live on-site Galaxy Unpacked event on February 1, where the new Galaxy S23 was presented. The CHIP test center certifies the new Samsung Galaxy S23 Ultra an "impressive start into the smartphone year 2023", it triumphs in all test areas.

This is supposed to raise Samsung's technology to a new level and could even surpass Apple's iPhones in some technical features according to t3n.

Samsung's path to Web3
In the future, the Ledger Quest information platform will be integrated so that users can verify the authenticity of their NFTs and acquire additional knowledge about digital assets. A collaboration with QUALCOMM will also enable the emergency call function via satellite communication on Samsung smartphones in the future.

In addition to developing various crypto apps, the South Korean electronics company is also said to be at the forefront of nanochip development for the cost-efficiency of Bitcoin mining. With the help of these chips, which are to be installed in mining hardware, energy consumption could be reduced by 45 percent, according to BTC-ECHO. A possible establishment of a new crypto exchange in 2023, together with other South Korean corporations, was also reported in the media last summer.

Source: (finanzen.net)

 

Between Chart Technique and ChatGPT Euphoria - Is NVIDIA Stock a Buy Now?

In the past year, the graphics card manufacturer NVIDIA had to struggle with some challenges. In 2023, it went for it already steeply upwards. Does the NVIDIA share now belong in the portfolio?

  • NVIDIA 2022 burdened by weakening economy
  • Chart technique sees important key levels reached
  • Wall Street sees hype around chatbot as key driver

Chip company NVIDIA has had a challenging year. After the chip market boomed in 2021, disillusionment followed in 2022. According to a survey by consulting firm Gartner, sales in the semiconductor industry rose by just 1.1 percent to $601.7 billion last year, following growth of around 25 percent in 2021. The background to this was the weakening economy and supply bottlenecks at the beginning of 2022, which led to a reduction in inventories. High inflation then also caused demand for PCs and smartphones to fall.

NVIDIA's sales and profits fall
This has also been felt by graphics card manufacturer NVIDIA. As shown in its financial statements for the third fiscal quarter of fiscal year 2023, which ended at the end of September 2022, there was a slump in profits in the quarter, in which EPS fell from $1.17 per share in the previous year to $0.58, which was even lower than the preliminary estimates of $0.706 per share. Sales were also down: Whereas the previous year's figure was 7.1 billion US dollars, the figure was now only 5.931 billion US dollars. The decline was particularly sharp in the graphics card business, where sales fell by a whopping 51 percent to 1.57 billion US dollars, mainly due to weakening PC demand. But a change in Ethereum, the second-largest cryptocurrency by market capitalization, also played a role, according to Deutsche Presse-Agentur, as it made graphics cards less useful in Ethereum mining.

Here's how NVIDIA stock is performing
NVIDIA's 2022 stock was also clearly drawn by the weak performance of the chip market. For example, the stock lost a total of 50 percent of its value on NASDAQ 2022, falling to a 52-week low of $108.14 in mid-October 2022. In the meantime, however, the share certificate has moved away from this significantly. Thus, the NVIDIA share has already gained 44.38 percent in the new year (as of the closing price on February 03, 2023).

These signals come from the chart technology and also from a chart-technical point of view, the paper could already leave some important marks behind, as Investor's Business Daily reports. For instance, the stock recently managed to break above its 50- and 200-day lines and is one of the top performers on the NASDAQ 100. Based on technical and fundamental data, Investor's Business Daily gives NVIDIA stock an IBD Composite Rating of 69. However, as the relevant industry portal writes, investors should rather focus on shares with a rating of 90 to 95 or even higher. On the other hand, the relative strength line of the NVIDIA stock is improving and is already at consolidation level, which can be seen as a bullish signal. A rising RS line means that a stock is outperforming the market-wide U.S. S&P 500 index.
Finally, Investor's Business Daily summarizes that while NVIDIA is expected to return to growing earnings and revenue in 2023, and the stock also recaptured key levels in January, from a chart perspective, the stock is still below the buy point and therefore does not recommend a buy.

Wall Street optimistic for NVIDIA stock in view of hype around ChatGPT
However, various Wall Street experts see things differently, referring to the latest developments surrounding the ChatGPT chatbot from OpenAIs. The chatbot is a software that can deceptively simulate a conversation with a human being. It is also possible to create your own texts. The software is currently available to the general public free of charge for testing.

What does this have to do with NVIDIA? 

Various analysts think it is possible that NVIDIA could benefit from the hype surrounding artificial intelligence, as Bloomberg reports. For example, the application of AI would require great computing power, which should benefit the market leader in graphics cards and graphics chips. The more the chatbot would be used, the more computing power would be demanded, which should result in an upgrade. The computer company Microsoft recently announced a billion-dollar investment in OpenAI, money that is to be used to improve the computing power.

Citigroup analyst Atif Malik believes that "NVIDIA has a potentially important demand driver for computing power in ChatGPT," as Bloomberg quotes the expert from an analysis. Specifically, Citi estimates that the chatbot could add $3 billion to $11 billion in revenue to NVIDIA's coffers over the next 12 months. However, Malik cautioned that it is quite difficult to predict the growth of such a novel software.
The U.S. banks Wells Fargo and Bank of America also believe that NVIDIA should benefit from the further development of artificial intelligence. SPEAR Invest chief strategist Ivana Delevska is similarly optimistic. She expects the popularity of the chatbot to lead to similar products coming to market, which should further drive up the demand for chips and processing power - to NVIDIA's benefit: "People will see how popular it [the chatbot, editor's note] has become and that this type of application could become quite a big thing. That, in turn, will generate more interest in the area, which should then lead to a lot more investment from all kinds of companies that also want to stay on the ball," she said, according to Bloomberg. Whether NVIDIA can live up to these high expectations, however, remains to be seen for the time being.

Source: (finanzen.net

 

UiPath freaks out

A supercharged stock you can add to your portfolio to help build your long-term wealth is UiPath (PATH 2.92%). UiPath is a leading robotic process automation player. With its share price down 58% over the past year, UiPath's stock has emerged as an attractive buy-the-dip pick.

High inflation has made it more difficult for organizations to manage expenses. UiPath's low-code software tools -- also called "software bots" -- help organizations easily automate repetitive processes and tasks without the aid of a software engineer. The result is that businesses can save on time and costs, reduce human errors, and enjoy higher operational efficiency.

As evidence of the appeal of UiPath's offerings, consider that it added 1,020 new customers in the past year and served 10,650 customers at end of its fiscal third quarter on Oct. 31. Its annual recurring revenue rose by 36% to $1.1 billion at end of fiscal Q3 -- a figure that gives the company high revenue visibility. Its fiscal Q3 dollar-based net retention rate of 126% further highlights how successful it has been at cross-selling and upselling its products. And UiPath also boasts a solid balance sheet, with $1.7 billion in cash and negligible debt.

To be perfectly clear, investing in UiPath is not without risks. The company makes heavy use of stock-based compensation, which has been dilutive to its shareholders. And if a recession occurs in 2023, that could delay corporate decision-making on new spending, which could result in a delayed sales cycle for UiPath.

Although these risks cannot be ignored, the company's strengths in the rapidly expanding robotic process automation market and its strong balance sheet make it an attractive pick now.

Source: (fool.com)


 

CREDIT CARD FOR TESLA: BANKS PROVIDE UP TO 7 BILLION DOLLARS AT LOW INTEREST RATES

Last October, Tesla for the first time received an investment grade rating for its bonds, i.e. above the speculative "junk" class to which they had belonged since the first issue. Of the two major rating agencies, however, only one, Standard & Poor's, has announced the Tesla upgrade so far, while Moody's is still hesitant. A new credit agreement now suggests that this could soon change. Tesla would probably save further interest in this case. 

Tesla credit line for all cases
The electric car maker has secured a $5 billion "revolving credit facility," news agency Bloomberg reported last week. According to a stock exchange report, Tesla could extend this facility by a further 2 billion dollars. Such an arrangement is like a credit card for companies, Bloomberg explains: up to the agreed maximum, they can make repeated use of it as needed - usually a reserve in case other sources of liquidity dry up.
The agency sees the agreement as another sign that Tesla bonds will soon be upgraded by Moody's as well, which would then give them final investment status. Indirectly, this may also have a positive impact on the stock: Some funds are only allowed to invest in companies whose credit quality is highly rated. In addition, a better rating means lower interest rates because creditors have to price in less default risk. 

Investment-grade bonds
To a large extent, Tesla bonds are already considered and traded as investment grade, according to Bloomberg - as evidenced, among other things, by the fact that no collateral is provided for the new credit facility. But an official upgrade by another agency could further broaden access to the capital market.

In fact, Tesla's interest rates on the new billion-dollar credit facility depend directly on agency ratings, according to the SEC filing: Banks will get a benchmark interest rate plus an (unspecified) premium based on Tesla's long-term unsecured debt rating. However, the terms should already be better than before. Because according to the announcement, the "revolver" administered by Citi-bank for Tesla replaces a credit agreement concluded in 2019 on the basis of provided collateral. 

Source: (teslamag.com

 

Melco Announces Commencement of New Gaming Concession

Melco Resorts & Entertainment Limited (Nasdaq: MLCO) (“Melco” or the “Company”), a developer, owner and operator of integrated resort facilities in Asia and Europe, today announces that the ten-year concession to operate games of fortune and chance in casinos in Macau (“Concession”) granted to Melco Resorts (Macau) Limited (“Melco Resorts Macau”), a subsidiary of the Company, has commenced today. In addition, the Company further announces that Melco Resorts Macau and each of Altira Resorts Limited, COD Resorts Limited and Studio City Developments Limited, the subsidiaries of the Company holding the land lease rights for the properties on which the Altira Casino, City of Dreams Casino and Studio City Casino are located, respectively, have executed a public deed pursuant to which the gaming and gaming support areas comprising the Altira Casino, City of Dreams Casino and Studio City Casino with an area of 17,128.8 square meters, 31,227.3 square meters and 28,784.3 square meters, respectively, and related gaming equipment and utensils, have reverted to the Macau SAR in accordance with the Macau gaming law. Under the terms of the Macau gaming law and the Concession, such areas and equipment and utensils have been transferred by the Macau SAR to Melco Resorts Macau for usage in its operations during the Concession for a fee of MOP750.00 per square meter of the casino for years 1 to 3 of the Concession, subject to a consumer price index increase in years 2 and 3 of the Concession. The fee will increase to MOP2,500.00 per square meter of the casino for years 4 to 10 of the Concession, subject to a consumer price index increase in years 5 to 10 of the Concession.

Mr. Lawrence Ho, Chairman and Chief Executive Officer of Melco said, “We are honored and thankful to be awarded a ten-year gaming Concession by the Macau SAR government. The Company is grateful for the Central government’s leadership and guidance in supporting Macau’s continued integration with mainland China. We pledge our full support to the sustainable and diversified development of the tourism and leisure industry in Macau, and will continue to work with the government, the community and stakeholders to benefit and contribute to the city’s development as a key global tourism destination.”

Safe Harbor Statement
This press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Melco Resorts & Entertainment Limited (the “Company”) may also make forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission (the “SEC”), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. These factors include, but are not limited to, (i) the global COVID-19 outbreak, caused by a novel strain of the coronavirus, and the continued impact of its consequences on our business, our industry and the global economy, (ii) risks associated with the newly adopted gaming law in Macau and its implementation by the Macau government, (iii) growth of the gaming market and visitations in Macau, the Philippines and the Republic of Cyprus, (iv) capital and credit market volatility, (v) local and global economic conditions, (vi) our anticipated growth strategies, (vii) gaming authority and other governmental approvals and regulations, and (viii) our future business development, results of operations and financial condition. In some cases, forward-looking statements can be identified by words or phrases such as “may”, “will”, “expect”, “anticipate”, “target”, “aim”, “estimate”, “intend”, “plan”, “believe”, “potential”, “continue”, “is/are likely to” or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the SEC. All information provided in this press release is as of the date of this press release, and the Company undertakes no duty to update such information, except as required under applicable law.

About Melco Resorts & Entertainment Limited
The Company, with its American depositary shares listed on the Nasdaq Global Select Market (Nasdaq: MLCO), is a developer, owner and operator of integrated resort facilities in Asia and Europe. The Company currently operates Altira Macau (), an integrated resort located at Taipa, Macau and City of Dreams (), an integrated resort located in Cotai, Macau. Its business also includes the Mocha Clubs (), which comprise the largest non-casino based operations of electronic gaming machines in Macau. The Company also majority owns and operates Studio City (), a cinematically-themed integrated resort in Cotai, Macau. In the Philippines, a Philippine subsidiary of the Company currently operates and manages City of Dreams Manila (), an integrated resort in the Entertainment City complex in Manila. In Europe, the Company is currently developing City of Dreams Mediterranean () in the Republic of Cyprus, which is expected to be the largest and premier integrated destination resort in Europe. The Company is currently operating a temporary casino, the first authorized casino in the Republic of Cyprus, and is licensed to operate four satellite casinos (“Cyprus Casinos”). Upon the opening of City of Dreams Mediterranean, the Company will continue to operate the satellite casinos while operation of the temporary casino will cease. For more information about the Company, please visit .

The Company is strongly supported by its single largest shareholder, Melco International Development Limited, a company listed on the Main Board of The Stock Exchange of Hong Kong Limited and is substantially owned and led by Mr. Lawrence Ho, who is the Chairman, Executive Director and Chief Executive Officer of the Company.

Source: (finance.yahoo.com)


 

This High-Yield Stock Is Cheap: Here's Why Warren Buffett Likes It

This stock provides solid upside potential with limited downside risk.
It's been a tough year for Ally Financial (ALLY 2.88%) as rising interest rates and slowing consumer demand for automotive loans hit its business. Ally is down nearly 48% since the start of the year and trades at a discount to book value, but that hasn't stopped Warren Buffett and Berkshire Hathaway (BRK.A 1.75%) (BRK.B 1.65%) from building a position in the digital bank.

Berkshire Hathaway initiated a position in Ally Financial in the first quarter and has since acquired a 9% ownership stake. Buffett is known for using a margin of safety when making investment decisions, making Ally Financial an ideal Berkshire Hathaway investment.


Ally's business is highly dependent on automotive lending conditions
While the bank has worked to expand its offerings to customers, including Ally Invest, Ally Credit Card, and Ally Lending, it still relies heavily on automotive lending as a big chunk of its business. This year Ally generated $4.1 billion in revenue through its automotive finance business, or 66% of its total revenue. For this reason, the bank is highly sensitive to changes in the automotive lending landscape.

Pandemic-related supply chain issues, including a shortage of computer chips, affected automotive production in the last few years. As a result, used cars were hard to come by, and their costs skyrocketed.

According to the Manheim Used Vehicle Value Index, the cost of used cars in January was up nearly 67% compared to January 2020. These elevated prices helped Ally's business originate larger loans per car sold. In the second quarter, the bank originated $13.3 billion in auto loans -- its highest quarter of originations since 2006.
Vehicle prices have since dropped -- a good thing for consumers, but not necessarily a great thing for Ally. Used car prices are down nearly 16% from their peak in January, and a more challenging economic backdrop is taking a toll on Ally's business. In the second quarter, originations dropped 7.5% to $12.3 billion, and investors also seemed concerned about its deteriorating loan quality. In the third quarter, its net charge-offs of 0.85% were up from 0.49% in the prior quarter.


How Ally's valuation gives Buffett a margin of safety
Margin of safety is a principle used by Warren Buffett that says you should only invest in stocks when their market price is far below their intrinsic value. By investing with a margin of safety, you are setting yourself up to make investments with limited downside potential. A company's book value is one way to measure a stock's intrinsic value, which you can use to determine its margin of safety.

