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19600.0
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2022-08-28 00:00:00 UTC
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My Top FAANG Stock to Buy for the Second Half of 2022 (and Beyond)
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AAPL
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https://www.nasdaq.com/articles/my-top-faang-stock-to-buy-for-the-second-half-of-2022-and-beyond-0
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nan
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FAANG is the acronym given to Meta (formerly Facebook) (NASDAQ: META), Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), the parent of Google. Four of the five FAANG stocks are in the top-10 of the most valuable U.S. companies by market capitalization. The exception is Netflix, which has seen its stock price drop over 60% year to date.
Now, what if you had to choose just one of these as your favorite stock for the second half of 2022? My top FAANG choice would be Apple. Down over 8% this year (it was down 28% back in mid-June), the tech stock has had a rough start to the year. Still, the company stands as the most valuable public company in the U.S. and even with its size, there's still room for it to grow -- and in so many ways.
Let's take a look at some.
A step in the right direction
Apple and Major League Soccer (MLS) announced a deal to show all MLS matches worldwide for 10 years beginning in 2023. The matches will have no restrictions or local blackouts, a first in major professional sports. The partnership itself is great for sports fans, but also for investors. It's a sign that Apple is willing to put more resources into becoming a competitor in the streaming world.
Apple TV+ subscriptions lag way behind Netflix, Disney+, and HBO Max, but that's to be expected considering it just launched in November 2019. Does that mean I think Apple TV+ will catch up to the other streaming services? Not really. But I do know the MLS is the fastest-growing soccer league in the world and that if Apple wants to compete, it's going to require partnerships like this, not just relying on original content being enough to bring consumers over.
It was only a matter of time
When Apple first announced Apple Pay in 2014, it was the company's first time making a splash in the financial services space, but not many people looked into it too much. It was more about the convenience of paying with your phone than anything else. Once the company announced Apple Card in 2019, it became a little more evident it was getting serious about financial services. Apple partnered with Goldman Sachs (NYSE: GS), using the investment bank to approve applications and fund the loans for the Apple Card.
Apple Pay Later, its most recent rollout, should be a sign to the financial services industry that the tech company has come to play. Apple Pay Later is the company's move into the buy now, pay later industry; it lets you split purchases into four equal payments over six weeks with no fees or interest. But the feature itself isn't why this move is so important.
Apple Pay Later will be the first time Apple underwrites and funds loans by itself. The good news: no more paying a bank to do it. The potentially not-so-good news: Apple has to absorb losses itself. Considering the company brought in over $365 billion in revenue in 2021, I'm sure the board of directors is not losing sleep over that possibility.
It always comes back to this
The one thing Apple has that no other financial institution can duplicate is that well over 100 million people in the U.S. have an iPhone (more than 1 billion worldwide). And with that iPhone comes access to more data than many of us can fathom. Even if Apple's solo start into underwriting gets off to a rocky start (which it possibly will), diving deeper into financial services is a way to deepen the relationship with customers -- which is key to long-term success.
If you think the iPhone is a one-stop shop now, just wait until it's a fully functional online bank in your hand. The fintech world should be on high alert.
Find out why Apple 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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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. 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. Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Goldman Sachs, Meta Platforms, Inc., 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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FAANG is the acronym given to Meta (formerly Facebook) (NASDAQ: META), Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), the parent of Google. But I do know the MLS is the fastest-growing soccer league in the world and that if Apple wants to compete, it's going to require partnerships like this, not just relying on original content being enough to bring consumers over. Find out why Apple is one of the 10 best stocks to buy now Our award-winning analyst team has spent more than a decade beating the market.
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FAANG is the acronym given to Meta (formerly Facebook) (NASDAQ: META), Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), the parent of Google. 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 (A shares), Alphabet (C shares), Amazon, Apple, Goldman Sachs, Meta Platforms, Inc., Microsoft, and Netflix.
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FAANG is the acronym given to Meta (formerly Facebook) (NASDAQ: META), Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), the parent of Google. It was only a matter of time When Apple first announced Apple Pay in 2014, it was the company's first time making a splash in the financial services space, but not many people looked into it too much. 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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FAANG is the acronym given to Meta (formerly Facebook) (NASDAQ: META), Apple (NASDAQ: AAPL), Amazon (NASDAQ: AMZN), Netflix (NASDAQ: NFLX), and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), the parent of Google. Down over 8% this year (it was down 28% back in mid-June), the tech stock has had a rough start to the year. The good news: no more paying a bank to do it.
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19601.0
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2022-08-28 00:00:00 UTC
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Weekly Preview: Earnings to Watch This Week 8-28-22 (AVGO, BIDU, CRWD, LULU)
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AAPL
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https://www.nasdaq.com/articles/weekly-preview%3A-earnings-to-watch-this-week-8-28-22-avgo-bidu-crwd-lulu
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nan
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nan
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T
he Fed is not pivoting from its hawkish stance regarding interest rates. Fed chairman Jerome Powell put those notions to rest Friday, speaking bluntly about policy decisions to combat inflation during his speech at Jackson Hole.
“Reducing inflation is likely to require a sustained period of below-trend growth,” Powell said. “While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses.”
The chairman insisted that the Fed will do whatever it has to do “until the job is done” of getting the cost of living back to its 2% target. Those blunt words didn’t excite investors. And Powell’s words also suggests that, despite what appears to be peak inflation, the period of rate decreases is perhaps farther away than the market anticipated. As such, stocks ended Friday’s trading taking it on the chin with the Dow Jones Industrial Average suffering its worst daily percentage drop in three months.
The Dow Jones Industrial Average on Friday suffered a 3.03% plunged, losing 1,008.38 points to close at 32,283.40. All of the blue chip components were down across the board, suffered by declines in Salesforce (CRM), Apple (AAPL), Microsoft (MSFT) and IBM (IBM). The S&P 500 also suffered, losing 141.46 points, or 3.4%, to finish at 4,057.66. This marked the S&P 500's biggest percentage decline since June 13. On Friday, only five stocks in the S&P 500 ended in positive territory. Meanwhile, the Nasdaq Composite Index fell 3.94%, giving up 497.56 points to finish at 12,141.71.
Notably, this was the Nasdaq’s largest percentage drop since June 16. For the week, all three benchmarks suffered declines of more than 4%, led by the Nasdaq which saw the biggest weekly decline 4.4%. This was the second consecutive week of losses for all three. But while the market reacted to Powell’s statements, it wasn't all bad news. While inflation remains high, the job market remains strong which Powell acknowledged, though he cautioned the market will have to weaken before inflation can be considered under control.
“These are the unfortunate costs of reducing inflation,” he said. “But a failure to restore price stability would mean far greater pain.” This phrase was interpreted as Powell effectively saying there will be no pivot to the hawkish stance. It seemingly caught the market by surprise. But that should not overshadow the positive economic data we have received. What’s more, although recent earnings have been anything but stellar, the results we have received so far have come better-than-expected. As such, with the recent decline, there are now opportunities for bargain hunters to find value. Here are the stocks I’ll be watching for the coming this week.
Baidu (BIDU) - Reports before the open, Tuesday, Aug. 30.
Wall Street expects Baidu to earn $1.58 per share on revenue of $4.23 billion. This compares to the year-ago quarter when earnings came to $2.39 per share on revenue of $4.84 billion.
What to watch: China’s regulatory crackdown on tech companies such as Baidu are now well-documented. Baidu has fallen victim to the impacts of increased regulatory scrutiny from the Beijing government. China’s pressure demanding better corporate governance, anticompetitive practices and improved political posture has sparked fears among U.S. investors that Baidu’s core marketing business won’t grow as expected, nor will it be able to accelerate its growth in the cloud. Chinese tech companies, the likes of Alibaba (BABA), JD.com (JD) and Tencent (TCEHY), are now working under new operating requirements imposed by the SAMR which includes forcing companies to increase its investments in the country, whether in the form of direct sales and marketing dollars or “strategic initiatives” investment. Baidu stock has been under pressure as a result. However, the shares have rebounded strongly over the past three months, suggesting investors are now more willing to take a risk with undervalued Chinese tech companies. Currently trading at around $138, Baidu is discounted relative to its long-term potential. For any of this perceived value to matter, on Thursday the company must speak positively about its growth potential despite the increased regulatory scrutiny in China.
CrowdStrike (CRWD) - Reports after the close, Tuesday, Aug. 30.
Wall Street expects CrowdStrike to earn 27 cents per share on revenue of $515.47 million. This compares to the year-ago quarter when earnings were 11 cents per share on revenue of $337.69 million.
What to watch: After struggling to find a bottom amid the tech correction, shares of CrowdStrike have surged almost 40% in the past three months. Having beaten revenue estimates for thirteen straight quarters, the cybersecurity specialist continues to produce strong financial results. Now armed with strong free cash flow and with a solid balance sheet, the management team has done a solid job executing on the company’s stated objectives of dominating the cloud security market. The company’s next-generation endpoint security technology platform aimed at stopping data breaches before they can inflict damage. In CrowdStrike’s last earnings report, revenue grew 61% year over year to $488 million, beating its own guidance of 52% growth. The company also issued guidance that was significantly higher than analysts' estimates. As such, despite the recent recovery, the stock remains attractively priced. The cybersecurity industry has played a critical role as more workloads move to the cloud. That’s likely to be the case for the foreseeable future. Recognized as a category leader, it would be a mistake to part with these shares now.
Lululemon (LULU) - Reports after the close, Thursday, Sep. 1.
Wall Street expects Lululemon to earn $1.86 per share on revenue of $1.77 billion. This compares to the year-ago quarter when earnings came to $1.65 per share on revenue of $1.45 billion.
What to watch: The combination of rising inflation, rising interest rates and the prospect of a recession were the ingredients that punished many retail stocks like Lululemon which has seen its shares fall 17% year to date and 21% over the past year. However, as inflationary metrics showed signs of easing, the pressure on retailers have also waned. For Lululemon, however, the company has shown its resilience during the decline. Thanks to its omni-channel operating model, including its direct-to-consumer sales strategy, the company posted strong revenue growth in the most-recent quarter. Despite intense competition from the likes of Nike (NKE) and Under Armour (UAA), Lululemon maintains its strong profit margins, while showing it has the ability to raise prices in order to do so. The Global Activewear Market is expected to grow to $455 billion in the next five year, according to Statista, rising from $380 billion. This means that Lululemon, generating just $6.64 billion in the past twelve months, still has tons of growth levers it can pull to dominate the athleisure market in the years ahead. The company’s international expansion strategy, combined with its powerful brand will continue to drive shareholder value. Aside from a top and bottom line beat on Thursday, investors will want to hear more about ways it is navigating inflation headwinds in the near-term.
Broadcom (AVGO) - Reports after the close, Thursday, Sep. 1.
Wall Street expects the company to earn $9.56 per share on revenue of $8.41 billion. This compares to the year-ago quarter when earnings came to $6.96 per share on revenue of $6.78 billion.
What to watch: After taking a massive hit over the past several months, chip stocks have come roaring back over the past several weeks, rising along with the rest of the tech sector on optimism that a recession can be averted. One of the biggest movers has been Broadcom which has seen its shares rise almost 10% in thirty days. And since mid-July, the stock has risen as much as 17% from a closing price of $476.30 on July 5th to $556.10, besting the S&P 500 index during that span. Having consistently beaten earnings expectations over the past two years, you would be hard-pressed to find a stronger management team within the chip space. On a mission to become the world leader in infrastructure technology, the company has gone on an acquisition spree and diversifying its business away from its core semiconductor segments. The company’s $61 billion acquisition of VMware is the latest example. Aside from expertise in data center infrastructure, networking, and storage, The VMware deal exposes Broadcom to various applications such as cloud management, arming it with strong portfolio of high-growth services to drive revenue for years to come. For the stock to maintain its uptrend, it will take upbeat revenue guidance and datacenter results to continue the cement the growth thesis.
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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All of the blue chip components were down across the board, suffered by declines in Salesforce (CRM), Apple (AAPL), Microsoft (MSFT) and IBM (IBM). Fed chairman Jerome Powell put those notions to rest Friday, speaking bluntly about policy decisions to combat inflation during his speech at Jackson Hole. China’s pressure demanding better corporate governance, anticompetitive practices and improved political posture has sparked fears among U.S. investors that Baidu’s core marketing business won’t grow as expected, nor will it be able to accelerate its growth in the cloud.
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All of the blue chip components were down across the board, suffered by declines in Salesforce (CRM), Apple (AAPL), Microsoft (MSFT) and IBM (IBM). The Dow Jones Industrial Average on Friday suffered a 3.03% plunged, losing 1,008.38 points to close at 32,283.40. For any of this perceived value to matter, on Thursday the company must speak positively about its growth potential despite the increased regulatory scrutiny in China.
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All of the blue chip components were down across the board, suffered by declines in Salesforce (CRM), Apple (AAPL), Microsoft (MSFT) and IBM (IBM). Wall Street expects Baidu to earn $1.58 per share on revenue of $4.23 billion. What to watch: The combination of rising inflation, rising interest rates and the prospect of a recession were the ingredients that punished many retail stocks like Lululemon which has seen its shares fall 17% year to date and 21% over the past year.
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All of the blue chip components were down across the board, suffered by declines in Salesforce (CRM), Apple (AAPL), Microsoft (MSFT) and IBM (IBM). For the week, all three benchmarks suffered declines of more than 4%, led by the Nasdaq which saw the biggest weekly decline 4.4%. Baidu stock has been under pressure as a result.
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19602.0
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2022-08-28 00:00:00 UTC
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2 FAANG Stocks Billionaires Are Buying Hand Over Fist and 1 They're Avoiding Like the Plague
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AAPL
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https://www.nasdaq.com/articles/2-faang-stocks-billionaires-are-buying-hand-over-fist-and-1-theyre-avoiding-like-the
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nan
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nan
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It's been multiple generations since investors have contended with such a challenging year on Wall Street. At the halfway mark of 2022, the benchmark S&P 500, which is viewed as the most-encompassing stock market barometer, had delivered its worst first-half return in 52 years!
Despite this turmoil, Wall Street's brightest and most-successful money managers have remained grounded. According to Form 13F filings with the Securities and Exchange Commission, most billionaire money managers were active buyers as the stock market plunged into a bear market during the second quarter.
Image source: Getty Images.
However, sentiment was clearly mixed when it came to the FAANG stocks. By "FAANG," I'm referring to:
Meta Platforms (NASDAQ: META), which was formerly known as Facebook
Apple (NASDAQ: AAPL)
Amazon (NASDAQ: AMZN)
Netflix (NASDAQ: NFLX)
Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), which was formerly known as Google
Among these industry leaders are two FAANG stocks billionaires have been buying hand over fist, as well as one FAANG they've been avoiding like the plague.
FAANG stock No. 1 billionaires are buying hand over fist: Alphabet
The first FAANG component billionaire fund managers can't seem to get enough of is Alphabet, the parent company of streaming platform YouTube, autonomous car company Waymo, and widely used internet search engine Google.
Based on recent 13F filings, a number of prominent billionaires built up their stakes in Alphabet. This includes Stephen Mandel of Lone Pine Capital, who started a nearly 3.44-million-share position during the second quarter, along with Chase Coleman of Tiger Global, Ken Fisher of Fisher Asset Management, and John Overdeck and David Siegel of Two Sigma Investments. Tiger Global, Fisher Asset Management, and Two Sigma respectively purchased approximately 2.21 million shares, 1.36 million shares, and 1.05 million shares.
Easily one of the best reasons to confidently buy into Alphabet is the company's leading internet search segment. Over the past two years, Google has commanded up to 93% worldwide internet search market share. With its closest-competitor 88 percentage points behind it, Google is able to command top-tier pricing power when placing ads on search pages. This is a competitive advantage that isn't going away anytime soon, and should allow parent Alphabet to benefit from disproportionately long periods of economic expansion.
However. It's Alphabet's ancillary operations that many investors find even more intriguing. YouTube has grown into the second most-visited social media site in the world, while Waymo appears to be light years ahead of electric-vehicle kingpin Tesla in terms of bringing autonomous vehicles into our everyday lives.
But it's cloud-service provider Google Cloud that could be Alphabet's greatest long-term asset. Cloud spending is still in its early stages, and Google Cloud has already gobbled up 8% of global cloud infrastructure spending, according to a report from Canalys. Though Alphabet's cloud segment is a money-loser at the moment, the margins associated with cloud services are often considerably higher than the margins generated from advertising. In other words, Google Cloud can be Alphabet's key to multiplying its operating cash flow.
FAANG stock No. 2 billionaires are buying hand over fist: Amazon
The second FAANG that billionaire fund managers have been buying hand over fist is e-commerce giant Amazon.
During the second quarter, a half-dozen of the brightest billionaires gobbled up shares of Amazon: Jeff Yass of Susquehanna International, Overdeck and Siegel of Two Sigma, Fisher of Fisher Asset Management, Ken Griffin of Citadel Advisors, and Philippe Laffont of Coatue Management. In order, these billionaires oversaw the respective addition of nearly 6.59 million shares, 1.83 million shares, 1.38 million shares, 1.26 million shares, and 1.09 million shares to their fund.
For many investors, Amazon's lure has always been its superior online marketplace. In terms of U.S. online retail sales, Amazon has more than five times the share of the next-closest competitor, and generates more revenue from online sales than its next 14-closest competitors on a combined basis.
