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17500.0
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2023-01-22 00:00:00 UTC
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3 Growth Stocks Available at Bargain Basement Prices
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https://www.nasdaq.com/articles/3-growth-stocks-available-at-bargain-basement-prices
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It's never fun living through a protracted market decline. Watching your account balance fall day after day might be enough to make you want to give up investing altogether. Still, if there's an upside to a down market, it's that bargains often emerge as investors do give up on decent businesses just because their shares have sunk.
When that happens, investors who haven't given up all hope can often leap in and buy shares of growing businesses at discount prices. With the possibility that such deals are starting to emerge, three Motley Fool contributors went looking to find growth stocks available at bargain basement prices. They found Lululemon Athletica (NASDAQ: LULU), Meta Platforms (NASDAQ: META), and Albertsons (NYSE: ACI). Read on to find out why and decide for yourself if those companies have the right combination of discount pricing and future prospects to deserve a spot in your portfolio.
Image source: Getty Images.
An investment that fits any investor beautifully
Eric Volkman (Lululemon Athletica): In these sensitive times, when worries about the direction of the economy cloud the stock market, even modest items of bad news can drive a stock's value down sharply. This has happened more than once to athleisure clothing purveyor Lululemon Athletica.
Investors traded out of Lululemon stock in December after the company proffered guidance, within its third-quarter results, that barely met analyst expectations. Never mind the double beat on both the top and bottom lines, or the hefty year-over-year growth rates -- 28% for revenue, and 36% for net income under generally accepted accounting principles (GAAP).
Adding insult to the market's injured psyche, the following month Lululemon caused even greater offense by revising its guidance for fourth-quarter gross margin. It now believes this metric will show a decline of around 1%, as opposed to the original expectation of marginal growth of 0.2% at best. Investor outrage was expressed in another sell-off for the stock.
Yet Lululemon remains the star of athleisurewear, and its considerable growth is a testament to the sturdiness of that position and the still robust demand for such apparel. Americans in particular have become more health conscious this millennium -- hence the continued popularity of yoga and other exercise options.
And no company, not even feisty competitors like Nike or Gap's Athleta, marries the utility of sportswear and the attractiveness of well-designed street clothing better than Lululemon. No wonder it's still the first choice of many consumers.
There's still plenty of room for these yoga pants to expand. The still very U.S.-centric company has vast potential outside of the country, as does the men's clothing segment it hasn't yet targeted intensely. It has a plan in place, the "Power of Three," which seeks to exploit these two opportunities, in addition to pushing digital sales much harder. It's probable that Lululemon's best days, then, are very much in front of it.
A huge user base just waiting to be reached
Parkev Tatevosian (Meta Platforms): One of the positive consequences of the broad stock market decline in 2022 was that it made several excellent growth stocks available for bargain prices. Meta Platforms is arguably the most dominant social media business worldwide. The company has reached 2.9 billion daily active users across its apps. Of course, its services are free to use for consumers; Meta makes money by showing advertisements to folks browsing its platform.
Between 2012 and 2021, Meta grew revenue at a compound annual rate of 41.3%. Meta's massive scale makes it attractive for marketers because they can reach a wide audience on a single platform. That revenue growth has slowed in recent quarters for Meta as Apple's privacy policy changes have made it more difficult for marketers to deliver targeted advertisements.
META PE Ratio data by YCharts
Still, Meta's phenomenal growth over the last decade has come with healthy profit margins. Indeed, between 2012 and 2021, Meta's operating profit margin averaged 38.8%. The business model is lucrative and challenging to replicate after Meta has attracted billions of daily active users. Meanwhile, the headwinds presented by Apple's privacy policy changes have Meta trading at a price to earnings ratio of 12.73, near the cheapest it has sold according to this metric in five years.
Heads you win, tails you're not likely to lose much
Chuck Saletta (Albertsons): Grocery store chains don't normally come to mind as the top picks of growth-oriented investors. Albertsons, however, offers a special circumstance at the moment where its shares are available at a clear discount due to uncertainty surrounding its future.
Back in October, Albertsons agreed to get bought out for $34.10 per share, less a $6.85 special dividend that has gone ex-dividend and now looks cleared to actually get paid to shareholders. That works out to around $27.25 per share for current investors.
Of course, there's an added wrinkle that some Albertsons stores may need to be spun off to a separate holding company to appease regulators. Even if that happens, existing shareholders will probably keep those stores in the spinoff as the rest of the chain is acquired, keeping the total value close to whole.
Despite having that purchase agreement in hand, Albertsons' shares recently traded at $20.95 each. That implies a whopping 30% return -- plus a potential for a better than 2% annualized dividend yield -- between now and whenever the merger closes. This suggests the market believes there is very real risk that the merger will be completely blocked.
Yet even if the merger does get blocked, Albertsons recently traded hands at around 7.5 times its anticipated next-year earnings as an independent company. Along with that bargain price, the company would be expected to deliver around an 8% annualized earnings growth rate over the next five years if it remained independent. While not the fastest growth on earth, when paired with the low valuation and decent dividend, it provides a path to a solid total return potential if the merger were to fail.
When you consider that this is something of a binary outcome -- either the merger happens or it doesn't -- the uncertainty holding down Albertsons stock seems almost silly. With one outcome, investors are likely to get a one-time boost as the company gets bought out. With the other, they have a solid business with a reasonable growth trajectory available at what looks like a value price.
The market's bargains don't last forever
Regardless of whether you believe Lululemon Athletica, Meta Platforms, or Albertsons provides a sufficient combination of bargain price and growth potential to make one or more of them worth purchasing, now is a great time to start looking for such opportunities. The market's decline has affected many investments, and something is likely out there right now, waiting to be found.
Chances to buy growing businesses at discount prices don't last forever, though. So make today the day you go looking, and you just might find the perfect diamond in the rough that deserves a spot in your portfolio.
10 stocks we like better than Lululemon Athletica
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Lululemon Athletica wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of January 9, 2023
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Chuck Saletta has no position in any of the stocks mentioned. Eric Volkman has positions in Apple and Meta Platforms. Parkev Tatevosian, CFA has positions in Apple. The Motley Fool has positions in and recommends Apple, Lululemon Athletica, Meta Platforms, and Nike. The Motley Fool recommends the following options: long January 2025 $47.50 calls on Nike, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Never mind the double beat on both the top and bottom lines, or the hefty year-over-year growth rates -- 28% for revenue, and 36% for net income under generally accepted accounting principles (GAAP). That revenue growth has slowed in recent quarters for Meta as Apple's privacy policy changes have made it more difficult for marketers to deliver targeted advertisements. Heads you win, tails you're not likely to lose much Chuck Saletta (Albertsons): Grocery store chains don't normally come to mind as the top picks of growth-oriented investors.
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They found Lululemon Athletica (NASDAQ: LULU), Meta Platforms (NASDAQ: META), and Albertsons (NYSE: ACI). The market's bargains don't last forever Regardless of whether you believe Lululemon Athletica, Meta Platforms, or Albertsons provides a sufficient combination of bargain price and growth potential to make one or more of them worth purchasing, now is a great time to start looking for such opportunities. The Motley Fool recommends the following options: long January 2025 $47.50 calls on Nike, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple.
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A huge user base just waiting to be reached Parkev Tatevosian (Meta Platforms): One of the positive consequences of the broad stock market decline in 2022 was that it made several excellent growth stocks available for bargain prices. The market's bargains don't last forever Regardless of whether you believe Lululemon Athletica, Meta Platforms, or Albertsons provides a sufficient combination of bargain price and growth potential to make one or more of them worth purchasing, now is a great time to start looking for such opportunities. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors.
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Along with that bargain price, the company would be expected to deliver around an 8% annualized earnings growth rate over the next five years if it remained independent. Eric Volkman has positions in Apple and Meta Platforms. The Motley Fool has positions in and recommends Apple, Lululemon Athletica, Meta Platforms, and Nike.
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17501.0
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2023-01-22 00:00:00 UTC
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Wall St Week Ahead-Tech stock rebound faces doubters with earnings season ahead
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https://www.nasdaq.com/articles/wall-st-week-ahead-tech-stock-rebound-faces-doubters-with-earnings-season-ahead-1
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By Lewis Krauskopf
NEW YORK, Jan 20 (Reuters) - A spate of earnings reports in coming weeks is set to test a recent bounce in technology and other megacap stocks, a category whose leadership position in U.S. markets has faltered after last year’s deep selloff.
The tech-heavy Nasdaq 100 index .NDX has gained nearly 6.2% in 2023, compared to a 3.45% rise for the S&P 500 .SPX. Shares of some megacap companies - which include those grouped outside of tech in sectors like communication services and consumer discretionary - have shot higher, with Amazon AMZN.O, Meta Platforms META.O and Nvidia NVDA.O posting double-digit percentage increases.
Several factors are driving that outperformance, including investors piling into stocks they believe were overly punished in 2022. A moderation in bond yields, whose jump last year particularly pressured tech-stock valuations, is also likely helping the group, investors said.
Now, however, the focus is shifting to whether these companies can withstand a widely expected economic downturn while supporting valuations that some investors believe are too high.
"To keep this rebound going, the guidance for ’23 has to be less worse than what people are anticipating," said Peter Tuz, president of Chase Investment Counsel, whose firm recently pared its holdings in Apple AAPL.O and Microsoft MSFT.O.
Tech and growth stocks led U.S. equity markets for years following the 2008 financial crisis, aided by near-zero interest rates. They struggled along with broader markets last year as the Federal Reserve raised rates to fight surging inflation, and some investors doubt they will regain the market's pole position any time soon. The Nasdaq 100 fell 33% in 2022, while the S&P 500 lost 19.4%.
The top six stocks by market value in late 2021 - Apple, Microsoft, Alphabet GOOGL.O, Amazon, Meta and Tesla TSLA.O - have seen their collective weight in the S&P 500 fall from 25% to 18%, according to Strategas Research Partners.
That dynamic echoes a pattern seen after the market’s dot-com bubble burst after the turn of the century. The six biggest stocks at that time saw their collective weight in the S&P 500 decline to 5% from a peak of 17% over a number of years, according to Strategas.
"This leadership unwind ... is going to be one that is measured in years, not in months or quarters," said Chris Verrone, head of technical and macro research at Strategas.
EARNINGS TEST
Companies comprising over half the S&P 500's market value are due to report results in the next two weeks, including Microsoft, the second-largest U.S. company by market value, on Tuesday, Elon Musk's Tesla and IBM IBM.N on Wednesday and Intel INTC.O on Thursday. Apple, the largest U.S. company by market value, and Google-parent Alphabet report the following week.
Fourth-quarter earnings in the tech sector are expected to have declined 9.1% from a year ago, compared to a 2.8% decline for S&P 500 earnings overall, according to Refinitiv IBES.
A critical question for many megacaps, once heralded for their stellar growth, is whether they can increase revenue and profits significantly while cutting costs in the face of a possible recession.
Alphabet Inc GOOGL.O said Friday it is cutting about 12,000 jobs, or 6% of its workforce, the latest tech giant to announce layoffs. Microsoft on Wednesday said it would eliminate 10,000 jobs while Amazon started notifying employees of its own 18,000-person job cuts.
"The biggest positive could be if they could show a control of expenses while keeping at least reasonable growth intact," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. "It’s a hard balancing act."
Valuations for tech and megacap companies have moderated after last year's selloff, though they still stand above those of the broader market. The S&P 500 tech sector still trades at a roughly 19% premium to the broader index, above its 7% average of the past 10 years, according to Refinitiv Datastream.
Nonetheless, some investors are reluctant to bet against tech stocks.
The Wells Fargo Investment Institute counts tech as one of its favored U.S. sectors.
The firm expects an economic downturn and believes many tech companies have businesses that are resilient to economic uncertainty, said Sameer Samana, a seniorglobal marketstrategist there.
"It’s just too important and too big a weighting not to participate," Samana said. "But the years of handily outperforming the S&P are probably now behind us.”
Megacaps as percentage of S&P 500https://tmsnrt.rs/3J1psCr
Looming U.S. earnings recessionhttps://tmsnrt.rs/3krofKz
(Reporting by Lewis Krauskopf; Editing by Ira Iosebashvili, John Stonestreet and Daniel Wallis)
((lewis.krauskopf@thomsonreuters.com; 646-223-6082; Reuters Messaging: lewis.krauskopf.thomsonreuters.com@reuters.net, Twitter: @LKrauskopf))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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"To keep this rebound going, the guidance for ’23 has to be less worse than what people are anticipating," said Peter Tuz, president of Chase Investment Counsel, whose firm recently pared its holdings in Apple AAPL.O and Microsoft MSFT.O. By Lewis Krauskopf NEW YORK, Jan 20 (Reuters) - A spate of earnings reports in coming weeks is set to test a recent bounce in technology and other megacap stocks, a category whose leadership position in U.S. markets has faltered after last year’s deep selloff. Shares of some megacap companies - which include those grouped outside of tech in sectors like communication services and consumer discretionary - have shot higher, with Amazon AMZN.O, Meta Platforms META.O and Nvidia NVDA.O posting double-digit percentage increases.
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"To keep this rebound going, the guidance for ’23 has to be less worse than what people are anticipating," said Peter Tuz, president of Chase Investment Counsel, whose firm recently pared its holdings in Apple AAPL.O and Microsoft MSFT.O. The top six stocks by market value in late 2021 - Apple, Microsoft, Alphabet GOOGL.O, Amazon, Meta and Tesla TSLA.O - have seen their collective weight in the S&P 500 fall from 25% to 18%, according to Strategas Research Partners. Fourth-quarter earnings in the tech sector are expected to have declined 9.1% from a year ago, compared to a 2.8% decline for S&P 500 earnings overall, according to Refinitiv IBES.
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"To keep this rebound going, the guidance for ’23 has to be less worse than what people are anticipating," said Peter Tuz, president of Chase Investment Counsel, whose firm recently pared its holdings in Apple AAPL.O and Microsoft MSFT.O. By Lewis Krauskopf NEW YORK, Jan 20 (Reuters) - A spate of earnings reports in coming weeks is set to test a recent bounce in technology and other megacap stocks, a category whose leadership position in U.S. markets has faltered after last year’s deep selloff. Companies comprising over half the S&P 500's market value are due to report results in the next two weeks, including Microsoft, the second-largest U.S. company by market value, on Tuesday, Elon Musk's Tesla and IBM IBM.N on Wednesday and Intel INTC.O on Thursday.
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"To keep this rebound going, the guidance for ’23 has to be less worse than what people are anticipating," said Peter Tuz, president of Chase Investment Counsel, whose firm recently pared its holdings in Apple AAPL.O and Microsoft MSFT.O. The top six stocks by market value in late 2021 - Apple, Microsoft, Alphabet GOOGL.O, Amazon, Meta and Tesla TSLA.O - have seen their collective weight in the S&P 500 fall from 25% to 18%, according to Strategas Research Partners. The six biggest stocks at that time saw their collective weight in the S&P 500 decline to 5% from a peak of 17% over a number of years, according to Strategas.
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17502.0
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2023-01-21 00:00:00 UTC
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Reviewing Goldman Sachs' Disappointing Quarter
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https://www.nasdaq.com/articles/reviewing-goldman-sachs-disappointing-quarter
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In this podcast, Motley Fool Senior Analyst Jason Moser discusses:
Fourth-quarter profits for Goldman Sachs falling 66%.
How investments in the Marcus brand and the Apple Card partnership haven't paid off yet.
Disney's blunt response to activist investor Nelson Peltz.
Motley Fool host Alison Southwick and Motley Fool personal finance expert Robert Brokamp talk with Stephanie Marini, CFP®, a financial planner with The Motley Fool, about what investors need to know about how the Secure 2.0 Act affects savings and retirement.
Looking to get a jump start on your 2023 financial goals? The Motley Fool's flagship service, Stock Advisor, is open to new members for just $99 a year! Access this special offer by visiting www.fool.com/intro.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
10 stocks we like better than Goldman Sachs Group
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Goldman Sachs Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
This video was recorded on Jan. 17, 2023.
Chris Hill: A wise man once said, never bring a knife to a gunfight. Motley Fool Money starts now. I'm Chris Hill. Joining me today, Motley Fool Senior Analyst Jason Moser. Thanks for being here.
Jason Moser: Hey, thanks for having me.
Chris Hill: We're going to get to the latest in the Disney fight in just a minute. But we talked on Friday about the big banks, most of them reported, but this morning we got the fourth-quarter results from Goldman Sachs. The headline is that this is the worst earnings miss for Goldman Sachs in a decade. Fourth-quarter profits down 66 percent. No one expected their results to be great. But, Jason, I feel like this is actually worse than people had feared. Is it?
Jason Moser: Probably. I don't think this really should come as a surprise if we talked about on Friday with Wells Fargo, Bank of America, JPMorgan, all reporting challenges on the investment banking front. It also taking a bit of a conservative approach, preparing for a potential downturn, boosting loss reserves to account for that. Certainly, there was a tone of caution on the Goldman Sachs call as well. I think a lot of this, you look at Goldman, it's far more levered to the investment banking side of things. It's very understandable. But it's just a very difficult environment right now. If we go to the numbers, not good, that really explains why the stock is being sold off so dramatically today, but revenue down 12 percent sequentially for the quarter, down 16 percent from a year ago. If you look at earnings per share down 60 percent sequentially, down 70 percent from a year ago.
That was after nine straight quarters of double-digit returns. This was a pivot. That this is a big pivot. But I don't know that it's something that lasts forever. But there's a lot that stood out in the quarter, I think, the investment bankers brought in just under $1.9 billion in fees for the fourth quarter. That was down 48 percent from a year ago. You look at net revenue in the asset and wealth management at $3.56 billion for the quarter. That was down 27 percent from the same quarter a year ago, 12 percent from the previous quarter. As we talked about with many of the other banks on Friday, the provision for credit loss is, again, played into Goldman's narrative as well, $972 million for the fourth quarter of 2022 versus $344 million from a year ago, and $515 million sequentially. It's just a very difficult environment for investment banking these days. We're seeing that play out with Goldman's results.
Chris Hill: When do you think we get any signal with an investment bank like Goldman Sachs that things are turning around on the investment banking side. Because to the point you made, a lot of this is not surprising. Maybe the magnitude, maybe the actual numbers were a surprise, but Goldman Sachs, this is the bank that was out there in front signposting back in December that they were going to be laying people off. They actually announced that earlier this month. Is this a situation where they're in their own category because they're so much more dependent on investment banking? Or do you think this is a bellwether for the entire group?
Jason Moser: No. I think that ultimately this boils down to two words, deal making. We're just in an environment where deal making has more or less come to a grinding halt. That is due to current market conditions, plenty of uncertainty in regard to the economy. Recession talk continues. This is just a very difficult time for investors writ large, and Goldman certainly falls into that category. I think that comes and goes, that goes in cycles. We'll see that improve as we see market conditions improve. I think another thing to keep an eye on with Goldman beyond that, they've made investments recently to diversify the business, become a little bit more modern. Looking at things like Marcus, for example, the investments in markets clearly haven't paid off. They are rolling that operation down considerably.
They're going to stop offering new loans on that platform. Another thing in interesting dynamic I find with the business there's this platform solutions side of the business which really focuses on consumer credit, and that stood out as a positive for this quarter. But that really was due to consumers taking on more credit card debt than anything. You take that however you'd like. But even more interesting, I think though when you look at Goldman Sachs' platform solutions side of the business, it lost $3 billion over three years here. But interestingly, a big chunk of those losses have come they're tied to the Apple card. Remember Goldman is in partnership with Apple for its Apple card. So far, granted the Apple Card is still a relatively new product, I think it was rolled out in 2019 or something, maybe somewhere in the neighborhood of 6 million-plus users, it's not resulting in good business right now for Goldman.
It's going to be interesting to see how that dynamic plays out over time if they really feel like that relationship is worth continuing, particularly as we enter this time where we know personal savings rate is it a decade-plus low. We know clearly that Americans are living more and more paycheck to paycheck. They're taking on more credit card debt, which means eventually they're going to have to pay that piper. You just wonder if this is a relationship that is working out as well as they thought it might have in the beginning. But at the end of the day, the bank group book value: 6.7 percent for the year. That puts shares today at around 1.1 times book value. That's not outrageous, I think in today's climate, it's obviously a key player in the investment banking world and they don't think it's going anywhere, but I don't know that things are going to be getting better anytime real soon.
Chris Hill: In a filing with the SEC, The Walt Disney Company has responded to activist investor Nelson Peltz regarding his push for a seat on the board of directors. Look, there were a lot of words in Disney's response, but I feel like it essentially boiled down to the following: With all due respect, Nelson Peltz is not telling us anything we don't already know. He is not proposing anything that we're not already considering. Thank you. Here are some lovely parting gifts.
Jason Moser: It's got to be hard being in it, I think Ron said this last week. He said being an activist is really hard. It is funny. Sometimes it's EVs activists, you think they've got it all figured out. They know the business better than the folks running the show, and in some cases maybe they do.
Chris Hill: Peltz has enough of a track record of success that as we talked about on the show, if it was some other firm, if it was you and me and we've got our activist fund and we had half a percent of Disney stock, they wouldn't give us the time of day, but Nelson Peltz, because of his track record, engenders some amount of respect, but not so much respect that Disney didn't respond the way they did.
Jason Moser: Agreed. I see both sides of this to an extent. I feel like Disney was very clear in their deck they released this morning and they said, and I quote, "Peltz has no track record, large-cap media or tech. No solutions to offer for the evolving media landscape and if MSG Sports is his training ground, it has not been a good one." That's just they're telling it like it is and I don't disagree with them. I think you're right. He has plenty of experience in the investing realm as an activist. This is not necessarily in his wheelhouse, I think now I will also give him credit because I think he's onto something here in regard to the Fox acquisition. He says, the Fox acquisition hurt the company, took the dividend away, it put their balance sheet into chaos. You can't contest that. Those are facts. That said, I don't know that Peltz knows this business, as well as someone like Bob Iger does. Disney is in the midst of a generational transformation in how they produce and distribute content.
I don't even think this is necessarily a business that Bob Iger is fully familiar with yet because they're still figuring it out and that is going to take some time, and it really goes to show I think the advantages in taking that risk of blazing a new trial. Someone like Reed Hastings at Netflix. This is going to take some time for them to fully get this new media paradigm sorted out. That said, I think they'll pull it off. The advantage of the IP, clearly they have good tech and they're in so many living rooms already now, they've done a good job there. It really is a matter of just getting the financials in order. When I say getting the financials in order, I mean, they went from a coverage ratio in 2017. Your coverage ratio is looking at how effectively you are able to service the debt that you have and higher is better. They went from a coverage ratio of 33 in 2017 to 4.5 today and no dividend either. I definitely understand where Peltz is coming from. I don't know that he really stands a chance of enforcing any real change or action, but it's nice to see is keeping management on their toes.
Chris Hill: Pop some more corn. I feel like this one is going somewhere.
Jason Moser: Indeed.
Chris Hill: Jason Moser, thanks for being here.
Jason Moser: Thank you.
Chris Hill: In late December, while most of us were busy either celebrating or recovering from the holidays, Congress passed the Secure 2.0 Act and it was signed into law. Robert Brokamp and Alison Southwick take a closer look at the bill and how it could change your retirement and your college savings.
Alison Southwick: The final days of December, the congresspeople in Washington were hard at work passing a $1.7-trillion-dollar spending bill. Buried within the 1,400 pages of that bill are 400 pages covering what has come to be known as the Secure 2.0 Act. In typical Washington fashion, SECURE is a tortured acronym for Setting Every Community Up for Retirement Enhancement. The first version was passed in 2019. The recent sequel has all kinds of new rules for retirement accounts, required minimum distributions, and five to nine plans, and here to help us discuss the most important provisions is Certified Financial Planner® and Fool Stephanie Marini. Hi, Stephanie. Thanks for joining us.
Stephanie Marini: Hi. Thanks for having me.
Alison Southwick: Today we're going to cover the six most important provisions of the Secure 2.0 Act. As we go through these, you're going to want to pay attention to the dates that they start because some start this year, but most won't take effect for another year or two. All right, with that said, let's start out with 529 accounts will be transferable to a Roth IRA.
Stephanie Marini: I'm going to take this one. I have two young kids, so it was really interesting for me to see. This provision allows for 529 accounts to be transferred into Roth IRAs, converted into Roth IRA accounts. It helps answer the question for parents or grandparents, what happens if there's extra in the 529 account, or what if my child doesn't go to college or get scholarships? Before anyone runs out to open an account or start converting, there are a lot of requirements to make this work. This provision won't start until 2024 so it is one of those later-year start dates. The beneficiary of the 529 plan must also be the owner of the Roth IRA.
Another one is the 529 plan needs to have been established for at least 15 years. The contributions in the account need to have been in there at least five years before they are eligible to roll over. In order to make that eligible rollover, Roth IRA annual contribution limits and the child having earned income still apply. That child does need to be working and have earned income and can only contribute to the annual maximum for that year or the rollover can only be up to the annual maximum for that year. There is also a lifetime rollover maximum of $35,000. There are a lot of stipulations, but I think this is really important because even with those provisions, it's a way for parents to transfer tax-free wealth to their children.
Robert Brokamp: Yeah, whenever it's something like this comes out, these big laws, you'll find out that some of the language is not exact, and then over the next 12 months or so, the IRS and Treasury Department will clarify a few things. One thing that needs to be clarified is that normally with a 529, you can transfer the money to a qualifying relative. If you have leftover 529 money, can you transfer that money to a qualifying relative, which could be you, and then you take the money and put it in your Roth IRA? Right now the thinking is that's possible, but it's not certain so we were hoping for more clarification sometime over the next six to 12 months.
Alison Southwick: All right, the next one we're going to talk about is changes to required minimum distributions.
Robert Brokamp: Yeah, so the original Secure Act bumped up the starting age for required minimum distributions, or RMDs as they're called, from retirement accounts from 70.5 to 72. This 2.0 version pushes that age back to 73, starting this year 2023, then to 75 starting in 2033. Another way to put this, is that effective immediately RMD age is 73 for those born between 1951 and 1959, and age 75 for those born in 1960 or later. The bottom line is that folks can let their money grow a little longer on a tax-advantaged basis assuming they don't need it. In other RMD news before Secure 2.0, the only retirement account that was exempt from RMDs was the Roth IRA.
You had to worry about RMDs from traditional IRAs, traditional employer-sponsored accounts like the 401(k) and Roth employer-sponsored accounts. However, thanks to Secure 2.0, you don't have to worry about RMDs from Roth employer accounts starting next year, not this year, but next year. Why should you care about taking your RMD while the penalty for not taking an RMD was pretty steep, it was 50 percent of the amount you were supposed to take. That was among the highest penalties in the tax code. But starting this year, the penalty will be reduced to 10 percent or 25 percent depending on how quickly the air is corrected, so if you forgot to take your RMD, fix the problem as soon as possible and you may pay a lower penalty.
Alison Southwick: The third aspect of Secure 2.0 we want to talk about is updates to the annual catch-up contributions.
Stephanie Marini: I think one of the overarching themes of this bill is that it encourages savings and more ways to save. In this provision, it encourages savings through updates to annual catch-up contributions. These are the contributions that are for more experienced workers 50 and up, keep an eye on the years here because they do change. But starting in 2024, catch-up contribution limits to IRAs are now going to be adjusted for inflation. Instead of having that set $1,000 that can be added to the standard contribution limit, we should start seeing it move higher.
Then starting in 2025, additional contributions can be made in your employer retirement accounts of 150 percent of the standard catch-up contributions. This is for workers ages 60 to 63, and it will allow for, within those years, a higher amount to be considered as a catch-up contribution. Taking 2023 numbers, that standard catch-up rate is 7,500, which would make the additional allowable catch-up contribution to be 11,250. This change doesn't just help fix the problem today with just the last year of high inflation, but it keeps these figures relevant for coming years moving forward.
Robert Brokamp: Another interesting change about catch-up contributions that will take effect next year is that higher-income folks who are 50 and older, their catch-up contributions will have to go into a Roth account and the higher income means $145,000. If you earn $145,000 this year, next year when you make your catch-up contributions, they have to go into a Roth account. They think the reason for this was basically when money goes more into Roth accounts it raises revenue for this year, it's congresspeople basically wanting more money this year and not worrying about what happens down the future. The thinking on this is that it's for employees, self-employed folks will probably not have to worry about this.
Alison Southwick: All right, the next one that we want to talk about is employers can match student loan repayments.
Robert Brokamp: Studies indicate that people who graduate from college with debt have lower retirement savings than those graduate without debt and so not a big surprise there. A provision in Secure 2.0 aims to close that gap by allowing employers to match student loan repayments by making deposits in their retirement plan accounts starting next year. The match formula and the vesting schedule will be the same as if the employee had contributed to the 401(k) instead of making a loan payment. There are several requirements such as it has to be a "qualified loan" to pay for "qualified higher education expenses" for an eligible individuals so you can't just claim any old loan and say it was for school. Obviously, by the time it takes effect next year, some system will have to be created by which employees can prove to their employers that they're making payments on their qualified loans. It'll be interesting to see how that plays out. But for those who can't afford to save for retirement due to student debt, this at least gets them started.
Alison Southwick: All right, next one we're going to talk about is reduced penalties and ways that they're going to try and encourage savings.
Stephanie Marini: The Secure 2.0 Act also helps address now well-known statistic that most Americans cannot afford an unexpected $400 expense. Beginning in 2024, investors will be able to take early emergency distribution of up to $1,000 to cover any unforeseen financial needs and avoid the usual 10 percent penalty. This is just one of the ways that the Secured 2.0 Act is reducing some of these penalties to help encourage more savings. The distribution can be repaid within a three-year period, but no further distributions are allowed in that three-year period until the previous amounts are repaid.
Robert Brokamp: They only going to add to this too, it's only for non-highly compensated employees, and that definition somewhat changes year to year, but the higher-income employees won't be able to do this.
Alison Southwick: All right, and the last one we're going to talk about is that employer-matching contributions can be deposited into Roth accounts.
Robert Brokamp: Yeah, before this latest version of the Secure Act, all employer matches to retirement accounts had to be deposited in pre-tax traditional accounts so the money would then grow tax-deferred. But then withdrawals would be taxed as ordinary income. However, starting this year, employers will be permitted to allow their employees to choose to have the matched deposited in a Roth account, which would make future withdrawals are tax-free, and while that sounds great. It's not necessarily a free lunch because that match would be considered taxable income to the employee.
For example, if you received a $5,000 match from your employer and you chose to have it put in the Roth account, your taxable income would be higher by $5,000, which of course would increase your tax bill. But if you're in a low or even middle-range tax bracket, it could still be the right move if you expect your tax rate to be higher in the future. The other thing I'll add is that while this is effective immediately, employers don't have to offer it. Plus it's going to take a while for plan providers and employers to update their systems and their websites and things like that in order for this to beat logistically possible.
Alison Southwick: Well, thank you, Stephanie and Bro, now I get to come in with the closing caveats. This wasn't an exhaustive list. There are many more provisions that we didn't cover from the Secure 2.0 Act, your mileage may vary. Additionally, many of the details, as you mentioned at the top of the show, will be tweaked and worked out over the coming months. If there's a provision that piqued your interest, make sure you track down the latest information before you take any action.
Chris Hill: As always, people on the program may have interest in the stocks they talk about and The Motley Fool may have formal recommendations for or against, so don't buy yourself stocks based solely on what you hear. I'm Chris Hill. Thanks for listening. We'll see you tomorrow.
Bank of America is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Alison Southwick has positions in Apple and Walt Disney. Chris Hill has positions in Apple, JPMorgan Chase, and Walt Disney. Jason Moser has positions in Apple and Walt Disney. Robert Brokamp, CFP(R) has positions in Walt Disney. Stephanie Marini, CFP®, CRPC® has positions in Apple and Walt Disney. The Motley Fool has positions in and recommends Apple, Bank of America, Goldman Sachs Group, JPMorgan Chase, Netflix, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Chris Hill: In a filing with the SEC, The Walt Disney Company has responded to activist investor Nelson Peltz regarding his push for a seat on the board of directors. The recent sequel has all kinds of new rules for retirement accounts, required minimum distributions, and five to nine plans, and here to help us discuss the most important provisions is Certified Financial Planner® and Fool Stephanie Marini. A provision in Secure 2.0 aims to close that gap by allowing employers to match student loan repayments by making deposits in their retirement plan accounts starting next year.
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In this podcast, Motley Fool Senior Analyst Jason Moser discusses: Fourth-quarter profits for Goldman Sachs falling 66%. The Motley Fool has positions in and recommends Apple, Bank of America, Goldman Sachs Group, JPMorgan Chase, Netflix, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple.
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Motley Fool host Alison Southwick and Motley Fool personal finance expert Robert Brokamp talk with Stephanie Marini, CFP®, a financial planner with The Motley Fool, about what investors need to know about how the Secure 2.0 Act affects savings and retirement. Chris Hill: Peltz has enough of a track record of success that as we talked about on the show, if it was some other firm, if it was you and me and we've got our activist fund and we had half a percent of Disney stock, they wouldn't give us the time of day, but Nelson Peltz, because of his track record, engenders some amount of respect, but not so much respect that Disney didn't respond the way they did. However, thanks to Secure 2.0, you don't have to worry about RMDs from Roth employer accounts starting next year, not this year, but next year.
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Joining me today, Motley Fool Senior Analyst Jason Moser. If you earn $145,000 this year, next year when you make your catch-up contributions, they have to go into a Roth account. The Motley Fool has positions in and recommends Apple, Bank of America, Goldman Sachs Group, JPMorgan Chase, Netflix, and Walt Disney.
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17503.0
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2023-01-21 00:00:00 UTC
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Dow Jones Bear Market: The Smartest Investors Are Buying These Beaten Down Stocks
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AAPL
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https://www.nasdaq.com/articles/dow-jones-bear-market%3A-the-smartest-investors-are-buying-these-beaten-down-stocks-1
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Smart investors are often willing to go against the crowd or even go where there isn't even a crowd at all. That's pretty much the thinking behind looking at stocks like GE HealthCare Technologies (NASDAQ: GEHC), United Parcel Service (NYSE: UPS), and Apple (NASDAQ: AAPL). Here's why all three are worth a close look by insightful investors.
1. GE HealthCare Technologies, an undervalued spinoff from General Electric
The recent spinoff from General Electric (NYSE: GE) doesn't have broad-based analyst coverage yet, but that shouldn't stop savvy investors from looking. The company has already preannounced its fourth-quarter earnings (due for release on Jan. 30), and they look good.
For example, management expects 5% to 7% organic growth in 2023 alongside profit margin expansion and 85% free-cash-flow (FCF) conversion from net income. Meanwhile, fourth-quarter organic revenue growth was a whopping 12%, with earnings above prior guidance.
The imaging and ultrasound-focused company has plenty of potential to grow margins, and with FCF of around $2.1 billion in 2022, it's trading on 14.2 times its FCF. That's too cheap for a world-class company with a huge installed base of equipment at medical facilities. In addition, the healthcare equipment company also owns a high-margin complementary pharmaceutical diagnostics business.
Throw in the fact that earnings and cash flow are being depressed by ongoing supply chain issues (which will hopefully recede through 2023), and the stock looks like an even better value.
2. UPS continues its transformation strategy
A slowing economy means weaker demand for package deliveries, and that's not good news for UPS. Its rival, FedEx (NYSE: FDX), is already restructuring in response to slowing demand. UPS will surely come under pressure too, and that's why Wall Street analysts have revenue and earnings declining in 2023.
Still, it's essential to keep some perspective here. The forward estimate for $12.23 in EPS for 2023 puts UPS on less than 15 times forward earnings. Moreover, just as with Apple, UPS is a business that benefited significantly from the pandemic. In other words, it's coming up against difficult comparisons. In addition, and again in common with Apple, UPS is improving the underlying profitability of its business.
As previously discussed, the transformational strategy of focusing on selected end markets (such as small and medium-sized businesses and healthcare) while being more selective over deliveries (focusing on higher-margin deliveries) has resulted in a tangible improvement in underlying margin and free cash flow.
Investors in UPS can expect that trend to continue in 2023, and the stock's 3.3% dividend yield provides a decent income while you wait for the economic cycle to turn again.
3. Apple's services growth means higher profit margins
Undoubtedly, the pandemic and the stay-at-home measures imposed on populations created a boom in demand for electronic devices. That's apparent in Apple's surging revenue and earnings before interest, taxation, depreciation, and amortization (EBITDA) through the back half of 2020 and 2021. Of course, that creates difficult comparisons, and Wall Street analysts have Apple's revenue growth moderating to low single digits and EBITDA flat in 2023.
As such, the stock has sold off by 22% over the last year.
Data by YCharts.
But here's the thing. As you can see above, the current enterprise value (market cap plus net debt-to-EBITDA valuation is similar to what it was entering 2020 (when very few could have predicted the pandemic). Moreover, Apple is a different business now in that its higher-margin services business has grown substantially at a rate higher than its products (iPhone, Mac, iPad, Wearables, Home, and Accessories) business.
In fact, in the last reported quarter, Apple's services business accounted for 21.2% of revenue (up from 17.8% in 2019) and almost a third of gross profit (compared to slightly less than 30% in 2019). Also, note that Apple's services gross profit margin has increased considerably.
APPLE METRIC
2019
2020
2021
2022
Product Revenue
$213.9 billion
$220.7 billion
$297.4 billion
$316.2 billion
Growth
(5.3%)
3.2%
34.7%
6.3%
Gross Profit
$68.9
$69.5 billion
$105.1 billion
$114.7 billion
Gross Margin
32.2%
31.5%
35.3%
36.3%
Services Revenue
$46.3 billion
$53.8 billion
$68.4 billion
$78.1 billion
Growth
16.5%
16.2%
27.3%
14.2%
Gross Profit
$29.5 billion
$35.5 billion
$47.7 billion
$56 billion
Gross Margin
63.7%
66%
69.7%
71.7%
Data source: Apple presentations.
All told, even though Apple's overall growth is likely to slow in 2023, the underlying growth in higher-margin services growth is improving the company's long-term margin and earnings potential. Meanwhile, the stock is moving into value range.
10 stocks we like better than Ge HealthCare Technologies
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*Stock Advisor returns as of January 9, 2023
Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and FedEx. The Motley Fool recommends United Parcel Service and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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That's pretty much the thinking behind looking at stocks like GE HealthCare Technologies (NASDAQ: GEHC), United Parcel Service (NYSE: UPS), and Apple (NASDAQ: AAPL). Investors in UPS can expect that trend to continue in 2023, and the stock's 3.3% dividend yield provides a decent income while you wait for the economic cycle to turn again. Apple's services growth means higher profit margins Undoubtedly, the pandemic and the stay-at-home measures imposed on populations created a boom in demand for electronic devices.
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That's pretty much the thinking behind looking at stocks like GE HealthCare Technologies (NASDAQ: GEHC), United Parcel Service (NYSE: UPS), and Apple (NASDAQ: AAPL). GE HealthCare Technologies, an undervalued spinoff from General Electric The recent spinoff from General Electric (NYSE: GE) doesn't have broad-based analyst coverage yet, but that shouldn't stop savvy investors from looking. 2019 2020 2021 2022 Product Revenue $213.9 billion $220.7 billion $297.4 billion $316.2 billion Growth (5.3%) 3.2% 34.7% 6.3% Gross Profit $68.9 $69.5 billion $105.1 billion $114.7 billion Gross Margin 32.2% 31.5% 35.3% 36.3% Services Revenue $46.3 billion $53.8 billion $68.4 billion $78.1 billion Growth 16.5% 16.2% 27.3% 14.2% Gross Profit $29.5 billion $35.5 billion $47.7 billion $56 billion Gross Margin 63.7% 66% 69.7% 71.7% Data source: Apple presentations.
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That's pretty much the thinking behind looking at stocks like GE HealthCare Technologies (NASDAQ: GEHC), United Parcel Service (NYSE: UPS), and Apple (NASDAQ: AAPL). 2019 2020 2021 2022 Product Revenue $213.9 billion $220.7 billion $297.4 billion $316.2 billion Growth (5.3%) 3.2% 34.7% 6.3% Gross Profit $68.9 $69.5 billion $105.1 billion $114.7 billion Gross Margin 32.2% 31.5% 35.3% 36.3% Services Revenue $46.3 billion $53.8 billion $68.4 billion $78.1 billion Growth 16.5% 16.2% 27.3% 14.2% Gross Profit $29.5 billion $35.5 billion $47.7 billion $56 billion Gross Margin 63.7% 66% 69.7% 71.7% Data source: Apple presentations. All told, even though Apple's overall growth is likely to slow in 2023, the underlying growth in higher-margin services growth is improving the company's long-term margin and earnings potential.
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That's pretty much the thinking behind looking at stocks like GE HealthCare Technologies (NASDAQ: GEHC), United Parcel Service (NYSE: UPS), and Apple (NASDAQ: AAPL). Of course, that creates difficult comparisons, and Wall Street analysts have Apple's revenue growth moderating to low single digits and EBITDA flat in 2023. All told, even though Apple's overall growth is likely to slow in 2023, the underlying growth in higher-margin services growth is improving the company's long-term margin and earnings potential.
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17504.0
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2023-01-21 00:00:00 UTC
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3 Growth Stocks That Got Crushed in 2022 but Are Poised for a Rebound
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AAPL
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https://www.nasdaq.com/articles/3-growth-stocks-that-got-crushed-in-2022-but-are-poised-for-a-rebound
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Share prices of Tesla (NASDAQ: TSLA), MP Materials (NYSE: MP), and Bentley Systems (NASDAQ: BSY) fell 65%, 46.5%, and 23.5%, respectively, in 2022. And as bad as those drawdowns might seem, there are reasons to believe each stock could be headed for a rebound that benefits patient investors.
What's more, all three growth stocks could work well in a diversified portfolio. Tesla offers exposure to electric vehicles (EVs). And down the road, it could make strides in robotics, artificial intelligence, self-driving software, and renewable energy.
MP Materials is a much smaller company that operates a rare-earth materials mine. And Bentley Systems is an infrastructure-engineering software company. Here are three Motley Fool contributors to tell you what makes each company worth considering now.
Image source: Getty Images.
Tesla can finally get back to beating manageable expectations
Daniel Foelber (Tesla): In 2022, Tesla suffered its worst calendar-year drawdown in its history. When a company loses nearly two-thirds of its value in one year, it's hardly ever due to deteriorating fundamentals alone. Rather, its sell-off, like those of many growth stocks in 2022, can be attributed mainly to its previously expensive valuation.
But an added layer of trouble for Tesla came from a whirlwind of developments, both operationally and with its management, that caused investors to question its ability to sustain its growth rate and deliver on its promises.
On the valuation front, Tesla stock went up 743.4% in 2020 and then another 49.8% in 2021. Just like its 65% slide in 2022 was likely too far too fast, its meteoric ascent in the two-year time frame from 2020 to 2021 was also simply too accelerated for the fundamentals to keep up.
The silver lining is that as the dust settles, Tesla finds itself at a valuation that seems a lot more reasonable. It has a net cash position on its balance sheet, which is virtually unheard of in the auto industry. It's also free-cash-flow positive, highly profitable, and growing at an impressive clip even as the auto industry faces declining demand. So as a company, Tesla is doing very well even though its stock price is faltering.
The biggest question facing Tesla is whether or not it can keep up with rising competition, as legacy automakers are eager to take a slice out of the growing EV pie. And an added concern is CEO Elon Musk's mishandling of his acquisition of Twitter and worries that his skill set is spread too thin among SpaceX, Tesla, and Twitter.
Tesla has always been chock-full of potential and some glaring risks. Even after its sell-off, the company has a lot to prove if it wants to stay a $400 billion company, let alone surpass a $1 trillion market cap again.
For many investors, Tesla is simply too volatile and not worth the risk. But for risk-tolerant folks with a long time horizon, the case for the stock is arguably far easier to make now than at any other point in the company's history.
Now's the time to dig into this rare-earth metals stock
Scott Levine (MP Materials): With the S&P 500 plunging 19%, there's no denying that 2022 was tough for investors. Those with MP Materials in their portfolios, however, found last year especially painful, with shares of the rare-earth metals producer plummeting 47%.
Beating analysts' quarterly revenue and earnings estimates in each of the first three quarters of 2022, MP Materials (and its investors) had a lot to celebrate last year. The stock's decline, though, belies the company's strong performance.
Evidently, analysts were pessimists regarding the stock, and there was speculation that Apple's interest in procuring metals from recycling could be a harbinger of reduced demand for rare-earth elements. The stock's sell-off, however, seems excessive, leaving patient forward-looking investors with a great buying opportunity.
MP Materials expects big things in the coming months. In April 2022, the company inked a long-term supply agreement with General Motors. Under the deal, MP Materials will provide GM with rare-earth materials, alloys, and finished magnets for electric motors beginning in late 2023 with the development of the company's Stage III factory.
While lithium gets the lion's share of the attention, EVs and other battery-powered modes of transport are dependent on rare-earth elements -- an indispensable component of the batteries.
MP Materials' Mountain Pass asset in California is the only integrated rare-earth mining and processing site in North America. This puts it in a unique position as the United States looks to shore up its rare-earth elements supply. As consumer enthusiasm for EVs continues to accelerate, the company should prosper accordingly.
Bentley Systems revolutionizes how infrastructure projects are built
Lee Samaha (Bentley Systems): Shares of this infrastructure software company were sold off by 24% in 2022, along with much of the software sector. While you can blame overvaluation, it's harder to make the case that Bentley's long-term growth prospects were damaged last year.
On the contrary, the federal $1.2 trillion infrastructure bill improved its long-term prospects considerably -- and it's the long term that matters for growth stocks.
The investment case for Bentley Systems -- its modeling and simulation application software, and project delivery systems -- isn't only based on the outlook for infrastructure spending. Instead, its main earnings driver is the increasing adoption of its software (Bentley is the market leader in infrastructure software) across the industry.
Historically, infrastructure projects like bridges or hydroelectric dams were designed and built by many consultants, contractors, and project management engineers. Each engineer would create a share of the work and keep the data in files, usually in 2D format. The physical projects were then maintained by using this data for many decades afterward.
In this example, it's easy to imagine a mass of information held disparately. So it wasn't very certain to be used to complete the project in a timely manner or maintain it for decades afterward.
Bentley Systems solves all these problems by helping engineers create a digital workflow (across engineering disciplines and sectors) that can be used to model and simulate data -- previously held in many separate files -- during the project's construction and use. For example, a digital twin can be created to use data from a physical asset and then digitally simulated to maintain the assets better.
Bentley Systems compiles a lot of detail work that could add up to multibillion-dollar savings on cost overruns associated with infrastructure projects -- and later on, billions in reduced maintenance costs on the projects.
Find out why Tesla is one of the 10 best stocks to buy now
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They just revealed their ten top stock picks for investors to buy right now. Tesla is on the list -- but there are nine others you may be overlooking.
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*Stock Advisor returns as of January 9, 2023
Daniel Foelber has positions in Tesla and has the following options: short March 2023 $110 calls on Tesla and short September 2023 $150 calls on Tesla. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Tesla. The Motley Fool recommends Bentley Systems and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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But an added layer of trouble for Tesla came from a whirlwind of developments, both operationally and with its management, that caused investors to question its ability to sustain its growth rate and deliver on its promises. Evidently, analysts were pessimists regarding the stock, and there was speculation that Apple's interest in procuring metals from recycling could be a harbinger of reduced demand for rare-earth elements. While lithium gets the lion's share of the attention, EVs and other battery-powered modes of transport are dependent on rare-earth elements -- an indispensable component of the batteries.
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Share prices of Tesla (NASDAQ: TSLA), MP Materials (NYSE: MP), and Bentley Systems (NASDAQ: BSY) fell 65%, 46.5%, and 23.5%, respectively, in 2022. Bentley Systems revolutionizes how infrastructure projects are built Lee Samaha (Bentley Systems): Shares of this infrastructure software company were sold off by 24% in 2022, along with much of the software sector. The Motley Fool recommends Bentley Systems and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.
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Share prices of Tesla (NASDAQ: TSLA), MP Materials (NYSE: MP), and Bentley Systems (NASDAQ: BSY) fell 65%, 46.5%, and 23.5%, respectively, in 2022. Bentley Systems revolutionizes how infrastructure projects are built Lee Samaha (Bentley Systems): Shares of this infrastructure software company were sold off by 24% in 2022, along with much of the software sector. *Stock Advisor returns as of January 9, 2023 Daniel Foelber has positions in Tesla and has the following options: short March 2023 $110 calls on Tesla and short September 2023 $150 calls on Tesla.
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Here are three Motley Fool contributors to tell you what makes each company worth considering now. Those with MP Materials in their portfolios, however, found last year especially painful, with shares of the rare-earth metals producer plummeting 47%. The Motley Fool has positions in and recommends Apple and Tesla.
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17505.0
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2023-01-21 00:00:00 UTC
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3 Top Warren Buffett Stocks to Buy in 2023
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AAPL
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https://www.nasdaq.com/articles/3-top-warren-buffett-stocks-to-buy-in-2023
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nan
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It's not a bad idea to check what stocks Warren Buffett's Berkshire Hathaway owns. A $1,000 investment in the company in 1965, when he took over, would have been worth $36 million through 2021.
Keep in mind that many of Berkshire's stocks were not selected by Buffett, but were chosen by one of his investing lieutenants, Ted Weschler and Todd Combs, who have also have an impressive investing record. However, it's usually not clear who picked what.
That said, three Motley Fool contributors recently picked three consumer-related stocks from Berkshire's holdings that are timely buys at the start of 2023. Here's why they like Apple (NASDAQ: AAPL), Kroger (NYSE: KR), and RH (NYSE: RH).
Buffett's new favorite
Jeremy Bowman (Apple): For years, Buffett avoided tech stocks, saying he couldn't confidently predict future cash flows in the industry.
However, Berkshire Hathaway began buying Apple in 2016, and the Oracle of Omaha has fully embraced the iPhone maker, calling it "probably the best business" in the world.
Apple has become Berkshire's largest holding, representing close to half of its stock portfolio as of the end of the third quarter, and it's easy to see why Buffett has become a big fan of the tech giant.
Apple's economic moat is huge and self-evident. It has an installed base of roughly 2 billion active devices, which form a network of competitive advantages as the devices work best when used together. You can share information through iCloud, for example, and wearables such as AirPods are designed to pair with an iPhone. Apple's App Store unites its devices through a high-margin services business as the company generally takes a 30% commission on money spent in the App Store.
The company's brand and product quality also allowed it to maintain pricing power and high margins on its devices. It continues to gain market share on Android and is the phone of choice among the youngest customers in the U.S., indicating a strong growth pipeline.
Like other tech giants, Apple is expected to see slow growth this year in response to recessionary headwinds. Even so, the company is making smart moves to plan for the next stage of growth, recently announcing that it would design its own chips in a range of hardware components, bringing business that had been outsourced to chipmakers in-house, which should help boost the company's margins. It's also expected to unveil a new mixed-reality headset in June, according to Bloomberg, which could unlock a new revenue stream for the company.
Currently, the stock trades at a price-to-earnings ratio of 22, only slightly more expensive than the S&P 500 average. Considering its manifest competitive advantages, and ability to grow and expand margins over the long term, that price looks like a great entry point for investors.
Your local grocery store is a great investment
John Ballard (Kroger): Local grocery stores have a lot of advantages serving a large pool of customers within a near proximity. Kroger has capitalized on this position with consistent financial results despite uncertainty in the economy. Management is aiming to deliver annualized shareholder returns between 8% and 11% over the long term. However, the stock trades at a low multiple of earnings, which makes it a solid buy in 2023.
The sky-high inflation over the last year hasn't hurt Kroger's business. It's actually brought more good for the company's growth, since eating at home is much less expensive than dining out. In the most recent quarter, Kroger reported comparable sales, or what it calls identical sales, of 6.9% over the year-ago quarter. Adjusted earnings grew even faster at 12.8%, which is better than management's long-term goal to grow earnings between 3% and 5% per year.
Kroger is a profitable and durable business with growth opportunities. It generates a very slim profit margin, but it reinvests into the stores to drive traffic. That churns out higher revenue and profits, which also fuels investment in higher-margin revenue streams, such as private label brands.
Kroger can do all that while also distributing dividend payments to shareholders. Over the last four quarters, it paid out more than a third of its earnings per share in dividends, bringing the yield to about 2.04%. Combine this above-average dividend yield with a cheap price-to-earnings ratio of 11 based on forward earnings estimates and it all adds up to a solid stock to hold in this rocky market environment.
Getting ready for a big comeback
Jennifer Saibil (RH): RH had a huge setback at the end of 2022 as inflation cut into its sales and disrupted its margins. Even as many stocks are showing signs of recovery a few weeks into 2023, RH stock remains down about 30% over the past year.
But this looks like an excellent opportunity, and it's a classic Buffett move. RH stock looks significantly undervalued. It trades at less than 12 times trailing-12-month earnings, which is cheap even in this market.
Yet it has outperformed the broader market over time, in fact by huge amounts, under better circumstances.
RH data by YCharts
Considering its business model and opportunities, RH has enormous potential to do that again.
RH sells luxury furniture, but the company has embarked on a process of becoming a leading luxury brand. Its core business is selling upscale products through its galleries in select affluent communities and its web portal. It has developed several exclusive lines that cater to this niche, with the advantages of high margins and a resilient clientele that has spending money even when the economy is volatile.
Also, RH branched out into luxury experiences, including several high-end restaurants, a guesthouse, and yacht and jet rentals. It recently hired well-known editor Margaret Russell to direct RH Media.
The company has resisted changing its strategy for the short-term benefits of raising sales through promotions. It has, even more so, continued to implement its efforts to build its premium brand through several acquisitions.
The risk here is that business doesn't come back so quickly, and that will depend on the state of the economy. But with sales down, year-over-year comparisons are in its favor. Any progress is likely to result in a higher stock price even if the economy remains pressured, and strong sales could lead to a surging stock. Whether or not that happens in 2023, RH stock looks like an outstanding long-term opportunity to create shareholder wealth.
10 stocks we like better than Apple
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*Stock Advisor returns as of January 9, 2023
Jennifer Saibil has no position in any of the stocks mentioned. Jeremy Bowman has positions in RH. John Ballard has positions in RH. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends RH and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Here's why they like Apple (NASDAQ: AAPL), Kroger (NYSE: KR), and RH (NYSE: RH). However, Berkshire Hathaway began buying Apple in 2016, and the Oracle of Omaha has fully embraced the iPhone maker, calling it "probably the best business" in the world. Apple has become Berkshire's largest holding, representing close to half of its stock portfolio as of the end of the third quarter, and it's easy to see why Buffett has become a big fan of the tech giant.
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Here's why they like Apple (NASDAQ: AAPL), Kroger (NYSE: KR), and RH (NYSE: RH). That said, three Motley Fool contributors recently picked three consumer-related stocks from Berkshire's holdings that are timely buys at the start of 2023. Your local grocery store is a great investment John Ballard (Kroger): Local grocery stores have a lot of advantages serving a large pool of customers within a near proximity.
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Here's why they like Apple (NASDAQ: AAPL), Kroger (NYSE: KR), and RH (NYSE: RH). Even as many stocks are showing signs of recovery a few weeks into 2023, RH stock remains down about 30% over the past year. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Jennifer Saibil has no position in any of the stocks mentioned.
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Here's why they like Apple (NASDAQ: AAPL), Kroger (NYSE: KR), and RH (NYSE: RH). That said, three Motley Fool contributors recently picked three consumer-related stocks from Berkshire's holdings that are timely buys at the start of 2023. Kroger is a profitable and durable business with growth opportunities.
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17506.0
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2023-01-21 00:00:00 UTC
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2 Genius Dividend Stocks to Buy in 2023
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AAPL
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https://www.nasdaq.com/articles/2-genius-dividend-stocks-to-buy-in-2023
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nan
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nan
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Many dividend-seeking investors gravitate to certain stocks because of their yields. The smarter play, however, is to concentrate on buying and holding stocks that have a history of growing their payouts. Stocks in that category have a history of producing higher returns than companies that strive to maintain outsized payouts.
The data is eye-opening. Over the last 50 years, dividend growers and initiators have delivered total annual returns averaging 10.7% -- higher than the S&P 500's 8.2% average annual total return -- according to data by Ned Davis Research and Hartford Funds. For comparison, companies that maintained their dividends only produced average annual total returns of 7.1%.
Tech giants Apple (NASDAQ: AAPL) and Broadcom (NASDAQ: AVGO) both have long histories of dividend growth. And with more payout increases likely down the road, they're smart buys for dividend investors as we start the year.
A cash flow machine
Some income-focused investors may dismiss Apple's stock given its paltry payout. Its current dividend yield of 0.7% is lower than the S&P 500's 1.7% yield.
However, what Apple's dividend lacks in size, it more than makes up for in growth. The tech giant has increased its payout every year since it re-instituted its dividend in 2012, and has increased its annual payouts by 143% since then. Those growing payouts have helped drive market-crushing annualized total returns for Apple of nearly 21%, significantly outpacing the 13.2% average annual total returns of the S&P 500.
Despite its mammoth size, Apple continues to grow at a healthy rate. It delivered another record-breaking quarter last period, with its revenue expanding by 8%. Meanwhile, its operating cash flow increased by $18 billion to more than $122 billion. That gave the company more money to invest in developing products and services, and more to return to shareholders via dividends and share repurchases. Between those two, Apple sent investors more than $29 billion last quarter, including about $3.7 billion in dividends.
Even with those outlays, it maintained a robust balance sheet with nearly $170 billion of cash and marketable securities. With its current dividend payment consuming only a small percentage of its cash flow, Apple has plenty of room to grow its payout.
Accelerating its software growth
Broadcom holds a more obvious appeal for income investors given its relatively attractive yield of 3.2%. That above-average payout is due to the company's strong cash flows and its dividend payout policy. The company converted 49% of its revenue into free cash flow in its fiscal 2022, which ended Oct. 30. Meanwhile, it set a policy to pay 50% of its prior fiscal year's free cash flow to shareholders via the dividend. It uses the other half to invest in growth and to repurchase shares. As it has been generating strong and growing free cash flow, Broadcom has steadily increased its dividend.
The semiconductor and infrastructure software solutions company increased its dividend by 12% for its fiscal 2023. That marked Broadcom's 12th straight year of increasing its payout since it initiated a dividend in its fiscal 2011. The company has increased its payout by a jaw-dropping 5,650% since that first payment. That has helped power it to a market-obliterating average annual total return of 31.3%, compared to 12.2% for the S&P 500.
Broadcom should be able to continue growing its dividend. A big driver of its earnings is its burgeoning software business. The company is working to accelerate its software capabilities by acquiring VMware in a $61 billion cash-and-stock deal. That deal should provide new growth opportunities, helping Broadcom to continue expanding its free cash flow and dividends.
Consider the total picture
It can be easy for income-focused investors to be drawn to the allure of high current dividend yields. However, the wiser investments can be those companies that are well-positioned (and well-inclined) to grow their payouts, because those companies have historically produced higher total returns for their shareholders. That has certainly been the case for Apple and Broadcom since they started paying dividends more than a decade ago. With more dividend growth ahead, these tech giants look like smart dividend stocks to buy this year.
10 stocks we like better than Apple
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Matthew DiLallo has positions in Apple, Broadcom, and VMware and has the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends Broadcom and VMware and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Tech giants Apple (NASDAQ: AAPL) and Broadcom (NASDAQ: AVGO) both have long histories of dividend growth. That gave the company more money to invest in developing products and services, and more to return to shareholders via dividends and share repurchases. With its current dividend payment consuming only a small percentage of its cash flow, Apple has plenty of room to grow its payout.
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Tech giants Apple (NASDAQ: AAPL) and Broadcom (NASDAQ: AVGO) both have long histories of dividend growth. Over the last 50 years, dividend growers and initiators have delivered total annual returns averaging 10.7% -- higher than the S&P 500's 8.2% average annual total return -- according to data by Ned Davis Research and Hartford Funds. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Matthew DiLallo has positions in Apple, Broadcom, and VMware and has the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.
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Tech giants Apple (NASDAQ: AAPL) and Broadcom (NASDAQ: AVGO) both have long histories of dividend growth. Over the last 50 years, dividend growers and initiators have delivered total annual returns averaging 10.7% -- higher than the S&P 500's 8.2% average annual total return -- according to data by Ned Davis Research and Hartford Funds. Those growing payouts have helped drive market-crushing annualized total returns for Apple of nearly 21%, significantly outpacing the 13.2% average annual total returns of the S&P 500.
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Tech giants Apple (NASDAQ: AAPL) and Broadcom (NASDAQ: AVGO) both have long histories of dividend growth. Over the last 50 years, dividend growers and initiators have delivered total annual returns averaging 10.7% -- higher than the S&P 500's 8.2% average annual total return -- according to data by Ned Davis Research and Hartford Funds. The tech giant has increased its payout every year since it re-instituted its dividend in 2012, and has increased its annual payouts by 143% since then.
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17507.0
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2023-01-20 00:00:00 UTC
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Apple appeals investigation by UK competition watchdog
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AAPL
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https://www.nasdaq.com/articles/apple-appeals-investigation-by-uk-competition-watchdog
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nan
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nan
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LONDON, Jan 20 (Reuters) - Technology giant Apple AAPL.O has filed an appeal against an investigation by Britain's competition watchdog into the dominance of its mobile browsers in the cloud gaming market.
Last November, the Competition and Markets Authority (CMA), Britain's competition regulator, launched a full investigation into cloud gaming and mobile browsers on concerns about restrictions by iPhone-maker Apple and Google.
U.S. tech giants, including Google's owner Alphabet and Apple, are drawing increasing attention from competition regulators in Brussels, London and elsewhere.
Lawyers representing Apple said in a notice filed with the Competition Appeal Tribunal on Friday that the CMA's investigation should be reviewed. In its argument, lawyers said that the CMA had missed timing requirements linked to the launch of an investigation.
"Apple seeks 1) an Order that the MIR Decision is quashed. 2) a declaration that the MIR Decision and market investigation purportedly launched by reference to it are invalid and of no legal effect," the filing with the Appeal Tribunal showed.
Responding to the appeal, the CMA said on Friday it would defend its position and continue to progress its work in line with the statutory timetable.
"We opened this investigation to make sure that UK consumers get a better choice of mobile web services and that UK developers can invest in innovative mobile content and services," the CMA said in an emailed statement.
There is due to be a preliminary hearing on the matter on Tuesday, according to the Competition Appeal Tribunal website.
(Reporting by Sarah Young)
((sarah.young@thomsonreuters.com; +44 20 7542 1109; Reuters Messaging: sarah.young.thomsonreuters@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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LONDON, Jan 20 (Reuters) - Technology giant Apple AAPL.O has filed an appeal against an investigation by Britain's competition watchdog into the dominance of its mobile browsers in the cloud gaming market. U.S. tech giants, including Google's owner Alphabet and Apple, are drawing increasing attention from competition regulators in Brussels, London and elsewhere. 2) a declaration that the MIR Decision and market investigation purportedly launched by reference to it are invalid and of no legal effect," the filing with the Appeal Tribunal showed.
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LONDON, Jan 20 (Reuters) - Technology giant Apple AAPL.O has filed an appeal against an investigation by Britain's competition watchdog into the dominance of its mobile browsers in the cloud gaming market. Last November, the Competition and Markets Authority (CMA), Britain's competition regulator, launched a full investigation into cloud gaming and mobile browsers on concerns about restrictions by iPhone-maker Apple and Google. Lawyers representing Apple said in a notice filed with the Competition Appeal Tribunal on Friday that the CMA's investigation should be reviewed.
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LONDON, Jan 20 (Reuters) - Technology giant Apple AAPL.O has filed an appeal against an investigation by Britain's competition watchdog into the dominance of its mobile browsers in the cloud gaming market. Last November, the Competition and Markets Authority (CMA), Britain's competition regulator, launched a full investigation into cloud gaming and mobile browsers on concerns about restrictions by iPhone-maker Apple and Google. Lawyers representing Apple said in a notice filed with the Competition Appeal Tribunal on Friday that the CMA's investigation should be reviewed.
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LONDON, Jan 20 (Reuters) - Technology giant Apple AAPL.O has filed an appeal against an investigation by Britain's competition watchdog into the dominance of its mobile browsers in the cloud gaming market. Lawyers representing Apple said in a notice filed with the Competition Appeal Tribunal on Friday that the CMA's investigation should be reviewed. 2) a declaration that the MIR Decision and market investigation purportedly launched by reference to it are invalid and of no legal effect," the filing with the Appeal Tribunal showed.
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17508.0
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2023-01-20 00:00:00 UTC
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Validea Daily Guru Fundamental Report for AAPL - 1/20/2023
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AAPL
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https://www.nasdaq.com/articles/validea-daily-guru-fundamental-report-for-aapl-1-20-2023
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nan
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nan
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Below is Validea's daily guru fundamental report for APPLE INC (AAPL). Of the twelve guru strategies we follow, AAPL rates highest using our Patient Investor model based on the published strategy of Warren Buffett. This strategy seeks out firms with long-term, predictable profitability and low debt that trade at reasonable valuations.
APPLE INC (AAPL) is a large-cap growth stock in the Communications Equipment industry. The rating using this strategy is 100% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Apple Inc. (Apple) designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories and sells a range of related services. The Company's products include iPhone, Mac, iPad, AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch and accessories. The Company operates various platforms, including the App Store, which allows customers to discover and download applications and digital content, such as books, music, video, games and podcasts. Apple offers digital content through subscription-based services, including Apple Arcade, Apple Music, Apple News+, Apple TV+ and Apple Fitness+. Apple also offers a range of other services, such as AppleCare, iCloud, Apple Card and Apple Pay. Apple sells its products and resells third-party products in a range of markets, including directly to consumers, small and mid-sized businesses, and education, enterprise and government customers through its retail and online stores and its direct sales force.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
EARNINGS PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS
Detailed Analysis of APPLE INC
AAPL Guru Analysis
AAPL Fundamental Analysis
Warren Buffett Portfolio
Top Warren Buffett Stocks
About Warren Buffett: Warren Buffett is considered by many to be the greatest investor of all time. As the chairman of Berkshire Hathaway, Buffett has consistently outperformed the S&P 500 for decades, and in the process has become one of the world's richest men. (Forbes puts his net worth at $37 billion.) Despite his fortune, Buffett is known for living a modest lifestyle, by billionaire standards. His primary residence remains the gray stucco Nebraska home he purchased for $31,500 nearly 50 years ago, according to Forbes, and his folksy Midwestern manner and penchant for simple pleasures -- a cherry Coke, a good burger, and a good book are all near the top of the list -- have been well-documented.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Below is Validea's daily guru fundamental report for APPLE INC (AAPL). Of the twelve guru strategies we follow, AAPL rates highest using our Patient Investor model based on the published strategy of Warren Buffett. APPLE INC (AAPL) is a large-cap growth stock in the Communications Equipment industry.
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Detailed Analysis of APPLE INC AAPL Guru Analysis AAPL Fundamental Analysis Warren Buffett Portfolio Top Warren Buffett Stocks About Warren Buffett: Warren Buffett is considered by many to be the greatest investor of all time. Below is Validea's daily guru fundamental report for APPLE INC (AAPL). Of the twelve guru strategies we follow, AAPL rates highest using our Patient Investor model based on the published strategy of Warren Buffett.
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Of the twelve guru strategies we follow, AAPL rates highest using our Patient Investor model based on the published strategy of Warren Buffett. Detailed Analysis of APPLE INC AAPL Guru Analysis AAPL Fundamental Analysis Warren Buffett Portfolio Top Warren Buffett Stocks About Warren Buffett: Warren Buffett is considered by many to be the greatest investor of all time. Below is Validea's daily guru fundamental report for APPLE INC (AAPL).
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Below is Validea's daily guru fundamental report for APPLE INC (AAPL). Of the twelve guru strategies we follow, AAPL rates highest using our Patient Investor model based on the published strategy of Warren Buffett. APPLE INC (AAPL) is a large-cap growth stock in the Communications Equipment industry.
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17509.0
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2023-01-20 00:00:00 UTC
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1 Huge Reason Stocks Could Rally in 2023
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AAPL
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https://www.nasdaq.com/articles/1-huge-reason-stocks-could-rally-in-2023
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nan
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nan
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2022 offered up a concoction of negative factors for investors: Inflation was red hot and gradually weakened consumer confidence and spending, Russia's invasion of Ukraine worsened inflation and sent energy prices even higher (not to mention set off a humanitarian crisis), and the U.S. Federal Reserve began its most aggressive interest rate hike cycle to try to bring inflation back down to normal levels.
While the Fed's rate hikes have helped stoke fears of a recession for 2023, it has had an even more dramatic (but little-known) impact on investors in another important way: the sharp rise of the U.S. dollar's value. However, after an incredible run-up in value, the dollar has begun to give back some of its gains in recent months. If the trend holds, this could be a huge tailwind for stocks in 2023. Here's how.
King Dollar's complicated relationship with stocks
The Fed's interest rate hikes have done far more than throttle economic activity (a blunt instrument used to try to reduce inflation). Interest rates have a direct bearing on demand for a particular currency relative to other currencies. A higher interest rate can increase demand, as investors might be interested in holding "risk-free" cash and short-term debt instruments in dollars, versus a currency where interest rates might be lower. Additionally, the Fed also began lowering the supply of dollars changing hands in the economy last year (known as "quantitative tightening"). Lower supply plus higher demand launched the dollar on an epic run-up in 2022.
To illustrate what happened, take a look at the U.S. Dollar Index, as measured by the Invesco US Dollar Index Bullish Fund -- which is designed to track the U.S. Dollar Index. This fund follows the value of the dollar versus a basket of other currencies (over half of the basket is euros, with the remainder a mix of the Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc).
Data by YCharts.
As you can see from the chart, the dollar's value remained fairly muted in 2021. But as the Fed ratcheted up interest rates, the dollar soared, culminating in a nearly 20% year-over-year run-up at the end of October 2022. So what?
If you own shares of U.S.-based companies that do business outside of the states, a strong dollar isn't exactly good news.
A strengthening dollar reduces the value of an international sale when the company converts that money back into dollars (since a higher dollar makes the value of the foreign currency worth less than it was before). So why make the currency conversion? To pay business expenses, satisfy Uncle Sam's corporate tax demands, and to report financial results to investors.
Two casualties from the dollar's harsh rule
The effect becomes even more pronounced when the reduced value of the revenue then has to be used to pay expenses in dollars. It's a double whammy for U.S. companies, especially tech companies that pay out most of their expenses in dollars (to employees, for the purchase of equipment, and other expenses related to research and development and marketing).
Just two companies help illustrate King Dollar's tyrannical rule in 2022: Microsoft (NASDAQ: MSFT) and Apple (NASDAQ: AAPL). During the three months ended in September 2022 (during the dollar's peak, and Microsoft's first quarter of fiscal year 2023), Microsoft said revenue increased 11% year over year. However, when backing out the effects of the dollar's liftoff, revenue would have grown 16% year over year. That's about a 30% reduction in total revenue growth thanks to the dollar lowering the value of international sales.
Microsoft's operating profit margin got hit even harder. The company said operating profit increased just 6% year over year in Q1 fiscal 2023, or 15% growth when backing out the dollar's value gains.
Apple had a similarly unpleasant time in the same quarter (for Apple, the fourth quarter of its fiscal year 2022). Revenue rose 8% year over year, but CFO Luca Maestri said growth would have been 14% when excluding exchange rates (a more than 40% reduction in sales growth) during the company's quarterly earnings call. Corresponding earnings per share (EPS) increased just 4% in the quarter. Although Apple didn't provide an exact figure on how the dollar lowered EPS, it most certainly was a major headwind.
A fall in the dollar could be a boost for U.S. stocks in 2023
As ugly as it was in 2022, an equally stunning reversal in the U.S. dollar has taken place in recent months. After peaking in late September/early October, the U.S. Dollar Index has backtracked in dramatic fashion. Other central banks have been increasing interest rates and are catching up with the Fed's aggressive stance against inflation. Meanwhile, the central bankers here in the U.S. have been indicating they'll increase rates far more gently during the first half of 2023 before pausing these hikes, which has added fuel to the dollar's recent declines.
The dollar is still up a lot compared to where it was a year prior, so exchange rates will still negatively impact earnings for companies like Microsoft and Apple in Q4 of calendar year 2022 and well into calendar 2023. However, starting around mid-2023, what was once a big headwind could reverse and become a tailwind for U.S. companies. After all, the dollar cuts both ways. A falling value of the U.S. dollar serves to boost year-over-year revenue and profit growth for companies that sell their goods and services overseas.
It's too soon to tell, but if the dollar's current value holds -- or better still, continues to fall -- it could turn into a catalyst for stocks later this year and spur on a big rally. Stay tuned for more details.
10 stocks we like better than Microsoft
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Microsoft wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
Nicholas Rossolillo and his clients have positions in Apple and Microsoft. The Motley Fool has positions in and recommends Apple and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Just two companies help illustrate King Dollar's tyrannical rule in 2022: Microsoft (NASDAQ: MSFT) and Apple (NASDAQ: AAPL). While the Fed's rate hikes have helped stoke fears of a recession for 2023, it has had an even more dramatic (but little-known) impact on investors in another important way: the sharp rise of the U.S. dollar's value. King Dollar's complicated relationship with stocks The Fed's interest rate hikes have done far more than throttle economic activity (a blunt instrument used to try to reduce inflation).