Declining car values, falling originations, and increasing charge-offs have Ally stock down 45% since the start of the year -- and at a dirt cheap valuation, with an 18% discount to its book value. It's also cheap in other measures, including its price-to-sales (P/S) and price-to-earnings (P/E), which have the bank stock near its lowest valuation since going public in 2014.


A great value stock for long-term investors
Ally Bank faces headwinds in the short term, which have weighed heavily on its stock price. Management expects fourth-quarter originations of $10.8 billion, which would represent a decline of 12% from the third quarter. It also expects an uptick in the net charge-off ratio, which management believes will peak around 1.6%.
However, Warren Buffett is playing the long game and looking past these short-term effects. The bank benefits from higher interest rates, with new loans producing up to 9% interest. It's also steadily growing its consumer banking business and recently completed its 54th consecutive quarter of increasing customer deposits. 

The bank is in a solid financial position too. Its CET1 ratio, a regulatory ratio for banks measuring core capital divided by risk-weighted assets, is 9.3% and well above the Federal Reserve's minimum ratio of 7% -- giving it $3.6 billion in excess capital. It has put its cash to work, rewarding investors with a 4.8% dividend yield and another $1.6 billion on buying back its stock this year.

Given Ally's dirt-cheap valuation, it's not too surprising that Warren Buffett has taken an interest in the bank. Buffett is in it for the long haul, and its cheap valuation gives it a margin of safety, which should provide investors with solid upside potential and limited downside risk.


Source: (fool.com)

 

Santander UK fined £108m over money laundering failings

Santander has been fined £107.8m over "serious and persistent gaps" in its anti-money laundering controls which opened the door to "financial crime".

The financial watchdog said the bank "failed to properly oversee and manage" systems aimed at verifying information provided by business customers.
Santander also failed to properly monitor the money customers had going through their accounts.

The bank said it was "very sorry" for the failings and had taken action.
Mark Steward, executive director of enforcement and market oversight at the Financial Conduct Authority (FCA), said: "Santander's poor management of their anti-money laundering systems and their inadequate attempts to address the problems created a prolonged and severe risk of money laundering and financial crime.

The failings affected the oversight of accounts held by more than 560,000 business customers between 31 December 2012 and 18 October 2017, and led to more than £298m passing through the bank before it closed accounts.
The FCA said that in one case, a new customer opened an account as a small translations business with expected monthly deposits of £5,000. Within six months it was receiving millions in deposits, and swiftly transferring the money to separate accounts.

Although the account was recommended for closure by the bank's own anti-money laundering team in March 2014, the FCA said that poor processes by Santander meant that it was not acted upon until September 2015.
As a result, the customer continued to receive and transfer millions of pounds through its account.
The City watchdog identified several other business banking accounts which Santander failed to manage correctly, leaving the bank open to "serious money laundering risk".

Santander chief executive Mike Regnier said: "We are very sorry for the historical anti-money laundering related controls issues in our Business Banking division between 2012-17 highlighted in the FCA's findings."
He said the bank took action to address the issues once they were identified, but accepted that its anti-money laundering controls at the time should have been stronger.

"We have since made significant changes to address this by overhauling our financial crime technology, systems and processes, he said, adding that more than 4,400 Santander staff are now focused on preventing financial crime.

Source: (bbc.com)


 

Top 5 Heavily Shorted Internet Stocks Set to Rebound in 2023

The technology sector, which enabled Wall Street to get rid of the coronavirus-induced short bear market and formed the new bull market, suffered a bloody blow at the start of 2022. Record-high inflation compelled the Fed to turn ultra-hawkish with tighter liquidity control and a higher interest rate regime. The blood bath in the technology sector has continued year to date.

However, the valuation of this sector has been corrected significantly. The Technology Select Sector SPDR (XLK) — one of the 11 broad sectors of the S&P 500 Index — has tumbled 25.5% year to date. The tech-heavy Nasdaq Composite Index has plunged 29.8% year to date and is currently in bear market.

We have selected five Internet-based stocks that were heavily shorted in 2022. However, these stocks have strong growth potential for 2023 supported by a favorable Zacks Rank. These companies are - Airbnb Inc. ABNB, Datadog Inc. DDOG, Ceridian HCM Holding Inc. CDAY, Cloudflare Inc. NET and Unity Software Inc. U,


Positive Development
Although the Fed is yet to signal any shift from its ultra-hawkish monetary policies, a section of Fed officials recently spoke in a relatively dovish tone. The minutes of the Fed’s November FOMC meeting revealed that a “substantial majority” of Fed officials favor reducing the magnitude of the interest rate hike going forward.

In his post-FOMC statement in November, Fed Chairman Jerome Powell warned that the terminal interest rate might go beyond 5% as estimated earlier and a soft landing of the economy may not be realized. However, with several important Fed officials recently expressing their dovish views, market participants expect that the terminal interest rate may not cross the 5% threshold.

High-growth-oriented companies, especially technology companies, depend on easy access to cheap credit to expand their businesses. Therefore, a reduction of the magnitude of the interest rate hike by the Fed will be a welcome development for the technology sector.

Moreover, lower market risk-free returns mean a lower discount rate for future cash flows from stock investing. This will increase the net present value of the investors from their investment in growth stocks.

Our Top Picks
We have narrowed our search to five large-cap (market capital >$10 billion) Internet-based stocks that have plunged 35% year to date. The stocks have strong growth potential for 2023 and have sAeen positive earnings estimate revision for the next year in the past 30 days. Each of our picks carries a Zacks Rank #2 (Buy).


Airbnb is riding on an improvement in the travel industry. Continued recovery in both longer-distance and cross-border travel owing to a reduction in travel restrictions is benefiting ABNB’s Nights & Experience bookings. Additionally, growth in average daily rates and gross booking value is a tailwind.

Growing active listings in Latin America, North America and EMEA are contributing well to the top line. Growing sales and marketing initiatives along with continuous efforts to upgrade various aspects of the Airbnb service are helping the company gain momentum among hosts and guests.
Airbnb has an expected revenue and earnings growth rate of 13.3% and 15.6%, respectively, for the next year. The Zacks Consensus Estimate for next-year earnings has improved 6.8% over the past 30 days. The stock price of ABNB has tanked 42.7% year to date.

Datadog is benefitting from new customer additions and increased adoption of its cloud-based monitoring and analytics platform driven by accelerated digital transformation and cloud migration across organizations.

The solid adoption of Synthetics and Network Performance Monitoring products are expected to aid customer wins for DDOG in the near term. Contributions from a solid cloud partner base, including Google Cloud, Microsoft Azure and Amazon Web Services, remain the key growth driver for DDOG besides an expanding portfolio.
Datadog has an expected revenue and earnings growth rate of 33% and 17.4%, respectively, for the next year. The Zacks Consensus Estimate for next-year earnings has improved 10.5% over the past 30 days. The stock price of DDOG has tumbled 59.6% year to date.

Ceridian HCM operates as a human capital management (HCM) software company in the United States, Canada, and internationally. CDAY offers Dayforce, a cloud HCM platform that provides human resources, payroll, benefits, workforce management, and talent management functionality and Powerpay, a cloud HR and payroll solution for the small business market. Ceridian HCM also provides Bureau solutions for payroll and payroll-related services. CDAY sells its solutions through a direct sales force and third-party channels.

Ceridian HCM has an expected revenue and earnings growth rate of 17.4% and 27.2%, respectively, for the next year. The Zacks Consensus Estimate for next-year earnings has improved 9.8% over the past 30 days. The stock price of CDAY has slid 38.7% year to date.

Cloudflare provides an integrated cloud-based security solution to secure a range of combination of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications and IoT devices worldwide.

NET’s security products comprise cloud firewall, bot management, distributed denial of service, IoT, SSL/TLS, secure origin connection, and rate limiting products. Cloudflare offers performance solutions, which include content delivery and intelligent routing, as well as content, mobile, and image optimization solutions. In addition, NET provides reliability solutions comprising load balancing, anycast network, virtual backbone, DNS, DNS resolver, online, and virtual waiting room solutions.

Cloudflare has an expected revenue and earnings growth rate of 35.6% and 35.4%, respectively, for the next year. The Zacks Consensus Estimate for next-year earnings has improved more than 100% over the past 30 days. The stock price of NET has plummeted 66.1% year to date.

Unity Software provides a platform for creating and operating interactive, real-time 3D content. U’s platform provides a set of software solutions to create, run and monetize interactive, real-time 2D and 3D content for mobile phones, tablets, PCs, consoles and augmented and virtual reality devices.

Unity Software enables content creators and developers, artists, designers, engineers, and architects to create interactive and real-time 2D and 3D content. U offers its solutions directly through its online store, field sales operations, independent distributors, and resellers in the United States, Denmark, Belgium, Canada, China, Colombia, Finland, France, Germany, Ireland, Israel, Japan, Lithuania, Portugal, Singapore, South Korea, Spain, Sweden, Switzerland, and the United Kingdom.

Unity Software has an expected revenue and earnings growth rate of 60.1% and more than 100%, respectively, for the next year. The Zacks Consensus Estimate for next-year earnings has improved more than 100% over the past 30 days. The stock price of U has plunged 74.8% year to date.


Source: (finance.yahoo.com)

 

Why Nu Holdings Stock Got Thrashed

A prognosticator's target-price cut triggers a bit of a sell-off in the fintech's shares.

What happened
Next-generation fintech and digital bank Nu Holdings (NU 5.71%) had a lousy Thursday on the stock market. Somewhat counter-intuitively, given the company's recent financial performance, an analyst lowered his price target on the stock. Investors took this to heart, trading the shares down by more than 8% on the day.

So what
That prognosticator was Jorge Kuri, who now feels Nu Holdings' stock is worth $10.75 per share; previously, his price target was $12.50. Yet Kuri is maintaining his bullish stance on the fintech and next-generation lender, as he kept his overweight (i.e., buy) recommendation intact.

Bullishness had been in the air for Nu Holdings this week. Late on Sunday, the company reported its third-quarter results, revealing solid growth that propelled its revenue to $1.3 billion for the period. The bottom line landed in the black, meanwhile, with a headline net income of just under $8 million.
Key operational metrics ticked up, too. The company said it added over 5 million customers during the quarter for a new total of 70.4 million throughout its native Brazil, plus Mexico and Colombia. Monthly average revenue per active consumer (ARPAC) -- a financial measure it considers important and indicative -- rose 61% on a year-over-year basis.

Now what

Kuri's new note wasn't particularly alarming; rather, it represented an adjustment to his take on Nu Holdings stock. All in all, investors might have taken it as a chance to book quick profits on the stock by selling it off after its nice run-up earlier in the week.

Source: (fool.com)


 

2 high-yield dividend stocks that could realistically double in 5 years

Some investors think they have to sacrifice strong growth for high dividends. However, that's not always the case. Here are two high-yield dividend stocks that could realistically double in the next five years.

1. Innovative Industrial Properties
Innovative Industrial Properties (IIPR -1.79%) (IIP) is a real estate investment trust (REIT) focused on the regulated cannabis industry in the United States. The company currently owns 111 properties in 19 states.
The company offers a dividend yield of nearly 7%. IIP has increased its dividend 12-fold since 2017.
To double over the next five years, IIP's stock price would only need to return to the level it was at the end of 2021. The stock has slumped on investor concerns about weakness in the U.S. cannabis industry.

However, IIP continues to post solid growth. The company's revenue rose 32% year-over-year in the third quarter of 2022. Profit was up 25%. Normalized funds from operations (FFO) increased nearly 22%.
The headwinds facing the U.S. cannabis industry primarily relate to an imbalance between supply and demand. This type of situation resolves itself over time.

Meanwhile, the number of states with legal cannabis markets continues to grow. In recent elections, voters in Maryland and Missouri voted to legalize marijuana for recreational use. In Virginia, recreational marijuana markets are scheduled to open in 2024.

IIP Executive Chairman Alan Gold noted in the company's third quarter conference call that total U.S. cannabis sales are expected to double by 2026. If IIP achieves that growth rate, the stock could easily double or more over the next five years.

2 Medical Properties Trust
Medical Properties Trust (MPW 3.89%) (MPT) is another REIT that income investors should keep an eye on. The company owns 435 hospital facilities with 44,000 licensed beds in 10 countries.

MPT stock is down nearly 50% this year. But that steep decline has pushed the company's dividend yield to 9.6%. In recent months, the yield has topped 10%. MPT has raised its dividend for eight consecutive years.
Hospital REIT shares could nearly double if only they regain their 52-week high. Reaching that goal seems entirely feasible in the next few years.
Hospital operators are facing higher costs due to skyrocketing inflation. However, with the upcoming reimbursement increases, relief should be in sight. The improving outlook for MPT tenants should reassure investors.

Meanwhile, MPT's financial position remains strong. The company's net income rose nearly 30% year-over-year in the third quarter of 2022. Normalized FFO rose just over 3%. MPT's third-quarter net debt was 16% lower than at the end of 2021.

Double whammy?
There are a few things that could prevent one of these high-yield dividend stocks from doubling. The most obvious potential obstacle is that IIP and MPT's rental income could be at risk.
One of IIP's tenants, Kings Garden, has already failed to make its lease payments this year. Another of the cannabis REIT's tenants, Vertical, is only making partial rent payments.
MPT is also facing some problems. Pipeline, a hospital operator that leases four facilities from MPT, recently filed for Chapter 11 bankruptcy. MPT's largest tenant, Steward, is also struggling financially.

Higher interest rates could also slow the growth of these two REITs. Steven Hammer, CFO of MPT, acknowledged in his company's third-quarter conference call that "any additional acquisition will require compelling economics."
Both IIP and MPT, however, appear well positioned to weather the storms they face. The idea that these stocks could double in the next five years is not so far-fetched.


Source: (fool.com)

 

Inflation: US consumer prices lower, markets cheer!

CPI

The long-awaited by the markets data on inflation in the U.S. are here: the just published U.S. consumer prices (October) were lower than expected at +0.4% on the previous month (forecast was +0.6%; previous month was +0.4%).

Compared to the same month of the previous year, prices rose by +7.7%, which was significantly less than expected (forecast was +8.0%; previous month was +8.2%).

At the core rate (excluding food and energy), prices rose +0.3% month-over-month (forecast was +0.6%; previous month was +0.6%) and +6.5% year-over-year (forecast was +6.5%; previous month was +6.6%).

Market reaction: The markets cheer - U.S. futures strongly up, yields and dollar strongly down...

Quelle: (finanzmarktwelt.de)

 

Facebook group Meta plans job reductions

According to media reports, significant job cuts are imminent at Facebook group Meta. Several thousand jobs are at stake, the Wall Street Journal wrote. The New York Times did not give figures, but reported that the job cuts could be the largest since the company was founded in 2004. The cuts could begin as early as this week, it said, citing people with knowledge of the matter. Facebook most recently had just over 87,000 employees.

Meta's problem is that its core business, advertising on online services like Fa-cebook and Instagram, is bringing in less revenue than it used to. At the same time, the development of virtual worlds driven by founder and CEO Mark Zuckerberg under the Metaverse buzzword is gobbling up more and more money. Zuckerberg had already recently announced that the number of employees at Meta would stop growing for the time being and could also shrink in the coming year because the group would focus on fewer areas.

In the last quarter alone, Reality Labs, the division working on the Metaverse, made an operating loss of nearly $3.7 billion. Since the beginning of the year, it has amassed a $9.4 billion deficit - on $1.4 billion in revenue from that division. And Zuckerberg announced that Reality Labs' losses would "grow significantly" in the coming year.