But the reality is that online retail sales are a low-margin revenue stream for Amazon. What's far more important for the company are its ancillary sales channels, which are generating juicier operating margins. For instance, Amazon has steadily become an advertising juggernaut. Even during the challenged second quarter, ad sales jumped 18% from the prior-year period. Advertising margins are substantially higher than online retail sales.
Amazon has also used the popularity of its online platform to sign up more than 200 million people to its Prime service. Based on the company's second-quarter operating results, it's generating almost $35 billion in annual run-rate sales from high-margin, transparent subscription revenue.
And don't forget about Amazon Web Services (AWS), the world's leading cloud infrastructure service provider. Even though AWS has accounted for just 16% of the company's net sales through the first six months of 2022, it's brought in for more than 100% of its operating income over the same span. AWS is Amazon's golden ticket to potentially tripling its cash flow by mid-decade.
Image source: Getty Images.
The FAANG stock billionaires are avoiding: Netflix
On the other hand, one FAANG stock has sent billionaires running for the exit. Since its share price fell off a cliff earlier this year, billionaires have largely avoided streaming provider Netflix.
Filings with the Securities and Exchange Commission show that four billionaires reduced or exited their Netflix positions entirely during the second quarter. This included Bill Ackman, whose Pershing Square Capital Management is winding down operations, Steven Cohen's Point72 Asset Management, Laffont's Coatue Management, and Griffin's Citadel Advisors. All told, these four billionaires respectively axed around 3.11 million shares, 231,000 shares, 201,000 shares, and 141,000 shares from their fund.
For years, Netflix was the streaming content kingpin. Its combination of proprietary shows, domestic streaming dominance, and potential to expand internationally into untapped markets, made it a popular buy. But times have changed, and so has Wall Street's opinion of Netflix.
Competition in the streaming space has heated up quickly as traditional cord-cutting has enticed legacy content providers to dangle streaming packages and bundles in front of users. The "House of Mouse," Walt Disney (NYSE: DIS), serves as a perfect example of a streaming provider capitalizing on its own proprietary content and branding. In the less than three years since launching Disney+, the company has gained more than 152 million subscribers. It took Netflix more than a decade to reach those figures after shifting its focus from DVD rentals to streaming. It's particularly noteworthy that Disney is gaining a significant number of subscribers as Netflix endures a subscriber decline.
The other big issue for Netflix is the company's cash generation. Even though Netflix has been profitable on an adjusted basis, the company had been burning cash for a long time as it spent aggressively on new content and international expansion. Even though it appears to have turned the page on jaw-dropping cash burns, the net cash provided to its from operations has been negative or negligible in four of the past five quarters.
While Netflix is about as inexpensive as it's ever been on an adjusted earnings basis, the company's minimal cash flow and increased competition serve as red-flag warnings for investors.
10 stocks we like better than Alphabet
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 Alphabet (A shares) 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 August 17, 2022
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. 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. Sean Williams has positions in Alphabet (A shares), Amazon, and Meta Platforms, Inc. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Netflix, 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 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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By "FAANG," I'm referring to: Meta Platforms (NASDAQ: META), which was formerly known as Facebook Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), which was formerly known as Google Among these industry leaders are two FAANG stocks billionaires have been buying hand over fist, as well as one FAANG they've been avoiding like the plague. YouTube has grown into the second most-visited social media site in the world, while Waymo appears to be light years ahead of electric-vehicle kingpin Tesla in terms of bringing autonomous vehicles into our everyday lives. Based on the company's second-quarter operating results, it's generating almost $35 billion in annual run-rate sales from high-margin, transparent subscription revenue.
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By "FAANG," I'm referring to: Meta Platforms (NASDAQ: META), which was formerly known as Facebook Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), which was formerly known as Google Among these industry leaders are two FAANG stocks billionaires have been buying hand over fist, as well as one FAANG they've been avoiding like the plague. During the second quarter, a half-dozen of the brightest billionaires gobbled up shares of Amazon: Jeff Yass of Susquehanna International, Overdeck and Siegel of Two Sigma, Fisher of Fisher Asset Management, Ken Griffin of Citadel Advisors, and Philippe Laffont of Coatue Management. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Netflix, Tesla, and Walt Disney.
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By "FAANG," I'm referring to: Meta Platforms (NASDAQ: META), which was formerly known as Facebook Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), which was formerly known as Google Among these industry leaders are two FAANG stocks billionaires have been buying hand over fist, as well as one FAANG they've been avoiding like the plague. 1 billionaires are buying hand over fist: Alphabet The first FAANG component billionaire fund managers can't seem to get enough of is Alphabet, the parent company of streaming platform YouTube, autonomous car company Waymo, and widely used internet search engine Google. In order, these billionaires oversaw the respective addition of nearly 6.59 million shares, 1.83 million shares, 1.38 million shares, 1.26 million shares, and 1.09 million shares to their fund.
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By "FAANG," I'm referring to: Meta Platforms (NASDAQ: META), which was formerly known as Facebook Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), which was formerly known as Google Among these industry leaders are two FAANG stocks billionaires have been buying hand over fist, as well as one FAANG they've been avoiding like the plague. For years, Netflix was the streaming content kingpin. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Alphabet (A shares) wasn't one of them!
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19603.0
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2022-08-27 00:00:00 UTC
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Will Tesla Be Worth More Than Apple by 2030?
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AAPL
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https://www.nasdaq.com/articles/will-tesla-be-worth-more-than-apple-by-2030
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nan
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nan
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Shares of Tesla (NASDAQ: TSLA) have shot up by nearly 15,000% over the past decade as the disruptive company established itself as the leading player in the electric vehicle (EV) space.
That remarkable upward run has brought Tesla's market capitalization to $930 billion as of this writing, making it the sixth-largest public company in the world. Apple (NASDAQ: AAPL), meanwhile, is the world's largest company with a market cap of nearly $2.7 trillion. Tesla has a long way to go if it's going to catch up to the iPhone maker. Could the EV leader manage it by 2030?
Tesla is growing at a faster pace than Apple
Starting from a far smaller base, Tesla's market cap has increased at a much faster pace than Apple's over the past decade.
AAPL Market Cap data by YCharts
The eye-popping growth of Elon Musk's company isn't too surprising as it operates in a market that is still taking off. Apple, on the other hand, reaps nearly half of its revenue from selling smartphones, the market for which has already matured.
For instance, in 2021, sales of EVs doubled year over year to a record 6.6 million units, according to the International Energy Agency. The impressive growth has continued in 2022, when 2 million EVs were sold in the first quarter alone -- a 75% jump over the prior-year period. On the other hand, according to research firm Gartner, smartphone sales increased by 6% in 2021. On the one hand, that small increase brought unit sales to 1.43 billion devices. On the other, the industry has run into trouble in 2022, with sales down 9% year over year in the second quarter due to a combination of oversupply and inflation.
The respective health of the EV and the smartphone markets is naturally reflected in Tesla's and Apple's latest results. Tesla's total revenue shot up 43% year over year to $16.9 billion in the second quarter. Adjusted earnings jumped 57% year over year to $2.27 per share, driven by fatter margins. Tesla's non-GAAP operating margin was up 358 basis points over the year-ago quarter to 14.6% thanks to an increase in the average selling price of its vehicles.
Apple's growth was nowhere near that rapid, but that's not surprising given its massive scale. For its fiscal 2022 third quarter, which ended June 25, Apple's revenue increased 2% year over year to $83 billion. That was nearly five times Tesla's revenue. With a sales base that huge, even a multibillion-dollar top-line gain would translate into a small increase in percentage terms.
But at the same time, it is also worth noting that the pace of growth in Tesla's end market is far greater than is occurring in Apple's end markets. That's where Tesla's advantage lies.
Can the EV specialist eclipse the world's largest company by the end of the decade?
Sales of EVs are expected to grow at a rapid pace through 2030. AlixPartners estimates that a third of all vehicles sold by 2028 will be EVs, with the proportion increasing to 54% by 2035. That would be a big jump over the first quarter of 2022, when EVs accounted for 10% of global vehicle sales. With overall vehicle sales expected to jump to 122.8 million units in 2030 from 85.3 million units in 2020, Tesla's addressable market is set to increase rapidly.
Meanwhile, the global smartphone market is expected to clock 7.6% annualized growth through 2030. That pales in comparison to the 29% annualized growth expected in EV sales through the end of the decade. Tesla, therefore, is in a solid position to grow its revenue and earnings at a faster pace than Apple through 2030.
Not surprisingly, analysts expect Tesla's earnings to grow at an average of 45% annually over the next five years, a pace that it could sustain beyond that given the market opportunity ahead of it. Apple is expected to clock annual earnings growth of 9.5% over the next five years. This explains why The Future Fund, an Australian wealth fund, anticipates that Tesla's market capitalization will hit $4 trillion in 2030.
All this indicates that Tesla could keep growing its market capitalization at a faster pace than Apple over the next eight years as it has done in the past, and that could make this electric vehicle play more valuable than the iPhone maker by 2030.
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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Tesla. The Motley Fool recommends Gartner 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), meanwhile, is the world's largest company with a market cap of nearly $2.7 trillion. AAPL Market Cap data by YCharts The eye-popping growth of Elon Musk's company isn't too surprising as it operates in a market that is still taking off. Shares of Tesla (NASDAQ: TSLA) have shot up by nearly 15,000% over the past decade as the disruptive company established itself as the leading player in the electric vehicle (EV) space.
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Apple (NASDAQ: AAPL), meanwhile, is the world's largest company with a market cap of nearly $2.7 trillion. AAPL Market Cap data by YCharts The eye-popping growth of Elon Musk's company isn't too surprising as it operates in a market that is still taking off. Tesla is growing at a faster pace than Apple Starting from a far smaller base, Tesla's market cap has increased at a much faster pace than Apple's over the past decade.
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Apple (NASDAQ: AAPL), meanwhile, is the world's largest company with a market cap of nearly $2.7 trillion. AAPL Market Cap data by YCharts The eye-popping growth of Elon Musk's company isn't too surprising as it operates in a market that is still taking off. Tesla is growing at a faster pace than Apple Starting from a far smaller base, Tesla's market cap has increased at a much faster pace than Apple's over the past decade.
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Apple (NASDAQ: AAPL), meanwhile, is the world's largest company with a market cap of nearly $2.7 trillion. AAPL Market Cap data by YCharts The eye-popping growth of Elon Musk's company isn't too surprising as it operates in a market that is still taking off. Apple, on the other hand, reaps nearly half of its revenue from selling smartphones, the market for which has already matured.
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2022-08-27 00:00:00 UTC
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3 No-Brainer Warren Buffett Stocks to Buy Right Now
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https://www.nasdaq.com/articles/3-no-brainer-warren-buffett-stocks-to-buy-right-now-1
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Fans and followers of Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) likely know he and his team reduced their stakes in some surprising names last quarter. The most noteworthy reductions include Verizon, Royalty Pharma, General Motors (NYSE: GM), and STORE Capital, though there were other positions also scaled back in size.Buffett and his lieutenants also picked up some stocks in the second quarter, adding to Berkshire's existing stakes in Apple (NASDAQ: AAPL), Chevron, and Occidental Petroleum. You'd be wise to at least consider why he bought and sold these stocks, and perhaps consider doing the same yourself.
On the other hand, you need not blindly follow every move the Oracle of Omaha makes. He may have a different end goal than you, after all, and he almost certainly has a different risk tolerance. It's also worth noting that of the stocks Berkshire Hathaway sold last quarter, it still has sizable stakes in many of them.
Here's a rundown of three stocks Buffett's Berkshire still owns that could be no-brainer picks for almost anyone else's portfolio as well.
General Motors
Wait...didn't I just say Berkshire reduced General Motors shares during the second quarter? I did. Buffett and his management team only sold 9.1 million shares of GM, though. It's still holding nearly 53 million shares of the iconic carmaker.
It's also worth noting that Berkshire made the decision to trim this position before the auto giant made a game-changing announcement last week. After more than a two-year hiatus, GM is reinstating its dividend, planning on paying $0.09 per share per quarter, with the first renewed payment coming due next month. The board of directors also approved the resumption of stock buybacks, earmarking up to $5 billion for the updated program.
That decision ultimately reflects confidence in the future of electric vehicles, and how General Motors is positioning itself for that future. Based on historical trends and other factors, EVAdoption estimates annual sales of EVs in the United States alone will swell from just a little under 1 million units this year to more than 4.7 million units in 2030, making GM's $35 billion investment in an EV-centric future well worth the expense.
American Express
Berkshire neither bought nor sold American Express (NYSE: AXP) stock last quarter. Rather, it simply stood pat with the 151 million shares it's been sitting on for a long, long time.
In passing, it's not easy to see what makes American Express very different -- or any better -- than rival card companies like MasterCard or Visa, both of which Berkshire also holds. American Express (still) largely holds itself out as a charge card company rather than a credit card outfit, though from a customer's perspective, there's no significant difference.
If you dig deeper into each companies' offerings, though, it becomes clearer that American Express offers a much more robust ecosystem of cardholder benefits. In addition to personal checking, savings accounts, and lending, cardholders receive generous credit toward future travel expenses, cash back on spending at grocery stores, ride-hailing service vouchers, and cash back on streaming subscriptions, just to name a few perks.
This solid set of benefits doesn't necessarily make the company's business a bulletproof one. It makes the business a rather rock-solid one, though, able to stand up firmly against even the toughest of economic environments. Despite what seemed like a wobbly second quarter, American Express reported a 31% year-over-year revenue increase for the three-month stretch ending in June, pushing earnings well above expectations and prompting the company to raise its profit guidance for the remainder of the year. The numbers and improved profit outlook underscore CEO Steve Squeri's comment made during last month's earnings call: "We continue to see no significant signs of stress in our consumer base."
Apple
Finally, add Apple to your list of stocks Buffett and his team like so much that you ought to consider it for yourself.
It's not a name that needs any real introduction. Apple is the company behind the stunningly popular iPhone, which leads a worldwide base of more than 1.8 billion actively used Apple-made devices. That reach is still growing, largely thanks to the intense customer loyalty the company is able to foster. Consumer Intelligence Research Partners reports that 90% of U.S. iPhone users stick with the iPhone after buying their first one. Presumably, Apple's achieving similar repeat purchases overseas.
In the meantime, the company is still positioning itself for a future beyond hardware. Roughly one-fifth of its revenue now comes from digital services, and while that still pales in comparison to the iPhone's contribution of more than half the company's top line, Apple's digital services revenue boasts considerably greater profit margin than physical products do. Of course, consumers' loyalty to the company's hardware sets more and more device owners up as future digital customers.
It's admittedly not Buffett's usual proverbial cup of tea. He generally eschews trendy tech stocks, uncertain of their staying power. But, Apple has proven itself over the years, and Berkshire's stake grew by 3.9 million shares last quarter to 894.8 million. The fact that this position is still four times bigger than Berkshire Hathaway's next-biggest stock holding, however, speaks volumes about how highly the Berkshire team thinks of Apple. Take the hint.
Find out why Apple is one of the 10 best stocks to buy now
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*Stock Advisor returns as of August 17, 2022
American Express is an advertising partner of The Ascent, a Motley Fool company. James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway (B shares), Mastercard, STORE Capital, and Visa. The Motley Fool recommends Verizon Communications and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), 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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The most noteworthy reductions include Verizon, Royalty Pharma, General Motors (NYSE: GM), and STORE Capital, though there were other positions also scaled back in size.Buffett and his lieutenants also picked up some stocks in the second quarter, adding to Berkshire's existing stakes in Apple (NASDAQ: AAPL), Chevron, and Occidental Petroleum. Despite what seemed like a wobbly second quarter, American Express reported a 31% year-over-year revenue increase for the three-month stretch ending in June, pushing earnings well above expectations and prompting the company to raise its profit guidance for the remainder of the year. The numbers and improved profit outlook underscore CEO Steve Squeri's comment made during last month's earnings call: "We continue to see no significant signs of stress in our consumer base."
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The most noteworthy reductions include Verizon, Royalty Pharma, General Motors (NYSE: GM), and STORE Capital, though there were other positions also scaled back in size.Buffett and his lieutenants also picked up some stocks in the second quarter, adding to Berkshire's existing stakes in Apple (NASDAQ: AAPL), Chevron, and Occidental Petroleum. American Express Berkshire neither bought nor sold American Express (NYSE: AXP) stock last quarter. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway (B shares), Mastercard, STORE Capital, and Visa.
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The most noteworthy reductions include Verizon, Royalty Pharma, General Motors (NYSE: GM), and STORE Capital, though there were other positions also scaled back in size.Buffett and his lieutenants also picked up some stocks in the second quarter, adding to Berkshire's existing stakes in Apple (NASDAQ: AAPL), Chevron, and Occidental Petroleum. The fact that this position is still four times bigger than Berkshire Hathaway's next-biggest stock holding, however, speaks volumes about how highly the Berkshire team thinks of Apple. The Motley Fool recommends Verizon Communications and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple.
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The most noteworthy reductions include Verizon, Royalty Pharma, General Motors (NYSE: GM), and STORE Capital, though there were other positions also scaled back in size.Buffett and his lieutenants also picked up some stocks in the second quarter, adding to Berkshire's existing stakes in Apple (NASDAQ: AAPL), Chevron, and Occidental Petroleum. Buffett and his management team only sold 9.1 million shares of GM, though. American Express Berkshire neither bought nor sold American Express (NYSE: AXP) stock last quarter.