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Just two companies help illustrate King Dollar's tyrannical rule in 2022: Microsoft (NASDAQ: MSFT) and Apple (NASDAQ: AAPL). During the three months ended in September 2022 (during the dollar's peak, and Microsoft's first quarter of fiscal year 2023), Microsoft said revenue increased 11% year over year. The company said operating profit increased just 6% year over year in Q1 fiscal 2023, or 15% growth when backing out the dollar's value gains.
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Just two companies help illustrate King Dollar's tyrannical rule in 2022: Microsoft (NASDAQ: MSFT) and Apple (NASDAQ: AAPL). To illustrate what happened, take a look at the U.S. Dollar Index, as measured by the Invesco US Dollar Index Bullish Fund -- which is designed to track the U.S. Dollar Index. A strengthening dollar reduces the value of an international sale when the company converts that money back into dollars (since a higher dollar makes the value of the foreign currency worth less than it was before).
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Just two companies help illustrate King Dollar's tyrannical rule in 2022: Microsoft (NASDAQ: MSFT) and Apple (NASDAQ: AAPL). Two casualties from the dollar's harsh rule The effect becomes even more pronounced when the reduced value of the revenue then has to be used to pay expenses in dollars. During the three months ended in September 2022 (during the dollar's peak, and Microsoft's first quarter of fiscal year 2023), Microsoft said revenue increased 11% year over year.
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17510.0
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2023-01-20 00:00:00 UTC
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Wall St Week Ahead-Tech stock rebound faces doubters with earnings season ahead
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AAPL
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https://www.nasdaq.com/articles/wall-st-week-ahead-tech-stock-rebound-faces-doubters-with-earnings-season-ahead
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nan
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nan
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By Lewis Krauskopf
NEW YORK, Jan 20 (Reuters) - A spate of earnings reports in coming weeks is set to test a recent bounce in technology and other megacap stocks, a category whose leadership position in U.S. markets has faltered after last year’s deep selloff.
The tech-heavy Nasdaq 100 index has gained over 3% in 2023, double the rise for the S&P 500 . Shares of some megacap companies - which include those grouped outside of tech in sectors like communication services and consumer discretionary - have shot higher, with Amazon , Meta Platforms and Nvidia posting double-digit percentage increases.
Several factors are driving that outperformance, including investors piling into stocks they believe were overly punished in 2022. A moderation in bond yields, whose jump last year particularly pressured tech-stock valuations, is also likely helping the group, investors said.
Now, however, the focus is shifting to whether these companies can withstand a widely expected economic downturn while supporting valuations that some investors believe are too high.
"To keep this rebound going, the guidance for ’23 has to be less worse than what people are anticipating," said Peter Tuz, president of Chase Investment Counsel, whose firm recently pared its holdings in Apple and Microsoft .
Tech and growth stocks led U.S. equity markets for years following the 2008 financial crisis, aided by near-zero interest rates. They struggled along with broader markets last year as the Federal Reserve raised rates to fight surging inflation, and some investors doubt they will regain the market's pole position any time soon. The Nasdaq 100 fell 33% in 2022, while the S&P 500 lost 19.4%. The top six stocks by market value in late 2021 - Apple, Microsoft, Alphabet , Amazon, Meta and Tesla - have seen their collective weight in the S&P 500 fall from 25% to 18%, according to Strategas Research Partners.
That dynamic echoes a pattern seen after the market’s dot-com bubble burst after the turn of the century. The six biggest stocks at that time saw their collective weight in the S&P 500 decline to 5% from a peak of 17% over a number of years, according to Strategas.
"This leadership unwind ... is going to be one that is measured in years, not in months or quarters," said Chris Verrone, head of technical and macro research at Strategas.
EARNINGS TEST
Companies comprising over half the S&P 500's market value are due to report results in the next two weeks, including Microsoft, the second-largest U.S. company by market value, on Tuesday, Elon Musk's Tesla and IBM on Wednesday and Intel on Thursday. Apple, the largest U.S. company by market value, and Google-parent Alphabet report the following week.
Fourth-quarter earnings in the tech sector are expected to have declined 9.1% from a year ago, compared to a 2.8% decline for S&P 500 earnings overall, according to Refinitiv IBES.
A critical question for many megacaps, once heralded for their stellar growth, is whether they can increase revenue and profits significantly while cutting costs in the face of a possible recession.
Alphabet Inc said Friday it is cutting about 12,000 jobs, or 6% of its workforce, the latest tech giant to announce layoffs. Microsoft on Wednesday said it would eliminate 10,000 jobs while Amazon started notifying employees of its own 18,000-person job cuts.
"The biggest positive could be if they could show a control of expenses while keeping at least reasonable growth intact," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. "It’s a hard balancing act."
Valuations for tech and megacap companies have moderated after last year's selloff, though they still stand above those of the broader market. The S&P 500 tech sector still trades at a roughly 19% premium to the broader index, above its 7% average of the past 10 years, according to Refinitiv Datastream.
Nonetheless, some investors are reluctant to bet against tech stocks.
The Wells Fargo Investment Institute counts tech as one of its favored U.S. sectors.
The firm expects an economic downturn and believes many tech companies have businesses that are resilient to economic uncertainty, said Sameer Samana, a seniorglobal marketstrategist there.
"It’s just too important and too big a weighting not to participate," Samana said. "But the years of handily outperforming the S&P are probably now behind us.”
https://tmsnrt.rs/3J1psCr Looming U.S. earnings recession
https://tmsnrt.rs/3krofKz
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Lewis Krauskopf; Editing by Ira Iosebashvili and John Stonestreet) ((lewis.krauskopf@thomsonreuters.com; 646-223-6082; Reuters Messaging: lewis.krauskopf.thomsonreuters.com@reuters.net, Twitter: @LKrauskopf)) ((Wall St Week Ahead runs every Friday. For thedaily stock marketreport, please click [.N])) Keywords: USA STOCKS/WEEKAHEAD (SCHEDULED COLUMN)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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By Lewis Krauskopf NEW YORK, Jan 20 (Reuters) - A spate of earnings reports in coming weeks is set to test a recent bounce in technology and other megacap stocks, a category whose leadership position in U.S. markets has faltered after last year’s deep selloff. Shares of some megacap companies - which include those grouped outside of tech in sectors like communication services and consumer discretionary - have shot higher, with Amazon , Meta Platforms and Nvidia posting double-digit percentage increases. "To keep this rebound going, the guidance for ’23 has to be less worse than what people are anticipating," said Peter Tuz, president of Chase Investment Counsel, whose firm recently pared its holdings in Apple and Microsoft .
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The top six stocks by market value in late 2021 - Apple, Microsoft, Alphabet , Amazon, Meta and Tesla - have seen their collective weight in the S&P 500 fall from 25% to 18%, according to Strategas Research Partners. Valuations for tech and megacap companies have moderated after last year's selloff, though they still stand above those of the broader market. "But the years of handily outperforming the S&P are probably now behind us.” https://tmsnrt.rs/3J1psCr Looming U.S. earnings recession https://tmsnrt.rs/3krofKz ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Reporting by Lewis Krauskopf; Editing by Ira Iosebashvili and John Stonestreet) ((lewis.krauskopf@thomsonreuters.com; 646-223-6082; Reuters Messaging: lewis.krauskopf.thomsonreuters.com@reuters.net, Twitter: @LKrauskopf)) ((Wall St Week Ahead runs every Friday.
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By Lewis Krauskopf NEW YORK, Jan 20 (Reuters) - A spate of earnings reports in coming weeks is set to test a recent bounce in technology and other megacap stocks, a category whose leadership position in U.S. markets has faltered after last year’s deep selloff. Companies comprising over half the S&P 500's market value are due to report results in the next two weeks, including Microsoft, the second-largest U.S. company by market value, on Tuesday, Elon Musk's Tesla and IBM on Wednesday and Intel on Thursday. Valuations for tech and megacap companies have moderated after last year's selloff, though they still stand above those of the broader market.
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The top six stocks by market value in late 2021 - Apple, Microsoft, Alphabet , Amazon, Meta and Tesla - have seen their collective weight in the S&P 500 fall from 25% to 18%, according to Strategas Research Partners. The six biggest stocks at that time saw their collective weight in the S&P 500 decline to 5% from a peak of 17% over a number of years, according to Strategas. Valuations for tech and megacap companies have moderated after last year's selloff, though they still stand above those of the broader market.
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17511.0
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2023-01-20 00:00:00 UTC
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Wall St Week Ahead-Tech stock rebound faces doubters with earnings season ahead
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AAPL
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https://www.nasdaq.com/articles/wall-st-week-ahead-tech-stock-rebound-faces-doubters-with-earnings-season-ahead-0
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By Lewis Krauskopf
NEW YORK, Jan 20 (Reuters) - A spate of earnings reports in coming weeks is set to test a recent bounce in technology and other megacap stocks, a category whose leadership position in U.S. markets has faltered after last year’s deep selloff.
The tech-heavy Nasdaq 100 index .NDX has gained nearly 6.2% in 2023, compared to a 3.45% rise for the S&P 500 .SPX. Shares of some megacap companies - which include those grouped outside of tech in sectors like communication services and consumer discretionary - have shot higher, with Amazon AMZN.O, Meta Platforms META.O and Nvidia NVDA.O posting double-digit percentage increases.
Several factors are driving that outperformance, including investors piling into stocks they believe were overly punished in 2022. A moderation in bond yields, whose jump last year particularly pressured tech-stock valuations, is also likely helping the group, investors said.
Now, however, the focus is shifting to whether these companies can withstand a widely expected economic downturn while supporting valuations that some investors believe are too high.
"To keep this rebound going, the guidance for ’23 has to be less worse than what people are anticipating," said Peter Tuz, president of Chase Investment Counsel, whose firm recently pared its holdings in Apple AAPL.O and Microsoft MSFT.O.
Tech and growth stocks led U.S. equity markets for years following the 2008 financial crisis, aided by near-zero interest rates. They struggled along with broader markets last year as the Federal Reserve raised rates to fight surging inflation, and some investors doubt they will regain the market's pole position any time soon. The Nasdaq 100 fell 33% in 2022, while the S&P 500 lost 19.4%.
The top six stocks by market value in late 2021 - Apple, Microsoft, Alphabet GOOGL.O, Amazon, Meta and Tesla TSLA.O - have seen their collective weight in the S&P 500 fall from 25% to 18%, according to Strategas Research Partners.
That dynamic echoes a pattern seen after the market’s dot-com bubble burst after the turn of the century. The six biggest stocks at that time saw their collective weight in the S&P 500 decline to 5% from a peak of 17% over a number of years, according to Strategas.
"This leadership unwind ... is going to be one that is measured in years, not in months or quarters," said Chris Verrone, head of technical and macro research at Strategas.
EARNINGS TEST
Companies comprising over half the S&P 500's market value are due to report results in the next two weeks, including Microsoft, the second-largest U.S. company by market value, on Tuesday, Elon Musk's Tesla and IBM IBM.N on Wednesday and Intel INTC.O on Thursday. Apple, the largest U.S. company by market value, and Google-parent Alphabet report the following week.
Fourth-quarter earnings in the tech sector are expected to have declined 9.1% from a year ago, compared to a 2.8% decline for S&P 500 earnings overall, according to Refinitiv IBES.
A critical question for many megacaps, once heralded for their stellar growth, is whether they can increase revenue and profits significantly while cutting costs in the face of a possible recession.
Alphabet Inc GOOGL.O said Friday it is cutting about 12,000 jobs, or 6% of its workforce, the latest tech giant to announce layoffs. Microsoft on Wednesday said it would eliminate 10,000 jobs while Amazon started notifying employees of its own 18,000-person job cuts.
"The biggest positive could be if they could show a control of expenses while keeping at least reasonable growth intact," said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey. "It’s a hard balancing act."
Valuations for tech and megacap companies have moderated after last year's selloff, though they still stand above those of the broader market. The S&P 500 tech sector still trades at a roughly 19% premium to the broader index, above its 7% average of the past 10 years, according to Refinitiv Datastream.
Nonetheless, some investors are reluctant to bet against tech stocks.
The Wells Fargo Investment Institute counts tech as one of its favored U.S. sectors.
The firm expects an economic downturn and believes many tech companies have businesses that are resilient to economic uncertainty, said Sameer Samana, a seniorglobal marketstrategist there.
"It’s just too important and too big a weighting not to participate," Samana said. "But the years of handily outperforming the S&P are probably now behind us.”
Megacaps as percentage of S&P 500https://tmsnrt.rs/3J1psCr
Looming U.S. earnings recessionhttps://tmsnrt.rs/3krofKz
(Reporting by Lewis Krauskopf; Editing by Ira Iosebashvili, John Stonestreet and Daniel Wallis)
((lewis.krauskopf@thomsonreuters.com; 646-223-6082; Reuters Messaging: lewis.krauskopf.thomsonreuters.com@reuters.net, Twitter: @LKrauskopf))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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"To keep this rebound going, the guidance for ’23 has to be less worse than what people are anticipating," said Peter Tuz, president of Chase Investment Counsel, whose firm recently pared its holdings in Apple AAPL.O and Microsoft MSFT.O. By Lewis Krauskopf NEW YORK, Jan 20 (Reuters) - A spate of earnings reports in coming weeks is set to test a recent bounce in technology and other megacap stocks, a category whose leadership position in U.S. markets has faltered after last year’s deep selloff. Shares of some megacap companies - which include those grouped outside of tech in sectors like communication services and consumer discretionary - have shot higher, with Amazon AMZN.O, Meta Platforms META.O and Nvidia NVDA.O posting double-digit percentage increases.
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"To keep this rebound going, the guidance for ’23 has to be less worse than what people are anticipating," said Peter Tuz, president of Chase Investment Counsel, whose firm recently pared its holdings in Apple AAPL.O and Microsoft MSFT.O. The top six stocks by market value in late 2021 - Apple, Microsoft, Alphabet GOOGL.O, Amazon, Meta and Tesla TSLA.O - have seen their collective weight in the S&P 500 fall from 25% to 18%, according to Strategas Research Partners. Fourth-quarter earnings in the tech sector are expected to have declined 9.1% from a year ago, compared to a 2.8% decline for S&P 500 earnings overall, according to Refinitiv IBES.
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"To keep this rebound going, the guidance for ’23 has to be less worse than what people are anticipating," said Peter Tuz, president of Chase Investment Counsel, whose firm recently pared its holdings in Apple AAPL.O and Microsoft MSFT.O. By Lewis Krauskopf NEW YORK, Jan 20 (Reuters) - A spate of earnings reports in coming weeks is set to test a recent bounce in technology and other megacap stocks, a category whose leadership position in U.S. markets has faltered after last year’s deep selloff. Companies comprising over half the S&P 500's market value are due to report results in the next two weeks, including Microsoft, the second-largest U.S. company by market value, on Tuesday, Elon Musk's Tesla and IBM IBM.N on Wednesday and Intel INTC.O on Thursday.
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"To keep this rebound going, the guidance for ’23 has to be less worse than what people are anticipating," said Peter Tuz, president of Chase Investment Counsel, whose firm recently pared its holdings in Apple AAPL.O and Microsoft MSFT.O. The top six stocks by market value in late 2021 - Apple, Microsoft, Alphabet GOOGL.O, Amazon, Meta and Tesla TSLA.O - have seen their collective weight in the S&P 500 fall from 25% to 18%, according to Strategas Research Partners. The six biggest stocks at that time saw their collective weight in the S&P 500 decline to 5% from a peak of 17% over a number of years, according to Strategas.
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17512.0
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2023-01-20 00:00:00 UTC
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Apple wins appeal to keep $308 million U.S. patent verdict at bay
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AAPL
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https://www.nasdaq.com/articles/apple-wins-appeal-to-keep-%24308-million-u.s.-patent-verdict-at-bay
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nan
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By Blake Brittain
Jan 20 (Reuters) - A U.S. appeals court on Friday affirmed a decision to throw out a $308.5 million jury verdict against Apple Inc AAPL.O for allegedly infringing a patent related to digital rights management.
The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., upheld an East Texas federal judge's ruling that Personalized Media Communications LLC's patent was invalid because the company engaged in misconduct before the U.S. Patent and Trademark Office.
PMC declined to comment on the decision. Representatives for Apple did not immediately respond to a request for comment.
PMC, a patent licensing company, first sued Apple for infringing several patents in 2015. An East Texas jury said in August 2021 that the FairPlay software used in Apple's iTunes and App Store to decrypt movies, music and apps infringed one of the patents and awarded the company $308.5 million in damages.
District Judge Rodney Gilstrap overturned the verdict four months later. He said PMC's patent was unenforceable because the company had used a "deliberate strategy of delay" in applying for the patent, representing a "conscious and egregious misuse of the statutory patent system."
Gilstrap said PMC had used an improper "submarine" strategy that some applicants employed before 1995 to delay patents from becoming public until a market developed for their invention.
The Federal Circuit affirmed Gilstrap in a 2-1 ruling, finding that PMC's "inequitable scheme to extend its patent rights" had prejudiced Apple.
(Reporting by Blake Brittain in Washington Editing by David Bario and Matthew Lewis)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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By Blake Brittain Jan 20 (Reuters) - A U.S. appeals court on Friday affirmed a decision to throw out a $308.5 million jury verdict against Apple Inc AAPL.O for allegedly infringing a patent related to digital rights management. Gilstrap said PMC had used an improper "submarine" strategy that some applicants employed before 1995 to delay patents from becoming public until a market developed for their invention. The Federal Circuit affirmed Gilstrap in a 2-1 ruling, finding that PMC's "inequitable scheme to extend its patent rights" had prejudiced Apple.
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By Blake Brittain Jan 20 (Reuters) - A U.S. appeals court on Friday affirmed a decision to throw out a $308.5 million jury verdict against Apple Inc AAPL.O for allegedly infringing a patent related to digital rights management. The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., upheld an East Texas federal judge's ruling that Personalized Media Communications LLC's patent was invalid because the company engaged in misconduct before the U.S. Patent and Trademark Office. The Federal Circuit affirmed Gilstrap in a 2-1 ruling, finding that PMC's "inequitable scheme to extend its patent rights" had prejudiced Apple.
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By Blake Brittain Jan 20 (Reuters) - A U.S. appeals court on Friday affirmed a decision to throw out a $308.5 million jury verdict against Apple Inc AAPL.O for allegedly infringing a patent related to digital rights management. The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., upheld an East Texas federal judge's ruling that Personalized Media Communications LLC's patent was invalid because the company engaged in misconduct before the U.S. Patent and Trademark Office. PMC, a patent licensing company, first sued Apple for infringing several patents in 2015.
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By Blake Brittain Jan 20 (Reuters) - A U.S. appeals court on Friday affirmed a decision to throw out a $308.5 million jury verdict against Apple Inc AAPL.O for allegedly infringing a patent related to digital rights management. PMC declined to comment on the decision. An East Texas jury said in August 2021 that the FairPlay software used in Apple's iTunes and App Store to decrypt movies, music and apps infringed one of the patents and awarded the company $308.5 million in damages.
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17513.0
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2023-01-20 00:00:00 UTC
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After Hours Most Active for Jan 20, 2023 : WY, CSX, AAPL, BAC, AMZN, GILD, CL, ADM, BEKE, AFL, TLT, MSFT
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AAPL
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https://www.nasdaq.com/articles/after-hours-most-active-for-jan-20-2023-%3A-wy-csx-aapl-bac-amzn-gild-cl-adm-beke-afl-tlt
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The NASDAQ 100 After Hours Indicator is down -7.58 to 11,611.45. The total After hours volume is currently 112,295,490 shares traded.
The following are the most active stocks for the after hours session:
Weyerhaeuser Company (WY) is unchanged at $32.03, with 6,292,793 shares traded.WY is scheduled to provide an earnings report on 1/26/2023, for the fiscal quarter ending Dec2022. The consensus earnings per share forecast is 0.18 per share, which represents a 49 percent increase over the EPS one Year Ago
CSX Corporation (CSX) is unchanged at $32.01, with 5,588,333 shares traded.CSX is scheduled to provide an earnings report on 1/25/2023, for the fiscal quarter ending Dec2022. The consensus earnings per share forecast is 0.47 per share, which represents a 42 percent increase over the EPS one Year Ago
Apple Inc. (AAPL) is -0.03 at $137.84, with 5,021,576 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Bank of America Corporation (BAC) is -0.01 at $33.84, with 4,880,538 shares traded. BAC's current last sale is 84.6% of the target price of $40.
Amazon.com, Inc. (AMZN) is -0.11 at $97.14, with 3,390,097 shares traded. As reported by Zacks, the current mean recommendation for AMZN is in the "buy range".
Gilead Sciences, Inc. (GILD) is -0.65 at $82.36, with 3,265,790 shares traded. GILD's current last sale is 92.54% of the target price of $89.
Colgate-Palmolive Company (CL) is unchanged at $75.44, with 3,222,562 shares traded.CL is scheduled to provide an earnings report on 1/27/2023, for the fiscal quarter ending Dec2022. The consensus earnings per share forecast is 0.76 per share, which represents a 79 percent increase over the EPS one Year Ago
Archer-Daniels-Midland Company (ADM) is -0.05 at $84.70, with 2,699,213 shares traded.ADM is scheduled to provide an earnings report on 1/26/2023, for the fiscal quarter ending Dec2022. The consensus earnings per share forecast is 1.6 per share, which represents a 150 percent increase over the EPS one Year Ago
KE Holdings Inc (BEKE) is -0.045 at $19.13, with 2,607,186 shares traded. As reported by Zacks, the current mean recommendation for BEKE is in the "buy range".
Aflac Incorporated (AFL) is unchanged at $71.05, with 2,557,485 shares traded. Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Mar 2023. The consensus EPS forecast is $1.35. AFL's current last sale is 100.07% of the target price of $71.
iShares 20+ Year Treasury Bond ETF (TLT) is +0.2 at $106.40, with 2,249,610 shares traded. This represents a 15.84% increase from its 52 Week Low.
Microsoft Corporation (MSFT) is +0.14 at $240.36, with 2,055,363 shares traded.MSFT is scheduled to provide an earnings report on 1/24/2023, for the fiscal quarter ending Dec2022. The consensus earnings per share forecast is 2.29 per share, which represents a 248 percent increase over the EPS one Year Ago
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple Inc. (AAPL) is -0.03 at $137.84, with 5,021,576 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Weyerhaeuser Company (WY) is unchanged at $32.03, with 6,292,793 shares traded.WY is scheduled to provide an earnings report on 1/26/2023, for the fiscal quarter ending Dec2022.
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Apple Inc. (AAPL) is -0.03 at $137.84, with 5,021,576 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The consensus earnings per share forecast is 0.18 per share, which represents a 49 percent increase over the EPS one Year Ago
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Apple Inc. (AAPL) is -0.03 at $137.84, with 5,021,576 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The consensus earnings per share forecast is 0.18 per share, which represents a 49 percent increase over the EPS one Year Ago
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As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Apple Inc. (AAPL) is -0.03 at $137.84, with 5,021,576 shares traded. Amazon.com, Inc. (AMZN) is -0.11 at $97.14, with 3,390,097 shares traded.
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17514.0
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2023-01-20 00:00:00 UTC
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2 Top Warren Buffett Stocks to Buy in 2023 and Hold Forever
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AAPL
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https://www.nasdaq.com/articles/2-top-warren-buffett-stocks-to-buy-in-2023-and-hold-forever
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In many ways, investing is like any other discipline. To get better at it, it helps to model what experts are doing. And there aren't many investing specialists that are more recognized than Warren Buffett. The Oracle of Omaha has an impeccable track record, having led Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) for decades while generally beating the stock market. At the very least, some of Buffett's favorite stocks are worth considering. And two in particular that stand out are Apple (NASDAQ: AAPL) and his very own Berkshire Hathaway. Read on to find out why.
1. Apple
Tech giant Apple is the largest holding in Berkshire Hathaway's portfolio. Buffett is a fan of the company; he once said it is "probably the best business I know in the world." What makes Apple such a fantastic company? Perhaps it is its ability to reinvent technologies. Apple's most popular products are not the company's brand-new creations from scratch; they are new and clever takes on existing products that managed to attract millions of customers worldwide.
But beyond Apple's technological prowess, the company successfully built a competitive advantage, something Buffett is fond of. Apple's brand is highly recognizable, valuable, and powerful, as evidenced by the fact that customers continued to buy the company's expensive (and, for the most part, nonessential products) last year amid near 40-year high inflation and other economic problems. Further, the company's ecosystem benefits from high switching costs.
For iPhone users, jumping ship to an Android device involves transferring files, an incredibly inconvenient task many choose to avoid. Some surveys have found that the iPhone has the highest loyalty rate -- above 90% -- of all major smartphone brands. That's why the company has over 1 billion iPhone users worldwide.
And this massive installed base will become increasingly more important for Apple as it finds new and improved ways to monetize it. The company's push into the fintech world looks particularly promising, at least in my view. Apple is a cash-generating machine, with a free cash flow of about $111.4 billion.
The company has the funds to pour money into new profitable ventures. Apple's shares have dropped by 22% in the past year, partly due to supply chain and manufacturing problems. But the company's earnings, track record, and prospects are too attractive to ignore. Buying Apple's shares right now while they hover around their 52-week lows is a great move.
2. Berkshire Hathaway
Berkshire Hathaway has been performing better than most in this market downturn. Shares are slightly in the green in the past year as of this writing. There are many reasons why this major conglomerate is an ideal stock to buy when the economy is down (or even when it isn't). The first is that Berkshire Hathaway owns a large portfolio of businesses in various industries, granting it a solid degree of diversification.
Some of Berkshire Hathaway's best-known subsidiaries include insurance giant Geico, battery manufacturer Duracell, and clothing specialist Fruit of the Loom. Berkshire Hathaway's diversification allows it to handle economic shocks since it isn't too dependent on just one or two businesses. Second, Berkshire Hathaway's track record against the market, especially since Buffett took over in 1965, is impressive.
BRK.A data by YCharts
While past performance is no guarantee of future success, the company has performed that well because of Buffett and his team's guidance and investing philosophy. Owning shares of Berkshire Hathaway means owning a company led by one of the best investors ever -- two if you include Charlie Munger.
And there are few things more critical to the long-term success of a business than the management team leading it. But it also raises an issue. Both Buffett and Munger are in their 90s. What happens when the company has to transition to the next era of leadership?
The person chosen to step up when that happens is Gregory Abel, who currently serves as the chairman of Berkshire Hathaway's non-insurance operations and is the CEO of Berkshire Hathaway Energy. Abel has been at the company since 1999 and has presumably learned enough from Buffett to "keep the culture," in the words of the Oracle of Omaha.
That is Buffett's way of ensuring investors that Berkshire Hathaway has promising prospects with or without him at the helm. Most investors interested in Berkshire Hathaway will gravitate toward the class B shares, BRK.B. For one, Berkshire Hathaway's original BRK.A stock -- having provided amazing returns over decades -- is substantially more expensive: Shares are currently changing hands for $461,300.
Meanwhile, the company's class B shares are a much more affordable $305. That is one of the reasons why Buffett and his team introduced lower-priced shares: To give the average investor a chance to own the stock. And although class B shares have some downsides, including lower voting rights, the two are otherwise pretty similar, although Class A shares can be converted to class B, but not vice-versa.
For most investors, the Class B shares will be worth the lower price point over long periods. What's more important than which class of shares one buys is that Berkshire Hathaway's long-term future could look much like its past, and that is more than enough reason to purchase the conglomerate's shares.
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Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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And two in particular that stand out are Apple (NASDAQ: AAPL) and his very own Berkshire Hathaway. For iPhone users, jumping ship to an Android device involves transferring files, an incredibly inconvenient task many choose to avoid. Some of Berkshire Hathaway's best-known subsidiaries include insurance giant Geico, battery manufacturer Duracell, and clothing specialist Fruit of the Loom.
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And two in particular that stand out are Apple (NASDAQ: AAPL) and his very own Berkshire Hathaway. The Oracle of Omaha has an impeccable track record, having led Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) for decades while generally beating the stock market. Owning shares of Berkshire Hathaway means owning a company led by one of the best investors ever -- two if you include Charlie Munger.
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And two in particular that stand out are Apple (NASDAQ: AAPL) and his very own Berkshire Hathaway. Owning shares of Berkshire Hathaway means owning a company led by one of the best investors ever -- two if you include Charlie Munger. What's more important than which class of shares one buys is that Berkshire Hathaway's long-term future could look much like its past, and that is more than enough reason to purchase the conglomerate's shares.
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And two in particular that stand out are Apple (NASDAQ: AAPL) and his very own Berkshire Hathaway. That's why the company has over 1 billion iPhone users worldwide. Berkshire Hathaway Berkshire Hathaway has been performing better than most in this market downturn.
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17515.0
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2023-01-20 00:00:00 UTC
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Netflix (NFLX) Q4 Earnings Miss, Revenues Up Y/Y on User Gain
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AAPL
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https://www.nasdaq.com/articles/netflix-nflx-q4-earnings-miss-revenues-up-y-y-on-user-gain
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Netflix NFLX reported fourth-quarter 2022 earnings of 12 cents per share, missing the Zacks Consensus Estimate by 74.47%. The figure slumped 91% year over year.
Revenues of $7.85 billion increased 1.9% year over year but lagged the consensus mark by 0.18%. On a foreign-exchange neutral basis, revenues grew 10% year over year.
The average revenues per membership decreased 2% year over year on a reported basis but increased 5% on a foreign-exchange neutral basis.
The streaming giant gained 7.66 million paid subscribers globally, higher than its estimate of 4.5 million users. It added 8.28 million paid subscribers in the year-ago quarter.
At the end of the fourth quarter, Netflix had 230.75 million paid subscribers globally, up 4% year over year and better than our estimate of 227.59 million.
Although Netflix is suffering from growing competition from services provided by Amazon AMZN, Disney DIS and Apple AAPL, the company benefited from a strong content portfolio in the reported quarter.
Hits like Wednesday, Harry & Meghan, Troll, and Glass Onion: A Knives Out Mystery helped Netflix to win subscribers.
Shares of this Zacks Rank #3 (Hold) company were up almost 6% in pre-market trading following the announcement of the better-than-expected results. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Netflix, Inc. Price, Consensus and EPS Surprise
Netflix, Inc. price-consensus-eps-surprise-chart | Netflix, Inc. Quote
Netflix’s shares have underperformed Apple and Disney but outperformed Amazon in the past year. While Netflix shares have declined 37.9%, Apple, Disney and Amazon lost 17.8%, 32.9% and 38.3%, respectively.
Netflix also announced the appointment of Greg Peters as Co-CEO, along with Ted Sarandos. Reed Hastings has been appointed as the executive chairman.
Segmental Revenue Details
The United States and Canada (“UCAN") reported revenues of $3.60 billion, which rose 8.6% year over year and accounted for 45.8% of the total revenues. ARPU grew 10% from the year-ago quarter on a foreign-exchange neutral basis.
The paid subscriber base for UCAN decreased 1.2% from the year-ago quarter to 74.30 million, which was better than our estimate of 73.84 million. The company gained 0.91 million paid subscribers compared with the year-ago quarter’s 1.19 million.
Europe, Middle East & Africa (“EMEA”) reported revenues of $2.35 billion, which declined 6.9% year over year and accounted for 29.9% of the total revenues. ARPU grew 5% from the year-ago quarter on a foreign-exchange neutral basis.
The paid subscriber base for EMEA increased 3.6% from the year-ago quarter to 76.73 million, which was better than our estimate of 74.53 million. The company gained 3.2 million paid subscribers compared with the year-ago quarter’s net addition of 3.54 million.
Latin America’s (LATAM) revenues of $1.02 billion increased 5.5% year over year, contributing 13% to the total revenues. ARPU grew 7% from the year-ago quarter on a foreign-exchange neutral basis.
The paid subscriber base for LATAM rose 4.4% from the year-ago quarter to 41.70 million and was higher than our estimate of 40.69 million. The company gained 1.76 million paid subscribers compared with the year-ago quarter’s net addition of 0.97 million.
The Asia Pacific’s (“APAC”) revenues of $857 million decreased 1.6% year over year and accounted for 10.9% of the total revenues. ARPU decreased 17% year over year on a foreign-exchange neutral basis.
The paid subscriber base for APAC jumped 16.5% from the year-ago quarter to 38.02 million but was lower than our estimate of 38.53 million. The company added 1.8 million paid subscribers in the quarter, down 30.2% year over year.
Operating Details
Marketing expenses increased 4.9% year over year to $831.6 million. As a percentage of revenues, marketing expenses increased 30 basis points (bps) to 10.6%.
Operating income decreased 13% year over year to $549.9 million, higher than Netflix’s guidance of $330 million, driven by higher revenues and lower hiring. The operating margin contracted 120 bps on a year-over-year basis to 7% primarily due to unfavorable forex.
Balance Sheet & Free Cash Flow
Netflix had $6.06 billion of cash and cash equivalents as of Dec 31, 2022, compared with $6.11 billion as of Sep 30, 2022.
Long-term debt was $14.4 billion as of Dec 31, 2022 compared with $13.9 billion as of Sep 30, 2022.
Streaming content obligations were $21.83 billion as of Dec 31, 2022, compared with $21.57 billion as of Sep 30, 2022.
Netflix reported a free cash flow of $332 million compared with $471.9 million in the previous quarter.
Guidance
For the first quarter of 2023, Netflix forecasts earnings of $2.82 per share, indicating a 20% decline from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for the same is pegged at $2.97 per share, currently higher than the company’s expectation but suggesting a 15.86% decline from the figure reported in the year-ago quarter.
Total revenues are anticipated to be $8.172 billion, suggesting year-over-year growth of 3.9%. The consensus mark for revenues stands at $8.17 billion, almost in line with the company’s expectation and indicating 3.88% growth from the figure reported in the year-ago quarter.
The quarterly operating margin is projected at 19.9% compared with the 25.1% reported in the year-ago quarter.
For 2023, Netflix expects revenues on a foreign-exchange neutral basis to accelerate during the course of the year. Paid net additions are likely to be greater in the second quarter of 2023 compared with the first quarter due to the rollout of paid sharing more expansively.
Moreover, Netflix expects the operating margin to be 21-22%. Including forex, the range is expected to be 18-20%.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
The Walt Disney Company (DIS) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Although Netflix is suffering from growing competition from services provided by Amazon AMZN, Disney DIS and Apple AAPL, the company benefited from a strong content portfolio in the reported quarter. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report To read this article on Zacks.com click here. The Zacks Consensus Estimate for the same is pegged at $2.97 per share, currently higher than the company’s expectation but suggesting a 15.86% decline from the figure reported in the year-ago quarter.
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Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report To read this article on Zacks.com click here. Although Netflix is suffering from growing competition from services provided by Amazon AMZN, Disney DIS and Apple AAPL, the company benefited from a strong content portfolio in the reported quarter. The company gained 3.2 million paid subscribers compared with the year-ago quarter’s net addition of 3.54 million.
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Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report To read this article on Zacks.com click here. Although Netflix is suffering from growing competition from services provided by Amazon AMZN, Disney DIS and Apple AAPL, the company benefited from a strong content portfolio in the reported quarter. At the end of the fourth quarter, Netflix had 230.75 million paid subscribers globally, up 4% year over year and better than our estimate of 227.59 million.
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Although Netflix is suffering from growing competition from services provided by Amazon AMZN, Disney DIS and Apple AAPL, the company benefited from a strong content portfolio in the reported quarter. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report To read this article on Zacks.com click here. Revenues of $7.85 billion increased 1.9% year over year but lagged the consensus mark by 0.18%.
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2023-01-20 00:00:00 UTC
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Should Vanguard Growth ETF (VUG) Be on Your Investing Radar?
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https://www.nasdaq.com/articles/should-vanguard-growth-etf-vug-be-on-your-investing-radar-5
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Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Vanguard Growth ETF (VUG) is a passively managed exchange traded fund launched on 01/26/2004.
The fund is sponsored by Vanguard. It has amassed assets over $70.19 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Qualities of growth stocks include faster growth rates compared to the broader market, as well as higher valuations and higher than average sales and earnings growth rates. Additionally, growth stocks have a greater level of risk associated with them. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.04%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.68%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 45.90% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Apple Inc. (AAPL) accounts for about 13.17% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN).
The top 10 holdings account for about 43.12% of total assets under management.
Performance and Risk
VUG seeks to match the performance of the CRSP U.S. Large Cap Growth Index before fees and expenses. The CRSP US Large Cap Growth Index represents the growth companies of the CRSP US Large Cap Index.
The ETF has added roughly 3.73% so far this year and is down about -23.57% in the last one year (as of 01/20/2023). In the past 52-week period, it has traded between $208.44 and $295.89.
The ETF has a beta of 1.09 and standard deviation of 29.40% for the trailing three-year period, making it a medium risk choice in the space. With about 247 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, VUG is a sufficient option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Growth ETF (IWF) and the Invesco QQQ (QQQ) track a similar index. While iShares Russell 1000 Growth ETF has $59.34 billion in assets, Invesco QQQ has $147.25 billion. IWF has an expense ratio of 0.18% and QQQ charges 0.20%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Vanguard Growth ETF (VUG): ETF Research Reports
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
iShares Russell 1000 Growth ETF (IWF): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Looking at individual holdings, Apple Inc. (AAPL) accounts for about 13.17% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Click to get this free report Vanguard Growth ETF (VUG): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports iShares Russell 1000 Growth ETF (IWF): ETF Research Reports To read this article on Zacks.com click here. It has amassed assets over $70.19 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.
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Click to get this free report Vanguard Growth ETF (VUG): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports iShares Russell 1000 Growth ETF (IWF): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc. (AAPL) accounts for about 13.17% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Vanguard Growth ETF (VUG) is a passively managed exchange traded fund launched on 01/26/2004.
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Click to get this free report Vanguard Growth ETF (VUG): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports iShares Russell 1000 Growth ETF (IWF): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc. (AAPL) accounts for about 13.17% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Vanguard Growth ETF (VUG) is a passively managed exchange traded fund launched on 01/26/2004.
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Looking at individual holdings, Apple Inc. (AAPL) accounts for about 13.17% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Click to get this free report Vanguard Growth ETF (VUG): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports iShares Russell 1000 Growth ETF (IWF): ETF Research Reports To read this article on Zacks.com click here. Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the Vanguard Growth ETF (VUG) is a passively managed exchange traded fund launched on 01/26/2004.
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2023-01-20 00:00:00 UTC
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89% of Warren Buffett's Secret Portfolio Is Invested in Just 5 Stocks
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https://www.nasdaq.com/articles/89-of-warren-buffetts-secret-portfolio-is-invested-in-just-5-stocks
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Few investors command as much respect on Wall Street as Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett. Although he's not infallible, he's crushed the benchmark S&P 500 on a head-to-head basis, including dividends paid, since taking the reins for Berkshire Hathaway in 1965. Through the end of 2021, Berkshire's Class A shares (BRK.A) had delivered an aggregate return of 3,641,613%, which is over 120 times greater than the 30,209% total return of the S&P 500 over the same stretch.
Suffice it to say that following Berkshire Hathaway's 13F filings with the Securities and Exchange Commission (SEC) and riding the Oracle of Omaha's coattails has been a moneymaking proposition for over a half-century.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
However, not all of Berkshire Hathaway's holdings can be found in its quarterly 13F filing with the SEC. Thanks to the acquisition of reinsurance giant General Re 25 years ago, Buffett's company also owns specialty investment firm New England Asset Management (NEAM). Even though Buffett isn't involved in the investment decisions of this $5.9 billion fund, NEAM is, nevertheless, owned by Berkshire Hathaway. This makes New England Asset Management Warren Buffett's secret portfolio.
What's particularly interesting about Warren Buffett's hidden portfolio is that it's concentrated very similarly to Berkshire Hathaway's investment portfolio. All told, 89% of Warren Buffett's secret portfolio is invested in just five stocks.
Apple: 48.13% of invested assets
If you thought Buffett's investment portfolio at Berkshire Hathaway was heavily concentrated in tech stock Apple (NASDAQ: AAPL), wait until you get a closer look at his hidden portfolio via NEAM. As of Sept. 30, 2022, Apple accounted for more than 48% of New England Asset Management's nearly $5.9 billion in assets under management.
The lure of Apple is that it's an undeniable moneymaker. It's generated more than $122 billion in operating cash flow over the trailing-12-month period, with exceptional customer loyalty and top-tier innovation acting as the company's lead drivers. Apple's iPhone is its top revenue producer and accounts for about half of all U.S. smartphone share.
Meanwhile, CEO Tim Cook is overseeing a successful shift to a subscription-driven operating model. This services segment offers sustained double-digit annual growth potential throughout the decade.
Additionally, Apple's capital-return program is unrivaled. It's paying out approximately $14.6 billion in dividends each year and has repurchased a whopping $554 billion worth of its common stock over the past decade. These buybacks have had a tangibly positive impact on Apple's earnings per share.
Bank of America: 11.69% of invested assets
Just like Berkshire Hathaway's core investment portfolio, Buffett's secret portfolio has Bank of America (NYSE: BAC) as its second-largest holding.
The reason Warren Buffett and his team love bank stocks so much is because they're perfectly positioned to take advantage of long periods of U.S. economic expansion. Even though recessions are a normal part of the economic cycle, they don't last very long.
As the U.S. economy expands, money-center giants like Bank of America are able to benefit from what I like to call the "bread-and-butter of banking": loan and deposit growth. It may not be sexy from a business standpoint, but growing loans and deposits is what generates a profit for banks and allows them to return capital to shareholders via buybacks and dividends.
Bank of America is also well positioned for the Federal Reserve's aggressive rate hikes. Among large banks, BofA has the highest sensitivity to shifts in the yield curve. With the nation's central bank having no choice but to combat historically high inflation, Bank of America is benefiting from a sizable jump in net interest income.
Image source: U.S. Bank.
U.S. Bancorp: 11.37% of invested assets
Regional banking giant U.S. Bancorp (NYSE: USB) is the third-largest holding in the Oracle of Omaha's hidden portfolio. The company, which is the parent of the more familiar U.S. Bank, accounts for more than 11% of NEAM's investment portfolio.
If there's one factor that helps U.S. Bancorp stand out from the crowd of publicly traded bank stocks, it's the company's digital engagement trends. As of the end of August, 82% of U.S. Bancorp's active customers were banking digitally, with 62% of total sales completed online or via mobile app.
Digital transactions cost banks just a fraction of what in-person or phone-based interactions run. Not surprisingly, this digitization push has helped U.S. Bancorp consistently produce above-average return on assets.
U.S. Bancorp's other secret to success has been its financial discipline. Unlike most money-center banks, U.S. Bancorp has predominantly avoided the riskier derivative investments that sacked its larger peers during the financial crisis. I'll say it again: By focusing on the bread-and-butter of banking, it's been able to consistently outperform.
Chevron: 10.85% of invested assets
Energy stock Chevron (NYSE: CVX) was the biggest buy in 2022 for Warren Buffett's secret portfolio. As of the end of the third quarter, Chevron stacked up as a 10.85% weighting.
Investors currently bullish on Chevron are likely betting on crude oil and natural gas prices to remain elevated for years to come. When Russia invaded Ukraine, it put Europe's supply of these energy commodities into limbo. But the bigger issue might be that the COVID-19 pandemic substantially reduced capital investments in drilling, exploration, and infrastructure for years. This makes it difficult to increase the global oil and gas supply anytime soon, and should provide a relatively safe floor beneath the spot prices of energy commodities.
Another key point with Chevron is that it's an integrated operator. Though it generates its juiciest margins from drilling, Chevron also operates pipelines, chemical plants, and refineries. Chemical plants and refineries are downstream assets that benefit when crude oil prices fall. In other words, Chevron's integrated model allows it to successfully navigate any economic environment.
HP: 6.99% of invested assets
The fifth sizable holding in Warren Buffett's secret portfolio is computing and printing solutions company HP (NYSE: HPQ). As of the end of September, HP accounted for roughly 7% of New England Asset Management's invested assets.
There's no denying that HP's growth heyday is in the rearview mirror. Nonetheless, selling personal computers and printing solutions tends to generate very predictable profits and operating cash flow from one quarter to the next. Further, with HP valued at 8 times Wall Street's forecast earnings in fiscal 2023 and 2024, the argument can be made that there's a safe floor beneath HP's share price.
Mature businesses also have a tendency to put rewarding shareholders at the top of their list. HP returned $5.3 billion to its shareholders in fiscal 2022 (ended Oct. 31, 2022) in the form of dividends and share buybacks. The company, which recently announced a modest increase to its quarterly dividend, is doling out a market-topping 3.8% yield.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and HP. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple: 48.13% of invested assets If you thought Buffett's investment portfolio at Berkshire Hathaway was heavily concentrated in tech stock Apple (NASDAQ: AAPL), wait until you get a closer look at his hidden portfolio via NEAM. Thanks to the acquisition of reinsurance giant General Re 25 years ago, Buffett's company also owns specialty investment firm New England Asset Management (NEAM). The reason Warren Buffett and his team love bank stocks so much is because they're perfectly positioned to take advantage of long periods of U.S. economic expansion.
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Apple: 48.13% of invested assets If you thought Buffett's investment portfolio at Berkshire Hathaway was heavily concentrated in tech stock Apple (NASDAQ: AAPL), wait until you get a closer look at his hidden portfolio via NEAM. Bank of America: 11.69% of invested assets Just like Berkshire Hathaway's core investment portfolio, Buffett's secret portfolio has Bank of America (NYSE: BAC) as its second-largest holding. HP: 6.99% of invested assets The fifth sizable holding in Warren Buffett's secret portfolio is computing and printing solutions company HP (NYSE: HPQ).
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Apple: 48.13% of invested assets If you thought Buffett's investment portfolio at Berkshire Hathaway was heavily concentrated in tech stock Apple (NASDAQ: AAPL), wait until you get a closer look at his hidden portfolio via NEAM. Bank of America: 11.69% of invested assets Just like Berkshire Hathaway's core investment portfolio, Buffett's secret portfolio has Bank of America (NYSE: BAC) as its second-largest holding. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple.
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Apple: 48.13% of invested assets If you thought Buffett's investment portfolio at Berkshire Hathaway was heavily concentrated in tech stock Apple (NASDAQ: AAPL), wait until you get a closer look at his hidden portfolio via NEAM. Berkshire Hathaway CEO Warren Buffett. Bank of America: 11.69% of invested assets Just like Berkshire Hathaway's core investment portfolio, Buffett's secret portfolio has Bank of America (NYSE: BAC) as its second-largest holding.
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2023-01-20 00:00:00 UTC
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Should You Invest in the Fidelity MSCI Information Technology Index ETF (FTEC)?
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https://www.nasdaq.com/articles/should-you-invest-in-the-fidelity-msci-information-technology-index-etf-ftec-5
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If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the Fidelity MSCI Information Technology Index ETF (FTEC), a passively managed exchange traded fund launched on 10/21/2013.
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 6, placing it in top 38%.
Index Details
The fund is sponsored by Fidelity. It has amassed assets over $5.10 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Broad segment of the equity market. FTEC seeks to match the performance of the MSCI USA IMI Information Technology Index before fees and expenses.
The MSCI USA IMI Information Technology Index represents the performance of the information technology sector in the U.S. equity market.
Costs
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.90%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 100% of the portfolio.
Looking at individual holdings, Apple Inc Common Stock Usd.00001 (AAPL) accounts for about 21.38% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT) and Nvidia Corp Common Stock Usd.001 (NVDA).
The top 10 holdings account for about 59.05% of total assets under management.
Performance and Risk
Year-to-date, the Fidelity MSCI Information Technology Index ETF has added roughly 3.04% so far, and is down about -20.22% over the last 12 months (as of 01/20/2023). FTEC has traded between $88.99 and $126.93 in this past 52-week period.
The ETF has a beta of 1.14 and standard deviation of 32.35% for the trailing three-year period, making it a medium risk choice in the space. With about 369 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity MSCI Information Technology Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FTEC is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. Technology Select Sector SPDR ETF has $38.61 billion in assets, Vanguard Information Technology ETF has $40.59 billion. XLK has an expense ratio of 0.10% and VGT charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Vanguard Information Technology ETF (VGT): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Looking at individual holdings, Apple Inc Common Stock Usd.00001 (AAPL) accounts for about 21.38% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT) and Nvidia Corp Common Stock Usd.001 (NVDA). Click to get this free report Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Technology Select Sector SPDR ETF (XLK): ETF Research Reports Vanguard Information Technology ETF (VGT): ETF Research Reports To read this article on Zacks.com click here. It has amassed assets over $5.10 billion, making it one of the largest ETFs attempting to match the performance of the Technology - Broad segment of the equity market.
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Looking at individual holdings, Apple Inc Common Stock Usd.00001 (AAPL) accounts for about 21.38% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT) and Nvidia Corp Common Stock Usd.001 (NVDA). Click to get this free report Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Technology Select Sector SPDR ETF (XLK): ETF Research Reports Vanguard Information Technology ETF (VGT): ETF Research Reports To read this article on Zacks.com click here. Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index.
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Click to get this free report Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Technology Select Sector SPDR ETF (XLK): ETF Research Reports Vanguard Information Technology ETF (VGT): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc Common Stock Usd.00001 (AAPL) accounts for about 21.38% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT) and Nvidia Corp Common Stock Usd.001 (NVDA). Alternatives Fidelity MSCI Information Technology Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors.
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Looking at individual holdings, Apple Inc Common Stock Usd.00001 (AAPL) accounts for about 21.38% of total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT) and Nvidia Corp Common Stock Usd.001 (NVDA). Click to get this free report Fidelity MSCI Information Technology Index ETF (FTEC): ETF Research Reports Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report Technology Select Sector SPDR ETF (XLK): ETF Research Reports Vanguard Information Technology ETF (VGT): ETF Research Reports To read this article on Zacks.com click here. If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the Fidelity MSCI Information Technology Index ETF (FTEC), a passively managed exchange traded fund launched on 10/21/2013.
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17519.0
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2023-01-20 00:00:00 UTC
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Didi Global's ride-hailing app back on Apple app stores in China
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AAPL
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https://www.nasdaq.com/articles/didi-globals-ride-hailing-app-back-on-apple-app-stores-in-china
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nan
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nan
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BEIJING, Jan 20 (Reuters) - Chinese technology company Didi Global's DIDI.N domestic ride-hailing app has returned to China's domestic Apple app store AAPL.O, according to checks by Reuters on Friday.
It also returned to some Android app stores on Tuesday.
Didi has been awaiting approval to resume new user registrations and downloads of its 25 banned apps in China as a key step to return to normal business since its regulatory troubles started in mid-2021.
(Reporting by Beijing newsroom; editing by Christian Schmollinger)
((Ella.Cao@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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BEIJING, Jan 20 (Reuters) - Chinese technology company Didi Global's DIDI.N domestic ride-hailing app has returned to China's domestic Apple app store AAPL.O, according to checks by Reuters on Friday. Didi has been awaiting approval to resume new user registrations and downloads of its 25 banned apps in China as a key step to return to normal business since its regulatory troubles started in mid-2021. (Reporting by Beijing newsroom; editing by Christian Schmollinger) ((Ella.Cao@thomsonreuters.com;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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BEIJING, Jan 20 (Reuters) - Chinese technology company Didi Global's DIDI.N domestic ride-hailing app has returned to China's domestic Apple app store AAPL.O, according to checks by Reuters on Friday. It also returned to some Android app stores on Tuesday. Didi has been awaiting approval to resume new user registrations and downloads of its 25 banned apps in China as a key step to return to normal business since its regulatory troubles started in mid-2021.
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BEIJING, Jan 20 (Reuters) - Chinese technology company Didi Global's DIDI.N domestic ride-hailing app has returned to China's domestic Apple app store AAPL.O, according to checks by Reuters on Friday. Didi has been awaiting approval to resume new user registrations and downloads of its 25 banned apps in China as a key step to return to normal business since its regulatory troubles started in mid-2021. (Reporting by Beijing newsroom; editing by Christian Schmollinger) ((Ella.Cao@thomsonreuters.com;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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BEIJING, Jan 20 (Reuters) - Chinese technology company Didi Global's DIDI.N domestic ride-hailing app has returned to China's domestic Apple app store AAPL.O, according to checks by Reuters on Friday. It also returned to some Android app stores on Tuesday. Didi has been awaiting approval to resume new user registrations and downloads of its 25 banned apps in China as a key step to return to normal business since its regulatory troubles started in mid-2021.
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17520.0
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2023-01-20 00:00:00 UTC
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Ericsson quarterly earnings miss expectations
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AAPL
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https://www.nasdaq.com/articles/ericsson-quarterly-earnings-miss-expectations
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nan
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nan
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Adds details from statement, CEO quote
STOCKHOLM, Jan 20 (Reuters) - Sweden's Ericsson ERICb.ST on Friday reported fourth-quarter core earnings that missed expectations for the third quarter in a row, as sales of 5G equipment slowed in high-margin markets such as the United States.
The company's quarterly adjusted operating earnings excluding restructuring charges fell to 9.3 billion Swedish crowns ($902 million) from 12.8 billion crowns a year earlier. Analysts' mean forecast for core earnings was 11.22 billion, according to Refinitiv data.
Net sales rose 21% to 86 billion crowns, beating estimates of 84.2 billion.
A settlement of a patent deal with Apple AAPL.O last month resulted in revenue of 6 billion crowns, but Ericsson also took 4 billion crowns in charges, including a provision for a potential fine from the U.S. regulators and divestments.
Ericsson said it expects significant patent revenue growth over the coming 18-24 months.
While U.S. and other markets are slowing down, Ericsson is hoping newer markets such as India would help it balance some of the lower demand for 5G equipment.
"The growth from share gains in several markets could not fully compensate for reduced operator capex and inventory reductions in other markets, including North America," Chief Executive Borje Ekholm said in a statement.
Gross margin decreased to 41.4% from 43.2% primarily due to business mix change in its Networks business.
($1 = 10.3095 Swedish crowns)
(Reporting by Supantha Mukherjee in Stockholm, editing by Terje Solsvik)
((supantha.mukherjee@thomsonreuters.com; +46 70 721 1004; Reuters Messaging: supantha.mukherjee.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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A settlement of a patent deal with Apple AAPL.O last month resulted in revenue of 6 billion crowns, but Ericsson also took 4 billion crowns in charges, including a provision for a potential fine from the U.S. regulators and divestments. Adds details from statement, CEO quote STOCKHOLM, Jan 20 (Reuters) - Sweden's Ericsson ERICb.ST on Friday reported fourth-quarter core earnings that missed expectations for the third quarter in a row, as sales of 5G equipment slowed in high-margin markets such as the United States. "The growth from share gains in several markets could not fully compensate for reduced operator capex and inventory reductions in other markets, including North America," Chief Executive Borje Ekholm said in a statement.
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A settlement of a patent deal with Apple AAPL.O last month resulted in revenue of 6 billion crowns, but Ericsson also took 4 billion crowns in charges, including a provision for a potential fine from the U.S. regulators and divestments. Adds details from statement, CEO quote STOCKHOLM, Jan 20 (Reuters) - Sweden's Ericsson ERICb.ST on Friday reported fourth-quarter core earnings that missed expectations for the third quarter in a row, as sales of 5G equipment slowed in high-margin markets such as the United States. The company's quarterly adjusted operating earnings excluding restructuring charges fell to 9.3 billion Swedish crowns ($902 million) from 12.8 billion crowns a year earlier.
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A settlement of a patent deal with Apple AAPL.O last month resulted in revenue of 6 billion crowns, but Ericsson also took 4 billion crowns in charges, including a provision for a potential fine from the U.S. regulators and divestments. Adds details from statement, CEO quote STOCKHOLM, Jan 20 (Reuters) - Sweden's Ericsson ERICb.ST on Friday reported fourth-quarter core earnings that missed expectations for the third quarter in a row, as sales of 5G equipment slowed in high-margin markets such as the United States. The company's quarterly adjusted operating earnings excluding restructuring charges fell to 9.3 billion Swedish crowns ($902 million) from 12.8 billion crowns a year earlier.
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A settlement of a patent deal with Apple AAPL.O last month resulted in revenue of 6 billion crowns, but Ericsson also took 4 billion crowns in charges, including a provision for a potential fine from the U.S. regulators and divestments. Analysts' mean forecast for core earnings was 11.22 billion, according to Refinitiv data. While U.S. and other markets are slowing down, Ericsson is hoping newer markets such as India would help it balance some of the lower demand for 5G equipment.
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17521.0
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2023-01-20 00:00:00 UTC
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Apple Stock: Bull vs. Bear
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AAPL
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https://www.nasdaq.com/articles/apple-stock%3A-bull-vs.-bear-2
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nan
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nan
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With a market capitalization of roughly $2.16 trillion, Apple (NASDAQ: AAPL) stands as the world's largest publicly traded company -- and it's actually held up pretty well against the broad-based sell-off for technology stocks. While the tech-heavy Nasdaq Composite index has fallen roughly 25.5% over the last year, Apple has dipped "only" 21.5% across the stretch.
With the company still posting incredible profits, should investors be buying Apple stock amid the broader valuation pullback for the tech sector? Or does the massive tech titan still present too much downside risk at current prices? Read on for a look at bullish and bearish theses presented by two Motley Fool contributors.
Image source: Apple.
A serial innovator at a reasonable valuation
Parkev Tatevosian: The core of my bull case for Apple rests on its decades of innovative consumer products. Apple has given the world iPods, iPhones, iPads, AirPods, Apple Watch, and more. What's most valuable for investors is that the aforementioned products have gone through multiple iterations. That means Apple can get an incredible return on its investment in research and development.
Meanwhile, customers feel they are getting such good value that they continue upgrading their Apple hardware products every few years. The combination of new and returning consumers has expanded Apple's sales from $171 billion in 2013 to $394 billion in 2022. It's not an easy task for any couple to more than double sales in ten years. It's exponentially harder to do when you're starting from a base of $171 billion.
More impressive than Apple's revenue growth, tremendous as it may be, is its profit growth. Apple's operating income from 2013 to 2012 increased from $49 billion to $119 billion. In other words, over the decades, Apple has proved it is a serial innovator and is doing an excellent job turning those creations into profits.
AAPL PE Ratio (Forward) data by YCharts.
With a forward price-to-earnings ratio of roughly 22, Apple's stock is not cheap, but investors can build enviable wealth by buying excellent companies at reasonable prices.
2023 could prove to be a tough year for Apple
Keith Noonan: For starters, I should say that I'm not bearish on Apple's long-term prospects. But in today's volatile market, there are some significant risk factors on the near-term horizon, and I think that even bullish investors would do well to familiarize themselves with bearish scenarios and things that could go wrong for the stock.
As my colleague Parkev notes above, Apple is valued at approximately 22 times expected forward earnings -- and that kind of growth-dependent valuation opens the door for turbulent trading, given recent market conditions and the potential for continued headwinds on the horizon. If the Federal Reserve continues to serve up rapid interest rate hikes in order to combat inflation, there's a real risk that Apple stock could continue to see multiple contractions. The potential for a prolonged recession to shape 2023's operating backdrop could also weigh on the company's premium-oriented business.
As it's facing a potentially substantial economic downturn, there's a risk that shoppers will be less eager to shell out for the company's new iPhone models. iPhone sales accounted for more than half of the company's overall revenue last fiscal year, and relatively soft performance for this year's annual hardware refresh would have substantial adverse impacts on the company's top and bottom lines.
In the company's most recently completed fiscal year, which ended in September 2022, the company's revenue grew roughly 8%. Meanwhile, earnings for the period were up 9% on an annual basis. In its previous fiscal year, Apple posted revenue growth of 33% and a 71% increase in earnings per share. The tech giant has already seen a dramatic growth deceleration recently, and there's a risk that the stock could continue to lose ground if macroeconomic conditions tamp down on business performance this year.
Should you buy Apple stock today?
Apple is one of the world's most profitable companies, and it has built an impressive hardware and software ecosystem. It's also demonstrated an impressive penchant for design and innovation.
For long-term investors undeterred by the potential for near-term valuation volatility, there's a good chance that the tech giant's stock will prove to be a worthwhile portfolio addition. But it's also worth keeping near-term pressures in mind. This year's operating backdrop may wind up being defined by a significant economic downturn, so even bullish investors may want to take a dollar-cost-averaging approach to Apple stock rather than buying all at once.
10 stocks we like better than Apple
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of January 9, 2023
Keith Noonan has no position in any of the stocks mentioned. Parkev Tatevosian, CFA has positions in Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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With a market capitalization of roughly $2.16 trillion, Apple (NASDAQ: AAPL) stands as the world's largest publicly traded company -- and it's actually held up pretty well against the broad-based sell-off for technology stocks. AAPL PE Ratio (Forward) data by YCharts. As my colleague Parkev notes above, Apple is valued at approximately 22 times expected forward earnings -- and that kind of growth-dependent valuation opens the door for turbulent trading, given recent market conditions and the potential for continued headwinds on the horizon.
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With a market capitalization of roughly $2.16 trillion, Apple (NASDAQ: AAPL) stands as the world's largest publicly traded company -- and it's actually held up pretty well against the broad-based sell-off for technology stocks. AAPL PE Ratio (Forward) data by YCharts. With the company still posting incredible profits, should investors be buying Apple stock amid the broader valuation pullback for the tech sector?
|
With a market capitalization of roughly $2.16 trillion, Apple (NASDAQ: AAPL) stands as the world's largest publicly traded company -- and it's actually held up pretty well against the broad-based sell-off for technology stocks. AAPL PE Ratio (Forward) data by YCharts. With the company still posting incredible profits, should investors be buying Apple stock amid the broader valuation pullback for the tech sector?
|
With a market capitalization of roughly $2.16 trillion, Apple (NASDAQ: AAPL) stands as the world's largest publicly traded company -- and it's actually held up pretty well against the broad-based sell-off for technology stocks. AAPL PE Ratio (Forward) data by YCharts. The tech giant has already seen a dramatic growth deceleration recently, and there's a risk that the stock could continue to lose ground if macroeconomic conditions tamp down on business performance this year.
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17522.0
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2023-01-20 00:00:00 UTC
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3 Stocks Warren Buffett Is Almost Certainly Buying in 2023
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AAPL
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https://www.nasdaq.com/articles/3-stocks-warren-buffett-is-almost-certainly-buying-in-2023
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nan
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nan
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Imagine a stack of $1 bills rising 7,143 miles into the sky. That's how big Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) cash stockpile was as of the end of the third quarter of 2022. The total was $105.2 billion. That's a lot of money for a renowned investor like Warren Buffett to put to work.
Buffett has stated in the past that he doesn't like having too much cash sitting around. However, he wants to find stocks that meet his high standards before investing even a dime. It's a pretty good bet that the legendary investor will be able to find great candidates in the new year. Here are three stocks that Buffett is almost certainly buying in 2023.
1. Berkshire Hathaway
This one is practically a no-brainer. The stock that Buffett is most likely to buy in 2023 with Berkshire Hathaway's massive pile of money is, without question, Berkshire itself. How can we be so certain that Buffett is buying Berkshire shares? Just look at the past -- and the present.
Berkshire bought back its own shares in each of the first three quarters of 2022. I would especially point out the buybacks in February and March of last year. The average prices of Berkshire's Class B shares in those purchases were $312.14 and $322.88, respectively. Berkshire's current share price is lower than both levels.
The company can buy back shares anytime Buffett and Berkshire vice-chairman Charlie Munger think that the stock is below its intrinsic value. The only caveat is that Berkshire's cash stockpile can't fall below $30 billion. Since Buffett and Munger clearly believed the stock was below its intrinsic value at a higher price than it is now, there's little doubt that Buffett will be buying more Berkshire shares.
2. Apple
There's a high probability that Buffett is buying Apple (NASDAQ: AAPL) these days. Buffett views Apple as one of Berkshire's "four giants" -- businesses that make up a big chunk of the company's value. It's the only one of the giants that isn't a Berkshire subsidiary. But it's not surprising that Buffett includes Apple -- it's by far the biggest holding in Berkshire's equity portfolio.
Berkshire bought additional shares of the tech giant in Q1 and Q2 last year. Buffett told CNBC in May 2022 that he scooped up more of the stock when it declined in April. He added: "Unfortunately, the stock went back up, so I stopped. Otherwise, who knows how much we would have bought?"
Why is Buffett very likely adding to Berkshire's already-huge position in Apple? The price is right. Even with a small gain in January, Apple's share price is still near its lowest point last year -- when Buffett was buying. It stands to reason that he would view the latest pullback as a buying opportunity.
3. Occidental Petroleum
Occidental Petroleum (NYSE: OXY) ranked among a small group of stocks that enabled Buffett to beat the market in 2022. Unlike Berkshire and Apple, Occidental's valuation isn't as attractive now as it was throughout much of last year. So why would Buffett buy shares of the oil and gas producer in 2023?
There's a real possibility that Occidental could become Berkshire's fifth giant. In August 2022, Berkshire secured approval from the Federal Energy Regulatory Commission to acquire up to 50% of the oil company.
At last count, Berkshire owned a 21.4% stake in Occidental. Buffett has a lot more buying to do to get anywhere close to the 50% threshold.
He's probably not concerned about the increased valuation with the oil stock still trading at only nine times expected earnings. I would be highly surprised if he doesn't pick up a lot more shares of Occidental this year.
Should you buy them, too?
It's not wise to automatically buy stocks just because another investor does -- even if that investor is Buffett. However, I think that Berkshire Hathaway, Apple, and Occidental are all smart picks for ordinary investors right now.
The long-term prospects for all three companies remain bright. And their valuations are attractive. Copying the legendary investor's likely moves with these three stocks in 2023 could pay off handsomely over time.
10 stocks we like better than Apple
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
Keith Speights has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple There's a high probability that Buffett is buying Apple (NASDAQ: AAPL) these days. The company can buy back shares anytime Buffett and Berkshire vice-chairman Charlie Munger think that the stock is below its intrinsic value. Even with a small gain in January, Apple's share price is still near its lowest point last year -- when Buffett was buying.
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Apple There's a high probability that Buffett is buying Apple (NASDAQ: AAPL) these days. That's how big Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) cash stockpile was as of the end of the third quarter of 2022. Occidental Petroleum Occidental Petroleum (NYSE: OXY) ranked among a small group of stocks that enabled Buffett to beat the market in 2022.
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Apple There's a high probability that Buffett is buying Apple (NASDAQ: AAPL) these days. The stock that Buffett is most likely to buy in 2023 with Berkshire Hathaway's massive pile of money is, without question, Berkshire itself. Since Buffett and Munger clearly believed the stock was below its intrinsic value at a higher price than it is now, there's little doubt that Buffett will be buying more Berkshire shares.
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Apple There's a high probability that Buffett is buying Apple (NASDAQ: AAPL) these days. Here are three stocks that Buffett is almost certainly buying in 2023. I would be highly surprised if he doesn't pick up a lot more shares of Occidental this year.
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17523.0
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2023-01-20 00:00:00 UTC
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FOCUS-Here's what Twitter lost in advertising revenue in final months of 2022
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AAPL
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https://www.nasdaq.com/articles/focus-heres-what-twitter-lost-in-advertising-revenue-in-final-months-of-2022-0
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nan
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nan
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By Jessica DiNapoli and Richa Naidu
NEW YORK/LONDON, Jan 20 (Reuters) - Top advertisers on Twitter slashed their spending after Elon Musk's takeover, according to estimates compiled for Reuters by research firm Pathmatics, in the latest shock to the company's dominant revenue source.
Fourteen of the top 30 advertisers on Twitter stopped all advertising on the platform after Musk took charge on October 27, according to the Pathmatics estimates. Four advertisers reduced spending between 92% and 98.7% from the week before Musk's acquisition through the end of the year.
Overall, advertising spending by the top 30 companies fell by 42% to an estimated $53.8 million for November and December combined, according to Pathmatics, despite an increase in spending by six of them.
Pathmatics said the previously unreported figures on Twitter advertising are estimates. The firm bases its estimates on technologies that track ads on desktop browsers and the Twitter app as well as those that mimic user experience.
But the company said those estimates do not account for deals advertisers may receive from Twitter, or promoted trends and accounts. "It is possible the spending data could be higher for some brands" if Twitter is offering incentives, Pathmatics said in an email.
Twitter did not respond to multiple requests for comment.
In a November event on Twitter Spaces, Musk, addressing the issue of companies pausing ads, said that he understands if advertisers "want to give it a minute." He added that "the best way to see how things are evolving (at Twitter) is just use Twitter."
Technology-focused publication The Information, citing details shared by a top Twitter ad executive at a staff meeting on Wednesday, reported that Twitter's fourth quarter revenue fell about 35% year over year due to a slump in advertising.
Twitter posted a loss of $270 million in the three months ended June 30, on total revenue of about $1.18 billion.
The Pathmatics estimates show continued upheaval in Twitter's main revenue stream heading into 2023, led by a pullback from top consumer brands.
Forward bookings, or agreements to lock in future ads, were also down for January and February, according to research firm Standard Media Index, which did not provide details.
Twitter is moving to reverse the advertiser exodus. It has introduced a slew of initiatives to win back advertisers, offering some free ads, lifting a ban on political advertising and allowing companies greater control over the positioning of their ads.
"They're frankly really amazing incentives. Honestly, I've not seen that type of incentive ever from any advertiser," said Molly Lopez, owner of ad agency HITE Digital Miami.
In addition, Mark DiMassimo, founder of New York-based ad agency DiMassimo Goldstein, said that "bargain basement" direct marketers and political action committees - big spenders on Meta Platform Inc's META.O Facebook - may fill the advertising gap.
Coca-Cola Co KO.N halted spending in mid November, after purchasing an estimated $1.1 million in Twitter ads earlier that month, while HBO spending collapsed to approximately $38,000 in December from roughly $1.1 million in November, Pathmatics found.
Coca-Cola declined to comment. HBO spokesperson Chris Willard did not comment on the specifics of advertising spending, but said "we will be assessing the platform under its new leadership and determine appropriate next steps."
Among consumer brands, Heinz ketchup maker Kraft Heinz CoKHC.O and Stouffers meal manufacturer Nestle SA NESN.S stopped all advertising, according to the Pathmatics estimates. Heinz and Nestle declined to comment.
Mass retailer Target Corp TGT.N and department store operator Kohls Corp KSS.N also skipped advertising on Twitter on Black Friday, one of the biggest shopping days of the year, the estimates show. Kohls did not return requests for comment.
However, Apple Inc AAPL.O and PepsiCo Inc PEP.O increased spending, according to Pathmatics.
Apple did not respond to requests for comment. PepsiCo declined to comment.
Financial technology provider SmartAsset and Amazon.com Inc AMZN.O said Pathmatics estimates showing an increase in advertising were inaccurate. Amazon did not elaborate further and SmartAsset said the figures were "inflated" without giving details. Pathmatics said "we want to reiterate that our figures are just estimates."
BRAND SAFETY
Most of the companies stopped spending in November, the estimates show, the same month that Musk restored suspended accounts and released a paid account verification that resulted in scammers impersonating corporations.
Telecommunications company AT&T Inc T.N and pet food provider Mars Inc slashed spending in September due to concerns about brand safety.
As the companies pulled back on Twitter, they maintained and in some cases boosted advertising on Meta Platform Inc's META.O Facebook and Instagram and on short video app TikTok, according to Pathmatics.
Meta and TikTok did not immediately return requests for comment.
AT&T said it paused advertising in September because of "concerns around content appearing next" to its ads. The company has been talking to Twitter about its concerns, according to a person familiar with AT&T's thinking.
Mars said its "suspension remains in effect."
Twitter has said to Reuters it is investing in child safety. The platform is leaning on automation to moderate content and restrict abuse-prone hashtags and search results in areas including child exploitation.
Companies also scaled back on tweeting. As of January 19, Target and Special K cereal maker Kellogg Co K.N hadn't tweeted since October; Coca-Cola and electronics retailer Best Buy Co IncBBY.N paused tweeting in November, according to a Reuters review of the company's main feeds.
Target, Best Buy and Kellogg did not return requests for comment.
Some advertisers cut spending or leave Twitter after Musk’s takeoverhttps://tmsnrt.rs/3ZiuSyy
(Reporting by Jessica DiNapoli in New York and Richa Naidu in London; additional reporting by Sheila Dang in Dallas; Editing by Vanessa O'Connell and Suzanne Goldenberg)
((Jessica.DiNapoli@thomsonreuters.com; 845-591-4428; @jessicadinapoli))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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However, Apple Inc AAPL.O and PepsiCo Inc PEP.O increased spending, according to Pathmatics. The Pathmatics estimates show continued upheaval in Twitter's main revenue stream heading into 2023, led by a pullback from top consumer brands. Forward bookings, or agreements to lock in future ads, were also down for January and February, according to research firm Standard Media Index, which did not provide details.
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However, Apple Inc AAPL.O and PepsiCo Inc PEP.O increased spending, according to Pathmatics. By Jessica DiNapoli and Richa Naidu NEW YORK/LONDON, Jan 20 (Reuters) - Top advertisers on Twitter slashed their spending after Elon Musk's takeover, according to estimates compiled for Reuters by research firm Pathmatics, in the latest shock to the company's dominant revenue source. Telecommunications company AT&T Inc T.N and pet food provider Mars Inc slashed spending in September due to concerns about brand safety.