Meanwhile, the revenue decline has accelerated. Meta is seeing itself hit by advertiser frugality as they spend less money on online ads amid high inflation and concerns about the economy. Meta's revenue fell four percent year over year to $27.7 billion. Bottom-line profit slumped 52 percent to about $4.4 billion. The stock price has been under pressure for months because investors believe Meta-verse's investments are too high. 


Source: (finance.yahoo.com)

 

Amazon stock sinks after holiday forecast and cloud growth, profit disappoint; $150 billion in market cap at risk

E-commerce powerhouse says that it could just break even in fourth quarter while analysts were expecting more than $5 billion in operating profit, AWS misses expectations; market cap heads lower than $1 trillion for the first time since April 2020

Amazon.com Inc. predicted Thursday that holiday sales and profit would come in well lower than analysts expected as cloud growth slowed and Amazon Web Services profit missed expectations by nearly $1 billion, sending shares south in after-hours trading.

Amazon AMZN, -4.06% executives guided for fourth-quarter operating profit of break-even to $4 billion and holiday sales of $140 billion to $148 billion, while analysts on average were expecting operating income of $5.05 billion on revenue of $155.09 billion, according to FactSet. AWS sales of $20.54 billion grew 27.5% from the year before, the lowest growth rate for the pioneering cloud-computing product in records dating back to the beginning of 2014, and lower than analysts’ average estimate of $21.2 billion; AWS operating income of $5.4 billion handily missed analysts’ average estimate of $6.37 billion, according to FactSet.

“As the third quarter progressed, we saw moderating sales growth across many of our businesses, as well as increased foreign-currency headwinds … and we expect these impacts to persist throughout the fourth quarter,” Chief Financial Officer Brian Olsavsky said in a conference call Thursday afternoon. “As we have done in similar times in our history we are also taking action to tighten our belt, including pausing hiring in certain businesses and winding down products and services where we believe our resources are better spent elsewhere.”

Shares dove as much as 20% in after-hours trading immediately following the release of the results, after closing with a 4.1% decline at $110.96, but ended the extended trading period down 13%. After-hours prices could chop roughly $150 billion from Amazon’s market capitalization and send it lower than $1 trillion for the first time since April 2020 if they were to persist through Friday’s regular trading session, according to FactSet.

Amazon reported its first quarterly profit of the year for the third quarter, and easily beat analysts’ expectations for the back-to-school period that included the company’s first Prime Day of the year, but earnings still declined from last year. Executives reported third-quarter profit of $2.87 billion, or 28 cents a share, down from 31 cents a share in the year-ago quarter after adjusting for Amazon’s 20-to-1 stock split.
Revenue grew to $127.1 billion from $110.8 billion, in the middle of executives’ forecast for $125 billion to $130 billion but slightly missing analysts’ expectations; executives said revenue would have been $5 billion higher without the effects of the strengthening dollar. Analysts on average expected earnings of 22 cents a share on sales of $127.39 billion, according to FactSet.

“There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets,” Chief Executive Andy Jassy said in a statement. “What won’t change is our maniacal focus on the customer experience, and we feel confident that we’re ready to deliver a great experience for customers this holiday shopping season.”

Amazon had reported quarterly losses through the first half of the year, largely because of a rapid post-IPO decline in one of its investments, Rivian Automotive Inc. RIVN, +0.17%. But the Seattle-based company has also been looking to cut costs after spending wildly during the first two years of the COVID-19 pandemic to keep up with spiking demand for its online store and Amazon Web Services cloud-computing products.
Amazon’s stock has suffered as it faces comparisons to the headier days of last year, and will do so again in the holiday season, when it faces a comparison with a nearly $12 billion profit from its Rivian investment, which has declined more than 50% from its IPO price and stands at roughly one-fifth its peak post-IPO price.
There were thoughts that Amazon would be cautious with its holiday forecast, as its attempts to cut costs run into the need to keep its giant logistics operation running smoothly. The company is looking to hire 150,000 workers to get through the holiday season, and recently announced increased pay for fulfillment workers.

“On 4Q consensus estimates, we believe AMZN will likely err on the side of being more conservative, given the uncertain consumer spend environment,” MKM Partners Managing Director Rohit Kulkarni wrote in a note. “We believe recently announced wage hike, higher near-term content costs amortization (NFL & Lord Of Rings), and potentially greater merchandise discounting might weigh on 4Q Op Margins.”

Amazon’s e-commerce operations were boosted in the third quarter by the company’s annual Prime Day event in July, and the company tried to replicate the event in October, but analysts saw the second Prime Day as less successful and potentially a sign of weakness.

“We see Amazon’s decision to hold two Prime Day sales in one calendar year as a red flag for weak e-commerce sales; consistent with retailers, in general, holding more sales when their sales are under pressure,” D.A. Davidson analyst Tom Forte wrote in a preview of Amazon’s report.

In the third quarter — with back-to-school sales and the first Prime Day event — quarterly retail sales in North America hit $78.84 billion, while overseas revenue totaled $27.72 billion. Analysts on average were expecting $77.24 billion and $29 billion respectively, according to FactSet. Sales in both locations were unprofitable from an operating perspective for the fourth consecutive quarter, losing a total of $2.88 billion.

Amazon’s profit largely comes from the fat margins of its AWS cloud-computing offering, but there have been concerns about growth leveling off for cloud after rival Microsoft Corp. MSFT, -1.98% reported a deceleration earlier this week and guided for a further decline in growth in the fourth quarter. AWS did provide enough profit in the third quarter to overcome the losses in e-commerce, but the result was the lowest quarterly operating income for Amazon overall since the first quarter of 2018, according to FactSet records.

Opinion: The cloud boom is coming back to Earth, and that could be scary for tech stocks

“The ongoing macroeconomic uncertainties have seen an uptick in AWS customers focused on controlling costs and we are proactively working to help customers cost-optimize just as we have done throughout our history, especially in periods of economic uncertainty,” Olsavsky said in Thursday’s conference call, before adding that revenue growth dipped to the mid-20s late in the period from an overall rate of 27.5% for the quarter.
“So carry that forecast to the fourth quarter, we are not sure how it’s going to play out, but that’s generally our assumption,” he said, suggesting that Amazon expects the AWS revenue-growth rate to decline again in the fourth quarter.

Amazon’s other higher-margin business is advertising, which has grown strongly in recent years as companies seeking to sell products on Amazon pay the company to list their products higher when consumers search for them on the e-commerce platform. Amazon reported third-quarter advertising revenue of $9.55 billion, up from $7.61 billion a year ago and topping the average analysts estimate of $9.48 billion.
The results seemed to spread fears to other e-commerce companies and cloud-focused companies. Wayfair Inc. W, +0.37%, eBay Inc. EBAY, +0.71% and Etsy Inc. ETSY, -0.48% shares all fell roughly 5% or more in after-hours trading, as did cloud-software providers Snowflake Inc. SNOW, -0.20%, MongoDB Inc. MDB, -0.35% and Datadog Inc. DDOG, +0.81% Microsoft’s stock declined about 1.5%.

Amazon stock has fallen 33.5% so far this year, as the S&P 500 index SPX, -0.61% has dropped 19.6%.

Source: (marketwatch.com)


 

Meta share crashes to 2016 level after Q3 results

The perfect storm is complete: In the third quarter, the downward trend in the business development of the Facebook parent accelerated so much that the shares of the social media pioneer plunged to their lowest level in six and a half years after trading hours.

Concerns ahead of the latest set of figures were once again not deceived. Meta's latest financial statement for the third quarter also partially disappointed Wall Street's already reduced consensus estimates.
Although Meta had to accept the second decline in sales in a row - the downward trend accelerated in the last three months. While the Facebook parent had posted revenues of $29.01 billion in the year-ago quarter, Meta CEO Mark Zuckerberg was only able to report revenues of $27.71 in the third quarter. Meta thus even exceeded the lowered analyst estimates, which had been against at 27.38 billion dollars.

Further headwinds from Apple's iOS limitation and high Reality Labs losses.

However, Meta saw its revenue drop by more than a billion dollars compared to the June quarter alone. Fundamentally, the social media pioneer continues to face additional headwinds from Apple's changes to its iOS mobile operating system - user habits, which are key to Facebook's ad business, have become harder to track ("targeting") since the update.

The challenging economic environment, which is characterized by a persistently high inflation rate, also led to booking restraint among ad customers. As expected, the lion's share of revenues came from the advertising business, at $27.24 billion. The social media pioneer also generated only 285 million dollars from its Reality Labs division, such as sales of Oculus headsets. However, this contrasts with the division's hair-raising losses of $3.67 billion in the past quarter alone.

Profit falls by 52 percent

Meanwhile, the profit development showed a correspondingly steep downward trend. After 9.19 billion dollars in the third quarter of 2021, CEO and founder Mark Zuckerberg had to report a drop in profits of almost five billion dollars or 52 percent in the past three-month period. Thus, the parent company of the world's largest social network could now only bring in a profit of 4.39 billion dollars in the 92 days between the beginning of July and the end of September.

In terms of earnings per share, the 18-year-old Internet company also significantly undercut analysts' estimates, which had still been at 1.89 dollars per share, and was instead only able to report a profit of 1.64 dollars per share. Group CEO Zuckerberg had told investors at the beginning of the year to expect a drop in profits this year due to the significant increase in investments in the Metaverse. However, the losses of the Reality Labs division are exceeding investors' imagination from quarter to quarter: In the first nine months of the year, Meta burned through an enormous $9.4 billion on its Metaverse.

Just under 3 billion Facebook users

Meanwhile, user development, which has been stagnating for several quarters, was mixed at best. Now 2.96 billion people use the world's largest social network at least once a month - an increase of four percent Analysts had expected 2.94 billion monthly active Facebookers.

Facebook also scored in terms of the number of daily active Facebook members (DAU): After 1.97 billion members at the end of June, 1.98 billion were now using the social media app with the highest number of users every day at the end of September. Compared with the same period last year, this represents an increase of 3 percent. The entire Facebook family (including the apps Instagram and WhatsApp) was used by 3.71 billion people a month and 2.93 billion members a day - an increase of 4 percent in each case.

Facebook stock falls back to 2016 levels after weak outlook

On Wall Street, the latest snapshot of Meta's business and user development was received with renewed dismay despite already significantly reduced expectations - not least because the outlook for current business was even significantly weaker than feared.

Group CEO Zuckerberg expects Meta to generate revenues of only between 30 and 32.5 billion dollars in the final fourth quarter - and thus to suffer the next decline in sales. Analysts had expected revenues of 32.2 billion dollars. In the same period last year, the social media pioneer had still generated 33.67 billion dollars.

As a result, Meta's share price fell again in the after-hours trading session in response to the figures, losing a further 20 percent to just 104 dollars. This meant that Meta shares were not only trading at a low for the year, but also at their lowest level since the beginning of 2016! Since the beginning of the year, Meta shareholders have lost 68 percent of their investment.

Source: (finance.yahoo.com)

 

Musk's controversial Twitter bid is immortalized as a business school case study

Elon Musk's $44 billion Twitter takeover saga has the makings of being immortalized in case studies for future captains of industry, as the tycoon's back-and-forth around the social media platform and his unique management style make for a unique combination.

The chief executive of electric carmaker Tesla Inc. performed an about-face by proposing to buy Twitter for the agreed-upon price after months of trying to get out of the deal just as a Delaware court was preparing to rule on the standoff.
"This is unique in many cases," said Arturo Bris, professor of finance and director of the IMD World Competitiveness Center. "It is definitely a case study in economics. Because we're talking about poison pills, severance payments, lawsuits and hostility."

While there are examples of acrimonious or hostile takeovers such as AOL-Time Warner and Sanofi-Aventis-Genzyme, here the world's richest man - who has long used his own Twitter account to advocate for more free speech - is trying to impose his will on another company.
Musk's attempt to take over Twitter is "a gift to professors and students," said Joshua White, a professor at Vanderbilt University, calling the situation "unprecedented."

Unique style
"Frankly, I hate doing management stuff," Musk wrote in a text message to Twitter CEO Parag Agrawal as he made a bid for the company, according to legal documents.
"I don't think anyone should be anyone's boss," he wrote, while noting in another message that he is "much better off working with engineers who are able to code hard than program manager/MBA types."

While the news reflects his unusual approach to running a company, taking control of Twitter also means managing it, at least initially. Musk has said he would take the reins as CEO, but only until he finds a new leader with experience in the media industry.
"What's coming is unclear," said Donna Hitscherich, a professor at Columbia Business School.

Musk did not respond to a request for comment on the challenges of running the company after such a controversial deal. Twitter declined to comment.
Academics and analysts believe Musk should focus on restructuring the social media company's business model after revenue fell in the second quarter due to the court battle and a weakening digital advertising market.
Musk has hinted that he wants to turn Twitter into what he called an "everything app," similar to WeChat, which is popular in China and offers everything from banking to chatting. Analysts say that will be difficult, especially in the United States, where consumers are already well served by multiple services.
Whether or how Musk pulls it off remains to be seen. But analysts and academics agree that the considerable energy and momentum could be wiped out by a projected high turnover among Twitter employees and executives.

Musk criticized the company's management for months, complaining about salaries, what he saw as political bias and automated "bot accounts" - of which he said there are many more than Twitter appreciates.

In a direct address to employees in June, he said that a "rationalization of staffing and expenses" was needed, while emphasizing that employees, who currently have relative freedom to choose where they work, should rather choose to work in an office.

One thing is for sure: Musk will get a lot of attention as he figures out how to run Twitter. Success or failure, experts say the topic will immediately pop up in business school classrooms.
"I'm really looking forward to the end," Bris says. "Then I can cover this case in class."

Source: (finance.yahoo.com)


 

APPLE IPHONE 15: EXPERTS EXPECT AN ULTRA SMARTPHONE IN 2023

Not only the Apple Watch, but also the iPhone will be supplemented by an Ultra class in the future. Experts are convinced of that. However, the popular Pro Max model could fall by the wayside and the prices for a top model could skyrocket (even further). Despite harsh criticism, the new Apple iPhone 14 family seems to enjoy great popularity. The demand in Apple's online store is still so high that the delivery times have already shifted to November. But as we all know, after the keynote is before the keynote, which is why experts are already looking at the next smartphone generation, the possible iPhone 15 (Pro).
The often well-informed Bloomberg reporter Mark Gurman currently assumes that Apple will come up with a long-awaited design upgrade and the change from the dusty Lightning connector to USB-C ports next year. Apart from that, the rumor mill continues to talk about a possible Periscope camera with a significantly expanded zoom.

Long overdue iPhone upgrades at a luxury price?
Gurman's prediction, however, sounds costly, as he sees the innovations primarily in an iPhone 15 Ultra. Thus, Apple could pump old wine through new wineskins with the iPhone 15 and iPhone 15 Pro next year and pay princely for the real upgrades in the form of an Ultra smartphone. The previous "Pro Max" flagship could even be completely replaced in the course of the iPhone 15 Ultra.
Apple is often criticized for its product and pricing policy, especially in a crisis-ridden year like this one. You have to pay at least 999 Euros for the new iPhone 14, which seems to be the spitting image of the previous year's model in terms of looks and technology. The "really new" Pro models, on the other hand, are priced between 1299 and 2099 Euros.

It remains to be seen whether the company will target outdoor users with the Ultra iPhone, similar to the Apple Watch, or whether the new class will only be used to push the price up further for a long overdue design upgrade.

Source: (ft.com)

 

Scholz sets its sights on Canadian commodities - As a substitute for Russian

SPD
During his three-day visit to Canada, German Chancellor Olaf Scholz wants to significantly expand cooperation with the world's second-largest country in the development of raw materials. "

The country has similar rich mineral resources as Russia - with the difference that it is a reliable democracy," Scholz said on Sunday evening (local time) after his arrival in Montreal. "This opens up new fields of cooperation. In particular, we want to cooperate closely in building a hydrogen economy."