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2022-08-27 00:00:00 UTC
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2 FAANG Stocks to Buy Now and 1 to Avoid
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https://www.nasdaq.com/articles/2-faang-stocks-to-buy-now-and-1-to-avoid
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It has been nine years since CNBC business news personality Jim Cramer coined the acronym "FANG," which later got expanded to "FAANG," to describe a group of game-changing U.S. technology companies. That cohort consists of:
Facebook, which renamed itself Meta Platforms (NASDAQ: META)
Amazon (NASDAQ: AMZN)
Apple (NASDAQ: AAPL)
Netflix (NASDAQ: NFLX)
Google, which renamed itself Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG)
Of those five, Netflix is the only company that hasn't achieved a trillion-dollar market valuation at some point since then. But despite the strong growth this group of stocks has already experienced, some could still have plenty more upside.
We asked three Motley Fool contributors to focus on the FAANG stocks. Here's why they think there's still upside left in Apple and Alphabet, but that Netflix shares are best avoided for now.
An Apple a day keeps the bears away
Anthony Di Pizio (Apple): Recommending Apple stock isn't exactly a bold call. It's one of the most popular companies to own among investors of all skill levels -- after all, it makes up 42% of the value of Warren Buffett's stock portfolio at Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B). But it's also exactly the type of stock investors will benefit from holding during turbulent market periods.
The Nasdaq 100 technology index is down 21% so far in 2022, yet Apple stock is down by just 7%. Its hardware products such as the iPhone, iPad, and AirPods continue to sell incredibly well. Plus, its services segment is driving strong growth through subscription offerings like Apple Music, iCloud, Apple TV, and its innovative Apple Pay platform, which recently expanded into the "buy now, pay later" business.
In terms of its top line, Apple's just had the most lucrative fiscal third quarter in its history: It reported record revenue of $82.9 billion for the period that ended June 25. That represented growth of just 2% year over year, but the company commented that the number of installed active Apple devices hit all-time highs in every product category, and across every geographic segment. This shows that demand remains strong for Apple's products among consumers even as high inflation and rising interest rates squeeze their budgets.
And while overall revenue growth was relatively modest, Apple's services segment sales grew by 12% in the quarter. This is important because the gross profit margin for its services segment is 71% -- significantly higher than its most recent hardware segment margin of 52%. As services become a larger part of Apple's business, investors can expect a greater share of its revenues to flow through to the bottom line.
The cherry on top of the buy case for Apple is the enormous amount of money it's returning to shareholders right now. Its dividend at current share prices offers a small annual yield of 0.55%, but it has repurchased nearly $65 billion worth of its own stock during the first nine months of fiscal 2022, which makes each share that remains in circulation more valuable.
Need information? Just Google it.
Trevor Jennewine (Alphabet): Google is the best known of Alphabet's many businesses. It's the go-to search engine for billions of people, and Google Search currently holds a 90% market share. That advantage has allowed the company to accumulate a lot of consumer data, and its ownership of YouTube -- the second-most-popular video streaming service by viewing time -- has only reinforced its ability to engage consumers and harvest their data.
Collectively, those web properties have made Google an indomitable force in the digital ad industry. Though its market share in that business has dropped by a few percentage points in recent years, Alphabet still took in 28% of global digital ad spending in 2021. Moreover, its strong presence in online search and streaming media should keep it at the forefront of digital advertising for years to come.
Meanwhile, Alphabet is also gaining momentum in cloud computing. Fueled by its investments in data analytics, artificial intelligence, and cybersecurity, Google Cloud captured 10% of the cloud computing market in Q2 2022, up from 8% in Q2 2021 and 6% in Q2 2020.
Not surprisingly, Alphabet's strong market positions in high-growth industries have translated into strong financial results. Its revenue soared by 26% to $278 billion over the past four quarters, and free cash flow climbed 11% to $65 billion. Better yet, investors have good reason to be optimistic about the future.
Companies will spend over $600 billion on digital ads in 2022, according to eMarketer, and it forecasts that that figure will reach $875 billion by 2026. Additionally, according to Grand View Research, cloud computing spending is expected to grow at an annualized rate of 16% to reach $1.6 trillion by 2030. Those tailwinds should keep Alphabet growing at a steady clip for many years to come.
As a final thought, Alphabet may yet have other tricks up its sleeve. The company's "Other Bets" segment today includes an assortment of unprofitable subsidiaries such as autonomous driving technology company Waymo, artificial intelligence research organization DeepMind, and life sciences research organization Verily. It's too early to bank on any meaningful contributions from those businesses, but any of them could provide Alphabet with its next big win.
For all those reasons, this FAANG stock is worth buying today.
A "growth" stock without high growth
Jamie Louko (Netflix): There's no disputing that Netflix led the charge in the streaming revolution, and its scale today reflects that: The company generated almost $8 billion in revenue in Q2, and it has attracted more than 220 million paid subscribers globally. However, Netflix might not be the best stock to load up on now because of the increasing competition it faces.
When streaming was in its early stages, Netflix was one of the only games in town. Now, however, it faces intense competition: Alphabet's YouTube TV and Disney's (NYSE: DIS) Hulu and Disney+ are all formidable rivals in the competition for viewers' streaming media attention. In fact, Disney recently overtook Netflix as the largest streaming service provider, with 221 million subscribers across all its services combined.
The intensifying competition is taking a toll on Netflix's financials. In Q2, its revenue growth fell below 9% on a year-over-year basis -- the third-slowest quarterly growth rate in its history as a public company. What is not slowing, however, is its spending. The company continues to invest heavily in new content and marketing. As a result, its operating income sank 15% year over year in Q2. Yet based on its top-line struggles, these investments are bearing little fruit.
Netflix now trades at just 20 times earnings. That's a steep discount compared to rivals like Disney, which trades at 67 times earnings. However, Netflix doesn't look like the company it once was, and there are better options for investors among the FAANG stocks. Consider buying one of the more powerful FAANG stocks instead of taking a bet on Netflix, which looks more like a value trap than a bargain buy right now.
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 August 17, 2022
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. 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. Anthony Di Pizio has no position in any of the stocks mentioned. Jamie Louko has positions in Amazon, Apple, Berkshire Hathaway (B shares), and Walt Disney. Trevor Jennewine has positions in Amazon and Walt Disney. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Meta Platforms, Inc., Netflix, and Walt Disney. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), 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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That cohort consists of: Facebook, which renamed itself Meta Platforms (NASDAQ: META) Amazon (NASDAQ: AMZN) Apple (NASDAQ: AAPL) Netflix (NASDAQ: NFLX) Google, which renamed itself Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) Of those five, Netflix is the only company that hasn't achieved a trillion-dollar market valuation at some point since then. It has been nine years since CNBC business news personality Jim Cramer coined the acronym "FANG," which later got expanded to "FAANG," to describe a group of game-changing U.S. technology companies. In terms of its top line, Apple's just had the most lucrative fiscal third quarter in its history: It reported record revenue of $82.9 billion for the period that ended June 25.
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That cohort consists of: Facebook, which renamed itself Meta Platforms (NASDAQ: META) Amazon (NASDAQ: AMZN) Apple (NASDAQ: AAPL) Netflix (NASDAQ: NFLX) Google, which renamed itself Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) Of those five, Netflix is the only company that hasn't achieved a trillion-dollar market valuation at some point since then. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Meta Platforms, Inc., Netflix, and Walt Disney. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple.
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That cohort consists of: Facebook, which renamed itself Meta Platforms (NASDAQ: META) Amazon (NASDAQ: AMZN) Apple (NASDAQ: AAPL) Netflix (NASDAQ: NFLX) Google, which renamed itself Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) Of those five, Netflix is the only company that hasn't achieved a trillion-dollar market valuation at some point since then. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Meta Platforms, Inc., Netflix, and Walt Disney. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple.
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That cohort consists of: Facebook, which renamed itself Meta Platforms (NASDAQ: META) Amazon (NASDAQ: AMZN) Apple (NASDAQ: AAPL) Netflix (NASDAQ: NFLX) Google, which renamed itself Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG) Of those five, Netflix is the only company that hasn't achieved a trillion-dollar market valuation at some point since then. Trevor Jennewine (Alphabet): Google is the best known of Alphabet's many businesses. However, Netflix doesn't look like the company it once was, and there are better options for investors among the FAANG stocks.
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2022-08-27 00:00:00 UTC
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These 2 High-Growth Stocks Could Power the Bull Market's Next Record Run
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https://www.nasdaq.com/articles/these-2-high-growth-stocks-could-power-the-bull-markets-next-record-run-3
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The stock market went on a record run from the 2009 end of the Great Recession through 2021. The S&P 500 -- an index made up of the 500 largest publicly traded companies in the United States -- produced a total return of 729.4% from March 2009 through Jan. 1, 2022.
A lot of these returns came from the explosive growth of the largest four technology stocks: Apple, Microsoft, Amazon, and Alphabet (the parent company of Google). Each of these four companies has a market cap of over $1 trillion, and together they make up almost 20% of the entire S&P 500.
SPY Total Return Level data by YCharts.
But what stocks will power the next bull market? Here are two high-growth candidates for reaching new highs whenever that time arrives.
1. Airbnb
First on the list is Airbnb (NASDAQ: ABNB), the Silicon Valley darling that is trying to disrupt the travel and lodging market. With its innovative marketplace that allows anyone to list their home or residence for other people to stay in, the company has changed the game for how people can travel around the world. It has also expanded into the tourist activity industry, allowing its hosts to offer "experiences" to tourists to explore local areas. Airbnb makes money by taking a cut of every transaction on its marketplace.
Last quarter, with the travel industry rebounding globally (excluding China, which the company decided to exit), Airbnb had 103.7 million nights and experiences booked on its platform. This was up 25% year over year and 24% compared to the quarter before the pandemic. Revenue growth was even more impressive, up 58% year over year to $2.1 billion, and 73% compared to the pre-pandemic quarter.
The opportunity for Airbnb remains massive. The size of the global hotel and resort industry before the pandemic was $1.52 trillion, which Airbnb should continue to take bites of as it gets more and more listings on its platform. Plus, the company is going after more than just the hotel market, with people actually living for months at a time in Airbnb rentals. Stays of 28 days or longer are the company's fastest-growing category right now, and with the rise of remote work, it could see consistent growth this decade.
With a market cap of $73.5 billion, Airbnb won't need a herculean effort to become one of the next technology giants. If it can keep growing its revenue at a strong double-digit rate, it wouldn't be surprising to see this business hit a trillion-dollar market cap sometime within the next 10 years.
2. Netflix
You might be surprised to see video streamer Netflix (NASDAQ: NFLX) on this list. The stock has been a big winner since the Great Recession, but with its market cap only touching $300 billion for a short time, it doesn't currently have the same impact on the market as the trillion-dollar technology giants. But that can change.
Netflix is going through a tough time acquiring customers. Subscribers have actually decreased in the last two quarters, and their number now sits at just under 221 million globally. While revenue is still growing because of subscription price increases, hitting $31 billion in the last twelve months, investors are nervous that Netflix may have hit a financial ceiling with its current business model. That has sent the stock price down a whopping 61% year to date, to a market cap of just over $100 billion.
Management is rolling out some smart initiatives to help grow the number of paying subscribers again. First, the company is testing how to restrict password-sharing between households. It estimates that 100 million households currently use Netflix but don't pay for it -- compare that to 221 million paying accounts. If implemented smartly, this could be an easy way for Netflix to regain its financial footing.
Second, it's planning on rolling out an advertising-supported tier in a partnership with Microsoft in the early part of 2023. With a 7.7% share of TV viewing in the United States this June, Netflix has billions of viewing hours that can be monetized with advertisements just in its home country. Apply this globally, and Netflix has a huge opportunity to monetize its service through ads.
The global video streaming market is worth an estimated $473 billion today, but is projected to grow to over $1 trillion this decade. If Netflix can execute with advertising, crack down on password-sharing, and help its subscriber count resume its upward trajectory, I think the company can capture a lot of this spending and become one of the next trillion-dollar technology giants.
Find out why Airbnb, Inc. 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. Airbnb, Inc. 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 August 17, 2022
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. Brett Schafer has no position in any of the stocks mentioned.
The Motley Fool has positions in and recommends Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Amazon, 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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Last quarter, with the travel industry rebounding globally (excluding China, which the company decided to exit), Airbnb had 103.7 million nights and experiences booked on its platform. If Netflix can execute with advertising, crack down on password-sharing, and help its subscriber count resume its upward trajectory, I think the company can capture a lot of this spending and become one of the next trillion-dollar technology giants. *Stock Advisor returns as of August 17, 2022 John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors.
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A lot of these returns came from the explosive growth of the largest four technology stocks: Apple, Microsoft, Amazon, and Alphabet (the parent company of Google). The Motley Fool has positions in and recommends Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Amazon, 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.
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Airbnb First on the list is Airbnb (NASDAQ: ABNB), the Silicon Valley darling that is trying to disrupt the travel and lodging market. The stock has been a big winner since the Great Recession, but with its market cap only touching $300 billion for a short time, it doesn't currently have the same impact on the market as the trillion-dollar technology giants. The Motley Fool has positions in and recommends Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Microsoft, and Netflix.
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After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. Airbnb, Inc. is on the list -- but there are nine others you may be overlooking. The Motley Fool has positions in and recommends Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Microsoft, and Netflix.
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19607.0
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2022-08-27 00:00:00 UTC
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Does Spotify Have a Moat?
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AAPL
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https://www.nasdaq.com/articles/does-spotify-have-a-moat
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In this podcast, Motley Fool senior analyst Asit Sharma discusses:
Target's (NYSE: TGT) 2nd-quarter profit falling nearly 90% compared to last year.
Silver linings within Target's results.
Lowe's posting a quintessential "mixed" quarter.
Lowe's CEO Marvin Ellison's steady leadership.
Does Spotify (NYSE: SPOT) have a moat against Apple? Motley Fool contributor Travis Hoium joins Motley Fool producer Ricky Mulvey for a "medium dive" on the streaming audio business.
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 Target
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 Target 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 August 17, 2022
This video was recorded on Aug. 17, 2022.
Chris Hill: We've got more retail earnings and a closer look at Spotify, Motley Fool Money starts now.
I'm Chris Hill joining me today, Motley Fool Senior Analyst, Asit Sharma. Good to see you.
Asit Sharma: Chris, good to see you.
Chris Hill: It's been a little while.
Asit Sharma: Yeah. I took some time off. I think you did too, so it's good. We're both refreshed.
Chris Hill: Yes, batteries recharged. Let's continue with the theme of the week, which is retail. Anyone who claims to be surprised by Target's, second-quarter results probably hasn't been paying attention the last couple of months. Profit was down nearly 90 percent year over year as Target cleared out inventory. The inventory level is still pretty high, but the CEO, Brian Cornell says it's a much better mix of inventory. I don't know, we talk all the time about taking the long-term view. It seems like that is exactly what Cornell is doing when you see what they did with clearing out their inventory, taking the short-term hit. He's very clear-eyed about what they are trying to pull off here.
Asit Sharma: I agree, Chris. This was like a rip the band-aid off quarter. Let's go ahead and take the hit now. Although for those of you who have had very small dermatological procedures and ripped off a band-aid only to see this mole looks about the same as it did before. [laughs] They said they're going to take it out. That's what we saw in the balance sheet. The inventory balance didn't really change that much from the last three months. But as you mentioned, the company has shifting out of some of those goods we were buying during the pandemic like electronics. Instead, they are piling into food which is a great attractor for foot traffic, their costs are going up. Even as they were foregoing some future revenue and frankly, promotionally discounting some longer-term goods, they're paying more at the unit level for groceries and hey, we are too.
Chris Hill: We are, and shares of Target are down a little bit today not that much. I'm trying to get my head around like what a reasonable expectation is for shareholders because I agree with you and I'm one of those Target shareholders. I agree with you. I would have liked to see the inventory level come down a little bit more, but I feel like they made progress and this sets the stage for their third quarter earnings report, which we'll get in three months. We're hopefully they build on what they've done over the last three months. If you're looking for some silver linings, comps were still in positive territory. They weren't all that impressive, but up about two and a-half percent. Food and beverage was the strongest category and those Ulta Beauty shops seem to be doing well within the Target.
Asit Sharma: This is what you want to see as a shareholder, you want to see continued innovation. As you mentioned, they had some nice metrics in the report. I think digital sales, comp sales were up just over a percent. What you want to have out of your management team isn't ability to recognize reality. They're sending us a message that look back to basics is the best course that we can take. We have to just acknowledge that in an uncertain environment where most of the pandemic is in the rear view mirror. But the consumer still doesn't know how he or she is going to utilize that discretionary income in the face of inflation, maybe uncertainty on the wage level. Our best TAC as a Target is to pile into the categories that pre-pandemic were providing that constant store traffic. That's how you build on a comp base. After that, yes, the little nudges innovations certainly help and emerge as a stronger company out of this. Now, we just don't want to hear management flip-flop, let's say in a year and say hey, we're reversing gear, we're taking a hit on inventory. We've shifted back into bicycles, stereos, the soundbars, etc.
Chris Hill: Silver lining for us as consumers. Checkout your local Target. [laughs] I said this when Cornell came out a couple of months ago and the stock took that huge drop. At the time it was like, hey, if you're looking for patio furniture, if you're looking for large appliances, checkout your local Target and it seems like particularly in the season of back to school shopping, you're probably going to find some good deals there as well. Let's move on to Lowe's. Lowe's second-quarter was the quintessential definition of a mixed quarter. On the downside, revenue was lower than expected. Same store sales fell just a tiny bit. On the plus side their profits held up and just like we saw yesterday with Home Depot, the average ticket at Lowe's was up 6.5 percent again similar to Home Depot that was driven largely by inflation.