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However, Apple Inc AAPL.O and PepsiCo Inc PEP.O increased spending, according to Pathmatics. By Jessica DiNapoli and Richa Naidu NEW YORK/LONDON, Jan 20 (Reuters) - Top advertisers on Twitter slashed their spending after Elon Musk's takeover, according to estimates compiled for Reuters by research firm Pathmatics, in the latest shock to the company's dominant revenue source. Fourteen of the top 30 advertisers on Twitter stopped all advertising on the platform after Musk took charge on October 27, according to the Pathmatics estimates.
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However, Apple Inc AAPL.O and PepsiCo Inc PEP.O increased spending, according to Pathmatics. Fourteen of the top 30 advertisers on Twitter stopped all advertising on the platform after Musk took charge on October 27, according to the Pathmatics estimates. Overall, advertising spending by the top 30 companies fell by 42% to an estimated $53.8 million for November and December combined, according to Pathmatics, despite an increase in spending by six of them.
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17524.0
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2023-01-20 00:00:00 UTC
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The Global Smartphone Market Just Fell Off a Cliff. Apple Beat the Odds.
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AAPL
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https://www.nasdaq.com/articles/the-global-smartphone-market-just-fell-off-a-cliff.-apple-beat-the-odds.
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The bear market and the accompanying macroeconomic uncertainty have weighed on even the most resilient technology companies. One such example is Apple (NASDAQ: AAPL). Despite delivering all-time or quarterly records in each of the preceding four quarters, the company has been buffeted by the gale force economic headwinds that have persisted over the past year. Investors, fearing the iPhone maker's performance would be overpowered by high inflation and rising interest rates that have become headline news, have pushed the tech stock down 25% since its peak reached early last year.
As if to confirm investors' fears, global smartphone shipments suffered their worst performance in more than 10 years. But the single bright spot in the data was the ongoing strength of the iPhone.
Image source: Apple.
An Apple a day
Worldwide smartphone shipments declined 17% year over year in the fourth quarter, the market's worst performance in a decade, according to data compiled by market analyst firm Canalys. This capped off a year when shipments were down 11%, reflecting fewer than 1.2 billion smartphones, the lowest total in more than 10 years.
Bucking that trend was Apple. Not only did the company increase share at the expense of rivals, but it reported its highest quarterly market share ever, at 25%. This was enough to once again steal the crown from Samsung, which saw its share shrink to 20%.
Economic headwinds
"Smartphone vendors have struggled in a difficult macroeconomic environment throughout 2022," wrote Canalys Research Analyst Runar Bjørhovde. Furthermore, "Q4 marks the worst annual and Q4 performance in a decade," he added. The report noted that merchants were "highly cautious" about taking on additional inventory, which helped fuel the dismal performance in the fourth quarter. The holiday season was marked by industrywide sales and incentives, which helped to reduce already high inventory levels.
One point that stood out was weakness that began to creep into high-end products, following slower demand for low- and mid-range products, which had slumped in previous quarters.
The pressure on smartphone sales is expected to continue throughout 2023. The market is expecting flat to marginal growth over the coming year, according to Canalys, as economic headwinds continue. "Though inflationary pressures will gradually ease, the effects of interest rate hikes, economic slowdowns and an increasingly struggling labor market will limit the market's potential," added Canalys research analyst Le Xuan Chiew.
A broken record
While Apple reported record growth in each of the preceding four quarters, a deeper look shows the macroeconomic situation took a toll. In the fiscal 2022 first quarter, revenue grew 11% year over year, which was the high point for the year. During the second, third, and fourth quarters, sales grew 9%, 2%, and 8%, respectively.
That's not to downplay the company's robust performance in the face of headwinds, but rather to illustrate that even Apple could eventually succumb to the weakening consumer environment. In the fourth quarter, CEO Tim Cook noted, Apple's revenue grew by double digits outside the U.S., weighed down by the impact of a strong dollar. That headwind is expected to continue well into next year.
Inflation remains historically high and interest rates are expected to climb higher in 2023. Even the most well-situated consumers are beginning to be more cautious in their spending.
Investors should watch closely what Tim Cook and company have to say about the most recently completed quarter and what it reveals about future demand. Apple hasn't provided guidance since the onset of the pandemic, due to the accompanying uncertainty.
Apple is scheduled to report its earnings for the 2023 fiscal first quarter -- which includes the critical holiday sales period -- on Thursday, Feb. 2, after the market close.
The results should give us some indication about whether Apple will be able to hang on to those hard-earned market share gains.
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Danny Vena has positions in Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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One such example is Apple (NASDAQ: AAPL). Investors, fearing the iPhone maker's performance would be overpowered by high inflation and rising interest rates that have become headline news, have pushed the tech stock down 25% since its peak reached early last year. Economic headwinds "Smartphone vendors have struggled in a difficult macroeconomic environment throughout 2022," wrote Canalys Research Analyst Runar Bjørhovde.
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One such example is Apple (NASDAQ: AAPL). An Apple a day Worldwide smartphone shipments declined 17% year over year in the fourth quarter, the market's worst performance in a decade, according to data compiled by market analyst firm Canalys. "Though inflationary pressures will gradually ease, the effects of interest rate hikes, economic slowdowns and an increasingly struggling labor market will limit the market's potential," added Canalys research analyst Le Xuan Chiew.
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One such example is Apple (NASDAQ: AAPL). An Apple a day Worldwide smartphone shipments declined 17% year over year in the fourth quarter, the market's worst performance in a decade, according to data compiled by market analyst firm Canalys. In the fiscal 2022 first quarter, revenue grew 11% year over year, which was the high point for the year.
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One such example is Apple (NASDAQ: AAPL). An Apple a day Worldwide smartphone shipments declined 17% year over year in the fourth quarter, the market's worst performance in a decade, according to data compiled by market analyst firm Canalys. In the fiscal 2022 first quarter, revenue grew 11% year over year, which was the high point for the year.
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17525.0
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2023-01-19 00:00:00 UTC
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US STOCKS-Wall Street set for lower open amid recession worries
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AAPL
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https://www.nasdaq.com/articles/us-stocks-wall-street-set-for-lower-open-amid-recession-worries
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nan
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nan
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By Amruta Khandekar and Shreyashi Sanyal
Jan 19 (Reuters) - U.S. stock indexes were set to open lower on Thursday as recession worries crept into the foreground of the earnings season, while shares of Procter & Gamble fell as it warned of cost pressures.
A surprise fall in U.S. weekly jobless claims, suggested the labor market remained tight even in a high interest rate environment.
Corporate America has been hit by a challenging economic environment, with Microsoft Corp MSFT.O announcing 10,000 job cuts on Wednesday.
With the quarterly reporting season underway, analysts noted that earnings estimates could decline even further as risks of a potential recession increase.
"The earnings picture is also looking weak and pointing to a recession," said Sam Stovall, chief investment strategist at CFRA research. "Expectations are that earnings will fall in the fourth quarter of 2022 as well as the first two quarters of 2023."
Analysts now expect year-over-year earnings from S&P 500 companies to decline 2.8% for the fourth quarter, according to Refinitiv data, compared with a 1.6% decline in the beginning of the year.
This comes after data on Wednesday showed retail sales, producer prices and production at U.S. factories fell more than expected in December, while November output was also weaker, adding to worries of a slowdown in the economy.
Leading Dow components were lower in premarket trading. Procter & Gamble Co PG.N fell 2.5% after warning of commodity costs pressuring profits, despite raising its full-year sales forecast.
The S&P 500 .SPX and the Dow .DJI logged their biggest daily percentage declines in over a month in the previous session, with comments from Federal Reserve officials that highlighted the disparity between the central bank's estimate of its terminal rate and market expectations.
St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester stressed on the need to raise rates beyond 5% to bring inflation to heel, while money markets see the rate peaking at 4.85% by June, with a 25-basis point rate hike baked in for February. FEDWATCH
At 8:58 a.m. ET, Dow e-minis 1YMcv1 were down 245 points, or 0.73%, S&P 500 e-minis EScv1 were down 27.75 points, or 0.70%, and Nasdaq 100 e-minis NQcv1 were down 85.5 points, or 0.75%.
Netflix Inc NFLX.O is expected to report its slowest quarterly revenue growth after markets close on Thursday. The company's shares fell 0.9%.
Tesla Inc TSLA.O fell 1.8%, leading declines among its growth peers Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Microsoft Corp MSFT.O, whose shares were down between 0.7% and 1.4%.
Piper Sandler cut the target price on electric-vehicle maker Tesla's stock to $300 from $340.
(Reporting by Shubham Batra in Bengaluru; Editing by Shounak Dasgupta)
((Shubham.Batra@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Tesla Inc TSLA.O fell 1.8%, leading declines among its growth peers Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Microsoft Corp MSFT.O, whose shares were down between 0.7% and 1.4%. By Amruta Khandekar and Shreyashi Sanyal Jan 19 (Reuters) - U.S. stock indexes were set to open lower on Thursday as recession worries crept into the foreground of the earnings season, while shares of Procter & Gamble fell as it warned of cost pressures. This comes after data on Wednesday showed retail sales, producer prices and production at U.S. factories fell more than expected in December, while November output was also weaker, adding to worries of a slowdown in the economy.
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Tesla Inc TSLA.O fell 1.8%, leading declines among its growth peers Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Microsoft Corp MSFT.O, whose shares were down between 0.7% and 1.4%. By Amruta Khandekar and Shreyashi Sanyal Jan 19 (Reuters) - U.S. stock indexes were set to open lower on Thursday as recession worries crept into the foreground of the earnings season, while shares of Procter & Gamble fell as it warned of cost pressures. With the quarterly reporting season underway, analysts noted that earnings estimates could decline even further as risks of a potential recession increase.
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Tesla Inc TSLA.O fell 1.8%, leading declines among its growth peers Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Microsoft Corp MSFT.O, whose shares were down between 0.7% and 1.4%. By Amruta Khandekar and Shreyashi Sanyal Jan 19 (Reuters) - U.S. stock indexes were set to open lower on Thursday as recession worries crept into the foreground of the earnings season, while shares of Procter & Gamble fell as it warned of cost pressures. Analysts now expect year-over-year earnings from S&P 500 companies to decline 2.8% for the fourth quarter, according to Refinitiv data, compared with a 1.6% decline in the beginning of the year.
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Tesla Inc TSLA.O fell 1.8%, leading declines among its growth peers Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Microsoft Corp MSFT.O, whose shares were down between 0.7% and 1.4%. By Amruta Khandekar and Shreyashi Sanyal Jan 19 (Reuters) - U.S. stock indexes were set to open lower on Thursday as recession worries crept into the foreground of the earnings season, while shares of Procter & Gamble fell as it warned of cost pressures. "Expectations are that earnings will fall in the fourth quarter of 2022 as well as the first two quarters of 2023."
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17526.0
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2023-01-19 00:00:00 UTC
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Google loses bid to block Indian Android antitrust ruling in major setback
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AAPL
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https://www.nasdaq.com/articles/google-loses-bid-to-block-indian-android-antitrust-ruling-in-major-setback
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nan
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By Arpan Chaturvedi, Aditya Kalra and Munsif Vengattil
NEW DELHI, Jan 20 (Reuters) - Google on Thursday lost its fight in India's Supreme Court to block an antitrust order, in a major setback that will force the U.S. tech giant to change the business model of its popular Android operating system in a key growth market.
The Competition Commission of India (CCI) ruled in October that Google, which is owned by Alphabet Inc GOOGL.O, exploited its dominant position in Android and told it to remove restrictions imposed on device makers, including related to pre-installation of apps. It also fined Google $161 million.
Google challenged the order in the Supreme Court, saying it would hurt consumers and its business. It warned growth of the Android ecosystem could stall and it would be forced to alter arrangements with more than 1,100 device manufacturers and thousands of app developers. Google also said "no other jurisdiction has ever asked for such far-reaching changes".
A three-judge bench at the Supreme Court, which included India's chief justice, delayed the Jan. 19 implementation of the CCI's directives by one week, but declined to block them.
"We are not inclined to interfere," Chief Justice D.Y Chandrachud said.
During the hearing, Chandrachud told Google: "Look at the kind of authority which you wield in terms of dominance."
About 97% of 600 million smartphones in India run on Android, according to Counterpoint Research estimates. Apple AAPL.O has just a 3% share.
India's top court asked a lower tribunal, which is already hearing the matter, to decide on Google's challenge by March 31.
Google did not respond to a request for comment.
Google licenses its Android system to smartphone makers, but critics say it imposes restrictions such as mandatory pre-installation of its own apps that are anti-competitive. The company argues such agreements help keep Android free.
Faisal Kawoosa, founder of Indian research firm Techarc, said the Supreme Court ruling meant Google may have to consider other business models in India, such as charging an upfront fee to startups to provide access to the Android platform and its Play Store.
"At the end of the day, Google is for profit and has to look at measures that make it sustainable and power growth for its innovations," he said.
Android has been the subject of various investigations by regulators around the world. South Korea has fined Google for blocking customised versions of it to restrict competition, while the United States Justice Department has accused Google of executing anticompetitive distribution agreements for Android.
In India, the CCI has ordered Google that the licensing of its Play Store "shall not be linked with the requirement of pre-installing" Google search services, the Chrome browser, YouTube or any other Google applications.
It also ordered Google to allow the uninstalling of its apps by Android phone users in India. Currently, apps such as Google Maps and YouTube can not be deleted from Android phones when they come pre-installed.
Google has been concerned about India's decision as the steps are seen as more sweeping than those imposed in the European Commission's 2018 ruling, when Google was fined for putting in place what the Commission called unlawful restrictions on Android mobile device makers. Google has challenged the record $4.3 billion fine in that case.
In Europe, Google has made changes including letting Android device users pick their default search engine from a list of providers.
Google also argued in its legal filings, seen by Reuters, that the CCI's investigation unit "copy-pasted extensively from a European Commission decision, deploying evidence from Europe that was not examined in India".
N. Venkataraman, a government lawyer representing the CCI, told the top court: "We have not cut, copy and pasted."
FACTBOX-India's antitrust directives on Android that have spooked Google
(Reporting by Aditya Kalra, Arpan Chaturvedi and Munsif Vengattil; Additional reporting by Diane Bartz and Supantha Mukherjee Editing by Jason Neely, Vin Shahrestani and Mark Potter)
((aditya.kalra@thomsonreuters.com; +91-11-49548021;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple AAPL.O has just a 3% share. By Arpan Chaturvedi, Aditya Kalra and Munsif Vengattil NEW DELHI, Jan 20 (Reuters) - Google on Thursday lost its fight in India's Supreme Court to block an antitrust order, in a major setback that will force the U.S. tech giant to change the business model of its popular Android operating system in a key growth market. The Competition Commission of India (CCI) ruled in October that Google, which is owned by Alphabet Inc GOOGL.O, exploited its dominant position in Android and told it to remove restrictions imposed on device makers, including related to pre-installation of apps.
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Apple AAPL.O has just a 3% share. By Arpan Chaturvedi, Aditya Kalra and Munsif Vengattil NEW DELHI, Jan 20 (Reuters) - Google on Thursday lost its fight in India's Supreme Court to block an antitrust order, in a major setback that will force the U.S. tech giant to change the business model of its popular Android operating system in a key growth market. A three-judge bench at the Supreme Court, which included India's chief justice, delayed the Jan. 19 implementation of the CCI's directives by one week, but declined to block them.
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Apple AAPL.O has just a 3% share. The Competition Commission of India (CCI) ruled in October that Google, which is owned by Alphabet Inc GOOGL.O, exploited its dominant position in Android and told it to remove restrictions imposed on device makers, including related to pre-installation of apps. In India, the CCI has ordered Google that the licensing of its Play Store "shall not be linked with the requirement of pre-installing" Google search services, the Chrome browser, YouTube or any other Google applications.
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Apple AAPL.O has just a 3% share. It also fined Google $161 million. Google challenged the order in the Supreme Court, saying it would hurt consumers and its business.
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17527.0
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2023-01-19 00:00:00 UTC
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The 5 Best Cloud Computing Stocks to Buy for 2023
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AAPL
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https://www.nasdaq.com/articles/the-5-best-cloud-computing-stocks-to-buy-for-2023
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Last year was terrible for some of the best cloud computing stocks, and for the Cloud Czars whose cash flow built it. Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL, GOOG), Amazon.Com (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META) combined to lose trillions of dollars in market cap. Meta lost more than half its value, and Amazon nearly that. Even Apple lost one-quarter of its value, its market cap falling below $2 trillion.
You can blame the Fed or the Czars’ own mistakes. Apple became dependent on China. Microsoft saw its Windows franchise crumble with PC sales. Alphabet lost billions of dollars on free services like Gmail. Amazon found itself winning a market with Alexa but failed to profit from it. Meta saw its Facebook franchise collapse while seeking to build a metaverse.
In 2023 investors are looking beyond the Czars for cloud profits. Equinix (NASDAQ:EQIX) and other data center REITs offer dividend income and a home for companies seeking independence from expensive cloud services. Palo Alto Networks (NASDAQ:PANW) and other security companies offer the one service every company doing business in the cloud online must-have.
None of this means the Czars won’t come back. I own shares in most of them. At the end of this gallery, you’ll see my favorite for 2023 profit. But if you’re going to make big money in tech markets, you always look for the next big thing.
EQIX Equinox $702.76
PANW Palo Alto $140.71
PTC PTC $127.57
GEHC GE HealthCare $63.94
AMZN Amazon $93.68
Equinix (EQIX)
Source: Shutterstock
Recently, 37 Signals CTO David Hansson said his company spent $3.2 million on Amazon Web Services last year. The bills moved him to quit the cloud. He bought Dell Technologies (NASDAQ:DELL) hardware and promised savings would follow.
But while you can quit the cloud, you can’t quit the cloud world. A data center still needs cloud connections and a secure location. That means 2023 should be a great year for companies like Equinix (NASDAQ:EQIX).
Equinix is a Real Estate Investment Trust (REIT) specializing in data centers. It builds these data centers with debt and pays out profits in dividends. The data centers are rented to companies like 37 Signals and include networked connections to major clouds. Clients put their servers in the space for the same reason they rent offices downtown.
Equinix is not a cheap stock. The current price-to-earnings ratio is 95, and the current dividend yields just 1.7%. But it is a long-term winner, with 20% per year over the last five when capital gains are factored in. The industry has been consolidating around Equinix and rival Digital Realty Trust (NYSE:DLR), another stock worth considering.
Palo Alto Networks (PANW)
Wars and cybercrime make security a priority for every customer, even one built into the cloud. The leader in the space is Palo Alto Networks (NASDAQ:PANW). Palo Alto is down 16% over the last year, roughly in line with the S&P 500. It was recently trading at $140. That’s 8 times last year’s revenue, and it loses money regularly. But revenue has doubled since 2020, and it has averaged gains of 35% per year over the last five years.
Palo Alto’s biggest problem is that leadership is expensive. About one-quarter of revenue was spent on research last year. There are always new breakthroughs being announced, new start-ups with new approaches, and new more being funded. It’s not easy being the King of Security. You must run fast to keep your place.
Acquisitions are also necessary to stay ahead, the most recent being Cider Security. New infrastructure is needed to manage it all. Palo Alto is known for its Prisma Cloud, aimed at preventing cyberattacks in the cloud. It is also led by Nikesh Arora, formerly number two at SoftBank (OTCMKTS:SFTBY). A fall of 18% in December makes Palo Alto’s rich valuation look more attractive.
When the tech market comes back, Palo Alto and other security stocks will be in the thick of it. So will rivals like Fortinet (NASDAQ:FTNT), Crowdstrike (NASDAQ:CRWD), and Splunk (NASDAQ:SPLK).
PTC (PTC)
Source: Shutterstock
The Internet isn’t just for people anymore. It’s for companies like PTC (NASDAQ:PTC).
Most Internet traffic today is already untouched by human hands. It moves from sensors to servers and back again, appearing to managers only in the form of online reports. It’s on engines warning of maintenance issues before things break. It’s all part of what I call the Machine Internet, a trend I’ve been studying for 20 years. In the past, I called these “always on” technologies, and analysts called them the Internet of Things. We’re now moving toward connecting things into systems to run factories, hospitals, and entire cities.
PTC has been in this game from the beginning, when the niche was called Product Lifecycle Management, back in the 1990s. Through Rockwell Automation (NYSE:ROK), which took a stake of nearly 9% in 2018, PTC has been building out the portfolio, scoring double ROK’s gains. Over the last year, the stock is up 18%, and the market cap is now $14.2 billion on sales of almost $2 billion. Of that, 15% became net income.
This stock is still not cheap but the best growth stories never are. I believe the Machine Internet is one of the big trends of this decade. You might also look to Cadence Design Systems (NASDAQ:CDNS), which is redesigning how chips are made for this new world.
GE HealthCare (GEHC)
Source: testing / Shutterstock.com
The Machine Internet is becoming an Internet of Systems.
A warehouse is a system. A factory is a system. A city is a system. A hospital is a system.
GE Healthcare (NASDAQ:GEHC), which has just been spun out of General Electric (NYSE:GE), is going to help build this new systems Internet. GEHC is already a leader, alongside Siemens (OTCMKTS:SIEGY), in producing the big scanners that are at the heart of hospitals today. These systems are now being used routinely. (I was tossed in one for a kidney stone last year.) There are innovations happening all the time. Lots of new machines mean lots of opportunities to build-in connectivity.
GE, like me, has been betting on this Industrial Internet for decades and failing to see results from it. GE was way too early, it was too unfocused, and it was far too arrogant.
Now it’s ready to deliver results, in the form of savings for hospitals and profits for GEHC. The GE breakup has created the humility necessary to move forward. The sunk cost of machines, and their necessary connections to patients and doctors, require these connections. It’s then a short step from scheduling the machines to the people.
Right now, however. GE Healthcare isn’t priced like a growth stock. With a market cap of $29 billion and a price-to-earnings ratio of just 15, it’s being priced like a value stock. The company estimates it will report $2.6 billion of earnings on $18.3 billion of revenue for all of 2022. I also like McKesson (NYSE:MCK), the hospital software company, here.
Amazon (AMZN)
Source: Tada Images / Shutterstock.com
If I’m to place a bet on any of the Cloud Czars for 2022, it’s Amazon (NASDAQ:AMZN).
First, because Amazon fell harder in 2022 than any other Czar not named Meta Platforms, the company is not broken. Amazon Web Services dominates in re-selling cloud, contributing nearly $5 billion of net income on revenue of $16 billion in the third quarter alone. Its media operations, Amazon Prime Video and Freevee, are set to dominate as streaming shakes out. The Kindle book operation and Fire TV already dominate their niches. Profits will grow, in contrast to its streaming rivals.
There are two problem areas. First, the store needs to be run like a store, with its own CEO and a logistics expert below them. Right now Amazon’s store is being beaten by Walmart (NYSE:WMT), which copied most of Amazon’s innovations while adding in-store pick-up and local deliveries.
The second problem is Alexa. Alexa won the voice control wars, but it doesn’t make any money so it can’t be sold. Its use cases are limited to music and cars. But there is an enormous user base for Alexa. It’s too big to kill. A lot of investors are put off by these problems, along with a PE of 87. But right now you’re paying barely two times the revenue for a stock that dominates its markets, including the world’s largest technology market.
I’ll admit that I should have sold out of Amazon a year ago, taken my profits, and waited for the smoke of the tech wreck to clear. But if I have $100 in cash today, this is the first place I put it. The second would be Alphabet (NASDAQ:GOOGL, GOOG).
On the date of publication, Dana Blankenhorn held positions in AMZN, GOOGL, MSFT, and AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. His 10th novel is The Time Tunnel, now available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com, tweet him at @danablankenhorn, or subscribe to his Substack.
The post The 5 Best Cloud Computing Stocks to Buy for 2023 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL, GOOG), Amazon.Com (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META) combined to lose trillions of dollars in market cap. On the date of publication, Dana Blankenhorn held positions in AMZN, GOOGL, MSFT, and AAPL. Equinix (NASDAQ:EQIX) and other data center REITs offer dividend income and a home for companies seeking independence from expensive cloud services.
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Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL, GOOG), Amazon.Com (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META) combined to lose trillions of dollars in market cap. On the date of publication, Dana Blankenhorn held positions in AMZN, GOOGL, MSFT, and AAPL. Equinix (NASDAQ:EQIX) and other data center REITs offer dividend income and a home for companies seeking independence from expensive cloud services.
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Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL, GOOG), Amazon.Com (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META) combined to lose trillions of dollars in market cap. On the date of publication, Dana Blankenhorn held positions in AMZN, GOOGL, MSFT, and AAPL. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Last year was terrible for some of the best cloud computing stocks, and for the Cloud Czars whose cash flow built it.
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Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL, GOOG), Amazon.Com (NASDAQ:AMZN), and Meta Platforms (NASDAQ:META) combined to lose trillions of dollars in market cap. On the date of publication, Dana Blankenhorn held positions in AMZN, GOOGL, MSFT, and AAPL. In 2023 investors are looking beyond the Czars for cloud profits.
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17528.0
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2023-01-19 00:00:00 UTC
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FOCUS-Here's what Twitter lost in advertising revenue in final months of 2022
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AAPL
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https://www.nasdaq.com/articles/focus-heres-what-twitter-lost-in-advertising-revenue-in-final-months-of-2022
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nan
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nan
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By Jessica DiNapoli and Richa Naidu
NEW YORK/LONDON, Jan 19 (Reuters) - Top advertisers on Twitter slashed their spending after Elon Musk's takeover, according to estimates compiled for Reuters by research firm Pathmatics, in the latest shock to the company's dominant revenue source.
Fourteen of the top 30 advertisers on Twitter stopped all advertising on the platform after Musk took charge on October 27, according to the Pathmatics estimates. Four advertisers reduced spending between 92% and 98.7% from the week before Musk's acquisition through the end of the year.
Overall, advertising spending by the top 30 companies fell by 42% to an estimated $53.8 million for November and December combined, according to Pathmatics, despite an increase in spending by six of them.
Pathmatics said the previously unreported figures on Twitter advertising are estimates. The firm bases its estimates on technologies that track ads on desktop browsers and the Twitter app as well as those that mimic user experience.
But the company said those estimates do not account for deals advertisers may receive from Twitter, or promoted trends and accounts. "It is possible the spending data could be higher for some brands" if Twitter is offering incentives, Pathmatics said in an email.
Twitter did not respond to multiple requests for comment.
In a November event on Twitter Spaces, Musk, addressing the issue of companies pausing ads, said that he understands if advertisers "want to give it a minute." He added that "the best way to see how things are evolving (at Twitter) is just use Twitter."
Technology-focused publication The Information, citing details shared by a top Twitter ad executive at a staff meeting on Wednesday, reported that Twitter's fourth quarter revenue fell about 35% year over year due to a slump in advertising.
Twitter posted a loss of $270 million in the three months ended June 30, on total revenue of about $1.18 billion.
The Pathmatics estimates show continued upheaval in Twitter's main revenue stream heading into 2023, led by a pullback from top consumer brands.
Forward bookings, or agreements to lock in future ads, were also down for January and February, according to research firm Standard Media Index, which did not provide details.
Twitter is moving to reverse the advertiser exodus. It has introduced a slew of initiatives to win back advertisers, offering some free ads, lifting a ban on political advertising and allowing companies greater control over the positioning of their ads.
"They're frankly really amazing incentives. Honestly, I've not seen that type of incentive ever from any advertiser," said Molly Lopez, owner of ad agency HITE Digital Miami.
In addition, Mark DiMassimo, founder of New York-based ad agency DiMassimo Goldstein, said that "bargain basement" direct marketers and political action committees - big spenders on Meta Platform Inc's META.O Facebook - may fill the advertising gap.
Coca-Cola Co KO.N halted spending in mid November, after purchasing an estimated $1.1 million in Twitter ads earlier that month, while HBO spending collapsed to approximately $38,000 in December from roughly $1.1 million in November, Pathmatics found.
Coca-Cola declined to comment. HBO spokesperson Chris Willard did not comment on the specifics of advertising spending, but said "we will be assessing the platform under its new leadership and determine appropriate next steps."
Among consumer brands, Heinz ketchup maker Kraft Heinz CoKHC.O and Stouffers meal manufacturer Nestle SA NESN.S stopped all advertising, according to the Pathmatics estimates. Heinz and Nestle declined to comment.
Mass retailer Target Corp TGT.N and department store operator Kohls Corp KSS.N also skipped advertising on Twitter on Black Friday, one of the biggest shopping days of the year, the estimates show. Kohls did not return requests for comment.
However, Apple Inc AAPL.O and PepsiCo Inc PEP.O increased spending, according to Pathmatics.
Apple did not respond to requests for comment. PepsiCo declined to comment.
Financial technology provider SmartAsset and Amazon.com Inc AMZN.O said Pathmatics estimates showing an increase in advertising were inaccurate. Amazon did not elaborate further and SmartAsset said the figures were "inflated" without giving details. Pathmatics said "we want to reiterate that our figures are just estimates."
BRAND SAFETY
Most of the companies stopped spending in November, the estimates show, the same month that Musk restored suspended accounts and released a paid account verification that resulted in scammers impersonating corporations.
Telecommunications company AT&T Inc T.N and pet food provider Mars Inc slashed spending in September due to concerns about brand safety.
As the companies pulled back on Twitter, they maintained and in some cases boosted advertising on Meta Platform Inc's META.O Facebook and Instagram and on short video app TikTok, according to Pathmatics.
Meta and TikTok did not immediately return requests for comment.
AT&T said it paused advertising in September because of "concerns around content appearing next" to its ads. The company has been talking to Twitter about its concerns, according to a person familiar with AT&T's thinking.
Mars said its "suspension remains in effect."
Twitter has said to Reuters it is investing in child safety. The platform is leaning on automation to moderate content and restrict abuse-prone hashtags and search results in areas including child exploitation.
Companies also scaled back on tweeting. As of January 19, Target and Special K cereal maker Kellogg Co K.N hadn't tweeted since October; Coca-Cola and electronics retailer Best Buy Co IncBBY.N paused tweeting in November, according to a Reuters review of the company's main feeds.
Target, Best Buy and Kellogg did not return requests for comment.
Some advertisers cut spending or leave Twitter after Musk’s takeoverhttps://tmsnrt.rs/3ZiuSyy
(Reporting by Jessica DiNapoli in New York and Richa Naidu in London; additional reporting by Sheila Dang in Dallas; Editing by Vanessa O'Connell and Suzanne Goldenberg)
((Jessica.DiNapoli@thomsonreuters.com; 845-591-4428; @jessicadinapoli))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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However, Apple Inc AAPL.O and PepsiCo Inc PEP.O increased spending, according to Pathmatics. The Pathmatics estimates show continued upheaval in Twitter's main revenue stream heading into 2023, led by a pullback from top consumer brands. Forward bookings, or agreements to lock in future ads, were also down for January and February, according to research firm Standard Media Index, which did not provide details.
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However, Apple Inc AAPL.O and PepsiCo Inc PEP.O increased spending, according to Pathmatics. By Jessica DiNapoli and Richa Naidu NEW YORK/LONDON, Jan 19 (Reuters) - Top advertisers on Twitter slashed their spending after Elon Musk's takeover, according to estimates compiled for Reuters by research firm Pathmatics, in the latest shock to the company's dominant revenue source. Telecommunications company AT&T Inc T.N and pet food provider Mars Inc slashed spending in September due to concerns about brand safety.
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However, Apple Inc AAPL.O and PepsiCo Inc PEP.O increased spending, according to Pathmatics. By Jessica DiNapoli and Richa Naidu NEW YORK/LONDON, Jan 19 (Reuters) - Top advertisers on Twitter slashed their spending after Elon Musk's takeover, according to estimates compiled for Reuters by research firm Pathmatics, in the latest shock to the company's dominant revenue source. Fourteen of the top 30 advertisers on Twitter stopped all advertising on the platform after Musk took charge on October 27, according to the Pathmatics estimates.
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However, Apple Inc AAPL.O and PepsiCo Inc PEP.O increased spending, according to Pathmatics. Fourteen of the top 30 advertisers on Twitter stopped all advertising on the platform after Musk took charge on October 27, according to the Pathmatics estimates. Overall, advertising spending by the top 30 companies fell by 42% to an estimated $53.8 million for November and December combined, according to Pathmatics, despite an increase in spending by six of them.
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2023-01-19 00:00:00 UTC
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3 Top BlackRock Holdings You Can (and Should) Buy Now
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AAPL
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https://www.nasdaq.com/articles/3-top-blackrock-holdings-you-can-and-should-buy-now
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Both novice and experienced investors should explore some of the appealing, undervalued stocks owned by BlackRock (NYSE:BLK) holdings. The investment company is among the world’s leading asset managers and has survived every recession since its founding in 1988. Not only that, but in less than 35 years, the company has built up its total assets under management (or AUM) figure to $10 trillion in 2021. Its AUM currently sits around $8.6 trillion, which is nothing short of impressive.
The company is also quite diversified, but it is heavily exposed to some large tech stocks. BlackRock’s top three holdings are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN). BLK owns $141 billion of AAPL stock, $120.8 billion of MSFT, and $65.8 billion of AMZN.
BlackRock, however, has decreased its positions in all three of those companies by millions of shares. In addition, BlackRock’s last 13F filing was on Nov. 2022, and it’s hard to know the firm’s stance on these stocks right now, since the stock market is still volatile.
With that in mind, I’ll be discussing stocks in which BlackRock increased its positions by a significant margin in Q3. The following three names fit that description:
TSLA Tesla $128
VZ Verizon $40
KO Coca-Cola $60.20
Tesla (TSLA)
Source: Roschetzky Photography / Shutterstock.com
While I’m no fan of Tesla CEO Elon Musk, I’d have to disagree with the idea that Tesla (NASDAQ:TSLA) is “just another car company.” Let’s compare its financial results to those of some other automakers to see if TSLA is unique.
In Q3, Tesla’s:
Net income surged 103% year-over-year.
Total revenues increased by 56%.
EBITDA climbed 55%.
Earnings per share soared 98% YoY.
Now let’s look at one of Tesla’s most important competitors, Mercedes-Benz (OTCMKTS:MBGAF), which competes with Tesla’s higher-end offerings.
In Q3, Mercedes-Benz’s:
Net income jumped 111% YoY.
Revenue increased 19%.
Diluted EPS surged 58.4%.
EBITDA grew 11.5% YOY.
It is also worth noting that the company’s Altman-Z score, a measure of financial strength, indicates that the firm is in “distress,” according to Gurufocus.com, even though Mercedes-Benz is by far Tesla’s strongest Western competitor, in my view.
Let’s look at some other car companies.
In Q3 BMW’s (OTCMKTS:BMWYY) :
Revenue increased by 33.3% year-over-year.
EPS grew 9% YoY.
In Q3, Ford’s (NYSE:F):
Losses widened to $827 million.
Revenue increased by 10.4%.
Other electric vehicle makers, such as Rivian (NASDAQ:RIVN) and Lucid (NASDAQ:LCID), are losing money and are growing much slower than Tesla. It’s hard to think of them as real “competitors” of TSLA.
We can also talk about some Chinese EV makers, such as BYD (OTCMKTS:BYDDY). But the latter company already has a price-earnings ratio of 269 times. Moreover, BYD cannot dominate in Western markets unless those nations’ relations with China improve.
With that in mind, Tesla is definitely among the of the appealing, undervalued stocks owned by BlackRock . BlackRock increased its position in TSLA in Q3 2022 by 5.75 million shares.
Verizon (VZ)
Source: Ken Wolter / Shutterstock.com
Verizon (NYSE:VZ) is another, deeply undervalued company. The U.S. is prioritizing communications infrastructure in order to compete with China, and I believe that Verizon will benefit a great deal from America’s efforts in that area.
Verizon’s net income sank almost 25% in Q3. But it’s unlikely that the trend will continue into 2023 because its comparisons will get easier. Verizon is well entrenched in the American market, and it won’t be too long until it stock bottoms out and its valuation rises.
BlackRock certainly knows that, and the investment company increased its position in VZ stock by 3.1 million shares in Q3.
Coca-Cola (KO)
Source: Fotazdymak / Shutterstock.com
Investing in Coca-Cola (NYSE:KO) is an excellent way to diversify a portfolio. KO is one of the most well-known brands in the world and has had a long track record of success. This defensive stock has remained steady during the harshest economic conditions and performs better than the broader market during volatile periods as investors pour into defensive stocks.
The company is also a dependable dividend payer, having increased its dividends for 61 consecutive years. Coca-Cola’s current forward yield stands at 2.94%.
Additionally, Coca-Cola’s financials are solid. Its net income increased 14.3% YOY in Q3, and its top line grew at a double-digit-percentage clip in Q3. Surprisingly, even its net margin increased while most companies’ net margins dropped, giving BlackRock confidence in Coke’s ability to survive a recession
The firm increased its position in KO by 2.1 million shares.
On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Omor Ibne Ehsan is a writer at InvestorPlace. He is also an active contributor to a variety of finance and crypto-related websites. He has a strong background in economics and finance and is a self taught investor. You can follow him on LinkedIn.
The post 3 Top BlackRock Holdings You Can (and Should) Buy Now appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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BlackRock’s top three holdings are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN). BLK owns $141 billion of AAPL stock, $120.8 billion of MSFT, and $65.8 billion of AMZN. It is also worth noting that the company’s Altman-Z score, a measure of financial strength, indicates that the firm is in “distress,” according to Gurufocus.com, even though Mercedes-Benz is by far Tesla’s strongest Western competitor, in my view.
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BLK owns $141 billion of AAPL stock, $120.8 billion of MSFT, and $65.8 billion of AMZN. BlackRock’s top three holdings are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN). InvestorPlace - Stock Market News, Stock Advice & Trading Tips Both novice and experienced investors should explore some of the appealing, undervalued stocks owned by BlackRock (NYSE:BLK) holdings.
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BlackRock’s top three holdings are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN). BLK owns $141 billion of AAPL stock, $120.8 billion of MSFT, and $65.8 billion of AMZN. The following three names fit that description: TSLA Tesla $128 VZ Verizon $40 KO Coca-Cola $60.20 Tesla (TSLA) Source: Roschetzky Photography / Shutterstock.com While I’m no fan of Tesla CEO Elon Musk, I’d have to disagree with the idea that Tesla (NASDAQ:TSLA) is “just another car company.” Let’s compare its financial results to those of some other automakers to see if TSLA is unique.
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BlackRock’s top three holdings are Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN). BLK owns $141 billion of AAPL stock, $120.8 billion of MSFT, and $65.8 billion of AMZN. Not only that, but in less than 35 years, the company has built up its total assets under management (or AUM) figure to $10 trillion in 2021.
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17530.0
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2023-01-19 00:00:00 UTC
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The Top 7 “Millionaire-Maker” Long-Term Stocks for 2023
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AAPL
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https://www.nasdaq.com/articles/the-top-7-millionaire-maker-long-term-stocks-for-2023
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Study after study shows that a long-term buy-and-hold investing strategy works best. A long-term investment is generally defined as any position in a stock that is held for a year or longer. While the stock market can decline by 20% or more in a single year, which was the case in 2022, equities almost always rise over the long term. For example, the U.S. stock market has posted an average annual return of 8% or more during 20-year periods. Over 30 years, the average annual return is closer to 9%, for a total return of 1,300%. The math is clear. The longer one stays invested, the better their returns are likely to be.
However, staying invested through market downturns, economic shocks, global recessions, and wars can be difficult. As humans, we are prone to getting nervous and frightened, and that can lead to us hitting the “sell” button too early, costing us dearly in the long run. Remaining calm and being patient are often the most important attributes of an investor. Here are the top seven “millionaire-maker” long-term stocks to buy for 2023.
Ticker Company Price
AAPL Apple $135.21
NVDA Nvidia $173.77
AMZN Amazon $95.46
BRK-A, BRK-B Berkshire Hathaway $466,259.97, $308.30
DXCM Dexcom $106.63
GOOG, GOOGL Alphabet $91.78, $91.12
COST Costco $479.47
Apple (AAPL)
Source: Eric Broder Van Dyke / Shutterstock.com
Few stocks have returned as much value to shareholders as consumer electronics giant Apple (NASDAQ:AAPL). The Silicon Valley company’s share price has gained 202% in the last five years, 625% in the past decade, and 79,000% since its initial public offering (IPO) in 1983. Long-term, it is difficult to find a stock that has performed better than Apple. And the good news for investors is that Apple is currently on sale, having declined 21% over the last 12 months to currently trade at $134 a share.
Many of the world’s most successful investors have made Apple a core position in their portfolio, including Warren Buffett, the most successful investor of all time. Buffett’s holding company, Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), currently owns $123.34 billion worth of Apple stock, making it the biggest position in the portfolio. Buffett himself has been buying AAPL stock over the last year as the price has slumped.
With continued new product innovations, including rumors of a touchscreen Mac computer and virtual reality headset, Apple looks set to outperform for many years to come.
Nvidia (NVDA)
Source: Shutterstock
Chipmaker Nvidia (NASDAQ:NVDA) has been battered and bruised in the last year. The Santa Clara, California-based company’s stock price has fallen 35% over the last 12 months, which is close to the drop in the Nasdaq index over the same time period. However, NVDA stock remains up nearly 200% in the last five years and has gained 5,350% over the last 10 years. As long-term investments go, Nvidia has been a winner for its shareholders.
There is every reason to believe that Nvidia will continue its outperformance. The company’s microchips and semiconductors are at the cutting edge of technological innovations that include artificial intelligence and self-driving cars. And its products continue to dominate in the video game space. With supply chain bottlenecks and demand recovering, there are signs that NVDA stock may have bottomed in recent weeks. So far into 2023, the share price has increased by 18% to now trade at just under $170 a share.
Amazon (AMZN)
Source: Tada Images / Shutterstock.com
Don’t count out e-commerce giant Amazon (NASDAQ:AMZN) either as a going concern or an investment. The Seattle-based company has produced long-term gains for investors that few other stocks can match. AMZN stock had climbed higher by nearly 600% in the last 10 years and is up nearly 110,000% since its 1997 IPO when it began trading for less than $1 a share. While the share price has been knocked lower by nearly 40% in the last 12 months, indications point to short-term issues that shouldn’t weigh down the stock over the long term.
Specifically, Amazon overbuilt, over-hired, and over-extended itself during the pandemic when the world was isolated at home and forced to shop online. The company is now working to course correct, laying off nearly 20,000 staff, closing fulfillment centers around the world, and delaying the launch of several projects. If chief executive Andy Jassy and his team can right the ship, there is every reason to believe that AMZN stock will continue growing into the future.
Berkshire Hathaway (BRK-A, BRK-B)
Source: Jonathan Weiss / Shutterstock.com
We mentioned that Apple is Warren Buffett’s most widely held position and that AAPL stock has delivered huge gains to Berkshire Hathaway. However, Berkshire itself is no slouch as an investment. In fact, the stock has been a juggernaut for long-term buy-and-hold investors for decades. Berkshire Hathaway’s Class A stock has doubled twice in the past decade. Since 1990, the stock has grown more than eight million percent.
That kind of growth is mind-boggling. So too, is the current $480,000 share price of the Class A stock, which has never split. The Class A shares have gotten so hefty that stock exchanges have had to be reconfigured to enable them to continue trading on their bourse. Berkshire’s Class B stock, which trades at a ratio of 1/1,500th of the Class A stock, is more reasonably priced at $317 per share currently. Any way you slice it, Warren Buffett’s Berkshire Hathaway has proven to be a stupendous long-term investment.
Dexcom (DXCM)
Source: FOOTAGE VECTOR PHOTO / Shutterstock.com
Probably the least well-known stock on this list is Dexcom (NASDAQ:DXCM). The San Diego-based medical device company makes continuous glucose monitoring systems for people who have Diabetes. And its glucose monitoring systems have become the standard in the U.S. and many other countries around the world. This has led to big gains in DXCM stock over the long term. Consider that the company’s share price has increased 675% in the last five years and gained more than 2,800% over the past 10 years. Since going public in 2005, the stock has been up more than 4,000%.
The current share price of $108 looks expensive, with a price-earnings ratio of more than 200. However, analysts remain bullish on DXCM stock, with a median price target on the shares of $130, suggesting a further 20% upside from current levels. Dexcom continues to benefit from its focus on treating Diabetes and its market-leading position when it comes to innovative glucose monitoring systems. The company continues to bring new Diabetes management products to market and is forecasting that it will grow 32.9% in each of the next five years. This is a stock built for the long term.
Alphabet (GOOG, GOOGL)
Source: Benny Marty / Shutterstock.com
Any investor who got in on Alphabet’s (NASDAQ:GOOG, NASDAQ:GOOGL) IPO nearly 20 years ago is sitting pretty today. That’s because GOOGL stock has risen more than 3,250% since the tech giant made its market debut in August 2004. More recently, the share price has gained 60% in the past five years. In the last 12 months, Alphabet has undertaken a 20-for-1 stock split that has made the shares much more affordable. A 33% decline in the share price has also helped make the stock cheap at its current level of $91. The price-earnings ratio of 18 is the lowest it has been in more than a decade.
Investors looking for a best-in-class tech company should give serious consideration to buying GOOGL stock while it’s on sale. With the online advertising market recovering and the Federal Reserve’s interest rate hikes nearing their conclusion, the outlook for Alphabet and its share price is brightening. Plus, Alphabet continues to grow its market share in sectors ranging from smartphones and artificial intelligence to cloud computing and wearable tech. The company’s balance sheet is fortified for an economic downturn, and Alphabet continues to generate huge amounts of cash, primarily from digital advertisements. This is a stock built for the long term.
Costco (COST)
Source: ilzesgimene / Shutterstock.com
Big box retailer Costco’s (NASDAQ:COST) stock seems to outperform in any type of market. COST stock has been flat over the last year, up 153% in the last five years, and has gained nearly 400% during the past decade. Since the year 2000, the Seattle-based company’s share price has risen 1,000%. This is a testament to Costco’s strong business model, durable competitive advantage, and the near cult-like devotion of its customers who pay an annual membership fee to shop at the warehouse club.
Costco’s same-store sales growth has remained consistently strong throughout the pandemic and economic reopening; the company is expanding into new service areas that include travel, home improvement, and business services, and its membership renewal rate is above 95%, the industry gold standard. Costco’s net sales in its most recent fiscal year, which ended October 2022, totaled $222.7 billion, up 16% from the previous year and an all-time record for the company. No wonder Yahoo Finance named Costco its 2022 “Company of the Year.” Investors with a long time horizon should definitely consider a position in COST stock.
On the date of publication, Joel Baglole held long positions in AAPL, NVDA and GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
The post The Top 7 “Millionaire-Maker” Long-Term Stocks for 2023 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Ticker Company Price AAPL Apple $135.21 NVDA Nvidia $173.77 AMZN Amazon $95.46 BRK-A, BRK-B Berkshire Hathaway $466,259.97, $308.30 DXCM Dexcom $106.63 GOOG, GOOGL Alphabet $91.78, $91.12 COST Costco $479.47 Apple (AAPL) Source: Eric Broder Van Dyke / Shutterstock.com Few stocks have returned as much value to shareholders as consumer electronics giant Apple (NASDAQ:AAPL). Buffett himself has been buying AAPL stock over the last year as the price has slumped. Berkshire Hathaway (BRK-A, BRK-B) Source: Jonathan Weiss / Shutterstock.com We mentioned that Apple is Warren Buffett’s most widely held position and that AAPL stock has delivered huge gains to Berkshire Hathaway.
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Ticker Company Price AAPL Apple $135.21 NVDA Nvidia $173.77 AMZN Amazon $95.46 BRK-A, BRK-B Berkshire Hathaway $466,259.97, $308.30 DXCM Dexcom $106.63 GOOG, GOOGL Alphabet $91.78, $91.12 COST Costco $479.47 Apple (AAPL) Source: Eric Broder Van Dyke / Shutterstock.com Few stocks have returned as much value to shareholders as consumer electronics giant Apple (NASDAQ:AAPL). Buffett himself has been buying AAPL stock over the last year as the price has slumped. Berkshire Hathaway (BRK-A, BRK-B) Source: Jonathan Weiss / Shutterstock.com We mentioned that Apple is Warren Buffett’s most widely held position and that AAPL stock has delivered huge gains to Berkshire Hathaway.
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Ticker Company Price AAPL Apple $135.21 NVDA Nvidia $173.77 AMZN Amazon $95.46 BRK-A, BRK-B Berkshire Hathaway $466,259.97, $308.30 DXCM Dexcom $106.63 GOOG, GOOGL Alphabet $91.78, $91.12 COST Costco $479.47 Apple (AAPL) Source: Eric Broder Van Dyke / Shutterstock.com Few stocks have returned as much value to shareholders as consumer electronics giant Apple (NASDAQ:AAPL). Buffett himself has been buying AAPL stock over the last year as the price has slumped. Berkshire Hathaway (BRK-A, BRK-B) Source: Jonathan Weiss / Shutterstock.com We mentioned that Apple is Warren Buffett’s most widely held position and that AAPL stock has delivered huge gains to Berkshire Hathaway.
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Ticker Company Price AAPL Apple $135.21 NVDA Nvidia $173.77 AMZN Amazon $95.46 BRK-A, BRK-B Berkshire Hathaway $466,259.97, $308.30 DXCM Dexcom $106.63 GOOG, GOOGL Alphabet $91.78, $91.12 COST Costco $479.47 Apple (AAPL) Source: Eric Broder Van Dyke / Shutterstock.com Few stocks have returned as much value to shareholders as consumer electronics giant Apple (NASDAQ:AAPL). Buffett himself has been buying AAPL stock over the last year as the price has slumped. Berkshire Hathaway (BRK-A, BRK-B) Source: Jonathan Weiss / Shutterstock.com We mentioned that Apple is Warren Buffett’s most widely held position and that AAPL stock has delivered huge gains to Berkshire Hathaway.
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2023-01-19 00:00:00 UTC
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Apple Stock Is Down 25% From Its High. Time to Buy?
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AAPL
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https://www.nasdaq.com/articles/apple-stock-is-down-25-from-its-high.-time-to-buy
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nan
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nan
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On Jan. 3, 2022, Apple's (NASDAQ: AAPL) stock reached an all-time high of $180.73 after a nearly two-year period where the tech industry flourished. Pandemic closures throughout 2020 and 2021 led people to invest in home offices and entertainment devices, which provided a welcome boost to the whole market. However, economic headwinds and a sell-off in 2022 have led Apple shares to fall 25% since its all-time high.
Despite declines in its stock price, the company remains one of the most reliable long-term investments. Here's why the sell-off makes now an excellent time to buy Apple stock.
Apple's cash cow: The iPhone
Production concerns involving the iPhone dominated headlines toward the end of 2022. Increased COVID-19 restrictions in China put manufacturing strains on Foxconn, also known as Hon Hai Technology Group, which produces about 70% of all iPhones. Investors' concerns have since eased. Production capacity has returned to 90%, Apple made plans to leave China entirely in the coming years, and Foxconn announced it would expand to Southeast Asia this year.
Despite recent production challenges, the iPhone remains a compelling reason to invest in Apple's stock. In 2022, the entire tech market suffered from declines in consumer demand. However, in Apple's third quarter ending in June, the iPhone attained a 50% market share, surpassing Alphabet's Android. Reaching a leading market share makes it easier for Apple to attract consumers to its other devices and services, as the iPhone is a gateway into the company's walled garden of products.
Over the last six years, iPhone revenue increased 47.5%, from $139.3 billion in 2017 to $205.5 billion in 2022. Merely looking at the iPhone's 7% year-over-year revenue growth in 2022 compared to the 39% growth from the year-before period may look concerning. However, as with stocks, it's best to focus on long-term growth to account for years when one device might be more popular than another. And the iPhone's consistent growth over several years is worth an investment.
Apple is diversifying its revenue
While the iPhone is a promising revenue source, Apple is also working toward diversifying its earnings with services and plans to enter a lucrative market this year.
The iPhone accounted for 52% of Apple's revenue in 2022, with services its second-biggest earner, bringing in 20% of its revenue. The segment includes subscription earnings from services such as Apple TV+, Music, Fitness+, News+, Arcade, and iCloud. In 2022, services revenue grew 14% year over year to $78.1 billion, double the growth of the iPhone. Even better, services hit a 71.7% profit margin compared to products' 36.3% profit margin.
Services are booming for Apple and provide an excellent opportunity for the company to lean on other sources of revenue in the event of production issues.
Additionally, this year will further diversify its product line with a venture into virtual and augmented reality (VR/AR), two high-growth markets. Numerous reports in recent weeks have revealed that Apple will almost certainly release a mixed-reality headset in 2023 with VR and AR capabilities. The new product is promising, as the VR market was worth $21.8 billion in 2021 and will grow at a compound annual growth rate (CAGR) of 15% through 2030 (per Grand View Research).
Meanwhile, the AR market is worth $25.33 billion and is expected to see a CAGR of 40.9% until at least 2030.
Apple has proven its immense skill at entering new markets and quickly rising to dominance. The company displayed this talent with its success in smartphones, tablets, smart watches, and Bluetooth headphones. The mainstream adoption of each of these technologies skyrocketed after Apple released its own take on the product. As a result, it's not far-fetched to say an investment in Apple could be an investment in the future leader of VR and AR.
Despite a 25% stock dip from its all-time high, Apple shares remain a screaming buy. The company has a reliable iPhone business alongside a booming services segment and a lucrative product launch later this year. Apple's stock is a no-brainer buy, with its decline in price offering a bargain.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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On Jan. 3, 2022, Apple's (NASDAQ: AAPL) stock reached an all-time high of $180.73 after a nearly two-year period where the tech industry flourished. Reaching a leading market share makes it easier for Apple to attract consumers to its other devices and services, as the iPhone is a gateway into the company's walled garden of products. Services are booming for Apple and provide an excellent opportunity for the company to lean on other sources of revenue in the event of production issues.
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On Jan. 3, 2022, Apple's (NASDAQ: AAPL) stock reached an all-time high of $180.73 after a nearly two-year period where the tech industry flourished. Apple is diversifying its revenue While the iPhone is a promising revenue source, Apple is also working toward diversifying its earnings with services and plans to enter a lucrative market this year. Even better, services hit a 71.7% profit margin compared to products' 36.3% profit margin.
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On Jan. 3, 2022, Apple's (NASDAQ: AAPL) stock reached an all-time high of $180.73 after a nearly two-year period where the tech industry flourished. Despite recent production challenges, the iPhone remains a compelling reason to invest in Apple's stock. Reaching a leading market share makes it easier for Apple to attract consumers to its other devices and services, as the iPhone is a gateway into the company's walled garden of products.
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On Jan. 3, 2022, Apple's (NASDAQ: AAPL) stock reached an all-time high of $180.73 after a nearly two-year period where the tech industry flourished. Apple is diversifying its revenue While the iPhone is a promising revenue source, Apple is also working toward diversifying its earnings with services and plans to enter a lucrative market this year. In 2022, services revenue grew 14% year over year to $78.1 billion, double the growth of the iPhone.
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17532.0
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2023-01-19 00:00:00 UTC
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Taiwan fines Foxconn for unauthorised China investment
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AAPL
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https://www.nasdaq.com/articles/taiwan-fines-foxconn-for-unauthorised-china-investment-0
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nan
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Recasts, adds details from ministry statement, background
TAIPEI, Jan 19 (Reuters) - Taiwan on Thursday fined Foxconn 2317.TW T$10 million ($329,088) for making an unauthorised investment in a Chinese chip firm, but said the Taiwanese iPhone assembler had cooperated in the case and so received a lesser punishment.
Taiwan, which Beijing views as sovereign Chinese territory, has turned a wary eye on China's ambition to boost its semiconductor industry and is tightening legislation to prevent what it says is China stealing its chip technology.
Foxconn, a major Apple Inc AAPL.O supplier and the world's largest contract electronics maker, disclosed last July it was a shareholder in Chinese chip conglomerate Tsinghua Unigroup, but said last month it would be selling the stake.
Taiwan's government, which needs to clear all outbound investments, had not approved the deal.
Taiwan's Economy Ministry said while Foxconn had acquired the stake without first getting approval and so was in breach of regulations, there was no concern about an "outflow of technology" and there was minimal impact on Taiwan's economy or industry.
"At the same time, it (Foxconn) fully cooperated during the investigation of this case," the ministry said in a statement, adding that over the past three years Foxconn has invested more than T$20.4 billion in Taiwan and created 7,943 jobs.
The fine can therefore be reduced at the ministry's discretion, the statement said.
Neither Foxconn not Tsinghua Unigroup immediately responded to a request for comment.
The ministry said Foxconn has committed to continue to invest in Taiwan this year and next and the ministry's Investment Commission will "require the company to implement its commitments".
Foxconn, formally called Hon Hai Precision Industry Co Ltd, is keen to make auto chips in particular as it expands into the electric vehicle market.
Taiwan prohibits companies from building their most advanced foundries in China to ensure they do not site their best technology offshore.
($1 = 30.3870 Taiwan dollars)
(Reporting by Meg Shen and Ben Blanchard; Editing by Jan Harvey and Jane Merriman)
((meg.shen@thomsonreuters.com; 852-39525805;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Foxconn, a major Apple Inc AAPL.O supplier and the world's largest contract electronics maker, disclosed last July it was a shareholder in Chinese chip conglomerate Tsinghua Unigroup, but said last month it would be selling the stake. Recasts, adds details from ministry statement, background TAIPEI, Jan 19 (Reuters) - Taiwan on Thursday fined Foxconn 2317.TW T$10 million ($329,088) for making an unauthorised investment in a Chinese chip firm, but said the Taiwanese iPhone assembler had cooperated in the case and so received a lesser punishment. Foxconn, formally called Hon Hai Precision Industry Co Ltd, is keen to make auto chips in particular as it expands into the electric vehicle market.
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Foxconn, a major Apple Inc AAPL.O supplier and the world's largest contract electronics maker, disclosed last July it was a shareholder in Chinese chip conglomerate Tsinghua Unigroup, but said last month it would be selling the stake. Recasts, adds details from ministry statement, background TAIPEI, Jan 19 (Reuters) - Taiwan on Thursday fined Foxconn 2317.TW T$10 million ($329,088) for making an unauthorised investment in a Chinese chip firm, but said the Taiwanese iPhone assembler had cooperated in the case and so received a lesser punishment. The ministry said Foxconn has committed to continue to invest in Taiwan this year and next and the ministry's Investment Commission will "require the company to implement its commitments".
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Foxconn, a major Apple Inc AAPL.O supplier and the world's largest contract electronics maker, disclosed last July it was a shareholder in Chinese chip conglomerate Tsinghua Unigroup, but said last month it would be selling the stake. Recasts, adds details from ministry statement, background TAIPEI, Jan 19 (Reuters) - Taiwan on Thursday fined Foxconn 2317.TW T$10 million ($329,088) for making an unauthorised investment in a Chinese chip firm, but said the Taiwanese iPhone assembler had cooperated in the case and so received a lesser punishment. Taiwan's Economy Ministry said while Foxconn had acquired the stake without first getting approval and so was in breach of regulations, there was no concern about an "outflow of technology" and there was minimal impact on Taiwan's economy or industry.
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Foxconn, a major Apple Inc AAPL.O supplier and the world's largest contract electronics maker, disclosed last July it was a shareholder in Chinese chip conglomerate Tsinghua Unigroup, but said last month it would be selling the stake. Recasts, adds details from ministry statement, background TAIPEI, Jan 19 (Reuters) - Taiwan on Thursday fined Foxconn 2317.TW T$10 million ($329,088) for making an unauthorised investment in a Chinese chip firm, but said the Taiwanese iPhone assembler had cooperated in the case and so received a lesser punishment. Taiwan, which Beijing views as sovereign Chinese territory, has turned a wary eye on China's ambition to boost its semiconductor industry and is tightening legislation to prevent what it says is China stealing its chip technology.
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17533.0
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2023-01-19 00:00:00 UTC
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New to Investing? 3 Stocks to Buy in 2023 and Hold Forever
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AAPL
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https://www.nasdaq.com/articles/new-to-investing-3-stocks-to-buy-in-2023-and-hold-forever
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There haven't been many better times to begin investing over the past year than now. The Nasdaq Composite index has dropped nearly 26% over the past 12 months, and many individual stocks have fallen far more. In other words, you can invest in businesses at multi-year lows, making it an opportune time to start investing.
If you're investing in individual stocks, where should you start? Much like a house, an investment portfolio for long-term investors requires a robust foundation, a durable structure, and a few decorations. Using this analogy, let's find out what stocks can be phenomenal long-term purchases for beginning investors.
Step 1: Build the foundation
Apple (NASDAQ: AAPL) can help serve as the bedrock for incoming investors for a few reasons. The first is that it has a recognizable name anywhere in the world, making it easy to understand what the company does and how it makes money. The second reason is that Apple is one of the largest businesses in the world, meaning that it has proven itself to investors better than nearly any company out there.
To become one of the best global businesses, it had to have one of the best income statements in the world. This holds true today as the company generated net income of $99.8 billion over the trailing 12 months. The company has also generated $111 billion in free cash flow over the same period, representing a margin of 28%. In other words, for every dollar Apple made in revenue over the past year, $0.28 was retained in cash flow.
Shares of Apple have plummeted 22% over the past year, bringing its valuation down to just 22 times earnings. New investors should build the foundation of their portfolio no matter what, but with Apple trading near its lowest valuation since the market crash of 2020, now looks like a better time than any lately.
Step 2: Add the structure
Once you construct the foundation of a house, you need an equally durable structure. Autodesk (NASDAQ: ADSK) is the equivalent of this stable frame. The company is the leading provider of computer-aided design (CAD) software for the architectural, engineering, and construction industries.
Autodesk is the Coca-Cola of the design industry, except there's no Pepsi to rival it. Some estimates pin Autodesk's market share at 31% in the CAD space, with the second-place provider miles behind, controlling only 12%.
This unrivaled dominance has led to jaw-dropping profitability for Autodesk. The company expects to generate nearly $2 billion in free cash flow in the 2023 fiscal year -- which ends Jan. 31, 2023.
CAD software is critical in the engineering, construction, architecture, and manufacturing worlds, and since Autodesk is the top dog, businesses will likely pay any price for its software. This could enable the company to raise prices over time, potentially resulting in far higher profitability three, five, and 10 years from now. I plan to own this stalwart for the long haul, and this stock could make a great addition to a new investor's portfolio.
Step 3: Furnish with some growth prospects
Once you have built a rock-solid foundation and an enduring structure, you can decorate your portfolio with growth stocks. Enter The Trade Desk (NASDAQ: TTD). This company is riskier than Autodesk or Apple, but it could provide far higher returns over the next decade.
The Trade Desk helps advertisers buy available digital ad inventory across the open internet, and it is one of the leading platforms that does so. The digital advertising landscape is anticipated to explode over the next few years, putting The Trade Desk in an optimal spot to thrive. In 2026, eMarketer predicts that $876 billion will be spent on purchasing digital ad space worldwide. That's 45% higher than the global spending in 2022.
The opportunity that The Trade Desk is capitalizing on is enormous, but what's even more impressive is that it is gaining market share rapidly. Even during this harsh economic environment, The Trade Desk saw third-quarter revenue soar 31% compared with the year-ago quarter to $395 million -- which is far faster than the sub-10% expected increase in the advertising industry this year.
Revenue is rising fast, but the company has balanced its rapid adoption with healthy cash generation. This advertising technology stock generated $485 million in free cash flow over the trailing 12 months, representing a margin of 33%. With high cash generation, impressive adoption, and a dominant position in a lucrative space, The Trade Desk might deserve a spot in a new investor's portfolio.
10 stocks we like better than Apple
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of January 9, 2023
Jamie Louko has positions in Apple, Autodesk, and Trade Desk. The Motley Fool has positions in and recommends Apple, Autodesk, and Trade Desk. The Motley Fool recommends the following options: long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Step 1: Build the foundation Apple (NASDAQ: AAPL) can help serve as the bedrock for incoming investors for a few reasons. New investors should build the foundation of their portfolio no matter what, but with Apple trading near its lowest valuation since the market crash of 2020, now looks like a better time than any lately. Even during this harsh economic environment, The Trade Desk saw third-quarter revenue soar 31% compared with the year-ago quarter to $395 million -- which is far faster than the sub-10% expected increase in the advertising industry this year.
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Step 1: Build the foundation Apple (NASDAQ: AAPL) can help serve as the bedrock for incoming investors for a few reasons. This advertising technology stock generated $485 million in free cash flow over the trailing 12 months, representing a margin of 33%. With high cash generation, impressive adoption, and a dominant position in a lucrative space, The Trade Desk might deserve a spot in a new investor's portfolio.
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Step 1: Build the foundation Apple (NASDAQ: AAPL) can help serve as the bedrock for incoming investors for a few reasons. With high cash generation, impressive adoption, and a dominant position in a lucrative space, The Trade Desk might deserve a spot in a new investor's portfolio. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Jamie Louko has positions in Apple, Autodesk, and Trade Desk.
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Step 1: Build the foundation Apple (NASDAQ: AAPL) can help serve as the bedrock for incoming investors for a few reasons. There haven't been many better times to begin investing over the past year than now. Much like a house, an investment portfolio for long-term investors requires a robust foundation, a durable structure, and a few decorations.
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17534.0
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2023-01-19 00:00:00 UTC
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Alphabet (GOOGL) to Boost YouTube TV With Redesigned Features
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AAPL
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https://www.nasdaq.com/articles/alphabet-googl-to-boost-youtube-tv-with-redesigned-features
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Alphabet’s GOOGL division Google is consistently adding new features to its online video-streaming service, YouTube.
This is evident from the fact that the company recently redesigned Library and Live tabs to provide a user-friendly interface based on personalized suggestions.
The Library tab shows all users’ recorded content that you watch. The Live tab integrates a highlighted state letting users to quickly see what they are watching. Moreover, a side panel was added to show an Add to Library button.
On the back of this initiative, Google aims to provide an enhanced streaming experience to users. This is expected to increase the adoption rate of YouTube TV in the days ahead.
This, in turn, is likely to aid the performance of Google Services segment, which contributes the most to Alphabet’s top line.
Revenues from the Google services business increased 2.5% year over year to $61.4 billion, accounting for 88.8% of the total third-quarter revenues.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Growing YouTube TV Initiatives
Apart from the recent move, Google is offering YouTube TV 4k Plus discounts for select subscribers. The effort is a step to gain momentum among customers.
Google is working on a multi-screen viewing capability on YouTube TV. The initiative focuses on providing an enhanced viewing experience to sports fans.
In an effort to increase its sports credentials, Google collaborated with the National Football League (NFL) and acquired exclusive rights of the NFL Sunday ticket for streaming Sunday games on YouTube TV and YouTube Primetime Channels.
With consistent efforts, Alphabet remains well-poised to rapidly penetrate the booming global video-streaming market.
Per a Precedence Research report, the underlined market is expected to reach $1.7 trillion by 2030, seeing a CAGR of 18.5% between 2022 and 2030.
Competitive Scenario
Given this upbeat scenario, not only Alphabet but other major companies like Amazon AMZN, Apple AAPL and The Walt Disney Company DIS are making strong efforts to expand their market share in the video-streaming space.
Amazon, which has lost 37.1% in the past year, is gaining traction among customers on the back of its video on-demand service, Prime Video. On AMZN’s video platform, viewers can watch movies, TV series and exclusive Amazon Originals.
Apple is witnessing solid momentum across its video-streaming platform, Apple TV. Apple’s growing original and regional content portfolio is helping it expand its user base. Shares of AAPL have been down 17.8% in the past year.
Disney is riding on the growing popularity of Disney+ owing to a strong content portfolio and a cheaper bundle offering. Moreover, DIS’s growing sports streaming initiatives remain a positive. Shares of DIS have lost 32.9% in the past year.
Nevertheless, Alphabet’s growing streaming efforts, strategic partnerships and strong service offerings are helping it to gain a competitive edge against the aforesaid peers.
Consequently, this will help GOOGL win the confidence of the investors in the near and long terms.
Shares of GOOGL have been down 31.6% in the past year compared with the Computer and Technology sector’s decline of 24.8%.
Currently, Alphabet carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Competitive Scenario Given this upbeat scenario, not only Alphabet but other major companies like Amazon AMZN, Apple AAPL and The Walt Disney Company DIS are making strong efforts to expand their market share in the video-streaming space. Shares of AAPL have been down 17.8% in the past year. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Competitive Scenario Given this upbeat scenario, not only Alphabet but other major companies like Amazon AMZN, Apple AAPL and The Walt Disney Company DIS are making strong efforts to expand their market share in the video-streaming space. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here. Shares of AAPL have been down 17.8% in the past year.
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Competitive Scenario Given this upbeat scenario, not only Alphabet but other major companies like Amazon AMZN, Apple AAPL and The Walt Disney Company DIS are making strong efforts to expand their market share in the video-streaming space. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here. Shares of AAPL have been down 17.8% in the past year.
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Shares of AAPL have been down 17.8% in the past year. Competitive Scenario Given this upbeat scenario, not only Alphabet but other major companies like Amazon AMZN, Apple AAPL and The Walt Disney Company DIS are making strong efforts to expand their market share in the video-streaming space. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report The Walt Disney Company (DIS) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here.
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17535.0
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2023-01-19 00:00:00 UTC
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How Does Warren Buffett Handle a Bull Market?
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AAPL
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https://www.nasdaq.com/articles/how-does-warren-buffett-handle-a-bull-market
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Warren Buffett has mastered being greedy when others are fearful, but what does he do when the market is going up? Travis Hoium and Jon Quast discuss how Buffett looks at the market and why a bull market isn't necessarily a bad time to buy great stocks.
*Stock prices used were end-of-day prices of Jan. 12, 2023. The video was published on Jan. 19, 2023.
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*Stock Advisor returns as of January 9, 2023
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Jon Quast has no position in any of the stocks mentioned. Travis Hoium has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Goldman Sachs Group. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Goldman Sachs Group wasn't one of them! The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Goldman Sachs Group.
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Travis Hoium has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Goldman Sachs Group. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple.
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Travis Hoium and Jon Quast discuss how Buffett looks at the market and why a bull market isn't necessarily a bad time to buy great stocks. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple.
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Travis Hoium and Jon Quast discuss how Buffett looks at the market and why a bull market isn't necessarily a bad time to buy great stocks. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Goldman Sachs Group. Their opinions remain their own and are unaffected by The Motley Fool.
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17536.0
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2023-01-19 00:00:00 UTC
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US STOCKS-Futures fall as weak data fuel recession worries, Fed comments on tap
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AAPL
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https://www.nasdaq.com/articles/us-stocks-futures-fall-as-weak-data-fuel-recession-worries-fed-comments-on-tap
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For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window
Futures down: Dow 0.52%, S&P 0.54%, Nasdaq 0.61%
Jan 19 (Reuters) - U.S. stock index futures fell on Thursday after weak economic data fueled recession worries, while investors await comments from more Federal Reserve officials for clues on the central bank's path of monetary tightening.
Data on Wednesday showed retail sales, producer prices and production at U.S. factories fell more than expected in December, while November output was also weaker, adding to worries of a slowdown in the economy.
This led to the S&P 500 .SPX and the Dow .DJI logging their biggest daily percentage declines in over a month in the previous session, with comments from Fed speakers that highlighted the disparity between the central bank's estimate of its terminal rate and market expectations.
St. Louis Fed President James Bullard and Cleveland Fed President Loretta Mester stressed on the need to raise rates beyond 5% to bring inflation to heel, while money markets see the rate peaking at 4.85% by June, with a 25-basis point rate hike baked in for February. FEDWATCH
"For once bad news really was bad news because of the implications it might have for interest rates. Weak retail sales suggested consumers' resilience may have been pushed beyond breaking point," said Russ Mould, investment director at AJ Bell.
"This undermined the hypothesis of a 'soft landing' for the U.S. economy."
December's housing starts number, weekly jobless claims and Philadelphia Fed's Manufacturing Survey for January, due at 8:30 a.m. ET, will provide more clues on the strength of the U.S. economy.
Investors are also focused on the fourth-quarter earnings season, with Netflix Inc NFLX.O, American Airlines Group Inc AAL.O, Procter & Gamble Co PG.N and Truist Financial Corp TFC.N among companies reporting results on Thursday.
Analysts now expect year-over-year earnings from S&P 500 companies to decline 2.6% for the quarter, according to Refinitiv data, compared with a 1.6% decline in the beginning of the year.
At 5:32 a.m. ET, Dow e-minis 1YMcv1 were down 173 points, or 0.52%, S&P 500 e-minis EScv1 were down 21.25 points, or 0.54%, and Nasdaq 100 e-minis NQcv1 were down 69.5 points, or 0.61%.
Tesla Inc TSLA.O fell 2% in premarket trading, leading declines among its growth peers Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Microsoft Corp MSFT.O, whose shares were down between 0.6% and 1.0%.
Piper Sandler cut the target price on electric-vehicle maker Tesla's stock to $300 from $340.