Scholz, an SPD politician, is visiting Canada together with Vice Chancellor and Economics Minister Robert Habeck (Greens). The two are accompanied by a high-ranking business delegation. After arriving in Montreal, Scholz met with Canadian Prime Minister Justin Trudeau for dinner.

The two were scheduled to hold further political talks on Monday.
During the visit, an agreement on closer cooperation in the production and transport of hydrogen is to be signed. But the talks will also focus on the supply of liquefied natural gas (LNG) to Germany and the extraction of minerals and metals available in Canada, such as nickel, cobalt, lithium and graphite, which are important for the production of batteries.
Scholz emphasized that Germany has hardly any other country outside the European Union with which it has such close and friendly ties as Canada. "We not only share common values, but also a similar view of the world," he said.
With an area of almost one million square kilometers, Canada is the second-largest country in the world after Russia, but with about 37 million inhabitants it is comparatively sparsely populated. The country is Germany's partner in the G7 of economically strong democracies and in NATO.


Source: (de.finance.yahoo.com)

 

Bed Bath & Beyond slides after investor Ryan Cohen files for stake sale

Bed Bath & Beyond Inc shares nosedived late in the session on Wednesday from a 45% surge earlier after investor and GameStop Chairman Ryan Cohen filed for a proposed sale of his stake in the struggling home goods retailer. The highly shorted shares continued their fall after the bell and were down more than 15% as Cohen's venture capital firm RC Ventures, the second largest investor, said it intends to sell 9.45 million shares, including options, through JP Morgan Securities.The company said it reached an agreement with RC Ventures in March and is working with financial advisors and lenders to strengthen its balance sheet as it struggles with declining revenue and liquidity concerns.

It will provide more information in an update by the end of this month.
Cohen did not respond to a request for comment. His venture capital firm had on Tuesday bought call options expiring in January 2023 on 1.67 million shares with a strike price ranging from $60 to $80. Cohen's bets led to the highest single-day purchase of the BBBY shares in at least five years, with individual investors dabbling in highly shorted shares buying $73.2 million worth of the company's shares in the previous session.

On Wednesday too, Bed Bath & Beyond was the most actively traded single stock option, far ahead of popular options trades including Apple Inc and Tesla Inc, data from Options Clearing Corp showed. The resurgence in retail trading comes after a rebound in U.S. stocks that helped the S&P 500 recoup more than half of the benchmark index's losses since its June low.

Bed Bath & Beyond has been gaining in 14 out of the last 15 sessions, helping its market value rise fourfold to more than $2 billion.
On Wednesday, the shares rose up to $30 and closed down at $23.08. The stock had lost more than 60% of its value in June and July.

"It truly is a quality company (but) shares are probably overvalued in the low teens and it is ridiculously overvalued at high $20s," said Jake Dollarhide, chief executive at Longbow Asset Management in Tulsa, Oklahoma.
About 55% of Bed Bath & Beyond's free float is shorted, an increase of 19% in the past 30 days despite the price surge, according to S3 Partners.
"It's possible for the meme rally to spread since there is a lot of short-term capital entering the market. We've seen the same with Chinese meme stocks over the past few weeks," Siddharth Singhai, chief investment officer at New York-based hedge fund Ironhold Capital.

Source: (finance.yahoo.com

 

US Consumer Price Index: New Impetus for Fed Monetary Policy and the Dollar?

Today at 2:30 p.m., we can expect the U.S. consumer price index (CPI) for the month of July. From the perspective of the financial markets, this will undoubtedly be the most important economic event of the week.
The consensus is that inflation should finally start to decline as a result of lower gasoline prices and the fading of supply chain problems.
According to data compiled by Investing.com, economists on average expect the CPI to rise 0.2 percent in July, down from 1.3 percent in June. On an annual basis, the CPI is expected to be 8.7 percent, up from 9.1 percent in June.
Excluding energy and food for the core CPI, inflation is expected to be 0.5 percent in July, lower than the 0.7 percent recorded in June. On an annual basis, however, core CPI is still expected to be higher at 6.1 percent, up from 5.9 in June.
Ahead of this release, which could prove crucial to the direction of many markets, we provide below an overview of some analysts' forecasts.
The Bank of Montreal, for example, wrote that "a strong enough reading of CPI, allows for a 75bp rate hike. Our baseline scenario is that much of the consensus will produce such an effect."
"The divergence between headline and core inflation, which has been exaggerated by the acceleration in energy and food costs, has moderated. It is expected to continue in July, as gasoline prices have fallen while core inflation has continued. The annual rate of headline inflation is expected to fall, while core inflation figures are expected to rise to 6.1 percent from 5.9 percent, a peak but not in line with the Fed's target," the bank added.
Morgan Stanley (NYSE:MS) believes that "the market is underestimating the persistence of inflation in the U.S., the Fed's determination to fight it, and the tightening of monetary policy needed to bring inflation lower."
The bank therefore said that "the Aug. 10 U.S. CPI could be a critical market catalyst for the next phase of the dollar rally if it exceeds market expectations."
For her part, Aneta Markowska, chief economist at Jefferies, said, "There are about four inflation drivers right now. There are commodity prices. Those are just about to come down. Then there are the supply chain issues. That's also unraveling, but there's still the housing and labor market, which will show up in services inflation."
She also clarified, "You still have a problem with service inflation, and that's due to housing and labor shortages. That problem is going to stay with us for quite a while until the Fed manages to affect demand, and that hasn't happened yet."
"Everyone is ready for reasonably good news, so it has to be good news. If it's not as good as people think, then it's exceptionally bad news," said Mark Zandi, chief economist at Moody's Analytics.
Zandi expects headline inflation to rise only 0.1 percent. "That would take the year-over-year inflation rate to 8.7 percent, an uncomfortably high, painfully large inflation rate, but one that's headed in the right direction. I think the 9.1 percent inflation rate we had in June will be the peak...which is largely dependent on oil prices," he explained.

Source: (investing.com)

 

Why Teva Stock Trounced the Market on Friday

What happened
The stock of Teva Pharmaceutical Industries (TEVA 5.63%) closed out the trading week in style, popping by almost 6% on Friday. The generic-drug specialist was the subject of a recommendation upgrade from a noted financial institution, hence the share price rise.

So what
The institution in question is Bank of America. Analyst Jason Gerberry from the bank's securities unit raised his recommendation on Teva from neutral to buy. Along the way, he also increased his price target on the stock, to $13 per share from the previous $10. This new level implies nearly 22% upside from the latest closing price.
Gerberry's move is part of a broader reorganization of healthcare sector ratings. It also comes from last month's announcement that Teva had reached a tentative $4.25 billion settlement with a host of parties over its alleged role in the U.S. opioid crisis. 

In his latest research note, referring to earnings before interest, taxes, depreciation, and amortization (EBITDA), the analyst wrote that "we believe Teva is making material progress toward cleaning up its legal litigation overhangs which along with a solid 2023-24 new product cycle should be enough to shift the company back toward EBITDA growth."

Now what
Gerberry's points are well taken, and operating in an environment where the population is aging and will require more medical care (plus the inexpensive generic drugs Teva specializes in), the company is poised to do well. Investors were clearly buying this argument on Friday; the bulls are clearly returning to Teva stock.

Source: (fool.com)

 

European Stock Futures Lower; Asian PMI Data, German Retail Sales Weigh

European stock markets are expected to open lower Monday, handing back some of the previous session’s gains as data from Asia raised fresh doubts about the global economic recovery.
At 02:00 AM ET (0600 GMT), the DAX futures contract in Germany traded 0.7% lower, CAC 40 futures in France dropped 0.6%, and the FTSE 100 futures contract in the U.K. fell 0.5%.

Stock markets closed firmly higher in Europe on Friday, with the DAX and the CAC 40 both climbing over 1.5%, after Eurozone gross domestic product grew surprisingly strongly in the second quarter, defying expectations of a slowdown, especially after the U.S. had fallen into a technical recession earlier in the week.
However, this optimism has been diluted after a series of purchasing managers' indexes in Asia for July pointed to weakness in the region's largest economies.
South Korea's factory activity fell for the first time in almost two years, Japan saw its slowest growth in activity in 10 months, while in China the official measure of factory activity, released over the weekend, unexpectedly contracted in July amid fresh COVID-19 outbreaks.

There are more manufacturing PMI readings due in Europe later in the session, but German retail sales added to the negative tone, slumping 1.6% on the month in June, and a massive annual fall of 8.8%.
On the corporate front, quarter earnings continue to flood in, with HSBC (LON:HSBA) in the spotlight Monday after Europe’s biggest bank reported a 15% dip in first-half profit as credit loss provisions rose.
However, this fall was not as bad as feared and the lender raised its near-term return on tangible equity goal to at least 12% from 2023 onwards, and vowed to restore paying quarterly dividends next year.
Heineken (AS:HEIN), the world's second-largest brewer, posted higher-than-expected first-half earnings on Monday, but the company dropped its margin target for 2023 due to higher costs.
Oil prices fell Monday after the unexpected drop in Chinese factory activity raised concerns over slowing crude demand in the world’s largest importer.

Attention this week will be on the Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, which is set to meet on Wednesday to discuss future supply.
By 02:00 AM ET, U.S. crude futures traded 1.2% lower at $97.47 a barrel, while the Brent contract fell 0.8% to $103.18.
Additionally, gold futures rose 0.3% to $1,776.30/oz, while EUR/USD traded 0.1% higher at 1.0221.

Source: (investing.com)

 

Fed continues to turn the interest rate screw - Is recession inevitable?

The unusually high interest rate hike did not come as a surprise - but it is certainly remarkable. The U.S. central bankers are trying with all their might to get inflation under control.

The U.S. Federal Reserve is fighting galloping inflation with all its might. For the second time in a row, the Fed raised its key interest rate on Wednesday by 0.75 percentage points. Fed Chairman Jerome Powell hinted at further increases of this magnitude. In the world's largest economy, fears of an economic downturn are thus growing at the same time. "I don't think the U.S. is in a recession right now," Powell appeased. But somewhat slower growth is necessary, he said.

The Fed is thus taking a much more aggressive approach to inflation than the European Central Bank (ECB), which raised interest rates in July for the first time in 11 years. The increase in the 19-member currency area was surprisingly strong at half a percentage point. However, critics accuse the ECB of having initiated the turnaround in interest rates too late. Inflation in the euro zone has been rising to record levels for months.
At the same time, the economic outlook in Europe has deteriorated significantly as a result of the Russian attack on Ukraine. If the ECB raises interest rates too quickly in this environment, this could become a burden, especially for highly indebted countries in southern Europe. Europe's monetary guardians, like the U.S. Federal Reserve, are thus faced with a balancing act.

The estimate of the gross domestic product in the USA for the second quarter on Thursday is now eagerly awaited. The economy shrank surprisingly in the winter. There are many indications that economic output has now started to decline again. If the economy shrinks two quarters in a row to the previous quarter, economists speak of a "technical recession". Powell cautioned that the new economic growth figures should be taken with a grain of salt. In his view, a recession is not inevitable.
The White House is also trying not to set the upcoming estimate too high. There are many factors that need to be taken into account, stressed Karine Jean-Pierre, spokeswoman for U.S. President Joe Biden. She referred, for example, to the strong labor market. The unemployment rate in the U.S. is at a similarly low level as before the outbreak of the pandemic in February 2020. Biden likes to boast about these values - at the same time, his approval ratings are suffering from rising consumer prices.

"It's not the president who caused the inflation. There are also external factors that have led us to where we are today," Jean-Pierre stressed, referring for example to energy prices and supply chain problems due to the Corona lockdowns in China. At 9.1 percent, the inflation rate in the U.S. is the highest it has been in about four decades. This is a far cry from the 2 percent target set by the Fed. As a result, central bankers are relying on a tight monetary policy - and could stall the upswing in the process.

The current interest rate step is the fourth increase this year. It was only in June that the Fed raised the key interest rate by 0.75 points. Increases in the key interest rate make loans more expensive and slow down demand. That helps bring down inflation, but it also weakens economic growth.

"If we don't get a handle on it now, it just raises the cost of dealing with it later," Powell warned, referring to inflation. "We don't want a recession, and we don't think we have to have one. We believe there's a way to bring inflation down while maintaining a strong labor market."
That probably won't work entirely without pain. Smaller companies in particular are likely to suffer from higher interest rates. They have lower cash flow and are more likely to rely on credit. On the stock markets, however, relief rather prevailed. Some of Powell's statements encouraged investors despite the high interest rate step - for example, that the Fed chief stressed that he would take a fresh look at developments from meeting to meeting. Some financial market players apparently interpreted this as a slight softening of the previously restrictive choice of words. The next decision is due in September.

Source: (wiwo.de)

 

Shares Europe close: High gas prices keep stock markets in check

Rising energy prices have spoiled investors' appetite for stocks on Tuesday. The EuroStoxx 50, the leading index for the euro zone, fell 0.80 percent to 3575.36 points. In addition, the signs continue to point to rising interest rates, which could reduce corporate profits. On Wednesday, the U.S. Federal Reserve Fed will in all likelihood raise key interest rates sharply for a second time.

In the afternoon, the price of a megawatt-hour of natural gas for August delivery rose more than 13 percent. "Rising gas prices are weighing on European markets," wrote analyst Michael Hewson of trading firm CMC Markets. He pointed out that Russia's Gazprom could cut gas supplies through the Nord Stream 1 pipeline to just 20 percent of capacity. "That weighs on the economic outlook for Europe as we head into the winter months," Hewson said.

France's Cac 40 closed 0.42 percent lower at 6211.45 points. The FTSE 100 exited trading at 7306.28 points, virtually unchanged from the previous day. The London stock market barometer received support from gains in oil and gas producers such as Shell , BP and Glencore

Source: (onvista.de)

 

Fed, tech earnings, GDP data: What to know ahead of the busiest week of the year

A jam-packed week of market-moving developments awaits traders in the coming days, headlined by the Fed, tech earnings, and key economic data.
The Federal Reserve's latest policy meeting is set to take place this coming Tuesday and Wednesday, July 26-27, with the central bank expected to raise interest rates another 75 basis points.
On the earnings side, some of the S&P 500’s most heavily-weighted components — including Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (FB), Apple (AAPL), and Amazon (AMZN) — are among more than 170 companies scheduled to report second-quarter results through Friday.
Also in the spotlight will be Thursday's advance estimate of second quarter GDP as market participants continue to debate whether a recession is already underway. Economists expect this report to show the U.S. economy grew at an annualized pace of 0.5% last quarter, according to estimates from Bloomberg.

All three major U.S. indexes logged gains last week after broad-based advances across sectors. On Tuesday, 98% of stocks in the benchmark S&P 500 advanced, the most since December 26, 2018, the first trading day after the market bottom that occurred on December 24, 2018, according to data from LPL Financial.
Recent gains have pushed up the index by roughly 6% since June 16, stoking optimism among some investors that the worst of the recent market downturn is over.
“While breadth has been rather unimpressive during the market’s rally since the June lows, days like Tuesday are exactly what we are looking for, and can go a long way towards changing the character of this market,” LPL strategist Scott Brown said in a note. “To be clear, the S&P 500 is not out of the woods yet.”
Tuesday pushed the index to a close above the 50-day moving average for the first time since April 20, but it remained just short of the late-June intraday highs, Brown pointed out. If the Federal Reserve proceeds with hiking rates three quarters of a percentage point later this week, the Federal funds rate will have moved from near 0% less than five months ago to a range of 2.25%-2.5% — a level in line with most officials’ estimates of the long-run neutral.