Asit Sharma: Yes, so a little boost on the top line, as you note from macro pressures. I really admired though, what CEO Marvin Ellison has been able to achieve in the fears since he's taken over the helm. They really are getting more productive on that operating margin line. They're watching their cost both in terms of cost of sales and their fixed overhead. Lowe's despite up pretty flattish, top line was able to eke out a very small improvement on its operating margins. That was pleasant to see. Of course they call that out and as well they should. The other thing which is really interesting is this mix of sales. In the do it yourself shoppers are dropping off, but the pro sales that the contractors who are builders that business increased by double-digits so it offset a little bit of that consumer weakness. I found it interesting. Management tried to explain to investors in the conference call that investors really shouldn't be worried too much about the fact that the housing market is slowing down. They called out the dynamics which push Lowe sales for chiefly. Almost quoting verbatim from transcript here at Lowe's, the three highest correlating factors of home improvement demand, are home price appreciation, the age of the housing stock, and disposable personal income. They went on to point out that more than half of the homes in the US are over 40 years old. I think mine's probably approaching that, maybe it's I don't 25-years old. Millions more at the peak of the housing boom are turning that magic 20 years old where you start to have to invest in your house. They also pointed out that consumer savings are about 2.6 trillion bucks higher than they were before the pandemic. The long-term factors which are good for shareholders of do-it-yourself businesses like Lowe's and Home Depot's those aren't changing despite the fact that you see this housing market really slowing down and prices starting to come off those searing high as we saw earlier this year.
Chris Hill: We've definitely seen data over the last few weeks out of housing, whether it's houses for sale, being on the market longer bidding wars starting to taper down, all that thing. You mentioned Marvin Ellison. He is as steady a hand on the wheel of this company as any CEO out there. It's just great to see. On yesterday's show, I said that you look at Walmart and Home Depot and what they did yesterday, fairly or unfairly, they raise the bar of expectations for Target and Lowe's. I think if you're a Target or Lowe shareholder there's nothing really to feel bad about. There's nothing to throw a party about either. But I think that in the case of Target, they showed improvement and it sets the stage for hopefully more improvement in the next three months. Cornell's being very transparent about what they're trying to do there. In the case of Lowe's the numbers weren't quite as good as Home Depot, but I feel like there was a lot to like there, including the fact that Ellison is very steady as she goes there. It's one of the things I like about them as a CEO. He doesn't get too high or too low no matter how good or how challenging the results are.
Asit Sharma: I think Ellison, speaking of home improvement is like that neighbor that you have who quietly goes about his or her business and gradually improves the exterior of their house and the lawn and you start to envy that at least people like me who are very bad with to yourself stuff too. I think this is a really nice point about both CEOs and both companies. These are disciplined businesses. They both shoot for very steady operating margin. The world has thrown a huge amount of crap into their business models, Chris, over the last 36 months. To be able to have fairly predictable results with the occasional big adjustment, as we saw in Target's inventory, this quarter is not a bad deal at all for long-term shareholders. I should point out both of these are highly generative cash businesses. They do right by shareholders with their capital allocation.
Chris Hill: Asit Sharma, always great talking to you. Thanks for being there.
Asit Sharma: Always fun to be here, Chris, thanks so much.
Chris Hill: Quick reminder about FoolFest, our annual investing conference in Washington DC. It's a two-day event August 29th and 30th. You've got breakout sessions on different investing strategies. We've got an awesome lineup of speakers, including Trex CEO Bryan Fairbanks, Venture Capitalists, Jenny Abramson, Motley Fool Co-Founder David Gardner, best-selling author Morgan Housel, just to name a few. It is free for Motley Fool members. If you're not yet a member to sign up for our Stock Advisor service and you get a complimentary digital pass to this two-day event. Go to fool.com/foolfest for more details. That's fool.com/foolfest. I will put the URL in the show notes. Up next Travis home and Ricky Mulvey go for a medium dive on Spotify, including whether or not Spotify has a mode against Apple.
Ricky Mulvey: You probably know Spotify, you might even be listening to the show on Spotify right now. Joining us now for a medium dive on the music streaming and digital media company is Motley Fool contributor Travis Hoium. Thanks for being here.
Travis Hoium: Thanks for having me here.
Ricky Mulvey: Easy question to start off, why is Spotify an interesting company to you as an investor?
Travis Hoium: It's the only company that's really focused on your ears as a business. It started with music but now they're really moving into podcasts, audio books. I think that could potentially be a really big market. Think of it as replacing radio if you will and pulling some of the successful business models that have been proven with advertising companies like [Meta's] Facebook and Alphabet or Google. I think that's a really compelling market and as an investor I think there's still a lot of upset.
Ricky Mulvey: They've got a premium model, they also sell ad space. A little bit into how the business model works.
Travis Hoium: Well, it really started with music. There are four major record labels that they have to deal with on the music side of things. That really limits what they can do in monetizing the music business. But like you said, they're able to offer subscriptions and then advertisements and they share that revenue with those record levels. Think about that as you have a small number of suppliers as a result, the suppliers have a lot of bargaining power that really squeezes their margins. That's why Spotify has been in this 20-30 percent margin range. But now they've moved into the non-music business, really trying to ramp up their advertising business. Think about this as like dynamic ads as you're listening to a podcast. Maybe you get some of those as you're listening to Spotify if you're listening to it right now. That has a lot more upside from an investment standpoint because it potentially has higher margins and also maybe even a bigger market.
Ricky Mulvey: Looking at the premium subscriber base, the company has about more than 400 million people on the platform. Something that caught my attention, that Spotify has about a 182 million premium subscribers and 240 million free users. I look at that and I had few questions because, A, it could mean they've been an incredibly high conversion rate. But also, B, the concern that I might have is that that might mean the company has hit a growth ceiling and that a lot of the leads have already become premium users.
Travis Hoium: To put that number into perspective, Facebook has about two billion users and Spotify has a huge international business. I'm not too concerned about them being in a saturation point in the market but definitely something to keep an eye on, this is something they report every quarter but the active monthly users were up 19 percent year-over-year last quarter. That's a pretty solid growth rate. Any company that's growing double-digits long term is really the kind of investment you want to be as a growth investor. I'm not worried about them hitting a wall at this point but obviously one of those numbers that you want to keep an eye on from a year-to-year basis.
Ricky Mulvey: Something that also [inaudible 00:14:02] brought this up is that the company doesn't seem to have a lot of pricing power so Spotify Premium and Apple Music are both set at $10 a month. Do you think they have more pricing power when it comes to the advertisements and owning that ear space and that's where investors should focus for growth.
Travis Hoium: Yeah, ultimately that's really where the upside is in the business. Think about this a little bit like being in the same business that Google is or that Facebook is where you don't have just a small number of suppliers like you have in the music business. Now you have potentially hundreds of thousands of podcasts who are coming to you to try to monetize their podcasts. You're able to match them with advertisers. Well, margins typically go up in that scenario. Margins of 60-80 percent long-term in the ad business is really where we see companies like this being. Long-term, that's really what I'm looking at for Spotify. Can they push not only growth on the revenue side but push up the gross margin number on the advertising business? That's where we could see profitability really jump. We're a long way from there. Spotify is relatively new in the advertising business. They only had $360 million in ad revenue last year but growing 31 percent,. If you keep a 31 percent growth rate, you double every 2.5 years so this could be a really big business by the end of the decade.
Ricky Mulvey: Spotify is also spending a ton of money on exclusive content. Thinking about Dax Shepherd, Joe Rogan, they have a partnership with DC Comics. What is their approach to exclusive content and how is that different from something like a Netflix?
Travis Hoium: There's some similarities with Netflix. They are doing licensing deals, they're also buying some companies like The Ringer. When you buy a company you own all of that content and so you're able to monetize it long term. There are obviously costs associated with ongoing podcasts so it's a little bit different business model from Netflix from that perspective. But the licensing side is very similar. Joe Rogan is a great example. They just write him a big check and then it's Spotify's responsibility to monetize that on the back end. Very similar there, what I think is unique with Spotify is this advertising side of the business where they have content coming to them that they don't have to pay for upfront and they're able to monetize that with their advertisers and match users who are paying for those ads. That's a little bit more like YouTube and that just gives a lot more potential upside because there's no limit to the amount of supply that there's available.
Ricky Mulvey: Companies led by founder leader Daniel Ek, sure he's made some expensive content plays but we also like some founder-led companies. What's your take on him as the CEO?
Travis Hoium: I really like what he's doing with this business and I don't know that anybody else could have the same vision and take a big swing at podcasting, at audio books the way that Daniel Ek is. He also sees that there's just a limit in how profitable on how big this company could be focusing on music. You got to expand that business if you're looking at owning the ear. The next place is podcasts and audio books. I think they have the right vision. Now, executing it is going to be a bit of a challenge because the ad space is very challenging naturally but if they can continue to scale the business I think there's a lot of upside for investors.
Ricky Mulvey: Exclusive podcasts also seem to be in my mind a challenging strategy because unlike the streaming wars, your competitors are offering free products with Apple and lets say even Pocket Casts, those sorts of things.
Travis Hoium: Yeah. The idea with exclusives is really to make Spotify a go-to location for podcasting. I think I'm a perfect example of this. I started using Apple podcasts and I continue going back to the Spotify app because they have podcasts that I listen to that are only available on Spotify. It is a draw, it is a way to build a marketplace and there is a huge upfront cost with that. Now, long-term, I don't think that having a lot of exclusives on this platform is really the way to go. If you think about this a little bit like YouTube, YouTube doesn't have many exclusive pieces of content. They just want to be the go-to place for both viewers and content producers and that's what Spotify is trying to do but instead of for video they're trying to do it for audio.
Ricky Mulvey: Before I ask you about their modes, anything stand out to you about Spotify's balance sheet? They've had some, let's call it wavering profitability particularly around the net income area.
Travis Hoium: Net income isn't something I'm super concerned about because they do have a lot of costs related to building out both the technology stack on the ad side but then also this exclusive content that we've talked about. One thing I am watching is free cash flow. They have been free cash-flow positive in 2022 so that is a positive thing to look at. As long as they can keep growing the business and stay positive on the free cash flow front I think the balance sheet isn't something I'm really worried about.
Ricky Mulvey: You've got competitors like Apple and Amazon. Those are mighty competitors at that. Do you think Spotify ultimately has a mode against them, and if Apple and Amazon are Spotify's biggest risk, what do you think is?
Travis Hoium: The great thing about having Apple and Amazon as competitors is they're trying to do a lot of things and Spotify is focused on the owning your ears. I think that's where they're really able to differentiate themselves. They're also able to distribute their content almost anywhere. They don't care if you listen on an iPhone or an Alexa speaker or in a car, whereas Apple and Amazon do care about those things. They're playing a little bit different game and I think that's what we need to focus on from a strategic standpoint, is that Amazon and Apple just aren't going to be able to compete in the same way that Spotify is. The biggest risk is simply that there isn't enough demand for advertising or for listening to podcasts and basically non-music content. Is there a cap on how much time we spend listening to podcasts long term? I don't know the answer to that. I'm very bullish but I've been listening to podcasts for over a decade at this point so maybe I'm not the right target market. I continue to look at what they report from listener numbers and then the amount of content that they're putting on the platform which is in their quarterly report and it continues to grow. It seems like the momentum is there, ad revenue is growing at a really rapid rate. So as long as the momentum continues and the flywheel effect keeps growing, I think they're in a really good position but that would be the limiting factor.
Ricky Mulvey: Full disclosure, I own shares and Spotify, Travis do you?
Travis Hoium: Yes, I do.
Ricky Mulvey: Last question, I know you're not into the Spotify playlist. What's your favorite podcast on there that is not the one-year currently on?
Travis Hoium: I listen to the Ringers basically full suite of podcasts but I keep going back to Bill Simmons podcasts. He is the OG in podcasting. I've been listening to him ever since I heard him. You had to listen on a web browser, so we go back long ways and I just can't quit that podcast.
Ricky Mulvey: Travis Hoium, thanks for your time.
Travis Hoium: Thanks for having me.
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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. 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. Asit Sharma has no position in any of the stocks mentioned. Chris Hill has positions in Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Home Depot, Lowe's, Target, and Trex. Ricky Mulvey has positions in Home Depot, Meta Platforms, Inc., Netflix, and Spotify Technology. Travis Hoium has positions in Apple and Spotify Technology. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Home Depot, Meta Platforms, Inc., Netflix, Spotify Technology, Target, Trex, and Ulta Beauty. The Motley Fool recommends Lowe's 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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The long-term factors which are good for shareholders of do-it-yourself businesses like Lowe's and Home Depot's those aren't changing despite the fact that you see this housing market really slowing down and prices starting to come off those searing high as we saw earlier this year. We've got an awesome lineup of speakers, including Trex CEO Bryan Fairbanks, Venture Capitalists, Jenny Abramson, Motley Fool Co-Founder David Gardner, best-selling author Morgan Housel, just to name a few. Ricky Mulvey: Exclusive podcasts also seem to be in my mind a challenging strategy because unlike the streaming wars, your competitors are offering free products with Apple and lets say even Pocket Casts, those sorts of things.
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Motley Fool contributor Travis Hoium joins Motley Fool producer Ricky Mulvey for a "medium dive" on the streaming audio business. Chris Hill has positions in Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Home Depot, Lowe's, Target, and Trex. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Home Depot, Meta Platforms, Inc., Netflix, Spotify Technology, Target, Trex, and Ulta Beauty.
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Motley Fool contributor Travis Hoium joins Motley Fool producer Ricky Mulvey for a "medium dive" on the streaming audio business. I started using Apple podcasts and I continue going back to the Spotify app because they have podcasts that I listen to that are only available on Spotify. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Home Depot, Meta Platforms, Inc., Netflix, Spotify Technology, Target, Trex, and Ulta Beauty.
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Margins of 60-80 percent long-term in the ad business is really where we see companies like this being. I started using Apple podcasts and I continue going back to the Spotify app because they have podcasts that I listen to that are only available on Spotify. Travis Hoium: The great thing about having Apple and Amazon as competitors is they're trying to do a lot of things and Spotify is focused on the owning your ears.
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19608.0
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2022-08-26 00:00:00 UTC
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US STOCKS-Wall St slips in choppy trade after Powell's speech
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AAPL
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https://www.nasdaq.com/articles/us-stocks-wall-st-slips-in-choppy-trade-after-powells-speech
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nan
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By Bansari Mayur Kamdar and Devik Jain
Aug 26 (Reuters) - Wall Street's main indexes extended losses on Friday after Federal Reserve Chief Jerome Powell's comments suggested the central bank will keep raising interest rates to tame inflation, prompting traders to bet on a big move next month.
The U.S. economy will need tight monetary policy "for some time" before inflation is under control, a fact that means slower growth, a weaker job market and "some pain" for households and businesses, Powell said in remarks, warning there is no quick cure for fast rising prices.
Money market traders saw about 55% odds of a 75 basis point rate hike in September versus 45% before the speech. FEDWATCH
Rate-sensitive banks .SPXBK slipped 0.2% as the U.S. two-year Treasury yield US2YT=RR briefly hit its highest level since October 2007 before falling. US/
High-growth stocks that tend to outperform in a low interest rate environment, also fell. Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O were down between 0.2% and 2.1%.
Data earlier showed U.S. consumer spending barely rose in July, but inflation eased considerably, which could give the Fed room to scale back its aggressive interest rate increases.
At 10:13 a.m. ET, the Dow Jones Industrial Average .DJI was down 45.93 points, or 0.14%, at 33,245.85, the S&P 500 .SPX was down 8.13 points, or 0.19%, at 4,190.99, and the Nasdaq Composite .IXIC was down 25.82 points, or 0.20%, at 12,613.45.
(Reporting by Bansari Mayur Kamdar, Devik Jain, Anisha Sircar and Sruthi Shankar in Bengaluru; Editing by Maju Samuel)
((BansariMayur.Kamdar@thomsonreuters.com; Twitter: @BansariKamdar))
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.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O were down between 0.2% and 2.1%. By Bansari Mayur Kamdar and Devik Jain Aug 26 (Reuters) - Wall Street's main indexes extended losses on Friday after Federal Reserve Chief Jerome Powell's comments suggested the central bank will keep raising interest rates to tame inflation, prompting traders to bet on a big move next month. The U.S. economy will need tight monetary policy "for some time" before inflation is under control, a fact that means slower growth, a weaker job market and "some pain" for households and businesses, Powell said in remarks, warning there is no quick cure for fast rising prices.
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Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O were down between 0.2% and 2.1%. By Bansari Mayur Kamdar and Devik Jain Aug 26 (Reuters) - Wall Street's main indexes extended losses on Friday after Federal Reserve Chief Jerome Powell's comments suggested the central bank will keep raising interest rates to tame inflation, prompting traders to bet on a big move next month. Money market traders saw about 55% odds of a 75 basis point rate hike in September versus 45% before the speech.
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Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O were down between 0.2% and 2.1%. By Bansari Mayur Kamdar and Devik Jain Aug 26 (Reuters) - Wall Street's main indexes extended losses on Friday after Federal Reserve Chief Jerome Powell's comments suggested the central bank will keep raising interest rates to tame inflation, prompting traders to bet on a big move next month. Data earlier showed U.S. consumer spending barely rose in July, but inflation eased considerably, which could give the Fed room to scale back its aggressive interest rate increases.