(Reporting by Shubham Batra in Bengaluru; Editing by Shounak Dasgupta)
((Shubham.Batra@thomsonreuters.com))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Tesla Inc TSLA.O fell 2% in premarket trading, leading declines among its growth peers Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Microsoft Corp MSFT.O, whose shares were down between 0.6% and 1.0%. Data on Wednesday showed retail sales, producer prices and production at U.S. factories fell more than expected in December, while November output was also weaker, adding to worries of a slowdown in the economy. This led to the S&P 500 .SPX and the Dow .DJI logging their biggest daily percentage declines in over a month in the previous session, with comments from Fed speakers that highlighted the disparity between the central bank's estimate of its terminal rate and market expectations.
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Tesla Inc TSLA.O fell 2% in premarket trading, leading declines among its growth peers Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Microsoft Corp MSFT.O, whose shares were down between 0.6% and 1.0%. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window Futures down: Dow 0.52%, S&P 0.54%, Nasdaq 0.61% Jan 19 (Reuters) - U.S. stock index futures fell on Thursday after weak economic data fueled recession worries, while investors await comments from more Federal Reserve officials for clues on the central bank's path of monetary tightening. Weak retail sales suggested consumers' resilience may have been pushed beyond breaking point," said Russ Mould, investment director at AJ Bell.
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Tesla Inc TSLA.O fell 2% in premarket trading, leading declines among its growth peers Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Microsoft Corp MSFT.O, whose shares were down between 0.6% and 1.0%. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window Futures down: Dow 0.52%, S&P 0.54%, Nasdaq 0.61% Jan 19 (Reuters) - U.S. stock index futures fell on Thursday after weak economic data fueled recession worries, while investors await comments from more Federal Reserve officials for clues on the central bank's path of monetary tightening. Data on Wednesday showed retail sales, producer prices and production at U.S. factories fell more than expected in December, while November output was also weaker, adding to worries of a slowdown in the economy.
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Tesla Inc TSLA.O fell 2% in premarket trading, leading declines among its growth peers Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Microsoft Corp MSFT.O, whose shares were down between 0.6% and 1.0%. This led to the S&P 500 .SPX and the Dow .DJI logging their biggest daily percentage declines in over a month in the previous session, with comments from Fed speakers that highlighted the disparity between the central bank's estimate of its terminal rate and market expectations. FEDWATCH "For once bad news really was bad news because of the implications it might have for interest rates.
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17537.0
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2023-01-19 00:00:00 UTC
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Better Buy: Apple Stock vs. Disney Stock
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AAPL
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https://www.nasdaq.com/articles/better-buy%3A-apple-stock-vs.-disney-stock
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nan
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nan
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Last year, rises in inflation and interest rates brought down numerous stocks across different industries. However, the start of 2023 has investors in an optimistic mood as multiple stocks have begun rising again.
Apple (NASDAQ: AAPL) and Disney (NYSE: DIS) have each enjoyed gradual but consistent stock growth since Jan. 1. These companies are dominating forces in their respective industries and will likely continue expanding for the long term.
Last year's sell-off has created an excellent investment opportunity, with shares in many companies on sale. However, with so many choices this January, it might be difficult to know which companies will offer the biggest gains over the long term. Apple and Disney are leading names in consumer tech and entertainment, but which is the better buy? Let's find out.
Apple is set for continued growth on VR/AR innovation
Apple shares have risen almost 9% in the first two weeks of the year as leaks of the company's one- to two-year roadmap look promising. Rumored moves, such as the release of a virtual/augmented reality (VR/AR) headset in 2023, touchscreen Macs, $99 AirPods, and a custom-designed telecom chip, could each offer a boost to revenue over the long term.
The most immediate and concrete development for Apple this year seems to be its VR/AR headset. The concept of VR has been implemented in different ways and devices for at least 30 years but has only recently been able to deliver on consumer expectations for the technology. Companies such as Meta and Sony currently dominate the space with their respective headsets, but Apple's participation in the burgeoning industry could easily push VR into mainstream use.
The iPhone company undeniably influenced the public's swift adoption of smartphones, tablets, smartwatches, and Bluetooth headphones. As a result, Apple has developed immense brand loyalty over the years, which increases its chances for success in the VR industry.
According to Grand View Research, the VR market was worth $21.8 billion in 2021 and will grow at a compound annual growth rate (CAGR) of 15% until 2030. However, Apple's headset is expected to also include AR capabilities which involve an even more lucrative market. The $25.33 billion AR market is expected to see a 40.9% CAGR through 2030. As potentially one of the earliest and biggest names in AR, Apple could position itself to profit significantly from both industries' growth.
Apple shares have risen 204% since 2018 despite a recent sell-off. The company is in a perpetual state of innovation, making its stock an excellent investment for the long term.
Disney should thrive from leading position in streaming
Since Jan. 1, Disney shares have skyrocketed 15% after plummeting almost 44% in 2022. Investors have become bullish after the return of "golden era" CEO Bob Iger, a box office hit this month with Avatar: The Way of Water, and a booming parks business. Additionally, the company's leading position in the streaming industry is only more reason to rally over this entertainment giant.
Disney's latest quarter was one to forget, with its media and entertainment segment reporting a revenue loss of 3% year over year to $12.7 billion and a 91% decline in operating income of $83 million. The losses mainly stemmed from the company's significant investment in streaming content to attract subscribers to Disney+. However, its efforts weren't in vain, achieving the most subscribers in the industry in the third quarter of 2022 and holding the top spot in the fourth quarter, with 235.7 million members, versus Netflix's 223.8 million.
Streaming was a volatile market in 2022 as companies went to war over subscribers. However, the industry is worth $59.14 billion and is expected to see a CAGR of 21.3% until at least 2030. It may have cost a lot, but Disney's investment to become the leader of streaming could pay off big in the long run.
Moreover, movie theater attendance is back after pandemic challenges, evident by Disney's Avatar sequel becoming the seventh-highest-grossing film in history after only four weeks, earning $1.7 billion by Jan. 8. The film reportedly cost $350 million to produce, according to Variety, suggesting it will provide a much-needed boost to the company's media business.
Apple and Disney have nearly unparalleled dominance in tech and entertainment, which will likely see them continue growing for decades. However, the pandemic, followed by economic headwinds in 2022, hit Disney far harder than Apple. Comparing price-to-earnings ratios, Disney's ratio of 58 suggests its stock is currently too expensive, with Apple's offering more value at 22.
It's wise to keep an eye on Disney's stock to strike at the right time, but for now, Apple is the better buy.
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*Stock Advisor returns as of January 9, 2023
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Meta Platforms, Netflix, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple (NASDAQ: AAPL) and Disney (NYSE: DIS) have each enjoyed gradual but consistent stock growth since Jan. 1. Rumored moves, such as the release of a virtual/augmented reality (VR/AR) headset in 2023, touchscreen Macs, $99 AirPods, and a custom-designed telecom chip, could each offer a boost to revenue over the long term. Investors have become bullish after the return of "golden era" CEO Bob Iger, a box office hit this month with Avatar: The Way of Water, and a booming parks business.
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Apple (NASDAQ: AAPL) and Disney (NYSE: DIS) have each enjoyed gradual but consistent stock growth since Jan. 1. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Apple, Meta Platforms, Netflix, and Walt Disney.
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Apple (NASDAQ: AAPL) and Disney (NYSE: DIS) have each enjoyed gradual but consistent stock growth since Jan. 1. Apple is set for continued growth on VR/AR innovation Apple shares have risen almost 9% in the first two weeks of the year as leaks of the company's one- to two-year roadmap look promising. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors.
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Apple (NASDAQ: AAPL) and Disney (NYSE: DIS) have each enjoyed gradual but consistent stock growth since Jan. 1. Apple and Disney are leading names in consumer tech and entertainment, but which is the better buy? The most immediate and concrete development for Apple this year seems to be its VR/AR headset.
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17538.0
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2023-01-19 00:00:00 UTC
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Up 133% Already in 2023, Is This Metaverse Crypto a Buy?
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AAPL
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https://www.nasdaq.com/articles/up-133-already-in-2023-is-this-metaverse-crypto-a-buy
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nan
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nan
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What a difference a year makes. In 2022, some metaverse cryptos were down more than 90% for the year, and many analysts had already written off the metaverse as a potential investment option. However, through the first two weeks of 2023, the script has flipped. Metaverse tokens are now the best-performing sector in the crypto market.
Leading the charge has been Decentraland (CRYPTO: MANA), which at one point was up more than 133% in 2023. Sentiment seems to have shifted dramatically on the prospects of this metaverse token. Moreover, sentiment has shifted nearly overnight. So is Decentraland a buy?
The roller-coaster hype cycle
When it comes to the metaverse sector, understanding investor sentiment is key. It has truly been a roller-coaster hype cycle for the metaverse during the past 18 months. Back in 2021, anything "metaverse" was golden, and Facebook even went so far as to change its name to Meta Platforms to achieve first-mover status in the metaverse.
And it wasn't just tech companies, celebrities, brands, and top social media influencers hyping the metaverse. High-end consulting firms and Wall Street banks constantly pointed out that the metaverse represented a potential $1 trillion market opportunity.
But in 2022, investors realized that it might take a lot longer than expected to realize the full scale of this market opportunity. That's why I'm concerned about this new hype cycle: It could be just as fleeting.
Lack of fundamentals
Of course, you can blame the broader market decline for much of Decentraland's woes last year, as investors dumped all cryptos indiscriminately in a mad rush for the exits. But part of the blame rests with Decentraland itself. Despite all the efforts spent on attracting top celebrities and brands to build in its metaverse world, Decentraland still has less than 1,000 daily active users. The usage numbers, quite frankly, are not very encouraging.
Lack of a good catalyst
Despite the recent run-up in price, it's difficult to find a single good reason why Decentraland has been rising so fast in 2023. The consensus seems to be that positive macroeconomic news in January is driving the growth. Based on a single good economic number, metaverse investors are now convinced that fears of inflation have been overblown, the economy will improve, and users will go back to playing in the metaverse.
Maybe I'm too skeptical, but I need to see some major catalyst that is driving this growth -- or else it's all hype and could disappear at any moment. Yes, Decentraland did announce some new profile features and avatar functions, but this seems to be a small tweak rather than a big catalyst. Another working hypothesis is that the start of the Australian Open tennis tournament in mid-January played a role. The logic here is that the Australian Open has a metaverse destination inside Decentraland where you can learn more about tennis, and that might be the reason Decentraland is up so much. I don't find this to be a very convincing argument, especially since the tournament only lasts two weeks.
Standing out in the metaverse
Even without the presence of a good catalyst, and even with poor usage numbers, I might be persuaded to buy Decentraland if I felt that it was absolutely the best-in-class metaverse crypto. But I don't think it's possible to make that argument. For example, both The Sandbox and Gala -- two metaverse cryptos that rank in the top 100 by market cap -- are surging as well. Overall, everything metaverse-related seems to be going up, so it's hard to say that Decentraland is somehow unique.
Image source: Getty Images.
Another major concern is that the term "metaverse" has been used so much that nobody really knows what it means anymore. Back in 2021, it generally referred to a specific metaverse world such as Decentraland. But it is now used to describe anything related to virtual reality, augmented reality, or even online gaming. You could legitimately make the case that Apple is now a potential metaverse stock, based on reports of a major VR headset product coming in 2023.
Short-term vs. long-term outlook
Over the long term, there is no doubt there will be some sort of market opportunity related to the metaverse. Some tech company will figure it out, or perhaps one crypto will find a new multibillion-dollar market niche. However, over the short term, I'm much more skeptical. The hype cycle is so intense that it's hard to see 100% gains in two weeks as anything other than another corkscrew turn on this roller-coaster ride called the metaverse.
Thus, I need to see a change in strategic direction before I can get behind Decentraland. The old approach of "build it and they will come" is not working. When Decentraland stops relying on influencers, brands, and celebrities to bring in new users, and instead finds a real value proposition that appeals to mainstream consumers, that's when I might decide to hop on the metaverse roller coaster.
10 stocks we like better than Decentraland
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Decentraland wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of January 9, 2023
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Dominic Basulto has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Gala, and Meta Platforms. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Lack of fundamentals Of course, you can blame the broader market decline for much of Decentraland's woes last year, as investors dumped all cryptos indiscriminately in a mad rush for the exits. You could legitimately make the case that Apple is now a potential metaverse stock, based on reports of a major VR headset product coming in 2023. When Decentraland stops relying on influencers, brands, and celebrities to bring in new users, and instead finds a real value proposition that appeals to mainstream consumers, that's when I might decide to hop on the metaverse roller coaster.
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And it wasn't just tech companies, celebrities, brands, and top social media influencers hyping the metaverse. The Motley Fool has positions in and recommends Apple, Gala, and Meta Platforms. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.
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Based on a single good economic number, metaverse investors are now convinced that fears of inflation have been overblown, the economy will improve, and users will go back to playing in the metaverse. The logic here is that the Australian Open has a metaverse destination inside Decentraland where you can learn more about tennis, and that might be the reason Decentraland is up so much. Standing out in the metaverse Even without the presence of a good catalyst, and even with poor usage numbers, I might be persuaded to buy Decentraland if I felt that it was absolutely the best-in-class metaverse crypto.
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The hype cycle is so intense that it's hard to see 100% gains in two weeks as anything other than another corkscrew turn on this roller-coaster ride called the metaverse. That's right -- they think these 10 stocks are even better buys. The Motley Fool has positions in and recommends Apple, Gala, and Meta Platforms.
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17539.0
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2023-01-19 00:00:00 UTC
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2 Warren Buffett ETFs to Stock Up On in 2023
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AAPL
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https://www.nasdaq.com/articles/2-warren-buffett-etfs-to-stock-up-on-in-2023
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nan
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nan
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The stock market has had a rough ride over the past year or so, and it has many investors understandably rattled.
However, with the right strategy, now could be the investing opportunity of the decade. Aside from the brief crash in 2020, the market hasn't dipped this low since the Great Recession in 2008.
By investing now, you can snag high-quality stocks at a fraction of the price, then potentially see lucrative returns when the market inevitably recovers. And there are two Warren Buffett exchange-traded funds (ETFs) that could be smart buys in 2023.
A strong investment choice
Through his holding company Berkshire Hathaway, Warren Buffett invests in only two ETFs: the Vanguard S&P 500 ETF (NYSEMKT: VOO) and the SPDR S&P 500 ETF Trust (NYSEMKT: SPY).
An S&P 500 ETF is an investment that aims to track the S&P 500 index itself, which means it includes all the same stocks as the index. The S&P 500 contains stocks from 500 of the largest companies in the U.S., including household names like Amazon, Apple, and Microsoft.
There are several advantages of investing in an S&P 500 ETF:
Instant diversification: Because each fund contains roughly 500 stocks from a wide variety of industries, you can achieve a well-diversified portfolio with a single investment.
More protection against volatility: The S&P 500 only includes the best of the best, so the stocks you're investing in are far more likely to recover from market downturns. Many of these companies have existed for decades, so they also have a strong track record of rebounding from even the worst recessions.
Low-maintenance investing: As passive funds, S&P 500 ETFs require very little effort on your part. All of the stocks are already chosen for you, and there's next to no upkeep or research required. Just invest consistently, and leave the rest of the work to the fund.
Whether you're just starting out or are an experienced investor, an S&P 500 ETF can be a smart option to protect your money during periods of volatility.
How much can you earn?
Despite being a relatively safe investment, the S&P 500 ETF can potentially make you a lot of money.
While nothing is guaranteed when it comes to the stock market, historically, the S&P 500 itself has earned an average rate of return of around 10% per year. In other words, all the highs and lows over the decades have averaged out to around 10% per year.
Although that may not sound like much, it can add up. Say, for example, you're investing $300 per month while earning a 10% average annual return. Here's approximately how much you could earn depending on how many years you invest:
NUMBER OF YEARS TOTAL SAVINGS
10 $57,000
20 $206,000
30 $592,000
40 $1,593,000
Source: Author's calculations via Investor.gov
The sooner you start investing, the easier it will be to accumulate hundreds of thousands of dollars or more. Even if you can't afford to invest much per month, given enough time, you can still see substantial earnings.
VOO vs. SPY: Which is right for you?
Because all S&P 500 ETFs track the same index, they're going to see similar returns. They do differ in the details, though.
VANGUARD S&P 500 ETF (VOO) SPDR S&P 500 ETF TRUST (SPY)
Expense ratio 0.03% 0.0945%
Year established 2010 1993
10-year annualized return 12.52% 12.42%
Price per share $365.10 $398.56
The biggest differences between these two funds are the fees and history. VOO has a significantly lower expense ratio, which means you'll pay less in fees per year. Over decades, that could potentially save you tens of thousands of dollars.
However, SPY has the advantage of being an older fund. In fact, it was the very first ETF listed in the U.S. While Vanguard is a reputable name in the industry, VOO doesn't have the track record of SPY, which can be considered a disadvantage.
Despite their minor differences, both of these ETFs are solid choices. By loading up on one or both of these investments in 2023, you could see significant earnings over time.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Katie Brockman has positions in Vanguard S&P 500 ETF. The Motley Fool has positions in and recommends Amazon.com, Apple, Berkshire Hathaway, Microsoft, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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By investing now, you can snag high-quality stocks at a fraction of the price, then potentially see lucrative returns when the market inevitably recovers. Expense ratio 0.03% 0.0945% Year established 2010 1993 10-year annualized return 12.52% 12.42% Price per share $365.10 $398.56 The biggest differences between these two funds are the fees and history. While Vanguard is a reputable name in the industry, VOO doesn't have the track record of SPY, which can be considered a disadvantage.
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A strong investment choice Through his holding company Berkshire Hathaway, Warren Buffett invests in only two ETFs: the Vanguard S&P 500 ETF (NYSEMKT: VOO) and the SPDR S&P 500 ETF Trust (NYSEMKT: SPY). The Motley Fool has positions in and recommends Amazon.com, Apple, Berkshire Hathaway, Microsoft, and Vanguard S&P 500 ETF. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple.
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A strong investment choice Through his holding company Berkshire Hathaway, Warren Buffett invests in only two ETFs: the Vanguard S&P 500 ETF (NYSEMKT: VOO) and the SPDR S&P 500 ETF Trust (NYSEMKT: SPY). An S&P 500 ETF is an investment that aims to track the S&P 500 index itself, which means it includes all the same stocks as the index. There are several advantages of investing in an S&P 500 ETF: Instant diversification: Because each fund contains roughly 500 stocks from a wide variety of industries, you can achieve a well-diversified portfolio with a single investment.
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A strong investment choice Through his holding company Berkshire Hathaway, Warren Buffett invests in only two ETFs: the Vanguard S&P 500 ETF (NYSEMKT: VOO) and the SPDR S&P 500 ETF Trust (NYSEMKT: SPY). * They just revealed what they believe are the ten best stocks for investors to buy right now... and Vanguard S&P 500 ETF wasn't one of them! The Motley Fool has positions in and recommends Amazon.com, Apple, Berkshire Hathaway, Microsoft, and Vanguard S&P 500 ETF.
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17540.0
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2023-01-19 00:00:00 UTC
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Can Tech Stocks Realistically Help You Retire Early?
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AAPL
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https://www.nasdaq.com/articles/can-tech-stocks-realistically-help-you-retire-early
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nan
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nan
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Technology stocks are rarely associated with retirement plans. Retirement stocks are thought to be businesses with stability, predictable profits, and returning cash to shareholders in the form of dividends for income. By contrast, tech stocks are often seen as unpredictable cash-burning gambles.
As a younger investor, I was tempted to focus on simply playing it safe -- or at least what I perceived to be safe. That was until I discovered one simple principle that changed my entire perspective.
Playing it safe could cost you
I'll share the principle momentarily. But first, I'll point out that, for retirement accounts, many investors prioritize making money over beating the average return of the stock market. However, this focus can lead to questionable investing decisions.
Three companies often regarded as great retirement stocks are The JM Smucker Company, Kellogg, and Campbell Soup. All three have been in business for more than a century, pay a dividend with a better-than-average return (dividend yield), and for those who bought 10 years ago, these stocks have never been down more than 10% at any point, as the chart shows.
SJM data by YCharts
The problem is, the chart also shows that they're giving investors below-average returns. Therefore, by picking safe stocks, investors always marched higher, which is good. But they sacrificed precious upside.
For investors who only wanted positive returns and a good-paying dividend, they could have elected to invest in something like the Invesco S&P 500 Equal Weight Consumer Staples ETF. This product holds positions in many stable companies (including JM Smucker, Kellogg, and Campbell), pays quarterly distributions to fund holders, and has also maintained positive returns for more than a decade as well.
The advantage of the Invesco S&P 500 Equal Weight Consumer Staples ETF -- and many exchange-traded funds (ETFs) for that matter -- is that returns are much closer to the average of the S&P 500.
^SPX data by YCharts
Therefore, if your goal is to inch your way toward retirement without ever backtracking, investing in ETFs is probably the smartest choice to make. Certain ETFs can provide the safety you crave without sacrificing average upside.
A principle to challenge investing assumptions
Investing in ETFs can seem smart. And indeed, for many investors, it could be an important part of their overall investment strategy. But in this article, I want you to understand how important the Pareto Principle is.
The Pareto Principle basically says that 20% of inputs control 80% of outputs. And it's a principle Berkshire Hathaway Vice Chairman Charlie Munger agrees with, at least loosely. Berkshire has produced astronomical returns for shareholders. But as Munger once said, "If you took our top 15 decisions out, we'd have a pretty average record."
In other words, a small 15 inputs accounted for the majority of Berkshire's outperformance -- the Pareto Principle at work.
The younger you are, the more you might consider approaching your journey toward retirement with this principle in mind.
Let's take three tech companies as examples: Microsoft, Apple, and Nvidia (NASDAQ: NVDA). Let's suppose that 10 years ago, a 30-year-old investor put $10,000 in each of these companies. That would have been a phenomenal decision, fast-tracking their path to early retirement.
AAPL data by YCharts
That $30,000 total investment would be worth about $743,000 today. And at age 40, they'd be well on their way toward retirement.
Perhaps you accuse me of cherry-picking these tech stock examples. Well, I'm guilty as charged, because that's the point. There are few companies that have returned as much over the past 10 years as cherry-picked Microsoft, Apple, and Nvidia. They were three of the small Pareto Principle inputs that drove the majority of returns.
Once understood, this principle can change a person's entire investment philosophy. However, there are inherent drawbacks with investing this way.
For starters, you'll probably pick many bad stocks. Moreover, your portfolio may underperform the market for periods of time.
The approach has inherent problems. But that's why the Motley Fool investing philosophy takes this into account and includes this tenant: Invest new money regularly.
Did you pick a bad stock? No problem. Try again with new money next time. This increases your chances of finding the next Nvidia.
The Motley Fool also recommends holding winning investments for a long time -- not selling quickly to "lock in gains." Imagine repeatedly failing with stock picks, finally stumbling upon Nvidia in 2012, and then selling it after it went up 100%. Locking in gains would have locked you out of a life-changing retirement nest egg.
If you're young and want to retire early, you'll probably need to score a few market-beating investments. Indeed, market-beating stocks will obviously get you to the finish line faster than average or below-average returns. Those market-beating stocks could come from the tech sector. But they could come from other sectors as well.
However, for the strategy to work, you need to become comfortable with a different investing mindset that embraces being wrong often and remains nevertheless resolute in being an investor for the long haul.
10 stocks we like better than Nvidia
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Nvidia wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, J. M. Smucker, Microsoft, and Nvidia. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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AAPL data by YCharts That $30,000 total investment would be worth about $743,000 today. Retirement stocks are thought to be businesses with stability, predictable profits, and returning cash to shareholders in the form of dividends for income. But first, I'll point out that, for retirement accounts, many investors prioritize making money over beating the average return of the stock market.
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AAPL data by YCharts That $30,000 total investment would be worth about $743,000 today. This product holds positions in many stable companies (including JM Smucker, Kellogg, and Campbell), pays quarterly distributions to fund holders, and has also maintained positive returns for more than a decade as well. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, J. M. Smucker, Microsoft, and Nvidia.
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AAPL data by YCharts That $30,000 total investment would be worth about $743,000 today. But first, I'll point out that, for retirement accounts, many investors prioritize making money over beating the average return of the stock market. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Jon Quast has no position in any of the stocks mentioned.
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AAPL data by YCharts That $30,000 total investment would be worth about $743,000 today. All three have been in business for more than a century, pay a dividend with a better-than-average return (dividend yield), and for those who bought 10 years ago, these stocks have never been down more than 10% at any point, as the chart shows. A principle to challenge investing assumptions Investing in ETFs can seem smart.
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17541.0
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2023-01-19 00:00:00 UTC
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Best Stock to Buy: Amazon Stock vs. Apple Stock
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AAPL
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https://www.nasdaq.com/articles/best-stock-to-buy%3A-amazon-stock-vs.-apple-stock
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nan
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nan
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It will be interesting to consider if the e-commerce giant Amazon (NASDAQ: AMZN) is a better stock to buy instead of the iPhone creator Apple (NASDAQ: AAPL). This video will answer which of these massive growth stocks is the better one to buy.
*Stock prices used were the afternoon prices of Jan. 16, 2023. The video was published on Jan. 18, 2023.
Find out why Amazon.com is one of the 10 best stocks to buy now
Our award-winning analyst team has spent more than a decade beating the market. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed their ten top stock picks for investors to buy right now. Amazon.com is on the list -- but there are nine others you may be overlooking.
Click here to get access to the full list!
*Stock Advisor returns as of January 9, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Parkev Tatevosian, CFA has positions in Apple. The Motley Fool has positions in and recommends Amazon.com and Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through fool.com/parkev, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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It will be interesting to consider if the e-commerce giant Amazon (NASDAQ: AMZN) is a better stock to buy instead of the iPhone creator Apple (NASDAQ: AAPL). Find out why Amazon.com is one of the 10 best stocks to buy now Our award-winning analyst team has spent more than a decade beating the market. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.
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It will be interesting to consider if the e-commerce giant Amazon (NASDAQ: AMZN) is a better stock to buy instead of the iPhone creator Apple (NASDAQ: AAPL). After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. The Motley Fool has positions in and recommends Amazon.com and Apple.
|
It will be interesting to consider if the e-commerce giant Amazon (NASDAQ: AMZN) is a better stock to buy instead of the iPhone creator Apple (NASDAQ: AAPL). After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. *Stock Advisor returns as of January 9, 2023 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.
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It will be interesting to consider if the e-commerce giant Amazon (NASDAQ: AMZN) is a better stock to buy instead of the iPhone creator Apple (NASDAQ: AAPL). After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. Parkev Tatevosian, CFA has positions in Apple.
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17542.0
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2023-01-18 00:00:00 UTC
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AAPL September 2024 Options Begin Trading
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AAPL
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https://www.nasdaq.com/articles/aapl-september-2024-options-begin-trading
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nan
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nan
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Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the September 2024 expiration. One of the key inputs that goes into the price an option buyer is willing to pay, is the time value, so with 611 days until expiration the newly available contracts represent a potential opportunity for sellers of puts or calls to achieve a higher premium than would be available for the contracts with a closer expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new September 2024 contracts and identified one put and one call contract of particular interest.
The put contract at the $135.00 strike price has a current bid of $15.20. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $135.00, but will also collect the premium, putting the cost basis of the shares at $119.80 (before broker commissions). To an investor already interested in purchasing shares of AAPL, that could represent an attractive alternative to paying $136.98/share today.
Because the $135.00 strike represents an approximate 1% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 11.26% return on the cash commitment, or 6.73% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Apple Inc, and highlighting in green where the $135.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $140.00 strike price has a current bid of $22.40. If an investor was to purchase shares of AAPL stock at the current price level of $136.98/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $140.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 18.56% if the stock gets called away at the September 2024 expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if AAPL shares really soar, which is why looking at the trailing twelve month trading history for Apple Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAPL's trailing twelve month trading history, with the $140.00 strike highlighted in red:
Considering the fact that the $140.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 16.35% boost of extra return to the investor, or 9.77% annualized, which we refer to as the YieldBoost.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 251 trading day closing values as well as today's price of $136.98) to be 36%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
Also see:
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SVC Videos
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Of course, a lot of upside could potentially be left on the table if AAPL shares really soar, which is why looking at the trailing twelve month trading history for Apple Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAPL's trailing twelve month trading history, with the $140.00 strike highlighted in red: Considering the fact that the $140.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the September 2024 expiration.
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Below is a chart showing AAPL's trailing twelve month trading history, with the $140.00 strike highlighted in red: Considering the fact that the $140.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 99%. Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the September 2024 expiration.
|
Below is a chart showing AAPL's trailing twelve month trading history, with the $140.00 strike highlighted in red: Considering the fact that the $140.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the September 2024 expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new September 2024 contracts and identified one put and one call contract of particular interest.
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At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new September 2024 contracts and identified one put and one call contract of particular interest. Below is a chart showing AAPL's trailing twelve month trading history, with the $140.00 strike highlighted in red: Considering the fact that the $140.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the September 2024 expiration.
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17543.0
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2023-01-18 00:00:00 UTC
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Is Artificial Intelligence a Fad or the Next Big Thing?
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AAPL
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https://www.nasdaq.com/articles/is-artificial-intelligence-a-fad-or-the-next-big-thing
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nan
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nan
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Artificial intelligence has captured the tech world's attention in the last six months, but it may not be a big moneymaker for investors quite yet. In this video, Travis Hoium and Jon Quast discuss some of the biggest AI models today, companies taking advantage of the technology, and where to look for disruption over the next decade.
*Stock prices used were end-of-day prices of Jan. 12, 2023. The video was published on Jan. 18, 2023.
10 stocks we like better than Microsoft
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Microsoft wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Jon Quast has no position in any of the stocks mentioned. Travis Hoium has positions in Alphabet and Apple. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Artificial intelligence has captured the tech world's attention in the last six months, but it may not be a big moneymaker for investors quite yet. In this video, Travis Hoium and Jon Quast discuss some of the biggest AI models today, companies taking advantage of the technology, and where to look for disruption over the next decade. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing.
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In this video, Travis Hoium and Jon Quast discuss some of the biggest AI models today, companies taking advantage of the technology, and where to look for disruption over the next decade. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing.
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After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Alphabet, Apple, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing.
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In this video, Travis Hoium and Jon Quast discuss some of the biggest AI models today, companies taking advantage of the technology, and where to look for disruption over the next decade. Travis Hoium has positions in Alphabet and Apple. Their opinions remain their own and are unaffected by The Motley Fool.
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17544.0
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2023-01-18 00:00:00 UTC
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Alphabet (GOOGL) to Expand Portfolio With Grogu Tracker
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AAPL
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https://www.nasdaq.com/articles/alphabet-googl-to-expand-portfolio-with-grogu-tracker
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nan
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nan
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Alphabet’s GOOGL division Google is consistently making strong efforts to expand its portfolio offerings.
According to 9TO5Google, Google is developing a new tracking device named Grogu.
The device includes Bluetooth and ultra-wideband connectivity which helps Pixel phone users to connect their phones with compatible devices.
Reportedly, the tracking device will be equipped with a speaker.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Move to Benefit
The latest move is in sync with the company’s consistent efforts toward advancing its Pixel phones with technical innovations.
We believe the tracking device will provide an enhanced experience to Pixel phone users. This is expected to boost the adoption rate of Grogu tracker.
This, in turn, is likely to contribute well to Google’s parent Alphabet’s top line.
Consequently, this will help GOOGL win the confidence of the investors in the near and long terms.
Shares of GOOGL have been down 32.5% in the past year compared with the Computer and Technology sector’s decline of 26%.
Competitive Scenario
However, Alphabet faces stiff competition from Apple AAPL, which offers robust tracking devices to gain momentum among customers.
Apple’s tracker device, AirTags put out Bluetooth and ultra-wideband signals to help iPhone users locate their compatible devices with the iPhone.
AirTags has an in-built speaker which acts as a privacy measure and a location aid. It provides a beep sound after it gets separated from the user.
Nevertheless, the recent move is positioning Alphabet well to gain a competitive edge against Apple, which lost 18.3% in the past year.
Zacks Rank & Stocks to Consider
Currently, Alphabet carries a Zacks Rank #3 (Hold).
Investors interested in the broader Zacks Computer & Technology sector can consider some better-ranked stocks like Asure Software ASUR and Agilent Technologies A, both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Asure Software has gained 39.2% in the past year. The long-term earnings growth rate for ASUR is currently projected at 23%.
Agilent Technologies has gained 10.6% in the past year. A’s long-term earnings growth rate is currently projected at 10%.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Apple Inc. (AAPL) : Free Stock Analysis Report
Agilent Technologies, Inc. (A) : Free Stock Analysis Report
Asure Software Inc (ASUR) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Competitive Scenario However, Alphabet faces stiff competition from Apple AAPL, which offers robust tracking devices to gain momentum among customers. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Agilent Technologies, Inc. (A) : Free Stock Analysis Report Asure Software Inc (ASUR) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here. Shares of GOOGL have been down 32.5% in the past year compared with the Computer and Technology sector’s decline of 26%.
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Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Agilent Technologies, Inc. (A) : Free Stock Analysis Report Asure Software Inc (ASUR) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here. Competitive Scenario However, Alphabet faces stiff competition from Apple AAPL, which offers robust tracking devices to gain momentum among customers. The device includes Bluetooth and ultra-wideband connectivity which helps Pixel phone users to connect their phones with compatible devices.
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Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Agilent Technologies, Inc. (A) : Free Stock Analysis Report Asure Software Inc (ASUR) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here. Competitive Scenario However, Alphabet faces stiff competition from Apple AAPL, which offers robust tracking devices to gain momentum among customers. Zacks Rank & Stocks to Consider Currently, Alphabet carries a Zacks Rank #3 (Hold).
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Competitive Scenario However, Alphabet faces stiff competition from Apple AAPL, which offers robust tracking devices to gain momentum among customers. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report Agilent Technologies, Inc. (A) : Free Stock Analysis Report Asure Software Inc (ASUR) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report To read this article on Zacks.com click here. We believe the tracking device will provide an enhanced experience to Pixel phone users.
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17545.0
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2023-01-18 00:00:00 UTC
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After Hours Most Active for Jan 18, 2023 : VONG, IGSB, BK, UBER, NYCB, AAPL, BAC, PYPL, INTC, IBN, AQN, QQQ
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AAPL
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https://www.nasdaq.com/articles/after-hours-most-active-for-jan-18-2023-%3A-vong-igsb-bk-uber-nycb-aapl-bac-pypl-intc-ibn
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nan
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nan
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The NASDAQ 100 After Hours Indicator is down -8.77 to 11,401.52. The total After hours volume is currently 104,309,471 shares traded.
The following are the most active stocks for the after hours session:
Vanguard Russell 1000 Growth ETF (VONG) is +0.1946 at $57.05, with 4,260,004 shares traded. This represents a 9.76% increase from its 52 Week Low.
iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) is +0.002 at $50.64, with 3,652,372 shares traded. This represents a 4.16% increase from its 52 Week Low.
The Bank Of New York Mellon Corporation (BK) is unchanged at $49.23, with 3,438,725 shares traded. Over the last four weeks they have had 4 up revisions for the earnings forecast, for the fiscal quarter ending Mar 2023. The consensus EPS forecast is $1.08. BK's current last sale is 89.51% of the target price of $55.
Uber Technologies, Inc. (UBER) is -0.07 at $28.89, with 2,922,019 shares traded. As reported by Zacks, the current mean recommendation for UBER is in the "buy range".
New York Community Bancorp, Inc. (NYCB) is -0.0098 at $9.49, with 2,723,835 shares traded. NYCB's current last sale is 94.9% of the target price of $10.
Apple Inc. (AAPL) is -0.29 at $134.92, with 2,654,693 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Bank of America Corporation (BAC) is -0.02 at $33.70, with 2,519,910 shares traded. BAC's current last sale is 84.25% of the target price of $40.
PayPal Holdings, Inc. (PYPL) is +0.08 at $77.39, with 2,129,241 shares traded. Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Jun 2023. The consensus EPS forecast is $0.9. As reported by Zacks, the current mean recommendation for PYPL is in the "buy range".
Intel Corporation (INTC) is +0.03 at $28.84, with 2,063,752 shares traded. INTC's current last sale is 96.13% of the target price of $30.
ICICI Bank Limited (IBN) is unchanged at $21.23, with 2,020,390 shares traded. As reported by Zacks, the current mean recommendation for IBN is in the "strong buy range".
Algonquin Power & Utilities Corp. (AQN) is unchanged at $6.94, with 1,980,959 shares traded. AQN's current last sale is 77.11% of the target price of $9.
Invesco QQQ Trust, Series 1 (QQQ) is -0.08 at $277.80, with 1,916,239 shares traded. This represents a 9.26% increase from its 52 Week Low.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple Inc. (AAPL) is -0.29 at $134.92, with 2,654,693 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". iShares 1-5 Year Investment Grade Corporate Bond ETF (IGSB) is +0.002 at $50.64, with 3,652,372 shares traded.
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Apple Inc. (AAPL) is -0.29 at $134.92, with 2,654,693 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The Bank Of New York Mellon Corporation (BK) is unchanged at $49.23, with 3,438,725 shares traded.
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Apple Inc. (AAPL) is -0.29 at $134.92, with 2,654,693 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The total After hours volume is currently 104,309,471 shares traded.
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Apple Inc. (AAPL) is -0.29 at $134.92, with 2,654,693 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The NASDAQ 100 After Hours Indicator is down -8.77 to 11,401.52.
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17546.0
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2023-01-18 00:00:00 UTC
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Better Buy in 2023: Apple Stock vs. Amazon Stock
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AAPL
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https://www.nasdaq.com/articles/better-buy-in-2023%3A-apple-stock-vs.-amazon-stock
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nan
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nan
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After a sell-off in 2022 triggered by economic declines and a looming recession ahead, this year it is crucial to invest in resilient and reliable companies that are likely to grow over the long term. Buying stocks in companies participating in high-growth markets can safeguard your investment against short-term market fluctuations.
Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) have strong positions in some of the most lucrative markets, which should offer sustained growth for years to come. These companies will likely continue expanding over the long term despite temporary economic challenges.
While Apple and Amazon both have promising long-term outlooks, one is unquestionably the better buy in 2023. Let's assess.
1. Apple
Apple shares have fallen 22% since last January after a year that brought the Nasdaq-100 Technology Sector index down 29% in the same period.
Despite market declines, revenue in Apple's fiscal 2022 rose 8% year over year to $394.3 billion, with operating income increasing 9.6% to $119.4 billion. The growth was mainly thanks to the company's leading positions in consumer electronics and online services.
For instance, while competitors like Microsoft reported a slight decline in PC revenue in the third quarter of 2022, Apple's Mac segment grew 25% year over year to $11.5 billion.
The company has come under scrutiny in recent months for its reliance on China for iPhone manufacturing. Toward the end of last year, after increased COVID-19 restrictions put strains on factories, Apple stock fell 14%. But the shares have begun recovering alongside improved production.
Meanwhile, its booming services business shows the company is smartly diversifying its revenue for the long term. In fiscal 2022, Apple's services revenue rose 14% year over year to $78.1 billion, double the 7% growth rate for iPhone revenue. Meanwhile, services reported a 71.7% profit margin, while the same metric for products came to 36.3%.
Apple's stock may have lost some steam in the last 12 months. However, its ability to continue dominating consumer product sales in an economically challenging year, along with a swiftly growing services business, proves the company is resilient and worth investing in for the long term.
2. Amazon
After a year to forget that has brought Amazon shares down 38% year over year, the company entered 2023 with a bang. Its stock has risen 17% since Jan. 1 and is still climbing. The rally seems to stem from the consumer price index 0.1% decline, suggesting inflation is easing, as well as an expansion of Amazon's Buy with Prime program.
Buy with Prime will allow all eligible U.S. retailers to offer Prime benefits, such as free shipping and returns on their own sites, outside of Amazon. Optimistic analysts believe the program will make the company more competitive against Shopify and allow Amazon to boost revenue by widening its net to capture sales from nearly any e-commerce site.
The potential of Buy with Prime will be music to investors' ears after the steep declines that Amazon's e-commerce business experienced last year. In Q3 2022, its e-commerce segment reported $2.87 billion in operating losses while its cloud computing business made up 100% of its operating income.
While Amazon Web Services is consistently reporting significant quarterly growth, e-commerce sales still made up 84% of the company's total revenue in Q3 2022. As a result, Amazon desperately needs to bring its online retail business back to profitability, and Buy with Prime is a promising step in that direction.
Amazon and Apple are titans of their respective markets, holding leading market shares in some of the most lucrative industries. However, when comparing their performance under last year's economic strains, Apple was the unequivocal winner, suggesting it is the more reliable investment.
Also, Amazon's stock is trading at 90 times its earnings, while Apple's price-to-earnings ratio is far more preferable at 22. Apple's stock offers more value and is the better buy in 2023.
10 stocks we like better than Apple
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com, Apple, Microsoft, and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify, long March 2023 $120 calls on Apple, short January 2023 $1,160 calls on Shopify, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) have strong positions in some of the most lucrative markets, which should offer sustained growth for years to come. After a sell-off in 2022 triggered by economic declines and a looming recession ahead, this year it is crucial to invest in resilient and reliable companies that are likely to grow over the long term. However, its ability to continue dominating consumer product sales in an economically challenging year, along with a swiftly growing services business, proves the company is resilient and worth investing in for the long term.
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Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) have strong positions in some of the most lucrative markets, which should offer sustained growth for years to come. Despite market declines, revenue in Apple's fiscal 2022 rose 8% year over year to $394.3 billion, with operating income increasing 9.6% to $119.4 billion. In fiscal 2022, Apple's services revenue rose 14% year over year to $78.1 billion, double the 7% growth rate for iPhone revenue.
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Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) have strong positions in some of the most lucrative markets, which should offer sustained growth for years to come. Despite market declines, revenue in Apple's fiscal 2022 rose 8% year over year to $394.3 billion, with operating income increasing 9.6% to $119.4 billion. Amazon After a year to forget that has brought Amazon shares down 38% year over year, the company entered 2023 with a bang.
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Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) have strong positions in some of the most lucrative markets, which should offer sustained growth for years to come. While Amazon Web Services is consistently reporting significant quarterly growth, e-commerce sales still made up 84% of the company's total revenue in Q3 2022. Apple's stock offers more value and is the better buy in 2023.
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17547.0
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2023-01-18 00:00:00 UTC
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Why Qualcomm Stock Defied Gravity Today
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AAPL
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https://www.nasdaq.com/articles/why-qualcomm-stock-defied-gravity-today
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nan
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nan
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What happened
By and large, Wednesday was an awful day for the stock market. One notable exception was mobile device components specialist Qualcomm (NASDAQ: QCOM), whose shares enjoyed a 1.5% rise while the S&P 500 index declined by roughly that amount. This, despite a negative move from an analyst regarding the company. What seemed to make up for this was the company's latest dividend declaration.
So what
That day, Citigroup's Christopher Danely placed Qualcomm and its chipmaking cousin Intel on his bank's negative catalyst watch list. In doing so, he reiterated his neutral ratings on both, and his $105 per share price target on Qualcomm.
Investors shrugged off this development, not least because they're about to get a bit more money in their pockets from their company.
Wednesday morning, Qualcomm declared its latest quarterly dividend. This is to be $0.75 per share, matching the three previous payouts, and yielding nearly 2.5% -- comparatively high for the typically ungenerous tech sector. This dividend is slated to be handed out on March 23 to investors of record as of March 2.
Now what
For many, Qualcomm is most closely identified as an important supplier to Apple, for which it provides the modem chips that allow for voice communication with the latter company's iDevices.
One big concern is Apple's ongoing efforts to bring the production of certain key components in-house, thus reducing dependence on third parties like Qualcomm. But this looming challenge has been anticipated by management for years, and the company still has a window of time to adjust its operations accordingly.
10 stocks we like better than Qualcomm
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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has positions in Apple. The Motley Fool has positions in and recommends Apple, Intel, and Qualcomm. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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One notable exception was mobile device components specialist Qualcomm (NASDAQ: QCOM), whose shares enjoyed a 1.5% rise while the S&P 500 index declined by roughly that amount. So what That day, Citigroup's Christopher Danely placed Qualcomm and its chipmaking cousin Intel on his bank's negative catalyst watch list. One big concern is Apple's ongoing efforts to bring the production of certain key components in-house, thus reducing dependence on third parties like Qualcomm.
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What seemed to make up for this was the company's latest dividend declaration. The Motley Fool has positions in and recommends Apple, Intel, and Qualcomm. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple.
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See the 10 stocks *Stock Advisor returns as of January 9, 2023 Citigroup is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Apple, Intel, and Qualcomm. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple.
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* They just revealed what they believe are the ten best stocks for investors to buy right now... and Qualcomm wasn't one of them! See the 10 stocks *Stock Advisor returns as of January 9, 2023 Citigroup is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Apple, Intel, and Qualcomm.
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17548.0
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2023-01-18 00:00:00 UTC
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Disney investors pay twice for half-leadership
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AAPL
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https://www.nasdaq.com/articles/disney-investors-pay-twice-for-half-leadership
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Reuters
Reuters
NEW YORK (Reuters Breakingviews) - Walt Disney’s poor succession planning is costing its shareholders twice over. The entertainment giant has earmarked around $60 million in pay and severance for former Chief Executive Bob Chapek and his replacement Bob Iger – who is returning for a second go as CEO. It’s a princely sum, at odds with a dysfunctional kingdom.
Chapek, who was fired without cause in November a mere six months after the board renewed his contract, is getting about $20 million in his termination agreement, according to Disney’s annual filing published on Tuesday. That includes salary, pro-rated bonus and restricted stock units. Since Chapek had fulfilled his term as chief executive at the end of Disney’s fiscal year ending September 2022, he gets a compensation package worth $24 million too, giving a grand total of roughly $45 million.
Then there’s Iger, who both picked Chapek in 2020 and replaced him in 2022. The former-current Disney boss was awarded$15 million in compensation last year. That takes Disney to $60 million in total pay for the duo. One comfort is that Iger is this year in line for a more modest $28 million, a little more than half of what he got in 2019.
Lesser companies pay more, it’s true. Warner Bros Discovery, a fraction of Disney’s size, awarded its boss David Zaslav a $247 million compensation package in 2021. But a better comparison would be Apple Chief Executive Tim Cook. He is in line for a downsized $49 million compensation package this year, after the company’s board halved his pay from the previous year, in a nod to keeping shareholders happy. Apple is worth 11 Disneys in terms of market value.
Disney’s challenges jar with its generosity. Iger, as former chairman, is partly to blame for the unnecessarily abrupt changing of the guard that saw Chapek come and then go. Activist investor Nelson Peltz is lobbying for a seat on the board, and all the while the media sector is heading into an advertising recession. Shareholders will get a non-binding say on the company’s pay at its upcoming annual meeting. A “for” vote would require Disney-esque levels of magical thinking.
Follow @jennifersaba on Twitter
CONTEXT NEWS
Walt Disney allocated $24 million in compensation to former Chief Executive Bob Chapek for the fiscal year ending September 2022, according to its annual shareholder filing published on Jan. 17. Chapek was fired in November. He also received $6.5 million in base salary, a pro-rated bonus of $1 million and $12.7 million in restricted stock units under his termination agreement.
Chief Executive Bob Iger, who both succeeded Chapek and preceded him as Disney CEO, was awarded a compensation package of $15 million for the 2022 fiscal year, the proxy filing shows. For the 2023 fiscal year, his target compensation package in 2023 is approximately $28 million.
Disney urged shareholders to vote for its slate of directors at the company’s upcoming annual meeting. Activist investor Nelson Peltz, through his company Trian Fund Management, has challenged Disney by seeking a seat on the board.
(Editing by John Foley and Sharon Lam)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Chapek, who was fired without cause in November a mere six months after the board renewed his contract, is getting about $20 million in his termination agreement, according to Disney’s annual filing published on Tuesday. Walt Disney allocated $24 million in compensation to former Chief Executive Bob Chapek for the fiscal year ending September 2022, according to its annual shareholder filing published on Jan. 17. Chief Executive Bob Iger, who both succeeded Chapek and preceded him as Disney CEO, was awarded a compensation package of $15 million for the 2022 fiscal year, the proxy filing shows.
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Since Chapek had fulfilled his term as chief executive at the end of Disney’s fiscal year ending September 2022, he gets a compensation package worth $24 million too, giving a grand total of roughly $45 million. Walt Disney allocated $24 million in compensation to former Chief Executive Bob Chapek for the fiscal year ending September 2022, according to its annual shareholder filing published on Jan. 17. He also received $6.5 million in base salary, a pro-rated bonus of $1 million and $12.7 million in restricted stock units under his termination agreement.
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Since Chapek had fulfilled his term as chief executive at the end of Disney’s fiscal year ending September 2022, he gets a compensation package worth $24 million too, giving a grand total of roughly $45 million. Walt Disney allocated $24 million in compensation to former Chief Executive Bob Chapek for the fiscal year ending September 2022, according to its annual shareholder filing published on Jan. 17. Chief Executive Bob Iger, who both succeeded Chapek and preceded him as Disney CEO, was awarded a compensation package of $15 million for the 2022 fiscal year, the proxy filing shows.
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Then there’s Iger, who both picked Chapek in 2020 and replaced him in 2022. Walt Disney allocated $24 million in compensation to former Chief Executive Bob Chapek for the fiscal year ending September 2022, according to its annual shareholder filing published on Jan. 17. Chief Executive Bob Iger, who both succeeded Chapek and preceded him as Disney CEO, was awarded a compensation package of $15 million for the 2022 fiscal year, the proxy filing shows.
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17549.0
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2023-01-18 00:00:00 UTC
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Here Come the FAANG Earnings Charts
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https://www.nasdaq.com/articles/here-come-the-faang-earnings-charts
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Fourth quarter earnings season is off and running but this week will still be fairly quiet as the big, regional banks reports earnings and a smattering of other names from various key industries such as the industrials, energy and the transports.
But we’re also getting the first of the five FAANG stocks, as Netflix will report. You remember the others: Meta Platforms, Apple, Amazon, and Alphabet.
After riding high in investors’ portfolios for the prior few years, the stocks finally tumbled in 2022’s technology sell-off. Several of them have announced layoffs and earnings are expected to decline in 2023 as the global economy slows.
Are these stocks deals?
Which one has the best earnings surprise record and will they keep their earnings streak alive?
Are There Any FAANG Earnings All-Stars Anymore?
1. Meta Platforms META
Meta Platforms has missed on earnings 3 out of the last 4 quarters. It’s not an earnings all-star.
Shares have also struggled over the last year, losing 58.7% during that time. Meta Platforms was recently trading at 5-year lows.
But is it cheap? It trades with a forward P/E of 17 as earnings estimates are also being cut. Earnings are expected to be down 11% in 2023.
Should you wait on the sidelines for Meta Platforms to get cheaper?
2. Apple AAPL
Apple has the best earnings record of the FAANG stocks. It hasn’t missed in 5 years. That’s impressive during a pandemic.
But shares of Apple are down 22% over the last year anyway on technology weakness. Apple is expected to grow earnings in fiscal 2024, however, by 8.8%.
Apple now trades at 22x earnings.
Is Apple on sale or does it have more room to fall?
3. Amazon AMZN
Amazon has an earnings streak going, but it’s not a positive one. It has missed 3 quarters in a row, and some of them were large misses.
Shares of Amazon are down about 40% in the last year but are off the recent lows. It’s not cheap. Amazon trades with a forward P/E of 62 as estimates are being cut.
Has Amazon lost it’s shine with investors?
4. Netflix NFLX
Netflix has put together a positive earnings surprise streak of 5 beats in a row.
It’s chart is a wild one, however, with the shares plunging in 2022. Over the last 3 months, they’ve rallied off the 2022 lows and are up about 42%.
But the longer term, 1-year period, is still challenging, with Netflix shares down 37% during that time.
Netflix is trading with a forward P/E of 31.
Is the worst over for Netflix?
5. Alphabet GOOGL
Alphabet has missed 3 quarters in a row but that was after beating 7 quarters in a row during the pandemic.
Alphabet has never really cared if it missed or beat so I’m assuming it still doesn’t care. But the Street cares. The shares are down 34.5% over the last year.
But Alphabet is now much cheaper, with a forward P/E of 18.3.
While earnings are expected to fall this year, analysts believe they will rise next year by 7.6%. Will they be right?
Is Alphabet a deal in 2023?
[In full disclosure, the author of this article owns shares of AMZN and GOOGL in her personal portfolio.]
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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Meta Platforms, Inc. (META) : Free Stock Analysis Report
To read this article on Zacks.com click here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple AAPL Apple has the best earnings record of the FAANG stocks. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report To read this article on Zacks.com click here. After riding high in investors’ portfolios for the prior few years, the stocks finally tumbled in 2022’s technology sell-off.
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Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report To read this article on Zacks.com click here. Apple AAPL Apple has the best earnings record of the FAANG stocks. You remember the others: Meta Platforms, Apple, Amazon, and Alphabet.
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Apple AAPL Apple has the best earnings record of the FAANG stocks. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report To read this article on Zacks.com click here. Meta Platforms META Meta Platforms has missed on earnings 3 out of the last 4 quarters.
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Apple AAPL Apple has the best earnings record of the FAANG stocks. Click to get this free report Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report Alphabet Inc. (GOOGL) : Free Stock Analysis Report Meta Platforms, Inc. (META) : Free Stock Analysis Report To read this article on Zacks.com click here. But we’re also getting the first of the five FAANG stocks, as Netflix will report.
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17550.0
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2023-01-18 00:00:00 UTC
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Microsoft Is Laying Off Thousands. Here's What It Means for Investors.
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https://www.nasdaq.com/articles/microsoft-is-laying-off-thousands.-heres-what-it-means-for-investors.
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Microsoft (NASDAQ: MSFT) just became the latest tech giant to thin its workforce.
After news broke Tuesday night about layoffs, the software titan confirmed the news Wednesday morning. In a memo to employees shared publicly, CEO Satya Nadella said the company was eliminating 10,000 jobs, less than 5% of its workforce.
Much like Meta Platforms, Amazon, and Salesforce, which have all announced layoffs in recent weeks, Nadella noted the whipsaw effect in the economy, saying that demand for technology accelerated during the pandemic, but has since slowed as much of the world is either in a recession or anticipating one.
Microsoft stock seemed unaffected by the news in Wednesday morning trading, a sign investors didn't expect it to have a big impact on the business' performance. The company also seems to be coming at the job cuts from more of a position of strength than its peers above. However, with its biggest round of job cuts since 2015, and coming at a time when the tech industry appears to be headed for a recession, the move deserves investor attention.
Microsoft CEO Satya Nadella. Image source: Microsoft.
Where the cost cuts are coming from
Nadella said it's crucial for the company to evolve with platform shifts -- a lesson Microsoft learned the hard way when it missed out on mobile -- and it is "aligning its cost structure with our revenue and where we see customer demand."
In particular, the company said it was making changes to its hardware portfolio, implying that some of the job cuts could target its consumer hardware divisions, including products like Surface tablets and Xbox gaming consoles. Demand for PCs has declined in recent quarters, and Windows OEM revenue fell 15% in the fiscal first quarter, a sharp slowdown after a boom during the pandemic.
The company didn't single out any other business segments in the memo but did say it aimed to consolidate its real estate footprint, echoing similar statements from Meta and Salesforce, as it looks to save costs on real estate as well.
Microsoft expects to take a $1.2 billion charge in its second-quarter earnings report, which is due out next week, for severance, hardware changes, and lease reductions.
Microsoft is still playing offense
In the letter, Nadella left no doubt that the company is still focused on growth, just in the areas that make the most strategic sense. He said the company is continuing to hire in key areas, and allocating "our capital and talent to areas of secular growth and long-term competitiveness for the company." As such, the layoff announcement seems to be as much about realigning the company with its strategic goals as it is about cutting costs.
The CEO also seems to be doubling down on artificial intelligence (AI), saying, "The next major wave of computing is being born with advances in AI, as we're turning the world's most advanced models into a new computing platform." The company has already begun integrating OpenAI technology into Azure, its cloud infrastructure business, announcing on Monday that an expansion of its Azure OpenAI service (which includes access to ChatGPT) is now generally available.
Microsoft formed a strategic partnership with OpenAI in 2019, investing $1 billion in the start-up at the time, and media reports have said recently that it is in talks to invest as much as $10 billion in the AI expert. Microsoft also reportedly plans to launch a ChatGPT-powered version of its Bing search engine as early as March.
What the layoffs mean for investors
Coming less than a week ahead of its fiscal second-quarter earnings report, the layoffs could signal that the quarterly numbers will be weaker than expected. The company had already noted macro headwinds building in the cloud computing division, and the layoffs across the tech sector and comments from other CEOs indicate those headwinds seem to have strengthened in the fourth quarter.
While companies would prefer to avoid layoffs since they mean real people are losing their jobs, it makes sense for Microsoft to realign its priorities with the opportunities in front of it, especially in a recessionary environment.
It's also worth remembering that Nadella's record as CEO is nearly impeccable. Since he took over Microsoft in 2014, the stock has outperformed the S&P 500 every year except for 2022, and he has made smart moves, including building Azure into a powerhouse, ending the war against Apple by allowing compatibility with Office and other Microsoft apps, and avoiding the blunders and busted acquisitions that had become common under former CEO Steve Ballmer.
Nadella's bet on AI and the company's partnership with OpenAI could also reap huge rewards for investors.
While the layoffs could signal a setback for the company, it's worth trusting Nadella's stewardship here. And maintaining efficiency and adapting to change are crucial for any tech company. Though a potential recession could weigh on the stock this year, expect Microsoft to continue to outperform over the long term.
10 stocks we like better than Microsoft
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Microsoft wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Amazon.com and Meta Platforms. The Motley Fool has positions in and recommends Amazon.com, Apple, Meta Platforms, Microsoft, and Salesforce. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Much like Meta Platforms, Amazon, and Salesforce, which have all announced layoffs in recent weeks, Nadella noted the whipsaw effect in the economy, saying that demand for technology accelerated during the pandemic, but has since slowed as much of the world is either in a recession or anticipating one. Microsoft stock seemed unaffected by the news in Wednesday morning trading, a sign investors didn't expect it to have a big impact on the business' performance. While companies would prefer to avoid layoffs since they mean real people are losing their jobs, it makes sense for Microsoft to realign its priorities with the opportunities in front of it, especially in a recessionary environment.
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Much like Meta Platforms, Amazon, and Salesforce, which have all announced layoffs in recent weeks, Nadella noted the whipsaw effect in the economy, saying that demand for technology accelerated during the pandemic, but has since slowed as much of the world is either in a recession or anticipating one. The Motley Fool has positions in and recommends Amazon.com, Apple, Meta Platforms, Microsoft, and Salesforce. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.
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Where the cost cuts are coming from Nadella said it's crucial for the company to evolve with platform shifts -- a lesson Microsoft learned the hard way when it missed out on mobile -- and it is "aligning its cost structure with our revenue and where we see customer demand." Since he took over Microsoft in 2014, the stock has outperformed the S&P 500 every year except for 2022, and he has made smart moves, including building Azure into a powerhouse, ending the war against Apple by allowing compatibility with Office and other Microsoft apps, and avoiding the blunders and busted acquisitions that had become common under former CEO Steve Ballmer. See the 10 stocks *Stock Advisor returns as of January 9, 2023 John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.
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The company also seems to be coming at the job cuts from more of a position of strength than its peers above. As such, the layoff announcement seems to be as much about realigning the company with its strategic goals as it is about cutting costs. The Motley Fool has positions in and recommends Amazon.com, Apple, Meta Platforms, Microsoft, and Salesforce.
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17551.0
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2023-01-18 00:00:00 UTC
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PREVIEW-Big Tech braces for dismal profits, more job cuts
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https://www.nasdaq.com/articles/preview-big-tech-braces-for-dismal-profits-more-job-cuts
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By Nivedita Balu and Yuvraj Malik
Jan 18 (Reuters) - Keen to buttress margins and appease investor concerns at a time of slowing sales growth, big U.S. technology firms are expected to whittle away at their bloated workforce and costs through the next few months, reversing pandemic-era excesses, analysts said.
Each of America's five largest tech companies, though, are expected to report a fall in profits for the October-December period, as they try to recalibrate in a high-interest environment. Facebook-owner Meta Platforms Inc META.O and Amazon.com Inc AMZN.O are expected to report the biggest declines.
Analysts have cut their total revenue projection for the five companies - Meta, Amazon, Apple Inc AAPL.O, Alphabet Inc GOOGL.O and Microsoft Corp MSFT.O - by 5% to $561.4 billion as of January from October.
Big tech companies are expected to be among the biggest drags to S&P 500's eleven sectors, with the information technology sector projected to report an earnings decline of 9.5%, according to FactSet data.
"I would not expect good news for a while ... at least for the next three quarters. I would expect more layoffs," said Siddharth Singhai, chief investment officer at investment firm Ironhold Capital.
Amazon, which is expected to report that earnings slumped 38% and revenue grew at the slowest pace in over 22 years, started communicating to staff on Wednesday whether they were laid off as part of its decision to cut 18,000 jobs.
The reduction in workforce came after the retailer overhired based on pandemic demand, echoing Meta's aggressive hiring to meet a surge in social media usage by stuck-at-home consumers.
Meta, which decided in November to chop 11,000 jobs, could see a 42% plunge in profit, its fifth straight quarter of decline. The company is also likely to see a 7% fall in revenue - its worst showing ever.
The five companies on an average increased their employee base by 45% in 2020 and 20.5% in 2021, with Apple hiring the most modestly.
"We are forecasting another 5% to 10% headcount cut across the tech sector as many of these companies were spending money like 1980s rockstars," said Wedbush analyst Dan Ives.
Microsoft said on Wednesday it would eliminate 10,000 roles, affecting less than 5% of its employees. Analysts expect the company to report a 2.4% rise in revenue, the slowest pace in about 24 quarters. Profit is expected to fall 9%.
Apple's revenue is expected to fall for the first time in 15 quarters as its major supplier Foxconn 2317.TW faced major disruption at the biggest iPhone factory in China due to worker unrest related to COVID curbs.
Revenue growth at Alphabet, which is slowing hiring and making "course corrections" to cut costs, is expected to be the slowest in 10 quarters.
To shore up stock prices, analysts said these companies could pour money into buybacks this year. Their shares fell between 26% and over 60% last year versus the broader market's nearly 20% decline.
They together have cash and cash equivalents of over $110 billion, with Amazon having the most and Meta having the least at the end of the September quarter.
Wall Street analysts alter revenue estimates for Big Techhttps://tmsnrt.rs/3Xb1o46
Amazon hired generously; Apple stayed frugal through pandemichttps://tmsnrt.rs/3kdd5sJ
(Reporting by Nivedita Balu and Yuvraj Malik in Bengaluru; Editing by Maju Samuel)
((yuvraj.malik@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Analysts have cut their total revenue projection for the five companies - Meta, Amazon, Apple Inc AAPL.O, Alphabet Inc GOOGL.O and Microsoft Corp MSFT.O - by 5% to $561.4 billion as of January from October. By Nivedita Balu and Yuvraj Malik Jan 18 (Reuters) - Keen to buttress margins and appease investor concerns at a time of slowing sales growth, big U.S. technology firms are expected to whittle away at their bloated workforce and costs through the next few months, reversing pandemic-era excesses, analysts said. Amazon, which is expected to report that earnings slumped 38% and revenue grew at the slowest pace in over 22 years, started communicating to staff on Wednesday whether they were laid off as part of its decision to cut 18,000 jobs.
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Analysts have cut their total revenue projection for the five companies - Meta, Amazon, Apple Inc AAPL.O, Alphabet Inc GOOGL.O and Microsoft Corp MSFT.O - by 5% to $561.4 billion as of January from October. By Nivedita Balu and Yuvraj Malik Jan 18 (Reuters) - Keen to buttress margins and appease investor concerns at a time of slowing sales growth, big U.S. technology firms are expected to whittle away at their bloated workforce and costs through the next few months, reversing pandemic-era excesses, analysts said. Big tech companies are expected to be among the biggest drags to S&P 500's eleven sectors, with the information technology sector projected to report an earnings decline of 9.5%, according to FactSet data.
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Analysts have cut their total revenue projection for the five companies - Meta, Amazon, Apple Inc AAPL.O, Alphabet Inc GOOGL.O and Microsoft Corp MSFT.O - by 5% to $561.4 billion as of January from October. Big tech companies are expected to be among the biggest drags to S&P 500's eleven sectors, with the information technology sector projected to report an earnings decline of 9.5%, according to FactSet data. Amazon, which is expected to report that earnings slumped 38% and revenue grew at the slowest pace in over 22 years, started communicating to staff on Wednesday whether they were laid off as part of its decision to cut 18,000 jobs.
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Analysts have cut their total revenue projection for the five companies - Meta, Amazon, Apple Inc AAPL.O, Alphabet Inc GOOGL.O and Microsoft Corp MSFT.O - by 5% to $561.4 billion as of January from October. Analysts expect the company to report a 2.4% rise in revenue, the slowest pace in about 24 quarters. Profit is expected to fall 9%.
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17552.0
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2023-01-18 00:00:00 UTC
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2 Top Stocks to Buy in 2023 and Hold Forever
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https://www.nasdaq.com/articles/2-top-stocks-to-buy-in-2023-and-hold-forever
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"If you aren't willing to own a stock for ten years, don't even think about owning it for ten minutes." So says investing star Warren Buffett. In other words, one of the best ways to succeed in the stock market is to hold onto shares in companies with solid businesses for the long term. By doing so, you can safeguard yourself from short-term economic declines and unexpected fluctuations in the market.
Last year was a prime example as a sell-off saw declines in numerous stocks. However, companies with the strongest businesses will, no doubt, be able to navigate this challenging time and come out ahead. So without further ado, here are two top stocks you can buy in 2023 and hold indefinitely.
Apple
Apple (NASDAQ: AAPL) is one of the easiest stocks to recommend in light of the almost unwavering demand for its products and a swiftly expanding services business. The company's stock is down 23% year over year after a sell-off in 2022. However, Apple isn't so bad off when noting the 33% to 39% stock declines that its peers, such as Alphabet and Amazon, experienced in the same period.
Last year, macroeconomic headwinds highlighted the strength of Apple's business with consistent demand for its products. For instance, in the third quarter of 2022, global PC shipments for the industry fell 15%. However, Apple reported the only growth among its competitors -- up 40.2% during the period.
While the company's hardware remained in demand, its services business continued to boom. In fiscal 2022, services revenue increased 14% year over year to $78.1 billion, while iPhone revenue rose by 7%. Additionally, services reported a 71.7% profit margin, while products came in at a 36.3% profit margin.
Apple proved the resilience and reliability of its business in an economically challenging year. Its stock price has grown 203% in the last five years despite a recent sell-off. Apple has multiple, highly anticipated products that are expected to be released in 2023 and continuing growth in its services. As a result, its stock is a screaming buy this year and one you can hold forever.
Microsoft
Like Apple, Microsoft (NASDAQ: MSFT) is a company that fared better than its competition in 2022, proving its stock would be an asset in any portfolio over the long term. The company's shares are down 25% year over year. However, those who bought the stock five years ago have still retained a 167% return on their investment thanks to the tech giant's stellar growth.
The company's biggest strength is its priority on diverse revenue streams. As the home to such brands as Windows, Office, Xbox, Azure, and LinkedIn, the company has carved out dominating positions in operation systems, productivity software, video games, cloud computing, and social media. As these markets continue to grow annually, so does Microsoft's revenue.
Moreover, the company's diversity kept its business growing in 2022 despite hits to the PC market. In fiscal 2023's first quarter, ended Sept. 30, Microsoft reported revenue growth of 11% year over year to $50.1 billion, with operating income rising 6% to $21.5 billion despite operating losses of 15% in its more personal computing segment.
Microsoft's earnings growth primarily came from businesses less affected by economic headwinds, such as subscription-based productivity services like LinkedIn and Office as well as its cloud computing platform, Azure. In Q1 2023, productivity processes saw revenue grow 9% year over year to $16.4 billion, with operating income increasing 10%. Meanwhile, its intelligent cloud segment enjoyed revenue growth of 20% to $20.3 billion, with operating income rising 17% to $8.9 billion.
In 2023, moves such as expanding Azure data centers to 11 new regions, growing its digital advertising business with a Netflix partnership, and boosting its gaming division by potentially acquiring Activision Blizzard are only further reasons to buy Microsoft stock. It's an ever-expanding company and a stock you can buy in 2023 with plans to hold forever.
10 stocks we like better than Apple
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet, Amazon.com, Apple, Microsoft, and Netflix. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple Apple (NASDAQ: AAPL) is one of the easiest stocks to recommend in light of the almost unwavering demand for its products and a swiftly expanding services business. As the home to such brands as Windows, Office, Xbox, Azure, and LinkedIn, the company has carved out dominating positions in operation systems, productivity software, video games, cloud computing, and social media. Microsoft's earnings growth primarily came from businesses less affected by economic headwinds, such as subscription-based productivity services like LinkedIn and Office as well as its cloud computing platform, Azure.
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Apple Apple (NASDAQ: AAPL) is one of the easiest stocks to recommend in light of the almost unwavering demand for its products and a swiftly expanding services business. In fiscal 2023's first quarter, ended Sept. 30, Microsoft reported revenue growth of 11% year over year to $50.1 billion, with operating income rising 6% to $21.5 billion despite operating losses of 15% in its more personal computing segment. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet, Amazon.com, Apple, Microsoft, and Netflix.
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Apple Apple (NASDAQ: AAPL) is one of the easiest stocks to recommend in light of the almost unwavering demand for its products and a swiftly expanding services business. The company's stock is down 23% year over year after a sell-off in 2022. In fiscal 2023's first quarter, ended Sept. 30, Microsoft reported revenue growth of 11% year over year to $50.1 billion, with operating income rising 6% to $21.5 billion despite operating losses of 15% in its more personal computing segment.
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Apple Apple (NASDAQ: AAPL) is one of the easiest stocks to recommend in light of the almost unwavering demand for its products and a swiftly expanding services business. The company's stock is down 23% year over year after a sell-off in 2022. Apple proved the resilience and reliability of its business in an economically challenging year.
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2023-01-18 00:00:00 UTC
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Down 22% to 30%, 3 Warren Buffett Dividend Stocks to Buy Right Now
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https://www.nasdaq.com/articles/down-22-to-30-3-warren-buffett-dividend-stocks-to-buy-right-now
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Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) trounced the S&P 500 by more than a 22 percentage-point margin in 2022 -- marking Berkshire's best performance relative to the market since 2007.
Luckily for investors, the contents of Berkshire's equity portfolio are public information. But that doesn't mean that you should copy Buffett's holdings exactly.
Today, Apple (NASDAQ: AAPL), Celanese (NYSE: CE), and United Parcel Service (NYSE: UPS) are three Buffett dividend stocks that stand out more than the rest of the pack. Here's why.
Image source: Getty Images.
Apple stock is a great value
Daniel Foelber (Apple): Even after falling more than 25% from its all-time high, Apple remains Berkshire Hathaway's largest holding -- by far. It makes up 37% of Berkshire's public equity holdings. But Berkshire didn't buy the position all at once. In fact, it has been adding to the position regularly since 2016.
That year, Apple resembled a classic value stock with a powerful brand and a bargain-bin price-to-earnings (P/E) ratio of less than 12. Today, Apple is much more expensive than it used to be -- with a P/E of around 22. But it trades at only a slight premium to the S&P 500's multiple of 19. And there's every reason to believe Apple deserves a premium valuation now more than ever.
AAPL PE Ratio data by YCharts
Apple's bread and butter is still iPhone and Mac sales. But it has successfully expanded the depth and breadth of its product and services offering to create an integrated ecosystem and recurring revenue streams. So far, Apple has mostly stuck to consumer electronics. But the rise of Apple Pay, Apple Card, and Apple Music adds another layer of stickiness for Apple customers.
Perhaps the most impressive quality of Apple is its operating margin and free cash flow (FCF) yield. The company sports an operating margin of more than 30%, meaning it pockets 30 cents on the dollar in operating income. That is borderline unheard of in the consumer electronics industry. And it's a testament to Apple's ability to sell a growing list of premium-priced products and services to its loyal customer base.
FCF yield is a great way to determine how much extra cash a company has at its disposal for dividends, buybacks, and other use cases. Apple's FCF yield of 5.1% means the company could theoretically pay a 5.1% dividend yield entirely with FCF, or buy back 5.1% of its own stock per year with cash. That's a big advantage, because it allows Apple to either use that cash to reinvest in the business or step in and buy its own stock if it is depressed.
All told, a 22 P/E ratio when the S&P 500's P/E ratio is 19 seems like a great deal given how powerful Apple's fundamentals are.
Investing like Warren Buffett requires patience
Lee Samaha (Celanese): The chemical and specialty materials company is going through a difficult period. That includes a cyclical slowdown in the global economy, notably in Europe where the December S&P Purchasing Managers' Index showed chemicals output and new orders declining sharply.
Given the cyclical exposure of Celanese's polymers and materials -- which are used across the economy, from automotives to industrial and consumer products, and electronics -- its sales are likely to come under pressure, not least from declining polymer prices. Meanwhile, the company will be busy integrating its $11 billion purchase of the majority of DuPont's former mobility and materials segment, a business that's underperforming Celanese's management expectations.
I've addressed the near-term negatives first to illustrate why the stock trades at just seven times 2022 earnings expectations and just over eight times 2023 earnings. However, if you can tolerate the potential for near-term lousy news and focus on the long-term picture, the stock, which has declined nearly 37% over the past year, is a good option.