“The Fed has told us they’re unlikely to let up on the brakes until they see a convincing shift in the trajectory of monthly inflation readings that would signal progress towards the Fed’s 2% target,” PGIM Fixed Income lead economist Ellen Gaske said in emailed comments. “We expect Powell will likely reiterate that message at his post-meeting press conference.” Federal Reserve Chair Jerome Powell is set to deliver remarks at 2:30 p.m. ET Wednesday, shortly after the U.S. central bank’s policy decision comes out at 2:00 p.m. ET.
“We suspect it’s likely too soon for the Fed to convey a much more forward-looking point of view, as the most recent inflation readings still showed high and widespread price pressures,” Gaske said. “But with each additional hike from here, the lagged effects of the Fed’s tightening measures will be increasingly important to consider.”Last month, U.S. consumer prices again accelerated at the fastest annual pace since November 1981. The Bureau of Labor Statistics' Consumer Price Index (CPI) reflected a year-over-year increase of 9.1% in June’s reading, marking the highest print of the inflation cycle.

Economists at Goldman Sachs said in a note last week that inflation expectations have notably softened since the FOMC last met in June, referencing downward revisions to the University of Michigan’s final read on 5-10 year inflation expectations, a decline in the survey’s preliminary July figure, and a “material” downtrend in market-based measures of inflation. “This softening of inflation expectations is one reason why we expect the FOMC will not accelerate the near-term hiking pace and will deliver a 75bp hike at the July FOMC meeting,” Goldman economists led by Jan Hatzius said. In addition to the Fed and earnings, investors will closely watch the government’s first estimate of gross domestic product – the broadest measure of economic activity — for the second quarter, set for release Thursday morning.
The Atlanta Federal Reserve’s latest GDPNow estimate for Q2 GDP on July 19, showed the economy likely shrank 1.6% last quarter. If realized, this decline would mark the second-consecutive quarter of negative economic growth and affirm to some strategists that the economy has entered a recession.

According to data from Bloomberg, Wall Street economists expect GDP grew at an annualized pace of 0.5% last quarter.On the earnings front, results from the mega-caps will be closely watched, though hundreds of other names will draw investor attention during one of the busiest weeks for corporate results of the year. In addition to performance for the most recent three-month periods, remarks from tech heavyweights on hiring plans or other adjustments to their outlooks related to macroeconomic headwinds will be closely tracked.

In recent weeks, Apple, Microsoft, Google, and Meta have all said they would scale back on hiring across certain areas.
According to FactSet Research, 21% of companies in the S&P 500 have reported second-quarter earnings through Friday, with only 68% presenting actual earnings per share above estimates — below the five-year average of 77%. Any earnings beats have also, in aggregate, been only 3.6% above estimates, less than half of the five-year average of 8.8%.


Source: (finance.yahoo.com)

Author: Alexandra Semenova/ Published by: Christian Walter

 

2 cheap semiconductor stocks that pay growing dividends

Texas Instruments, Intel and Applied Materials play an important role in the global chip industry.
The semiconductor industry is constantly evolving to make chips smaller and more powerful. But in today's connected world, the demand for chips has expanded beyond consumer electronics to automobiles, industrial machinery and virtually every industry. The shift from mechanical processes to automation requires more chips. That's why semiconductor stocks are worth a look amid the general stock market sell-off.
Texas Instruments (TXN 1.70%), Intel (INTC 2.41%) and Applied Materials (AMAT 3.05%) are three particularly attractive semiconductor stocks to buy now. Here are the reasons why.

A low-cost way to make money on microchips
Scott Levine (Texas Instruments): If you're like many investors, you've had some sleepless nights lately because you fear a prolonged market downturn. While some are bolstering their portfolios with gold and other safe-haven assets, others are turning to dividend machine stocks like semiconductor maker Texas Instruments - a stock that currently offers an attractive forward yield of 3%.

A cursory look at the stock's valuation may make some cringe, given its price-to-sales ratio of 7.6, considering that the S&P 500's P/E ratio is 2.5. However, dig a little deeper and you'll find that this is a discount to TI's five-year average revenue multiple of 8.3 - but you shouldn't conclude that the stock is now a bargain based on that valuation alone.

Let's look at how the shares are valued in terms of cash flow. Currently, the shares are valued at 16 times cash flow from operations, which is a discount to the five-year average cash flow multiple of 19.3. In addition, Texas Instruments shares trade at 17.7 times trailing earnings, a notable discount to the five-year average P/E multiple of 24.2.

As for the dividend, income investors will certainly welcome management's commitment to rewarding shareholders. For 18 consecutive years - from 2004 to 2021 - Texas Instruments has grown its dividend at a compound annual growth rate of 25%. While there is no guarantee that the company will increase its payout at the same rate in future years, the dividend growth demonstrates management's commitment to shareholders. Still, management has not sacrificed the company's financial health to satisfy shareholders with its rising dividend: Over the past 10 years, Texas Instruments has averaged a conservative 53.3% payout ratio.


A high-yield blue-chip dividend stock on the verge of a turnaround
Daniel Foelber (Intel): Intel stock has lost its luster in recent years. Due to a lack of innovation, the company lost market share to Advanced Micro Devices and other competitors. In many ways, the stock deserved to fall. But looking ahead, buying shares now could be a great turnaround opportunity.
Intel made headlines in January when it announced a $20 billion investment in two chip fabs in Ohio. However, the company then announced in late June that the mega-project could be delayed due to the status of the CHIPS for America Act, a bill designed to encourage domestic chip production to create jobs and free the U.S. from chip imports.

Regardless of the timing of the project, the semiconductor industry has had a tailwind for several decades. The growing need for domestic production is another green light for Intel to expand.
With a price-to-earnings ratio of just 6.4 and a current dividend yield of 3.9%, Intel looks like a great source of passive income, but also offers upside potential if the company can turn its business around.

Source: (fool.com)

 

American Airlines expects to report first quarterly profit since 2019

American Airlines Group Inc expects to report its first pretax quarterly profit since the onset of the pandemic as booming travel demand helps it offset mounting costs, the carrier said on Tuesday.
Major U.S. airlines are poised to post their strongest earnings starting Wednesday, helped by a surge in bookings driven by pent-up demand even as they grapple with higher jet fuel costs and labor shortages.

The carrier expects total revenue per available seat mile to be up about 22.5% amid a lower-than-planned capacity, as its pricing power gains momentum.
"American Airlines' overall guidance looks modestly positive, with revenue stronger than expected, even though ex-fuel seat mile cost and jet fuel kerosene expense pressure look a little worse than expected," said Citi analyst Stephen Trent

The Fort Worth, Texas-based company expects fuel expenses to average between $4.00 and $4.05 per gallon compared with its previous forecast of $3.92 to $3.97 per gallon.
Revenue in the quarter is expected to rise by about 12% to 13.39 billion from the same period in 2019. The company had earlier forecast second-quarter revenue between 11% and 13%.

The carrier expects to earn a pre-tax income of $585 million in the quarter.

Source: (finance.yahoo.com)

 

Norwegian Cruise Line (NCLH) Outpaces Stock Market Gains: What You Should Know

Norwegian Cruise Line (NCLH) closed at $11.33 in the latest trading session, marking a +1.89% move from the prior day. This change outpaced the S&P 500's 1.06% gain on the day. Meanwhile, the Dow gained 1.05%, and the Nasdaq, a tech-heavy index, added 0.4%.

Prior to today's trading, shares of the cruise operator had lost 30.85% over the past month. This has lagged the Consumer Discretionary sector's loss of 11.74% and the S&P 500's loss of 8.3% in that time.

Wall Street will be looking for positivity from Norwegian Cruise Line as it approaches its next earnings report date. On that day, Norwegian Cruise Line is projected to report earnings of -$1.74 per share, which would represent year-over-year growth of 9.84%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.26 billion, up 28827.62% from the year-ago period.

NCLH's full-year Zacks Consensus Estimates are calling for earnings of -$2.17 per share and revenue of $5.39 billion. These results would represent year-over-year changes of +73.11% and +731.74%, respectively.

Any recent changes to analyst estimates for Norwegian Cruise Line should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.94% lower. Norwegian Cruise Line is holding a Zacks Rank of #3 (Hold) right now.

The Leisure and Recreation Services industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 144, putting it in the bottom 44% of all 250+ industries.

Source: (finance.yahoo.com)
Author: Zacks Equity Research/ Published by: Christian Walter

 

Where Will Magnite Be in 5 Years?

The ad tech company still has a bright future.

Magnite (MGNI -1.57%) was formed in April 2020 from the merger of two ad tech companies, Rubicon Project and Telaria. On its first day as a merged company, Magnite stock opened at $5.47 per share.
But in February of this year, during the Reddit-triggered rally in meme and growth stocks, the stock shot to an all-time high of $61.80. Today, shares trade at about $10 a share. That wild ride made Magnite seem dangerously volatile, but could it stabilize and continue to rise over the next five years?


What does Magnite do?
Magnite's original merger made it the world's largest independent sell-side platform (SSP) for digital ads. SSPs help publishers and digital media owners manage and sell their own ad inventory. They are at the other end of the ad supply chain than demand-side platforms (DSPs) such as The Trade Desk (TTD 4.25%), which allow trade desks, ad agencies and advertisers to bid on ad inventory and manage their ad campaigns.
Magnite generates the majority of its revenue from the desktop and mobile advertising markets. However, most of its growth comes from the connected TV (CTV) market, which is benefiting from the secular growth of ad-supported streaming video services and the extinction of linear TV platforms.
After the initial merger, Magnite acquired two more companies - SpotX and SpringServe - to further expand its CTV business. Earlier this year, Magnite also bought Carbon to gain more monetization tools for publishers.
How quickly has Magnite grown?
Magnite's formation and expansion have created a gap between reported and pro forma revenues, which normalize year-over-year comparisons for acquisitions. Magnite also measures its underlying growth by removing traffic acquisition costs (ex-TAC) from its revenues.
Therefore, to measure Magnite's true growth rates, investors should look at its pro forma "ex-TAC" revenues instead of its reported Generally Accepted Accounting Principles (GAAP) numbers.
Magnite generated 34% of its ex-TAC revenue from its CTV business in 2021. Another 39% came from mobile advertising and the remaining 27% from desktop advertising. However, growth in Magnite's CTV business has cooled in the last two quarters as supply chain challenges and other macroeconomic factors have hurt ad buys in certain sectors.
This slowdown spooked investors, as bulls had viewed Magnite as a promising long-term investment in the FTV advertising market.

Where will Magnite be in five years?
Last September, Magnite set some ambitious long-term goals during an Investor Day presentation. The company claimed it could achieve annual organic revenue growth of more than 25% over the next few years while maintaining an adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) margin of 35% to 40% - compared with adjusted EBITDA margins of 20% in 2020 and 36% in 2021.
Over the next five-plus years, Magnite believes it will process $15 billion to $20 billion in annual ad spend, compared to "several billion" dollars today. In addition, Magnite expects the overall CTV advertising market to grow more than fivefold by the end of that period, and its share of that growing pie to increase from about 20% to 25% in 2021 to more than 30%.
At the moment, analysts' expectations for the next three years are somewhat less optimistic than Magnite's rosy long-term forecasts. However, they also suggest that the adjusted EBITDA margin will be within the target range of 35% to 40%.
All of these estimates should be taken with a grain of salt, as advertising spending will inevitably decline in a new recession. But at a share price of $10, Magnite is currently trading at just seven times this year's adjusted EBITDA.
By comparison, The Trade Desk - which is expected to grow its revenue and adjusted EBITDA by 33% and 22%, respectively, this year - trades at 36 times that adjusted EBITDA estimate. We could therefore easily argue that Magnite deserves a much higher valuation.
If Magnite's adjusted EBITDA is in line with analysts' expectations through 2024, and the stock trades at a more reasonable valuation of 14 times projected adjusted EBITDA, Magnite's share price could triple to about $30 per share. If the company maintains this valuation and its adjusted EBITDA continues to grow at 20% over the following two years, the share price could easily reach the low $40s.


Source: (fool.com)

Author: Leo Sun/ Published by: Christian Walter

 

ChargePoint Stock Is Still a Great Pick for Long-Term Investors

Oil companies are not the only firms that are benefiting tremendously from high petroleum prices. The growth of America’s electric-vehicle (EV) sector is also accelerating rapidly due to the elevated gasoline prices in the country. ChargePoint (NYSE:CHPT) stock is extremely well-positioned to benefit from this situation over the long-term, making it a great pick for long-term investors.


High Gasoline Prices and U.S. EV Sales
The combination of elevated gasoline prices and the increased acceptance of EVs in America has jump-started adoption of EVs in the U.S. Another factor contributing to EV adoption is the fact that automakers with well-established reputations in America, including Ford (NYSE:F), Hyundai (OTCMKTS:HYMTF) and GM (NYSE:GM) have released multiple EV models.
In the first quarter, registrations of EVs soared 60% year-over-year in the U.S. The jump caused Car and Driver to assert that America’s “EV acceptance may have turned some important but invisible corner recently.”

Huge Demand for EV Chargers and Federal Help
In an April 2022 report, consulting firm McKinsey notes that the U.S. needs many more chargers to support President Joe Biden’s administration goals when it comes to EVs, while the Bipartisan Infrastructure Law has appropriated $7.5 billion to build an additional 500,000 chargers.
Even more encouragingly for ChargePoint, McKinsey estimates that if the administration’s 2030 goal is met, “America would require 1.2 million public EV chargers and 28 million private EV chargers by that year.” In other words, the firm believes that the demand for EV chargers will grow very rapidly over the next 7.5 years.

With more public chargers in the U.S. than any other company, a first-mover advantage in the space and $540 million of cash at the end of Q1, ChargePoint is very well-positioned to benefit both from the funds that will come from Washington to build new EV chargers and the huge demand for EV chargers that’s building.

ChargePoint’s Results Have Been Good and Will Get Better
In the first quarter, the company’s revenue soared 102% year-over-year to $81.6 million as it obtained more than 1,000 additional customers in Q1. For Q2, the company expects its revenue to jump to “$96 million to $106 million.” And for all of the current year, ChargePoint reiterated its previous revenue outlook of between $450 million and $500 million.
ChargePoint’s Q1 loss from operations was $89.8 million, well below the $46.6 million that it lost during the same period a year earlier.

But supply chain issues, which should clear up as global supply chains untangle, negatively impacted the company’s profitability. Moreover, since ChargePoint’s gross profit came in at a fairly healthy $12.1 million, as the company continues to rapidly grow, its bottom line should surge in the long-term.

In the coming months and years, the company’s rapid growth amid strong EV adoption and improving profitability should greatly boost CHPT stock.

Source: (finance.yahoo.com)
Author: Larry Ramer/ Published by: Christian Walter

 

UPDATE 1-Verizon, AT&T agree to delay some 5G deployment until mid-2023

WASHINGTON, June 17 (Reuters) - The Federal Aviation Administration said Friday that Verizon Communications and AT&T have voluntarily agreed to delay some C-Band 5G usage until July 2023 as air carriers work to retrofit airplanes to ensure they will not face interference.

The two carriers agreed in January to delay through July 5 switching on some wireless towers and depowering others near airports. Verizon said Friday the new agreement will allow it to "lift the voluntary limitations on our 5G network deployment around airports in a staged approach over the coming months meaning even more consumers and businesses will benefit from the tremendous capabilities of 5G technology."

AT&T said with the FAA it had "developed a more tailored approach to controlling signal strength around runways that allows us to activate more towers and increase signal strength." AT&T added that it had voluntarily "chosen in good faith to implement these more tailored precautionary measures so that airlines have additional time to retrofit equipment."