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Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Alphabet Inc GOOGL.O were down between 0.2% and 2.1%. By Bansari Mayur Kamdar and Devik Jain Aug 26 (Reuters) - Wall Street's main indexes extended losses on Friday after Federal Reserve Chief Jerome Powell's comments suggested the central bank will keep raising interest rates to tame inflation, prompting traders to bet on a big move next month. The U.S. economy will need tight monetary policy "for some time" before inflation is under control, a fact that means slower growth, a weaker job market and "some pain" for households and businesses, Powell said in remarks, warning there is no quick cure for fast rising prices.
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19609.0
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2022-08-26 00:00:00 UTC
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5 Stocks That Warren Buffett Is Betting on Now
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AAPL
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https://www.nasdaq.com/articles/5-stocks-that-warren-buffett-is-betting-on-now
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
With the latest updates to Berkshire Hathaway’s (NYSE:BRK-A, NYSE:BRK-B) list of equity holdings, Warren Buffett stocks are again making headlines. Investors large and small like to follow his portfolio moves. That’s not surprising. The “Oracle of Omaha” is considered to be one of the greatest investors of all time.
On Aug 15, Berkshire filed its quarterly 13F filing with the U.S. Securities and Exchange Commission (SEC). This report covers the company’s holdings as of June 30, 2022. Last quarter, macro fears led to a considerable pullback for stocks, especially during June.
Yet while Buffett’s company exited or trimmed several of its holdings, Berkshire added to many of its existing positions. In addition, the firm just recently announced another big increase to its position in one of its largest positions.
So, what are these Warren Buffett stocks that the legendary investor is buying while others are selling, in line with his “be greedy when others are fearful” maxim? These five, are a mix of value stocks, “wonderful business at a fair price” names, and even a merger arbitrage play.
Ticker Company Price
ALLY Ally Financial $34.98
AAPL Apple $169.47
ATVI Activision Blizzard $79.16
OXY Occidental Petroleum $74.04
PARA Paramount Global $25.28
Ally Financial (ALLY)
Source: JHVEPhoto/Shutterstock.com
Per Whalewisdom, which tracks 13F filings, Berkshire Hathaway increased its position in financial services company Ally Financial (NYSE:ALLY) by 234% last quarter.
Formerly known as GMAC, it took on its current name after the bankruptcy of its former corporate parent, General Motors (NYSE:GM) in 2009. Already diversifying away from its auto lending roots under GM’s ownership, over the past decade it’s been transforming itself into something more like a fintech company than an automaker’s finance division.
Negative sentiment about the economy is weighing heavily on ALLY stock. Shares are down around 33% in the past year. Yet with its low valuation (less than 5x earnings), Buffett may believe it has become oversold. Concerns about an “auto loan crisis” could ultimately prove to be overblown. If this happens, the stock could make a big jump from its current trading range.
Apple (AAPL)
Source: Moab Republic / Shutterstock
Apple (NASDAQ:AAPL) is the largest of the Warren Buffett stocks, and not only because it has a $2.7 trillion market capitalization. It makes up 40.8% of Berkshire’s portfolio of U.S.-listed equities.
Last quarter, Buffett continued to add to Berkshire’s AAPL stock position, purchasing an additional 3.9 million shares. Buffett’s holding in this stock is a good example of his “wonderful business at a fair price” philosophy put into practice. This strategy entails buying stocks that aren’t necessarily “cheap,” but can generate above-average returns.
This is due to factors like a deep economic moat, a strong balance sheet, and strong cash flow generation abilities. The tech behemoth fits these criteria. That said, shares have zoomed higher since the end of last quarter. One can argue Buffett got a “more than fair price,” assuming he made his latest purchases during the May/June sell-offs.
Activision Blizzard (ATVI)
Source: FellowNeko / Shutterstock.com
What’s Warren Buffett’s angle with Activision Blizzard (NASDAQ:ATVI)? Neither a value nor a “wonderful business” play, this is a merger arbitrage position for Berkshire Hathaway. Merger arbitrage is the strategy of buying stocks ahead of an announced mergers and acquisitions (M&A) transaction.
There’s typically a spread between trading price and deal price, given the uncertainty over whether an M&A transaction will go through. With ATVI stock, there’s concern that its tentative acquirer, Microsoft (NASDAQ:MSFT) will not receive regulatory approval to complete the deal. This has resulted in a big merger arbitrage spread.
In short, Buffett is betting big the deal goes through. If he’s right, Berkshire could see around a 20% gain. Given his decades of experience with similar “merger arb” trades, this such wager could result in a quick profit for this “buy and hold” investor.
Occidental Petroleum (OXY)
Source: Pavel Kapysh / Shutterstock.com
Spiking oil prices have resulted in a triple-digit gain for Occidental Petroleum (NYSE:OXY) shares so far this year, yet its growing status as a Warren Buffett stock may be why it continues to climb.
Buffett has been involved with the oil and gas company since 2019. That year, he helped finance its takeover of Anadarko Petroleum. At the time, Buffett’s firm bought $10 million in preferred shares and received warrants to buy 80 million shares of OXY stock.
Flash forward to 2022. After its pandemic crash, and post-pandemic recovery, Buffett began buying Occidental’s common shares on the open market, just as it was surging due to the Russia/Ukraine conflict. Still buying, Berkshire has received the regulatory go-ahead to up its stake to 50%, if it so chooses. It remains to be seen whether he buys the company outright, but he likely sees more upside for this top-performing stock.
Paramount Global (PARA)
Source: viewimage / Shutterstock
“Old media” stocks like Paramount Global (NASDAQ:PARA) are out of favor right now. The market is skeptical about whether it can make the transition to a streaming-focused business model. Especially as even streaming-only companies like Netflix (NASDAQ:NFLX) struggle with subscriber growth.
Yet based on Berkshire’s nearly $2 billion position in PARA stock, it’s clear Buffett is taking the contrarian view. There’s a lot pointing to going against the grain being the better move. As InvestorPlace’s Josh Enomoto argued last month, shares are modestly undervalued. Investors may be overestimating the future impact of further “cord cutting.”
The company’s two streaming platforms (Paramount Plus, PlutoTV) continue to report subscriber growth. The market may be underestimating how successful it’ll be with its streaming pivot. In time, streaming could end up boosting its earnings. This, plus a market re-rating, could send the stock to much higher prices.
On the date of publication, Thomas Niel 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.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.
The post 5 Stocks That Warren Buffett Is Betting on 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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Ticker Company Price ALLY Ally Financial $34.98 AAPL Apple $169.47 ATVI Activision Blizzard $79.16 OXY Occidental Petroleum $74.04 PARA Paramount Global $25.28 Ally Financial (ALLY) Source: JHVEPhoto/Shutterstock.com Per Whalewisdom, which tracks 13F filings, Berkshire Hathaway increased its position in financial services company Ally Financial (NYSE:ALLY) by 234% last quarter. Apple (AAPL) Source: Moab Republic / Shutterstock Apple (NASDAQ:AAPL) is the largest of the Warren Buffett stocks, and not only because it has a $2.7 trillion market capitalization. Last quarter, Buffett continued to add to Berkshire’s AAPL stock position, purchasing an additional 3.9 million shares.
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Ticker Company Price ALLY Ally Financial $34.98 AAPL Apple $169.47 ATVI Activision Blizzard $79.16 OXY Occidental Petroleum $74.04 PARA Paramount Global $25.28 Ally Financial (ALLY) Source: JHVEPhoto/Shutterstock.com Per Whalewisdom, which tracks 13F filings, Berkshire Hathaway increased its position in financial services company Ally Financial (NYSE:ALLY) by 234% last quarter. Apple (AAPL) Source: Moab Republic / Shutterstock Apple (NASDAQ:AAPL) is the largest of the Warren Buffett stocks, and not only because it has a $2.7 trillion market capitalization. Last quarter, Buffett continued to add to Berkshire’s AAPL stock position, purchasing an additional 3.9 million shares.
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Ticker Company Price ALLY Ally Financial $34.98 AAPL Apple $169.47 ATVI Activision Blizzard $79.16 OXY Occidental Petroleum $74.04 PARA Paramount Global $25.28 Ally Financial (ALLY) Source: JHVEPhoto/Shutterstock.com Per Whalewisdom, which tracks 13F filings, Berkshire Hathaway increased its position in financial services company Ally Financial (NYSE:ALLY) by 234% last quarter. Apple (AAPL) Source: Moab Republic / Shutterstock Apple (NASDAQ:AAPL) is the largest of the Warren Buffett stocks, and not only because it has a $2.7 trillion market capitalization. Last quarter, Buffett continued to add to Berkshire’s AAPL stock position, purchasing an additional 3.9 million shares.
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Ticker Company Price ALLY Ally Financial $34.98 AAPL Apple $169.47 ATVI Activision Blizzard $79.16 OXY Occidental Petroleum $74.04 PARA Paramount Global $25.28 Ally Financial (ALLY) Source: JHVEPhoto/Shutterstock.com Per Whalewisdom, which tracks 13F filings, Berkshire Hathaway increased its position in financial services company Ally Financial (NYSE:ALLY) by 234% last quarter. Apple (AAPL) Source: Moab Republic / Shutterstock Apple (NASDAQ:AAPL) is the largest of the Warren Buffett stocks, and not only because it has a $2.7 trillion market capitalization. Last quarter, Buffett continued to add to Berkshire’s AAPL stock position, purchasing an additional 3.9 million shares.
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19610.0
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2022-08-26 00:00:00 UTC
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The Top 10 Constituents of the Nasdaq-100 Index
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AAPL
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https://www.nasdaq.com/articles/the-top-10-constituents-of-the-nasdaq-100-index
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aunched in 1985, the Nasdaq-100 (NDX) is a modified capitalization weighted index that tracks the largest non-financial companies listed on the Nasdaq Stock Exchange. The Nasdaq-100 Index brings together innovation, high growth, diversity, global appeal and liquidity in one basket, which makes it ideal for any investor's core portfolio.
Here’s a closer look at the top ten constituents of the Nasdaq-100 Index.
Apple, Inc. (AAPL)
Apple became the first publicly traded U.S. company to hit a $1 trillion market cap in August 2018. Two years later, in August 2020, it touched the $2 trillion valuation, and this year in June, Apple briefly touched the $3 trillion market cap during trading hours. Apple has repeatedly said, “Our objective is to make great products and services that enrich people's lives and to provide an unparalleled customer experience so that our users are highly satisfied, loyal and engaged. As we accomplish these objectives, strong financial results follow.” Apple reported a revenue of $274.51 billion in FY2020 and $365.82 billion in FY2021 (October 2020 – September 2021). During the nine months of FY2022 (October 2021 – June 2022), the company reported a revenue of $304.18 billion. Apple spent 6% of its net sales on research and development in FY2021.
Microsoft Corporation (MSFT)
Microsoft, under the leadership of its CEO Satya Nadella, has been working under the renewed vision for a “mobile-first, cloud-first, data-powered world.” In FY2022 (July 2021 – June 2022), Microsoft delivered $198.3 billion in revenue, up 18% year-over-year from $168.08 billion in FY2021. Its operating income grew 19% to reach $83.4 billion. Cloud has a growth driver for the company in recent times. With research and development efforts, initiatives and partnerships, Azure has more than doubled its worldwide market share from 10% in 2014 to 22% in 2022. During Q4 FY2022, Microsoft Cloud surpassed $25 billion in quarterly revenue for the first time, up 28% and 33% in constant currency. Microsoft has acquired around 227 companies since 1994. In recent years, MSFT has made key acquisitions to help bolster its cloud services.
Alphabet, Inc. Class C & Class A (GOOG, GOOGL)
Alphabet is a collection of businesses, the largest of which is Google. The company’s earnings are reported under three segments—Google Services, Google Cloud, and all non-Google businesses collectively as Other Bets. Other Bets include earlier stage technologies that are further afield from the company’s core Google business. Over the past few years, Google has intensified its efforts to catch up with the leaders in Cloud computing. A lot has been achieved, and today, Google Cloud ranks third, after Amazon AWS and Microsoft Azure with a 10% market share. During FY2021 (January 2021 – December 2021), Alphabet reported a revenue of $257.64 billion vis-à-vis $182.53 billion in FY2020. During Q2 FY2022, Google Cloud surpassed the $6 billion quarterly revenue mark for the first time. Overall, a revenue of $69.7 billion was reported, up 13% versus last year or 16% on a constant currency basis.
Amazon.com, Inc. (AMZN)
The company once said: “We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position.”
While this is an excerpt from Amazon’s 1997 shareholder letter, it remains true till today. Amazon is the undisputed leader in e-commerce in the U.S., dominating 39.5% of the market share in 2022. The U.S. e-commerce market is expected to cross the $1 trillion mark for the first time in 2022. In addition to e-commerce, another market segment which Amazon continues to lead is Cloud. Amazon’s AWS currently captures 33% of the Cloud market. During FY2021 (January 2021 – December 2021), Amazon’s net sales increased 22% to $469.8 billion, compared with $386.1 billion in 2020.
Tesla, Inc. (TSLA)
Founded in 2003, Tesla is almost a synonym to electric cars. The company dominates 60.9% of the U.S. BEV market according to July numbers by Morgan Stanley. Tesla’s revenue swelled by 71% from $31.53 billion in FY2020 to $53.82 billion in FY2021 (January 2021 – December 2021). During Q2 FY2022, Tesla reported a total revenue $16.9 billion, growing 42% year-on-year on the back of growth in vehicle deliveries, increased average selling price (ASP), and growth in other parts of the business. Tesla builds not only all-electric vehicles but also infinitely scalable clean energy generation and storage products. In 2021, the global fleet of Tesla vehicles, energy storage and solar panels enabled its customers to avoid emitting 8.4 million metric tons of CO2e.
Meta Platforms, Inc. (META)
In October 2021, Facebook’s name was changed to Meta. Since its foundation in 2004, Facebook changed the way people connect, and the change in name captures the company’s vision.
Mark Zuckerberg wrote in a letter: “In our DNA, we build technology to bring people together. The metaverse is the next frontier in connecting people, just like social networking was when we got started.”
The company has laid much emphasis on Augmented Reality (AR) and Virtual Reality (VR), and in August 2020, it introduced a new name for its AR/VR team—Reality Labs. In Q4 FY2021, Meta added reporting on two operating segments: Family of Apps (FoA) and Reality Labs. In FY2021 (January 2021 – December 2021), Meta posted a revenue of $117.93 billion vis-à-vis $85.96 billion in FY2020. FoA includes Facebook, Instagram, Messenger, WhatsApp and other services. Reality Labs includes AR- and VR-related consumer hardware, software and content.
NVIDIA Corporation (NVDA)
NVIDIA has been a pioneer in accelerated computing. The company’s invention of the GPU in 1999 sparked the growth of the PC gaming market, redefined computer graphics, and ignited the era of modern AI. Today, NVIDIA is a full-stack computing company with data-center-scale offerings that are reshaping the industry. During FY2022 (February 2021 – January 2022), the company’s revenue stood at $26.92 billion as compared to $16.67 billion in FY2021. The four major segments highlighted in NVIDIA’s earning report are gaming, data centers, professional visualization, and automotive. NVIDIA recently reported its Q2 FY2023 earnings with its revenue at $6.70 billion, up 3% from a year ago, and down 19% from the previous quarter. “NVIDIA has excellent products and position driving large and growing markets. As we navigate these challenges, we remain focused on the once-in-a-generation opportunity to reinvent computing for the era of AI,” said Jensen Huang, founder and CEO of NVIDIA.
PepsiCo, Inc. (PEP)
PepsiCo’s foundation goes back to 1965. Today, its products are consumed in more than 200 countries and territories around the world. PepsiCo's product portfolio includes a wide range of enjoyable foods and beverages that generate more than $1 billion each in estimated annual retail sales. PepsiCo generated $79 billion in net revenue in FY2021 (January 2021 – December 2021). PepsiCo’s portfolio includes Lay's, Doritos, Cheetos, Gatorade, Pepsi-Cola, Mountain Dew, Quaker, and SodaStream. During Q2 FY2022, the company reported $20.22 billion as its net revenue for the quarter. PepsiCo became a component of the Nasdaq-100 Index in July 2018.
Costco Wholesale Corporation (COST)
Costco Wholesale is a multi-billion-dollar global retailer. The company currently operates 834 warehouses, including 575 in the United States and Puerto Rico, 107 in Canada, 40 in Mexico, 31 in Japan, 29 in the United Kingdom, 16 in Korea, 14 in Taiwan, 13 in Australia, four in Spain, two each in France and China and one in Iceland. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan and Australia. Its revenue was reported at $195.93 billion in FY2021 (September 2020 – August 2021) vis-à-vis $166.76 billion in FY2020. For the forty-eight weeks ended July 31, 2022, of the ongoing FY2022, the company reported net sales of $205.19 billion, an increase of 16.4% from $176.30 billion during the similar period last year.
Some of the other prominent names that make up the index are Cisco (CSCO), Qualcomm (QCOM), Intel (INTC), Micron (MU), Adobe (ADBE), Advanced Micro Devices (AMD), Gilead (GILD), Regeneron (REGN), Vertex (VRTX), Amgen (AMGN), Netflix (NFLX) and Starbucks (SBUX).