Plus, the acquisition will add geographic reach to its engineered materials segment and expand Celanese's leadership in new categories, while management is aiming for $500 million in run-rate synergies -- around 4.1% of estimated 2023 revenue -- within four years of the closing of the deal.
It all adds up to a company trading at a valuation cheap enough to offset near-term risk but with good long-term opportunities to improve underlying return on assets --a typical Buffett-like investment.
Big Brown can deliver big passive income
Scott Levine (UPS): It may be one of the smallest positions in Berkshire Hathaway's portfolio, currently worth about $10 million, but that shouldn't preclude investors who want the reassurance of Buffett-approved dividend payers from picking up shares of UPS and its forward dividend yield of 3.4%.
While there are numerous companies that have been paying a dividend to shareholders longer than the 23 years that UPS has, it's important to recognize that UPS only held its initial public offering in 1999. In other words, since its debut on the public markets, UPS has rewarded shareholders with a dividend -- one that's never been reduced from one year to the next.
Over the past year, shares of UPS have dropped about 12%, representing a decline consistent with the S&P 500's fall of about 14%.
Inauspicious as it may seem, the stock's fall doesn't reflect something inherently wrong with the company's performance. Instead, the stock's poor performance stems from investors' concerns that an economic downturn could reduce demand for the company's services. Forward-looking investors, consequently, have the opportunity to grab shares of UPS on the cheap. The stock is currently trading at just under 11 times operating cash flow, representing a discount to its five-year average multiple of 14.
Averaging a payout ratio of 68% over the past five years, UPS is taking a relatively conservative approach to rewarding shareholders. More than that, though, a quick look at the company's impressive free cash flow generation shows that the cash allotted for shareholders isn't jeopardizing the company's financial health.
UPS Total Dividends Paid (Annual) data by YCharts.
Despite inflationary pressure and other headwinds, UPS still foresees ample free cash flow in 2022 -- about $9 billion.
10 stocks we like better than Apple
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*Stock Advisor returns as of January 9, 2023
Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends United Parcel Service and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Today, Apple (NASDAQ: AAPL), Celanese (NYSE: CE), and United Parcel Service (NYSE: UPS) are three Buffett dividend stocks that stand out more than the rest of the pack. AAPL PE Ratio data by YCharts Apple's bread and butter is still iPhone and Mac sales. That includes a cyclical slowdown in the global economy, notably in Europe where the December S&P Purchasing Managers' Index showed chemicals output and new orders declining sharply.
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Today, Apple (NASDAQ: AAPL), Celanese (NYSE: CE), and United Parcel Service (NYSE: UPS) are three Buffett dividend stocks that stand out more than the rest of the pack. AAPL PE Ratio data by YCharts Apple's bread and butter is still iPhone and Mac sales. Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) trounced the S&P 500 by more than a 22 percentage-point margin in 2022 -- marking Berkshire's best performance relative to the market since 2007.
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Today, Apple (NASDAQ: AAPL), Celanese (NYSE: CE), and United Parcel Service (NYSE: UPS) are three Buffett dividend stocks that stand out more than the rest of the pack. AAPL PE Ratio data by YCharts Apple's bread and butter is still iPhone and Mac sales. Apple stock is a great value Daniel Foelber (Apple): Even after falling more than 25% from its all-time high, Apple remains Berkshire Hathaway's largest holding -- by far.
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Today, Apple (NASDAQ: AAPL), Celanese (NYSE: CE), and United Parcel Service (NYSE: UPS) are three Buffett dividend stocks that stand out more than the rest of the pack. AAPL PE Ratio data by YCharts Apple's bread and butter is still iPhone and Mac sales. But Berkshire didn't buy the position all at once.
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2023-01-18 00:00:00 UTC
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Bloomberg: Apple To Focus On Developing Mixed-reality Headset Instead Of Augmented Reality Glasses
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AAPL
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https://www.nasdaq.com/articles/bloomberg%3A-apple-to-focus-on-developing-mixed-reality-headset-instead-of-augmented-reality
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(RTTNews) - As per Bloomberg News, Apple Inc. (AAPL) plans to launch a mixed-reality headset in the current year. The company has put on hold its project for augmented reality glasses due to technical difficulties.
In October, 2022, Mark Zuckerberg unveiled Meta Quest Pro, Meta's first full-color mixed reality headset, priced at $1,499.99. Mixed reality is a key part of the journey toward full augmented reality devices, according to Meta.
Apple will be releasing a lower priced model of the planned mixed-reality headset in the following year, as per the report.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - As per Bloomberg News, Apple Inc. (AAPL) plans to launch a mixed-reality headset in the current year. The company has put on hold its project for augmented reality glasses due to technical difficulties. Apple will be releasing a lower priced model of the planned mixed-reality headset in the following year, as per the report.
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(RTTNews) - As per Bloomberg News, Apple Inc. (AAPL) plans to launch a mixed-reality headset in the current year. In October, 2022, Mark Zuckerberg unveiled Meta Quest Pro, Meta's first full-color mixed reality headset, priced at $1,499.99. Apple will be releasing a lower priced model of the planned mixed-reality headset in the following year, as per the report.
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(RTTNews) - As per Bloomberg News, Apple Inc. (AAPL) plans to launch a mixed-reality headset in the current year. In October, 2022, Mark Zuckerberg unveiled Meta Quest Pro, Meta's first full-color mixed reality headset, priced at $1,499.99. Mixed reality is a key part of the journey toward full augmented reality devices, according to Meta.
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(RTTNews) - As per Bloomberg News, Apple Inc. (AAPL) plans to launch a mixed-reality headset in the current year. The company has put on hold its project for augmented reality glasses due to technical difficulties. In October, 2022, Mark Zuckerberg unveiled Meta Quest Pro, Meta's first full-color mixed reality headset, priced at $1,499.99.
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2023-01-18 00:00:00 UTC
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OPEX Looms: 3 Reasons Markets May Need to Digest
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https://www.nasdaq.com/articles/opex-looms%3A-3-reasons-markets-may-need-to-digest
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Over the past three weeks, the major U.S. market indices have gained strength and have held their 2022 lows. Beaten-down stocks such as Tesla TSLA, Alibaba BABA, and Apple AAPL have rallied back fiercely off their recent swoons. Today we will provide our opinion on the short-term view of the market:
Options Expiration Often Leads to Short Term Choppiness
Monthly options expiration in U.S. markets typically falls on the third Friday of each month. This Friday marks monthly options expiration. Options expiration, also known as OPEX can lead to increased choppiness in the stock market because as options expire, bulls and bears often alter their positions as time runs out. The outcome of these modifications results in increased volume and volatility in the specific stock and the market itself. Furthermore, options that are “in the money” at the time of expiration get exercised – increasing trading volume and volatility to a greater extent.
Earnings
The market is smack dab in the middle of earnings season. Earnings can often lead to increased volatility and choppiness as well. Tuesday was a perfect example. Shares of Morgan Stanley MS popped after the banking giant beat earnings expectations Q4 expectations.
Image Source: Zacks Investment Research
Meanwhile, Goldman Sachs GS sank after reporting a larger-than-expected drop in Q4 profits.
Image Source: Zacks Investment Research
More key earnings reports with market moving potential are on tap later in the week, such as streaming giant Netflix NFLX and consumer products king Proctor and Gamble PG.
Is Frothiness Creeping In?
The market is showing some subtle signs of frothiness in the short term. First, the Williams % R Oscillator is at the most overbought levels since late November when the major indices each shot up 5% in a session. Of course, overbought can become more overbought and does not necessarily mean the market will fall precipitously. However, it does usually mean that the odds favor some sort of back and fill or corrective price action.
Image Source: Zacks Investment Research
Highly speculative equities like meme and crypto stocks are rising rapidly. Usually, these price moves occur when things get a bit too hot. For example, Bed Bath and Beyond BBBY is on the brink of bankruptcy yet it has tripled in the past few weeks. The Valkyrie Bitcoin Miners ETF WGMI is up 87% in the past two weeks of trading. Chinese ecommerce retailer Vipshop Holdings VIPS has moved higher for eleven weeks in a row and doubled in that period.
Image Source: Zacks Investment Research
Lastly, Tesla, which is up 30% in three weeks’ time, saw a tremendous amount of call option activity pour in. Traders doled out a whopping $50 million on call premium alone Tuesday.
Conclusion
The intermediate and short-term trends remain higher after stocks were able to hold their 2022 lows and rally over the past few weeks. With that said, investors have some potential obstacles to contend with in the short term and should not get caught chasing an extended market with too much exposure as options expiration and key earnings loom. As always know your time frame and mind your risk accordingly.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report
Morgan Stanley (MS) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Netflix, Inc. (NFLX) : Free Stock Analysis Report
Procter & Gamble Company The (PG) : Free Stock Analysis Report
Bed Bath & Beyond Inc. (BBBY) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Vipshop Holdings Limited (VIPS) : Free Stock Analysis Report
Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report
Valkyrie Bitcoin Miners ETF (WGMI): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Beaten-down stocks such as Tesla TSLA, Alibaba BABA, and Apple AAPL have rallied back fiercely off their recent swoons. Click to get this free report The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report Morgan Stanley (MS) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report Procter & Gamble Company The (PG) : Free Stock Analysis Report Bed Bath & Beyond Inc. (BBBY) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report Vipshop Holdings Limited (VIPS) : Free Stock Analysis Report Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report Valkyrie Bitcoin Miners ETF (WGMI): ETF Research Reports To read this article on Zacks.com click here. Image Source: Zacks Investment Research More key earnings reports with market moving potential are on tap later in the week, such as streaming giant Netflix NFLX and consumer products king Proctor and Gamble PG.
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Click to get this free report The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report Morgan Stanley (MS) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report Procter & Gamble Company The (PG) : Free Stock Analysis Report Bed Bath & Beyond Inc. (BBBY) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report Vipshop Holdings Limited (VIPS) : Free Stock Analysis Report Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report Valkyrie Bitcoin Miners ETF (WGMI): ETF Research Reports To read this article on Zacks.com click here. Beaten-down stocks such as Tesla TSLA, Alibaba BABA, and Apple AAPL have rallied back fiercely off their recent swoons. Today we will provide our opinion on the short-term view of the market: Options Expiration Often Leads to Short Term Choppiness Monthly options expiration in U.S. markets typically falls on the third Friday of each month.
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Click to get this free report The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report Morgan Stanley (MS) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report Procter & Gamble Company The (PG) : Free Stock Analysis Report Bed Bath & Beyond Inc. (BBBY) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report Vipshop Holdings Limited (VIPS) : Free Stock Analysis Report Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report Valkyrie Bitcoin Miners ETF (WGMI): ETF Research Reports To read this article on Zacks.com click here. Beaten-down stocks such as Tesla TSLA, Alibaba BABA, and Apple AAPL have rallied back fiercely off their recent swoons. Today we will provide our opinion on the short-term view of the market: Options Expiration Often Leads to Short Term Choppiness Monthly options expiration in U.S. markets typically falls on the third Friday of each month.
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Beaten-down stocks such as Tesla TSLA, Alibaba BABA, and Apple AAPL have rallied back fiercely off their recent swoons. Click to get this free report The Goldman Sachs Group, Inc. (GS) : Free Stock Analysis Report Morgan Stanley (MS) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Netflix, Inc. (NFLX) : Free Stock Analysis Report Procter & Gamble Company The (PG) : Free Stock Analysis Report Bed Bath & Beyond Inc. (BBBY) : Free Stock Analysis Report Tesla, Inc. (TSLA) : Free Stock Analysis Report Vipshop Holdings Limited (VIPS) : Free Stock Analysis Report Alibaba Group Holding Limited (BABA) : Free Stock Analysis Report Valkyrie Bitcoin Miners ETF (WGMI): ETF Research Reports To read this article on Zacks.com click here. Over the past three weeks, the major U.S. market indices have gained strength and have held their 2022 lows.
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2023-01-18 00:00:00 UTC
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3 Stocks to Buy if They Take a Dip
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https://www.nasdaq.com/articles/3-stocks-to-buy-if-they-take-a-dip-5
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It's no secret that the stock market had a rough 2022. The S&P 500 index of 500 of America's biggest companies dropped more than 18%, and the Nasdaq Stock Market, home to more than 2,500 companies (including tech giants such as Apple and Microsoft), fell more than 32%. As of the time of this writing, the markets haven't recovered significantly.
Lots of companies have seen their stock prices fall even more than the overall market, putting many into bargain territory. Still, there are some particularly attractive companies that would be well worth considering for your portfolio -- if they fell more. Here are three.
1. Costco
Costco (NASDAQ: COST) shares were recently down about 6.5% over the past year. The stock is one many would love to own, but it's not yet trading at an enticing level. Its price-to-earnings (P/E) ratio, its forward-looking P/E ratio, and its price-to-sales ratio were all recently fairly close to their five-year average -- not well below it, as one would prefer to see.
Costco is a retailing powerhouse, with more than 840 locations worldwide. (That includes 583 in the U.S. and Puerto Rico, 107 in Canada, 40 in Mexico, 31 in Japan, and more in other countries.) It has grown while keeping its profit margins on the low side, retaining employees via solid benefits (such as above-average pay, health coverage, and bonuses), and rewarding shareholders, too. Its shares have more than quintupled in value over the past decade, averaging 18% growth per year.
It's reasonable to expect the company to keep growing for the foreseeable future. Some anticipate an increase in its annual fees, which have been $60 for a basic membership and $120 for an executive one. That alone will boost revenue. While shares aren't cheap, you might ease into the stock via incremental purchases over time -- or just add it to your watch list.
2. Intuitive Surgical
Intuitive Surgical (NASDAQ: ISRG) isn't a household name for most people, but those paying attention to great stock performers have probably heard of it. Shares have more than quadrupled over the past decade, averaging 16.4% annually.
The company specializes in robotic surgical equipment, with its key product, the da Vinci system, featuring a robot that typically costs well above $1 million. More than 6,700 of them have been installed in hospitals in 69 countries, and more than 10 million procedures have been performed on them. Better still, the company enjoys lots of dependable recurring revenue as it sells service contracts, accessories, and supplies for the equipment.
The company has seen its shares drop nearly 21% over the past year, but that hasn't been enough to make the shares seem undervalued. Its recent price-to-sales ratio of 15.5 is indeed a bit below its five-year average of 17.6, but its P/E and forward P/E ratios are both fairly close to their five-year averages. Consider keeping an eye on this great grower. You might buy into it incrementally, or wait for a better price.
3. Apple
Shares of Apple were recently down 23% over the past year, but that hasn't made them screaming bargains. Indeed, Apple's price-to-sales ratio and forward-looking price-to-earnings ratio were recently only near their five-year average, while the stock's price-to-earnings ratio of 22 was only a bit below the five-year average of 24. Shares have more than septupled in value over the past decade, averaging nearly 23% per year.
It's not hard to imagine Apple continuing to grow robustly in the years to come. One of its core skills is innovation, and it looks like it will be adding virtual reality and augmented reality offerings to its ecosystem in the next few years. Some worry about slowing iPhone sales, but there's much more to Apple than iPhones. Its services, for example, including Apple TV+, Apple Music, Apple Arcade, Apple Card, and more, are growing briskly overall -- reaching 900 million subscribers in 2022.
Think twice before rushing to fill your arms with buckets of Apple stock, but you might ease into the stock or just wait for a better price. If you plan to hold any of these stocks for many years, you might justify buying shares now, as they will likely be considerably more valuable a decade hence. The most desirable stocks often trade at premium levels.
10 stocks we like better than Costco Wholesale
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Costco Wholesale wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
Selena Maranjian has positions in Apple, Costco Wholesale, Intuitive Surgical, and Microsoft. The Motley Fool has positions in and recommends Apple, Costco Wholesale, Intuitive Surgical, and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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It has grown while keeping its profit margins on the low side, retaining employees via solid benefits (such as above-average pay, health coverage, and bonuses), and rewarding shareholders, too. While shares aren't cheap, you might ease into the stock via incremental purchases over time -- or just add it to your watch list. Better still, the company enjoys lots of dependable recurring revenue as it sells service contracts, accessories, and supplies for the equipment.
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Its price-to-earnings (P/E) ratio, its forward-looking P/E ratio, and its price-to-sales ratio were all recently fairly close to their five-year average -- not well below it, as one would prefer to see. Indeed, Apple's price-to-sales ratio and forward-looking price-to-earnings ratio were recently only near their five-year average, while the stock's price-to-earnings ratio of 22 was only a bit below the five-year average of 24. The Motley Fool has positions in and recommends Apple, Costco Wholesale, Intuitive Surgical, and Microsoft.
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The S&P 500 index of 500 of America's biggest companies dropped more than 18%, and the Nasdaq Stock Market, home to more than 2,500 companies (including tech giants such as Apple and Microsoft), fell more than 32%. Indeed, Apple's price-to-sales ratio and forward-looking price-to-earnings ratio were recently only near their five-year average, while the stock's price-to-earnings ratio of 22 was only a bit below the five-year average of 24. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Selena Maranjian has positions in Apple, Costco Wholesale, Intuitive Surgical, and Microsoft.
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Costco Costco (NASDAQ: COST) shares were recently down about 6.5% over the past year. Shares have more than quadrupled over the past decade, averaging 16.4% annually. The Motley Fool has positions in and recommends Apple, Costco Wholesale, Intuitive Surgical, and Microsoft.
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2023-01-18 00:00:00 UTC
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Spotify joins media firms to urge EU action against Apple's 'unfair' practices
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AAPL
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https://www.nasdaq.com/articles/spotify-joins-media-firms-to-urge-eu-action-against-apples-unfair-practices
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Jan 18 (Reuters) - Music streaming service Spotify Technology SPOT.N, along with other media firms such as Deezer, urged the European Commission to take action against Apple Inc AAPL.O for anticompetitive and unfair practices, in a joint industry letter on Wednesday.
The letter, addressed to the European Union antitrust regulator's Executive Vice-President Margrethe Vestager, demanded the Commission to act fast for the welfare of European consumers.
Spotify has for years accused Apple of abusing its market position using its App Store rules to stifle competition.
It has previously submitted antitrust complaints against Apple in various countries, alleging the 30% charge Apple requires developers to pay on its App Store has forced Spotify to "artificially inflate" its own prices.
"We are writing to you to call for swift and decisive action by the European Commission against anticompetitive and unfair practices by certain global digital gatekeepers, and Apple in particular," read the letter, which was signed by chief executives of media firms Schibsted, Proton and Basecamp.
Spotify's Chief Executive Daniel Ek had previously said the iPhone maker "gives itself every advantage while at the same time stifling innovation and hurting consumers".
Apple did not immediately respond to a Reuters request for comment.
(Reporting by Chavi Mehta in Bengaluru; Editing by Krishna Chandra Eluri)
((Chavi.Mehta@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Jan 18 (Reuters) - Music streaming service Spotify Technology SPOT.N, along with other media firms such as Deezer, urged the European Commission to take action against Apple Inc AAPL.O for anticompetitive and unfair practices, in a joint industry letter on Wednesday. "We are writing to you to call for swift and decisive action by the European Commission against anticompetitive and unfair practices by certain global digital gatekeepers, and Apple in particular," read the letter, which was signed by chief executives of media firms Schibsted, Proton and Basecamp. Spotify's Chief Executive Daniel Ek had previously said the iPhone maker "gives itself every advantage while at the same time stifling innovation and hurting consumers".
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Jan 18 (Reuters) - Music streaming service Spotify Technology SPOT.N, along with other media firms such as Deezer, urged the European Commission to take action against Apple Inc AAPL.O for anticompetitive and unfair practices, in a joint industry letter on Wednesday. "We are writing to you to call for swift and decisive action by the European Commission against anticompetitive and unfair practices by certain global digital gatekeepers, and Apple in particular," read the letter, which was signed by chief executives of media firms Schibsted, Proton and Basecamp. Spotify's Chief Executive Daniel Ek had previously said the iPhone maker "gives itself every advantage while at the same time stifling innovation and hurting consumers".
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Jan 18 (Reuters) - Music streaming service Spotify Technology SPOT.N, along with other media firms such as Deezer, urged the European Commission to take action against Apple Inc AAPL.O for anticompetitive and unfair practices, in a joint industry letter on Wednesday. It has previously submitted antitrust complaints against Apple in various countries, alleging the 30% charge Apple requires developers to pay on its App Store has forced Spotify to "artificially inflate" its own prices. "We are writing to you to call for swift and decisive action by the European Commission against anticompetitive and unfair practices by certain global digital gatekeepers, and Apple in particular," read the letter, which was signed by chief executives of media firms Schibsted, Proton and Basecamp.
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Jan 18 (Reuters) - Music streaming service Spotify Technology SPOT.N, along with other media firms such as Deezer, urged the European Commission to take action against Apple Inc AAPL.O for anticompetitive and unfair practices, in a joint industry letter on Wednesday. The letter, addressed to the European Union antitrust regulator's Executive Vice-President Margrethe Vestager, demanded the Commission to act fast for the welfare of European consumers. Spotify has for years accused Apple of abusing its market position using its App Store rules to stifle competition.
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17558.0
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2023-01-18 00:00:00 UTC
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10 Best Stocks to Buy Now for Long-Term Investors
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AAPL
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https://www.nasdaq.com/articles/10-best-stocks-to-buy-now-for-long-term-investors
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nan
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nan
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Today, I share my 10 best stocks to buy now for long-term investors. The video below provides a blend of stocks, including dividend stocks, growth stocks, and value stocks. These are high-quality, high-conviction stocks that I feel are the top stocks to buy and hold for five or more years.
*Stock prices used were the morning prices of Jan. 17, 2023. The video was published on Jan. 17, 2023.
10 stocks we like better than Apple
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Eric Cuka has positions in Alphabet, Amazon.com, Apple, Broadcom, Costco Wholesale, Microsoft, Tesla, Tractor Supply, and UnitedHealth Group. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet, Amazon.com, Apple, Costco Wholesale, Microsoft, and Tesla. The Motley Fool recommends Broadcom, Tractor Supply, UnitedHealth Group, VMware, and Vici Properties and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. Eric Cuka is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Eric Cuka has positions in Alphabet, Amazon.com, Apple, Broadcom, Costco Wholesale, Microsoft, Tesla, Tractor Supply, and UnitedHealth Group. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet, Amazon.com, Apple, Costco Wholesale, Microsoft, and Tesla.
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Eric Cuka has positions in Alphabet, Amazon.com, Apple, Broadcom, Costco Wholesale, Microsoft, Tesla, Tractor Supply, and UnitedHealth Group. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet, Amazon.com, Apple, Costco Wholesale, Microsoft, and Tesla. The Motley Fool recommends Broadcom, Tractor Supply, UnitedHealth Group, VMware, and Vici Properties and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.
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The video below provides a blend of stocks, including dividend stocks, growth stocks, and value stocks. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. The Motley Fool recommends Broadcom, Tractor Supply, UnitedHealth Group, VMware, and Vici Properties and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.
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The video below provides a blend of stocks, including dividend stocks, growth stocks, and value stocks. That's right -- they think these 10 stocks are even better buys. Eric Cuka has positions in Alphabet, Amazon.com, Apple, Broadcom, Costco Wholesale, Microsoft, Tesla, Tractor Supply, and UnitedHealth Group.
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17559.0
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2023-01-18 00:00:00 UTC
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Is Invesco FTSE RAFI US 1000 ETF (PRF) a Strong ETF Right Now?
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AAPL
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https://www.nasdaq.com/articles/is-invesco-ftse-rafi-us-1000-etf-prf-a-strong-etf-right-now-5
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nan
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nan
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The Invesco FTSE RAFI US 1000 ETF (PRF) made its debut on 12/19/2005, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Managed by Invesco, PRF has amassed assets over $6.07 billion, making it one of the larger ETFs in the Style Box - Large Cap Value. This particular fund seeks to match the performance of the FTSE RAFI US 1000 Index before fees and expenses.
The FTSE RAFI US 1000 Index is designed to track the performance of the largest U.S. equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. U.S. equities are then weighted by each of these four fundamental measures.An overall weight is calculated for each firm by equally-weighting each fundamental measure.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.39%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.94%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
PRF's heaviest allocation is in the Financials sector, which is about 19% of the portfolio. Its Healthcare and Information Technology round out the top three.
Taking into account individual holdings, Exxon Mobil Corp (XOM) accounts for about 2.81% of the fund's total assets, followed by Berkshire Hathaway Inc (BRK/B) and Apple Inc (AAPL).
Its top 10 holdings account for approximately 16.4% of PRF's total assets under management.
Performance and Risk
So far this year, PRF return is roughly 3.84%, and is down about -6.19% in the last one year (as of 01/18/2023). During this past 52-week period, the fund has traded between $138.77 and $174.26.
The ETF has a beta of 1 and standard deviation of 25.65% for the trailing three-year period, making it a medium risk choice in the space. With about 1004 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI US 1000 ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $55.27 billion in assets, Vanguard Value ETF has $100.21 billion. IWD has an expense ratio of 0.18% and VTV charges 0.04%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
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Invesco FTSE RAFI US 1000 ETF (PRF): ETF Research Reports
Apple Inc. (AAPL) : Free Stock Analysis Report
Exxon Mobil Corporation (XOM) : Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
iShares Russell 1000 Value ETF (IWD): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Taking into account individual holdings, Exxon Mobil Corp (XOM) accounts for about 2.81% of the fund's total assets, followed by Berkshire Hathaway Inc (BRK/B) and Apple Inc (AAPL). Click to get this free report Invesco FTSE RAFI US 1000 ETF (PRF): ETF Research Reports Apple Inc. (AAPL) : Free Stock Analysis Report Exxon Mobil Corporation (XOM) : Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports iShares Russell 1000 Value ETF (IWD): ETF Research Reports To read this article on Zacks.com click here. The Invesco FTSE RAFI US 1000 ETF (PRF) made its debut on 12/19/2005, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
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Click to get this free report Invesco FTSE RAFI US 1000 ETF (PRF): ETF Research Reports Apple Inc. (AAPL) : Free Stock Analysis Report Exxon Mobil Corporation (XOM) : Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports iShares Russell 1000 Value ETF (IWD): ETF Research Reports To read this article on Zacks.com click here. Taking into account individual holdings, Exxon Mobil Corp (XOM) accounts for about 2.81% of the fund's total assets, followed by Berkshire Hathaway Inc (BRK/B) and Apple Inc (AAPL). Alternatives Invesco FTSE RAFI US 1000 ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market.
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Click to get this free report Invesco FTSE RAFI US 1000 ETF (PRF): ETF Research Reports Apple Inc. (AAPL) : Free Stock Analysis Report Exxon Mobil Corporation (XOM) : Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports iShares Russell 1000 Value ETF (IWD): ETF Research Reports To read this article on Zacks.com click here. Taking into account individual holdings, Exxon Mobil Corp (XOM) accounts for about 2.81% of the fund's total assets, followed by Berkshire Hathaway Inc (BRK/B) and Apple Inc (AAPL). IShares Russell 1000 Value ETF (IWD) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index.
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Taking into account individual holdings, Exxon Mobil Corp (XOM) accounts for about 2.81% of the fund's total assets, followed by Berkshire Hathaway Inc (BRK/B) and Apple Inc (AAPL). Click to get this free report Invesco FTSE RAFI US 1000 ETF (PRF): ETF Research Reports Apple Inc. (AAPL) : Free Stock Analysis Report Exxon Mobil Corporation (XOM) : Free Stock Analysis Report Vanguard Value ETF (VTV): ETF Research Reports iShares Russell 1000 Value ETF (IWD): ETF Research Reports To read this article on Zacks.com click here. The Invesco FTSE RAFI US 1000 ETF (PRF) made its debut on 12/19/2005, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Value category of the market.
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17560.0
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2023-01-18 00:00:00 UTC
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In a Stunning Move, Apple Plans to Ditch Highly Valued Wireless Component Suppliers
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AAPL
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https://www.nasdaq.com/articles/in-a-stunning-move-apple-plans-to-ditch-highly-valued-wireless-component-suppliers
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nan
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nan
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Bloomberg published a report at the end of 2021 that Apple (NASDAQ: AAPL) intended to hire people right in Broadcom's (NASDAQ: AVGO) and Skyworks Solutions' (NASDAQ: SWKS) backyard of Irvine, California, to design wireless communication chips. Nevertheless, investors were still shocked when a recent report suggested Apple intends to replace Broadcom's Wi-Fi and Bluetooth chips as soon as 2025.
While there are many benefits that Apple could gain by designing proprietary components and transitioning away from third-party providers like Broadcom, the strategy also comes fraught with risk.
Let's look at the risks and rewards of the company's strategy to eliminate its component suppliers.
Why Apple wants to design proprietary components
There are three advantages Apple gains by bringing component production in-house. First, the strategy gives it more control over component production, ensuring that it has enough parts for manufacturing the final product -- a significant benefit considering the many supply chain problems interrupting output over the last several years.
Second, one of the more significant problems that Apple faced over the last several years is the increasingly smaller differentiation between an iPhone and a high-end Android phone. For Apple to justify its premium status and charge customers more, it needs to create and maintain better features than its competitors.
Its solution is that by developing more control over its components' development and production processes, the company can substantially improve innovation and differentiation.
For instance, when Apple replaced Intel's laptop processors in 2020 with its internally developed M1 chip, it improved its laptop battery life. Most laptops used for home, school, or office work have batteries that last around eight to 10 hours. But according to Tom's Guide, a review site, MacBook Air equipped with the M-1 lasted 14 hours and 41 minutes when first tested. And with the new M-2 chip, Apple claims users get 18 hours of battery life, just one factor differentiating a MacBook Air from a run-of-the-mill laptop with "Intel Inside."
In contrast, when a third-party component manufacturer creates new features, all of that company's hardware customers instantly have the same access to the new capabilities, which goes into creating products that quickly become commoditized.
Last, bringing component production in-house eliminates costs like sales and marketing between companies that own separate production stages. Removing excess charges can boost profit margins. Or a company can pass along the savings to consumers by maintaining steady-state pricing or even lowering pricing.
For example, some theorize that Apple's "Far Out" product launch in September 2022 lacked iPhone and Apple Watch price hikes due to its ability to control costs through its in-house strategy.
Bringing production in-house might be challenging
Apple may be unsuccessful in bringing one or more components in-house, or these goals might take far longer to achieve than initially planned.
For example, for quite some time, Apple has sought to displace Qualcomm's (NASDAQ: QCOM) modems from the iPhone. In 2019, it bought Intel's (NASDAQ: INTC) modem operations to jump-start its efforts to establish an in-house modem business. And its original plan was to introduce these in-house modems to the iPhone in 2023. But unfortunately, management has pushed back the Apple modem introduction to 2024, showing the difficulty of building a viable third-party wireless component from scratch.
There is also more risk than the technical difficulty of building sophisticated device components. For Apple to produce cost-competitive parts against third-party suppliers like Broadcom, Qualcomm, or Skyworks, it must manufacture the parts at an adequate scale. And the minimum efficient scale needed for manufacturing a component could be more than the volume required for efficiently manufacturing the final product. This is a mismatch that could upset the apple cart for achieving substantial financial benefits from bringing component production in-house.
A competitive advantage
Bringing component production in-house has a very high cost and complexity. However, Apple is one of the few companies with pockets deep enough to execute the strategy successfully. At the end of the third quarter of 2022, it had $48.3 billion in cash and marketable securities and produced $111.4 billion in trailing-12-month free cash flow.
Its competitors, with fewer resources, will likely continue using third-party suppliers.
If Apple successfully supplants component manufacturers like Broadcom, Skyworks, Qualcomm, and others over the next five years, it could benefit significantly from having in-house component suppliers that its competitors lack and would be hard-pressed to copy.
10 stocks we like better than Apple
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
{%sfr%}
*Stock Advisor returns as of January 9, 2023
Rob Starks Jr has positions in Skyworks Solutions. The Motley Fool has positions in and recommends Apple, Intel, and Qualcomm. The Motley Fool recommends Broadcom and Skyworks Solutions and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Bloomberg published a report at the end of 2021 that Apple (NASDAQ: AAPL) intended to hire people right in Broadcom's (NASDAQ: AVGO) and Skyworks Solutions' (NASDAQ: SWKS) backyard of Irvine, California, to design wireless communication chips. Second, one of the more significant problems that Apple faced over the last several years is the increasingly smaller differentiation between an iPhone and a high-end Android phone. And with the new M-2 chip, Apple claims users get 18 hours of battery life, just one factor differentiating a MacBook Air from a run-of-the-mill laptop with "Intel Inside."
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Bloomberg published a report at the end of 2021 that Apple (NASDAQ: AAPL) intended to hire people right in Broadcom's (NASDAQ: AVGO) and Skyworks Solutions' (NASDAQ: SWKS) backyard of Irvine, California, to design wireless communication chips. Why Apple wants to design proprietary components There are three advantages Apple gains by bringing component production in-house. For Apple to produce cost-competitive parts against third-party suppliers like Broadcom, Qualcomm, or Skyworks, it must manufacture the parts at an adequate scale.
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Bloomberg published a report at the end of 2021 that Apple (NASDAQ: AAPL) intended to hire people right in Broadcom's (NASDAQ: AVGO) and Skyworks Solutions' (NASDAQ: SWKS) backyard of Irvine, California, to design wireless communication chips. Why Apple wants to design proprietary components There are three advantages Apple gains by bringing component production in-house. If Apple successfully supplants component manufacturers like Broadcom, Skyworks, Qualcomm, and others over the next five years, it could benefit significantly from having in-house component suppliers that its competitors lack and would be hard-pressed to copy.
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Bloomberg published a report at the end of 2021 that Apple (NASDAQ: AAPL) intended to hire people right in Broadcom's (NASDAQ: AVGO) and Skyworks Solutions' (NASDAQ: SWKS) backyard of Irvine, California, to design wireless communication chips. First, the strategy gives it more control over component production, ensuring that it has enough parts for manufacturing the final product -- a significant benefit considering the many supply chain problems interrupting output over the last several years. For Apple to justify its premium status and charge customers more, it needs to create and maintain better features than its competitors.
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17561.0
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2023-01-18 00:00:00 UTC
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3 Rock-Solid Dividend Stocks to Buy in 2023
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AAPL
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https://www.nasdaq.com/articles/3-rock-solid-dividend-stocks-to-buy-in-2023
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nan
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nan
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Dividend stocks can provide you with a reliable stream of passive income. The challenge, of course, is being able to identify the stocks that can be counted on to deliver cash to their investors quarter after quarter and year after year.
You'll want to invest in strong, high-quality companies with solid growth prospects. You'll likely also appreciate businesses with proven histories of rewarding their share owners with rising cash payouts.
The following three dividend stocks meet these challenging criteria. All three are attractive buys today.
1. Microsoft
Few businesses are as financially sound as Microsoft (NASDAQ: MSFT). The tech juggernaut has over $100 billion in cash and investments on its fortress-like balance sheet. Microsoft is also a profit- and cash-generating machine, with a staggering $70 billion in net income and $63 billion in free cash flow over the trailing 12 months.
The software star passes roughly a quarter of these profits on to its shareholders via a steadily rising dividend. Its stock currently yields a respectable 1.1%.
MSFT Dividend data by YCharts.
A host of highly regarded cloud technology platforms is driving this impressive financial performance. Microsoft's Office 365 dominates the corporate productivity software market, while Windows powers more than 70% of desktop computers worldwide. And Microsoft's Azure computing infrastructure platform is a potent growth driver as businesses increasingly shift their operations to the cloud.
With these broad-based revenue streams and Microsoft's bountiful cash reserves helping to reduce the risks for investors, you'll be able to sleep well at night while owning this stalwart dividend stock.
2. Apple
Like Microsoft, Apple's (NASDAQ: AAPL) financial strength is awe-inspiring. The tech colossus produced a stunning $100 billion in net income and $111 billion in free cash flow in its 2022 fiscal year, which ended on Sept. 24. Apple also has a sterling balance sheet, with a whopping $169 billion in cash and investments.
The iPhone lies at the center of Apple's vast technological empire. Macs, iPads, and wearables like the Apple Watch and AirPods help to round out the company's highly regarded product portfolio. Popular services -- such as Apple Pay, iCloud+, and a promising new advertising network -- provide additional growth and profit potential.
Apple's stock yields a modest 0.7%. But that figure belies the massive scale of its capital returns to shareholders, which included nearly $15 billion in dividends and over $89 billion in stock buybacks in fiscal 2022 alone.
Moreover, Apple has raised its cash payout every year since it began paying a dividend in 2012. Yet the tech giant is still paying out only about 15% of its profits as dividends, so investors can safely expect their cash payments to continue to increase in the coming years.
3. Starbucks
From its humble beginnings as a single coffee shop back in 1971 to its well-earned status as a global titan with over 35,000 stores today, Starbucks (NASDAQ: SBUX) is one of the greatest growth stories in corporate history. Yet, with some major international markets still largely untapped, Starbucks has a long runway for expansion still ahead.
Much of this growth will take place in China. The Chinese government's decision to ease its COVID-19-related restrictions and reopen its economy should provide Starbucks with a powerful growth catalyst in 2023.
Looking further ahead, the company plans to have nearly 9,000 stores in China by 2025, up from roughly 6,000 today. Starbucks' store count in the country could eventually eclipse the over 15,000 locations it has in the United States, considering that China's population is four times larger than that of the U.S.
All told, management expects Starbucks' revenue and earnings per share to grow by as much as 12% and 20%, respectively, in fiscal 2023. That type of growth should allow the coffee king to boost its cash payout to shareholders, which currently yields a solid 2%, and extend its 12-year streak of annual dividend increases.
10 stocks we like better than Microsoft
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now… and Microsoft wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Microsoft, and Starbucks. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple, short January 2023 $92.50 puts on Starbucks, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple Like Microsoft, Apple's (NASDAQ: AAPL) financial strength is awe-inspiring. With these broad-based revenue streams and Microsoft's bountiful cash reserves helping to reduce the risks for investors, you'll be able to sleep well at night while owning this stalwart dividend stock. Yet the tech giant is still paying out only about 15% of its profits as dividends, so investors can safely expect their cash payments to continue to increase in the coming years.
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Apple Like Microsoft, Apple's (NASDAQ: AAPL) financial strength is awe-inspiring. A host of highly regarded cloud technology platforms is driving this impressive financial performance. The tech colossus produced a stunning $100 billion in net income and $111 billion in free cash flow in its 2022 fiscal year, which ended on Sept. 24.
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Apple Like Microsoft, Apple's (NASDAQ: AAPL) financial strength is awe-inspiring. With these broad-based revenue streams and Microsoft's bountiful cash reserves helping to reduce the risks for investors, you'll be able to sleep well at night while owning this stalwart dividend stock. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Joe Tenebruso has no position in any of the stocks mentioned.
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Apple Like Microsoft, Apple's (NASDAQ: AAPL) financial strength is awe-inspiring. Microsoft Few businesses are as financially sound as Microsoft (NASDAQ: MSFT). Looking further ahead, the company plans to have nearly 9,000 stores in China by 2025, up from roughly 6,000 today.
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17562.0
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2023-01-17 00:00:00 UTC
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FAANG Stocks Look Ready to Soar Later This Month. Here's Why.
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AAPL
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https://www.nasdaq.com/articles/faang-stocks-look-ready-to-soar-later-this-month.-heres-why.
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nan
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nan
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FAANG stocks got crushed last year as a combination of slowing growth and compressing valuations hit even the mightiest tech stocks like Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), and Apple (NASDAQ: AAPL).
2023 offers investors the chance at a new beginning, and stocks jumped out of the gate on data showing that inflation is cooling while the economy remains stable.
Looking ahead to earnings season, there's another reason why the stock market, and especially FAANG stocks, could get a boost. The dollar has weakened substantially over the last few months, which makes international revenue more valuable.
Image source: Getty Images.
The FX effect
When big tech stocks reported third-quarter earnings nearly three months ago, a stronger dollar was a major headwind because all of these companies derive a significant percentage of their revenue from outside the U.S.
In Amazon's third-quarter earnings report, the company reported 15% revenue growth, but it rose 19% in constant currency. Alphabet reported 6% revenue growth in its third quarter, or 11% in constant currency, and Netflix's (NASDAQ: NFLX) revenue rose 6%, or 13% in constant currency.
As you can see from the chart below, the dollar index hit a 10-year high a few months ago, but the dollar cooled rapidly since then as interest rates have fallen and investors expect the Fed to stop hiking interest rates soon.
^DJFXCMD data by YCharts
The chart below shows that the dollar plateaued in late September and October before falling sharply when the CPI report came out in November showing inflation falling faster than expected. It's continued to fall since then and now is the lowest it's been since last May.
^DJFXCMD data by YCharts
Most multinational companies expected currency headwinds to strengthen from the third quarter to the fourth quarter. However, based on the chart above and the year-over-year comparisons, those currency headwinds seem to have actually weakened from the third quarter to the fourth, though they'll still weigh on results.
That's a good indicator that FAANG results will beat guidance since these companies made their forecasts based on the value of the dollar in late October.
Amazon, for example, called for 460 basis points of currency headwinds in its fourth quarter, but currency headwinds will almost certainly be more favorable than that. Similarly, Netflix, which gets most of its revenue from outside the U.S., expected nearly 8 percentage points of currency headwinds.
Not only will these companies benefit from the weaker dollar in the fourth quarter, but their guidance is also likely to get a lift from the falling dollar. In fact, currency exchange could become a tailwind within a couple of quarters and for 2023 as a whole if the dollar continues to weaken.
The weakening dollar is also a tailwind because of its impact on the bottom line. These companies typically have most of their expenses in U.S. dollars since that's where their employees are based, so the revenue impact is likely to be magnified on the bottom line.
FAANG stocks are cheap
After the subsector plunged this year, these stocks are all trading at a discount, and they retain the same competitive advantages they had before last year's crash.
In other words, the weakening dollar, especially if it leads to a beat-and-raise quarter, could be just the catalyst to spark a rebound in these big tech names.
Many of the FAANG stocks are trading at the lowest valuations they've had in years so it shouldn't take much for them to recover. If the dollar continues to weaken, don't be surprised to see FAANG stocks keep marching higher.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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FAANG stocks got crushed last year as a combination of slowing growth and compressing valuations hit even the mightiest tech stocks like Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), and Apple (NASDAQ: AAPL). 2023 offers investors the chance at a new beginning, and stocks jumped out of the gate on data showing that inflation is cooling while the economy remains stable. The FX effect When big tech stocks reported third-quarter earnings nearly three months ago, a stronger dollar was a major headwind because all of these companies derive a significant percentage of their revenue from outside the U.S.
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FAANG stocks got crushed last year as a combination of slowing growth and compressing valuations hit even the mightiest tech stocks like Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), and Apple (NASDAQ: AAPL). In Amazon's third-quarter earnings report, the company reported 15% revenue growth, but it rose 19% in constant currency. Alphabet reported 6% revenue growth in its third quarter, or 11% in constant currency, and Netflix's (NASDAQ: NFLX) revenue rose 6%, or 13% in constant currency.
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FAANG stocks got crushed last year as a combination of slowing growth and compressing valuations hit even the mightiest tech stocks like Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), and Apple (NASDAQ: AAPL). The FX effect When big tech stocks reported third-quarter earnings nearly three months ago, a stronger dollar was a major headwind because all of these companies derive a significant percentage of their revenue from outside the U.S. Alphabet reported 6% revenue growth in its third quarter, or 11% in constant currency, and Netflix's (NASDAQ: NFLX) revenue rose 6%, or 13% in constant currency.
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FAANG stocks got crushed last year as a combination of slowing growth and compressing valuations hit even the mightiest tech stocks like Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), and Apple (NASDAQ: AAPL). The FX effect When big tech stocks reported third-quarter earnings nearly three months ago, a stronger dollar was a major headwind because all of these companies derive a significant percentage of their revenue from outside the U.S. In fact, currency exchange could become a tailwind within a couple of quarters and for 2023 as a whole if the dollar continues to weaken.
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17563.0
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2023-01-17 00:00:00 UTC
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Apple (AAPL) Gains As Market Dips: What You Should Know
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AAPL
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https://www.nasdaq.com/articles/apple-aapl-gains-as-market-dips%3A-what-you-should-know-5
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nan
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nan
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In the latest trading session, Apple (AAPL) closed at $135.94, marking a +0.88% move from the previous day. This move outpaced the S&P 500's daily loss of 0.2%. Elsewhere, the Dow lost 1.14%, while the tech-heavy Nasdaq added 1.39%.
Prior to today's trading, shares of the maker of iPhones, iPads and other products had gained 1.81% over the past month. This has lagged the Computer and Technology sector's gain of 3.75% and the S&P 500's gain of 4.01% in that time.
Apple will be looking to display strength as it nears its next earnings release, which is expected to be February 2, 2023. The company is expected to report EPS of $1.93, down 8.1% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $120.48 billion, down 2.8% from the prior-year quarter.
AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.19 per share and revenue of $404.08 billion. These results would represent year-over-year changes of +1.31% and +2.47%, respectively.
Investors should also note any recent changes to analyst estimates for Apple. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.
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. Over the past month, the Zacks Consensus EPS estimate has moved 0.01% lower. Apple is currently sporting a Zacks Rank of #3 (Hold).
Looking at its valuation, Apple is holding a Forward P/E ratio of 21.77. This represents a premium compared to its industry's average Forward P/E of 8.34.
We can also see that AAPL currently has a PEG ratio of 1.74. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Computer - Mini computers industry currently had an average PEG ratio of 2.4 as of yesterday's close.
The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 223, putting it in the bottom 12% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual 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.
To follow AAPL in the coming trading sessions, be sure to utilize Zacks.com.
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To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In the latest trading session, Apple (AAPL) closed at $135.94, marking a +0.88% move from the previous day. AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.19 per share and revenue of $404.08 billion. We can also see that AAPL currently has a PEG ratio of 1.74.
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Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report To read this article on Zacks.com click here. In the latest trading session, Apple (AAPL) closed at $135.94, marking a +0.88% move from the previous day. AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.19 per share and revenue of $404.08 billion.
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In the latest trading session, Apple (AAPL) closed at $135.94, marking a +0.88% move from the previous day. AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.19 per share and revenue of $404.08 billion. We can also see that AAPL currently has a PEG ratio of 1.74.
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In the latest trading session, Apple (AAPL) closed at $135.94, marking a +0.88% move from the previous day. AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.19 per share and revenue of $404.08 billion. We can also see that AAPL currently has a PEG ratio of 1.74.
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17564.0
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2023-01-17 00:00:00 UTC
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After Hours Most Active for Jan 17, 2023 : UAL, GOOGL, SU, ATCO, MSFT, DIS, TSLA, AMZN, AAPL, RIG, T, VICI
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AAPL
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https://www.nasdaq.com/articles/after-hours-most-active-for-jan-17-2023-%3A-ual-googl-su-atco-msft-dis-tsla-amzn-aapl-rig-t
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nan
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The NASDAQ 100 After Hours Indicator is up 1.92 to 11,559.11. The total After hours volume is currently 110,180,953 shares traded.
The following are the most active stocks for the after hours session:
United Airlines Holdings, Inc. (UAL) is +1.01 at $52.21, with 3,856,344 shares traded. Smarter Analyst Reports: United Airlines Reports Narrower-Than-Expected Q3 Loss; Shares Rise 2.3%
Alphabet Inc. (GOOGL) is -0.04 at $91.25, with 2,932,724 shares traded. As reported by Zacks, the current mean recommendation for GOOGL is in the "buy range".
Suncor Energy Inc. (SU) is unchanged at $32.89, with 2,859,643 shares traded. SU's current last sale is 80.45% of the target price of $40.88.
Atlas Corp. (ATCO) is unchanged at $15.30, with 2,820,370 shares traded. ATCO's current last sale is 100.33% of the target price of $15.25.
Microsoft Corporation (MSFT) is -0.12 at $240.23, with 2,696,053 shares traded.MSFT is scheduled to provide an earnings report on 1/24/2023, for the fiscal quarter ending Dec2022. The consensus earnings per share forecast is 2.29 per share, which represents a 248 percent increase over the EPS one Year Ago
Walt Disney Company (The) (DIS) is -0.1 at $99.81, with 2,668,340 shares traded. As reported by Zacks, the current mean recommendation for DIS is in the "buy range".
Tesla, Inc. (TSLA) is +0.66 at $132.15, with 2,487,660 shares traded. TSLA's current last sale is 57.46% of the target price of $230.
Amazon.com, Inc. (AMZN) is -0.19 at $95.86, with 2,473,762 shares traded. As reported by Zacks, the current mean recommendation for AMZN is in the "buy range".
Apple Inc. (AAPL) is +0.09 at $136.03, with 2,445,623 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Transocean Ltd. (RIG) is -0.04 at $6.03, with 2,272,519 shares traded., following a 52-week high recorded in today's regular session.
AT&T Inc. (T) is -0.01 at $19.32, with 1,929,960 shares traded. T's current last sale is 85.87% of the target price of $22.5.
VICI Properties Inc. (VICI) is unchanged at $33.63, with 1,648,525 shares traded. Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Mar 2023. The consensus EPS forecast is $0.52. As reported by Zacks, the current mean recommendation for VICI is in the "buy range".
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple Inc. (AAPL) is +0.09 at $136.03, with 2,445,623 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Microsoft Corporation (MSFT) is -0.12 at $240.23, with 2,696,053 shares traded.MSFT is scheduled to provide an earnings report on 1/24/2023, for the fiscal quarter ending Dec2022.
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Apple Inc. (AAPL) is +0.09 at $136.03, with 2,445,623 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Smarter Analyst Reports: United Airlines Reports Narrower-Than-Expected Q3 Loss; Shares Rise 2.3%
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Apple Inc. (AAPL) is +0.09 at $136.03, with 2,445,623 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The total After hours volume is currently 110,180,953 shares traded.
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Apple Inc. (AAPL) is +0.09 at $136.03, with 2,445,623 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Amazon.com, Inc. (AMZN) is -0.19 at $95.86, with 2,473,762 shares traded.
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17565.0
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2023-01-17 00:00:00 UTC
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Goldman slams into unwelcome sort of volatility
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AAPL
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https://www.nasdaq.com/articles/goldman-slams-into-unwelcome-sort-of-volatility
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nan
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nan
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Reuters
Reuters
NEW YORK (Reuters Breakingviews) - The similarities between Goldman Sachs and Morgan Stanley are drawing attention to what makes them different. It’s a problem for Goldman Chief Executive David Solomon.
Both Wall Street giants on Tuesday reported a slump in fourth-quarter earnings. Investment banking fees halved year-on-year for each, though Goldman generated roughly 50% more from deal advice and underwriting stocks and bonds than its archrival. Goldman’s trading revenue also increased nearly one-fifth from the last three months of 2021, while Morgan Stanley’s fell 12%.
When investment banking activity wilts, investors scrutinize the other businesses. Whereas Morgan Stanley boss James Gorman has successfully poured energy and capital into wealth management, which delivered an 18% return on equity, Solomon for years promised growth would come from consumer lending initiatives such as its credit card with Apple. It hasn’t, yet. The division Goldman now calls “platform solutions” generated a negative 65% return in the fourth quarter.
The problem is that while Main Street banking was meant to add predictability to Goldman’s earnings, it has done the opposite. It lost nearly $4 billion over the past three years before tax, recent filings show. Back in 2019, Solomon told shareholders the consumer push had eaten up around $1 billion, suggesting the cumulative number is now somewhere around $5 billion.
Some of that is just bad luck: Banks must now take bad-debt charges when loans are made, which wasn’t the case when Goldman embarked on the strategy. Solomon concedes there are other problems, too, from personnel to plain-old overreaching. By waiting years to detail losses in a business once touted as “game-changing,” Goldman has lost some credibility. Meanwhile, Morgan Stanley has stolen a march: Half its revenue is now from wealth management, and on Tuesday Gorman reaffirmed a longer-term goal of accumulating $10 trillion of assets, more than fund colossus BlackRock has today.
It leaves Goldman on the back foot, and Solomon with something to prove, at the firm’s investor presentation next month. During the decade before he took over, Goldman traded at a premium to Morgan Stanley. Now investors value a dollar of Morgan Stanley’s net assets as if it was worth 40% more than the same dollar at Goldman, according to Refinitiv data. While the idea may be to stop investors from comparing the two, the discrepancies make it hard for them not to.
Follow @johnsfoley on Twitter
CONTEXT NEWS
Goldman Sachs said on Jan. 17 that it generated earnings per share of $3.32 for the fourth quarter of 2022, a 69% decline from a year earlier and 40% below what analysts had estimated, according to Refinitiv.
Separately, rival Morgan Stanley reported earnings per share of $1.26 for the same three-month period, 37% less than for the same span in 2021, and slightly higher than analysts’ forecasts, according to Refinitiv.
Goldman reported a $2 billion full-year loss for its new “platform solutions” division, which includes the credit card it offers alongside iPhone maker Apple. The loss is roughly double that of 2021, based on restated earnings published on Jan. 13.
The investment bank’s revenue from trading securities increased almost one-fifth to $4.8 billion while fees from advising on mergers and acquisitions and underwriting stock and bond issues roughly halved year-on-year. JPMorgan, Bank of America and Citigroup on Jan. 13 reported similar plunges in deal-related fees.
(Editing by Jeffrey Goldfarb and Sharon Lam)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Whereas Morgan Stanley boss James Gorman has successfully poured energy and capital into wealth management, which delivered an 18% return on equity, Solomon for years promised growth would come from consumer lending initiatives such as its credit card with Apple. Meanwhile, Morgan Stanley has stolen a march: Half its revenue is now from wealth management, and on Tuesday Gorman reaffirmed a longer-term goal of accumulating $10 trillion of assets, more than fund colossus BlackRock has today. The investment bank’s revenue from trading securities increased almost one-fifth to $4.8 billion while fees from advising on mergers and acquisitions and underwriting stock and bond issues roughly halved year-on-year.
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Investment banking fees halved year-on-year for each, though Goldman generated roughly 50% more from deal advice and underwriting stocks and bonds than its archrival. The division Goldman now calls “platform solutions” generated a negative 65% return in the fourth quarter. Goldman reported a $2 billion full-year loss for its new “platform solutions” division, which includes the credit card it offers alongside iPhone maker Apple.
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NEW YORK (Reuters Breakingviews) - The similarities between Goldman Sachs and Morgan Stanley are drawing attention to what makes them different. Investment banking fees halved year-on-year for each, though Goldman generated roughly 50% more from deal advice and underwriting stocks and bonds than its archrival. Now investors value a dollar of Morgan Stanley’s net assets as if it was worth 40% more than the same dollar at Goldman, according to Refinitiv data.
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NEW YORK (Reuters Breakingviews) - The similarities between Goldman Sachs and Morgan Stanley are drawing attention to what makes them different. It’s a problem for Goldman Chief Executive David Solomon. Goldman’s trading revenue also increased nearly one-fifth from the last three months of 2021, while Morgan Stanley’s fell 12%.
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17566.0
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2023-01-17 00:00:00 UTC
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Dow Analyst Moves: AAPL
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AAPL
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https://www.nasdaq.com/articles/dow-analyst-moves%3A-aapl-3
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nan
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nan
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The latest tally of analyst opinions from the major brokerage houses shows that among the 30 stocks making up the Dow Jones Industrial Average, Apple is the #6 analyst pick. Apple also comes in above the median of analyst picks among the broader S&P 500 index components, claiming the #65 spot out of 500.
Looking at the stock price movement year to date, Apple is showing a gain of 4.0%.
VIDEO: Dow Analyst Moves: AAPL
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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VIDEO: Dow Analyst Moves: AAPL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The latest tally of analyst opinions from the major brokerage houses shows that among the 30 stocks making up the Dow Jones Industrial Average, Apple is the #6 analyst pick. Apple also comes in above the median of analyst picks among the broader S&P 500 index components, claiming the #65 spot out of 500.
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VIDEO: Dow Analyst Moves: AAPL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The latest tally of analyst opinions from the major brokerage houses shows that among the 30 stocks making up the Dow Jones Industrial Average, Apple is the #6 analyst pick. Apple also comes in above the median of analyst picks among the broader S&P 500 index components, claiming the #65 spot out of 500.
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VIDEO: Dow Analyst Moves: AAPL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The latest tally of analyst opinions from the major brokerage houses shows that among the 30 stocks making up the Dow Jones Industrial Average, Apple is the #6 analyst pick. Apple also comes in above the median of analyst picks among the broader S&P 500 index components, claiming the #65 spot out of 500.
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VIDEO: Dow Analyst Moves: AAPL The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. The latest tally of analyst opinions from the major brokerage houses shows that among the 30 stocks making up the Dow Jones Industrial Average, Apple is the #6 analyst pick. Apple also comes in above the median of analyst picks among the broader S&P 500 index components, claiming the #65 spot out of 500.
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17567.0
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2023-01-17 00:00:00 UTC
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Apple Unveils New MacBook Pro Powered By M2 Pro And M2 Max Chips
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AAPL
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https://www.nasdaq.com/articles/apple-unveils-new-macbook-pro-powered-by-m2-pro-and-m2-max-chips
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nan
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(RTTNews) - Apple Inc. (AAPL) Tuesday launched the new 14- and 16-inch MacBook Pro featuring M2 Pro and M2 Max, Apple's next-generation pro silicon chips.
MacBook Pro's battery can now last up to 22 hours, the longest battery life ever in a Mac. The new MacBook Pro supports Wi-Fi 6E, as well as advanced HDMI, which supports 8K displays for the first time. Customers can order the new 14- and 16-inch MacBook Pro today, with availability beginning Tuesday, January 24.
"MacBook Pro with Apple silicon has been a game changer, empowering pros to push the limits of their workflows while on the go and do things they never thought possible on a laptop," said Greg Joswiak, Apple's senior vice president of Worldwide Marketing. "Today the MacBook Pro gets even better. With faster performance, enhanced connectivity, and the longest battery life ever in a Mac, along with the best display in a laptop, there's simply nothing else like it."
Apple also launched M2 Pro and M2 Max, two next-generation SoCs (systems on a chip).
"Only Apple is building SoCs like M2 Pro and M2 Max. They deliver incredible pro performance along with industry-leading power efficiency," said Johny Srouji, Apple's senior vice president of Hardware Technologies. "With an even more powerful CPU and GPU, support for a larger unified memory system, and an advanced media engine, M2 Pro and M2 Max represent astonishing advancements in Apple silicon."
M2 Pro scales up the architecture of M2 to deliver an up to 12-core CPU and up to 19-core GPU, together with up to 32GB of fast unified memory. M2 Max builds on the capabilities of M2 Pro, including an up to 38-core GPU, double the unified memory bandwidth, and up to 96GB of unified memory.
Built using a second-generation 5-nanometer process technology, M2 Pro consists of 40 billion transistors — nearly 20 percent more than M1 Pro, and double the amount in M2. It features 200GB/s of unified memory bandwidth — twice that of M2 — and up to 32GB of low-latency unified memory. The next-generation 10- or 12-core CPU consists of up to eight high-performance cores and four high-efficiency cores, resulting in multithreaded CPU performance that is up to 20 percent faster than the 10-core CPU in M1 Pro.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(RTTNews) - Apple Inc. (AAPL) Tuesday launched the new 14- and 16-inch MacBook Pro featuring M2 Pro and M2 Max, Apple's next-generation pro silicon chips. With faster performance, enhanced connectivity, and the longest battery life ever in a Mac, along with the best display in a laptop, there's simply nothing else like it." They deliver incredible pro performance along with industry-leading power efficiency," said Johny Srouji, Apple's senior vice president of Hardware Technologies.
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(RTTNews) - Apple Inc. (AAPL) Tuesday launched the new 14- and 16-inch MacBook Pro featuring M2 Pro and M2 Max, Apple's next-generation pro silicon chips. Apple also launched M2 Pro and M2 Max, two next-generation SoCs (systems on a chip). "With an even more powerful CPU and GPU, support for a larger unified memory system, and an advanced media engine, M2 Pro and M2 Max represent astonishing advancements in Apple silicon."
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(RTTNews) - Apple Inc. (AAPL) Tuesday launched the new 14- and 16-inch MacBook Pro featuring M2 Pro and M2 Max, Apple's next-generation pro silicon chips. "With an even more powerful CPU and GPU, support for a larger unified memory system, and an advanced media engine, M2 Pro and M2 Max represent astonishing advancements in Apple silicon." M2 Max builds on the capabilities of M2 Pro, including an up to 38-core GPU, double the unified memory bandwidth, and up to 96GB of unified memory.
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(RTTNews) - Apple Inc. (AAPL) Tuesday launched the new 14- and 16-inch MacBook Pro featuring M2 Pro and M2 Max, Apple's next-generation pro silicon chips. "With an even more powerful CPU and GPU, support for a larger unified memory system, and an advanced media engine, M2 Pro and M2 Max represent astonishing advancements in Apple silicon." The next-generation 10- or 12-core CPU consists of up to eight high-performance cores and four high-efficiency cores, resulting in multithreaded CPU performance that is up to 20 percent faster than the 10-core CPU in M1 Pro.
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17568.0
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2023-01-17 00:00:00 UTC
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The Technology Select Sector SPDR Fund Experiences Big Outflow
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AAPL
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https://www.nasdaq.com/articles/the-technology-select-sector-spdr-fund-experiences-big-outflow-4
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nan
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nan
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Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the The Technology Select Sector SPDR Fund (Symbol: XLK) where we have detected an approximate $659.0 million dollar outflow -- that's a 1.6% decrease week over week (from 307,110,000 to 302,060,000). Among the largest underlying components of XLK, in trading today Apple Inc (Symbol: AAPL) is up about 1.4%, Microsoft Corporation (Symbol: MSFT) is up about 0.4%, and Accenture plc (Symbol: ACN) is up by about 1.8%. For a complete list of holdings, visit the XLK Holdings page » The chart below shows the one year price performance of XLK, versus its 200 day moving average:
Looking at the chart above, XLK's low point in its 52 week range is $112.97 per share, with $164.32 as the 52 week high point — that compares with a last trade of $131.52. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs experienced notable outflows »
Also see:
Top Ten Hedge Funds Holding GJV
Top Ten Hedge Funds Holding VLT
Institutional Holders of MOON
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Among the largest underlying components of XLK, in trading today Apple Inc (Symbol: AAPL) is up about 1.4%, Microsoft Corporation (Symbol: MSFT) is up about 0.4%, and Accenture plc (Symbol: ACN) is up by about 1.8%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the The Technology Select Sector SPDR Fund (Symbol: XLK) where we have detected an approximate $659.0 million dollar outflow -- that's a 1.6% decrease week over week (from 307,110,000 to 302,060,000). These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand.
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Among the largest underlying components of XLK, in trading today Apple Inc (Symbol: AAPL) is up about 1.4%, Microsoft Corporation (Symbol: MSFT) is up about 0.4%, and Accenture plc (Symbol: ACN) is up by about 1.8%. For a complete list of holdings, visit the XLK Holdings page » The chart below shows the one year price performance of XLK, versus its 200 day moving average: Looking at the chart above, XLK's low point in its 52 week range is $112.97 per share, with $164.32 as the 52 week high point — that compares with a last trade of $131.52. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed).
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Among the largest underlying components of XLK, in trading today Apple Inc (Symbol: AAPL) is up about 1.4%, Microsoft Corporation (Symbol: MSFT) is up about 0.4%, and Accenture plc (Symbol: ACN) is up by about 1.8%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the The Technology Select Sector SPDR Fund (Symbol: XLK) where we have detected an approximate $659.0 million dollar outflow -- that's a 1.6% decrease week over week (from 307,110,000 to 302,060,000). For a complete list of holdings, visit the XLK Holdings page » The chart below shows the one year price performance of XLK, versus its 200 day moving average: Looking at the chart above, XLK's low point in its 52 week range is $112.97 per share, with $164.32 as the 52 week high point — that compares with a last trade of $131.52.
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Among the largest underlying components of XLK, in trading today Apple Inc (Symbol: AAPL) is up about 1.4%, Microsoft Corporation (Symbol: MSFT) is up about 0.4%, and Accenture plc (Symbol: ACN) is up by about 1.8%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the The Technology Select Sector SPDR Fund (Symbol: XLK) where we have detected an approximate $659.0 million dollar outflow -- that's a 1.6% decrease week over week (from 307,110,000 to 302,060,000). For a complete list of holdings, visit the XLK Holdings page » The chart below shows the one year price performance of XLK, versus its 200 day moving average: Looking at the chart above, XLK's low point in its 52 week range is $112.97 per share, with $164.32 as the 52 week high point — that compares with a last trade of $131.52.
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17569.0
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2023-01-17 00:00:00 UTC
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Will Warren Buffett Own a Virtual Reality Stock in 2023?
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AAPL
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https://www.nasdaq.com/articles/will-warren-buffett-own-a-virtual-reality-stock-in-2023
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nan
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nan
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One of the more interesting places to look for investing ideas is the list of companies owned by Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). Its longtime CEO Warren Buffett is famous for his investing acumen, making Berkshire's portfolio a fascinating look into the mind of one of the world's greatest investors.
Buffett has a reputation for sticking within his circle of competence. Insurance companies and railroads are more commonly associated with Buffett than emerging technology. However, if the rumors are to be believed, there's a chance that Buffett may find himself as the owner of a virtual reality business before the end of 2023.
Apple and the constant rumors
While anything is possible, if the Berkshire portfolio ends up owning a virtual reality company, it's mostly likely to be because of Apple (NASDAQ: AAPL). While it's commonly believed that it was one of Buffett's lieutenants at Berkshire who first took a stake in the consumer tech giant, Buffett has been effusive in his praise of Apple and its CEO Tim Cook. Over the years, Apple has grown to become Berkshire's largest holding.
There have been speculation for years that Apple is developing an augmented reality (AR) or virtual reality (VR) device. Over the past months these rumors heated up, with reports that references to an AR/VR device were found in code for other device apps.
While these are still rumors, Apple's track record suggests that the creation of a brand-new device that could define a new category is believable. After all, the iPhone, iPad, and Apple Watch were significant in the development of the global smartphone, tablet, and smartwatch markets.
Apple also has several years of experience in the AR space already. In June of 2017, Apple introduced development software to integrate AR into its latest iPhone operating system. In the ensuing years, more and more companies have added AR features to their apps. This has given Apple years of data and feedback so that if the company does debut a hardware device this year, it won't be starting from scratch.
Don't buy the rumor, buy the business
To be clear, rumors about a new device should not be a reason for investors to buy Apple stock. There's always a chance Apple abandons this idea, or that the timeline gets delayed. Fortunately for both Berkshire and individual shareholders, Apple is still a wonderful business to own.
When Apple reported its 2022 results (for its fiscal year, ending in September), it was a clear demonstration that it is still a strong growth company. While its year-over-year revenue increase was only 8%, Apple saw growth in all but its iPad product categories. Additionally, net sales increased in every geography other than Japan.
This growth led to $111 billion in free cash flow. In a clear demonstration of Apple's strong financial position, this is the cash left over after any investments it made into a potential AR/VR device. Even if the new hardware doesn't come to pass, investors are owning one of the best businesses in the world.
Lastly, Apple has a long track record of rewarding shareholders. Over the past 10 years, Apple has reduced its shares outstanding by about 40%. Share buybacks have the effect of making each share owned by an investor worth more, which is a nice benefit to owning Apple stock.
Should investors buy Apple stock now?
Apple may or may not release an AR/VR device in 2023. Considering that Apple is a wonderful company to own regardless, I think the recent rumors are an interesting reason to take a second look at the business for those who are not already shareholders.
If the new device does get announced, Apple has a track record of success in new hardware categories and this could be good news for the company. If the year ends with no new device, Apple is still a worthy addition to any portfolio.
10 stocks we like better than Apple
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*Stock Advisor returns as of January 9, 2023
Jeff Santoro has positions in Apple and Berkshire Hathaway. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple and the constant rumors While anything is possible, if the Berkshire portfolio ends up owning a virtual reality company, it's mostly likely to be because of Apple (NASDAQ: AAPL). Its longtime CEO Warren Buffett is famous for his investing acumen, making Berkshire's portfolio a fascinating look into the mind of one of the world's greatest investors. When Apple reported its 2022 results (for its fiscal year, ending in September), it was a clear demonstration that it is still a strong growth company.
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Apple and the constant rumors While anything is possible, if the Berkshire portfolio ends up owning a virtual reality company, it's mostly likely to be because of Apple (NASDAQ: AAPL). One of the more interesting places to look for investing ideas is the list of companies owned by Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple.
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Apple and the constant rumors While anything is possible, if the Berkshire portfolio ends up owning a virtual reality company, it's mostly likely to be because of Apple (NASDAQ: AAPL). Don't buy the rumor, buy the business To be clear, rumors about a new device should not be a reason for investors to buy Apple stock. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple.
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Apple and the constant rumors While anything is possible, if the Berkshire portfolio ends up owning a virtual reality company, it's mostly likely to be because of Apple (NASDAQ: AAPL). While it's commonly believed that it was one of Buffett's lieutenants at Berkshire who first took a stake in the consumer tech giant, Buffett has been effusive in his praise of Apple and its CEO Tim Cook. Even if the new hardware doesn't come to pass, investors are owning one of the best businesses in the world.
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17570.0
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2023-01-17 00:00:00 UTC
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Microsoft Is Playing the Long Game in Artificial Intelligence
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AAPL
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https://www.nasdaq.com/articles/microsoft-is-playing-the-long-game-in-artificial-intelligence
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nan
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nan
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Microsoft (NASDAQ: MSFT) is reported to be investing $10 billion into OpenAI, the creator of ChatGPT. The company's cloud resources, business customers, and large amount of data resources make it a perfect partner to improve the artificial intelligence models and create a business model for it. Travis Hoium covers why Microsoft isn't doing this for headlines, it's playing the long game.
*Stock prices used were end-of-day prices of Jan. 12, 2023. The video was published on Jan. 17, 2023.
10 stocks we like better than Microsoft
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Microsoft wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Travis Hoium has positions in Alphabet and Apple. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Microsoft (NASDAQ: MSFT) is reported to be investing $10 billion into OpenAI, the creator of ChatGPT. Travis Hoium covers why Microsoft isn't doing this for headlines, it's playing the long game. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, and Microsoft. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.
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See the 10 stocks *Stock Advisor returns as of January 9, 2023 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, and Microsoft.
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See the 10 stocks *Stock Advisor returns as of January 9, 2023 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Travis Hoium has positions in Alphabet and Apple. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, and Microsoft.
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17571.0
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2023-01-17 00:00:00 UTC
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US STOCKS-Wall St dips after Goldman profit miss, China concerns weigh
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AAPL
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https://www.nasdaq.com/articles/us-stocks-wall-st-dips-after-goldman-profit-miss-china-concerns-weigh
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nan
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nan
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For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window
Goldman Sachs falls on bigger-than-expected Q4 profit drop
Morgan Stanley gains on Q4 profit beat
Microsoft falls on Guggenheim downgrade
China ADRs down on weak domestic economic data
Indexes down: Dow 0.43%, S&P 0.06%, Nasdaq 0.22%
Updates to market open
By Shreyashi Sanyal and Amruta Khandekar
Jan 17 (Reuters) - Wall Street's main indexes slipped on Tuesday as Goldman Sachs missed quarterly profit estimates, worsening sentiment already dented by concerns of a slowdown in China's economic growth.
Goldman Sachs Group IncGS.N fell 3.5% after the bank reported a bigger-than-expected drop in quarterly profit, weighing the most on the Dow Jones Industrial Average .DJI.
Morgan StanleyMS.N jumped 4.4% as it beat analysts' estimates for fourth-quarter profit as its trading business got a boost from market volatility.
"Widely expected to be awful, Goldman Sachs' quarterly results were even more miserable than anticipated," said Octavio Marenzi, chief executive at consultancy Opimas.
Shares of Microsoft Corp MSFT.O were a drag on the Nasdaq .IXIC, falling 0.4%, after Guggenheim downgraded them to "sell" from "neutral", cautioning of a likely disappointing full-year outlook.
Other Big Tech and growth stocks such as Amazon.com Inc AMZN.O and Apple Inc AAPL.O were mixed, while Tesla TSLA.O shares were up 4%, keeping the pressure off the benchmark S&P 500 .SPX.
The S&P 500 energy .SPNY and consumer staples .SPLRCS sectors were up about 0.6% each, while financial stocks .SPSY fell 0.6%.
Earnings from Goldman Sachs and Morgan Stanley wrap up a mixed reporting season for big banks, most of which have put aside rainy-day funds to prepare for a looming recession.
Analysts expect year-over-year earnings from S&P 500 companies to decline 2.4% for the quarter, according to Refinitiv data.
Investors will keep an eye out for economic data, including retail sales, later in the week, as well as comments from Federal Reserve officials for clues on the central bank's rate hike trajectory.
Markets have started 2023 on a strong footing on hopes that a moderation in inflationary pressures and some signs of cooling in the labor market could give the Fed cover to dial down the size of its interest rate hikes.
Money market participants are currently expecting a 25-basis point interest rate hike from the Fed in February and see rates peaking at 4.94% in June. FEDWATCH
U.S.-listed stocks of Chinese companies such as JD.Com Inc JD.O, Baidu Inc BIDU.O and Bilibili Inc BILI.O fell between 4.9% and 6.4% after China's economic growth in 2022 slumped to one of its worst levels in nearly half a century.