Concerns that the 5G service could interfere with airplane altimeters, which give data on a plane's height above the ground and are crucial for bad-weather landing, led to disruptions at some U.S. airports earlier this year.

In recent months, the Federal Aviation Administration has been urging airlines to complete retrofits of some airplane radio altimeters.

Acting FAA Administrator Billy Nolen on Wednesday urged the chief executives of major U.S. airlines to move quickly to address risks from a 5G wireless rollout by installing filters on radio altimeters, in a bid to avoid potential disruptions at key airports from next month.

Airlines for America, an industry trade group representing American Airlines, Delta Air Lines, United Airlines and others, said at an FAA meeting Friday they learned "the vast majority" of members fleet of 4,800 total aircraft "would need to be retrofitted by July 2023" and raised questions if that is feasible. "Given that the FAA has not even approved solutions nor have manufacturers manufactured these products for most of this fleet, it is not at all clear that carriers can meet what appears to be an arbitrary deadline."

The FAA said Friday "filters and replacement units for the mainline commercial fleet should be available on a schedule that would permit the work to be largely completed by July 2023. After that time, the wireless companies expect to operate their networks in urban areas with minimal restrictions." Airlines CEOs on Jan. 17 had warned of an impending "catastrophic" aviation crisis that could have grounded almost all traffic because of the 5G deployment.

Source: (finance.yahoo.com)

Author: David Shepardson/ Published by: Christian Walter

 

Musk: Tesla without FSD solution basically worth nothing, young electric car companies threatened with bankruptcy

Once again, Tesla CEO Elon Musk, who avoids contact with official media, gave an hour-long interview to some of his fans. After the first one, the second part of it was also published this week, with a third to follow. Even other followers are starting to get bored with this, however, because these meetings have a tendency to turn into audiences in which the Tesla boss tells what he wants in detail and without questioning, not for the first time. So far, the latest questioning has also included a lot of old stuff. But Musk was remarkably skeptical with an eye toward other young electric car companies - and Tesla's stock market value if autonomous driving doesn't pan out.

Lucid and Rivian at risk, according to Musk.

Musk's cautionary word on other electric car startups specifically referenced Rivian and Lucid, both of which recently launched their R1T pickup and Air sedan, respectively, and are currently losing money on every car they sell. It was no different for Tesla during its multi-year startup phase. But looking at even younger competitors, Musk now warned that if things don't change significantly there, they will go broke. "Their path leads to insolvency," the Tesla CEO declared.

For the blog Electrek, that's technically true, but still unfair in a way. In fact, neither Rivian nor Lucid are currently making money, which would have to change at some point, but that was part of the plan at this stage of their development. Like Tesla before them, the startups would have the opportunity to cut costs as production ramps up before their reserves are depleted. Invoking imminent doom here therefore sets the wrong tone, he said. After all, Tesla itself had been predicted to go bankrupt soon for years, which greatly angered Musk, Electrek writes.

However, the Tesla boss did not deny Rivian and Lucid every chance of getting out of the loss zone. His bankruptcy forecast only applied in the event that they could not change their course, Musk qualified, which he demonstrated with his hand falling as a plane on the desk in front of him (see photo above). But he said he hoped the two companies would do something about it in time. Otherwise, they would face insolvency, as in history all automakers in the U.S. except Ford and Tesla, the CEO said, reminding once again that the assembly line pioneer and his own company are rare exceptions in this regard.

Tesla value to be based on FSD solution

But he was also cautionary about Tesla in the interview, at least in terms of stock market value. For the most part, the company is focused on "solving Full Self-Driving," he explained. That term is more or less synonymous with autonomous driving, but at Tesla, abbreviated as FSD, it also stands for both the current beta software for the Autopilot system and its computer and the option you have to buy to use all its features. Full Self-Driving is critical, Musk added after thinking about it for a moment. Ultimately, he said, it makes the difference between Tesla being worth a lot and basically nothing.

This likely referred to market capitalization and has also been heard from Musk before, but not in this drastic form: Compared to robotaxis and FSD, everything else pales in comparison, he explained in the conference call on the business figures for the end of 2021, refusing to give an analyst information on how Tesla plans to drastically increase its electric car production by 2024 on this basis. He did not say, however, that Tesla has no value without an FSD solution - although the "practically" or "in principle" ("basically") in his current statement could, of course, be meant relative to the enormous value Musk sees autonomy software creating.

Source: (teslamag.de)

 

The 2 Best Robinhood Stocks to Buy Now For Under $20

Palantir (NYSE:PLTR) was one of the more controversial companies to go public in the last two years. One reason was the way it went public through a direct listing. Another reason is the company’s founder Peter Thiel is a controversial figure. And some of the company’s largest clients are in the U.S. government, specifically the defense industry.

However, the company has been consistently increasing the number of commercial clients on its roster. And in the company’s most recent earnings report the company posted a 54% year-over-year revenue increase in its commercial business. Plus, it continues to add clients within the government.

That being said, PLTR stock is now trading below its direct listing price. I’ve previously posed the question, what more does Palantir have to do? It could be that retail investors are beginning to ask the same question.

SoFi Technologies (NASDAQ:SOFI) is down 57% for the year. And for investors who bought SOFI stock at its 52-week high, the loss is even greater. SOFI entered the market at the height of the fintech bubble. However, investors are struggling to decide if the fintech firm represents a better alternative or is it just one of many.

One person who is placing his bets on SoFi being the former is its chief executive officer, Anthony Noto. He’s been buying shares with regularity. In fact, his most recent purchase was his 12th buy in the last 12 months. This is nearly always a bullish sign. Remember there are many reasons for insiders to sell a stock, but they typically only buy for one reason. That is, they believe the stock is undervalued. And at least one analyst shares that opinion. SoFi received a bullish upgrade from Piper Sandler.


Source: (finance.yahoo.com)

Author: Chris Markoch/ Published by: Christian Walter

 

Inflation hits 40-year high as CPI rises 8.6% in May

U.S. consumer prices accelerated in May at the fastest rate since 1981, as Americans grapple with a surge in the cost of gas, food, and shelter, data showed Friday.
The Bureau of Labor Statistics' May Consumer Price Index (CPI) showed a year-over-year increase of 8.6% last month, up from 8.3% in April. Economists were expecting an 8.3% increase in May, according to estimates compiled by Bloomberg.

On a month-over-month basis, the broadest measure of inflation climbed 1.0%, compared to 0.3% in April. "Core" inflation, which strips out the more volatile costs of food and gas, rose 6% over the prior year in May, more than the 5.9% that was expected.

The biggest contributors to the latest jump in inflation were shelter, gasoline, and food, according to the BLS. The energy index rose 3.9% month-on-month in May, with the gasoline index rising 4.1%. Compared to the prior year, energy prices in May were up 34.6%, the most since September 2005.

Meanwhile, the food index rose 1.2% from April to May and 10.1% over the prior year, the largest jump since March 1981.

The cost of shelter rose 0.6% in May when compared to the prior month, the largest jump since March 2004. Owners' equivalent rent, a component of the shelter index, rose 0.6% in May, the most since August 1990.

Also driving the index higher were airline fares amid a surge in fuel prices and pent-up demand for travel as COVID restrictions ease. The price of airline fares rose 12.6% in May, though this marked a slight moderation from April's 18.6% increase.

“The increases were nearly ubiquitous – just no place to hide," Bankrate Chief Financial Analyst Greg McBride said. “With food, energy, and shelter prices continuing to escalate at the fastest pace in decades, any relief for household budgets remains elusive.”

Beyond serving as a gauge of the costs everyday Americans shell out for groceries, gas, housing and other goods and services, May’s consumer price index comes just before the Federal Reserve is poised to further ramp up interest rates at its policy-setting meeting next week.

Source: (finance.yahoo.com)

 

Do Options Traders Know Something About Lyft (LYFT) Stock We Don't?

Investors in Lyft, Inc. LYFT need to pay close attention to the stock based on moves in the options market lately. That is because the Jun 10, 2022 $11.00 Call had some of the highest implied volatility of all equity options today.

What do the Analysts Think?

Clearly, options traders are pricing in a big move for Lyft shares, but what is the fundamental picture for the company? Currently, Lyft is a Zacks Rank #3 (Hold) in the Internet - Services industry that ranks in Bottom 34% of our Zacks Industry Rank. Over the last 60 days, no analysts have increased their earnings estimates for the current quarter, while five have revised their estimates downward. The net effect has taken our Zacks Consensus Estimate for the current quarter from earnings of 12 cents per share to a loss of 6 cents in that period.

Given the way analysts feel about Lyft right now, this huge implied volatility could mean there’s a trade developing. Often times, options traders look for options with high levels of implied volatility to sell premium. This is a strategy many seasoned traders use because it captures decay. At expiration, the hope for these traders is that the underlying stock does not move as much as originally expected.

Source: (finance.yahoo.com)
Author: Zacks Equity Research / Published by: Christian Walter

 

IBM (IBM) grows faster than the stock market: what you should know

IBM (IBM) closed the last trading session at $142.88, up +1.2% from the previous session. This change outpaced the S&P 500's daily gain of 0.31%. At the same time, the Dow gained 0.05% and the tech-heavy Nasdaq rose 0.14%.

Prior to today, shares of the technology and consulting firm had gained 2.55% over the past month, outpacing the computer and technology sector's loss of 3.62% and the S&P 500's loss of 1.38% over the same period.

Wall Street will be waiting for positive signals from IBM ahead of its next earnings report. Analysts expect IBM to report earnings of $2.28 per share in that report. This would represent a 2.15% decline from a year ago. Our latest consensus estimate is for quarterly revenue of $15.06 billion, down 19.68% from the same period last year.

For the full year, the Zacks Consensus Estimates analysts expect earnings of $9.89 per share and revenue of $60.99 billion. These totals would represent year-over-year changes of +24.72% and -13.84%, respectively.

Investors are also likely to notice recent changes in analyst estimates for IBM. These recent revisions generally reflect evolving near-term business trends. Therefore, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe that these estimate revisions are directly related to the performance of stocks close to the team. The Zacks Rank was developed to take advantage of this phenomenon. This system accounts for these estimate revisions and provides a clear, actionable valuation model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has a proven, externally audited track record, with #1 ranked stocks having an average annual return of +25% since 1988. The Zacks Consensus EPS Estimate has been flat over the past month. IBM currently has a Zacks Rank of #3 (Hold).

In terms of valuation, IBM is currently trading at a forward P/E ratio of 14.28. This valuation represents a discount compared to the industry average forward P/E of 14.57.

We also see that IBM currently has a PEG ratio of 1.58. This popular ratio is similar to the widely known P/E ratio, except that the PEG ratio also takes into account the company's expected earnings growth rate. Computer - Integrated Systems stocks average a PEG ratio of 1.66 based on yesterday's closing prices.


Source: (finance.yahoo.com)
Author: Zacks Equity Research / Published by: Christian Walter

 

Interactive Brokers is now officially available at TradingView!

The day has finally come, and we’re excited to introduce the newly integrated TradingView partner —Interactive Brokers! The TradingView community had been waiting for this day for a long time, and we now have our first global multi-asset integration live on platform.

Interactive Brokers Group, Inc. was founded by current Chairman Thomas Peterffy in 1977. For over 40 years, Interactive Brokers has been known as the global leader in international asset trading, global research products, as well as low fees. Today, it has grown to become one of the biggest securities firms in the world with over $10 billion in consolidated equity capital. Interactive Brokers (IBKR) is publicly listed at NASDAQ and regulated in more than ten tier-1 jurisdictions, making it a reputable broker.

Interactive Brokers offers clients from over 200 countries and territories with access to 150 markets globally. IBKR provides direct access trade execution and clearing services to institutional and professional traders for a wide variety of electronically traded products including stocks, options, futures, currencies, bonds, gold, cryptocurrency, ETFs and mutual funds globally. Interactive Brokers Group and its affiliates execute an over 2 million trades per day.

Interactive Brokers’ commissions and fees are highly competitive and include the lowest margin trading rates within the industry. Additionally, IBKR provides access to international markets across 33 countries and 25 currencies and a broad range of investment products globally.

With our soft launch, investors will have the ability to trade futures and stocks, with more asset classes launching soon.

So, without further ado — open the TradingView trading panel, find the new IBKR icon, connect your trading account, and start your brand new experience on TradingView, which we will continue to improve upon for the entire TradingView community. 


Source: (tradingview.com)

 

UPDATE 3-Teva, Allergan reach $161.5 mln opioid settlement with West Virginia

May 25 (Reuters) - Teva Pharmaceutical Industries and AbbVie's Allergan unit reached a settlement worth $161.5 million to resolve claims the companies fueled an opioid epidemic in West Virginia, state attorney general Patrick Morrisey said on Wednesday.

The agreement is the largest state-negotiated settlement in West Virginia history, and consists of $134 million in cash plus the contribution of drugs used to treat opioid overdoses, Morrisey said at a news conference.

West Virginia had accused Teva and Allergan of deceiving prescribers about the risks of opioids when marketing their drugs for the treatment for chronic pain. The misleading marketing led to an increase in substance abuse and overdose deaths, according to West Virginia's complaint.

The settlement ended a trial that had been proceeding for two months in Kanawha County Circuit Court. The companies did not admit wrongdoing as part of the settlement.

The state's decision to press forward at trial helped it secure more money, Morrisey said.
"We took lot of risk to do the right thing, and it has paid off big for West Virginia," he added.

Teva said it will pay $83 million in cash and provide a 10-year supply of Narcan, a drug used to stop opioid overdoses, which the state valued at $27 million. Allergan said it will pay $51.2 million.

West Virginia has been hit particularly hard by opioid abuse and overdoses, with more than three times the national rate of overdose deaths in 2020, according to the U.S. Centers for Disease Control and Prevention.
West Virginia previously reached a $99 million settlement with Johnson & Johnson and a $26 million settlement with Endo International Plc. Endo settled before the trial began and J&J settled two weeks into the trial.

Israel-based Teva has been attempting to reach a nationwide settlement to resolve opioid lawsuits against the company, and has said it expects a deal by the end of the year.

The West Virginia settlement guarantees the state an additional payout if Teva and Allergan reach larger-than-expected settlements of their nationwide opioid liability, Morrisey said. That agreement would trigger if Teva and Allergan reach a nationwide deal worth more than $7.2 billion, he said.

More than 3,300 lawsuits have been filed against drugmakers, distributors and pharmacies over the U.S. public health crisis. J&J and the three largest U.S. drug distributors - AmerisourceBergen Corp, Cardinal Health Inc and McKesson Corp - previously reached final settlements worth $26 billion over their roles in the nationwide epidemic. (Reporting by Dietrich Knauth; Editing by Louise Heavens, Noeleen Walder and Bill Berkrot)


Source: (finance.yahoo.com)

Author: Dietrich Knauth/ Published by: Christian Walter

 

More than $18-million investment to strengthen research and innovation in Newfoundland and Labrador

Memorial University, IBM Canada (NYSE: IBM), the Government of Canada and the Government of Newfoundland and Labrador today announced the launch of two new initiatives – the Centre for Analytics, Informatics and Research (CAIR) and the Accelerated Analytics and Machine Learning (AAML) project.

Led by Memorial, the two initiatives will focus on innovation and research in such diverse fields as data science and astrophysics, genetic analysis, artificial intelligence, machine learning, image analysis and scientific computing.

CAIR will be equipped with powerful high-performance computers able to process huge amounts of complex data, leading to faster insights for projects such as AAML.

Memorial will receive a more than $18-million investment from the Government of Canada, through the Atlantic Canada Opportunities Agency (ACOA), and the Government of Newfoundland and Labrador, as jurisdictional partners, and private-sector partner IBM. This includes a $16-million, in-kind investment of hardware, software and staffing from IBM during a period of four years. IBM will also provide free development and cloud credits to early stage entrepreneurs and startup companies via the Startup with IBM program. ACOA is providing $1.4 million towards the two initiatives and the Government of Newfoundland and Labrador will contribute $1.35 million.