Disclaimer: The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration. The report has been carefully prepared, and any exclusions or errors in it are totally unintentional. Details based on company earnings reports and press releases.
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) Apple became the first publicly traded U.S. company to hit a $1 trillion market cap in August 2018. Apple has repeatedly said, “Our objective is to make great products and services that enrich people's lives and to provide an unparalleled customer experience so that our users are highly satisfied, loyal and engaged. This value will be a direct result of our ability to extend and solidify our current market leadership position.” While this is an excerpt from Amazon’s 1997 shareholder letter, it remains true till today.
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Apple, Inc. (AAPL) Apple became the first publicly traded U.S. company to hit a $1 trillion market cap in August 2018. During FY2021 (January 2021 – December 2021), Alphabet reported a revenue of $257.64 billion vis-à-vis $182.53 billion in FY2020. During FY2021 (January 2021 – December 2021), Amazon’s net sales increased 22% to $469.8 billion, compared with $386.1 billion in 2020.
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Apple, Inc. (AAPL) Apple became the first publicly traded U.S. company to hit a $1 trillion market cap in August 2018. During FY2021 (January 2021 – December 2021), Alphabet reported a revenue of $257.64 billion vis-à-vis $182.53 billion in FY2020. During FY2022 (February 2021 – January 2022), the company’s revenue stood at $26.92 billion as compared to $16.67 billion in FY2021.
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Apple, Inc. (AAPL) Apple became the first publicly traded U.S. company to hit a $1 trillion market cap in August 2018. The company’s earnings are reported under three segments—Google Services, Google Cloud, and all non-Google businesses collectively as Other Bets. A lot has been achieved, and today, Google Cloud ranks third, after Amazon AWS and Microsoft Azure with a 10% market share.
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19611.0
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2022-08-26 00:00:00 UTC
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U.S. DOJ in early stages of drafting possible antitrust suit against Apple - Politico
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AAPL
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https://www.nasdaq.com/articles/u.s.-doj-in-early-stages-of-drafting-possible-antitrust-suit-against-apple-politico
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Aug 26 (Reuters) - The U.S. Department of Justice (DOJ) is in the early stages of drafting a potential antitrust complaint against Apple Inc AAPL.O, news website Politico reported on Friday, citing a person with direct knowledge of the matter. (https://politi.co/3AsoZ6s)
Apple and the DOJ did not immediately respond to Reuters requests for comment.
(Reporting by Eva Mathews in Bengaluru; Editing by Arun Koyyur)
((Eva.Mathews@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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Aug 26 (Reuters) - The U.S. Department of Justice (DOJ) is in the early stages of drafting a potential antitrust complaint against Apple Inc AAPL.O, news website Politico reported on Friday, citing a person with direct knowledge of the matter. (https://politi.co/3AsoZ6s) Apple and the DOJ did not immediately respond to Reuters requests for comment. (Reporting by Eva Mathews in Bengaluru; Editing by Arun Koyyur) ((Eva.Mathews@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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Aug 26 (Reuters) - The U.S. Department of Justice (DOJ) is in the early stages of drafting a potential antitrust complaint against Apple Inc AAPL.O, news website Politico reported on Friday, citing a person with direct knowledge of the matter. (https://politi.co/3AsoZ6s) Apple and the DOJ did not immediately respond to Reuters requests for comment. (Reporting by Eva Mathews in Bengaluru; Editing by Arun Koyyur) ((Eva.Mathews@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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Aug 26 (Reuters) - The U.S. Department of Justice (DOJ) is in the early stages of drafting a potential antitrust complaint against Apple Inc AAPL.O, news website Politico reported on Friday, citing a person with direct knowledge of the matter. (https://politi.co/3AsoZ6s) Apple and the DOJ did not immediately respond to Reuters requests for comment. (Reporting by Eva Mathews in Bengaluru; Editing by Arun Koyyur) ((Eva.Mathews@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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Aug 26 (Reuters) - The U.S. Department of Justice (DOJ) is in the early stages of drafting a potential antitrust complaint against Apple Inc AAPL.O, news website Politico reported on Friday, citing a person with direct knowledge of the matter. (https://politi.co/3AsoZ6s) Apple and the DOJ did not immediately respond to Reuters requests for comment. (Reporting by Eva Mathews in Bengaluru; Editing by Arun Koyyur) ((Eva.Mathews@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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19612.0
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2022-08-26 00:00:00 UTC
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What Investors Need to Understand About FAANG Stocks
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AAPL
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https://www.nasdaq.com/articles/what-investors-need-to-understand-about-faang-stocks
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t is often said that the term “FANG stocks” was coined by Jim Cramer, the loud, wildly gesticulating face and voice of investing advice at CNBC. That is incorrect. He popularized it, for sure, but it was first used by a writer at his publication The Street, named Bob Lang. It originally stood for Facebook (Then FB: Now META), Amazon (AMZN), Netflix (NFLX), and Google (GOOG: GOOGL). The acronym has since been lengthened in many cases to FAANG by the addition of Apple (AAPL).
Despite all the changes and challenges, and whoever first came up with it, it has for years been considered a useful phrase in that it is shorthand for an otherwise hard to categorize group of stocks. However, the rebranding of Facebook and Google as Meta and Alphabet and the changing stock symbols have made FANG, or FAANG for that matter, a bit anachronistic. So, is it or should it be, still a thing?
The five names that make up FAANG were once pure tech companies but have progressed way beyond that. They now exist in a space that is basically their own: giant tech-like companies that were once disruptors and that have exposure to multiple markets. Meta is a multimedia company these days with successful competitors. Meanwhile, Amazon is more about logistics and real estate than retail, and our dependence on iPhones has turned Apple into a consumer staples company with some degree or resistance to economic ups and downs. Netflix is a TV and movie production company rather than just a delivery service. As for Alphabet, they moved past being just a search engine a long time ago, and their long-term prospects depend on things like autonomous vehicle adoption and the internet of things trend more than how we search the internet.
In short, these are all giant conglomerates that are so hard to categorize that they really do deserve their own category and, in that way, lumping them together as FAANG makes sense.
That doesn’t mean, however, that their fortunes are always closely tied. Their valuations have historically been based on growth, making them subject to mood swings around growth in general, but even that no longer applies. In fact, if you disregard Amazon’s still triple-digit P/E, the others trade at multiples of earnings ranging from 14 to 28 – not exactly the typical growth stock profile. They have become victims of the law of large numbers as used in stock analysis, in that once a company gets past a certain size, growing sales and earnings in percentage terms becomes a lot harder. They are more dependent now on branding and marketing than technical innovation, and as that change has taken place, the FAANG stocks have diverged in terms of performance.
The comparative chart above, with META as the main body, AMZN in green, Apple in light blue, Netflix in red and Alphabet in purple, indicates that these five stocks haven’t really followed each other much over the last five years, resulting in performance over that time ranging from META’s +1% to AAPL’s +319%. Clearly, then, while they have similar characteristics, the stocks that make up FAANG don’t trade as a group. Thet are not like, say oil stocks, or semiconductor companies that tend to move together.
For investors, that is the key thing to remember. When we think of FAANG stocks, we should understand that while they are similar in terms of outgrowing their original industries and styles and now exist in their own category, the similarity ends there. They all have factors that differentiate them in terms of the influences on their stock price. Apple is influenced by semiconductor pricing and consumer strength in China, whereas Amazon is impacted more by the price of oil given their huge fleet of vehicles and airplanes. Add in the fact that the businesses are at different stages in their development and, clearly, while FAANG is still a thing in some ways, investors need to look at each of its components differently and not buy or sell them as a group.
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 acronym has since been lengthened in many cases to FAANG by the addition of Apple (AAPL). The comparative chart above, with META as the main body, AMZN in green, Apple in light blue, Netflix in red and Alphabet in purple, indicates that these five stocks haven’t really followed each other much over the last five years, resulting in performance over that time ranging from META’s +1% to AAPL’s +319%. However, the rebranding of Facebook and Google as Meta and Alphabet and the changing stock symbols have made FANG, or FAANG for that matter, a bit anachronistic.
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The acronym has since been lengthened in many cases to FAANG by the addition of Apple (AAPL). The comparative chart above, with META as the main body, AMZN in green, Apple in light blue, Netflix in red and Alphabet in purple, indicates that these five stocks haven’t really followed each other much over the last five years, resulting in performance over that time ranging from META’s +1% to AAPL’s +319%. It originally stood for Facebook (Then FB: Now META), Amazon (AMZN), Netflix (NFLX), and Google (GOOG: GOOGL).
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The comparative chart above, with META as the main body, AMZN in green, Apple in light blue, Netflix in red and Alphabet in purple, indicates that these five stocks haven’t really followed each other much over the last five years, resulting in performance over that time ranging from META’s +1% to AAPL’s +319%. The acronym has since been lengthened in many cases to FAANG by the addition of Apple (AAPL). However, the rebranding of Facebook and Google as Meta and Alphabet and the changing stock symbols have made FANG, or FAANG for that matter, a bit anachronistic.
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The acronym has since been lengthened in many cases to FAANG by the addition of Apple (AAPL). The comparative chart above, with META as the main body, AMZN in green, Apple in light blue, Netflix in red and Alphabet in purple, indicates that these five stocks haven’t really followed each other much over the last five years, resulting in performance over that time ranging from META’s +1% to AAPL’s +319%. However, the rebranding of Facebook and Google as Meta and Alphabet and the changing stock symbols have made FANG, or FAANG for that matter, a bit anachronistic.
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19613.0
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2022-08-26 00:00:00 UTC
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Alphabet's (GOOGL) Google Brings Google Wallet to South Africa
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AAPL
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https://www.nasdaq.com/articles/alphabets-googl-google-brings-google-wallet-to-south-africa
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Alphabet’s GOOGL division Google is consistently working toward expanding its footprint in the global digital payment space.
Reportedly, the tech giant introduced Google Wallet in South Africa.
Per the report, cardholders of FirstRand Bank, Discovery Bank, Investec, Standard Bank, ABSA and Nedbank can add their cards to Google Wallet.
Users of the mentioned banks can store debit and credit card details on the wallet and seamlessly make contactless payments with their Android phones or Wear OS devices.
The latest move is expected to help GOOGL expand its reach among the merchants and customers in South Africa, where digital payment transactions are proliferating.
This, in turn, is likely to drive Alphabet’s revenues in the near term.
This is anticipated to help GOOGL win investor confidence in the near term and the long haul.
Shares of GOOGL have been down 19.5% in the year-to-date period, outperforming the Computer and Technology sector’s decline of 24.5%.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Global Expansion of Google Wallet
Alphabet introduced Google Wallet in 39 countries after it showcased the Google wallet revamp at the I/O developer conference in May.
In the second round, apart from South Africa, Alphabet rolled out Google Wallet in five more countries, including Moldova, Qatar, Serbia, Azerbaijan and Iceland.
Reportedly, Google Wallet users in Azerbaijan and Iceland can make payments using Android phones. Users in these regions can avail of the feature of paying through Wear OS smartwatches in the coming months.
Google Wallet will replace the existing Google Pay app and provide users with a comprehensive digital wallet comprising innovative features and support for digital IDs, loyalty cards, boarding passes, transit cards, digital keys, et al. With Google Wallet, Alphabet aims to provide an enhanced digital wallet experience to users.
Competitive Digital Payment Market
The aforesaid global efforts will continue to help Alphabet expand its presence in the booming digital wallet market, where growth is attributed to the increasing adoption of Internet and mobile phones in the developing nations, and the coronavirus pandemic-led rise in contactless payments.
Per a Transparency Market Research report, the global mobile wallet market is expected to be worth $16.2 trillion by 2031, seeing a CAGR of 22.2% during the 2022-2031 forecast period.
The digital payment market is likely to hit $204.1 billion by 2028, witnessing a CAGR of 15.1% between 2022 and 2028, according to a Vantage Market Research report.
Given the potential in the digital payment market, other than Alphabet, major companies like Apple AAPL, Amazon AMZN and PayPal PYPL are making strong efforts to bolster their presence in this space.
Apple is continuously working toward expanding its digital payment services worldwide on the back of its mobile payment service, Apple Pay. AAPL’s partnership with top merchant banks is constantly helping it gain momentum among its customers. Users can add their cards to Apple Pay to avail of a secure transaction along with rewards and benefits.
Amazon gained strong momentum among customers globally with its online payment service Amazon Pay. With this, users can shop fast and safely on the e-commerce platform. Users can also make bill payments, buy insurances and travel tickets, and access rewards and gift vouchers.
PayPal continues to gain solid traction in the global online payment market on the back of its robust products. Moreover, PYPL’s peer-to-peer payment service Venmo is driving its active accounts base with strong monetization efforts and robust features. PYPL’s strong connections with global financial service providers are helping it expand its customer base, which is a positive.
Apple, Amazon and PayPal have lost 4.3%, 17.6% and 48.7%, respectively, in the year-to-date period.
We believe that Alphabet’s consistent initiatives in the digital payment space will continue to help it gain a competitive edge against peers.
Currently, Alphabet currently 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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Apple Inc. (AAPL): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
PayPal Holdings, Inc. (PYPL): 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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Given the potential in the digital payment market, other than Alphabet, major companies like Apple AAPL, Amazon AMZN and PayPal PYPL are making strong efforts to bolster their presence in this space. AAPL’s partnership with top merchant banks is constantly helping it gain momentum among its customers. Apple Inc. (AAPL): Free Stock Analysis Report
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Given the potential in the digital payment market, other than Alphabet, major companies like Apple AAPL, Amazon AMZN and PayPal PYPL are making strong efforts to bolster their presence in this space. AAPL’s partnership with top merchant banks is constantly helping it gain momentum among its customers. Apple Inc. (AAPL): Free Stock Analysis Report
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Given the potential in the digital payment market, other than Alphabet, major companies like Apple AAPL, Amazon AMZN and PayPal PYPL are making strong efforts to bolster their presence in this space. AAPL’s partnership with top merchant banks is constantly helping it gain momentum among its customers. Apple Inc. (AAPL): Free Stock Analysis Report
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Given the potential in the digital payment market, other than Alphabet, major companies like Apple AAPL, Amazon AMZN and PayPal PYPL are making strong efforts to bolster their presence in this space. AAPL’s partnership with top merchant banks is constantly helping it gain momentum among its customers. Apple Inc. (AAPL): Free Stock Analysis Report
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19614.0
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2022-08-26 00:00:00 UTC
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Top Analyst Reports for Apple, Alibaba & Bristol-Myers Squibb
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AAPL
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https://www.nasdaq.com/articles/top-analyst-reports-for-apple-alibaba-bristol-myers-squibb
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Friday, August 26, 2022
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 12 major stocks, including Apple Inc. (AAPL), Alibaba Group Holding Ltd. (BABA) and Bristol-Myers Squibb Co. (BMY). These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today’s research reports here >>>
Apple’s shares have gained +15.1% over the past year, roughly in line with the Zacks Computer - Mini computers industry’s gain of +15.4%. The company’s third-quarter fiscal 2022 results benefited from strong iPhone sales and continued momentum in the Services business. The segment benefited from the robust performance of Apple TV+, partially offset by unfavorable forex, the absence of revenues from Russia and the challenging macroeconomic environment.
However, iPad sales were hurt by supply-chain constraints. Apple did not provide revenue guidance for the fourth quarter of fiscal 2022. Apple expects year-over-year revenue growth to accelerate during the fiscal fourth quarter on a sequential basis, despite approximately 600 basis points of unfavorable year-over-year impact from forex.
Services revenue growth is expected to be lower than the June quarter due to challenging macroeconomic conditions and unfavorable forex.
(You can read the full research report on Apple here >>>)
Alibaba’s shares have declined -36.0% over the past year against the Zacks Internet - Commerce industry’s decline of -28.6%. The Zacks analyst believes that the resurgence of COVID-19 in China remained a major headwind for the company during the reported quarter.
We believe disruptions led by the coronavirus pandemic are likely to persist as concerns for Alibaba’s domestic businesses. Further sluggishness in online physical goods’ GMV at Taobao and Tmall marketplaces remains an overhang.
However, Alibaba’s fiscal first quarter results were driven by solid momentum across Alibaba’s China commerce and International commerce wholesale businesses. Also, strength across the local consumer services, cloud computing business and Cainiao logistics services contributed well to the top-line growth.
Further, contributions from direct sales businesses like Alibaba Health and Freshippo continue to remain tailwinds.
(You can read the full research report on Alibaba here >>>)
Bristol-Myers Squibb shares have outperformed the Zacks Medical - Biomedical and Genetics industry over the past year (+10.9% vs. -37.7%). The company’s performance in the second quarter of 2022 was strong as earnings and sales beat estimates on the back of solid demand for Eliquis and label expansion of Opdivo. Eliquis is the leading oral anticoagulant drug and continues to experience growth in its market share.
The label expansion of Opdivo into indications of lung cancer, renal cancer and gastric cancer boosted sales. The recent approval of drugs adds a new stream of revenues, which should boost growth in the coming quarters. The pipeline progress has been impressive and strategic collaborations will further expand the portfolio.
However, one of the top revenue generators Revlimid is facing generics, which will adversely impact sales. Moreover, competition is stiff for Opdivo.
(You can read the full research report on Bristol-Myers Squibb here >>>)
Other noteworthy reports we are featuring today include Tesla, Inc. (TSLA), Union Pacific Corp. (UNP) and Cigna Corp. (CI).