"I think it's a combination of some minor profit taking after a very strong rally last week and the news out of China," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
At 9:42 a.m. ET, the Dow Jones Industrial Average .DJI was down 147.35 points, or 0.43%, at 34,155.26, the S&P 500 .SPX was down 2.24 points, or 0.06%, at 3,996.85, and the Nasdaq Composite .IXIC was down 24.64 points, or 0.22%, at 11,054.51.
Insurer Travelers Cos Inc TRV.N fell 3%, among other drags on the Dow, after forecasting fourth-quarter earnings below estimates.
Advancing issues outnumbered decliners for a 1.17-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.18-to-1 ratio on the Nasdaq.
The S&P index recorded seven new 52-week highs and no new low, while the Nasdaq recorded 46 new highs and six new lows.
(Reporting by Shubham Batra, Shreyashi Sanyal and Amruta Khandekar in Bengaluru; Additional reporting by Bansari Mayur Kamdar; Editing by Vinay Dwivedi and Shounak Dasgupta)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Other Big Tech and growth stocks such as Amazon.com Inc AMZN.O and Apple Inc AAPL.O were mixed, while Tesla TSLA.O shares were up 4%, keeping the pressure off the benchmark S&P 500 .SPX. Earnings from Goldman Sachs and Morgan Stanley wrap up a mixed reporting season for big banks, most of which have put aside rainy-day funds to prepare for a looming recession. Investors will keep an eye out for economic data, including retail sales, later in the week, as well as comments from Federal Reserve officials for clues on the central bank's rate hike trajectory.
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Other Big Tech and growth stocks such as Amazon.com Inc AMZN.O and Apple Inc AAPL.O were mixed, while Tesla TSLA.O shares were up 4%, keeping the pressure off the benchmark S&P 500 .SPX. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window Goldman Sachs falls on bigger-than-expected Q4 profit drop Morgan Stanley gains on Q4 profit beat Microsoft falls on Guggenheim downgrade China ADRs down on weak domestic economic data Indexes down: Dow 0.43%, S&P 0.06%, Nasdaq 0.22% Updates to market open By Shreyashi Sanyal and Amruta Khandekar Jan 17 (Reuters) - Wall Street's main indexes slipped on Tuesday as Goldman Sachs missed quarterly profit estimates, worsening sentiment already dented by concerns of a slowdown in China's economic growth. Goldman Sachs Group IncGS.N fell 3.5% after the bank reported a bigger-than-expected drop in quarterly profit, weighing the most on the Dow Jones Industrial Average .DJI.
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Other Big Tech and growth stocks such as Amazon.com Inc AMZN.O and Apple Inc AAPL.O were mixed, while Tesla TSLA.O shares were up 4%, keeping the pressure off the benchmark S&P 500 .SPX. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window Goldman Sachs falls on bigger-than-expected Q4 profit drop Morgan Stanley gains on Q4 profit beat Microsoft falls on Guggenheim downgrade China ADRs down on weak domestic economic data Indexes down: Dow 0.43%, S&P 0.06%, Nasdaq 0.22% Updates to market open By Shreyashi Sanyal and Amruta Khandekar Jan 17 (Reuters) - Wall Street's main indexes slipped on Tuesday as Goldman Sachs missed quarterly profit estimates, worsening sentiment already dented by concerns of a slowdown in China's economic growth. Goldman Sachs Group IncGS.N fell 3.5% after the bank reported a bigger-than-expected drop in quarterly profit, weighing the most on the Dow Jones Industrial Average .DJI.
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Other Big Tech and growth stocks such as Amazon.com Inc AMZN.O and Apple Inc AAPL.O were mixed, while Tesla TSLA.O shares were up 4%, keeping the pressure off the benchmark S&P 500 .SPX. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window Goldman Sachs falls on bigger-than-expected Q4 profit drop Morgan Stanley gains on Q4 profit beat Microsoft falls on Guggenheim downgrade China ADRs down on weak domestic economic data Indexes down: Dow 0.43%, S&P 0.06%, Nasdaq 0.22% Updates to market open By Shreyashi Sanyal and Amruta Khandekar Jan 17 (Reuters) - Wall Street's main indexes slipped on Tuesday as Goldman Sachs missed quarterly profit estimates, worsening sentiment already dented by concerns of a slowdown in China's economic growth. Goldman Sachs Group IncGS.N fell 3.5% after the bank reported a bigger-than-expected drop in quarterly profit, weighing the most on the Dow Jones Industrial Average .DJI.
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17572.0
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2023-01-17 00:00:00 UTC
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Should Investors Bite Into Apple (AAPL) Stock?
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AAPL
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https://www.nasdaq.com/articles/should-investors-bite-into-apple-aapl-stock
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nan
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nan
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D
riven by prolonged monetary tightening, the tech-heavy Nasdaq Composite Index suffered the worst of the three major averages in 2022, and among the biggest decliners were large-cap technology stocks such as Apple (AAPL).
Although Apple ended the year as the world's most valuable company, it suffered a massive market cap decline of roughly $755 billion, ending the year with a market valuation of $2.07 trillion. However, after licking their wounds in 2022, Apple investors have some strong catalysts to be excited about in 2023. To be sure, inflation continues to drive higher operating expenses for several companies like Apple, which remains a headwind for its profit margins. This has not been lost to the market, however.
In fact, Friday’s close of $134.76 is still about 13.5% below its three-month high of $155.74, which it logged on October 28. The reason for the recent decline has been due to a combination of factors, namely growing concerns about the growth of the Services segment, in particular the App Store, as well as iPhone unit shipments. Last Wednesday, analyst Tim Long at Barclays cited the company's recent production issues in China and "weakening demand" across certain hardware categories, and lowered his earnings estimates not only for the just-ended first quarter, but also for the second quarter and the entire fiscal year.
"What started out as production driven cuts has moved to demand weakness across product categories," wrote Long. "We are also concerned by decelerating Services growth. We are lowering estimates accordingly.” Long’s concerns are valid as the company has suffered from prolonged labor shortages at its main production facility in China. Supply chain disruptions and rising inflation have also been among the many events that have pressured the company's revenue and profits in 2022.
However, it’s hard to ignore the attractive valuation in Apple heading into 2023. While iPhone sales generate a sizable portion of revenues, Apple’s collective high-margin Services businesses are also growing. Apple Services segment in 2022 generated a gross margin of 72%, compared to 36% for hardware and devices. In 2023, investors can expect stronger revenue growth and margin expansion, thanks to price increases on Apple Music, TV+ and its One bundle. It remains to be seen if the Services segment can power the company through what is expected to be a tough hardware environment.
Apple is set to report first quarter fiscal 2023 earnings on Thursday, Feb 2 after the close. In the three months that ended December, Wall Street expects the company to earn $1.95 per share on revenue of $122 billion. This compares to the year-ago quarter when earnings came to $2.10 per share on revenue of $123.94 billion. This means both revenue and profits are expected to decline.
Still, outside of fundamental reasons, Apple rarely suffers stock declines in back-to-back years. In fact, Apple stock often outperforms the market following a down year, producing median return of 35%. Not only is that return stronger than its FAANG peers, it is also ten percentage points higher than the company’s typical annual return of about 24.5% since its IPO in 1980. With a consensus analyst price target of $176, which suggests 30% upside from current levels, Apple stock should be on any short list of stocks to buy in 2023.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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riven by prolonged monetary tightening, the tech-heavy Nasdaq Composite Index suffered the worst of the three major averages in 2022, and among the biggest decliners were large-cap technology stocks such as Apple (AAPL). The reason for the recent decline has been due to a combination of factors, namely growing concerns about the growth of the Services segment, in particular the App Store, as well as iPhone unit shipments. We are lowering estimates accordingly.” Long’s concerns are valid as the company has suffered from prolonged labor shortages at its main production facility in China.
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riven by prolonged monetary tightening, the tech-heavy Nasdaq Composite Index suffered the worst of the three major averages in 2022, and among the biggest decliners were large-cap technology stocks such as Apple (AAPL). Although Apple ended the year as the world's most valuable company, it suffered a massive market cap decline of roughly $755 billion, ending the year with a market valuation of $2.07 trillion. Last Wednesday, analyst Tim Long at Barclays cited the company's recent production issues in China and "weakening demand" across certain hardware categories, and lowered his earnings estimates not only for the just-ended first quarter, but also for the second quarter and the entire fiscal year.
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riven by prolonged monetary tightening, the tech-heavy Nasdaq Composite Index suffered the worst of the three major averages in 2022, and among the biggest decliners were large-cap technology stocks such as Apple (AAPL). Although Apple ended the year as the world's most valuable company, it suffered a massive market cap decline of roughly $755 billion, ending the year with a market valuation of $2.07 trillion. Last Wednesday, analyst Tim Long at Barclays cited the company's recent production issues in China and "weakening demand" across certain hardware categories, and lowered his earnings estimates not only for the just-ended first quarter, but also for the second quarter and the entire fiscal year.
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riven by prolonged monetary tightening, the tech-heavy Nasdaq Composite Index suffered the worst of the three major averages in 2022, and among the biggest decliners were large-cap technology stocks such as Apple (AAPL). This means both revenue and profits are expected to decline. Still, outside of fundamental reasons, Apple rarely suffers stock declines in back-to-back years.
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17573.0
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2023-01-17 00:00:00 UTC
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Should Vanguard Mega Cap Growth ETF (MGK) Be on Your Investing Radar?
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AAPL
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https://www.nasdaq.com/articles/should-vanguard-mega-cap-growth-etf-mgk-be-on-your-investing-radar-5
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nan
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nan
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The Vanguard Mega Cap Growth ETF (MGK) was launched on 12/17/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Vanguard. It has amassed assets over $9.94 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.07%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.66%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 48.60% of the portfolio. Consumer Discretionary and Telecom round out the top three.
Looking at individual holdings, Apple Inc. (AAPL) accounts for about 15.72% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN).
The top 10 holdings account for about 55.64% of total assets under management.
Performance and Risk
MGK seeks to match the performance of the CRSP U.S. Mega Cap Growth Index before fees and expenses. The CRSP US Mega Cap Growth Index is a float-adjusted, market-capitalization-weighted index designed to measure equity market performance of mega-capitalization growth stocks in the United States.
The ETF has added about 5.63% so far this year and is down about -25.73% in the last one year (as of 01/17/2023). In the past 52-week period, it has traded between $168.21 and $241.72.
The ETF has a beta of 1.10 and standard deviation of 29.99% for the trailing three-year period, making it a medium risk choice in the space. With about 96 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Mega Cap Growth ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, MGK is a good option for those seeking exposure to the Style Box - Large Cap Growth area of the market. Investors might also want to consider some other ETF options in the space.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $71.48 billion in assets, Invesco QQQ has $151.99 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Vanguard Mega Cap Growth ETF (MGK): ETF Research Reports
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Looking at individual holdings, Apple Inc. (AAPL) accounts for about 15.72% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Click to get this free report Vanguard Mega Cap Growth ETF (MGK): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports Vanguard Growth ETF (VUG): ETF Research Reports To read this article on Zacks.com click here. It has amassed assets over $9.94 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
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Click to get this free report Vanguard Mega Cap Growth ETF (MGK): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports Vanguard Growth ETF (VUG): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc. (AAPL) accounts for about 15.72% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). The Vanguard Mega Cap Growth ETF (MGK) was launched on 12/17/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
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Click to get this free report Vanguard Mega Cap Growth ETF (MGK): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports Vanguard Growth ETF (VUG): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc. (AAPL) accounts for about 15.72% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). The Vanguard Mega Cap Growth ETF (MGK) was launched on 12/17/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
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Looking at individual holdings, Apple Inc. (AAPL) accounts for about 15.72% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Click to get this free report Vanguard Mega Cap Growth ETF (MGK): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report Invesco QQQ (QQQ): ETF Research Reports Vanguard Growth ETF (VUG): ETF Research Reports To read this article on Zacks.com click here. The Vanguard Mega Cap Growth ETF (MGK) was launched on 12/17/2007, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
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17574.0
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2023-01-17 00:00:00 UTC
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3 Great Foreign Companies to Invest In Right Now
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AAPL
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https://www.nasdaq.com/articles/3-great-foreign-companies-to-invest-in-right-now-6
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nan
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nan
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Sure, many U.S. stocks look cheap after the 2022 bear market; however, investors shouldn't restrict themselves to just U.S. stocks. Because of a lack of familiarity on the part of U.S. investors and geopolitical turmoil overseas, even some of the world's greatest, most competitively advantaged companies trade at bargain-basement valuations today -- even bigger bargains than their U.S. counterparts.
On that note, the following three stocks from Taiwan, France, and the U.K. all look like incredible deals today.
Taiwan Semiconductor Manufacturing
It's always surprising to see how cheap leading semiconductor stocks can get whenever there's a downcycle in the industry, considering the importance and growth outlook for semiconductors over the long term.
Yes, the chip industry is seeing a big inventory correction in both PCs and low-end mobile phones coming off the pandemic, but if one thinks about the rise of artificial intelligence, such as the recent release of ChatGPT, the energy transition to EVs and the smart grid, the Metaverse, and cloud and edge computing, all of these applications need lots and lots of semiconductors to work.
That's why investors should take advantage of the fact that Taiwan Semiconductor Manufacturing (NYSE: TSM), the world's leading chip foundry, can be bought at just 13 times earnings today.
TSMC has demonstrated technological manufacturing superiority cultivated over decades, with a lead in producing semiconductors at the leading edge, and a 60% estimated total market share of the foundry industry.
That dominance has allowed TSMC to raise prices to its chip designer customers this year, flexing its pricing power over the likes of even giant clients Apple and Nvidia. Growth and price increases enabled TSMC to grow earnings 70% and achieve a return on equity of 40% in 2022. And it's quite possible the mission-critical TSMC will be getting a greater share of the profitability pie from the chip industry through this decade, since virtually all semiconductor companies outsource their manufacturing and virtually all leading-edge chipmakers use TSMC.
On last week's fourth-quarter conference call, Chairman C.C. Wei touched on this topic:
The semiconductor [has] become more essential and more pervasive in people's life. And the semiconductor industry value in the supply chain is increasing. And if we look at our customers' performance, they are rising structural gross margin over the past five to six years, it continues to improve. That reflects what I just said, the semiconductors' value has been recognized and also very important in our daily life. And so, we set out our pricing strategy to reflect all the values we share to customer, and customer, also, in their value for the end market.
Management predicts the semiconductor industry will contract about 4% this year, but even in a down market, TSMC expects to see "slight growth" in 2023, because of its technological advantages. Even with no earnings growth, the past two years -- one "boom," one "bust" -- would see a two-year earnings growth rate of 35%. With its low-teens earnings multiple, it's no wonder Warren Buffett was attracted to this market leader.
TotalEnergies
France's TotalEnergies (NYSE: TTE) may be off the radar of U.S. investors more familiar with U.S.-domiciled oil and gas majors, but this is a high-yielding gem. TotalEnergies' dividend yield is currently 4.62%, but when factoring in a special dividend paid to shareholders in December thanks to the past year's high profits, that yield pops up to 5.14%.
That yield is also backed by a robust, diversified portfolio across not only integrated oil and natural gas upstream, midstream, and downstream operations, but also a growing renewables portfolio in solar and wind. The company used to be called just Total but changed its name in 2021 to TotalEnergies, reflecting its brand shift toward making the energy-focused transition.
While TotalEnergies still gets the bulk of its profits from oil and natural gas, the company has pivoted away from any fuel source that is overly carbon-intensive, even in its oil projects, and the renewables portfolio is growing quickly. This year, the company will devote 25% of capital expenditures to "decarbonized" technologies.
As a global energy producer, trader, and transporter, Total can run into hiccups. For instance, Total had to write off or sell some Russian assets last year. The company was also hit by windfall profits taxes levied by European governments.
Still, the company's profitability has soared so much that shareholders are still getting their fair share. The LNG and refining businesses saw their profitability soar after Russia's invasion of Ukraine and subsequent sanctions on Russia by Europe, taking away those competitive oil and gas products. Return on average capital employed was an impressive 27.2% over the past 12 months, allowing the company to add more renewables, pay out the special dividend, repurchase stock, and de-lever its balance sheet.
That last part is especially noteworthy, as Total now has only about $5 billion in net debt as of Sept. 30, down from $24 billion one year prior.
Considering Total's diversified portfolio, by both energy source and geography, its nearly debt-free balance sheet, and ample payouts to shareholders, the fact that the stock trades at just 5.3 times 2023 earnings estimates is surprising. It's a bargain-priced energy stock U.S. investors should consider as part of their energy sector allocation.
Farfetch
Finally, luxury e-commerce leader Farfetch (NYSE: FTCH) had a terrible 2022, capped off by a Capital Markets Day in December that I think was widely misunderstood. Overall, the stock plunged 86% in 2022. Even after a nice bounce to start 2023, it still looks wildly undervalued.
Farfetch is the leading global e-commerce marketplace for luxury brands, and it also powers many brands' direct-to-consumer websites. In addition, Farfetch owns the New Guards platform, which cultivates up-and-coming luxury brands, and also owns some brands outright itself. Each of these three businesses is high-margin in terms of gross and contribution margins, but Farfetch is unprofitable today, because of operating expenses and investments in growth.
The investing community sold off pretty much any unprofitable growth stock en masse last year. On top of that, Farfetch suffered from the shutdown of its Russian business, which was its third-largest market, and lockdowns in China, its second-largest market. Reporting in U.S. dollars, Farfetch's results were also hit by the rise of the U.S. dollar. At its Capital Markets Day on Dec. 1, the company forecast solid growth and profit numbers to 2025, but those forecasts were probably conservative, given the myriad headwinds, and that disappointed some investors. Combined with tax-loss selling opportunities, the market subsequently sold the stock to bargain-basement levels.
So 2022 was a perfect storm. Yet already, those headwinds look to be reversing. Just after the Capital Markets Day, China suddenly reopened, and the dollar has weakened against other currencies. After February, Farfetch will have lapped the shutdown of its Russia business.
Despite a nice bounce off its lows, Farfetch still trades equal to sales. This is for a company that should grow at a 20%-plus rate for the next several years at least, and should show increasing profitability as it does. Although management's 10% adjusted EBITDA margin forecast for 2025 may have underwhelmed some, Farfetch won't be done growing and scaling by then, given the size of the luxury market and Farfecth's competitive position.
Remember, luxury giant Richemont sold Farfetch's main rival, Yoox Net-a-Porter, to Farfetch this past summer, taking a large stake in Farfetch in return at a much higher valuation. That seemed to consolidate the luxury e-commerce landscape in Farfetch's favor.
The luxury industry is a resilient industry with pricing power and high margins; over the long term, Farfetch looks well positioned to capture a lot of this market, and its stock looks very cheap after a disastrous 2022.
10 stocks we like better than TSMC
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*Stock Advisor returns as of January 9, 2023
Billy Duberstein has positions in Apple, Farfetch, Taiwan Semiconductor Manufacturing, and TotalEnergies Se and has the following options: short January 2023 $210 calls on Apple. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Apple, Farfetch, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Because of a lack of familiarity on the part of U.S. investors and geopolitical turmoil overseas, even some of the world's greatest, most competitively advantaged companies trade at bargain-basement valuations today -- even bigger bargains than their U.S. counterparts. Return on average capital employed was an impressive 27.2% over the past 12 months, allowing the company to add more renewables, pay out the special dividend, repurchase stock, and de-lever its balance sheet. Considering Total's diversified portfolio, by both energy source and geography, its nearly debt-free balance sheet, and ample payouts to shareholders, the fact that the stock trades at just 5.3 times 2023 earnings estimates is surprising.
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That's why investors should take advantage of the fact that Taiwan Semiconductor Manufacturing (NYSE: TSM), the world's leading chip foundry, can be bought at just 13 times earnings today. TSMC has demonstrated technological manufacturing superiority cultivated over decades, with a lead in producing semiconductors at the leading edge, and a 60% estimated total market share of the foundry industry. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.
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Taiwan Semiconductor Manufacturing It's always surprising to see how cheap leading semiconductor stocks can get whenever there's a downcycle in the industry, considering the importance and growth outlook for semiconductors over the long term. The luxury industry is a resilient industry with pricing power and high margins; over the long term, Farfetch looks well positioned to capture a lot of this market, and its stock looks very cheap after a disastrous 2022. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Billy Duberstein has positions in Apple, Farfetch, Taiwan Semiconductor Manufacturing, and TotalEnergies Se and has the following options: short January 2023 $210 calls on Apple.
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Sure, many U.S. stocks look cheap after the 2022 bear market; however, investors shouldn't restrict themselves to just U.S. stocks. Taiwan Semiconductor Manufacturing It's always surprising to see how cheap leading semiconductor stocks can get whenever there's a downcycle in the industry, considering the importance and growth outlook for semiconductors over the long term. The luxury industry is a resilient industry with pricing power and high margins; over the long term, Farfetch looks well positioned to capture a lot of this market, and its stock looks very cheap after a disastrous 2022.
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17575.0
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2023-01-17 00:00:00 UTC
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Warren Buffett Is Raking in $4.84 Billion in Annual Dividend Income From These 6 Stocks
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AAPL
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https://www.nasdaq.com/articles/warren-buffett-is-raking-in-%244.84-billion-in-annual-dividend-income-from-these-6-stocks
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nan
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nan
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For nearly six decades as Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO, Warren Buffett has run circles around Wall Street. Through this past weekend, the Oracle of Omaha has led his company's Class A shares (BRK.A) to an aggregate return of well over 3,800,000% since taking the reins.
While there is no shortage of lists extolling the strategies Buffett has used to vastly outperform the benchmark S&P 500, it's his penchant for buying and holding dividend stocks that might be his biggest tailwind. A majority of the roughly four dozen securities held by Berkshire Hathaway pay a dividend -- and dividend stocks have a rich history of crushing their non-paying peers in the return department.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
What's particularly interesting about Berkshire's portfolio is that Buffett's love for dividend stocks is coupled with his preference for portfolio concentration. Although the Oracle of Omaha's company is on track to collect over $6 billion in dividend income this year, $4.84 billion in annual dividend income -- take note, this figure includes assets held by Buffett's secret portfolio -- is set to come from just six stocks.
1. Chevron: $964,107,966 in annual dividend income
The proverbial "Dividend King" of Berkshire Hathaway's portfolio is energy stock Chevron (NYSE: CVX), which has been aggressively bought by the Oracle of Omaha and his team over the past two years. Chevron is riding is a 35-year streak of increasing its base annual payout. One more boost and Buffett's company could be looking at a cool $1 billion in annual dividends.
Warren Buffett's seemingly new-found love for energy stocks looks to be a bet that crude oil and natural gas prices will remain above their historic norms. For that to happen, disruptions to the energy supply chain would need to persist. Russia's invasion of Ukraine, coupled with an underinvestment in drilling and exploration by global energy majors, should constrain the worldwide supply of energy commodities and provide some degree of upward lift on spot prices.
Buffett and his team are likely also a big fans of Chevron's balance sheet. The first nine months of 2022 saw the oil and gas giant reduce its net debt by 68% to just $8.2 billion. Among global energy majors, Chevron arguably has the most financial flexibility.
2. Bank of America: $908,909,765 in annual dividend income
This likely won't come as a surprise to anyone who follows Berkshire Hathaway's buying and selling activity via 13F filings, but the Oracle of Omaha and his investment team love bank stocks. In particular, they've really piled into Bank of America (NYSE: BAC), or BofA for short. Over the next 12 months, Berkshire Hathaway will collect almost $909 million in dividend income from BofA.
Buffett's fascination with bank stocks has to do with their ability to take advantage of long-winded periods of economic expansion. As loans and deposits grow, so does the bottom line for most banks. In turn, this often leads to a growing dividend and hearty share buyback program. During bull markets, it's not uncommon for Bank of America to return $20 billion to $25 billion annually to its shareholders in the form of dividends and share repurchases.
Another factor working in BofA's favor is its interest rate sensitivity. As the Federal Reserve raises interest rates, no large bank will a see bigger positive impact to its net interest income than Bank of America.
An elevated crude oil price is needed to help Occidental Petroleum pay down its debt. WTI Crude Oil Spot Price data by YCharts.
3. Occidental Petroleum: $901,062,858 in annual dividend income (includes preferred stock dividends)
Have I mentioned that energy stocks have been on the radar? Last year, Buffett and his investing lieutenants (Todd Combs and Ted Weschler) oversaw the purchase of more than 194 million shares of Occidental Petroleum (NYSE: OXY). While these common shares are netting Berkshire Hathaway $101 million in yearly dividend income, it's the $10 billion invested in Occidental preferred stock yielding 8% which is providing the bulk of income from this company ($800 million annually).
While Occidental Petroleum's catalysts are similar to Chevron, there are a few key differences. Even though both energy companies are integrated, and therefore have downstream assets they can rely on to hedge a decline in the price of crude oil, Occidental's revenue is more heavily weighted to high-margin drilling than Chevron.
The other difference can be found on Occidental's balance sheet. Normally, the Oracle of Omaha and his team avoid heavily indebted businesses. Even though Occidental has reduced its net debt by $15 billion since the end of March 2021, it's still sitting on $20.5 billion in net debt. It'll need oil prices to remain elevated to continue chipping away at its burdensome debt.
Image source: Apple.
4. Apple: $842,008,404 in annual dividend income
Another big-time income producer that should come as absolutely no surprise to most investors is tech stock Apple (NASDAQ: AAPL). Apple is Berkshire Hathaway's largest holding by a considerable amount, and is on track to provide $842 million in dividend income this year.
According to Kantar and its global BrandZ ranking, Apple is the most-valuable brand in the world. In particular, Kantar highlights the company's product innovation and differentiation to help explain why consumers love the brand. Since introducing 5G capable versions of its iPhone in late 2020, Apple has accounted for around 50% (plus or minus a few percentage points) of U.S. smartphone market share. It's innovations like these that keep customers loyal to the brand and generate mountains of operating cash flow.
But Apple's true lure, at least in the eyes of Warren Buffett, might just be its unsurpassed capital-return program. Aside from doling out one of the largest nominal-dollar dividends among publicly traded companies, Apple has repurchased $554 billion worth of its common stock in a span of 10 years. Buying back that much stock has provided a nice lift to Apple's earnings per share.
5. Coca-Cola: $704,000,000 in annual dividend income
Warren Buffett and his team are also raking in a boatload of annual dividend income from beverage stock Coca-Cola (NYSE: KO). Coke is Berkshire Hathaway's longest-held stock (since 1988), and it'll likely be increasing its base annual payout for the 61st consecutive year in 2023.
The biggest competitive edge working in Coca-Cola's favor is its geographic diversity. It holds a 14% share of all commercial beverages in developed countries, which leads to strong pricing power and predictable cash flow. Meanwhile, Coke maintains a 6% share of all commercial beverages in emerging markets and is able to take advantage of higher organic growth rates in these regions. With the exception of North Korea, Cuba, and Russia, a Coca-Cola product is available for sale in every other country right now.
Additionally, Coca-Cola's marketing has been on point for decades. Whether it's using social media to connect with young adults or leaning on its holiday ties-ins to captivate a more mature audience, Coca-Cola is one of the few brands that can easily transcend generational gaps and engage with consumers.
6. Kraft Heinz: $521,015,709 in annual dividend income
The sixth company that's allowing Warren Buffett to rake in a collective $4.84 billion in annual dividend income is consumer staples stock Kraft Heinz (NASDAQ: KHC). The company behind such brands as Kraft, Heinz, Cool Whip, Kool-Aid, and Oscar Mayer, helps Berkshire Hathaway collect $521 million in yearly income.
On one hand, Kraft Heinz has been a prime beneficiary of the COVID-19 pandemic. With people choosing to eat at home more often, the company's vast assortment of prepackaged meals, snacks, and condiments, have helped its pricing power. Since food is a basic necessity in any economic environment, cash flow for a consumer staples giant like Kraft Heinz tends to be relatively predictable.
However, Kraft Heinz is also one of Berkshire Hathaway's riskiest (and possibly worst) investments. Kraft Heinz's balance sheet is weighed down by debt and goodwill, which leaves it little flexibility to reignite interest in its brands. To boot, historically high inflation may encourage shoppers to trade down to less-costly brands. Although Kraft Heinz's payout doesn't look to be in trouble, it's not a stock I'd want to own in 2023.
10 stocks we like better than Chevron
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Chevron wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Sean Williams has positions in Bank of America. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool recommends Kraft Heinz and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple: $842,008,404 in annual dividend income Another big-time income producer that should come as absolutely no surprise to most investors is tech stock Apple (NASDAQ: AAPL). Last year, Buffett and his investing lieutenants (Todd Combs and Ted Weschler) oversaw the purchase of more than 194 million shares of Occidental Petroleum (NYSE: OXY). Even though both energy companies are integrated, and therefore have downstream assets they can rely on to hedge a decline in the price of crude oil, Occidental's revenue is more heavily weighted to high-margin drilling than Chevron.
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Apple: $842,008,404 in annual dividend income Another big-time income producer that should come as absolutely no surprise to most investors is tech stock Apple (NASDAQ: AAPL). While these common shares are netting Berkshire Hathaway $101 million in yearly dividend income, it's the $10 billion invested in Occidental preferred stock yielding 8% which is providing the bulk of income from this company ($800 million annually). Kraft Heinz: $521,015,709 in annual dividend income The sixth company that's allowing Warren Buffett to rake in a collective $4.84 billion in annual dividend income is consumer staples stock Kraft Heinz (NASDAQ: KHC).
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Apple: $842,008,404 in annual dividend income Another big-time income producer that should come as absolutely no surprise to most investors is tech stock Apple (NASDAQ: AAPL). While these common shares are netting Berkshire Hathaway $101 million in yearly dividend income, it's the $10 billion invested in Occidental preferred stock yielding 8% which is providing the bulk of income from this company ($800 million annually). Kraft Heinz: $521,015,709 in annual dividend income The sixth company that's allowing Warren Buffett to rake in a collective $4.84 billion in annual dividend income is consumer staples stock Kraft Heinz (NASDAQ: KHC).
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Apple: $842,008,404 in annual dividend income Another big-time income producer that should come as absolutely no surprise to most investors is tech stock Apple (NASDAQ: AAPL). Chevron: $964,107,966 in annual dividend income The proverbial "Dividend King" of Berkshire Hathaway's portfolio is energy stock Chevron (NYSE: CVX), which has been aggressively bought by the Oracle of Omaha and his team over the past two years. While these common shares are netting Berkshire Hathaway $101 million in yearly dividend income, it's the $10 billion invested in Occidental preferred stock yielding 8% which is providing the bulk of income from this company ($800 million annually).
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17576.0
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2023-01-17 00:00:00 UTC
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Did Amazon Just Overpay for 'Thursday Night Football'?
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AAPL
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https://www.nasdaq.com/articles/did-amazon-just-overpay-for-thursday-night-football
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nan
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nan
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The NFL regular season is now in the books, which means we not only know who's going to the playoffs but also how many people tuned in.
In the media, the biggest move this season was Amazon's (NASDAQ: AMZN) decision to purchase the exclusive rights to broadcast Thursday Night Football games outside of local markets. The company paid $11 billion to carry Thursday Night Football for 11 seasons, streaming it on Prime Video to entice more sign-ups for its membership program and as a retention tool.
With just 15 Thursday Night Football (TNF) games in the season with a preseason game thrown in, Amazon paid $67 million per regular season game this season, comparable to the budget for a Hollywood movie. With a steep price stage like that, did Amazon get its money's worth?
Image source: Getty Images.
The early results
According to a report in Business Insider, the answer seems to be no. Viewership for TNF was 25% lower than Amazon had estimated, and the company has been looking for ways to pay advertisers back for the shortfall in audiences, including giving them replacement ad inventory elsewhere.
Data from Nielsen showed that TNF games averaged 9.6 million viewers on Amazon, the lowest total since the NFL began selling the package in 2014.
Since this was the first year that games were exclusively streamed, the slide wasn't such a big surprise, though Amazon did bring in a modestly younger viewer than typical NFL games, at a median age of 47 versus 54.
Not only did the company see football as a way to increase Prime membership, it also hoped to recoup its spending for the package with advertising and burnish its relationship with advertisers, as advertising has become one of its most profitable businesses.
In some ways that makes sense for Amazon. Unlike competing platforms, it also offers the benefit of an audience that presumably shops on Amazon. If you're an advertiser that sells on Amazon, then it's a natural fit.
A pretty penny
While the logic in streaming NFL games holds, the price tag may not. Broadcast networks such as CBS, Fox, NBC, and ESPN all paid more than $2 billion per year for NFL games, but they get significantly more for their dollar than Amazon.
CBS, Fox, and NBC host games on Sunday, while ESPN has the established Monday Night Football franchise, which typically has better teams playing than Thursday Night Football.
Additionally, all four networks air playoff games and rotate to host the Super Bowl each year. They also have the ability to show games both through linear TV and streaming, unlike Amazon.
Alphabet's YouTube also just shelled out $2 billion for NFL Sunday Ticket, a subscription that allows viewers to watch out-of-market games of their choice.
Sports media rights have inflated significantly in recent years and that's likely to continue as big tech companies like Amazon, Alphabet, and even Apple vie for a piece of the live sports audience.
Amazon's contention that spending on video is a worthwhile way to drive Prime membership still seems dubious, especially because the company, more than 25 years after its founding, doesn't seem to be making money from e-commerce. Through the first three quarters of the year, Amazon lost $8 billion outside of Amazon Web Services.
The company spent $15 billion on Prime Video last year, more than any of its streaming peers, including Netflix, which represents roughly half of the revenue it brings in from Prime.
It's too early to tell if Amazon wasted money on the NFL deal. After all, the contract lasts for 11 years, and audiences and advertising could grow over that period as they get more accustomed to streaming live sports.
But a 25% miss in viewership is a clear disappointment. It's also evidence that Amazon seems too willing to spend money without a clear return on investment, one reason why the stock plunged 50% last year.
Although the company has been cutting costs across the business, it still seems to have a lot more opportunity to trim the fat. The $15 billion budget for Prime Video and $1 billion budget for Thursday Night Football show that bloated costs are hiding profits in high-margin businesses. The company could still be a lot more profitable.
Find out why Amazon.com is one of the 10 best stocks to buy now
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Amazon.com and Netflix. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, and Netflix. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In the media, the biggest move this season was Amazon's (NASDAQ: AMZN) decision to purchase the exclusive rights to broadcast Thursday Night Football games outside of local markets. The company paid $11 billion to carry Thursday Night Football for 11 seasons, streaming it on Prime Video to entice more sign-ups for its membership program and as a retention tool. Viewership for TNF was 25% lower than Amazon had estimated, and the company has been looking for ways to pay advertisers back for the shortfall in audiences, including giving them replacement ad inventory elsewhere.
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The company paid $11 billion to carry Thursday Night Football for 11 seasons, streaming it on Prime Video to entice more sign-ups for its membership program and as a retention tool. With just 15 Thursday Night Football (TNF) games in the season with a preseason game thrown in, Amazon paid $67 million per regular season game this season, comparable to the budget for a Hollywood movie. The $15 billion budget for Prime Video and $1 billion budget for Thursday Night Football show that bloated costs are hiding profits in high-margin businesses.
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With just 15 Thursday Night Football (TNF) games in the season with a preseason game thrown in, Amazon paid $67 million per regular season game this season, comparable to the budget for a Hollywood movie. Since this was the first year that games were exclusively streamed, the slide wasn't such a big surprise, though Amazon did bring in a modestly younger viewer than typical NFL games, at a median age of 47 versus 54. Broadcast networks such as CBS, Fox, NBC, and ESPN all paid more than $2 billion per year for NFL games, but they get significantly more for their dollar than Amazon.
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Not only did the company see football as a way to increase Prime membership, it also hoped to recoup its spending for the package with advertising and burnish its relationship with advertisers, as advertising has become one of its most profitable businesses. Broadcast networks such as CBS, Fox, NBC, and ESPN all paid more than $2 billion per year for NFL games, but they get significantly more for their dollar than Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, and Netflix.
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17577.0
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2023-01-17 00:00:00 UTC
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Apple supplier Foxconn replaces iPhone business chief- Bloomberg News
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AAPL
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https://www.nasdaq.com/articles/apple-supplier-foxconn-replaces-iphone-business-chief-bloomberg-news-0
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Adds background and additional details from report
Jan 17 (Reuters) - Taiwan's Foxconn 2317.TW has appointed Michael Chiang as the new boss for its iPhone assembly business after a tumultuous year in China, Bloomberg News reported on Tuesday, citing people familiar with the matter.
Chiang replaces longtime leader Wang Charng-yang as head of the iPhone assembly division, the Bloomberg report said.
Foxconn declined to comment. Apple did not immediately respond to a request for comment.
Foxconn's plant in China's Zhengzhou city, the world's largest manufacturing facility of Apple Inc's AAPL.O iPhones, was heavily affected late last year after a COVID-19 outbreak and curbs taken to control the virus prompted thousands of workers to leave.
It was also hit by a bout of worker unrest over payment issues, but the plant was almost back to full production with December shipments reaching about 90% of initial plans, sources told Reuters earlier in January.
Chiang's appointment is part of Foxconn Chairman Young Liu's efforts to elevate younger executives to maintain the company's supply chain leadership in the face of growing competition from Chinese contenders, the Bloomberg report said.
Earlier this month, the Financial Times newspaper reported that Apple was set to sign up Chinese contract manufacturer Luxshare Precision Industry Co Ltd 002475.SZ to produce premium iPhone models, to make up for lost production at Foxconn's 2317.TW Zhengzhou factory last year.
(Reporting by Lavanya Ahire in Bengaluru; Editing by Dhanya Ann Thoppil and Nivedita Bhattacharjee)
((LavanyaSushil.Ahire@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Foxconn's plant in China's Zhengzhou city, the world's largest manufacturing facility of Apple Inc's AAPL.O iPhones, was heavily affected late last year after a COVID-19 outbreak and curbs taken to control the virus prompted thousands of workers to leave. Chiang's appointment is part of Foxconn Chairman Young Liu's efforts to elevate younger executives to maintain the company's supply chain leadership in the face of growing competition from Chinese contenders, the Bloomberg report said. Earlier this month, the Financial Times newspaper reported that Apple was set to sign up Chinese contract manufacturer Luxshare Precision Industry Co Ltd 002475.SZ to produce premium iPhone models, to make up for lost production at Foxconn's 2317.TW Zhengzhou factory last year.
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Foxconn's plant in China's Zhengzhou city, the world's largest manufacturing facility of Apple Inc's AAPL.O iPhones, was heavily affected late last year after a COVID-19 outbreak and curbs taken to control the virus prompted thousands of workers to leave. Adds background and additional details from report Jan 17 (Reuters) - Taiwan's Foxconn 2317.TW has appointed Michael Chiang as the new boss for its iPhone assembly business after a tumultuous year in China, Bloomberg News reported on Tuesday, citing people familiar with the matter. Chiang replaces longtime leader Wang Charng-yang as head of the iPhone assembly division, the Bloomberg report said.
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Foxconn's plant in China's Zhengzhou city, the world's largest manufacturing facility of Apple Inc's AAPL.O iPhones, was heavily affected late last year after a COVID-19 outbreak and curbs taken to control the virus prompted thousands of workers to leave. Adds background and additional details from report Jan 17 (Reuters) - Taiwan's Foxconn 2317.TW has appointed Michael Chiang as the new boss for its iPhone assembly business after a tumultuous year in China, Bloomberg News reported on Tuesday, citing people familiar with the matter. Earlier this month, the Financial Times newspaper reported that Apple was set to sign up Chinese contract manufacturer Luxshare Precision Industry Co Ltd 002475.SZ to produce premium iPhone models, to make up for lost production at Foxconn's 2317.TW Zhengzhou factory last year.
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Foxconn's plant in China's Zhengzhou city, the world's largest manufacturing facility of Apple Inc's AAPL.O iPhones, was heavily affected late last year after a COVID-19 outbreak and curbs taken to control the virus prompted thousands of workers to leave. Adds background and additional details from report Jan 17 (Reuters) - Taiwan's Foxconn 2317.TW has appointed Michael Chiang as the new boss for its iPhone assembly business after a tumultuous year in China, Bloomberg News reported on Tuesday, citing people familiar with the matter. Chiang replaces longtime leader Wang Charng-yang as head of the iPhone assembly division, the Bloomberg report said.
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17578.0
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2023-01-17 00:00:00 UTC
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Apple launches new macbooks, Mac mini in rare January launch
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AAPL
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https://www.nasdaq.com/articles/apple-launches-new-macbooks-mac-mini-in-rare-january-launch-0
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Adds details on products
Jan 17 (Reuters) - Apple Inc AAPL.O on Tuesday unveiled new MacBooks powered with the latest M2 Pro and M2 Max chips made in-house, in a surprise announcement ahead of its traditional launch event.
The Mac mini starts at $599, cheaper than the latest iPhone 14 series, and is available beginning Jan. 24. Apple however did not provide pricing information for the laptops.
The new MacBook Pro's performance is six-times faster than the Intel-based MacBook Pro, according to Apple.
The company traditionally has four launch events in a year, with the first spring event scheduled in March, when Apple launches its iMacs and accessories.
(Reporting by Nivedita Balu in Bengaluru; Editing by Shounak Dasgupta)
((Nivedita.Balu@thomsonreuters.com; Twitter: @niveditabalu))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Adds details on products Jan 17 (Reuters) - Apple Inc AAPL.O on Tuesday unveiled new MacBooks powered with the latest M2 Pro and M2 Max chips made in-house, in a surprise announcement ahead of its traditional launch event. The Mac mini starts at $599, cheaper than the latest iPhone 14 series, and is available beginning Jan. 24. (Reporting by Nivedita Balu in Bengaluru; Editing by Shounak Dasgupta) ((Nivedita.Balu@thomsonreuters.com; Twitter: @niveditabalu)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Adds details on products Jan 17 (Reuters) - Apple Inc AAPL.O on Tuesday unveiled new MacBooks powered with the latest M2 Pro and M2 Max chips made in-house, in a surprise announcement ahead of its traditional launch event. The new MacBook Pro's performance is six-times faster than the Intel-based MacBook Pro, according to Apple. The company traditionally has four launch events in a year, with the first spring event scheduled in March, when Apple launches its iMacs and accessories.
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Adds details on products Jan 17 (Reuters) - Apple Inc AAPL.O on Tuesday unveiled new MacBooks powered with the latest M2 Pro and M2 Max chips made in-house, in a surprise announcement ahead of its traditional launch event. The new MacBook Pro's performance is six-times faster than the Intel-based MacBook Pro, according to Apple. The company traditionally has four launch events in a year, with the first spring event scheduled in March, when Apple launches its iMacs and accessories.
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Adds details on products Jan 17 (Reuters) - Apple Inc AAPL.O on Tuesday unveiled new MacBooks powered with the latest M2 Pro and M2 Max chips made in-house, in a surprise announcement ahead of its traditional launch event. The Mac mini starts at $599, cheaper than the latest iPhone 14 series, and is available beginning Jan. 24. Apple however did not provide pricing information for the laptops.
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17579.0
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2023-01-16 00:00:00 UTC
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2 Top Tech Stocks to Buy for the Long Haul
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AAPL
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https://www.nasdaq.com/articles/2-top-tech-stocks-to-buy-for-the-long-haul-9
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Market corrections are a painful but inevitable part of the investing cycle. Yet, there's an upside to the pain. Every bear market has represented an opportunity for patient investors to scoop up great companies on the cheap.
Data shows they typically resolve quickly, and throughout history every notable downturn in the broader market has eventually been erased by a bull market rally. The Schwab Center for Financial Research says the average bear market since 1966 has lasted only about 15 months, while the typical bull market lasts roughly three years. Even better, from 1970 on, bull markets have tended to last more than six years on average. The last one went on for almost 11 years!
That's why smart investors don't despair when prices go down. They see that their favorite companies are now on sale, and they can buy them at lower prices. As we'll see, the two following supercharged stocks have the competitive edge necessary to help you buy low and sell high, making riches in the decades to come.
Image source: Getty Images.
Apple
Apple (NASDAQ: AAPL) just made a lot of headlines with a flurry of announcements that included CEO Tim Cook agreeing to take a 40% pay cut this year and tie more of his earnings to Apple's stock performance; developing touchscreen Macs; and intending to drop Broadcom and Qualcomm as chip suppliers in favor of in-house production.
While many were surprised by the moves, in reality, only Cook's salary was unexpected. Apple taking greater control of its supply chain has been in the works for years, signaled by acquisitions it has made over time. For example, it bought low-power screen maker LuxVue back in 2014 and acquired Intel's unit that makes wireless modems for smartphones nearly four years ago, not to mention designing its own M1 chips.
The decisions will certainly enhance Apple's profits even further as it still largely outsources manufacturing and assembly, instead preferring to control design. Yet Apple's stock is down 25% from recent highs and trades at around 22 times trailing earnings, 20 times next year's estimates, and 22 times the free cash flow it generates. It's not bargain basement material, but represents a level that is very attractive for long-term investors who believe the iPhone maker has not run out of ideas and will remain a competitive force for years.
With the iPhone accounting for approximately half of all U.S. smartphone market share and its continued shift to subscription services further boosting margins, Apple is a cheap stock to buy now.
Image source: Getty Images.
Palantir Technologies
Data analytics firm Palantir Technologies (NYSE: PLTR) continues to pave the way for future growth opportunities through its artificial intelligence (AI)-driven platforms, Gotham and Foundry, though the market these days continues to price the stock as if it won't win any more business. It's off some 58% over the past year, but down 82% from the all-time high set two years ago.
Gotham has been Palantir's top sales driver in years past as most of its business comes from government contracts. It needs to process and analyze massive amounts of data to perform tasks like coordinating millions of troops around the world and reading signals from a global flow of data. Yet today's businesses have an equal need for such capabilities, which is why Palantir created Foundry, and it's growing even faster.
The number of new customers buying Palantir's artificial intelligence and machine learning software has doubled in the past year, and it now has over 330 total enterprises in its ranks, up 66% year over year and over two-and-a-half times greater than in 2019. It provides the path for future growth.
For example, Palantir just partnered with Cloudflare (NYSE: NET) to help businesses cut their cloud costs. As more businesses and organizations move data to the cloud but utilize a multi-cloud approach, the complexity and costs associated with the transition increase.
Foundry is just in its early innings compared to Gotham, yet it's still rapidly expanding despite the current market turmoil. As a result, it will likely prove to be Palantir's profit center in the years ahead.
10 stocks we like better than Apple
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Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Cloudflare, Intel, Palantir Technologies, and Qualcomm. The Motley Fool recommends Broadcom and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple Apple (NASDAQ: AAPL) just made a lot of headlines with a flurry of announcements that included CEO Tim Cook agreeing to take a 40% pay cut this year and tie more of his earnings to Apple's stock performance; developing touchscreen Macs; and intending to drop Broadcom and Qualcomm as chip suppliers in favor of in-house production. For example, it bought low-power screen maker LuxVue back in 2014 and acquired Intel's unit that makes wireless modems for smartphones nearly four years ago, not to mention designing its own M1 chips. It's not bargain basement material, but represents a level that is very attractive for long-term investors who believe the iPhone maker has not run out of ideas and will remain a competitive force for years.
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Apple Apple (NASDAQ: AAPL) just made a lot of headlines with a flurry of announcements that included CEO Tim Cook agreeing to take a 40% pay cut this year and tie more of his earnings to Apple's stock performance; developing touchscreen Macs; and intending to drop Broadcom and Qualcomm as chip suppliers in favor of in-house production. Palantir Technologies Data analytics firm Palantir Technologies (NYSE: PLTR) continues to pave the way for future growth opportunities through its artificial intelligence (AI)-driven platforms, Gotham and Foundry, though the market these days continues to price the stock as if it won't win any more business. The Motley Fool has positions in and recommends Apple, Cloudflare, Intel, Palantir Technologies, and Qualcomm.
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Apple Apple (NASDAQ: AAPL) just made a lot of headlines with a flurry of announcements that included CEO Tim Cook agreeing to take a 40% pay cut this year and tie more of his earnings to Apple's stock performance; developing touchscreen Macs; and intending to drop Broadcom and Qualcomm as chip suppliers in favor of in-house production. Palantir Technologies Data analytics firm Palantir Technologies (NYSE: PLTR) continues to pave the way for future growth opportunities through its artificial intelligence (AI)-driven platforms, Gotham and Foundry, though the market these days continues to price the stock as if it won't win any more business. The number of new customers buying Palantir's artificial intelligence and machine learning software has doubled in the past year, and it now has over 330 total enterprises in its ranks, up 66% year over year and over two-and-a-half times greater than in 2019.
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Apple Apple (NASDAQ: AAPL) just made a lot of headlines with a flurry of announcements that included CEO Tim Cook agreeing to take a 40% pay cut this year and tie more of his earnings to Apple's stock performance; developing touchscreen Macs; and intending to drop Broadcom and Qualcomm as chip suppliers in favor of in-house production. The last one went on for almost 11 years! Palantir Technologies Data analytics firm Palantir Technologies (NYSE: PLTR) continues to pave the way for future growth opportunities through its artificial intelligence (AI)-driven platforms, Gotham and Foundry, though the market these days continues to price the stock as if it won't win any more business.
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17580.0
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2023-01-16 00:00:00 UTC
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Apple supplier Foxconn replaces iPhone business chief- Bloomberg News
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AAPL
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https://www.nasdaq.com/articles/apple-supplier-foxconn-replaces-iphone-business-chief-bloomberg-news
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nan
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nan
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Jan 17 (Reuters) - Taiwan's Foxconn 2317.TW has appointed Michael Chiang as the new boss for its iPhone assembly business after a tumultuous year in China, Bloomberg News reported on Tuesday, citing people familiar with the matter.
Chiang replaces longtime leader Wang Charng-yang as head of the iPhone assembly division, the report added.
Foxconn declined to comment. Apple did not immediately respond to a request for comment.
(Reporting by Lavanya Ahire in Bengaluru; Editing by Dhanya Ann Thoppil)
((LavanyaSushil.Ahire@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Jan 17 (Reuters) - Taiwan's Foxconn 2317.TW has appointed Michael Chiang as the new boss for its iPhone assembly business after a tumultuous year in China, Bloomberg News reported on Tuesday, citing people familiar with the matter. Chiang replaces longtime leader Wang Charng-yang as head of the iPhone assembly division, the report added. (Reporting by Lavanya Ahire in Bengaluru; Editing by Dhanya Ann Thoppil) ((LavanyaSushil.Ahire@thomsonreuters.com;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Jan 17 (Reuters) - Taiwan's Foxconn 2317.TW has appointed Michael Chiang as the new boss for its iPhone assembly business after a tumultuous year in China, Bloomberg News reported on Tuesday, citing people familiar with the matter. Chiang replaces longtime leader Wang Charng-yang as head of the iPhone assembly division, the report added. (Reporting by Lavanya Ahire in Bengaluru; Editing by Dhanya Ann Thoppil) ((LavanyaSushil.Ahire@thomsonreuters.com;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Jan 17 (Reuters) - Taiwan's Foxconn 2317.TW has appointed Michael Chiang as the new boss for its iPhone assembly business after a tumultuous year in China, Bloomberg News reported on Tuesday, citing people familiar with the matter. Chiang replaces longtime leader Wang Charng-yang as head of the iPhone assembly division, the report added. (Reporting by Lavanya Ahire in Bengaluru; Editing by Dhanya Ann Thoppil) ((LavanyaSushil.Ahire@thomsonreuters.com;)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Jan 17 (Reuters) - Taiwan's Foxconn 2317.TW has appointed Michael Chiang as the new boss for its iPhone assembly business after a tumultuous year in China, Bloomberg News reported on Tuesday, citing people familiar with the matter. Chiang replaces longtime leader Wang Charng-yang as head of the iPhone assembly division, the report added. Foxconn declined to comment.
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17581.0
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2023-01-16 00:00:00 UTC
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POLL-Taiwan Q4 GDP seen growing 1.3% as cooling tech demand weighs
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AAPL
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https://www.nasdaq.com/articles/poll-taiwan-q4-gdp-seen-growing-1.3-as-cooling-tech-demand-weighs
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*
For poll data click: reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=TWGDPP%3DECI
*
Preliminary Q4 GDP seen at +1.3% y/y (prior qtr +4.01%)
*
Data due Wednesday, Jan 18, 3 p.m. (0700 GMT)
TAIPEI, Jan 17 (Reuters) - Taiwan's economy likely expanded much more slowly in the fourth quarter compared to the prior quarter due to increased global economic headwinds denting demand for technology which is a key export, a Reuters poll showed on Tuesday.
Gross domestic product (GDP) likely grew just 1.3% in October-December versus a year earlier, the poll of 20 economists shows, after it expanded 4.01% year-on-year in the third quarter.
Policymakers have said they expect full-year 2022 growth of around or less than 3%, slower than the 6.45% logged for 2021. That was the fastest rate in over a decade since it expanded 10.25% in 2010.
Economists' forecasts for preliminary GDP data due on Wednesday varied widely from a contraction of 0.1% to growth of 3.5%.
GDP last year peaked in the second and third quarters, with the fourth quarter hit by weakening electronics demand, and also coming off a high base, First Capital Management analyst Chengyu Liu said.
"Recent economic data released by the United States is also weak," Liu added. "It is expected that Taiwan's GDP in the first and second quarters of this year will not be good, with growth in the first quarter only 1.1%."
Demand for Taiwanese goods has been hit by COVID-19 controls and outbreaks in China, as well as soaring global inflation and tightening monetary policy.
The economy in China, Taiwan's largest trading partner, expanded 2.9% in the fourth quarter year-on-year, and 3.0% for the full year of 2022, badly missing the official target of "around 5.5%".
Taiwan's exports fell for a fourth straight month in December. Exports dropped 12.1% by value last month from a year earlier to $35.75 billion, the lowest level in 20 months.
Taiwan is a key hub in the global technology supply chain for giants such as Apple Inc , and home to the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co Ltd (TSMC) .
Taiwan's preliminary figures will be released in a statement with minimal commentary. Revised figures will be released a few weeks later, with more details and forward-looking forecasts. (Poll compiled by Madhumita Gokhale, Susobhan Sarkar and Carol Lee; Reporting by Ben Blanchard; Additional reporting by Roger Tung; Editing by Rashmi Aich) ((ben.blanchard@thomsonreuters.com;)) Keywords: TAIWAN ECONOMY/GDP (POLL)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Gross domestic product (GDP) likely grew just 1.3% in October-December versus a year earlier, the poll of 20 economists shows, after it expanded 4.01% year-on-year in the third quarter. Demand for Taiwanese goods has been hit by COVID-19 controls and outbreaks in China, as well as soaring global inflation and tightening monetary policy. The economy in China, Taiwan's largest trading partner, expanded 2.9% in the fourth quarter year-on-year, and 3.0% for the full year of 2022, badly missing the official target of "around 5.5%".
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* For poll data click: reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=TWGDPP%3DECI * Preliminary Q4 GDP seen at +1.3% y/y (prior qtr +4.01%) * Data due Wednesday, Jan 18, 3 p.m. (0700 GMT) TAIPEI, Jan 17 (Reuters) - Taiwan's economy likely expanded much more slowly in the fourth quarter compared to the prior quarter due to increased global economic headwinds denting demand for technology which is a key export, a Reuters poll showed on Tuesday. Economists' forecasts for preliminary GDP data due on Wednesday varied widely from a contraction of 0.1% to growth of 3.5%. The economy in China, Taiwan's largest trading partner, expanded 2.9% in the fourth quarter year-on-year, and 3.0% for the full year of 2022, badly missing the official target of "around 5.5%".
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* For poll data click: reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=TWGDPP%3DECI * Preliminary Q4 GDP seen at +1.3% y/y (prior qtr +4.01%) * Data due Wednesday, Jan 18, 3 p.m. (0700 GMT) TAIPEI, Jan 17 (Reuters) - Taiwan's economy likely expanded much more slowly in the fourth quarter compared to the prior quarter due to increased global economic headwinds denting demand for technology which is a key export, a Reuters poll showed on Tuesday. GDP last year peaked in the second and third quarters, with the fourth quarter hit by weakening electronics demand, and also coming off a high base, First Capital Management analyst Chengyu Liu said. "It is expected that Taiwan's GDP in the first and second quarters of this year will not be good, with growth in the first quarter only 1.1%."
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Gross domestic product (GDP) likely grew just 1.3% in October-December versus a year earlier, the poll of 20 economists shows, after it expanded 4.01% year-on-year in the third quarter. Economists' forecasts for preliminary GDP data due on Wednesday varied widely from a contraction of 0.1% to growth of 3.5%. "It is expected that Taiwan's GDP in the first and second quarters of this year will not be good, with growth in the first quarter only 1.1%."
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17582.0
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2023-01-16 00:00:00 UTC
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Investor Ryan Cohen builds Alibaba stake, pushes for more share buybacks
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AAPL
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https://www.nasdaq.com/articles/investor-ryan-cohen-builds-alibaba-stake-pushes-for-more-share-buybacks
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By Svea Herbst-Bayliss
Jan 16 (Reuters) - Billionaire investor Ryan Cohen has built a stake in China's Alibaba Group 9988.HK worth hundreds of millions of dollars and is pushing the e-commerce giant to increase and speed up share buybacks, people familiar with the matter said on Monday.
Cohen, who built his fortune by co-founding online pet retailer Chewy Inc CHWY.N and cemented it with investments in videogame retailer GameStop GME.N and Apple Inc AAPL.O, reached out to Alibaba last August to express concerns, the people said.
In his communications, Cohen told Alibaba he thought the company could reach double-digit sales growth and nearly 20% free cashflow growth over the coming five years, according to the sources.
Cohen felt the company's shares were undervalued at the time, according to the people, who declined to be identified because the investment is private.
Alibaba in November raised the size of its share repurchase program to $40 billion, increasing it by $15 billion, and said it would extend the time frame for the program through the end of March, 2025.
Cohen has told Alibaba executives that more can be done, suggesting the total buyback program could be raised to $60 billion, the people familiar with his communications said.
The company's shares began an ongoing tumble in late October 2020, just as authorities in Beijing began a regulatory crackdown on the tech sector. The company lost about a third of its value by November 2022, though in recent weeks shares have recovered amid signs the Chinese government will ease its pressure on internet companies.
Over roughly the same period, Alibaba has steadily escalated its share buyback program. It first announced the scheme at the end of 2020, pledging to buy back $10 billion over a two-year period.
As well as cutting the supply of shares available, supporting their prices, buybacks - often recommended by activist investors - can send a signal to the market that executives are confident about how high their companies' shares might be able to climb.
Canada-born Cohen, 37, has a net worth estimated at $2.5 billion. He made a splash in the investing world two years ago when he joined the board of GameStop, igniting a frenzy in the stock price that turned the video retailer into a so-called 'meme stock' backed by retail investors.
GameStop's shares, which underwent a stock split in 2022, are up 19% this year even though they are off 25% in the last 52 weeks.
Cohen has said previously that he wants to find more undervalued companies to invest with and identify those that can be managed better and push them to adopt changes.
INSIGHT-From pet food to video games: inside Ryan Cohen's GameStop obsession{https://www.reuters.com/article/us-retail-trading-gamestop-cohen-insight-idUSKBN2BF1AS]
Ryan Cohen's $60 million Bed Bath u-turn triggers meme stock investor ire[https://www.reuters.com/markets/us/ryan-cohens-60-mln-bed-bath-u-turn-triggers-meme-stock-investor-ire-2022-08-19/]
(Svea Herbst-Bayliss in New York; Additional reporting by Miyoung Kim in Beijing and Aishwarya Nair in Bengaluru; Editing by Leslie Adler and Kenneth Maxwell)
((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters Messaging: svea.herbst.thomsonreuters.com@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Cohen, who built his fortune by co-founding online pet retailer Chewy Inc CHWY.N and cemented it with investments in videogame retailer GameStop GME.N and Apple Inc AAPL.O, reached out to Alibaba last August to express concerns, the people said. By Svea Herbst-Bayliss Jan 16 (Reuters) - Billionaire investor Ryan Cohen has built a stake in China's Alibaba Group 9988.HK worth hundreds of millions of dollars and is pushing the e-commerce giant to increase and speed up share buybacks, people familiar with the matter said on Monday. Cohen has told Alibaba executives that more can be done, suggesting the total buyback program could be raised to $60 billion, the people familiar with his communications said.
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Cohen, who built his fortune by co-founding online pet retailer Chewy Inc CHWY.N and cemented it with investments in videogame retailer GameStop GME.N and Apple Inc AAPL.O, reached out to Alibaba last August to express concerns, the people said. By Svea Herbst-Bayliss Jan 16 (Reuters) - Billionaire investor Ryan Cohen has built a stake in China's Alibaba Group 9988.HK worth hundreds of millions of dollars and is pushing the e-commerce giant to increase and speed up share buybacks, people familiar with the matter said on Monday. He made a splash in the investing world two years ago when he joined the board of GameStop, igniting a frenzy in the stock price that turned the video retailer into a so-called 'meme stock' backed by retail investors.
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Cohen, who built his fortune by co-founding online pet retailer Chewy Inc CHWY.N and cemented it with investments in videogame retailer GameStop GME.N and Apple Inc AAPL.O, reached out to Alibaba last August to express concerns, the people said. By Svea Herbst-Bayliss Jan 16 (Reuters) - Billionaire investor Ryan Cohen has built a stake in China's Alibaba Group 9988.HK worth hundreds of millions of dollars and is pushing the e-commerce giant to increase and speed up share buybacks, people familiar with the matter said on Monday. Alibaba in November raised the size of its share repurchase program to $40 billion, increasing it by $15 billion, and said it would extend the time frame for the program through the end of March, 2025.
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Cohen, who built his fortune by co-founding online pet retailer Chewy Inc CHWY.N and cemented it with investments in videogame retailer GameStop GME.N and Apple Inc AAPL.O, reached out to Alibaba last August to express concerns, the people said. Cohen has told Alibaba executives that more can be done, suggesting the total buyback program could be raised to $60 billion, the people familiar with his communications said. He made a splash in the investing world two years ago when he joined the board of GameStop, igniting a frenzy in the stock price that turned the video retailer into a so-called 'meme stock' backed by retail investors.
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17583.0
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2023-01-16 00:00:00 UTC
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2 FAANG Stocks to Buy in 2023 and 1 to Avoid: Here's Why
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AAPL
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https://www.nasdaq.com/articles/2-faang-stocks-to-buy-in-2023-and-1-to-avoid%3A-heres-why
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nan
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The five FAANG stocks took a beating in 2022. Last year, each and every one of these tech titans underperformed the S&P 500 index, which wasn't having a great year in the first place:
META data by YCharts
But that was then, and this is now. Most of the FAANG greats are poised to bounce back in 2023, most likely beating the market from their current spring-loaded discounts. Read on to see why Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) fit that bill in my eyes.
I could talk your ear off about the long-term virtues of owning Netflix (NASDAQ: NFLX) but the stock has nearly doubled since mid-July and no longer strikes me as the most obvious no-brainer buy on the market. This recovery is well underway already. Still a great investment, but you may want to hold your horses on buying Netflix until this Thursday's fourth-quarter earnings report.
As for iPhone maker Apple (NASDAQ: AAPL), the company faces manufacturing issues and other unique headwinds, so I'm not terribly convinced that Cupertino's stock can outperform the S&P 500 in 2023.
That leaves Meta Platforms (NASDAQ: META), formerly known as Facebook, whose trouble runs so deep that I recommend going out of your way to avoid it this year. Read on beyond the Alphabet and Amazon reviews if you want to hear more.
FAANG buy 1: Alphabet
Alphabet's stock is down 36% since the end of 2021. However, it's important to remember that market sell-offs can often present buying opportunities. In this case, there are several reasons why the parent company of Google and YouTube remains a strong buy.
First and foremost, Google has a virtual monopoly on the search engine market, with over 90% market share in search around the world. I'd show you a graph, but it's pretty boring with Google'sglobal marketshare maxed out and everyone else bunched up in single-digit percentages. This gives the company tremendous market power and reliable profits, as well as an entrenched brand across many sub-sectors of the technology market. This dominance is unlikely to change in the near future, making Google and its many services a reliable revenue stream for Alphabet.
Another reason to consider buying Alphabet stock is the company's generous profit margins. In the long run, Alphabet's operating margins have often hovered in the 25-35% range, with a dip around the early COVID-19 crisis followed by a spike in the last two years.
Moreover, Alphabet's cloud infrastructure business, Google Cloud, is showing potential for profitable long-term growth. While it currently trails behind rivals like Amazon Web Services, it's growing quickly with revenue up 38% to $6.9 billion in its most recent quarter. Additionally, the division's negative operating margin narrowed from -14% to -10% in the third quarter, suggesting a path to profitability. While it may never be as profitable as AWS or Azure, it should eventually become a significant contributor to Alphabet's bottom line.
Lastly, Alphabet's other bets, such as Waymo, its autonomous vehicle division, and life sciences projects, could potentially pay off over the years. These businesses give Alphabet a long-term flexibility that's worth its weight in gold. While they have lost over $20 billion in the last five years and brought in little revenue, any breakthroughs in these areas could have a significant impact on the company's bottom line. One day, I'm sure the Google name will fade away as new technologies and as-yet unheard-of rivals undermine the traditional web search and advertising operation. In its place, one or more of today's or tomorrow's "other bets" will take over, letting Alphabet investors forget about the Google name and still feel good about the company's future.
Despite the recent market sell-off and concerns about the economy, Alphabet's dominance in search, huge profit margins, potential for growth in Google Cloud and other bets, make it a strong buy for long-term investors. And the stock trades at a very reasonable 18 times earnings, giving value investors something to chew on, too.
FAANG buy 2: Amazon
E-commerce giant Amazon took a deeper dive than Alphabet in 2022. The stock is off to a strong start this year, but still trails Alphabet's returns since the end of 2021 with a 41% dip. This price cut had its reasons, and you need to weigh these bearish arguments before putting your money to work in Amazon stock.
The primary pressure point for Amazon is competition. The company used to have a solid first-mover advantage and be the only game in town, but many old-school retailers have stepped up their online sales to offer tougher competition. This has made it difficult for Amazon to maintain its torrential growth rates and dominant market share. While Amazon still rules the American e-commerce space with a 38% market share, Walmart (NYSE: WMT) has a 30% share of the e-commerce grocery space, according to Euromonitor data. This is an important segment and Amazon has struggled to gain a foothold here.
Furthermore, Amazon has invested heavily in its physical logistics network that gives it delivery advantages over traditional retailers. This has come with significant costs, including increases in net shipping costs and fulfillment costs. These infrastructure expenses now represent 16.8% of sales.
However, there are also many reasons for optimism around Amazon's business and stock.
The Amazon Web Services (AWS) cloud computing platform has long been Amazon's primary source of profitability on the segment level, and it also continues to drive the company's top-line growth. AWS's revenue jumped 27% in the third quarter, and year-to-date operating profits of $17.3 billion are 33% higher year over year.
So Amazon's stock had a rough year, but the sharp price drop looks like an overreaction. The company's dominance in the e-commerce space, profitability from AWS, and potential for robust growth in cloud computing make Amazon stock a strong buy for long-term investors.
The FAANG stock to stay away from: Meta Platforms
Meta's core advertising business stalled out for a few reasons last year, including Apple's iOS update with new restrictions to advertisers' ad-tracking efforts, the rise of TikTok and its competition with Instagram, and the macroeconomic headwinds affecting the broader advertising market. So Meta's operating margins are running at multiyear lows and the stock is down 59% over the same year-and-change period as Alphabet's and Amazon's slightly smaller drops.
To counter TikTok, Meta aggressively invested in the expansion of Instagram Reels, but warned that monetizing those short videos would be more difficult than its Feed-based ads. However, instead of streamlining its business to offset those costs, Meta doubled down on expanding its Reality Labs segment, which houses its virtual reality products. That effort is off to a rocky start. The Reality Labs segment's revenue rose less than 3% YoY to $1.4 billion in the first nine months of 2022 while its operating loss widened from $6.9 billion to $9.4 billion.
This painful combination of slowing growth and rising expenses has driven away investors, with analysts expecting a 2% drop in revenue and a 33% lower earnings for 2022. In 2023, Wall Street expects a 5% rise in revenue and 15% drop in earnings as expenses continue to climb. It's also worth noting that Meta's insiders sold nearly four times as many shares as they bought over the past 12 months.
Slowing sales, dropping profits, weak insider trading, and an unconvincing response to surging competition are not qualities I look for in prospective investments. Meta has work to do before I would consider buying or recommending this stock, starting with a clearer response to the TikTok challenge. Until then, I'll gladly stay on Meta's sidelines.
Find out why Amazon.com is one of the 10 best stocks to buy now
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*Stock Advisor returns as of January 9, 2023
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anders Bylund has positions in Alphabet, Amazon.com, and Netflix. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, Netflix, and Walmart. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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As for iPhone maker Apple (NASDAQ: AAPL), the company faces manufacturing issues and other unique headwinds, so I'm not terribly convinced that Cupertino's stock can outperform the S&P 500 in 2023. I could talk your ear off about the long-term virtues of owning Netflix (NASDAQ: NFLX) but the stock has nearly doubled since mid-July and no longer strikes me as the most obvious no-brainer buy on the market. Despite the recent market sell-off and concerns about the economy, Alphabet's dominance in search, huge profit margins, potential for growth in Google Cloud and other bets, make it a strong buy for long-term investors.
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As for iPhone maker Apple (NASDAQ: AAPL), the company faces manufacturing issues and other unique headwinds, so I'm not terribly convinced that Cupertino's stock can outperform the S&P 500 in 2023. Moreover, Alphabet's cloud infrastructure business, Google Cloud, is showing potential for profitable long-term growth. Despite the recent market sell-off and concerns about the economy, Alphabet's dominance in search, huge profit margins, potential for growth in Google Cloud and other bets, make it a strong buy for long-term investors.
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As for iPhone maker Apple (NASDAQ: AAPL), the company faces manufacturing issues and other unique headwinds, so I'm not terribly convinced that Cupertino's stock can outperform the S&P 500 in 2023. Despite the recent market sell-off and concerns about the economy, Alphabet's dominance in search, huge profit margins, potential for growth in Google Cloud and other bets, make it a strong buy for long-term investors. The company's dominance in the e-commerce space, profitability from AWS, and potential for robust growth in cloud computing make Amazon stock a strong buy for long-term investors.
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As for iPhone maker Apple (NASDAQ: AAPL), the company faces manufacturing issues and other unique headwinds, so I'm not terribly convinced that Cupertino's stock can outperform the S&P 500 in 2023. Read on to see why Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Amazon (NASDAQ: AMZN) fit that bill in my eyes. Despite the recent market sell-off and concerns about the economy, Alphabet's dominance in search, huge profit margins, potential for growth in Google Cloud and other bets, make it a strong buy for long-term investors.
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17584.0
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2023-01-16 00:00:00 UTC
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Better Growth Stock in 2023: Apple vs. AMD
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AAPL
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https://www.nasdaq.com/articles/better-growth-stock-in-2023%3A-apple-vs.-amd
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nan
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A sell-off in 2022 led the Nasdaq-100 Technology Sector index to plunge 34% year over year. As the tech industry is known for its wealth of growth stocks, now is an excellent time to invest in the consistently developing sector.
Apple (NASDAQ: AAPL) and Advanced Micro Devices (NASDAQ: AMD) suffered considerable stock declines in 2022. However, these companies have retained triple-digit growth in their shares over the past five years, proving the value of investing in growth stocks for the long term.
Although Apple and AMD suffered from macroeconomic headwinds last year, 2023 holds some exciting developments for these companies. So, which is the better buy? Let's take a look.
Apple plans bigger step into virtual and augmented reality
Apple shares fell 27% throughout 2022 amid the sell-off. However, the new year is off to a promising start, with the company's stock up 4% in the last five days and up 204% since 2018. Numerous reports in the first two weeks of 2023 have revealed Apple's rumored roadmap for the next couple of years, rallying investors.
One of the biggest nuggets of news is Apple's plans to venture into the virtual/augmented reality (VR/AR) markets this year with a new headset. The company's step into the booming markets has been rumored for years, with various acquisitions and patents concerning the technologies making the question not if but when Apple would finally pull the trigger.
Well, it looks like the debut of its long-anticipated headset is finally here, with Bloomberg reporting the company will announce the headset this spring.
Experts foresee AR and VR becoming a significant focus of technology in the near future. According to Grand View Research, the $25.33 billion AR market is expected to see a 40.9% compound annual growth rate (CAGR) through 2030. Meanwhile, the VR market was worth $21.8 billion in 2021 and will grow at a CAGR of 15% in the same period. Apple's immense brand loyalty and proven skill at successfully entering new markets could help it become the leader of an incredibly lucrative industry.
In addition to a VR/AR headset, reports have revealed the company is working on touchscreen Macs, lower-priced AirPods, and in-house designed telecom chips, which would allow it to boost revenue by ending partnerships with Qualcomm and Broadcom.
Despite a challenging 12 months, Apple has a bright future that will likely see its shares soar over the long term, making 2023 an excellent time to invest in this growth stock.