Working with Memorial, IBM will also help drive further economic development in the province by supporting skills growth via the IBM SkillsBuild program. The free digital training program helps learners develop valuable new skills and find jobs, regardless of their background or education. SkillsBuild provides learners with professional workplace readiness and technical skills and enables them to earn digital badges recognized by the market. Globally, IBM is committed to providing 30 million people with new skills needed for the jobs of tomorrow by 2030.

Source: (finance.yahoo.com)
Author: IBM / Published by: Christian Walter

 

Ford sells more shares of Rivian Automotive after vesting period ends

Ford Motor Co. sold more shares of Rivian Automotive Inc. on Friday, selling more shares of Rivian Automotive Inc. worth more than $400 million since the end of the lock-up period this week.

The U.S. auto giant sold 7 million Rivian shares Friday at $26.88 apiece, according to a report, reducing its stake in the company to nearly 87 million shares. The transaction follows Monday's sale of 8 million Rivian shares at $26.80 apiece after selling restrictions were lifted for certain insiders and investors.

Ford had invested $1.2 billion in Rivian and saw the value of its stake soar in the wake of the electric carmaker's stock market debut, the largest in the U.S. last year. Since then, however, Rivian's stock has crashed from a high of $172 in November to a low of $19.25 this week.

Ford called the stock sale "prudent," but would not say what the proceeds will be used for or whether the company plans to further reduce its stake.

"It is not uncommon for investors to take such an opportunity after a successful IPO," a Rivian spokesman said in a statement. "We remain focused on executing our vision to create a more sustainable future with electric vehicles and create long-term value for all of our current and future shareholders."

Dearborn, Michigan-based Ford makes its own electric pickup truck, the F150 Lightning, which is already seeing early success. Chief Executive Officer Jim Farley said in a Bloomberg interview in January, when asked about his company's stake in Rivian, that "everything is on the table."


Source: (finance.yahoo.com)

Author: Shiyin Chen / Published by: Christian Walter

 

BP makes $6.2 billion profit amid debate over windfall taxes

Despite a massive $24 billion writedown over its exposure to Russia, British oil giant BP and its industry peers are raking in money faster than they can pump dead dinosaurs out of the earth's crust.

The British oil giant made it rain this Tuesday when it reported an adjusted profit of $6.2 billion in the first quarter, up from $2.6 billion in the same period last year - beating analysts' expectations of $4.5 billion. The company now faces a delicate balancing act: returning excess value to investors while reassuring governments that it is not benefiting from the weakening economy.
BP has acknowledged the obvious, attributing its stellar results to "exceptional oil and gas trading." Energy prices, including crude, have spent much of the year flirting with their highest levels since the 2008 recession. At the same time, this is an extremely delicate moment to be making so much money in the UK energy sector.

British households are struggling with rising energy bills after the country's energy price cap was raised by 54% on April 1. Seriously, 54%. Resolution Foundation researchers warned that as many as five million English households could be living in fuel poverty, meaning they have to spend more than 10% of their income on energy. Meanwhile, governments in Europe have debated whether energy companies should be taxed for so-called "windfall profits," large sums of money generated by commodity price fluctuations that some say harm working people. Against this backdrop, BP was especially eager to make shareholders and attentive government officials feel that they were being listened to. Let's look at the details:
Unlike Italy, which plans to raise a windfall profits tax on energy companies from 10% to 25%, the British government has not introduced a windfall tax. Chancellor of the Exchequer Rishi Sunak said that could change if British energy companies don't repatriate enough of their profits to the country. BP has pledged to invest £18 billion in green energy and fossil fuel development in the U.K. by 2030, which could be enough to keep Sunak and his Cabinet colleagues in check.

To satisfy loyal shareholders who endured years of underperformance before the energy boom, BP is accelerating quarterly share buybacks to a value of $2.5 billion by the end of the second quarter, up from $1.6 billion in the first quarter. By reducing the number of shares on the market, the buybacks may increase the value of the remaining shares - a good thing for investors, who have already seen BP's stock rise nearly 14% this year.

Shrugged off by Russia: BP's $24 billion write-down to cover its withdrawal from Russia was by far the largest loss by a major oil company from its Russian operations. Rival Shell's write-down was a comparatively modest $5 billion, Total's was $4 billion, and Exxon's was $3.5 billion. Still, BP brushed aside the loss, saying it would not interfere with cash payouts to its investors.


Source: (fool.com)
Author: The Daily Upside / Published by: Christian Walter

 

Pfizer (NYSE:PFE) shareholders to receive higher dividend than last year

The board of directors of Pfizer Inc. (NYSE:PFE) has announced that it will increase its divi-dend to $0.40 on June 10. This brings the dividend yield to 3.2%, which shareholders will be pleased about.

Pfizer's payment has solid earnings coverage
If the payments are not sustainable, a high yield for a few years is not that important. However, prior to this announcement, Pfizer's dividend was well covered by both cash flow and earnings. This means that most of the company's revenue is used for its growth.
Next year's EPS is forecast to increase by 56.5%. If the dividend continues in line with recent trends, we estimate a payout ratio of 27%, which is in a range that convinces us about the sustainability of the dividend.


Pfizer has a solid track record
Even in its long history of paying dividends, the company's payouts have been remarkably stable. Since 2012, the first annual payment was $0.80, while the most recent full-year payment was $1.60. This means that the company has increased its distributions by about 7.2% annually during this period. The dividend has grown very well for a number of years and has provided shareholders with a nice income in their portfolios.


Dividend will likely continue to grow
Some investors will toy with the idea of buying some shares of the company based on its dividend history. Pfizer has impressed us with 28% annual EPS growth over the past five years. Earnings per share are growing at a solid pace, and the payout ratio is low, which we think is an ideal combination for a dividend stock, as the company can easily increase the dividend in the future.


Pfizer's dividend has potential
In summary, it is always positive when the dividend is increased, and we are particularly pleased with its overall sustainability. Earnings easily cover distributions, and the company generates ample cash. Considering all these factors, it is fair to say that this company has solid potential as a dividend stock.


Source: (finance.yahoo.com)

Author: Simply Wall St / Published by: Christian Walter

 

Acquisition for $44 billion: What does Musk make of Twitter?

The fact that tweeting king Elon Musk is buying up Twitter seems logical to many observers. Now people are wondering what the Tesla boss plans to do with the short message service.

Elon Musk buys the only moderately successful short message service Twitter for around 44 billion dollars. The social network has been lagging behind other platforms such as Facebook, Instagram and TikTok for years. While Facebook has almost two billion daily users, Twitter has just 230 million. Why is Musk so fond of the San Francisco-based service and what does he intend to do with the hitherto unprofitable platform?

Resilient financing model
What looked like an extremely unlikely deal just a few days ago has now become reality. Negotiations between Musk and the company's supervisory board had dragged on into the early hours of yesterday morning. The turning point in the negotiations was apparently that the 50-year-old was able to make a resilient financing commitment.

According to this, Musk will pay 54.20 dollars per share, which corresponds to a total of around 44 billion dollars. Musk wants to raise this huge sum with the help of financial services provider Morgan Stanley and other lenders, among others. They are contributing 13 billion in debt capital. Musk will finance a further 12.5 billion dollars by mortgaging his Tesla shares. Last but not least, he wants to raise another $21 billion from his cash assets.

Twitter as the ideal stage for Musk?
In Silicon Valley, people don't quite know yet whether to cheer or condemn the takeover. In the tech world, there is a general admiration for the 50-year-old, whose fortune is estimated at nearly $270 billion. At the same time, however, he represents a new type of CEO who wants to be much more than a mere corporate leader who dutifully reports to his shareholders every three months. Musk is pursuing a different goal: He wants to influence public discourse. For him, his companies are platforms for what is close to his heart. Twitter is the ideal stage for him here.

There is definitely a trend here: Silicon Valley investor Marc Andreesen controls the audio platform "Clubhouse," Amazon founder Jeff Bezos owns the newspaper "Washington Post," tech investor Peter Thiel supports political candidates on the right spectrum and is considered a confidant of former U.S. President Donald Trump.

What does Musk mean by freedom of speech?
Although he repeatedly emphasizes how important freedom of expression and democracy are to him: Very few people in the tech industry believe him. For many observers, the best proof is a tweet Musk sent out last week after learning that Microsoft founder Bill Gates had reduced his Tesla shares. Musk then tweeted an unflattering picture of Gates and wrote, "In case you want to lose a boner fast"
For many in the tech industry, such tweets from Musk are a badge of how little the future owner of Twitter understands about content moderation in an age of hate speech and fake news, as it is at other companies such as Facebook, Snap and YouTube.

Still many questions unclear
But what's next for Twitter's workforce? Still Group CEO Parag Agrawal has met this afternoon with part of the good 7500 Twitter employees and informed them about the latest development. There will be no layoffs, he stressed, according to participants. One comment Agrawal made, however, was eye-opening: once Musk's takeover is complete, they don't know what direction the company will go in.
Many employees are concerned that they will lose their jobs under the new owner or that the company could move its headquarters to Texas, as Musk had already done with automaker Tesla.
Musk also ventilated the idea of shutting down the company's headquarters in the middle of San Francisco, laying off employees and no longer paying salaries to the company's board members. This could save three million dollars a year. That the current CEO, Parag Agrawal will have to go seems assured. He does not trust the company's management team, Musk had publicly stated several times.

Coffee guessing from Musk tweets
Musk had raised more questions than he answered in recent weeks with his tweets about what he would do differently at Twitter. Several times he had declared that he wanted to transform the service into a global platform for free speech. He accused the 500 or so content moderators of interfering too often and too much. Most of the existing moderation guidelines, which prohibit threats of violence, harassment or spamming, he wants to abolish, Musk said.

Is "TheRealDonaldTrump" coming back?
Another question that kept coming up in the past few days: What will happen to former U.S. President Donald Trump's Twitter account? The had been blocked from the platform after the violent riots on January 6, 2021. Facebook has also blocked Trump.

Musk could have the Trump account reactivated, who had tried unsuccessfully several times in recent months to set up his own social media platform. Similar to Musk, Trump considers Twitter his mouthpiece, through which he had insulted and defamed people in the past. However, a return of Trump is not certain, if only because the person concerned had rejected exactly that in an interview in mid-April.

Analysts and Wall Street are concerned
Analysts have not burst into jubilation over the entry. They fear Musk could neglect his other companies. The 50-year-old is head of both carmaker Tesla and rocket company SpaceX. He also owns biotech company Neuralink and tunneling firm Boring Company.
Twitter will release its quarterly results on Thursday. There should be no queries from analysts and the press this time. The company has canceled the press conference as a precaution. Too much is currently in the vague for the former social media shooting star.

Source: (tagesschau.de)
Author: Marcus Schuler / Published by: Christian Walter

 

What Do Analysts Make of Plug Power’s Walmart Deal?

Investors liked the latest news coming out of Plug Power (PLUG) HQ on Tuesday. Specifically, the hydrogen specialist said that Walmart (WMT) has agreed on an option to buy up to 20 tpd (tons per day) of liquid green hydrogen.
The retail giant will use the hydrogen to power up to 9,500 material handling lift trucks spread across its U.S. distribution and fulfillment centers. The agreement is a continuation of an already existing relationship between the companies; the two have collaborated on the use of hydrogen-powered materials handling equipment for more than a decade and the agreement will go some way toward assisting Walmart meet its target of zero emissions by 2040.
Evercore’s James West calls the pact a “validation” of Plug’s green H2 production strategy.
“Plug Power continues to execute on its vision of a nation-wide and potentially global network of green H2 production facilities,” the analyst noted. “We expect additional, substantial, offtake agreements to be announced in the coming months which will further de-risk the company’s hydrogen production strategy.”

As a result, West maintains an Outperform (i.e. Buy) rating on PLUG shares, along with a $46 price target. At current valuation, he sees a 101% one-year upside for the shares.
With a goal of reaching 70 tons per day of green hydrogen production by the end of the year, BMO analyst Ameet Thakkar views the announcement as an “important, positive first step,” which should be followed by further off-take agreements of the company’s green hydrogen production.
The analyst thinks the deal might be an “early trial run” and sees the potential for Walmart to expand its green hydrogen supply with PLUG in the future.
However, before getting properly bullish, Thakkar thinks additional investigation of what the deal entails is required.
“Walmart's agreement is positive,” said the analyst, “but we are curious about what sort of pricing mechanics (index vs fixed) and other contractual terms that will allow investors to get more confidence around potential for PLUG to achieve its target 30% gross margins in fuel supply agreements such as this.”
As such, Thakkar sticks with a Market Perform (i.e. Hold) rating, backed by a $33 price target. Nevertheless, should that figure be met, investors are looking at one-year returns of 44%.

What does the rest of the Street make of PLUG’s prospects? 2 other analysts join Thakkar on the sidelines, but 7 others line up next to West, making the consensus view a Moderate Buy. The average price target sits somewhere between the two analysts’ projections; at $39.09, the figure represents 12-month gains of ~71%.


Source: (finance.yahoo.com)
Author: TipRanks / Published by: Christian Walter

 

3 Top Metaverse Stocks to Buy in April

These stocks could help investors make the most of this emerging tech trend. 

These stocks could help investors make the most of this emerging tech trend.
The metaverse is an emerging concept that is expected to explode thanks to its application in various fields - including gaming, education, work and entertainment - as it allows virtual avatars to interact with each other in a three-dimensional, digital world.
According to a third-party estimate, the global metaverse market could grow at a compound annual growth rate (CAGR) of 43% to $1.6 trillion by 2030. There are a number of ways people can benefit from this emerging opportunity.Roblox ( RBLX -3.64% ), Advanced Micro Devices ( AMD -2.62% ) and Qualcomm ( QCOM -1.82% ) are three companies that could benefit greatly from the Metaverse.

1. Roblox
The Metaverse is a 3D virtual world in which avatars of real people located in different places on Earth interact with each other. Metaverse users could attend a virtual concert or sporting event, or they could even study virtually. Roblox builds these 3D virtual worlds.Roblox has already built a huge base of users and developers who help the company take advantage of the Metaverse. The company had 55 million daily active users and 29 million developers creating virtual experiences on the platform as of February 2022. In addition, Roblox engaged its users on its platform for 41.4 billion hours last year, a 35% increase from 2020.
Roblox thus appears to be in a good position to capitalize on the growing demand for virtual worlds, which should accelerate the company's already impressive growth. The company's revenue grew 108% to $1.9 billion in 2021, and analysts expect that momentum to continue.
With Roblox stock now trading at 12 times sales, compared to last year's multiple of 36, now seems like a good time for investors to buy this potential Metaverse winner.

2. Advanced Micro Devices
Simultaneous delivery of Metaverse content, such as virtual worlds, to millions of users around the globe would put massive strain on data centers. It is believed that building the Metaverse would require data center infrastructure that does not yet exist to support constant high-bandwidth data transfers.
Advanced Micro Devices is one of the companies trying to solve this problem. Meta Platforms is building what it claims is the world's fastest supercomputer for machine learning and natural language processing to power the Metaverse. AMD will provide 4,000 of its Epyc server processors for Meta's supercomputer. The chipmaker has already shipped 1,520 Epyc processors for Meta's supercomputer, with the remainder to be deployed by mid-year.
AMD expects revenue to grow 31% to $21.5 billion in 2022, thanks to strength across its businesses. Even better, analysts expect annual earnings growth of 30% over the next five years. The addition of catalysts like the Metaverse could help accelerate AMD's growth and drive the stock higher over the long term.