Mark Vickery
Senior Editor
Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, please click here>>>
Today's Must Read
Robust Portfolio, Services Strength to Benefit Apple (AAPL)
Wholesale & Cloud Businesses Momentum Aids Alibaba (BABA)
Eliquis, Opdivo Fuel Bristol (BMY) Amid Generic Competition
Featured Reports
Volume Growth Lifts Union Pacific (UNP), Cost Woes Linger
The Zacks analyst is impressed with the uptick in overall volumes. High-fuel costs are escalating operating expenses, denting the bottom line in turn.
Cigna (CI) Benefits from Strategic Acquisitions, Costs High
Per the Zacks analyst, strategic buyouts are enhancing Cigna's capabilities, leading to top-line growth. However, high operating costs continue to weigh on margins.
New Product Development, Wide Market Reach Aid Eaton (ETN)
Per the Zacks analyst Eaton's operations in 175 countries across the world and development of new products through ongoing R&D investments will continue to drive demand and boost profitability.
Schlumberger (SLB) Gains From Higher OilField Service Demand
Per the Zacks analyst, Schlumberger is likely to gain from higher oilfield service demand, as strong commodity prices have increased drilling activities. Yet, its massive debt level is concerning.
Robust Retail Sales Aid Walgreens (WBA) Amid Rising Costs
The Zacks analyst is encouraged by the ongoing strong performance within Walgreens' retail business. However, mounting operating expenses weigh on the company's bottom line.
Loan Growth, High Rates Aid KeyCorp (KEY), High Costs a Woe
Per the Zacks analyst, KeyCorp is well poised for revenue growth, driven by continued improvement in loans and higher interest rates. However, increasing costs are likely to hurt bottom-line growth.
RPM International (RPM) Rides on MAP 2025 Growth Initiative
Per the Zacks analyst, RPM International is gaining from solid operational improvement plan and buyout synergies.
New Upgrades
Tesla (TSLA) Rides on Stellar Deliveries of Models 3 & Y
High demand for Models 3 & Y is aiding Tesla's automotive sales. Positive reception of Megapack and Powerwall products is also fueling energy generation and storage revenues, per the Zacks analyst.
Marathon (MPC) Gains from Sale of Speedway Retail Unit
The Zacks analyst likes Marathon's sale of Speedway business, which provided a much-needed cash infusion and came with a supply agreement ensuring a steady revenue stream.n
Hardwire Plan, Livewire Spin-Off Aid Harley-Davidson (HOG)
Per the Zacks analyst, Harley-Davidson's Hardwire strategic plan aiming to improve revenues and margins and the spin-off of its EV division Livewire seek to spur the firm's prospects.
New Downgrades
Higher Production Costs Weigh on Freeport (FCX)
According to the Zacks analyst, higher unit net cash costs per pound of copper resulting from an increase in energy and freight expenses will hurt the company's margins in 2022.
NVIDIA (NVDA) Hurt by Weakening Demand, Supply Chain Issues
Per the Zacks analyst, NVIDIA is hurt by weakening demand for its gaming chips and ongoing supply-chain issues which is negatively impacting its data center end market business.
Soft Industrial Segment & Rising Costs Hurt Woodward (WWD)
Per the Zacks analyst, Woodward's performance is being affected by weakness in Industrial segment due to supply chain woes. Rising material and labor costs are added concerns.
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
Bristol Myers Squibb Company (BMY): Free Stock Analysis Report
Union Pacific Corporation (UNP): Free Stock Analysis Report
Cigna Corporation (CI): Free Stock Analysis Report
Tesla, Inc. (TSLA): Free Stock Analysis Report
Alibaba Group Holding Limited (BABA): 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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If you want an email notification each time Sheraz publishes a new article, please click here>>> Today's Must Read Robust Portfolio, Services Strength to Benefit Apple (AAPL) Wholesale & Cloud Businesses Momentum Aids Alibaba (BABA) Eliquis, Opdivo Fuel Bristol (BMY) Amid Generic Competition Featured Reports Volume Growth Lifts Union Pacific (UNP), Cost Woes Linger The Zacks analyst is impressed with the uptick in overall volumes. Today's Research Daily features new research reports on 12 major stocks, including Apple Inc. (AAPL), Alibaba Group Holding Ltd. (BABA) and Bristol-Myers Squibb Co. (BMY). Apple Inc. (AAPL): Free Stock Analysis Report
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Today's Research Daily features new research reports on 12 major stocks, including Apple Inc. (AAPL), Alibaba Group Holding Ltd. (BABA) and Bristol-Myers Squibb Co. (BMY). If you want an email notification each time Sheraz publishes a new article, please click here>>> Today's Must Read Robust Portfolio, Services Strength to Benefit Apple (AAPL) Wholesale & Cloud Businesses Momentum Aids Alibaba (BABA) Eliquis, Opdivo Fuel Bristol (BMY) Amid Generic Competition Featured Reports Volume Growth Lifts Union Pacific (UNP), Cost Woes Linger The Zacks analyst is impressed with the uptick in overall volumes. Apple Inc. (AAPL): Free Stock Analysis Report
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If you want an email notification each time Sheraz publishes a new article, please click here>>> Today's Must Read Robust Portfolio, Services Strength to Benefit Apple (AAPL) Wholesale & Cloud Businesses Momentum Aids Alibaba (BABA) Eliquis, Opdivo Fuel Bristol (BMY) Amid Generic Competition Featured Reports Volume Growth Lifts Union Pacific (UNP), Cost Woes Linger The Zacks analyst is impressed with the uptick in overall volumes. Today's Research Daily features new research reports on 12 major stocks, including Apple Inc. (AAPL), Alibaba Group Holding Ltd. (BABA) and Bristol-Myers Squibb Co. (BMY). Apple Inc. (AAPL): Free Stock Analysis Report
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Today's Research Daily features new research reports on 12 major stocks, including Apple Inc. (AAPL), Alibaba Group Holding Ltd. (BABA) and Bristol-Myers Squibb Co. (BMY). If you want an email notification each time Sheraz publishes a new article, please click here>>> Today's Must Read Robust Portfolio, Services Strength to Benefit Apple (AAPL) Wholesale & Cloud Businesses Momentum Aids Alibaba (BABA) Eliquis, Opdivo Fuel Bristol (BMY) Amid Generic Competition Featured Reports Volume Growth Lifts Union Pacific (UNP), Cost Woes Linger The Zacks analyst is impressed with the uptick in overall volumes. Apple Inc. (AAPL): Free Stock Analysis Report
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19615.0
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2022-08-26 00:00:00 UTC
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Stock Stories With a Motley Fool Senior Analyst
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AAPL
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https://www.nasdaq.com/articles/stock-stories-with-a-motley-fool-senior-analyst
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nan
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In this podcast, Motley Fool senior analyst Matt Argersinger discusses:
The rise and sudden fall of Wang Laboratories.
Why his search for "the next Warren Buffett" ended badly.
Amazon and Home Depot sharing discipline as a common business trait.
How he overcame the challenge of adding to his winners.
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 Amazon
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 Amazon 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 August 17, 2022
This video was recorded on Aug. 23, 2022.
Chris Hill: How would an investor react if the company they bought shares of went bankrupt? Let's find out. Motley Fool money starts now.
I'm Chris Hill and just like yesterday's episode with Jason Moser, today, we've got the investing origin story with Motley Fool Senior Analyst Matt Argersinger. Yes, the first stock he ever bought shares of was a company that went bankrupt just three years later. We'll get to that in a minute. But I started the conversation by asking him, who was the first person to really start him on his investing journey.
Matt Argersinger: My dad was a little bit of an investor. He was in the army. But I remember we get the Wall Street Journal at home and I can't remember when, but I remember at some point I was probably seven or eight years old. You flip through the Wall Street Journal back in the day when they had pages and pages of stock tickers. You just like what is going on here, why the number is moving around every day plus, minus fractional, it was all fractional back then. I think I just got kind of intrigued by the idea that you could invest in these numbers. But they are companies, these symbols, right? The next day you could have more money. I think that was fascinating to me. As early as I remember, I had a paper route as a lot of kids did back in late '80s, when I was eight or nine years old. I could save a little bit of money. If it wasn't video games or something like that, I was trying to think, can I save enough money to buy one of these stocks that my dad was talking about. I can't remember when the light went off, but that was my earliest memory of being interested in investing.
Chris Hill: I remember thinking it was like a code, looking at stock charts, not even charts but just as you said, the pages and pages of the shortened names of the companies and thinking like, oh, it's a secret code for names of actual businesses, right?
Matt Argersinger: Right. Then you know there was magical when you could go to the mall or something and you'd say, oh, here's the Gap. Just to name a company that was popular in the '80s or '90s, or a Walmart or something like that. You realize, wait, that's one of the symbol, so you could actually buy a piece of this company that I know that I can see and touch. That was also just the wow moment. Yeah.
Chris Hill: What was the first stock you bought?
Matt Argersinger: It's a funny story. You finally saved enough money. I had a paper route, I was mowing lawns for people. I think I saved like 500 bucks [laughs] which when you're like nine or 10.
Chris Hill: That's lot of money with your kid.
Matt Argersinger: Yeah. I was like, I'm rich, man. I said, OK, I want to buy a stock. I remember I talked to my parents and they gave me terrible advice. [laughs] But it's good advice, I'll tell it, it's like a back story to this. We were living in Massachusetts and one of the big companies at the time, was a company called Wang Laboratories. It was founded by a really great entrepreneur named An Wang. I think he immigrated from China way long time ago in the '20s or '30s. He just built technology companies, software companies in the '60s and '70s. Eventually he built this company Wang Laboratories, that was one of the leading word processing machine companies, calculators and word processing. It became a big company, I think at some point in the early mid '80s, it was employing 10 of thousands of people. Anyway, so I asked my parents, hey, what should I invest in? They said, well, Wang Labs is a great company. It's right near us. I think it was based in Lowell, Massachusetts. Of course I was like, this sounds really great. I invested $500 in Wang Laboratories.
I think it was like 1989. Well, in 1990 An Wang, the CEO, died, and the company was passed to his son. Two years later, the company went bankrupt. No idea how or why. But my first stock investment ever went up in smoke. The lesson I took from it though, which is not the lesson you expect, at the time I remember I was into video games and computer games as a lot of kids were. There was a computer company called Sierra On-Line, which made games like King's Quest and Space Quest. These games I love to play. I remember asking my parents at the time, can I invest in Sierra On-Line? They said no, you should invest in something established like Wang Laboratories. It didn't take much to convince me to do that. But I remember looking back, way on later on when I was adult, I could've invested in Sierra On-Line in 1989, and I think the company went on to five or 6x before it was acquired. I could have had a great first investment by investing in Wang Laboratories.
Chris Hill: What's great about this Matt is, there are so many people who have a similar experience to you. That alone just drives them away from the stock market [laughs] for the rest of their life. Not only have you continued to invest, you've made it your profession. Let me move on to, because obviously you've been doing this for a long time, what's the worst stock you've ever bought? Because you could go with Wang Laboratories, the company you bought went bankrupt. But I'm guessing you have another choice.
Matt Argersinger: No, I've many other choices. But one that really comes to mind is a company that's still traded today. It's not bankrupt and it wasn't even my worst performing investment. But it's company called Biglari Holdings and the ticker is BH. I think what really brought me into that company was as a young investor, especially since I remember 10 years ago or so. We're all searching for the next Warren Buffett, and we're always so quick to name the next Warren Buffett. Well, here I found a young entrepreneur named Sardar Biglari, he had run a hedge fund as a young person, he had a really good track record, and he ends up acquiring this restaurant company called Steak 'n Shake, which you can still find in the Midwest and other states. He turns around the restaurant and his whole plan was Steak 'n Shake is going to be this business that kicks off a lot of cash flow. I'm going to invest in all these other businesses, and he does.
He invests in an energy company, he invests in insurance business. In my eyes, I like this is my Warren Buffett. This is the guy that's going to lead me to the promised land, he's going to build the next Berkshire Hathaway. I literally went to every annual meeting for about five or six straight years up in New York. I was so enthralled by it. The reason it's my worst investment is because I let the mystique of him and the company force me to keep putting money into this business, even though I could see that the way it was being managed was not right. The Steak 'n Shake business itself was falling off and it's really fallen off now if you know the company. I let myself just be load in and not really objective about it as much as I should have been as an analyst. I think it's my worst investment just because of the time, the mental energy, and the amount of capital I put in routinely into this company for years before I wised up and sold my position several years ago.
Chris Hill: I appreciate you making that distinction because I think the default thinking for a lot of people is the worst stock you buy, is the stock that you lose the most money on, or it has the greatest percentage drop. But as you said, there's a time element there.
Matt Argersinger: Right?
Chris Hill: A mindshare element that can cost you as well. Let's go in a more positive direction. What's the stock that means the most to you, not necessarily because it's been the biggest winner, but because of some affinity you have for the business.
Matt Argersinger: Yeah. This is an easy one. Right about when I was about to finish college, one of my first investments I made where it was my own brokerage account making the investment was Boston Beer. You know it, maker of Samuel Adams. This was in 2001, I believe. The stock was trading from $14 a share. The reason I love it is because in college, I loved the Samuel Adams blogger. At that time they really just had the Samuel Adams lager, and now of course these days they've got dozens of labels. They've got the Twisted Tea, Angry Orchard cider, and the Seltzer. They've got a lot of beverages, and they're a much bigger company. But I just knew the company, I had an affinity for the brand. I love the story of Jim Koch, the founder and CEO. I've owned shares ever since.
One of the cool things is I remember when I first bought shares for myself, my brother was graduating high school and I ordered away one of those ones share certificates that you can get. I don't know if you can do that anymore, but I got them one share of Boston Beer, at $14 a share, plus 10 or 20 bucks whatever the shipping handling was for this certificate. The beautiful thing is, over the years, I could tell him like, hey, you know that certificate you've got hanging on your wall, it keeps going up in value. At one point Boston Beer was trading over $1,000 a share. The bad part about this story is that several years ago, my brother didn't tell me this, but he actually sold it, I know in 2016 or 17. He sold it when he was, I guess, moving apartments and he just was like how are these things worth like four or 500 bucks now, I should sell it, and what a bum. [laughs] But anyway, so it's just got an interesting story and I've held this stock for so long that yeah, it's pretty much pardoning me now.
Chris Hill: Also, when you're in college, beer tends to be a commodity that people save money on. Like if you're buying Sam Adams beer in college like that's a premium beer.
Matt Argersinger: Well. It was the aspirational beer. It's was like we would buy the Yuenglings and the Budweisers thinking about someday, someday we're going to pay 999 for that six pack of Sam Adams. Now I'm in it, it's like a tree.
Chris Hill: Is there one that got away? Do you have your version of a stock that you sold too soon or just for whatever reason never pulled the trigger on?
Matt Argersinger: Yeah, the one it's an easy one, because I bet you everyone listening on this has owned it at least part of their life, but I never owned Apple. Can you believe that? I've never owned shares of Apple, and I think because I always assumed for years that Apple's they're at their peak, it's really a hardware business, and hardware over time, especially in the consumer electronics space, it's not exactly a great business. I totally underestimated their amazing transition to software services, and just the whole they have on the App Store, which has become the ecosystem of mobile apps and technology. For some stupid reason, I admired the company. I was always impressed by the company, I used their products like no one else, but I never bought shares. It's pretty sad.
Chris Hill: Apple is one of those companies that, from the standpoint of investing, it essentially broke to long-standing things that all investors tended to agree on. One is what you already spoke to, which is the whole, well, consumer electronics, the price comes down over time. For such a long time, that was the narrative around Apple. It's like, well, they're not going to be able to keep charging this amount of money for those phones, are they? The other one was all of the debate around them paying a dividend. Are they going to pay a dividend? Well, if they do that, it will turn them into a stodgy old dividend paying company, and it will just kill their growth. It's like they did that, and then we've never had that conversation since. As investors, we've never had that.
Matt Argersinger: Apple broke some serious rules. They fooled me for sure, lowercase fooled, and I never bought shares, missed out on huge gains.
Chris Hill: Is there a company you own shares of that you particularly admire?
Matt Argersinger: Yeah, I was thinking about this. I think I have two that I need to mention. They're similar but different in a lot of ways, but Amazon and the Home Depot. Amazon, not just because what the scope and scale of this company that Jeff Bezos has built, but just their ability to always, to use that old analogy, escape where the puck is going, in terms of e-commerce, of course, but just third-party fulfillment. Amazon Web Services, cloud computing, mobile advertising, just so many streaming, they're always into the best places in such a great job. I just so admire how they've been able to get into all these different businesses. I think the Home Depot, if you just think of their history as a "big box retailer", the margins they put up, the growth that they've been able to achieve without actually growing that many stores. These days Home Depot they open maybe a dozen stores per year. But you just see the growth that they're able to continually put out and the affinity that people have for that experience that they get from Home Depot and the products and services. The way they got into the big contracting business several years ago, that's been worked out. Two businesses, Amazon and Home Depot, that I think of always just seems like they're ahead of the competition, ahead of the curve, and I love owning both businesses, and I plan to hold them for a very long time.
Chris Hill: You have to assume that both of those businesses also have a lot of institutional discipline built-in. Just hearing you talk about The Home Depot really not opening a lot of new locations year after year. You have to believe there are some people inside the executive ranks saying, no, we can do more than this, even if we just go from 12 to 24 in a year, that sort of thing.