AMD could see console-upgrade catalyst soon
AMD's role as a leader in the PC industry hit its business harder than most in 2022, with consumer demand in the market suffering steep declines. In the third quarter of 2022, IDC Tracker reported a 15% decline in worldwide PC shipments. Meanwhile, graphics processing unit (GPU) shipments fell 25.1% in the same quarter.
As a result, AMD's stock plunged 55% throughout 2022. However, the company's shares have retained growth of 490% since 2018 and have started 2023 by rising 9% in the first 12 days of the year.
Moreover, while a declining GPU market is concerning for AMD, its 16% market share means it won't suffer as much as competitors like Nvidia, with its 72% market share.And AMD has made promising moves to diversify its business in other lucrative industries.
In the third quarter of 2022, AMD's gaming segment revenue grew 13.7%, earning $1.63 billion, largely thanks to partnerships with console manufacturers. Specifically, AMD exclusively supplies graphics and processing hardware to Sony and Microsoft for their widely popular gaming consoles. Both companies are expected to release upgraded, beefier versions of their consoles within the next two years, which would provide AMD with a boost in revenue.
Additionally, AMD is home to a booming data centers segment. Its revenue rose 45% year over year to $1.6 billion in Q3 2022, earning the largest portion of AMD's revenue.
AMD's stock has a mountain to climb, but I wouldn't bet against the company over the long term.
Apple and AMD have carved out unique positions in the tech industry, and their businesses and stocks have soared over time. These companies both have promising outlooks; however, Apple is the better growth stock in 2023.
Apple has a bevy of exciting projects in the works and was less affected by the economic declines in 2022 than AMD, proving it is the more resilient business. Additionally, AMD shares are trading at 42 times its earnings compared to Apple's preferable price-to-earnings ratio of 22.
10 stocks we like better than Apple
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Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Microsoft, Nvidia, and Qualcomm. The Motley Fool recommends Broadcom and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple (NASDAQ: AAPL) and Advanced Micro Devices (NASDAQ: AMD) suffered considerable stock declines in 2022. The company's step into the booming markets has been rumored for years, with various acquisitions and patents concerning the technologies making the question not if but when Apple would finally pull the trigger. In addition to a VR/AR headset, reports have revealed the company is working on touchscreen Macs, lower-priced AirPods, and in-house designed telecom chips, which would allow it to boost revenue by ending partnerships with Qualcomm and Broadcom.
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Apple (NASDAQ: AAPL) and Advanced Micro Devices (NASDAQ: AMD) suffered considerable stock declines in 2022. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Microsoft, Nvidia, and Qualcomm. The Motley Fool recommends Broadcom and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.
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Apple (NASDAQ: AAPL) and Advanced Micro Devices (NASDAQ: AMD) suffered considerable stock declines in 2022. However, these companies have retained triple-digit growth in their shares over the past five years, proving the value of investing in growth stocks for the long term. Moreover, while a declining GPU market is concerning for AMD, its 16% market share means it won't suffer as much as competitors like Nvidia, with its 72% market share.And AMD has made promising moves to diversify its business in other lucrative industries.
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Apple (NASDAQ: AAPL) and Advanced Micro Devices (NASDAQ: AMD) suffered considerable stock declines in 2022. In the third quarter of 2022, AMD's gaming segment revenue grew 13.7%, earning $1.63 billion, largely thanks to partnerships with console manufacturers. Apple and AMD have carved out unique positions in the tech industry, and their businesses and stocks have soared over time.
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17585.0
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2023-01-16 00:00:00 UTC
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2 Tech ETFs to Help You Capture the Sector's Rebound
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AAPL
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https://www.nasdaq.com/articles/2-tech-etfs-to-help-you-capture-the-sectors-rebound
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nan
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The tech sector had a difficult year in 2022, as soaring inflation followed by rapidly rising interest rates brought the sector back down from the meteoric valuations it saw in 2021.
But there is optimism in the air, with inflation seemingly slowing and many investors expecting the Federal Reserve's aggressive rate-hiking campaign to wind down soon as well. The outlook for this year is still quite uncertain, with liquidity tightening and the impact of all of the Fed's rate hikes still largely unknown.
But if the tech sector is able to bounce back, investors won't want to miss out. A great way to get exposure to a broad sector is through an exchange-traded fund (ETF), which trades like a stock but is composed of a basket of equities, offering more diversification. Here are two good ETFs to help capture the tech sector's rebound.
1. Invesco QQQ Trust
The Invesco QQQ Trust (NASDAQ: QQQ) is a popular tech ETF because it owns many headline-grabbing tech stocks like Apple, Microsoft, Amazon, Alphabet, and Meta Platforms, just to name some of its largest holdings. Apple and Microsoft alone make up more than 21% of the ETF's assets.
Like the Nasdaq Composite, the QQQ saw its price fall about 33% last year, which isn't so great for an ETF that's supposed to be less risky. But over the last five years, the QQQ is up more than 67%, and since its launch in 1999 the ETF is up more than 426%. So by and large, this has still been a great investment. Of course, the low expense ratio of 0.2% doesn't hurt, either.
Furthermore, investors can take some solace in the fact that these are well-established companies with strong balance sheets and the ability to weather a recession. Both Apple and Microsoft have $23 billion or more of cash and cash equivalents on their balance sheets, and both also made tens of billions of dollars in profits in 2022, despite their struggles.
2. VanEck Semiconductor ETF
As its name suggests, the VanEck Semiconductor ETF (NASDAQ: SMH) is a good way for investors to get exposure to the burgeoning semiconductor industry, which is responsible for making the chips that power a host of electronics used daily in everything from mobile phones to cars. This ETF is down 25% over the last year, but up almost 111% over the last five. This ETF charges somewhat higher expense fees than the Invesco QQQ Trust, but VanEck's Semiconductor ETF's expense ratio is still fairly reasonable at 0.35%.
The largest holdings in this ETF are Taiwan Semiconductor Manufacturing, Nvidia, ASML Holding NV, and Qualcomm. Taiwan Semiconductor and Nvidia make up about 24%.
Now, concerns about global chip demand are weighing on the industry. Taiwan Semiconductor recently said that it expects revenue in the first quarter to drop 5%, and that it's planning to cut investment in its operations this year due to lower demand.
But semiconductor production can be a very high-margin business in good times, and the chip industry is only expected to grow. The consulting firm McKinsey thinks it could grow 6% to 8% annually and become a $1 trillion industry by 2030. So this ETF should perform well long-term, especially once global demand improves.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors.
Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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A great way to get exposure to a broad sector is through an exchange-traded fund (ETF), which trades like a stock but is composed of a basket of equities, offering more diversification. Taiwan Semiconductor recently said that it expects revenue in the first quarter to drop 5%, and that it's planning to cut investment in its operations this year due to lower demand. The Motley Fool has positions in and recommends ASML, Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing.
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Invesco QQQ Trust The Invesco QQQ Trust (NASDAQ: QQQ) is a popular tech ETF because it owns many headline-grabbing tech stocks like Apple, Microsoft, Amazon, Alphabet, and Meta Platforms, just to name some of its largest holdings. The largest holdings in this ETF are Taiwan Semiconductor Manufacturing, Nvidia, ASML Holding NV, and Qualcomm. The Motley Fool has positions in and recommends ASML, Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing.
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Invesco QQQ Trust The Invesco QQQ Trust (NASDAQ: QQQ) is a popular tech ETF because it owns many headline-grabbing tech stocks like Apple, Microsoft, Amazon, Alphabet, and Meta Platforms, just to name some of its largest holdings. VanEck Semiconductor ETF As its name suggests, the VanEck Semiconductor ETF (NASDAQ: SMH) is a good way for investors to get exposure to the burgeoning semiconductor industry, which is responsible for making the chips that power a host of electronics used daily in everything from mobile phones to cars. This ETF charges somewhat higher expense fees than the Invesco QQQ Trust, but VanEck's Semiconductor ETF's expense ratio is still fairly reasonable at 0.35%.
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This ETF is down 25% over the last year, but up almost 111% over the last five. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Invesco Qqq Trust, Series 1 wasn't one of them! The Motley Fool has positions in and recommends ASML, Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing.
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17586.0
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2023-01-16 00:00:00 UTC
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Warren Buffett Owns a Lot of Stocks -- Here's the One I'm Most Excited About
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AAPL
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https://www.nasdaq.com/articles/warren-buffett-owns-a-lot-of-stocks-heres-the-one-im-most-excited-about-2
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nan
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nan
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Warren Buffett has a case for the title of the greatest investor of all time; understandably, a $110 billion net worth gets you a lot of respect. The Oracle of Omaha owns many stocks, but it could be his holding in Bank of America (NYSE: BAC) that gets me the most excited. The banking giant is Berkshire Hathaway's largest holding other than Apple.
So what has me excited? Or, more importantly, why should you get excited about Bank of America stock? To put it plainly, Wall Street isn't giving Bank of America enough respect. I'll show you how that is and why the stock could be poised to deliver strong investment returns.
Disrespect? Look at that valuation!
Bank of America stock trades at a price-to-book ratio of just over 1.1, roughly on par with the stock's average over the past five years. However, partially due to rising interest rates, Bank of America is achieving a higher return on equity than its average in that period. In other words, the company is more profitable, but the stock's valuation doesn't reflect it.
BAC Price to Book Value data by YCharts
While bank earnings can be inconsistent, one can compare Bank of America to the broader market. The stock's price-to-earnings ratio is just 11. How do we know that's cheap? The S&P 500 trades at a forward P/E of 17; consider that analysts are pegging estimated earnings growth for the S&P 500 at 5.5% in 2023. Analysts' estimates for Bank of America call for more than 14% earnings growth this year.
Said another way, investors are willing to pay more than twice as much for a dollar of earnings from the S&P 500 versus Bank of America, despite the latter growing more than twice as fast. A fair question might be, why? Investors could be wary of banks based on the risk that the economy falls into a recession, and the threat of defaulting loans could frighten those who still remember the catastrophe of the Great Recession more than a decade ago, which spurred controversial bailouts of flailing lenders.
But times have changed. The Dodd-Frank Act was enacted shortly after the Great Recession to prevent a future financial sector collapse by giving regulators more authority in overseeing large banks. Additionally, Bank of America has proven excellent at managing its capital, increasing its common equity tier 1 ratio to 11% at the end of the third quarter, above its required 10.4%. This means that the bank is better equipped to endure potential financial distress. No investment is risk-free, but Bank of America's financials seem to stand on solid ground, which Buffett seemingly agrees with, given the bank's 10.8% weighting in Berkshire's enormous investment portfolio.
More profits on the way?
Rising interest rates have been the talk of Wall Street for about a year now, but fewer folks are discussing how that could benefit Bank of America. As a rule of thumb, rising interest rates are generally good for banks, which benefit from a wider spread between their cost of deposits and the interest earned on loans. You can see below how net interest income directly correlates with the federal funds rate, the rate set by the Federal Reserve that determines how much banks charge each other for overnight loans. In other words, Bank of America makes more money when rates rise.
Effective Federal Funds Rate data by YCharts
Some Fed officials believe the rate could top out at around 5% in 2023, which still leaves quite a bit of room from where it currently sits. The most recent consumer price index report, a widely watched inflation measure, came in as expected at 5.7% for December (excluding energy and food prices), showing that inflation is cooling -- but not yet down to the Fed's 2% target. More rate increases could further line Bank of America's pockets.
Spoon-feeding cash to shareholders
Bank of America is very profitable, generating billions in annual profit. After any capital needs are addressed, it sends the leftover earnings to shareholders through share repurchases and dividends. Not only has the company reduced its shares outstanding by 21% during the past five years, but the dividend has increased 83%, rising for nine straight years.
BAC Shares Outstanding data by YCharts
The dividend yield is 2.6% at the current share price, and analysts forecast earnings-per-share growth to average 7% annually during the next three to five years. That alone will earn investors nearly 10% in yearly total returns, and we haven't factored in a potential rebound in the stock's depressed valuation. When you add it all up, Bank of America looks like a true blue-chip financial stock that investors can own in confidence, much like Warren Buffett himself does.
10 stocks we like better than Bank of America
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Bank of America wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of January 9, 2023
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Warren Buffett has a case for the title of the greatest investor of all time; understandably, a $110 billion net worth gets you a lot of respect. The Dodd-Frank Act was enacted shortly after the Great Recession to prevent a future financial sector collapse by giving regulators more authority in overseeing large banks. Additionally, Bank of America has proven excellent at managing its capital, increasing its common equity tier 1 ratio to 11% at the end of the third quarter, above its required 10.4%.
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To put it plainly, Wall Street isn't giving Bank of America enough respect. The Motley Fool has positions in and recommends Apple, Bank of America, and Berkshire Hathaway. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway, short January 2023 $265 calls on Berkshire Hathaway, and short March 2023 $130 calls on Apple.
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Bank of America stock trades at a price-to-book ratio of just over 1.1, roughly on par with the stock's average over the past five years. 10 stocks we like better than Bank of America When our award-winning analyst team has a stock tip, it can pay to listen. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Bank of America is an advertising partner of The Ascent, a Motley Fool company.
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In other words, the company is more profitable, but the stock's valuation doesn't reflect it. That alone will earn investors nearly 10% in yearly total returns, and we haven't factored in a potential rebound in the stock's depressed valuation. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Bank of America is an advertising partner of The Ascent, a Motley Fool company.
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17587.0
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2023-01-16 00:00:00 UTC
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The Zacks Analyst Blog Highlights Lenovo Group, HP, Dell Technologies and Apple
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AAPL
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https://www.nasdaq.com/articles/the-zacks-analyst-blog-highlights-lenovo-group-hp-dell-technologies-and-apple
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nan
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For Immediate Release
Chicago, IL – January 16, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Lenovo Group Ltd. LNVGY, HP Inc. HPQ, Dell Technologies Inc DELL and Apple, Inc. AAPL.
Here are highlights from Friday’s Analyst Blog:
Can the PC Market Bounce Back from Multi-Year Lows?
Global PC sales, which soared during the peak of the pandemic, have been on a steady decline. During the height of the epidemic, sales of PCs, which include laptops and tablets, unexpectedly jumped as millions worked and learned remotely. However, as things started returning to normal and people began going back to their jobs and schools, demand showed signs of fading.
However, there are several other challenges plaguing the industry. The supply-chain problem is one of the biggest among them.
PC Sales Continue to Decline
The COVID-19 epidemic severely impacted a number of industries but allowed some to reap significant rewards. The PC industry was one that profited the most. However, the situation has changed since then, with sales declining almost every quarter.
Global PC shipments totaled 65.3 million units in the fourth quarter of 2022, down 28.5% on a year-over-year basis, according to the latest from Gartner. This is also the largest quarterly decline since the firm started tracking the PC market in the 1990s.
Overall global PC shipments for 2022 totaled 286.2 million units, declining 16.2% from 2021.
Also, for theglobal market this is the third consecutive quarter of double-digit decline. According to the report, the PC market has been hit by the fears of a global recession, rising inflation and increasing interest rates.
According to the report, the PC market is currently experiencing a bottleneck due to higher inventory levels that began to accumulate in the first half of 2022. High demand and supply chain interruptions until 2021 resulted in low PC supply, which was swiftly transformed into an excess of supply after demand dropped quickly and drastically.
Challenges Aplenty
With the steep decline in PC shipments, the market leaders appear to be the biggest sufferers. Although their rankings as market leaders haven't changed, the top three PC manufacturers have also suffered the greatest losses over this time.
Lenovo Group Ltd., continues to dominate the top spot with a market share of 24%. However, LNVGY recorded its steepest quarterly decline since the mid-1990s. This was also the fifth consecutive quarter of sales decline for Lenovo Group Limited.
Also, HP Inc. and Dell Technologies Inc witnessed sharp quarterly declines. HPQ suffered the most in the EMEA market, with shipments plummeting 44% on a year-over-year basis in the fourth quarter of 2022. However, HP Inc. now holds the biggest market share of 26.8% in terms of shipments in the United States.
Dell Technologies also held its position as the third-biggest player. However, DELL's business was affected in the fourth quarter by sluggish demand in the large business market. Dell Technologies now has the second biggest market share in the United States with 23.4%, but slowing sales have been impacting its business.
Apple, Inc. is the only exception among the top players. AAPL saw a 3.6% jump in shipments in the fourth quarter on a year-over-year basis. This follows a 7% jump in the third quarter and a 9.3% jump in the second quarter. Apple currently has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The U.S. PC market, one of the biggest markets, plummeted 20.5% in the fourth quarter of 2022, recording its sixth straight quarterly decline. The U.S. PC market as a whole is suffering from slowing laptop sales. However, demand for desktops has slightly increased.
The industry is facing a spate of challenges, with price being the biggest concern. Americans have cut back on expensive items as a result of soaring inflation. The supply-chain issue began to ease in the third quarter, but excessive inventory levels are now causing new worries as demand continues to decline in both the consumer and commercial markets.
Also, sales of semiconductors are increasingly being affected by the decline in PC demand. A number of chip manufacturers have claimed that lower PC demand is having an effect on their sales. Overall, 2022 was a difficult year for the PC market, and experts don't expect things to get better until the second half of 2023.
Why Haven't You Looked at Zacks' Top Stocks?
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Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Apple Inc. (AAPL) : Free Stock Analysis Report
HP Inc. (HPQ) : Free Stock Analysis Report
Dell Technologies Inc. (DELL) : Free Stock Analysis Report
Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Stocks recently featured in the blog include: Lenovo Group Ltd. LNVGY, HP Inc. HPQ, Dell Technologies Inc DELL and Apple, Inc. AAPL. AAPL saw a 3.6% jump in shipments in the fourth quarter on a year-over-year basis. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report HP Inc. (HPQ) : Free Stock Analysis Report Dell Technologies Inc. (DELL) : Free Stock Analysis Report Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report To read this article on Zacks.com click here.
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Stocks recently featured in the blog include: Lenovo Group Ltd. LNVGY, HP Inc. HPQ, Dell Technologies Inc DELL and Apple, Inc. AAPL. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report HP Inc. (HPQ) : Free Stock Analysis Report Dell Technologies Inc. (DELL) : Free Stock Analysis Report Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report To read this article on Zacks.com click here. AAPL saw a 3.6% jump in shipments in the fourth quarter on a year-over-year basis.
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Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report HP Inc. (HPQ) : Free Stock Analysis Report Dell Technologies Inc. (DELL) : Free Stock Analysis Report Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report To read this article on Zacks.com click here. Stocks recently featured in the blog include: Lenovo Group Ltd. LNVGY, HP Inc. HPQ, Dell Technologies Inc DELL and Apple, Inc. AAPL. AAPL saw a 3.6% jump in shipments in the fourth quarter on a year-over-year basis.
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Stocks recently featured in the blog include: Lenovo Group Ltd. LNVGY, HP Inc. HPQ, Dell Technologies Inc DELL and Apple, Inc. AAPL. AAPL saw a 3.6% jump in shipments in the fourth quarter on a year-over-year basis. Click to get this free report Apple Inc. (AAPL) : Free Stock Analysis Report HP Inc. (HPQ) : Free Stock Analysis Report Dell Technologies Inc. (DELL) : Free Stock Analysis Report Lenovo Group Ltd. (LNVGY) : Free Stock Analysis Report To read this article on Zacks.com click here.
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17588.0
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2023-01-16 00:00:00 UTC
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Zacks Value Trader Highlights: Berkshire Hathaway, Apple, Bank of America, Chevron, The Coca-Cola
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AAPL
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https://www.nasdaq.com/articles/zacks-value-trader-highlights%3A-berkshire-hathaway-apple-bank-of-america-chevron-the-coca
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For Immediate Release
Chicago, IL – January 16, 2023 – Zacks Value Trader is a podcast hosted weekly by Zacks Stock Strategist Tracey Ryniec. Every week, Tracey will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life. To listen to the podcast, click here: https://www.zacks.com/stock/news/2039167/is-berkshire-hathaway-a-value-stock)
Is Berkshire Hathaway Really a Value Stock?
Welcome to Episode #312 of the Value Investor Podcast.
(0:45) - Value Stocks Back In Favor: Should You jump On The Warren Buffett Bandwagon?
(6:00) - Ark Invest vs Berkshire Hathaway: What Fits Best Into Your Portfolio?
(21:00) - Episode Roundup: BRKB, ARKK, AAPL, BAC, KO, AXP, TSM, CVX, EXAS, ZM, TSLA
Podcast@Zacks.com
Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks.
With value stocks out performing in 2022, value investing has come back into favor.
And that means the cult of Warren Buffett, and Berkshire Hathaway, is back. At the end of 2022, there was a chart making the rounds on Twitter that compared Cathie Wood's ARK Innovation performance over the last 5 years with Berkshire Hathaway's.
As you might have guessed, Berkshire Hathaway is outperforming thanks to ARKK's terrible 2022. Over the last 5 years, Berkshire Hathaway is up 76.3% while ARKK is down 18.9%.
Meanwhile, many investors are diving into Berkshire Hathaway's stock in search of safety. Over the last three months, Berkshire's B shares are up 19.3% versus the S&P 500's gain of 10.5%.
But is Berkshire Hathaway itself even a value stock?
Should value investors be investing in the stock, and its large holdings?
Is there Value in Berkshire Hathaway?
1. Berkshire Hathaway (BRK.B)
Berkshire Hathaway is a large cap holding company that owns dozens of businesses, cash and equity investments. Reminder: it's not a mutual fund or an ETF fund. It's a corporation with Warren Buffett as Chairman and CEO.
Berkshire Hathaway trades with a forward P/E of 19, which is more expensive than the S&P 500 and is not in the normal range for most value investors. Tracey usually looks for companies trading under 15.
What about its PEG ratio? Berkshire Hathaway has a PEG of 2.7, which does not indicate value either. A PEG under 1.0 indicates a company has growth and value.
However, Berkshire does have a P/B ratio of 1.5, which is under 3.0, and indicates value.
Is a low P/B ratio enough for value investors or should they wait for a sell-off in the Berkshire Hathaway shares?
2. Apple Corp. AAPL
Apple is Berkshire's largest equity holding. It was cheap when Buffett first bought it in 2016, with a forward P/E of around 10.
But in 2023, it is trading at 21x, which is much higher than the S&P 500 which is trading around 18. Apple has a PEG of 1.7.
Additionally, earnings are expected to rise just 1% in fiscal 2023 so there isn't much growth there either.
Should value investors take a pass on Apple?
3. Bank of America BAC
Bank of America is Berkshire's second largest holding, and has been for several years. Warren Buffett has been patient with Bank of America, even while selling many of his other bank stocks.
Shares of Bank of America are down 30% in the last year. It's cheap with a forward P/E of 9.5. But with banks, investors should also look at P/B ratio. Bank of America's is 1.15. With banks, a P/B ratio near 1.0 indicates there's value.
Should investors join Buffett and add Bank of America to their own short list?
4. Chevron Corp. (CVX)
Chevron suddenly became the third largest position in Berkshire's portfolio, at 8%, last year when Buffett went all in on the energy stocks.
Chevron shares surged in 2022, rising 36.9% as energy was the best performing sector for the second year in a row. But it remains cheap as earnings have also risen. Chevron is trading with a forward P/E of just 10.8.
It's yielding 3.2% now.
Should you follow Buffett into the energy trade, or is it too late to jump into Chevron?
5. The Coca-Cola Company KO
Coca-Cola has been in the Berkshire portfolio since the first quarter of 2001. Berkshire has held it through the Great Recession and the pandemic. It's still the fourth largest position in the portfolio.
Coca-Cola shares are up 25% over the last 2 years, versus just 5.4% for the S&P 500.
But shares aren't cheap. It trades with a forward P/E of 24.4. And Coca-Cola has a PEG ratio of 3.9.
Is Coca-Cola too expensive for value investors in 2023?
What Else Should You Know About Berkshire Hathaway to Start 2023?
Listen to this week's podcast to find out.
[In full disclosure, Tracey owns BAC in Zacks Value Investor portfolio.]
Why Haven't You Looked at Zacks' Top Stocks?
Our 5 best-performing strategies have blown away the S&P's impressive +28.8% gain in 2021. Amazingly, they soared +40.3%, +48.2%, +67.6%, +94.4%, and +95.3%. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Tracey Ryniec is the Value Stock Strategist for Zacks.com. She is also the Editor of the Insider Trader and Value Investor services. You can follow her on twitter at @TraceyRyniec and she also hosts the Zacks Market Edge Podcast on iTunes.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Click here for your free subscription to Profit from the Pros.
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Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com/performance
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Bank of America Corporation (BAC) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
CocaCola Company The (KO) : Free Stock Analysis Report
Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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(21:00) - Episode Roundup: BRKB, ARKK, AAPL, BAC, KO, AXP, TSM, CVX, EXAS, ZM, TSLA Podcast@Zacks.com Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks. Apple Corp. AAPL Apple is Berkshire's largest equity holding. Click to get this free report Bank of America Corporation (BAC) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report CocaCola Company The (KO) : Free Stock Analysis Report Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report To read this article on Zacks.com click here.
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(21:00) - Episode Roundup: BRKB, ARKK, AAPL, BAC, KO, AXP, TSM, CVX, EXAS, ZM, TSLA Podcast@Zacks.com Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks. Click to get this free report Bank of America Corporation (BAC) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report CocaCola Company The (KO) : Free Stock Analysis Report Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report To read this article on Zacks.com click here. Apple Corp. AAPL Apple is Berkshire's largest equity holding.
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(21:00) - Episode Roundup: BRKB, ARKK, AAPL, BAC, KO, AXP, TSM, CVX, EXAS, ZM, TSLA Podcast@Zacks.com Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks. Click to get this free report Bank of America Corporation (BAC) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report CocaCola Company The (KO) : Free Stock Analysis Report Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report To read this article on Zacks.com click here. Apple Corp. AAPL Apple is Berkshire's largest equity holding.
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(21:00) - Episode Roundup: BRKB, ARKK, AAPL, BAC, KO, AXP, TSM, CVX, EXAS, ZM, TSLA Podcast@Zacks.com Every week, Tracey Ryniec, the editor of Zacks Value Investor portfolio, shares some of her top value investing tips and stock picks. Apple Corp. AAPL Apple is Berkshire's largest equity holding. Click to get this free report Bank of America Corporation (BAC) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Chevron Corporation (CVX) : Free Stock Analysis Report CocaCola Company The (KO) : Free Stock Analysis Report Berkshire Hathaway Inc. (BRK.B) : Free Stock Analysis Report To read this article on Zacks.com click here.
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17589.0
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2023-01-16 00:00:00 UTC
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History Says the Nasdaq Could Soar in 2023 -- 5 Stocks You'll Wish You'd Bought if It Does
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AAPL
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https://www.nasdaq.com/articles/history-says-the-nasdaq-could-soar-in-2023-5-stocks-youll-wish-youd-bought-if-it-does
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The Nasdaq-100 technology index plunged into bear territory during 2022, ending the year with a decline of 33%. Wounded tech investors might be pleased to learn that 2023 could be a booming year for the index if history is any guide. That's because, since its inception in 1985, the Nasdaq-100 has only fallen two years in a row on one occasion -- the period between 2000 and 2002, otherwise known as the dot-com tech bust.
Historically, in the first positive year following a loss, the Nasdaq-100 returned between 37% and 64%, or an average of 51% across the four instances in 1991, 2003, 2009, and 2019. To be clear, investors will have to grapple with a few hurdles in 2023 before they see long-lasting gains, like elevated inflation and rising interest rates. But some of those challenges have begun to resolve, and the Nasdaq-100 is already up 4.9% in January, suggesting a great start.
If the tech index does have a blockbuster year as history suggests, here are five stocks that stand to benefit from the recovery.
1. Microsoft
Microsoft (NASDAQ: MSFT) is one of the safest bets on Wall Street and gets praise from analysts and retail investors alike. That's because the company has a track record of success spanning more than three decades and has crushed the return of the broader stock market since its initial public offering (IPO) in 1986.
Microsoft has billions of customers using its legacy software products like the Windows operating system and the Office 365 document suite, but its business is now more diverse than ever. It has a fast-growing cloud services segment led by its Azure platform, which is ranked in the top two in the industry. It also holds a leadership position in gaming through its Xbox brand, which could expand further if the company's $69 billion acquisition of development studio Activision Blizzard passes regulatory scrutiny.
Overall, Microsoft could deliver a whopping $212 billion in revenue during fiscal 2023 (ending June 30), which is a 7.1% increase over fiscal 2022. But this company is always thinking about the future, so keep an eye on its planned $10 billion equity purchase of OpenAI, the developer of ChatGPT.
2. Apple
Apple (NASDAQ: AAPL) makes some of the most popular consumer electronics in the world and, like Microsoft, is a phenomenal long-term success story loved by a lengthy list of investing giants that includes Warren Buffett. Apple is coming off another successful product launch in September, where it unveiled its flagship range of iPhone 14 smartphones, plus next-generation accessories like the Watch Ultra and AirPods wireless headphones. These add-ons to the iPhone ecosystem have become multibillion-dollar revenue generators on their own, and now rumors are swirling that Apple is about to tackle the next frontier -- virtual/augmented reality -- later this year.
Despite the company having a tough 2022 as consumers pulled back on their spending, it still managed to deliver record-high revenue of $394 billion for the fiscal year (ended Sept. 24). Its services segment, which includes subscriptions like Apple Music, Apple News, and iCloud, was the star growth driver once again.
With Apple stock down 25% from its all-time high, this is a rare opportunity to buy America's largest company by market cap at a discount.
3. Zscaler
Cybersecurity powerhouse Zscaler's (NASDAQ: ZS) stock has collapsed by 70% since hitting its all-time high in November 2021, but its business had a spectacular 2022. That's because corporate executives named cyber risk the top threat to their revenue last year in a survey conducted by PwC, and thus continued to invest heavily in protection.
Zscaler is the developer of zero-trust technology, which is designed to protect networks by treating all accessors as hostile. When an employee tries to enter their company's network, Zscaler's Zero Trust Exchange verifies their identity by going beyond login credentials and analyzing the user's location, device, and role within the organization to make sure that the user is supposed to be there.
In fiscal 2022 (ended July 31), Zscaler delivered $1.09 billion in revenue, which was a 62% jump year over year. It was the fastest rate of growth since the company went public in 2018, even in the face of a weak economy. The company expects to follow up the result with more than $1.52 billion in revenue in fiscal 2023.
Zscaler stock might be trading down steeply, but the strength of its business suggests it could be one of the first to soar higher if the Nasdaq-100 recovers.
4. Nvidia
Nvidia (NASDAQ: NVDA) is one of the world's leading producers of advanced semiconductors (computer chips). Some of the incredible progress being made in areas like artificial intelligence (AI) wouldn't be possible without the hardware that Nvidia develops, and it's often referred to as a pioneer of such technologies as a result.
The company's gaming segment -- once its largest source of revenue -- struggled recently as consumers spend less money on big-ticket items like computers. But Nvidia's data center business has picked up the slack, and it has the potential to drive the entire company forward over the next few years as further advancements in machine learning and AI foster demand for advanced chips. The data center is no longer a place to simply store information; it has become a central training ground for AI models and Nvidia is at the forefront.
But there's one other part of Nvidia's business investors should watch long-term. That's the automotive segment, where its Drive platform has been adopted by at least 35 of the world's largest car manufacturers. Drive is an end-to-end hardware and software solution for car makers that want to install fully autonomous self-driving capabilities into their vehicles.
Nvidia is a quintessential company of the future with the potential to supercharge any stock portfolio in the long run.
5. Amazon
Amazon (NASDAQ: AMZN) is another company suffering from a drop in consumer spending, because e-commerce still makes up over 80% of its total revenue. But Amazon is set to emerge from this difficult economic period a much leaner business, as it has shuttered some of its loss-making start-up projects and trimmed its workforce.
The company does have diverse revenue streams, though, and its Amazon Web Services (AWS) cloud platform is at the top of what could be a $1.5 trillion industry by 2030 (according to Grand View Research). Plus, it has a booming advertising business that sells spots on its flagship website, Amazon.com, which attracts 2.7 billion visitors a month. But opportunities in that area could expand through its Prime streaming service, and its growing portfolio of live sports rights.
When Amazon reports its 2022 full-year results later this month, the company is expected to have generated over $510 billion in revenue. It would be the first year it has passed the half-trillion-dollar milestone.
Much like Microsoft and Apple, Amazon has delivered outsize returns for investors compared to the broader stock market since it went public in 1997. There's no reason to think it will stop over the long term, and with the stock down 48% from its all-time high, this is a rare opportunity to buy at a steep discount.
10 stocks we like better than Microsoft
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Microsoft wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Activision Blizzard, Amazon.com, Apple, Microsoft, Nvidia, and Zscaler. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple Apple (NASDAQ: AAPL) makes some of the most popular consumer electronics in the world and, like Microsoft, is a phenomenal long-term success story loved by a lengthy list of investing giants that includes Warren Buffett. It also holds a leadership position in gaming through its Xbox brand, which could expand further if the company's $69 billion acquisition of development studio Activision Blizzard passes regulatory scrutiny. Apple is coming off another successful product launch in September, where it unveiled its flagship range of iPhone 14 smartphones, plus next-generation accessories like the Watch Ultra and AirPods wireless headphones.
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Apple Apple (NASDAQ: AAPL) makes some of the most popular consumer electronics in the world and, like Microsoft, is a phenomenal long-term success story loved by a lengthy list of investing giants that includes Warren Buffett. With Apple stock down 25% from its all-time high, this is a rare opportunity to buy America's largest company by market cap at a discount. The Motley Fool has positions in and recommends Activision Blizzard, Amazon.com, Apple, Microsoft, Nvidia, and Zscaler.
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Apple Apple (NASDAQ: AAPL) makes some of the most popular consumer electronics in the world and, like Microsoft, is a phenomenal long-term success story loved by a lengthy list of investing giants that includes Warren Buffett. Despite the company having a tough 2022 as consumers pulled back on their spending, it still managed to deliver record-high revenue of $394 billion for the fiscal year (ended Sept. 24). In fiscal 2022 (ended July 31), Zscaler delivered $1.09 billion in revenue, which was a 62% jump year over year.
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Apple Apple (NASDAQ: AAPL) makes some of the most popular consumer electronics in the world and, like Microsoft, is a phenomenal long-term success story loved by a lengthy list of investing giants that includes Warren Buffett. Much like Microsoft and Apple, Amazon has delivered outsize returns for investors compared to the broader stock market since it went public in 1997. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Microsoft wasn't one of them!
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17590.0
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2023-01-16 00:00:00 UTC
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Should iShares S&P 100 ETF (OEF) Be on Your Investing Radar?
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AAPL
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https://www.nasdaq.com/articles/should-ishares-sp-100-etf-oef-be-on-your-investing-radar-4
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nan
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Launched on 10/23/2000, the iShares S&P 100 ETF (OEF) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.
The fund is sponsored by Blackrock. It has amassed assets over $7.40 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.20%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.49%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 31.10% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 9.05% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 36.87% of total assets under management.
Performance and Risk
OEF seeks to match the performance of the S&P 100 Index before fees and expenses. The S&P 100 Index measures the performance of the large-capitalization sector of the U.S. equity market. It is a subset of the S&P 500 and consists of blue chip stocks from diverse industries in the S&P 500 with exchange listed options & the Index represented approximately 45% of the market capitalization of listed U.S. equities.
The ETF has added about 3.96% so far this year and is down about -16.08% in the last one year (as of 01/16/2023). In the past 52-week period, it has traded between $161.29 and $212.94.
The ETF has a beta of 0.99 and standard deviation of 25.51% for the trailing three-year period, making it a medium risk choice in the space. With about 105 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares S&P 100 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, OEF is a reasonable option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $300.48 billion in assets, SPDR S&P 500 ETF has $372.31 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares S&P 100 ETF (OEF): ETF Research Reports
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
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SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Looking at individual holdings, Apple Inc (AAPL) accounts for about 9.05% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Click to get this free report iShares S&P 100 ETF (OEF): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research Reports To read this article on Zacks.com click here. Launched on 10/23/2000, the iShares S&P 100 ETF (OEF) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Blend segment of the US equity market.
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Click to get this free report iShares S&P 100 ETF (OEF): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc (AAPL) accounts for about 9.05% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Why Large Cap Blend Large cap companies usually have a market capitalization above $10 billion.
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Click to get this free report iShares S&P 100 ETF (OEF): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research Reports To read this article on Zacks.com click here. Looking at individual holdings, Apple Inc (AAPL) accounts for about 9.05% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Alternatives IShares S&P 100 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors.
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Looking at individual holdings, Apple Inc (AAPL) accounts for about 9.05% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Click to get this free report iShares S&P 100 ETF (OEF): ETF Research Reports Amazon.com, Inc. (AMZN) : Free Stock Analysis Report Apple Inc. (AAPL) : Free Stock Analysis Report Microsoft Corporation (MSFT) : Free Stock Analysis Report SPDR S&P 500 ETF (SPY): ETF Research Reports iShares Core S&P 500 ETF (IVV): ETF Research Reports To read this article on Zacks.com click here. The top 10 holdings account for about 36.87% of total assets under management.
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17591.0
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2023-01-16 00:00:00 UTC
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Wafer maker IQE flags potential demand hit in first half of 2023 fiscal
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AAPL
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https://www.nasdaq.com/articles/wafer-maker-iqe-flags-potential-demand-hit-in-first-half-of-2023-fiscal
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nan
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nan
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Jan 16 (Reuters) - IQE Plc IQE.L said on Monday it expected destocking in the wider industry to weigh on demand from its existing customers in the first half of the current fiscal year, after the chip components supplier forecast an 8% revenue growth in 2022.
The company, which makes semiconductor wafers for chips used in Apple AAPL.O products, said 2022 trading was boosted by revenue from its photonics division in the second-half period, partially offsetting softness in its wireless markets.
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich)
((abyjose.koilparambil@thomsonreuters.com; +919986528692))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The company, which makes semiconductor wafers for chips used in Apple AAPL.O products, said 2022 trading was boosted by revenue from its photonics division in the second-half period, partially offsetting softness in its wireless markets. Jan 16 (Reuters) - IQE Plc IQE.L said on Monday it expected destocking in the wider industry to weigh on demand from its existing customers in the first half of the current fiscal year, after the chip components supplier forecast an 8% revenue growth in 2022. (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich) ((abyjose.koilparambil@thomsonreuters.com; +919986528692)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The company, which makes semiconductor wafers for chips used in Apple AAPL.O products, said 2022 trading was boosted by revenue from its photonics division in the second-half period, partially offsetting softness in its wireless markets. Jan 16 (Reuters) - IQE Plc IQE.L said on Monday it expected destocking in the wider industry to weigh on demand from its existing customers in the first half of the current fiscal year, after the chip components supplier forecast an 8% revenue growth in 2022. (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich) ((abyjose.koilparambil@thomsonreuters.com; +919986528692)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The company, which makes semiconductor wafers for chips used in Apple AAPL.O products, said 2022 trading was boosted by revenue from its photonics division in the second-half period, partially offsetting softness in its wireless markets. Jan 16 (Reuters) - IQE Plc IQE.L said on Monday it expected destocking in the wider industry to weigh on demand from its existing customers in the first half of the current fiscal year, after the chip components supplier forecast an 8% revenue growth in 2022. (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich) ((abyjose.koilparambil@thomsonreuters.com; +919986528692)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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The company, which makes semiconductor wafers for chips used in Apple AAPL.O products, said 2022 trading was boosted by revenue from its photonics division in the second-half period, partially offsetting softness in its wireless markets. Jan 16 (Reuters) - IQE Plc IQE.L said on Monday it expected destocking in the wider industry to weigh on demand from its existing customers in the first half of the current fiscal year, after the chip components supplier forecast an 8% revenue growth in 2022. (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Rashmi Aich) ((abyjose.koilparambil@thomsonreuters.com; +919986528692)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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17592.0
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2023-01-16 00:00:00 UTC
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Is TSMC Stock a Buy Now?
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AAPL
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https://www.nasdaq.com/articles/is-tsmc-stock-a-buy-now-0
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nan
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nan
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Taiwan Semiconductor Manufacturing's (NYSE: TSM) stock price jumped 6% on Jan. 12 after the world's largest contract chipmaker posted its fourth-quarter report. Its revenue rose 43% year over year to NT$625.5 billion ($19.9 billion), but missed analysts' expectations by NT$10.5 billion ($345 million) and marked its first quarterly top-line miss in two years. Its net income jumped 78% to NT$295.9 billion ($9.4 billion), or $1.82 per American Depositary Receipt (ADR), and still beat analysts' estimates by a nickel.
TSMC's headline numbers were mixed, but its stock had already declined by more than 30% over the past 12 months as investors fretted over the slowing growth of the semiconductor sector. At 15 times forward earnings, its downside potential also seemed fairly limited ahead of its Q4 report. So should investors buy TSMC's stock right now?
Image source: Getty Images.
Why will TSMC's growth cool off in 2023?
TSMC generated 41% and 39% of its revenues from the high-performance computing (HPC) and smartphone markets, respectively, in 2022. Its top HPC clients include Advanced Micro Devices (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA), while its top smartphone clients include Apple (NASDAQ: AAPL) and Qualcomm (NASDAQ: QCOM).
AMD and Nvidia experienced big growth spurts during the worst of the pandemic as more people upgraded their PCs for online classes, remote work, and high-end gaming, but those tailwinds dissipated after the lockdowns ended. Apple and Qualcomm benefited from the 5G upgrade cycle from 2019 to 2021, but the end of that cycle -- along with inflationary headwinds and the COVID-19 lockdowns in China -- have curbed the market's appetite for new smartphones.
TSMC's revenue rose 43% in 2022 (34% in USD terms), but analysts anticipate less than 4% growth in 2023 as its two growth engines cool off. Its automotive and Internet of Things (IoT) businesses could continue to grow this year, but those two smaller segments only accounted for 14% of its revenues in 2022.
During the conference call, TSMC CEO C.C. Wei predicted the entire semiconductor market, excluding memory chips, would "decline approximately 4%" in 2023. However, Wei also expects the semiconductor cycle to "bottom" in the first half of the year and recover in the second half -- which suggests the industry will return to growth in 2024.
Will TSMC maintain the process lead this year?
TSMC might face a cyclical slowdown this year, but it remains far ahead of its closest rivals, Samsung and Intel (NASDAQ: INTC), in the "process race" to manufacture smaller, denser, and more power-efficient chips.
TSMC generated 26% of its revenue from its top-tier 5nm chips in 2022, and 27% came from its 7nm chips. The remaining 47% came from its older nodes. It will likely generate even more revenue from the 5nm node this year as it ramps up the production of its newest 3nm chips, which are expected to account for a "mid-single-digit" percentage of its 2023 revenue.
That roadmap still puts it at least two generations ahead of Intel, which previously claimed it could catch up to TSMC in the process race by 2024, and about one generation ahead of Samsung. During the peak of the chip shortage a year ago, TSMC said it would boost its capex to $40 billion to $44 billion in 2022 to maintain that lead and produce more chips.
But TSMC actually only spent $36.3 billion on capex for the full year, and it expects that figure to decline to $32 billion to $36 billion in 2023. That lower spending outlook indicates that chip supplies are stabilizing as TSMC remains comfortably ahead of Intel and Samsung in the process race. By comparison, Intel expects to spend $21 billion on its capex in 2022.
Analysts expect TSMC's net income to decline 15% in 2023 as it ramps up its production of 3nm chips and prepares for the leap to 2nm chips in 2025, but its lower capex might reduce some of the near-term pressure on its margins.
Is it the right time to buy TSMC?
TSMC's gains in the first half of 2023 might be limited as the bear market drags on, but it could bounce back in the second half as the smartphone and HPC markets heat up again. Therefore, I believe TSMC is still a solid investment in the semiconductor sector -- and it's definitely the right time for long-term investors to buy the stock.
10 stocks we like better than Taiwan Semiconductor Manufacturing
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Taiwan Semiconductor Manufacturing wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of January 9, 2023
Leo Sun has positions in Apple and Qualcomm. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Intel, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Its top HPC clients include Advanced Micro Devices (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA), while its top smartphone clients include Apple (NASDAQ: AAPL) and Qualcomm (NASDAQ: QCOM). Taiwan Semiconductor Manufacturing's (NYSE: TSM) stock price jumped 6% on Jan. 12 after the world's largest contract chipmaker posted its fourth-quarter report. AMD and Nvidia experienced big growth spurts during the worst of the pandemic as more people upgraded their PCs for online classes, remote work, and high-end gaming, but those tailwinds dissipated after the lockdowns ended.
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Its top HPC clients include Advanced Micro Devices (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA), while its top smartphone clients include Apple (NASDAQ: AAPL) and Qualcomm (NASDAQ: QCOM). The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Intel, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple.
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Its top HPC clients include Advanced Micro Devices (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA), while its top smartphone clients include Apple (NASDAQ: AAPL) and Qualcomm (NASDAQ: QCOM). Its revenue rose 43% year over year to NT$625.5 billion ($19.9 billion), but missed analysts' expectations by NT$10.5 billion ($345 million) and marked its first quarterly top-line miss in two years. TSMC might face a cyclical slowdown this year, but it remains far ahead of its closest rivals, Samsung and Intel (NASDAQ: INTC), in the "process race" to manufacture smaller, denser, and more power-efficient chips.
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Its top HPC clients include Advanced Micro Devices (NASDAQ: AMD) and Nvidia (NASDAQ: NVDA), while its top smartphone clients include Apple (NASDAQ: AAPL) and Qualcomm (NASDAQ: QCOM). Its revenue rose 43% year over year to NT$625.5 billion ($19.9 billion), but missed analysts' expectations by NT$10.5 billion ($345 million) and marked its first quarterly top-line miss in two years. It will likely generate even more revenue from the 5nm node this year as it ramps up the production of its newest 3nm chips, which are expected to account for a "mid-single-digit" percentage of its 2023 revenue.
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17593.0
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2023-01-15 00:00:00 UTC
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2 Cheap Tech Stocks to Buy Right Now
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AAPL
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https://www.nasdaq.com/articles/2-cheap-tech-stocks-to-buy-right-now-10
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nan
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Last year's interest rate increases are reminding everyone about the merits of value investing, but that doesn't mean you should ignore tech stocks. While "tech" gets a bad rap due to many high-profile yet unprofitable companies -- mostly in the software or EV spaces -- many hardware companies are very cheap on a multiple of current earnings.
Even better, technology hardware infrastructure is the key enabler for many of today's big innovations, from artificial intelligence to industrial automation to electric vehicles and the smart grid.
Here are two dividend-paying hardware companies powering each of those big trends, and their stocks can be had at bargain-basement valuations today.
Kulicke and Soffa
Advanced packaging company Kulicke and Soffa (NASDAQ: KLIC) is known for its core ball bonder business, which attaches chips in packages or to an electronic circuit board. The highly cyclical business boomed over 2020 and 2021. However, with investors fearing a downturn in wire-bonding equipment sales going forward, K&S trades at just a 6.8 price-to-earnings (PE) ratio. Actually, even that low valuation underrates how cheap this stock is. K&S has about $775 million in cash and no debt, which amounts to more than a quarter of its market cap!
However, Kulicke and Soffa, while cyclical, should see higher highs and lows with time as semiconductors are now leaning more on advanced packaging to drive breakthroughs in power and performance. And new applications, such as electric vehicles, also need more packaging equipment.
Meanwhile, even chipmakers themselves are using advanced packaging techniques within individual processors. Leading logic chip designers have begun constructing complex chips through connected "chiplets" in which individual semiconductor functions are etched onto small sub-chips. The sub-chips are then stitched together in a modular fashion with advanced packaging techniques in various combinations.
Since processors have become more advanced and difficult to produce, Intel and Advanced Micro Devices each recently incorporated chiplet architectures into their most current processor designs.
In addition, K&S has an exciting new growth business in advanced LED displays, including mini- and microLED formats. Mini- and micro-LEDs are the next generation of high-end screens with quality advantages over traditional LCD and OLED screens. While mini-LEDs are now used only in the highest-end screens, such as televisions, as the technology matures, mini- and micro-LEDs could find their way into mainstream devices like PCs and smartphones.
On the lastearnings call CEO Fusen Chen noted that the company's advanced display tools business had already exceeded the company's internal targets for 2022. And just last week, Bloomberg reported that Apple (NASDAQ: AAPL) is pursuing in-house production of its own mini- and micro-LED displays. The move is another bid by Apple to bring more of its hardware production in-house and replace its existing OLED screens made by third parties.
According to people familiar with the matter, Apple intends to use mini-LEDs in high-end Apple Watches by the end of next year, with plans to potentially expand the advanced display technology to the iPhone later on.
Should Apple begin to use mini-LEDs in iPhone screens and adopt Kulicke and Soffa's technology to produce them, it could be a massive new business for this small-cap company.
Dell Technologies
There's a good reason Dell Technologies (NYSE: DELL) trades at just 6.5 times next year's earnings estimates: The PC market is in freefall. Just last week, tech research firm Gartner reported that PC shipments fell a stunning 28.5% in the fourth quarter -- the largest decline since the firm began collecting data in the mid-1990s!
That's likely factored into Dell's low valuation. Meanwhile, Dell's infrastructure segment, which sells servers, storage, and software to data center operators, actually surpassed the PC segment last quarter in terms of operating income. So the massive slowdown in PC and desktop sales won't affect Dell's overall results as much as some may think. While data center investment is projected to slow, it won't be by nearly as much as the PC slowdown.
Dell has also been selling more multi-cloud storage software of late, as well as other services not tied purely to hardware sales. Last quarter, services made up 23% of Dell's revenue and grew 6%, even as hardware products fell 10%. Overall, recurring services and software revenue should be less sensitive to the economic cycle.
More than one-third off its all-time highs, Dell should be able to continue growing its 3.2% dividend and repurchasing stock, even in these lean times. Once the company gets past this downturn, it should be able to capture opportunities in the data economy over the long term.
Management's model is to grow revenue at a 3% to 4% rate over the long term, with earnings-per-share growth of 6%. That may not sound like much, but since shareholders can buy Dell's stock today at a 16% earnings yield, it actually makes Dell attractive despite its various headwinds.
10 stocks we like better than Dell Technologies
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*Stock Advisor returns as of January 9, 2023
Billy Duberstein has positions in Apple, Dell Technologies, and Kulicke And Soffa Industries and has the following options: short January 2023 $210 calls on Apple. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, and Intel. The Motley Fool recommends Gartner and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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And just last week, Bloomberg reported that Apple (NASDAQ: AAPL) is pursuing in-house production of its own mini- and micro-LED displays. Even better, technology hardware infrastructure is the key enabler for many of today's big innovations, from artificial intelligence to industrial automation to electric vehicles and the smart grid. However, Kulicke and Soffa, while cyclical, should see higher highs and lows with time as semiconductors are now leaning more on advanced packaging to drive breakthroughs in power and performance.
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And just last week, Bloomberg reported that Apple (NASDAQ: AAPL) is pursuing in-house production of its own mini- and micro-LED displays. Kulicke and Soffa Advanced packaging company Kulicke and Soffa (NASDAQ: KLIC) is known for its core ball bonder business, which attaches chips in packages or to an electronic circuit board. Meanwhile, Dell's infrastructure segment, which sells servers, storage, and software to data center operators, actually surpassed the PC segment last quarter in terms of operating income.
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And just last week, Bloomberg reported that Apple (NASDAQ: AAPL) is pursuing in-house production of its own mini- and micro-LED displays. Dell Technologies There's a good reason Dell Technologies (NYSE: DELL) trades at just 6.5 times next year's earnings estimates: The PC market is in freefall. See the 10 stocks *Stock Advisor returns as of January 9, 2023 Billy Duberstein has positions in Apple, Dell Technologies, and Kulicke And Soffa Industries and has the following options: short January 2023 $210 calls on Apple.
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And just last week, Bloomberg reported that Apple (NASDAQ: AAPL) is pursuing in-house production of its own mini- and micro-LED displays. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Dell Technologies wasn't one of them! See the 10 stocks *Stock Advisor returns as of January 9, 2023 Billy Duberstein has positions in Apple, Dell Technologies, and Kulicke And Soffa Industries and has the following options: short January 2023 $210 calls on Apple.
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17594.0
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2023-01-14 00:00:00 UTC
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Big Tech CEOs Give Investors Something to Think About
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AAPL
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https://www.nasdaq.com/articles/big-tech-ceos-give-investors-something-to-think-about
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nan
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nan
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In this podcast, Motley Fool Senior Analysts Matt Argersinger and Jason Moser discuss:
Layoff announcements and a sober prediction from Microsoft CEO Satya Nadella.
The market's positive reaction to the December jobs report.
Key things they're watching in the tech industry.
Newest unveilings at CES in Las Vegas.
The latest from Stitch Fix and Constellation Brands.
Bed Bath & Beyond's real estate footprint as the company seems to near a bankruptcy filing.
Two stocks on their radar: Amazon and Bentley Systems.
Malcolm Ethridge, host of the Tech Money podcast, weighs in with predictions of two more interest rate hikes, why megacap tech is the key to a stock market rally, and what he's watching for this earnings season.
Looking to get a jump start on your 2023 financial goals? The Motley Fool's flagship service, Stock Advisor, is open to new members for just $99 a year! Access this special offer by visiting www.fool.com/intro.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
10 stocks we like better than Walmart
When our award-winning analyst team has an investing tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Walmart wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
Stock Advisor returns as of December 1, 2022
This video was recorded on Jan. 06, 2023.
Chris Hill: All eyes on Vegas for the start of CES, and the market ends the week on a positive note. Motley Fool Money starts now.
[music]
From Fool global headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Chris Hill. Joining me: Motley Fool Senior Analysts Jason Moser and Matt Argersinger. Good to see you as always, gentlemen.
Jason Moser: Howdy.
Matt Argersinger: Chris.
Chris Hill: We've got the latest news from Wall Street. Malcolm Ethridge from the Tech Money podcast is our guest. And as always, we've got a couple of stocks on our radar.
But we begin with the big picture on a shortened trading week for investors. Three of the most influential CEOs in the tech industry dominated the headlines. Salesforce CEO Marc Benioff announced his company would be laying off 8,000 employees. In a memo to staff, Andy Jassy announced Amazon will be cutting 18,000 jobs. And in an interview with CNBC's network in India, Microsoft CEO Satya Nadella painted a sober picture of the business landscape, saying, "The next two years are probably going to be the most challenging."
Matt, I understand any investor who hears this and thinks, well, this is just one industry. It's not healthcare, it's not energy. But these are influential businesses. And in the case of Microsoft and Amazon, you've got two of the biggest companies by market cap in the world. So given all of that, should investors temper their expectations for the next year or two?
Matt Argersinger: I think they should, Chris, and what's interesting is everything you laid out is such in stark contrast to what the market is doing on Friday with this jobs report that came out, which was stronger than expected, showing big job gains in places like leisure and hospitality, healthcare, construction, and other places.
But as we've talked about actually on the show, the layoffs that we're hearing about and seeing are coming from the big technology companies like the ones you named, financial services companies. Ultimately, I think, even though we can say, well, maybe this is going to be a white-collar recession, or Jason had a great term for it earlier, the "rich-session."
Jason Moser: Rich session, yeah.
Matt Argersinger: But ultimately, you're talking about fairly highly paid workers. As you mentioned, influential companies, a big industry that dominates the market. Eventually, this has to roll downhill a little bit. I do think consumer spending, which is, of course, really dominated in this particular group, it's going to be affected. To me, it's worrisome. It doesn't take away the recession equation that we think we're probably facing this year.
Chris Hill: Jason, to Matty's point, we did see a positive reaction from investors on Friday after the jobs report, in part because wage growth came in lower than expected. I think that's probably why we saw the market pop on Friday.
But to his point, when you hear these CEOs making these comments, making these moves, particularly in the case of Amazon, where the raw number of employees is larger, more than double what we saw from Salesforce. But on a percentage basis, it's really just about 1%, maybe a little more than 1% of all of Amazon's employee base.
Jason Moser: I think it's fair to say we are, well... Do we have to be closer to the beginning of this than the end of it? It does feel like these are just the first announcements of job cuts that we'll likely see through the course of the year, at least the first half of the year. I think that we've seen these... tech companies have been on the radar all year, basically, last year. Certainly the back half of the year as they struggled to cut costs and right-size workforces.
Really, I think a lot of that is a product of just cleaning up the mess really from these past few years. We saw a lot of growth pulled forward. We saw a ton of stimulus go out into the economy, and expectations certainly got out of whack to a degree, at least in absolutes. It turns out people aren't fully changing how they do everything.
It reminds me, takes me back to something you and I were speaking about earlier in the week. A good lesson I think we could all take away from this. At least something to reiterate is to be careful in investing with that absolute mindset and saying, well, things are just going to change from this to that. We're going into the digital economy. Everybody is going to be working remotely now. Everything's going to be done via Zoom and Slack, and we don't ever have to go anywhere anymore. You can just do your exercises from home now. Who needs a gym?
Well, we've certainly seen with Planet Fitness. I mean, there's a recovery going on there. I think it's because consumer behavior is starting to normalize, at least somewhat. There was this mindset over the last few years that we could be headed toward this permanent change or shift, and I think now we're seeing that change or shift is a little bit more modest. It's like hybrid as opposed to saying we're all going to be working in person or we're all going to be working remotely. It feels like hybrid is the mindset going for the way most things are going to be going forward. and these tech companies, I think, are coming to that realization and they're having to restructure their businesses accordingly.
Matt Argersinger: I think Jason nailed it. Going back to what you said, Chris, about just Amazon specifically. That 18,000 layoff numbers seems big. But from the end of 2019 to the peak in first quarter of 2022, Amazon hired 800,000 workers. They more than doubled their workforce.
Now to Jason's point, all these trends and things I think we saw it in the immediate aftermath of the pandemic, they're starting to slow or reverse a little bit. E-commerce is even slowing down. I was looking at data from Forbes, and they're projecting that e-commerce, as a share of retail sales, it ended around 20% in 2022. That's big. It's a big share. But I think especially in the aftermath of COVID-19, I just remember seeing projections that e-commerce was going to account for more than a third of retail sales, even 50% of retail sales, and I think it's a near certainty that companies like Amazon saw those lofty projections, and it made its way into their hiring plans.
Jason Moser: I think to that point just, what you're talking about -- Salesforce. I mean, you look at it, the hiring that's gone on at Salesforce versus the growth that the businesses witnessed. In looking at just as of January 31, 2020, the company had more than 49,000 employees, and they reported revenue over that stretch, over that year, of $17 billion. Most recently, we saw in October that they had 80,000 employees, and for that trailing-12-month period, they recognized reported revenue of $30.3 billion. So you see, over that period of time, revenue grew 78%. That's outstanding. Employees grew 63%. That's a lot of hiring.
Now you consider over that stretch, too, we saw margins decline across the board. Costs are starting to get a little bit out of control, and now management is seeing these headwinds on the horizon. What they see going forward is a big slowdown. That growth that was pulled forward, that 78% revenue growth, that wasn't normal. That was exceptional, and we're starting to see that normalize now. That growth wasn't because they hired more people. They hired more people thinking that growth might continue, and now we're seeing clear signs that it won't. And so going forward, they're going to have to account for that. That really just comes through whittling down the cost structure, whittling down your employee base, which just, traditionally, that's one of the most expensive things a company has to maintain, is its employee base.
Chris Hill: I think it's going to be interesting to see not only where the other big tech companies go in terms of staffing and potential layoffs. You think about Alphabet, Microsoft as well. But also if Salesforce gets to a point where they feel like they need to cut even more jobs, because on a percentage basis, what Benioff announced was a reduction of 10% of the staff. That's a pretty sizable percentage. Maybe not quite a rip-the-Band-Aid-off approach but pretty close to it. I think it's going to be noteworthy if we get another cut in jobs from Salesforce, whereas I think the three of us are very much expecting more announcements of reductions at Amazon.
All that being said, Matty, thinking forward within the tech industry, what is something you're going to be watching this year?
Matt Argersinger: I think when it comes to tech, I feel like there's been rumors about this for years if not decades. But I feel like this year could be the year where Apple does enter that virtual reality, augmented reality space. They're calling it, I think, their mixed-reality headset. If that comes out -- and I'm not saying it's going to be a game changer like the iPhone was, certainly not. But I think it could finally lead to some mass adoption within that space. It's something that we've been expecting for a while, and I think Apple could be the one to do it.
If it does become the mass adoption platform, then imagine the third-party applications, the experiences that could be developed for Ford in the near term. I think it could be massive, and it could be a catalyst that ignites a new tech bull market. I think that might be a little pie in the sky, but I think that's what tech almost needs. They almost need a new platform, a new marketplace, and I think something like a VR set, a mixed reality set from Apple could be that if it does again mass adoption.
I'm intrigued by the possibilities there. Who knows if it gets off to a great start or how many versions you have to get to before it does reach that mass adoption, but I do think it's something worth watching.
Chris Hill: Well, the iWatch was not a big hit when it first came out, and they just kept iterating, kept improving, and now it's bringing in a decent chunk of revenue.
Jason, what about you? What are you watching within the tech industry?
Jason Moser: I'm going to go a bit bigger picture. It's less company centric and more industry focused. And that is just looking at revenue per employee.
I think, going back to that point I made earlier about tech companies really realizing that they're having to rein in those costs, revenue per employee is always an interesting starting point, I think. You can get an idea of how productive a company is being, but you can also see trends. If a company is overhiring and it's not resulting in growth, then you see, over time, that revenue per employee go down.
But I think it's a good starting point there, and you can take it down the line then to look at how profits are being impacted. How are margins being impacted? Particularly in a time where revenue growth might be a bit more muted, as I think we all agree it will be at least in the near term. It's really just keeping an eye on how efficient these companies are.
Back to your point there on Salesforce and the rip-the-Band-Aid-off moment, I wouldn't be surprised to see many of these companies go back to the well when it comes to these job cuts because they hired so much over the last couple of years. It's not to target Salesforce or Amazon. I think companies across the board did it. Everyone's guilty. You just have to go ahead and atone for that, or you have to pay the price and deal with a really rough next couple of years as opposed to just a kind of rough next couple of years.
Chris Hill: After the break, we're heading to Las Vegas to check in on the latest news from CES. Stay right here. This is Motley Fool Money.
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Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Matt Argersinger. I hope the new year is going well so far.
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Shares of Stitch Fix up 12% this week on the news that company founder and former CEO Katrina Lake is returning to the corner office. First order of business was cutting 20% of the staff. Jason, how many more lives does Stitch Fix have?
Jason Moser: "I don't know" is the short answer. This is a tough one. Stitch Fix appears to be a business that has hit its ceiling, I think. With as many online subscription businesses that exist now, it's just facing a slew of competition that is clearly having an impact on the business.
Ms. Spaulding had a year and a half on the job there in very difficult conditions, I might add. You fast-forward and Ms. Lake coming back, it's hard to fully pinpoint what her end game is here. She still holds a significant amount of the business, better than 8.5% of the shares and considerable voting interest, so the dual-class share structure but as was noted in the announcement, Lake coming back, cutting 20% of the workforce.
Ultimately, when Ms. Spaulding took over, she had implemented some job cuts that left Stitch Fix with around 1,700 salaried employees as of June 2022. This additional cut, it's going to be 340, 350 additional jobs that they're going to whittle down. What was surprising to me was to see that this business has almost 8,000 employees to begin with. That just seems to be excessive.
But with that said, it makes sense that the standout quote in the announcement was that the focus for the team is squarely on creating a leaner, more nimble organization. Again, going back to businesses with bloated cost structures, obviously, Ms. Lake understands what's at stake here. They're also going to be closing down there Salt Lake City Distribution Center. A company that's clearly on the defensive these days.
Chris Hill: Challenging end to 2022 for Constellation Brands, the parent company of Corona beer and other beer, wine, and spirits brands. Saw sales growth in the beer category in the third quarter but that was offset by supply chain problems. Shares of Constellation Brands down nearly 10% this week, Matt.
Matt Argersinger: It's all about the beer, Chris. If you look at depletions, they were 5.7% in the quarter. It's down from a range of where they'd been, about 8% to 9% over the past several quarters. That means retailers are buying less from distributors because they're seeing lower sales at the storefront.
I think this is an example and maybe one of the rare examples or not rare examples of this era we're in where there's a product like beer which is more price elastic than others. You raise prices enough, and demand is going to fall. Constellation has been raising prices because of, like you said, increases in things like energy and aluminum related to their supply chain issues. It's having trouble transferring the full brunt of those prices onto its customers.
I think the bigger question for me, though, when I think of Constellation Brands and other alcoholic beverage businesses is younger people -- are they drinking less these days? I've heard it anecdotally, but there is some data I dug up from Gallup and a medical journal called JAMA Pediatrics. It's a journal focusing on young-adult and adolescent care. Younger people are, in fact, consuming alcohol at a lower rate than previous generations. Don't know if that holds up, but it just means that I think the three of us are going to have to pick up the slack.
Jason Moser: I think you make a great point there, Matty. You also see a lot of these companies, beer in particular. You're seeing more nonalcoholic options being served, and you've seen this new little niche market in hoppy seltzers. You're getting that hop flavor that you like from a beer in nonalcoholic seltzer form. It's really interesting to see all of the different experimentation these beverage companies are undertaking.
Matt Argersinger: I've always wondered what's the point of those nonalcoholic beers and things, but you're right, I guess there's a market for them.
Chris Hill: This week, over 100,000 technology enthusiasts descended upon Las Vegas for the Consumer Electronics Show. Among the early headlines from public companies, Roku unveiled a branded television, and Sony unveiled the prototype for an electric vehicle in partnership with Honda that's due on the market in 2026.
Jason, we've got about a minute left. Anything catch your attention?
Jason Moser: I thought that car looked really cool. Now, you might say, Sony, a car? But let's remember it's in partnership with Honda. They've got some experience there to help them steer their way forward on that one. No pun intended.
The one that stands out to me: Honestly, the Roku TV, it seems misguided. They're pivoting away from being a hardware company to being...a hardware company? This -- color me skeptical -- this is a business for a long time we said, well, the idea was to not worry so much about the hardware. That's a loss leader. It's all about the platform.
To hear management explain it, again, they know that the core of the business and the advertising revenue that they generate from their distributed platform there, that's the business, that's the market share. Making their own TVs is an effort to gain more market share. But remember, they license that technology to other TVs too so now that puts them in direct competition with them. It's not certain this is the right call.
Chris Hill: Jason Moser, Matt Argersinger, guys, we'll see you later in the show. But up next, more of what investors should expect this year with Tech Money podcast host Malcolm Ethridge. Stay right here. This is Motley Fool Money.
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Welcome back to Motley Fool Money. I'm Chris Hill. Malcolm Ethridge is a Certified Financial Planner, an executive vice president with CIC Wealth, and he's the host of the Tech Money podcast. He joins me now from the greater Washington, DC, area. Thanks for being here.
Malcolm Ethridge: No, always glad to get a chance to sit and talk markets with you, my friend.
Chris Hill: After the worst year for investors since 2008, what is your optimism level right now on a scale of 1 to 10?
Malcolm Ethridge: I appreciate you assuming I have some optimism. I do, but I appreciate you assuming my optimism is probably at about a 7.5 to 8, believe it or not. I'm pretty high, I think, on the optimism scale compared to a lot of the folks I listened to and read and watch.
Chris Hill: Why is that?
Malcolm Ethridge: I think the statistics of market corrections like the one we just dealt with, the one we're in, I guess I should say right now, the bear market cycle, that just because the calendar has turned over, doesn't mean the market cycle has. I got to remind myself of that and not talk about it in past tense.
But statistically, it takes about 14 months to work our way out of a 20% drawdown in the S&P. The one exception to that, the outlier, would be the tech wreck, so '01, '02, that was about 30 months. But we also don't have the same level of what's the word I would use, I hate saying "volatility" because it said so much, it means nothing anymore. I'll say "consternation" this time, and that'll be the word I use.
We don't have that level of heartburn the way we did in the VIX back then, and the NASDAQ fell something like 80% at that time, and we haven't gotten anywhere close to that. I just feel like that one outlier case doesn't really apply here. If we just look at the fact that 14 months, on average, is where we tend to be, November 2021 is where we all benchmark this whole thing started to get really ugly from, we're pretty much at the tail end of that average time period.
Then if you think about the fact that the S&P 500 tends to turn positive four to five months before the broader economy does, that also is encouraging, because that means that even though sentiment is very negative right now out on the street, the market itself can and will start to turn positive before we start to feel good about the markets as investors again.
Just from those statistics, I look at it and I say, I think we've already taken the whipping that we're going to take, and we can start to turn the corner and be a little more positive about the prospects going forward.
Chris Hill: Let me go back to tech for a second, because earlier in the show, we talked about Salesforce and Amazon kicking off the year with layoff announcements. I'm curious if you think whether it is big tech companies like them, or companies in other industries. Do you think we're in four months of these types of announcements?
Malcolm Ethridge: I think we are to a point. I think we'll continue to see those announcements coming out of the tech world. Because the tech world also got extremely greedy and built up recruiting networks that it didn't necessarily need.
If you really look under the hood of the leaked memo from Amazon, it's less software engineers and program managers and folks like that that are really instrumental to the organization. It's more recruiters and HR staff and folks like that. They are an important piece to the puzzle, but they're much more important during boom times, when we're hiring anybody with a pulse and a degree in X, Y, and Z versus now where we're being a little bit more thoughtful and methodical about who comes in the door aad we're figuring out ways to be happy with the workforce that we have.
I think those layoffs are really just... I hate to say it this way, because it's literally people losing their jobs that we're talking about. But it's from a number's perspective. It's just trimming the fat. It's cutting headcount for the sake of we don't really need this headcount to serve this function anymore. Versus folks who are actually doing the work and building the products and moving the organization forward. What we'll see now is productivity per employee, which, again, has a very cold metric that only CFOs appreciate.
But from an investor standpoint, productivity per employee will go up in 2023 for these tech companies where software is the service that they're selling. They've got a ton of operating leverage. It doesn't cost you anymore to deliver Malcolm the newest version of XYZ software than it did for you to deliver it to Chris. That added customer is now just one more layer of icing on the cake. The productivity per employee goes up because you shrink the headcount, take your medicine in January and we can move forward now.
Chris Hill: Last year, you and I talked a lot about interest rate hikes. We weren't the only ones, really 2022 was the year of interest rate hikes. When you think about the year to come, the FED meeting in early February: What, if any, expectations do you have either around the size of interest rate hikes or how long they may continue into the year?
Malcolm Ethridge: I try my best not to let my optimism as an investor creep into my expectations as an asset manager, so do with that what you will. But my thinking on this is that we're likely going to see two more raises in the first quarter of the year at 25 basis points. Because that's where the expectations and the consensus and the dot plot is. I think if you look at what Powell has done, pretty much the second half of 2022 and beyond. It's been perfectly in alignment with where the dot plot told him he needed to be and where the Street's expectations where anyway.
He has said language that's extremely aggressive and extremely hawkish, and we're looking for this, and we're going to do that. One good report doesn't tell us that we got to stop and mission accomplished. But his actual behaviors where the decisions he's made haven't really been all that aggressive in comparison to what the expectations were all along.
I think we're probably going to see two hikes to start out 2023 and then a pause following that. I'm not in the camp that thinks we're going to get this pivot, and suddenly there at the end of the year, I think that's nonsense. But I do think we will see a pause is the announcement that we'll get that makes the difference there.
Chris Hill: Obviously, with the market decline that we saw in 2022, particularly with the NASDAQ being, what 10, 12 percentage points greater than the S&P 500. Not everything is cheap, but certainly, some things are cheaper on a valuation basis. I'm curious if there are particular areas in the market that are looking attractive to you right now.
Malcolm Ethridge: I am, again trying not to sound too much like, I'm talking my own book because I do own quite a bit of tech stocks individually, and then our clients also in aggregate on a considerable amount of tech. Just the nature of the way the market is shaped right now, the S&P is shaped.
But I am of the opinion that there can't be a meaningful rally in 2023 that doesn't involve megacap tech. I think the term "megacap tech" has gotten smaller, the number of companies that it includes. It used to be Tesla. I don't think it includes Tesla anymore. It used to be Netflix. I don't think it's Netflix anymore.
When you look at companies like that, who do you have left? You've got Apple, you've got Google, Microsoft, Amazon and maybe a couple more that for some reason just are not drawing immediately to my memory. But those are the companies that I think make all the difference in weather we have a recovery that's single-digit percentage by the end of the year, or a meaningful recovery by the end of the year, where we're now talking maybe double digits that filter -- hoping for, because obviously we want to recoup some of what we lost in 2022. But we can't have a real meaningful recovery, in my opinion, that doesn't involved at least two out of the four mega-cap tech names that I just mentioned.
Chris Hill: Let's go to the near future, then. Earnings season is going to kick in later this month. What are you going to be watching for, whether its actual results or guidance and commentary from company executives?
Malcolm Ethridge: Again, I like tech, but I'm going to move away from megacap tech this time and point out the fact that you just mentioned Amazon, the behemoth, is slated to cut 18,000 workers. Salesforce slated to cut something like what was it? Five thousand, I think.
Chris Hill: Ten thousand.
Malcolm Ethridge: Ten thousand workers, and then all of the ones that were announced last year that layoffs that FY has been tracking. It's like north of 125,000 people that have been laid off. The thing I'm interested to see now is who among the tech companies that are larger, but they're not... Microsoft... are mentioning the fact that they are looking to hire, and not in a meaningful way where we're bringing on 18,000 people, that just doesn't make any sense.