3. Qualcomm
Qualcomm's Snapdragon processors are known for powering smartphones. By the end of 2021, the company had a 30% share of the smartphone application processor market. And now Qualcomm is pulling strings to ensure it remains one of the top players in the Metaverse with its chips for virtual reality (VR) and augmented reality (AR) headsets.
The partnership with Meta puts Qualcomm in a good position to capitalize on the growth of the AR/VR headset market, which is expected to grow rapidly over the long term. IDC estimates that 50 million headsets could ship in 2026, up from just over 10 million units last year. Qualcomm is expected to further strengthen its position in the headset market, as Meta's upcoming Oculus Quest 3 is expected to feature the chipmaker's Snapdragon XR3 processor.

Qualcomm's moves in the metaverse could help add another dimension to its already strong growth. The company reported a 30% year-over-year increase in revenue to $10.7 billion in the first quarter of fiscal 2022 (which ended Dec. 26, 2021) and a 49% increase in earnings per share to $3.23. Analysts expect Qualcomm to grow earnings by 15% annually over the next five years, although the company could do even better once catalysts like the Metaverse come into play.
All of this makes Qualcomm an enticing tech stock at the moment, as the company trades at just 16 times trailing earnings, making it much cheaper than the Nasdaq 100 multiple of 33.

Source: (fool.com)
Author: Harsh Chauhan / Published by: Christian Walter

 

Pure recession fear: This will be important for the Dax today

Recession or no recession - that is the question here: investors are currently puzzling over the outlook for the economy and stock market prices. "Continued higher prices as a result of the Ukraine war - not only for energy, but also for agricultural and industrial commodities - will dampen global growth and accelerate the downturn," warn experts at asset manager Jupiter. "We think a recession is almost certain in Europe and very likely in the U.S. in the longer term."
The U.S. bond market already sent corresponding signals in the old week: the two-year T-bonds yielded at times more than the ten-year. Experts see such an "inverse yield curve" as a strong indicator of an imminent downturn. The reason is investors' fear that the U.S. Federal Reserve will raise interest rates in its fight against inflation, plunging the economy into recession.

Benjamin Melman, chief investor at asset manager Edmond de Rothschild, is cautiously optimistic. To be sure, the Ukraine war and persistently high inflation are weighing on the stock market, he said. "Nevertheless, it should not be forgotten that the global recovery should continue even if there is a significant correction in growth in Europe."

Against this backdrop, investors will be carefully weighing every word of the minutes of the Federal Reserve's latest meeting, which are due to be released on Wednesday. In contrast, the start of the week is quiet. The Dax is currently valued at 14,470 points. From the Friday trading, the German share index goes with a plus of 0.2 percent and 14,447 points. Price impulses could trigger the publication of the German trade balance in the morning or the incoming orders of the U.S. industry in the afternoon. The Sentix economic index for Germany is also on the agenda. In addition, the Dax group Henkel invites shareholders to an online annual general meeting.

Source: (n-tv.de)
Author: NTV / Published by: Christian Walter

 

Can gold price tackle $2,000 next week? Here's how that can happen

After another solid week of gains, gold could be ready to take on the $2,000 an ounce level next week. But there are a few technical elements that need to come together for that to happen.

Gold was able to advance more than 1.3% on the week despite a massive surge in U.S. Treasury yields, triggered by markets betting on a more aggressive Federal Reserve. This comes after Fed Chair Jerome Powell signaled a possibility of 50-basis-point hikes at upcoming meetings in May and June.
On Friday, the 10-year rate jumped, hitting 2.503% on Friday — the highest level since May 2019. And April Comex gold futures were last at $1,957.00.
"Higher yields are typically negative for non-interest bearing gold, but for now, the ongoing divergence between the two asset classes highlights the market's newfound sensitivity to inflation and the need to buy any/all real assets (including gold) as a hedge," said MKS PAMP head of Metals Strategy Nicky Shiels.
There is also a growing concern that the yield curve will invert. The relationship analysts pay close attention to is the 2-year and 10-year Treasury yields.

"Typically, when you see an inversion of the yield curve, it projects a strong possibility of some kind of a recession further out. Markets are expecting to see weakness in the next two quarters. We already had one of the worst Januaries on record for equities. And gold has been making higher lows and higher highs. And it could push back up to $2,000," said Blue Line Futures chief market strategist Phillip Streible.
Inversion of the yield curve happens when long-term debt instruments have a lower yield than short-term debt instruments. And markets use this gauge to sometimes foreshadow a recession.

"We know that the yields curve is beginning to flatten. Rates continue to move higher. So far, there is no indication that the Fed is going to back off on rates. The market is talking about half-a-point moves at the next two meetings," RJO Futures senior market strategist Frank Cholly said.
There is a lot of debate around whether or not an inversion of the yield curve is a precursor to a recession. Still, the topic is definitely on everyone's minds as slower growth seems inevitable due to the Federal Reserve's aggressive monetary policy tightening.
"Once in a while, we'll see the curve starts to flatten. I am convinced yet that it is leading towards a recession. But I am concerned that the Fed may slam the brakes on growth a little too much if we do see continued rate hikes," Cholly told Kitco News.

However, markets might be pricing in too many rate hikes for this year, Streible pointed out. "The only thing the Fed can do is disappoint form here. It won't be able to raise rates in a weakening economic environment," he said.
The Fed is projecting seven rate hikes in 2022, but that number is likely to come down to five, Streible added.
For gold, this is a very constructive environment. "Gold is going to go higher next week. Gold is doing well against the yields. The number of rate hikes from here is limited. Rising yields are hitting their objectives at these levels. Gold should find some support," Streible told Kitco News.

And on top of the new safe-haven demand in light of the war in Ukraine, there is the inflation narrative that will continue to drive gold higher this spring.
The key level for gold to hit and sustain is the $1,957 an ounce, said Cholly. "I feel more bullish. Gold bounced up after hitting $1,900. We need to stay above $1,950. Once it is above $1,975, I start to feel encouraged again that we'll be above $2,000. We spent a week trading between $1,925-$1,950. The next level is $1,950-75 and then $2,000.”

Data to watch
Next week's two main data releases will be the U.S. Q4 GDP number and the employment report. Market projects see the GDP at 7.1% and for the U.S. economy to have added 488,000 jobs in March.
"The jobs numbers will be in focus, but while we know demand is incredibly strong, the issue is a lack of supply of workers to fill the vacancies available," said ING chief international economist James Knightley. "Like supply chain strains, a lack of suitable workers is holding back growth potential and putting up costs as wages get bid higher in a red hot jobs market."
Anything around 500,000 jobs for March would support expectations of a 50-basis-point rate hike in May, Knightley added.


Source: (kitco.com)
Author: Anna Golubova / Published by: Christian Walter


 

Schlumberger (SLB) Gains But Lags Market: What You Should Know

In the latest trading session, Schlumberger (SLB) closed at $39.73, marking a +0.56% move from the previous day. This move lagged the S&P 500's daily gain of 1.17%. At the same time, the Dow added 0.8%, and the tech-heavy Nasdaq gained 0.18%.

Heading into today, shares of the world's largest oilfield services company had lost 3.89% over the past month, lagging the Oils-Energy sector's gain of 4.63% and the S&P 500's gain of 0.88% in that time.

Wall Street will be looking for positivity from Schlumberger as it approaches its next earnings report date. The company is expected to report EPS of $0.34, up 61.9% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $6.04 billion, up 15.63% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.97 per share and revenue of $26.48 billion. These totals would mark changes of +53.91% and +15.5%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Schlumberger. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.82% lower within the past month. Schlumberger is currently a Zacks Rank #3 (Hold).

Digging into valuation, Schlumberger currently has a Forward P/E ratio of 20.03. For comparison, its industry has an average Forward P/E of 26.33, which means Schlumberger is trading at a discount to the group.
The Oil and Gas - Field Services industry is part of the Oils-Energy sector. This group has a Zacks Industry Rank of 102, putting it in the top 41% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.


Source: (finance.yahoo.com)
Author: Zacks Equity Research / Published by: Christian Walter

 

Uber Has an Answer to High Gas Prices (You Won’t Like It)

Uber Technologies has come up with a temporary solution to help its drivers and couriers relieve the impact of high gasoline prices.

The Russia invasion of Ukraine has led to a significant spike in gasoline prices that has raised costs for anyone using an automobile, including truckers, delivery drivers, commuters and ride-sharing services.
Inflation had already increased the cost of doing business for everyone, but the recent escalation of gas prices over the past two weeks compounds the problem even more.The average price of a gallon of gas on Sunday was $4.33, according to AAA data, which is 11.4% higher than last week, 19.7% higher than the price last month and 34.8% more than last year.

Businesses are starting to pass the higher cost of gas on to consumers with ride-sharing company Uber Technologies (UBER) - Get Uber Technologies, Inc. Report leading the charge by adding a temporary fuel surcharge for its drivers and couriers to collect beginning Wednesday.

What Uber is Doing About High Gas Prices

Uber ride-sharing rival Lyft (LYFT) - Get Lyft, Inc. Class A Report has not added a fuel surcharge at last check of its website and neither has food delivery services such as DoorDash (DASH) - Get DoorDash, Inc. Class A Report and Grubhub. But you can expect those services to follow Uber's lead as gas prices continue to rise.
Uber drivers will add a fuel surcharge of either 45 cents or 55 cents on each trip and either 35 cents or 45 cents on each Uber Eats order, depending on the location with 100% of that money being paid to the drivers, according to a Friday statement.

New York City, however, is exempt from the fuel surcharges as trips that start in the city and orders delivered to customers in the city are excluded from surcharges.
Uber noted in a statement that on March 1, drivers in the city began receiving a 5.3% increase in New York's mandated minimum earnings standard, which accounts for increased operating costs. It said the vast majority of the city's delivery workers use bicycles and not cars.The surcharges, which will be collected for at least 60 days, are based off the average trip distance and the increase in gas prices in each state. Kansas had the lowest average gas price among states on Sunday at $3.82, while California had the highest average at $5.74, according to AAA.

Will Uber Drivers Switch to Electric Vehicles?

Uber said that it is encouraging its drivers to switch to electric vehicles. Those who drive EVs can take advantage of Uber's Green Future Program that provides incentives to EV drivers, such as $1 per trip for up to $4,000 annually.
The ride-sharing company said that it has negotiated discounts for drivers on leading EV models and special deals on charging, but did not reveal any specific discounts or deals in the statement.
Uber added that it has negotiated an agreement with Hertz, which will make up to 50,000 fully electric Teslas available for eligible drivers to rent by 2023. However, Uber did not mention whether it has taken steps to ensure that its drivers will not encounter any legal issues from renting a Hertz vehicle.
Some 230 plaintiffs are currently suing Hertz for alleged false arrest and in some cases prosecution, with customers seeking more than $500 million in combined damages. The lawsuits allege that Hertz filed police reports for missing vehicles that may have been returned late or were misplaced, rather than conducting internal investigations to locate late or missing vehicles or to correct errors in their records.

Many of the police reports allegedly led to car renters being jailed in false arrests because of missing vehicles, according to lawsuits. At a recent hearing in a Delaware U.S. Bankruptcy Court, a judge ruled that several of the lawsuits can now proceed.


Source: (thestreet.com)
Author: KIRK O’NEIL / Published by: Christian Walter


 

Palantir share price down again

A new document filed with the SEC is pushing the Big Data company's stock price down.

What happened
Despite a day of gains for the broader market, shares of Palantir (PLTR -3.04%) are falling again. The data analytics company's share price fell about 4.2% at 2:40 p.m. ET on Friday. Meanwhile, the S&P 500 Index was up about 1.9% and the Nasdaq Composite Index was up about 1.1%.

Palantir shareholders haven't had it easy lately, and today's selloff appears to be due to a recent filing with the Securities and Exchange Commission (SEC). CFO David Glazer filed on Thursday showing that he had sold some of his shares in the company, and investors seem to take that as a bad sign.

What does it mean?
Glazer's filing with the SEC shows that he sold a total of 201,190 shares from Tuesday to Thursday, a value of about $2.1 million. An executive selling shares doesn't necessarily mean the underlying company is in trouble, but Palantir shareholders have had a variety of negative catalysts to consider lately, and investors are nervous.

Palantir reported its fourth-quarter and full-year results on Feb. 17. Revenues exceeded market expectations, but earnings fell short of average analyst targets. The company reported non-GAAP (adjusted) earnings per share of $0.02 on revenue of $432.9 million, while the average analyst estimate was for earnings of $0.04 per share on revenue of $418 million.

Following the earnings disappointment, Citigroup analyst Tyler Radke lowered his one-year price target on the stock to $10 per share from $13 and maintained his sell recommendation on the company. Palantir shares are down about 19% since the company's fourth-quarter earnings release.

Where do we go from here?
For the current quarter, the company expects revenue of $443 million and an adjusted operating margin of 23%. For the full year, the company is targeting an adjusted operating margin of 27% and reiterated its guidance for revenue growth of 30% or more through 2025.

Palantir now has a market capitalization of approximately $22.3 billion and is valued at 11 times expected revenue and 57 times expected earnings.

Source: (fool.com)
Author: Keith Noonan / Published by: Christian Walter

 

The SoFi has fallen: What next?

SoFi Technologies (NASDAQ:SOFI) hasn't had it easy as a publicly traded company, especially lately. SOFI stock has been in a brutal bear market, falling more than 50% since its peak in November.
Even though SOFI stock has taken a beating in a tough investment environment, there are a number of positives.

A closer look at SOFI stock
If you look at the chart (more on the technicals in a minute), you can see some pretty big swings to the upside. One of those occurred in early November, when many growth stocks were at multi-month lows. SOFI stock rallied back toward its Q2 highs after better-than-expected earnings.
Another rally - this time much more short-lived - occurred in mid-January. Shares shot up when it was announced that SoFi received regulatory approval to become a national bank. This even led one analyst to raise the price target to $30. At current levels, that would mean a return of over 145%.
At the time, there were warnings of the impending sell-off following this news.
Although the rally in SOFI stock did not continue due to the general downward trend in the stock market, these are promising developments when the dust eventually settles.
SoFi Technologies is expected to deliver its next quarterly report on March 1. It's entirely possible that it will be disappointing. But you might look at SOFI stock not as a one- or two-quarter value, but in the long run.
Long-term estimates are hard to pin down. A lot can happen between now and a few quarters, let alone a few years.
Still, analysts project revenue growth of 44% to $1.44 billion next year. And they expect revenue to grow about 40% annually through 2024.
The downside of all this? SoFi isn't profitable yet and isn't expected to be in the next few years. The upside is that it's impressive to see it grow in this way.
After that crazy explosion early in 2021, SoFi stock pulled back and bottomed out at $13.14. While that level was not a good one for the rest of the year remained untouched, it now plays an important role, especially as resistance.
SOFI stock has technically made a series of higher lows. Still, a single sharp pullback could be enough to retest last month's low at $10.51.
Without knowing when the market selloff will end or how far it will ultimately go, it's hard to say when or if SOFI stock has bottomed.


The bottom line on SOFI stock
From here, however, I'd like to see the stock move back above its fourth-quarter low of $13.66 and above its 50-day moving average. That could open the door to higher prices and put $15 to $16.50 in play. The latter part of that range is last month's high.
On the downside, SoFi is trying to hold the 10- and 21-day moving averages as support. However, there is no guarantee that this will be the case.
If it fails to recapture and hold these levels, a drop below $12 could bring the $10.50 level into play. Bulls can hope that this does not happen, but must be realistic and understand that it could.

Source: (finance.yahoo.com)

Author: Bret Kenwell / Published by: Christian Walter

 
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