But in a market that's as soft as this one is in the tech space where people are being laid off, anybody who's showing strength and saying we want to bring people in the door. That would be a very interesting little nugget to get out of their earnings call. That would say to me, and I'm thinking about like a Spotify, for example, could be somebody who's in that direction. I think Spotify's taking the beating it's going to take.
I think folks in the cybersecurity space would be good candidates for that as well. There's rampant... "fraud" is not the word I want to use, but there's rampant security breaches that are happening and are going to continue to happen, and will continue to increase, so cybersecurity is not going anywhere. Those are the companies that I think could and probably will be looking to add a few key people to their teams while they're leaving these other companies that don't have a need for that talent, but they're talented people.
Chris Hill: You would have to think that it would almost be a double win in some cases, because if companies have the financial resources to be hiring at a time when some companies are laying people off, and they're also doing it in the environment where people are being laid off, it's almost the other end of the spectrum of what we saw 12, 18 months ago, where all these companies were doing as much hiring as they could, and you had people job hopping because they could get a little bit of... could get to 10% salary increase over there as opposed to where they were at any one moment. In a layoff environment, it seems like companies that are doing hiring, they're more in the driver's seat.
Malcolm Ethridge: ADP had a report that they released this morning, I think it was, that showed that the average person who stayed in their job last year saw a wage increase of something like five-point-something percent. Then the people who decided to job hop instead to get that increase saw double the wage increases of the people who stayed put. I think you see a little bit of an increase, still, in wages for these highly skilled technical workers. But nowhere near double what people are going to be getting in 2023 who actually stay at the company.
If 5% is the number, let's say, let's just anchor there for a second. They're going to end up with that 5% elevated salary coming in the door at the new company, above and beyond what they had at the old company, but not 100, 115, and beyond. I think those days are over and behind us. The same way that the days of the sight-unseen, 24-hours-to-bid-after-the-open-house real estate market is well behind us at this point.
Chris Hill: Season 3 of the Tech Money podcast is starting later this month. Just give me a quick sneak preview of what you're working on.
Malcolm Ethridge: Yes. Still going to have the same focus on investments and helping to make tech workers smarter about their money, our tagline.
But one of the things that we've decided from feedback from the audience and everything else is that there's this interest in conversation being had out there in the ether about financial independence and how to get there. We want to focus in a little bit more of the conversation that we're having, and the guests were having on so forth in that financial independence realm. Not just investing for investing's sake, but how do we use this portfolio we're building up to help by a few extra years of life versus work. And those little undertones will be woven through the season, which I'm really excited about, because that's a whole other side that I'm excited to be able to explore more.
Chris Hill: Malcolm Ethridge, always appreciate your time. Thanks so much for being here.
Malcolm Ethridge: Thanks for having me.
Chris Hill: If you're listening to the show on one of our many radio station affiliates, thanks for listening, and check out the Motley Fool Money Podcast for even more content. Later in January, we'll be bringing our podcast listeners conversations with Charles Schwab Chief Investment Strategist Liz Ann Saunders, best-selling author Morgan Housel, and a lot more. Follow Motley Fool Money on your favorite podcast app with just the click of a button.
Coming up after the break, we're going to pour one out for a long-time consumer business, and Jason Moser and Matt Argersinger are coming back with two stock ideas for your watch list. Don't touch that dial. You're listening to Motley Fool Money.
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As always, people on the program may have interest in the stocks they talk about on the Motley Fool may have formal recommendations for or against. Don't buy or sell stocks based solely on what you hear.
Welcome back to Motley Fool Money. Chris Hill here once again with Matt Argersinger and Jason Moser.
Shares of Bed Bath and Beyond fell to a 30-year low this week after the company warned investors that it is almost out of money and seriously considering bankruptcy. Matt, for a retailer in this much trouble, Bed Bath and Beyond has a massive footprint, with more than 700 stores across the U.S.
Matt Argersinger: That's what you think about is what happens when all of a sudden those stores go dark. Your national inclination say well, OK, another retailer will come in, or an adjacent retailer might take up more space.
But this is a problem we've been struggling with in the U.S., is that in this country, we have so much more retail square footage per capita than anywhere else. In fact, we have about 4 to 5 times the amount of retail space per capita than most other developed countries. It's possible that most of that real estate, and you said it's a massive footprint, it's probably heading toward obsolescence. I just don't think it's a surprise that Bed Bath and Beyond is here, just given the retail climate like I just said, that the fact that we saw too much retail.
What I think is sad to me, Chris, is that my last memory of Bed Bath and Beyond -- it's been around for decades and it's a well-known brand -- is that the fact that last summer, for a brief period of time, it became this meme stock that quadrupled overnight. There was a university student who made like $100 million in it, and you had the chairman of GameStop involved. I don't remember the exact story, it was one of those things that reminded me that if you had any delusions that the stock market was an efficient market, that probably got rid of it for good. And that's my last memory of Bed Bath & Beyond as it teeters toward bankruptcy. Sad.
Chris Hill: Let's get to the stocks on our radar. Our man behind the glass, Rick Engdahl, is going to hit you with a question. Jason Moser, you're up first. What are you looking at?
Jason Moser: I've been digging into a company called Bentley Systems. The ticker is BSY. Bentley's mission is to provide innovative software and services for the enterprises and professionals who design, build, and operate the world's infrastructure, so think roads, rails, airports, water, oil, gas, hospitals, campuses even.
Something interesting that Bentley has, they have this platform called the ITwin platform, which allows their customers to develop digital twins. so this is an interesting business. I think it really establishes identity is the infrastructure engineering software company. This is why I like that focus, and they cover all stages of the infrastructure life cycle, so design, construction, maintenance.
Interesting in that it's a family business. You really are getting on board here with the Bentley family. They control shares through a dual-class system. But a neat company. It's still fairly new to the public markets, but continuing to learn more about it.
Chris Hill: Rick, question about Bentley Systems.
Rick Engdahl: I'm not going to let that just fly by. You said something about digital twins. What the heck is that? Is this an AI play or what?
Jason Moser: More like a virtual reality immersive technology play. Think about building another Rick. And let's look at that digital Rick, and let's see what we can do to make Rick even better. I mean, let's not kid ourselves. We can't make Rick any better than he already is. But if we could, we would probably do it by creating a virtual Rick.
Chris Hill: Shout out to the Rick and Morty fans who are listening right now. [laughs]
Matt Argersinger, what are you looking at this week?
Matt Argersinger: I'll keep this one quick. Amazon, AMZN. We've already talked about it during the show, but the stock has been in absolute free fall and could almost certainly go lower. But I just think the stock has gotten to a point where I think there's probably pretty good value there.
If Andy Jassy can right the ship in terms of the companies cross structure -- I know that's a big if -- I think Amazon should be more than capable of generating $4 and $5 in earnings per share in a couple of years. And you put a 20 to 25 multiple on that, and you quickly, you've got a $100 stock.
If Andy Jassy doesn't right the ship, maybe Jeff Bezos comes back, and maybe that's another catalyst. I think there's just a lot more upside Amazon from today's price than downside.
Chris Hill: Rick, question about Amazon?
Rick Engdahl: I'm all for it. I like your optimism. Just what's Amazon's next big thing? Are they going to get into some new technology or something? They're resting on their laurels right now.
Jason Moser: It's super exciting, Rick. They're going to get into cost-cutting. That's the next big thing for Amazon.
Chris Hill: Rick, what do you want to add to your watch list?
Rick Engdahl: I may well regret this in the near future, but I'm going to go with the digital Rick.
Jason Moser: I like that. There we go. I think that digital Rick is better than a digital Dan Boyd, by the way. Nicer, less evil. He's not listening. It's OK, he's not going to listen to this.
Rick Engdahl: Shots fired. I don't want to be in that battle royale, I have to say.
Chris Hill: We're out of time. Guys, thanks for being here. Thanks, everyone, for listening. We'll see you next time.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Chris Hill has positions in Amazon.com, Apple, and Microsoft. Jason Moser has positions in Amazon.com and Apple. Matthew Argersinger has positions in Amazon.com, Netflix, Roku, Stitch Fix, and Tesla and has the following options: short February 2023 $175 calls on Tesla and short January 2023 $80 puts on Amazon.com. Rick Engdahl has positions in Amazon.com, Apple, Microsoft, Netflix, Roku, Salesforce, Sony Group, Spotify Technology, and Tesla. The Motley Fool has positions in and recommends Amazon.com, Apple, Constellation Brands, Microsoft, Netflix, Roku, Salesforce, Spotify Technology, Stitch Fix, and Tesla. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In this podcast, Motley Fool Senior Analysts Matt Argersinger and Jason Moser discuss: Layoff announcements and a sober prediction from Microsoft CEO Satya Nadella. Later in January, we'll be bringing our podcast listeners conversations with Charles Schwab Chief Investment Strategist Liz Ann Saunders, best-selling author Morgan Housel, and a lot more. Bentley's mission is to provide innovative software and services for the enterprises and professionals who design, build, and operate the world's infrastructure, so think roads, rails, airports, water, oil, gas, hospitals, campuses even.
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In this podcast, Motley Fool Senior Analysts Matt Argersinger and Jason Moser discuss: Layoff announcements and a sober prediction from Microsoft CEO Satya Nadella. Rick Engdahl has positions in Amazon.com, Apple, Microsoft, Netflix, Roku, Salesforce, Sony Group, Spotify Technology, and Tesla. The Motley Fool has positions in and recommends Amazon.com, Apple, Constellation Brands, Microsoft, Netflix, Roku, Salesforce, Spotify Technology, Stitch Fix, and Tesla.
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Back to your point there on Salesforce and the rip-the-Band-Aid-off moment, I wouldn't be surprised to see many of these companies go back to the well when it comes to these job cuts because they hired so much over the last couple of years. Chris Hill: Let me go back to tech for a second, because earlier in the show, we talked about Salesforce and Amazon kicking off the year with layoff announcements. Chris Hill: You would have to think that it would almost be a double win in some cases, because if companies have the financial resources to be hiring at a time when some companies are laying people off, and they're also doing it in the environment where people are being laid off, it's almost the other end of the spectrum of what we saw 12, 18 months ago, where all these companies were doing as much hiring as they could, and you had people job hopping because they could get a little bit of... could get to 10% salary increase over there as opposed to where they were at any one moment.
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I'm curious if you think whether it is big tech companies like them, or companies in other industries. Rick Engdahl has positions in Amazon.com, Apple, Microsoft, Netflix, Roku, Salesforce, Sony Group, Spotify Technology, and Tesla. The Motley Fool has positions in and recommends Amazon.com, Apple, Constellation Brands, Microsoft, Netflix, Roku, Salesforce, Spotify Technology, Stitch Fix, and Tesla.
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2023-01-14 00:00:00 UTC
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"Rule Breaker Investing": Old, New, Borrowed, and Blue
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https://www.nasdaq.com/articles/rule-breaker-investing%3A-old-new-borrowed-and-blue
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In this podcast, Motley Fool co-founder David Gardner talks about topics including:
Tesla
Capitalism
Reaching past peak polarization
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on January 4, 2023.
David Gardner: Every once in a blue moon, or a new moon, or an old moon, or a borrowed moon, I queue up a hodgepodge of points that I want to share. They're not really related to each other. A hodgepodge. But I forced them to fit into this mold: something old, something new, something borrowed, something blue. You probably know the expression, don't you? It's what brides traditionally are supposed to wear on their wedding day for good luck: something old, something new, something borrowed, something blue.
While I won't be providing this in this podcast, you're also supposed to have a silver sixpence in your shoe. Now, if you want to look at a dime or a quarter, slip it into your shoe for this week's podcast, I think you might even have better luck.
Anyway, it's time to crank up this once-a-year-or-so episodic series, Old, New, Borrowed, and Blue. We're going to talk about Tesla, holiday gifts, capitalism, and something blue, too, to start 2023. Happy new year. Only on this week's Rule Breaker Investing.
[music]
Welcome back to Rule Breaker Investing. I hope I'm not the first one to say this to you: happy new year. Well, Rick and I had a lot of fun prerecording our final two podcasts of last year. Thinking in particular of last week's Rule Breaker Investing Mailbag, the final point at the end of that one. If you didn't get a chance, you might be amused by the last few minutes of last week's podcast, but that was then, it was a year ago now, and this is now. We're, in my case, back from Barcelona and back in my study doing this podcast, which is more typical for us, the day before it actually goes out. Happy January.
Something old, something new, something borrowed, something blue. That's the format I'm using this week. Just to briefly explain each of those.
Something old is typically a framework I've talked about in the past or a quote that I love or a story I've told. Something old. Something new, well, that'll be something -- squirrel -- something flashy, shiny, just jumped up in front of me, something that seems worthy of calling out.
Something borrowed, that's never hard. There's so many brilliant writers, thinkers, investors. There are so many wonderful things to borrow these days. I'm thinking this week in particular of an author who appeared a few years ago, sharing a great framework, I want to borrow and reshare with you again.
Then finally, something blue. Well, in years past for this one, I've talked everything from University of North Carolina basketball and Duke and Kentucky, all of whom wear blue, to the loss of celebration, which made me blue during COVID thinking about all those graduations that never happened. Something blue often is a little bit of a reminiscence, sometimes a little bit of a downer. I don't think it is this time, but understandably, hey, it's something blue.
I'd say without further ado, let's get started with something old.
Well, as I looked back over the course of this series, I noted, I first started it in April of 2017. It was April 5th, 2017. We called it Old, New, Borrowed, and Blue. We didn't call at Volume 1 because Rick, who generally picks the titles for our podcasts, couldn't have known that I decided I liked it enough that I would want to repeat it about once each year since then. Old, New, Borrowed, and Blue appeared on April 5th of 2017.
Here was the new back then, about six years ago. The new that I was highlighting that week is that Tesla and its market cap had just, for the first time, exceeded the market cap of Ford Motors, ticker symbol F. TSLA greater than sign F as a market cap for the first time in history.
This is quite interesting in light of Tesla's recent movements. I think a lot of people listening to me right now at least know of Tesla, but many of you probably, like me, own some Tesla shares. I have owned the stock since 2011. That was when we first recommended it in Motley Fool Rule Breakers, a position that has now been held for 11-plus years. The day that we are recording, Tesla has lost another $15 to $108.10, where it closed this day of Tuesday, January 3rd. Again, it was the first in this series, the first episode, Old, New, Borrowed, and Blue, when I was celebrating and thinking forward about what it meant that Tesla was now bigger than Ford.
I want to pull one other page from the past as we stick here with something old. I was looking back over old transcripts from our Motley Fool radio show. At one point, we had Max Baer Junior on the Motley Fool radio show. Now raise your hand, although if you're driving, keep your hands on the wheel. Raise your hand if you know who Max Baer Junior, is. And oh my gosh, I see some of you do have your hands up, but many do not. It's understandable, because The Beverly Hillbillies show isn't a big thing in the year 2023. But when I was growing up, a lot of people watched The Beverly Hillbillies, and it was one of the most-watched shows, some of its episodes of all time during its time.
Max Baer Junior played the character of Jethro. Now, I'm not going to reexplain who Jethro is or what was actually going on with that show. Feel free to check it out on Wikipedia if you don't know anything about The Beverly Hillbillies. But Max Baer Junior came on the Motley Fool radio show as an older man reflecting back. He said this, he said, "I've been a has-been, a once-was, a used-to-be. But Jethro," said Max Baer Junior, "will always be and is."
In fact, I use that quote in a Great Quotes, it was Volume 6 some years ago reflecting on it, which I will do briefly with you now, which is what I love about that quote, was the humility is implicit. We can all admire that. But what I love about it is I think this speaks to Trait No. 3 that I look for in Rule Breakers stocks and always have. That's basically a powerful brand. I think we're going to do much better as stock pickers, as investors, and livers of life if we focus not on the has beens or once wases or used to bes but on the things that are.
In fact on Twitter, I tweeted out this week inviting anybody to share companies that they think represent powerful brands that like Jethro will always be and is. I saw some great and understandable lists of stocks; Disney, Apple, Amazon, Starbucks, Netflix. A few of you said Tesla, which brings me back to my main point. I do indeed agree that Tesla deserves to be on that Mount Rushmore of present-day ises.
Now Tesla has not been around nearly as long as most of the rest of those companies. In fact, this day that we are recording this podcast, which is January 3rd of 2023, this day in history in 1977 was the day that Apple was incorporated. Tesla is clearly not as old as Apple, and Apple isn't nearly as old as Disney. But if we focus our stock picking and a lot of our attention in life on what is, not what once was or has been, I think we're going to do better as investors.
I'm going to say in a sec how Tesla has done since the week it passed Ford, April of 2017. But first, let's look a little bit more recently. Three years ago this month, we had a fun exchange on Twitter. Austin Lieberman, my longtime Fool friend was saying, David, it's really important that people know the true investing journey of Tesla and Tesla in Motley Fool Rule Breakers.
I'll say it again. I mentioned earlier we recommended it first in 2011. It went up about 6 times in value over those next two years, which was amazing. Six-bagger in just two years from our initial recommendation, 2011, '12, '13. But then for five long years, the stock went sideways. It went up sometimes and then down others. It had no creation of value, zero percent return, basically from 2013 to 2018.
Now the stock market, by the way, had a great five-year return during those five years. I think we can all remember that. If you're judging Tesla over those five years, you were like, what's up with this? The stock market had gone steadily up 2013 to '18. Tesla, in its early golden age, is a company shipping some great product with a well-known CEO and a formerly high riser of a stock, went sideways for five long years.
Now if you look back just over the last three years, how has Tesla done? Three years ago this month, it was at $40. At the start of last year, it was at $400, a 10-bagger over the course of about a year and a half. As of market close today, Tuesday, January 3rd, it's down to $108 from $400 at the start of last year. It has been extremely volatile.
But I want to go back to the original Old, New, Borrowed, and Blue point. Tesla, over these approximately six years, is up 6 times in value overall. The market is only up about 40% to 50% over the last six years. Ford Motors is up 0% over the last four years. Tesla's market cap six years ago was at $47 billion, and some people thought that's crazy. It's now worth more than Ford. Well, even after decline to $108 from $400, it's lost more than two-thirds of its value over the last year or so. The market cap is still $338 billion today.
Now, I realize some will hear that and say, well, it still has a lot of room to fall. After all, it's bigger than Ford, Plus General Motors, etc. You'll hear people say that. But what I want to remind you is that this company is doing something very important, very much for real standing shoulder to shoulder, I think, with some of those other companies, I'm not saying it'll ever be as big or successful over the long-term as Disney.
But if you think about companies that are ises, we speak today as Tesla didn't quite ship as many cars as it thought it would last quarter, but in fact, shipped a lot of electric cars. Have you noticed that every other brand worldwide now has its electric vehicle? I've noticed that too. I think that Tesla is a is and is worth considering here at just over $100 a share as we start 2023.
Before I move on to something new, am I a huge Elon fanboy? Not particularly. I admire Elon Musk. I would continue to invest in him and alongside him over the course of my life, the next 10-plus years as I have the previous but some of his behavior and I would say his failure in some cases to build trust at real scale is slightly troubling. I don't think, though, Elon has=been a once-was or a used-to-be. I think he's an is, and I think Tesla is too, and I'd be remiss if I didn't close this point, mentioning that while I continue to favor Tesla -- and yes, I'm a shareholder -- I also would never spend too much time on any one stock. The reason I stay diversified, I hope you do too, is not to be too beholden, or rolling the dice as it were on just one or two investments. It's the stay broadly diversified in the best companies of your time. Yeah, I think that Tesla is one of those.
On to something new. Well, this is only about a month old, but I'm going to move away from investing briefly and just talk about cool stuff. A number of the things I'm about to list for you, I've already spoken to this podcast over the last three to six months because they're new things that I came across and thought were awesome. In fact, as I look back on five previous episodes of Old, New, Borrowed, and Blue, in a few of them I took new to mean, what are some new things I'm reading or using or enjoying that I'd like to share out because I think you might too?
For some of my close friends over the course of this past holiday month of gift-giving, I just made out a list of six things. In fact, I believe Rick Engdahl, my dear producer, is one of those who received my list, and I just invited my gift recipient to pick their favorite off of a menu of things that I think are awesome.
Rather than just share it with a few close or business friends, I thought I'd just share that list right here with you in case you're still looking for something great, maybe returning something not so great for one of these great things are done. I know some of you have birthdays proximate to Christmas. Happy birthday, January 4thers.
Here's some ideas. Here it was, my list of six alphabetically listed products or services that I love that I think are awesome that I'm just going to put out there right now in Something New.
The first one is kombucha, and a particular brand of kombucha. Now, kombucha is very healthy for the stomach. It's basically fermented tea. It comes in different flavors. I often like the ginger or ginger-lemon versions. It's a lot healthier than many of the other things that I drink. In fact, it's probably among the most healthy things I drink. Asterisk, because No. 4 on my list of sixth-grade gifts coming up is another thing that I enjoy drinking, but kombucha is worth looking into.
Many of you, I know, already discovered this drink years ago and have loved it for a long time so I'm a little bit of a Johnny-come-lately, but I also suspect, especially in America, many people still don't really know what this is or have used it.
I particularly like the Better Booch brand of kombucha because it's produced by a friend of mine, and that would be Trey Lockerbie, who's one of the hosts of the Investors podcast. I appeared just a month ago on Trey's podcast most recently, if you want to hear too much Rule Breaker Investing. If this weekly podcast isn't enough for you, you might enjoy my appearance on Trey's podcast.
But Trey, in addition to being a talented and thoughtful podcast host and investor, is also an entrepreneur. Better Booch can be ordered off of Amazon. It'll be packaged up with refrigerating insulation, probably, as it gets shipped to you wherever you are. Better Booch kombucha, my favorite brand of kombucha.
Gift item No. 2, is Building a Second Brain. It's by Tiago Forte and this is my favorite book of last year. I've already spoken to it recently on this podcast. But if you find yourself trying to figure out how to organize your digital life, like you have all of these notes over in this one application, but you have stuff in Dropbox over there and then you've got your file folders on your hard drive and you're trying to figure out where to store some of the emails, or what about your to-dos? How do you get your arms around all of the digital stuff in your life?
Well, Building a Second Brain, for me, anyway, has been huge and I really revamped and greatly enhanced my productivity just in the last couple of months. Since finishing the book, I find myself reading it and allowed to my wife over supper so she can learn it, to sharing that with friends. Hope to have the author on the podcast this year. Really love Building a Second Brain.
My third product up for grabs that I love is Duolingo. If you probably have already used this app in the past, it helps you learn languages. It gamifies the learning of foreign languages. It's a public company these days as well. At our Motley Fool holiday party that we had with our employees in Alexandria, Virginia, last month, I had a great conversation with a couple of people I had seen and used Duolingo a little bit over the years. If we're traveling to Austria a week before I'd signed into Duolingo and learn a few phrases or lines in German.
But I ask these fellow Fools, hey, how deep does this app really go? I'm treating it as an arcade game and a brief dalliance before trips. I was assured by my Fool friends that Duolingo goes very deep. My friend Yasser El-Shimy, who's been on this podcast before, who is using it, I think, right now to learn Italian, he has a 318-day streak or so of signing into the app every day and learning. And having used it quite extensively myself over the last couple of months, I can see how much fun it is, how gamified it is, how well done it is, and it really is a wonderful way to learn a language.
Now you're going to be hit silly with ads if you stick with a free version. Every minute or two, you're going to have to sit through a 15-second ad, in my experience. I would highly recommend just paying up, as I hope you would for a Motley Fool service, paying up for the premium, not the free version, in this case, Super Duolingo. Gift item No. 3.
Now gift item No. 4, I've also spoken to on this podcast I mentioned earlier my enjoyment of kombucha. I've also really been getting into H2O. Still water, good filtered water, just drinking water. We're told to hydrate. I never really knew how much I should be hydrating until I bought the HidrateSpark PRO Smart Water bottle. All of a sudden, I discovered that there's this device that you can buy it an Apple store, order over Amazon. As you take a sip from this water bottle, the big brain chip in the bottom of the bottle is precisely measuring...
Let's say you just drank 1.3 ounces from the bottle. It might be a 17-ounce bottle or 24-ounce bottle. You can get it in steel or plastic and in different colors. But the whole key is really the app attached to it. On your smartphone, you download the app, and you're able to track how much you're hydrating yourself. But not just that, you're able to invite friends in, give them a bottle, have them join in. It becomes a social little network, at least it has with my friends, where we see who's hydrated themselves most or first on any given day. Kind of like Duolingo, you can put together daily streaks.
It has completely gamified, in the same way Duolingo has gamified and made fun learning a foreign language, HidrateSpark PRO has done so for water. There's a study out this week that shows over 30 years the importance and power of regularly hydrating, the benefits of that. I think this is a home-run gift and it sure was for some of my friends under the tree in the past month.
Gift item No. 5 of 6 is the Nixplay 8-inch Smart Photo Frame. I started looking around my house, and I determined that we had framed photographs sitting, let's say, on a living room table or the bureau just outside my study. We had the same photos, just sitting in the same frames and often camping out together like blocking each other. The little picture in back was just never seen because we wouldn't move anything on that table for years. I started thinking, can't we make this smarter and more fun in the same way that the HidrateSpark PRO Smart Water bottle makes water more fun? Could we make our photos more fun?
I know many of you are already familiar with this concept of a smart photo frame. Like, it changes the picture inside it every 30 seconds or every 5 minutes or half-hour or whatever you want it to be. But the key and the reason I really have enjoyed the Nixplay Smart Photo Frame is that with this product, you can actually network it with other smart photo frames.
For example, your grandparents, who might live 500 miles away and your two kids from college, who are both up somewhere in the Northeast, they can all be networked to the same photo frame. If they have that frame wherever they are, you each could load in pictures and have each other see each other's pictures. You're basically growing a shared photo album of ever-changing pictures just in the one frame, not the 18 photograph frames that are taking up the whole table but just the one frame, a big and beautiful landscape or portrait orientation. Networking our photos, sharing out with friends and family, saving a lot of space, which keys into the dematerialization trend that Kevin Kelly from WIRED Magazine, in his book, The Inevitable. I'm hoping to have Kevin back on the podcast this year. He has spoken to this in the past. The dematerialization, i.e., hardware that we used to have, is disappearing and replaced by software in many cases and makes our world much more sustainable as well. I really love the Nixplay photo frames.
The final sixth in my bulleted gift list for you, something new. Again, something else I've spoken to in recent months, Readwise. I think I spoke to this on the Mailbag last week. I talked about it throughout the fall, ever since my friends Kara Chambers and Rex Moore said, hey, you really should use Readwise. You should upload all your highlights from a digital book, like Kindle books or Apple books. You should upload all of those, and then Readwise will hold those for you. You now have a searchable library of all of your highlights from all of your books.
But it also creates a short daily email, firing you back by email the quotes that you've highlighted from books you've forgot about eight years ago, etc. I've already spoken to this recently on the podcast. I won't belabor it now, but there is something else new.
Take it all together. Better Booch kombucha, Building a Second Brain, the book, Super Duolingo, the HidrateSpark PRO Smart Water bottle, the Nixplay Smart Photo Frames, and Readwise. Those were a few of my favorite things from 2022. Still feels very new for 2023.
Well, before we move on to Something Borrowed, I can imagine somebody might be wondering, is Dave just plugging products like an influencer on his podcast? Is he getting any kickbacks for any? The answer is, sadly, no. Dave receives no kickbacks for any of these things. I am simply an enthusiast for great things that come across in life. If you think about our Mailbag every month on this podcast, you are often sharing great thoughts with me, and I simply share them back out out of pure enthusiasm. That's all that's behind my six-gift list.
By the way, if there is an awesome seventh or eighth thing that I should have as we start 2023, if there's something amazing that I'm missing, our email address is rbi@fool.com. I would love to hear. If you're a cool hunter and you've found something cool, let me know. I would love to hear about it in this month's Mailbag to improve my life and maybe those of many others. Thank you.
Next, on to Something Borrowed. Well, I'm thinking back to my friend Jay Jakub, who came on this podcast in August of 2020. The title that week is Authors in August: Jay Jakub Helps Us Complete Capitalism. Jay, along with his friend and business partner Bruno Roche, have written a wonderful book called Completing Capitalism. In that book, there's a wonderful framework that I want to share with you in brief right now. Again, if you've already heard that podcast or read the book, great, please give yourself five gold stars. But for many others, you're probably hearing about this for the first time.
The Completing Capitalism framework began when Mars -- yap, chocolatier, the global, these days, pet food company, about as big a business as sweets and candies for Mars -- hat company. The longtime family leadership of that company asked a compelling question, what is the right level of profit for our business? Jay Jakub who was working at Mars within an internal think tank, was tasked with answering that question. What is the right level of profit for this business?
Now most people would think, I think, or answer, there is no right level. The simple answer would be more, more, more. But that often leads to unsustainable practices as businesses start to pinch their suppliers or cut corners with their customers or not treat their employees so well trying to maximize profit.
Well, a company of Mars's vintage, 100 years old and of incredible size and growth, is probably better positioned than most to ask a beautiful question like that, what is the right level of profit for our company? The leadership at Mars wanted to be profitable -- who doesn't? -- but not in a way that creates short-term problems or ultimate unsustainability. And so Jay and his team went to work trying to answer that question. Out of that came the work detailed in Completing Capitalism.
The two key insights that I take away from that book I want to share with you now. The first is that there are actually four forms of capital. When we start talking about capitalism, most people are just talking about financial capital. They're thinking about money. Money, after all, is easy to measure. It's easy to produce. Sometimes it's easy to lose as well. Many people, when they think about capitalism, small "c," they're just thinking about money and profits.
Yet Mars and Jay, in their work, and, I would say, Conscious Capitalism, whose board I sit on as well, many others recognize these days that that's a little short-sighted. In fact, Jay would say there are four types of capital.
We'll lead off with financial capital, that's the one we all know, but there's also human capital. That is how you're treating the humans that are in your network, whether they're your employees or your customers, but thinking in particular of those who produce for you, so your employees. That's a very important type of capital as well.
Another is natural capital. How we're treating the Earth. How we're treating our neighborhoods or society, specifically thinking about the natural world. That's a third important form of capital after financial and human.
The fourth and final one is social capital, which I find particularly compelling. Think about trust, which is sometimes synonymous with social capital. It's one way to measure capital. Trust is so important in this world, and yes, it's a key factor behind social capital.
Insight No. 1 that I hope you appreciate and will take away from this week's podcast is there really are four types of capital, and yet Jay and his team have discovered and taught that they shouldn't all be measured by converting back into dollars.
He was critical in that podcast a couple of years ago of so-called triple-bottom-line companies. A lot of people think triple bottom line is cool. You're not just measuring your bottom line of profits, you're also measuring how you treated the Earth or how you treated society. But the problem, Jay says, is most of the triple-bottom-line companies are just converting their other forms of capital -- human capital, natural capital -- they are just converting them back into dollars, back into financial capital which really misses some important points. In Completing Capitalism and on the podcast a couple of years ago, Jay shared the importance of measuring each of these four different types of capital with their own metrics, not just converting back to dollars.
The final key insight that I love about their framework, and that's why I want to mention it again here a couple of years later, is that their studies show, if you improve any one of those four types of capital... Let's say you're an entrepreneur. If you treat your community better, social capital, create some trust, or if you treat the environment better, thinking of natural capital, their studies show that all three other forms of capital rise as well. If you do well according to one metric, it helps the other three. This is, to me, one of the best insights in recent years I've seen about capitalism.
To summarize: It's not just financial, dear Fools. There's capital all around us when you really reframe it. Second, by focusing on judging each of the four forms according to its own metrics, you're going to do better at it, and doing better at any one of them will improve the other three. Completing Capitalism, a wonderful framework I've borrowed from Jay Jakub and Bruno Roche.
I should mention before proceeding on the phrase they use to describe their framework as "the economics of mutuality." Anybody who's interested and would like to learn more about it, just Google "economics of mutuality," and you will learn more. I also of course, highly recommend the book Completing Capitalism. Or if you just want the Cliff Notes in audio form, I guess you could just listen to my one-hour interview with Jay from a couple of years ago, but I highly recommend their book.
All right. Something old, something new, something borrowed, and now something blue. Part of the reason I enjoy this episodic series is that Old, New, Borrowed, and Blue enables me to revisit, I've been doing that this week, key cardinal points and conversations from the past. I guess this final point is no exception.
A few times over the years, I've referenced blue in the context of the humorous invention of Charles Dickens, the novelist. His first novel, The Pickwick Papers, presents us many comic, picaresque moments as Samuel Pickwick, the protagonist, along with his manservant, Sam Weller, have adventures around the English countryside, which then get variously reported back to the Pickwick Club, which is the overall structure and rhythm of the novel: two fellows having adventures and coming back and sharing with their friends at their club. Sometimes that makes me think of this podcast.
Anyway, at one point, they wander into a town that is extremely politically divided. It's the town of Eatanswill, and there are two parties that have divided up the town into a polarized set of bars, a polarized couple of newspapers, even church pews. The whole town is divided up into two parts, the Buffs and the Blues. Something blue.
From time to time on this podcast over the years I've mentioned my lack of political interests, my independent nature, my nonaffiliation with any political party.
At my happiest, I can laugh along with Pickwick and Dickens and maybe the rest of you about how an area can be so divided up. In the novel, of course, between the Buffs and the Blues, so divided that they go to different bars. They read different newspapers, and they sit in the same church in different church pews. I guess that's at my happiest about this, when I can just laugh at the satire.
But at my saddest and most blue, I rule that people have been tribing up in our world today. In the U.S., people talk, I don't, of red and, there it is again, blue. At the heart of so much of this dialogue, I think there's blame. What's happening is just constant, and the media trumpets this blame, blame of the other side. If you're a Blue, you're blaming the Buffs. If you're a Buff, you're blaming the Blues.
But rather than be too blue about this on my Something Blue point, I thought I would start by suggesting that rather than saying we're constantly divided, that's a a tired cliche at this point. For me anyway. America is so divided, red and blue. I'm thinking to suggest that maybe, just maybe, we've hit at or near the extreme. Maybe we're about as polarized as we're going to get. I hope this isn't too preposterous.
Imagine if a public that is tired of blame and today holds Congress at its lowest approval of all time, imagine if that same people, you and me, began to reward new leadership. Leadership that didn't first and foremost and mechanically and constantly blame the other side. Could this actually happen? Could that actually happen in politics? Could the Blues and the Buffs be civil?
Well, the reason I think they can is because of how odd and inappropriate this blaming behavior is in the other realms that we frequent, you and me, over the course of our lives. I'll give you two I know really well. Take sports. Imagine if in American football, a team lost, and all of the offensive players, in the postgame media interviews, blamed their defense in public. In fact, imagine if the leadership of that team, everyone on the offense, said it was the defense's fault, and imagine if everyone on the defense said it was the offense's fault.
Then not only does that sound juvenile and never really happens, but if it were to happen, it would be clearly an example of a failed team. The team that's not going to do so well going forward, the team you probably don't want to be on or follow when the offense is the Blues and the defense is the Buffs. That's the way the leaders are behaving. But behavior in sports, which is certainly not always perfect on its own, is nevertheless, I would say, a wide margin ahead of politics. And yet I think our public discourse can actually get there.
And think of a second instance, a second context in closing. I'm going to go now from sports to business. How many CEOs do you actually see just blaming, just trash-talking one of their own divisions or actively trash-talking their competitors? I would say not that many. I can think of very few CEOs that would spend a lot of time throwing shade at any aspect, toxically, of their own company or really of others in their industry.
Political ads these days, I think we're used to seeing blame and attack of the competitor. You never really see for-profit companies advertising, whether it's the Super Bowl or whatever non-ad-free streaming show you watched yesterday, you really don't see companies advertising simply to attack their competitors. I would say any CEO who does that probably wouldn't be CEO for much longer. Would they?
In fact, I've said this once before, the closest I can think of that ever happening in the business world is when there's a bad merger. Sometimes you'll hear people say, those people over at HP, they don't know what they're doing. We here at Compaq, even though we're now the same company, think differently. You sometimes hear that. Those are always dysfunctional, or those are the companies that don't do so well.
I truly believe we cannot keep compartmentalizing public discourse in its own odd-shaped and unattractive box. We just can't sustain that. I actually think a lot of the divisiveness is overdone. It's exhausting. It's more played out than people realize. I think, I hope anyway, but I really do think that a lot of today's politics, the Buffs and the Blues, are eating each other, feeding on themselves, losing relevance to most of the rest of us.
I think you and I are after true solutions, true connections, working together with others, like we were taught in kindergarten. Even people who don't look like us or think like us or even agree with us. I see it every day working in many contexts outside politics. I think politics is at the point where it's going to be shaped by new people and a new wind blowing over our culture. I think it's a warm wind. Not like a lot of us in the U.S. have suffered over the last few weeks, a cold winter wind, and so is something blue.
I'm here to say at the end of '22, the start of something new '23, that blame isn't generative. It's not productive. I don't care whether you're red or buff or blue. Instead, the good and productive forces in our society, I think, will increasingly take us higher and forward. It's a thought. Maybe I'm just playing the fool.
Something old, something new, something borrowed, something blue. Thanks for spending some time with me at the start of the New Year. I'll talk to you next week. Fool on.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. David Gardner has positions in Apple, Netflix, Starbucks, Tesla, and Walt Disney. The Motley Fool has positions in and recommends Amazon.com, Apple, Netflix, Starbucks, Tesla, and Walt Disney. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2023 $92.50 puts on Starbucks, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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In fact, I believe Rick Engdahl, my dear producer, is one of those who received my list, and I just invited my gift recipient to pick their favorite off of a menu of things that I think are awesome. Networking our photos, sharing out with friends and family, saving a lot of space, which keys into the dematerialization trend that Kevin Kelly from WIRED Magazine, in his book, The Inevitable. Or if you just want the Cliff Notes in audio form, I guess you could just listen to my one-hour interview with Jay from a couple of years ago, but I highly recommend their book.
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In this podcast, Motley Fool co-founder David Gardner talks about topics including: Tesla Capitalism Reaching past peak polarization To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. Better Booch kombucha, Building a Second Brain, the book, Super Duolingo, the HidrateSpark PRO Smart Water bottle, the Nixplay Smart Photo Frames, and Readwise. The Motley Fool recommends the following options: long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2023 $92.50 puts on Starbucks, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple.
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In this podcast, Motley Fool co-founder David Gardner talks about topics including: Tesla Capitalism Reaching past peak polarization To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. But the problem, Jay says, is most of the triple-bottom-line companies are just converting their other forms of capital -- human capital, natural capital -- they are just converting them back into dollars, back into financial capital which really misses some important points. In Completing Capitalism and on the podcast a couple of years ago, Jay shared the importance of measuring each of these four different types of capital with their own metrics, not just converting back to dollars.
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We're going to talk about Tesla, holiday gifts, capitalism, and something blue, too, to start 2023. Now if you look back just over the last three years, how has Tesla done? Better Booch kombucha, Building a Second Brain, the book, Super Duolingo, the HidrateSpark PRO Smart Water bottle, the Nixplay Smart Photo Frames, and Readwise.
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2023-01-14 00:00:00 UTC
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Big Tech Job Cuts and Dividend Stocks to Watch
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https://www.nasdaq.com/articles/big-tech-job-cuts-and-dividend-stocks-to-watch
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In this podcast, Motley Fool senior analyst Tim Beyers discusses:
How Salesforce's recent acquisitions are the reason layoffs shouldn't be surprising.
Why HubSpot's next move is one of the most interesting things in tech.
One tech business bucking the trend by increasing its hiring.
Motley Fool senior analyst Matt Argersinger previews the year for dividend stock investors, discusses why the payout ratio is a key metric to watch, and shares two dividend stocks he believes are looking more attractive.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on Jan. 04, 2023.
Chris Hill: Big tech is cutting jobs, and we've got some dividend payers you might want to put on your watch list. Motley Fool Money starts now.
[music]
I'm Chris Hill joining me: Our man in Colorado, Motley Fool Senior Analyst Tim Beyers. Thanks for being here.
Tim Beyers: Happy New Year. Fully caffeinated, ready to go.
Chris Hill: Happy New Year to you as well, my friend.
Let's start with this. In what he called a very difficult decision, Salesforce CEO Marc Benioff told employees the company plans to reduce headcount by 10%. Given the workforce at Salesforce, that nets out to between 7,000 and 8,000 jobs. We'll get to the ripple effects of this in a second.
But I guess my first question is, Tim, were you surprised by this news? Because when I think about big tech companies considering layoffs, I did not have Salesforce at the top of my list.
Tim Beyers: Yeah, not on the bingo card. I'm not super surprised. But I am surprised. I didn't think we were going to start off 2023 with the purge. That wasn't on my bingo card, either.
The reason I'm not surprised, Chris, is because Salesforce has made quite a large number of acquisitions. And in the most recent earnings report, they signaled that sales cycles for enterprise software running were longer. That is a message we have heard from other companies, that as we are exiting 2022, coming into 2023, enterprise sales, meaning just -- plain language here -- a big piece of software takes a long time to sell. A lot of salespeople are involved. It takes a lot of implementation, so it's just a multimonth process. There are fewer companies that are wanting to write really big checks to companies like Salesforce.
So, in that sense, it's not a huge surprise. In the announcement, essentially, Marc Benioff, who's co-founder and CEO, said that they overhired, they overbuilt in 2020. That also is not something that is unique. We've heard that message before. So surprising but not surprising.
Chris Hill: You went exactly where my brain went this morning. We have heard this before, but we've heard it from the CEOs at places like Alphabet and Amazon.
Tim Beyers: Right.
Chris Hill: Which makes me wonder if, in the coming weeks and months, we're going to hear similar announcements from them. The reaction from Wall Street is, as often the case with large profitable companies announcing layoffs, it's a positive one. Depending on the time of the morning, shares of Salesforce up anywhere from 3% to 6%.
Again, you hinted at the length of the cycle, how long it takes to make these large enterprise sales, unwinding. A workforce similarly takes a decent amount of time as well. We can put Alphabet and Amazon aside, because they are the biggest of the big, or certainly on the shortlist of the biggest of the big. Are there other companies in the tech realm that you think are watching this closely, and maybe this is giving them even more license to cut back their workforce as well?
Tim Beyers: I don't think they need anymore license, Chris. There is a tracker called layoffs.fyi that you can check out for yourself. It includes everything from small companies and start-ups to the largest of the large public tech companies. We've seen a lot of them.
If you look at this, you are going to see quite a large number of companies that have laid off staff. As of the current number, I'm quoting this now, Chris, 1,013 tech companies tracked in layouts.fyi, and that has accounted for 153,160 job losses according to that site. I don't think they needed anymore license here Chris.
However, to answer your question, does this give some air cover maybe to some larger companies? I think unequivocally it does. I think it sets an expectation among investors, particularly institutional investors, saying, OK, when are your layoffs coming? There may be some activist investors who say, hey, you know what, you have a bloated company. You've got to lay some people off. You may have maybe less executives feeling free to lay some people off and more executives feeling under pressure from large institutions with money at stake saying, hey, when are your layoffs coming? We just saw Salesforce do this. You're bloated. When are you going to cut some people?
Chris Hill: It seems like that may have been the case with Salesforce. If you look at Starboard Value and their stake in the company and their potential role in nudging Benioff in this direction... There are absolutely institutional investors, and probably retail investors as well, who are sitting on the sidelines with some of these large tech companies, and one of the things they are looking for that is going to trigger their "buy" signal is an announcement of layoffs.
As someone who has looked at this category for a long time, is that what you're looking for, or are you looking for companies that are still actually doing some hiring out there?
Tim Beyers: Yeah, it's the second. I like looking for companies... I think one of the most interesting things to look at now that Salesforce is laying so many people off is what does HubSpot do? Because HubSpot is in the small-business CRM. They're at the lower tier of the market, but they're trying to scale up so they can serve, say, like a Salesforce-like customer. But they've traditionally been the smaller player underneath the larger players. Salesforce the big brother, HubSpot the little brother.
But HubSpot is not laying anybody off, Chris. What's interesting to me, I'll be interested to see if HubSpot maybe increases some of its hiring. To me, I think it's an interesting signal when a company starts hiring when its peers are laying people off and putting up good numbers at the same time.
A good recent example of this would be monday.com. Asana, which is its direct peer, announced a layoff, and almost at the same time, monday.com came out with its earnings results and said, hey, our operating margins are getting better, and we're still hiring people. They talked about it like they are still hiring people. They haven't been like crazily overbuilding, but they're still hiring people.
That, to me, is an interesting signal when the results are getting better and you're still hiring. I'm going to be really interested to see what HubSpot does in, say, the next three to six months. Do they ramp up their hiring a little bit? Do they announce some new initiatives? It'd be fascinating to see. I like to see the companies doing well amid the downdraft for everybody else.
Chris Hill: Definitely going to give us things to be watching over the next few months. Tim Beyers, always great talking to you. Thanks for being here.
Tim Beyers: Thanks, Chris.
Chris Hill: Today we're continuing our series on previewing the year for different categories of stocks. On Tuesday's episode, it was a growth stocks. Today, we're taking a closer look at dividend stocks. Here to do just that is Motley Fool Senior Analyst Matt Argersinger. Matt, thanks for being here.
Matt Argersinger: You bet, Chris.
Chris Hill: In my fading memory, 2022 wasn't quite as bad for dividend investors as it was for stake growth investors. How should they be feeling this year?
Matt Argersinger: Well, your memory is good, because, yes, dividend-paying companies held up very well in 2022. In fact, if you look at some of the largest dividend ETFs, like the Schwab US Dividend ETF was down just 3.3% in 2022. How many of us would have loved to be down just 3% last year? I certainly would, because I lost many times that amount. You can also look at like the Vanguard High Dividend Yield ETF, which almost broke even in 2022. How about that?
Yeah, dividends in 2022, they did what they've done historically, which is they tend to lose less, far less during bad times or bear markets than the average stock. That's one of the reasons you want them in your portfolio. I think they should be a meaningful part of your portfolio.
If you look back through history -- and S&P Global has done some great research on this going back about 50 years -- dividend-paying companies, but especially dividend-growing companies, have been the best performers by a wide margin. No matter what happens in 2023, I think you want to have exposure to dividend-paying companies.
All that said, if you're expecting a big rebound in the markets this year, I would expect dividends to lag, because what will tend to outperform in a rally are the things that we're so beaten down last year: your technology companies, your software companies, your high-growth, high-beta stocks. They're the ones that are probably going to lead the charge.
But if you ask me, I don't expect 2023 to be a barn-burner of a year for the market. It's rare to have two back-to-back bad years in the stock market. It's actually only happened a few times over the last hundred years. I think stocks may still struggle this year. I think it's probable that we still have some degree of economic slowdown, earnings estimates probably come down. I wouldn't be surprised if, at best, maybe we have another challenging year, hopefully not as bad as last year.
Chris Hill: You and I are old enough to remember, there was a good stretch of time where a company starting to pay a dividend was almost like, I don't want to say it was a stigma, but it was almost like, Wall Street is going to put you in a different category. That was the big debate around Apple as they built up their cash reserves. It's like, well, if they started paying a dividend, we're going to put them over in this other category, and they broke the mold in that regard.
I don't look at companies paying a dividend or starting to pay a dividend as having that same black cloud over them. That being said, are there, if not black clouds, red flags that investors should be on the lookout for?
Matt Argersinger: Yes. I think when it comes to most dividend-paying companies, you're tending to look at companies in the industrial sector, consumer discretionary sector, financial sector, basic materials and commodities companies. These tend to be cyclical businesses that can be highly sensitive to any kind of economic slowdown. As I mentioned earlier, if we're heading into a situation or earnings estimates are going to come down, these companies might be more susceptible than others.
Dividends, of course, are paid out of earnings. If earnings come down, dividend growth is likely to slow, especially case for companies with poor balance sheets. It could be in dividends get cut, or even suspended.
I would pay attention to things like payout ratio, which is, of course, dividends per share as a percentage of earnings per share. If you're looking at a company and the payout ratio is above 60%, which means that the company is, of course, is paying more than 60% of its earnings out as dividends, and it's an industrial business or retail company that's built up a lot of inventory on its balance sheet, susceptible to an earnings slowdown, that dividend could come under pressure. That's a bit of a red flag.
An example of a business I own in my own portfolio that's really struggled lately is Stanley Black & Decker, well-known tools and machinery brand. They had a huge earnings miss late last year. They actually slashed their earnings from over $10 a share to $4. They also announced a big restructuring.
They had simply built up too much inventory, business load. They had a slashed prices. They face big challenges now. The thing is, though, they haven't cut the dividend yet. That's because even with that big earnings drop, their payout ratio is so low that it was enough to protect the dividend, at least for now.
That's not going to be the case for a lot of companies, especially if we get into an economic slowdown. Some just won't be able to afford to keep paying the dividend with any kind of earnings drop.
Chris Hill: Well, and that's just as we've seen with a lot of companies over the last 6 to 12 months cutting back on their marketing spend. Because that's a relatively easy lever to pull. I understand if someone looks at the dividend and says, "Well, just cut the dividend." That's an easy lever to pull. In theory, it is, but companies really hate doing that. It's almost a last resort.
Matt Argersinger: They do totally, especially, you've got the Dividend Achievers and Dividend Kings, the ones that have been paying a dividend for so many consecutive years. It does.
I would say... you mentioned earlier there's a stigma for us as a company starts paying a dividend. There's definitely a stigma when a company stops paying a dividend; it almost gets put into the dustbin. There are times when it's smart to cut the dividend. I remember Vail Resorts, which has a great track record, they cut the dividend shortly after COVID started. Of course, makes sense; they didn't know if anyone was even going to show up at their ski resorts that winter. They resumed the dividend the next year, always good, but there are times when that happens, and the market really doesn't like it.
Chris Hill: If not specific stocks, are there areas of the market that you think dividend investors should take a closer look at because maybe they're looking a little bit more attractive right now?
Matt Argersinger: Oh yeah, I've got a couple, Chris. I'm still seeing a lot of value in REITs. I know people who've listened to me on the show over there, I know I talk a lot about the real estate sector.
One REIT that I'm excited about lately is Extra Space Storage, the ticker is EXR. It's one of the leading owner-operators of self-storage facilities. If you think about self-storage, can have some countercyclical aspects to it. If people move or downsize in a recession, that can lead to needing more temporary storage. There's also this big trend for baby boomers who are retiring and downsizing and finding out that their children don't necessarily want to inherit all their stuff. But either way, you have a very well-run company with a great track record and a 4% dividend yield.
Then outside of REITs, one that I've become interested in lately is one called Lennox International. The ticker's LII. Again, another boring company: It produces HVAC and refrigeration appliances. Super boring. That's why I love it. It's been a killer stock. They've slowly taken market share from larger companies in the industry. While the dividend right now is just about less than 2%, so the yield is not that exciting, they've actually grown that dividend by more than 18% a year for the last 10 years.
I'd say one caveat with Lennox, because it's industrial, because it's cyclical, I might wait a few weeks until the company reports its G4 earnings. I'm not trying to time the market here, but I think they'll likely disappoint, especially when it comes to their guidance as we see with a lot of companies. Residential HVAC is a big share of the business. Housing market can slow down, constructions already slowing down. If you can buy the stock for closer to $200 a share, which I would like to do, I think it could be a home run.
Chris Hill: Matt Argersinger, great talking to you. Thanks for being here.
Matt Argersinger: Thanks, Chris.
[music]
Chris Hill: As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks-based solely on what you hear. I'm Chris Hill. Thanks for listening. We'll see you tomorrow.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Chris Hill has positions in Alphabet and Apple. Matthew Argersinger has positions in Alphabet, Extra Space Storage, Stanley Black & Decker, and Vail Resorts. Tim Beyers has positions in Alphabet, Apple, HubSpot, and Salesforce. The Motley Fool has positions in and recommends Alphabet, Apple, Asana, HubSpot, Monday.com, Salesforce, and Vail Resorts. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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That is a message we have heard from other companies, that as we are exiting 2022, coming into 2023, enterprise sales, meaning just -- plain language here -- a big piece of software takes a long time to sell. Chris Hill: You and I are old enough to remember, there was a good stretch of time where a company starting to pay a dividend was almost like, I don't want to say it was a stigma, but it was almost like, Wall Street is going to put you in a different category. [music] Chris Hill: As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy or sell stocks-based solely on what you hear.
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In this podcast, Motley Fool senior analyst Tim Beyers discusses: How Salesforce's recent acquisitions are the reason layoffs shouldn't be surprising. Motley Fool senior analyst Matt Argersinger previews the year for dividend stock investors, discusses why the payout ratio is a key metric to watch, and shares two dividend stocks he believes are looking more attractive. Matthew Argersinger has positions in Alphabet, Extra Space Storage, Stanley Black & Decker, and Vail Resorts.
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Motley Fool senior analyst Matt Argersinger previews the year for dividend stock investors, discusses why the payout ratio is a key metric to watch, and shares two dividend stocks he believes are looking more attractive. All that said, if you're expecting a big rebound in the markets this year, I would expect dividends to lag, because what will tend to outperform in a rally are the things that we're so beaten down last year: your technology companies, your software companies, your high-growth, high-beta stocks. If you're looking at a company and the payout ratio is above 60%, which means that the company is, of course, is paying more than 60% of its earnings out as dividends, and it's an industrial business or retail company that's built up a lot of inventory on its balance sheet, susceptible to an earnings slowdown, that dividend could come under pressure.
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In this podcast, Motley Fool senior analyst Tim Beyers discusses: How Salesforce's recent acquisitions are the reason layoffs shouldn't be surprising. I like looking for companies... If you're looking at a company and the payout ratio is above 60%, which means that the company is, of course, is paying more than 60% of its earnings out as dividends, and it's an industrial business or retail company that's built up a lot of inventory on its balance sheet, susceptible to an earnings slowdown, that dividend could come under pressure.
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17597.0
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2023-01-14 00:00:00 UTC
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3 Top Stocks to Buy for the Long Haul
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AAPL
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https://www.nasdaq.com/articles/3-top-stocks-to-buy-for-the-long-haul-5
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It's still far too early to tell how the market will fare in 2023, but the experts aren't hopeful. A recent Bloomberg poll indicates the nation's economists believe there's a 70% chance the U.S. economy will slip into a recession this year. Clearly, that's not a bullish indicator for stocks.
And yet, it's also not a major worry for true long-term investors thinking five to 10 years into the future. The market's recent turbulence, in fact, shows all the signs of being a long-term buying opportunity. The trick is simply identifying companies you can feel comfortable owning in an unclear, distant future. Here are three of your best bets to consider.
1. Apple
Are Apple's (NASDAQ: AAPL) highest-growth days in its past? Probably. Worldwide annual sales of smartphones are slowing as we move toward market saturation. Indeed, they've all but stagnated, according to numbers from IDC and Counterpoint Research. The iPhone isn't immune to this headwind, nor is it adding to its share of this stagnating market. The continued growth of Apple's services business is offsetting some of the impacts of this slowing growth, while higher selling prices for its iPhones are doing the same. That's not a growth driver the company can count on forever, though.
It matters simply because the iPhone still accounts for roughly half of Apple's top line. That's one of the key reasons Apple shares are uncharacteristically down to the tune of 25% since late 2021.
Largely overlooked in the midst of this weakness, however, is that this is Apple. Not only is the $2 trillion giant the world's biggest and most profitable company, but it's also one of the world's most respected and best-recognized brands. If nothing else, Apple should be able to leverage that.
That being said, while it may not necessarily boost sales, the organization is making moves that will increase profit margins on its biggest moneymaker. By 2024 the company plans on manufacturing its own screens for its mobile devices, and it is also reportedly working on an internal chip foundry that will be up and running by 2025.
It's not clear to what extent this strategy will reduce its dependency on third-party suppliers, who may also be competitors. But there's no denying the complex strategic shift will ultimately provide Apple with greater flexibility and profitability.
2. Walmart
Apple isn't the only great long-haul stock to step into here, of course. You might also want to consider Walmart (NYSE: WMT) as a potential semi-permanent pick for your portfolio.
Walmart is the world's biggest retailer, operating more than 10,000 stores; roughly half of them are in the United States. The company does nearly $600 billion worth of sales every year, dwarfing all of its brick-and-mortar rivals' top lines.
That's a key piece of the long-term bullish argument.
Although Walmart may never dish out the sort of annual revenue growth Apple can, it can drive steady, reliable growth. Consumers always need groceries, after all, and they usually need life's basics, like towels, school supplies, diapers, kitchen utensils, and more. Walmart sells it all. It's also got enough sheer size to outmuscle its competitors.
And now it's adding some finesse to this brute force.
While interest in the service has just been so-so (with estimates ranging widely from a little less than 10 million to as many as more than 40 million people), the subscription-based shopping/shipping services known as Walmart+ is at least successful enough to give Amazon pause. It's not just free shipping of online orders, though. The company's inching its way into primary healthcare with surprisingly complete stand-alone clinics, and Walmart.com is a fast-growing third-party online marketplace. The retailer's even entered the premium wine market with its own private-label products.
None of these initiatives will ignite rapid growth for the company. Collectively, though, they're the sort of add-on offerings increasingly making Walmart a lifestyle choice rather than a mere retailer.
3. Merck
Finally, add drugmaker Merck (NYSE: MRK) to your list of stocks you can feel good about jumping into for the long haul.
Investors that know the company well will know the blue-chip pharmaceutical name doesn't always grow its top and bottom lines. There was a stretch between 2012 and 2018, for example, when its sales slumped slightly -- the period after asthma drug Singulair's key patent expired and before sales of its cancer-fighting Keytruda really started to take off in earnest.
The company's been firing on all cylinders since Keytruda's been greenlighted for more and more uses. The multiyear sales lull, however, still illustrates that not even powerhouse Merck is immune to the pharma business's biggest headache. That's the need for constant and expensive innovation, even if innovation has to be acquired.
The thing is, when you're as big and well-funded as Merck, creating growth opportunities like the one supplied by Keytruda -- now Merck's top seller -- is relatively easy to do. Indeed, the pharmaceutical giant is in the process of making a tender offer for Imago BioSciences as a means of bringing a couple of new, promising oncology candidates into the fold. Keytruda wasn't developed in-house either, for that matter. Merck acquired it when it acquired Schering-Plough back in 2009, which had developed the drug up until then.
The point is, given the never-ending need for pharmaceuticals and the big spending required to create new ones, it ultimately takes a major player like Merck to balance the risk and cost of being in the business with the likely reward.
10 stocks we like better than Apple
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See the 10 stocks
*Stock Advisor returns as of January 9, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com, Apple, Merck, and Walmart. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Apple Are Apple's (NASDAQ: AAPL) highest-growth days in its past? By 2024 the company plans on manufacturing its own screens for its mobile devices, and it is also reportedly working on an internal chip foundry that will be up and running by 2025. Indeed, the pharmaceutical giant is in the process of making a tender offer for Imago BioSciences as a means of bringing a couple of new, promising oncology candidates into the fold.
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Apple Are Apple's (NASDAQ: AAPL) highest-growth days in its past? It matters simply because the iPhone still accounts for roughly half of Apple's top line. The thing is, when you're as big and well-funded as Merck, creating growth opportunities like the one supplied by Keytruda -- now Merck's top seller -- is relatively easy to do.
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Apple Are Apple's (NASDAQ: AAPL) highest-growth days in its past? Walmart Apple isn't the only great long-haul stock to step into here, of course. The Motley Fool has positions in and recommends Amazon.com, Apple, Merck, and Walmart.
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Apple Are Apple's (NASDAQ: AAPL) highest-growth days in its past? The iPhone isn't immune to this headwind, nor is it adding to its share of this stagnating market. It matters simply because the iPhone still accounts for roughly half of Apple's top line.
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17598.0
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2023-01-14 00:00:00 UTC
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Is It Time to Buy the Dow Jones' 3 Worst-Performing December Stocks?
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AAPL
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https://www.nasdaq.com/articles/is-it-time-to-buy-the-dow-jones-3-worst-performing-december-stocks
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nan
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nan
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Last month was another tough one for the stock market ... even the blue chips. The Dow Jones Industrial Average (DJINDICES: ^DJI) lost a little more than 4% of its value in December, bringing a budding rebound effort to a screeching halt. It remains to be seen if the rally since then has legs.
And it was even worse for some of the Dow's constituent stocks. Several of its components fell by double-digit percentages last month, in fact, driving a handful of these tickers to new 52-week lows in the process.
Veteran investors of course know such sell-offs can be buying opportunities. The question is, are the biggest of the Dow's December losers worth stepping into now?
What went wrong
For the record, the steepest losses suffered by Dow stocks last month were dished out by Intel (NASDAQ: INTC), Apple (NASDAQ: AAPL), and Salesforce (NYSE: CRM). Apple and Intel each fell a little more than 12% in December, while Salesforce ended the month with a setback of more than 17%.
AAPL data by YCharts
Intel's stumble isn't rooted in a specific cause. Indeed, the company made some encouraging announcements last month. Not only is it splitting up its graphics processing operating arm to better focus on its opportunities in that arena, but the company also introduced new software that extracts more computing power for its institutional hardware customers. It's just that none of this news was bigger than Intel's broader, perceived problems: competition and brewing economic weakness.
Apple's uncharacteristic pullback stems from early December reports that holiday demand for its iPhone was tepid, followed by news that the company was struggling to procure them anyway. Neither headline is something Apple's shareholders are accustomed to seeing. Just bear in mind the stock's weakness for the better part of 2022 may have made these investors sensitive to such red flags.
As for Salesforce, chalk its loss up to so-so guidance for the quarter now underway, and the resignation of co-CEO Bret Taylor. Although the company is in good hands with Marc Benioff at the helm, Taylor's abrupt exit at the same time Salesforce announced expectations for top-line growth of only between 8% and 10% for the quarter ending this month was more than investors could bear. Ditto for the several analysts who downgraded and/or lowered their price targets for the stock last month.
Look five years down the road, not five days
The question remains, however: Are any or all of these Dow stocks worthy buys following last month's lousy results? The official, "most-correct" answer is no.
While it's certainly better to purchase a quality stock while it's down rather than up, there's nothing about a calendar month's results that makes it a better (or worse) time to step into a new name. Stocks hit major highs and lows in all days and all months, and it's entirely possible all three of these names have more value left to lose before making a bottom.
The unofficial, "don't overthink this" answer, however, is yes -- all three of these stocks are arguably closer to a major low than not; you could certainly find less compelling entry points.
Take Salesforce as an example. Although Taylor's impending exit sends a warning of sorts, it shouldn't. Benioff has been the company's figurehead for years, in the spotlight, answering the tough questions. Very little will change in terms of effective leadership.
The company is also adapting to what looks like an economic headwind, announcing earlier this month it would be laying off about 10% of its workers in the near future. Rather than seeing the glass as half-empty, investors celebrated the cost-cutting measure, sending the stock well up from last month's new 52-week low. It's a sign that the market may be shopping for any reason to start stepping back in again after Salesforce shares' 58% pullback from their late-2021 high.
Intel shares are starting to test the bullish waters as well, up 15% from December's low. That may be because the company unveiled the 13th Gen Intel Core Mobile Processor -- now the world's fastest mobile CPU -- at this year's CES (held early this month). It's also starting to turn heads with its recently released 4th Gen Xeon Processors aimed at the server and data center market, which were also unveiled at this year's CES. While Intel sells hardware to the consumer market, institutions are big business for the company too.
Newcomers can buy the stock at only around 10 times its past and projected per-share profits. That's not bad, even with Intel's long-standing design and foundry challenges.
And Apple? It's the biggest and most profitable company in the world for good reason. The stock, however, is down more than 20% since August for the wrong reason. That's the erroneous, generalized worry that Apple can't thrive in a lousy economic environment.
The main thing is still the main thing
Let's be clear. These stocks aren't attractive additions to your portfolio simply because they lost a lot of ground in a short period of time. Lots of stocks suffer setbacks of this scope, but fully deserve to do so.
In this instance, though, all three of these stocks represent companies with staying power that's not being factored in. And, the fact that December's pullbacks are only part of much bigger pullbacks bolsters the long-term bullish thesis. That thesis remains intact even if these three stocks end up moving a little lower before moving meaningfully higher again. For perspective, Apple and Salesforce shares are presently priced below their consensus price targets, while Intel is trading right at its target price.
In other words, don't be penny-wise and pound-foolish here, and don't get too hung up on the short-term noise.
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When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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*Stock Advisor returns as of January 9, 2023
James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Intel, and Salesforce. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, long March 2023 $120 calls on Apple, short January 2025 $45 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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What went wrong For the record, the steepest losses suffered by Dow stocks last month were dished out by Intel (NASDAQ: INTC), Apple (NASDAQ: AAPL), and Salesforce (NYSE: CRM). AAPL data by YCharts Intel's stumble isn't rooted in a specific cause. Not only is it splitting up its graphics processing operating arm to better focus on its opportunities in that arena, but the company also introduced new software that extracts more computing power for its institutional hardware customers.
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What went wrong For the record, the steepest losses suffered by Dow stocks last month were dished out by Intel (NASDAQ: INTC), Apple (NASDAQ: AAPL), and Salesforce (NYSE: CRM). AAPL data by YCharts Intel's stumble isn't rooted in a specific cause. That may be because the company unveiled the 13th Gen Intel Core Mobile Processor -- now the world's fastest mobile CPU -- at this year's CES (held early this month).
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What went wrong For the record, the steepest losses suffered by Dow stocks last month were dished out by Intel (NASDAQ: INTC), Apple (NASDAQ: AAPL), and Salesforce (NYSE: CRM). AAPL data by YCharts Intel's stumble isn't rooted in a specific cause. See the 10 stocks *Stock Advisor returns as of January 9, 2023 James Brumley has no position in any of the stocks mentioned.
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What went wrong For the record, the steepest losses suffered by Dow stocks last month were dished out by Intel (NASDAQ: INTC), Apple (NASDAQ: AAPL), and Salesforce (NYSE: CRM). AAPL data by YCharts Intel's stumble isn't rooted in a specific cause. Apple and Intel each fell a little more than 12% in December, while Salesforce ended the month with a setback of more than 17%.
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17599.0
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2023-01-14 00:00:00 UTC
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281 Billion Reasons Why You May Regret Not Buying Apple Stock
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AAPL
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https://www.nasdaq.com/articles/281-billion-reasons-why-you-may-regret-not-buying-apple-stock
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nan
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nan
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The iPhone has been the cornerstone of Apple's (NASDAQ: AAPL) success for years, ever since it disrupted the smartphone market when its first model debuted 16 years ago, but it looks like days of rapid sales growth for its flagship device may be over.
In its fiscal 2022 (which ended on Sept. 24), the Cupertino-based tech giant's iPhone revenue increased by 7%. While that may not seem like much, it is worth noting that Apple added $13.5 billion in incremental iPhone revenue during the fiscal year, bringing its total to $205.5 billion.
That massive revenue base explains why even multibillion-dollar jumps will appear fairly small on a percentage basis.
Moreover, as the iPhone was responsible for 52% of Apple's revenue last fiscal year, the product's maturity means that its slow growth is weighing on the company's overall growth. This helps explain why Apple's total revenue in fiscal 2022 increased by just 8% to $394 billion.
Things are expected to get worse in the current fiscal year, with the top line forecast to increase by just 2.6%. So Apple is no longer the high-flying growth company that it was in 2021 when users were rapidly upgrading to 5G iPhones.
But don't be surprised to see Apple's iPhone sales growth accelerate once again in the coming years as the company pushes deeper into a huge smartphone market where it is still in its early stages of growth.
Making solid progress in a massive smartphone market
India is a huge country with a population of around 1.41 billion people, but the number of smartphones sold there is relatively small by comparison. Counterpoint Research estimates that 160 million smartphones were sold in India in 2022. That number is expected to increase to 175 million in 2023.
Statista estimates that India's smartphone penetration rate stood at 66% in 2022, and projects that figure could jump to 95% by 2040. This suggests that there's still a lot of room for growth in the Indian smartphone market. According to another estimate, smartphone sales in India could generate $281 billion in revenue by 2028, up from $139 billion in 2021.
Currently, Apple is scratching just the surface of this huge opportunity. It reportedly holds a market share of only 5% in India, but the good news is that it has been pulling the right strings to pick up a bigger chunk. Investors should note that Apple's share of the Indian smartphone market was an even smaller 2.5% five years ago. The company was struggling to gain a foothold in the Indian market then as customers weren't willing to pay up for iPhones given how expensive they were compared to rival devices.
But things have changed. The iPhone 13 was the best-selling smartphone in India in the fourth quarter of 2022. The entry-level model of the device starts at 61,999 Indian rupees (roughly $753 at the current exchange rate). Samsung's Galaxy M13 was the second-best seller, but the interesting thing to note here is that it costs just a fifth as much as the iPhone 13.
This indicates that more Indian customers are now willing to pay for iPhones, and that is translating into terrific growth for the company in that market. Apple's India revenue increased by 45% year over year to a record $4 billion in fiscal 2022. That amounted to over 1% of the company's total revenue for the year.
But the incredible $281 billion smartphone revenue opportunity in India and Apple's moves to increase its footprint there suggest that the world's second-most populous nation could become a much bigger contributor to the company's top line.
Making the right moves at the right time
Apple currently relies on China for a big chunk of its iPhone production. In 2019, between 44% to 47% of Apple's production happened in China. By 2021, it had reduced its dependence on China to 36%. More importantly, Apple is busily diversifying its supply chain into markets beyond China, and India is one of the beneficiaries of this strategy.
Apple and its partners have been investing in setting up production facilities in India. According to recent reports, Apple suppliers could invest 28 billion Indian rupees (around $340 million at the current exchange rate) to boost production in the country. Apple has reportedly asked its supply chain partners to boost output in other countries such as India after COVID lockdowns in China reduced the company's iPhone supply in recent months.
India reportedly makes 5% of the iPhones produced globally now. By 2025, a quarter of global iPhone production is expected to happen in India. The tech-focused newspaper DigiTimes estimates that India could manufacture half of all iPhones by 2027. As a result, Apple should be able to price its smartphones more competitively there.
This could encourage more Indian customers to come into Apple's fold, especially considering that people there are now spending more on smartphones. The average selling price of smartphones in India jumped 15% year over year in Q3 2022 to $226, while 5G smartphones carried a higher average selling price of $393.
Also, India's 5G smartphone market is still in its infancy, with network deployments having just begun. Only 10% of smartphones in India are 5G-capable. Growth in that segment could pave the way for Apple to gain more market share. That's because Apple is the leader in the market for smartphones priced at 30,000 Indian rupees (around $360 at the current exchange rate) and above, with a share of 40%.
The higher average selling price of 5G smartphones and Apple's move to enhance production in India could help it offer competitive prices and set the company up for solid market share gains in the future. If Apple only doubles its share of the Indian smartphone market over the next five years, it could generate close to $30 billion in annual revenue from that market based on the $281 billion estimate mentioned previously.
However, it won't be surprising to see the company generate more revenue from this market given that it enjoys a much higher average selling price of around $1,000. That would be nearly seven times the revenue Apple generated from India last fiscal year. As such, the Indian market could infuse life into Apple's slowing iPhone revenue growth and help accelerate the tech giant's overall growth in the long run.
10 stocks we like better than Apple
When our award-winning analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of January 9, 2023
Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
The iPhone has been the cornerstone of Apple's (NASDAQ: AAPL) success for years, ever since it disrupted the smartphone market when its first model debuted 16 years ago, but it looks like days of rapid sales growth for its flagship device may be over. The company was struggling to gain a foothold in the Indian market then as customers weren't willing to pay up for iPhones given how expensive they were compared to rival devices. But the incredible $281 billion smartphone revenue opportunity in India and Apple's moves to increase its footprint there suggest that the world's second-most populous nation could become a much bigger contributor to the company's top line.
|
The iPhone has been the cornerstone of Apple's (NASDAQ: AAPL) success for years, ever since it disrupted the smartphone market when its first model debuted 16 years ago, but it looks like days of rapid sales growth for its flagship device may be over. Making solid progress in a massive smartphone market India is a huge country with a population of around 1.41 billion people, but the number of smartphones sold there is relatively small by comparison. According to recent reports, Apple suppliers could invest 28 billion Indian rupees (around $340 million at the current exchange rate) to boost production in the country.
|
The iPhone has been the cornerstone of Apple's (NASDAQ: AAPL) success for years, ever since it disrupted the smartphone market when its first model debuted 16 years ago, but it looks like days of rapid sales growth for its flagship device may be over. But don't be surprised to see Apple's iPhone sales growth accelerate once again in the coming years as the company pushes deeper into a huge smartphone market where it is still in its early stages of growth. The higher average selling price of 5G smartphones and Apple's move to enhance production in India could help it offer competitive prices and set the company up for solid market share gains in the future.
|
The iPhone has been the cornerstone of Apple's (NASDAQ: AAPL) success for years, ever since it disrupted the smartphone market when its first model debuted 16 years ago, but it looks like days of rapid sales growth for its flagship device may be over. Making solid progress in a massive smartphone market India is a huge country with a population of around 1.41 billion people, but the number of smartphones sold there is relatively small by comparison. According to another estimate, smartphone sales in India could generate $281 billion in revenue by 2028, up from $139 billion in 2021.
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