Matt Argersinger: Right.
Chris Hill: The same with Amazon. The discipline not just to go after new initiatives, but to say no to a lot of others.
Matt Argersinger: Absolutely. It's so impressive.
Chris Hill: What is the stock that is your biggest holding?
Matt Argersinger: Yes. It's a base holding by orders of magnitude and it wasn't really by design. Well, maybe kind of. MercadoLibre, which I've talked about on this show for years. The reason it is my biggest holding, not only because it's been such an amazing winner over the last, I've held it for gosh now, 13 or 14 years, and I've added to it. But the reason I've added to it is that not only has the business been successful, but I was a part of this service called Supernova, which you know about, and we recommended MercadoLibre for our portfolio in Supernova, I want to say, seven or eight times, and I made it a point when I was the advisor of that service to really follow our owninvestment advice I bought pretty much every investment we made, including MercadoLibre, seven or eight times.
That was incredibly fortunate, but I certainly love the business. I mean, as the e-commerce leader in Latin America, big presence in Brazil, Mexico, Argentina, and other countries. What I loved especially is early on they are actually owned by eBay. I don't know if many investors know that, and I was worried that they were going to a little bit follow the eBay model, which is not a terrible model, and not really go after the logistics and fulfillment part of the business that really completes that consumer shopping cycle. But fortunately they really did go after Amazon starting about seven or eight years ago, modeling Amazon but also modeling PayPal with payments and transactions. It just becomes such a big e-commerce powerhouse throughout Latin America, and I just see many years ahead of big growth for them.
Chris Hill: You're the reason I own shares of MercadoLibre. I wish I had listened to you the first several times you'd mentioned it on the show before finally clinging in. But I do want to ask you about something you mentioned, which is the number of times you added to it. What was that like? To the extent that you can, walk me through that mental process, because I find this to be a challenge, and I'm sure other investors do as well. The idea of adding to our winners sounds great in theory, but for me, the struggle is, well, wait, I already bought it at this lower cost base. I do have that hurdle I need to get over. I've gotten into it some times in my life, but not all the time. How did you do it?
Matt Argersinger: It took me a long time too, and I think it was really honestly just working closely with David Gardner for years and seeing him. We rerecommend these stocks that he'd recommended years ago that were up five, six, 10x and he's recommending them again. It was tough for me early on as well, but then I just thought, why am I so focused on what David Gardner would say, which is what most investors do, which is they water their weeds and trim their flowers. I should be watering my flowers and trimming my weeds. I had to pound that in my head, but eventually I did, and thankfully, it's led me to buy MercadoLibre all the way up, buy Amazon and other companies on the way up. Winners tend to keep winning. I think that's something also David Gardner says. It is hard to get your head around as an investor. As an investor, we're hardwired to be looking for bargains, and discounts from what we paid. But if you have a premium business, pay up and keep paying up as you go, it'll make a huge difference. The biggest difference to my portfolio, my returns, my net worth over time has come from adding multiple times to winners. It hasn't come from seeking bargains or doubling down on stocks as we like to do.
Chris Hill: Matt, thanks so much for being here.
Matt Argersinger: Thank you, Chris.
Chris Hill: That's all for today, but coming up tomorrow, we will get back to the headlines with Motley Fool Senior Analyst, Bill Mann. 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.
John Mackey, 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, Apple, Home Depot, MercadoLibre, PayPal Holdings, and eBay. Matthew Argersinger has positions in Amazon, Boston Beer, Home Depot, MercadoLibre, PayPal Holdings, and eBay and has the following options: short October 2022 $40 puts on eBay. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), Biglari Holdings, Biglari Holdings Inc. Class A, Home Depot, MercadoLibre, PayPal Holdings, and Walmart Inc. The Motley Fool recommends Boston Beer and eBay and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), short March 2023 $130 calls on Apple, and short October 2022 $50 calls on eBay. 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 analyst Matt Argersinger discusses: The rise and sudden fall of Wang Laboratories. I'm Chris Hill and just like yesterday's episode with Jason Moser, today, we've got the investing origin story with Motley Fool Senior Analyst Matt Argersinger. Amazon, not just because what the scope and scale of this company that Jeff Bezos has built, but just their ability to always, to use that old analogy, escape where the puck is going, in terms of e-commerce, of course, but just third-party fulfillment.
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Matthew Argersinger has positions in Amazon, Boston Beer, Home Depot, MercadoLibre, PayPal Holdings, and eBay and has the following options: short October 2022 $40 puts on eBay. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), Biglari Holdings, Biglari Holdings Inc. Class A, Home Depot, MercadoLibre, PayPal Holdings, and Walmart Inc. The Motley Fool recommends Boston Beer and eBay and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), short March 2023 $130 calls on Apple, and short October 2022 $50 calls on eBay.
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I think it's my worst investment just because of the time, the mental energy, and the amount of capital I put in routinely into this company for years before I wised up and sold my position several years ago. But the reason I've added to it is that not only has the business been successful, but I was a part of this service called Supernova, which you know about, and we recommended MercadoLibre for our portfolio in Supernova, I want to say, seven or eight times, and I made it a point when I was the advisor of that service to really follow our owninvestment advice I bought pretty much every investment we made, including MercadoLibre, seven or eight times. The Motley Fool recommends Boston Beer and eBay and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), short March 2023 $130 calls on Apple, and short October 2022 $50 calls on eBay.
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Two years later, the company went bankrupt. I'm going to invest in all these other businesses, and he does. Matt Argersinger: Yeah, the one it's an easy one, because I bet you everyone listening on this has owned it at least part of their life, but I never owned Apple.
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19616.0
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2022-08-26 00:00:00 UTC
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U.S. Justice Department in early stages of drafting possible antitrust suit against Apple -Politico
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AAPL
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https://www.nasdaq.com/articles/u.s.-justice-department-in-early-stages-of-drafting-possible-antitrust-suit-against-apple
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nan
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nan
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Adds Justice Department declining to comment, details from Politico, background
WASHINGTON, Aug 26 (Reuters) - The U.S. Justice Department is in the early stages of drafting a potential antitrust complaint against Apple Inc AAPL.O, Politico reported on Friday, citing a person with direct knowledge of the matter.
A Justice Department spokesperson declined to comment. Apple did not immediately respond to Reuters requests for comment.
Politico reported the Justice Department has not made a decision whether to sue Apple, but the department’s antitrust division hopes to file suit by the end of the year.
Reuters reported previously that the Justice Department opened an antitrust probe into Apple in 2019.
(Reporting by Eva Mathews in Bengaluru and David Shepardson in Washington; Editing by Arun Koyyur and Jonathan Oatis)
((Eva.Mathews@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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Adds Justice Department declining to comment, details from Politico, background WASHINGTON, Aug 26 (Reuters) - The U.S. Justice Department is in the early stages of drafting a potential antitrust complaint against Apple Inc AAPL.O, Politico reported on Friday, citing a person with direct knowledge of the matter. Reuters reported previously that the Justice Department opened an antitrust probe into Apple in 2019. (Reporting by Eva Mathews in Bengaluru and David Shepardson in Washington; Editing by Arun Koyyur and Jonathan Oatis) ((Eva.Mathews@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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Adds Justice Department declining to comment, details from Politico, background WASHINGTON, Aug 26 (Reuters) - The U.S. Justice Department is in the early stages of drafting a potential antitrust complaint against Apple Inc AAPL.O, Politico reported on Friday, citing a person with direct knowledge of the matter. Politico reported the Justice Department has not made a decision whether to sue Apple, but the department’s antitrust division hopes to file suit by the end of the year. Reuters reported previously that the Justice Department opened an antitrust probe into Apple in 2019.
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Adds Justice Department declining to comment, details from Politico, background WASHINGTON, Aug 26 (Reuters) - The U.S. Justice Department is in the early stages of drafting a potential antitrust complaint against Apple Inc AAPL.O, Politico reported on Friday, citing a person with direct knowledge of the matter. Politico reported the Justice Department has not made a decision whether to sue Apple, but the department’s antitrust division hopes to file suit by the end of the year. Reuters reported previously that the Justice Department opened an antitrust probe into Apple in 2019.
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Adds Justice Department declining to comment, details from Politico, background WASHINGTON, Aug 26 (Reuters) - The U.S. Justice Department is in the early stages of drafting a potential antitrust complaint against Apple Inc AAPL.O, Politico reported on Friday, citing a person with direct knowledge of the matter. A Justice Department spokesperson declined to comment. Apple did not immediately respond to Reuters requests for comment.
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19617.0
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2022-08-26 00:00:00 UTC
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Electronic Arts won’t be a multiplayer M&A game
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AAPL
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https://www.nasdaq.com/articles/electronic-arts-wont-be-a-multiplayer-ma-game
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nan
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nan
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Reuters
Reuters
NEW YORK (Reuters Breakingviews) - Electronic Arts is a tempting target but finding the right players might be harder to master. On Friday, CNBC reported that Amazon.com is not expected to make a bid for the video-game maker, knocking down an earlier report https://ftw.usatoday.com/2022/08/amazon-buy-electronic-arts about a potential deal. Still, it’s not hard to see why the publisher behind the FIFA franchise could be in play.
Microsoft’s $69 billion move for Activision Blizzard bodes well for EA. The software giant’s deal represented 19 times Activision’s EBITDA last year. On the same multiple applying estimated EBITDA for the fiscal year ending March, it would imply that EA is worth over $50 billion. That’s about a 54% premium to its current enterprise value.
But potential buyers may be out of the game. Netflix is suffering from a market capitalization rout and others like Apple would attract unwanted attention from regulators. EA in play may have to wait another day. (By Jennifer Saba)
Capital Calls - More concise insights on global finance:
Grab drives home how much investors now see red
China’s Muji wannabe has long road to restoration
Amazon’s green drive clips venture capital coupons
Rio blinks first in Mongolian standoff
Singtel’s India sale is timely collect call
(Editing by Gina Chon and Amanda Gomez)
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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NEW YORK (Reuters Breakingviews) - Electronic Arts is a tempting target but finding the right players might be harder to master. On the same multiple applying estimated EBITDA for the fiscal year ending March, it would imply that EA is worth over $50 billion. (By Jennifer Saba) Capital Calls - More concise insights on global finance: Grab drives home how much investors now see red China’s Muji wannabe has long road to restoration Amazon’s green drive clips venture capital coupons Rio blinks first in Mongolian standoff Singtel’s India sale is timely collect call (Editing by Gina Chon and Amanda Gomez) 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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Reuters Reuters The software giant’s deal represented 19 times Activision’s EBITDA last year. (By Jennifer Saba) Capital Calls - More concise insights on global finance: Grab drives home how much investors now see red China’s Muji wannabe has long road to restoration Amazon’s green drive clips venture capital coupons Rio blinks first in Mongolian standoff Singtel’s India sale is timely collect call (Editing by Gina Chon and Amanda Gomez) 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 Friday, CNBC reported that Amazon.com is not expected to make a bid for the video-game maker, knocking down an earlier report https://ftw.usatoday.com/2022/08/amazon-buy-electronic-arts about a potential deal. On the same multiple applying estimated EBITDA for the fiscal year ending March, it would imply that EA is worth over $50 billion. (By Jennifer Saba) Capital Calls - More concise insights on global finance: Grab drives home how much investors now see red China’s Muji wannabe has long road to restoration Amazon’s green drive clips venture capital coupons Rio blinks first in Mongolian standoff Singtel’s India sale is timely collect call (Editing by Gina Chon and Amanda Gomez) 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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Reuters Reuters NEW YORK (Reuters Breakingviews) - Electronic Arts is a tempting target but finding the right players might be harder to master. On Friday, CNBC reported that Amazon.com is not expected to make a bid for the video-game maker, knocking down an earlier report https://ftw.usatoday.com/2022/08/amazon-buy-electronic-arts about a potential deal.
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19618.0
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2022-08-26 00:00:00 UTC
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The Smartphone Market Is Slowing. Not Even Apple Is Immune.
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AAPL
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https://www.nasdaq.com/articles/the-smartphone-market-is-slowing.-not-even-apple-is-immune.
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nan
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nan
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Consumer demand for smartphones continues to wane. While still up year over year, worldwide deliveries of smartphones nearly fell to their early-2020, pandemic-crimped levels during the second quarter. Were it not for broken supply chains in the early days of the pandemic, last quarter's unit sales would have fallen to levels not seen since 2014, when they were on the way up. Not even the venerable Apple (NASDAQ: AAPL) iPhone is selling as briskly as it used to.
The drop in demand is not an insurmountable challenge, but it's not one that investors can afford to ignore. While we're not quite there yet, the sales slowdown is another piece of evidence that smartphone saturation is an increasingly real headwind. Manufacturers must respond if they can.
Another quarter, another smartphone slowdown
The data comes from technology market research outfit International Data Corp. (IDC). The organization reports an 8.7% year-over-year decline in second-quarter deliveries of smartphones, marking the fourth consecutive quarter this figure has fallen.
The most popular brands held their own. That's Samsung and the aforementioned Apple. Apple's iPhone sales were essentially even with the second quarter of last year, while Samsung's capacity to shake off some of the current chip shortage allowed it to improve its total deliveries by 5.6%. Value brands like Oppo, Xiaomi, and Vivo, meanwhile, each saw sales slip by more than 20%.
IDC research director Nabila Popal commented on the quarterly data: "What started out as a supply-constrained industry earlier this year has turned into a demand-constrained market." She added that "roaring inflation and economic uncertainty ... seriously dampened consumer spending and increased inventory across all regions."
IDC believes the second-quarter slowdown will be offset by reinflated demand in the foreseeable future. And perhaps it will. That optimistic outlook, however, ignores a bigger-picture downtrend that's been in place since 2017, following 2016's peak in smartphone purchases.
The graphic below tells the tale. Last quarter's worldwide shipments of 286 million smartphones were almost as low as the 275.2 million in Q1 2020, and the 278.4 million in Q2 2020. If you take those highly disrupted quarters out of the mix, last quarter's shipments were a multiyear low for any quarter. More than that, though, the chart makes clear that smartphone sales have been suffering slower growth for years now, led by Samsung's weakening sales:
Data source: International Data Corporation (IDC). Chart by author. All data is in millions of units.
A closer look at the image also shows us that prior to COVID-19, demand for Apple's iPhone was also slowing. It perked up during the pandemic, as Apple was better equipped to handle supply chain disruption than its peers. Even so, the iPhone's pandemic growth is also clearly leveling off as well.
There are several plausible reasons for this waning growth pace, each of which should be considered. Among them are the increasing quality and the increasing prices of the devices. Making ever-bigger investments in smartphones, consumers may feel more compelled to keep them longer before replacing them. Since the devices are higher quality, however, owners can do so without sacrificing performance.
Mostly, though, the slowdown points to saturation. The Pew Research Center reports that 85% of U.S. residents now own smartphones, mirroring similar ownership rates in other parts of the world. Voicing the same idea more directly, former Shopify subsidiary Oberlo wrote that 6.6 billion people in 2022 are already smartphone users; that leaves some room for further penetration. Arguably the remainder of the addressable market, however, would have embraced smartphones by now if they were going to.
Too big to ignore
Fortunately for investors, most publicly traded smartphone makers also manufacture so many other goods that there's plenty of cushion against this slowdown. For instance, Samsung also makes televisions, appliances, and computers. Xiaomi is deeper into smartphone waters than Samsung, though Xiaomi too manufactures goods like television sets and smartwatches. Clearly, these and other companies should adapt their long-term product strategies as needed, even if the slowdown can't exactly wreck their businesses.
There is one name that's neck-deep in the smartphone business, though: That's Apple. The iPhone still accounts for more than half of its top line, despite efforts to cultivate other profit centers like digital services.
That's not to suggest that the smartphone sales slowdown spells doom for Apple. However, Apple, like its smartphone competitors, should acknowledge the obvious trend. While the need for new smartphones will never go away, their highest-growth days are in the past, and that growth continues to slow as we inch toward saturation. At the very least it's a cause for tougher questions regarding the near and distant futures, for Apple as well as the rest of these companies.
Find out why Apple 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. Apple is on the list -- but there are nine others you may be overlooking.
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*Stock Advisor returns as of August 17, 2022
James Brumley has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple 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.
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Not even the venerable Apple (NASDAQ: AAPL) iPhone is selling as briskly as it used to. Apple's iPhone sales were essentially even with the second quarter of last year, while Samsung's capacity to shake off some of the current chip shortage allowed it to improve its total deliveries by 5.6%. IDC research director Nabila Popal commented on the quarterly data: "What started out as a supply-constrained industry earlier this year has turned into a demand-constrained market."
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Not even the venerable Apple (NASDAQ: AAPL) iPhone is selling as briskly as it used to. Were it not for broken supply chains in the early days of the pandemic, last quarter's unit sales would have fallen to levels not seen since 2014, when they were on the way up. Another quarter, another smartphone slowdown The data comes from technology market research outfit International Data Corp. (IDC).
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Not even the venerable Apple (NASDAQ: AAPL) iPhone is selling as briskly as it used to. Another quarter, another smartphone slowdown The data comes from technology market research outfit International Data Corp. (IDC). More than that, though, the chart makes clear that smartphone sales have been suffering slower growth for years now, led by Samsung's weakening sales: Data source: International Data Corporation (IDC).
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Not even the venerable Apple (NASDAQ: AAPL) iPhone is selling as briskly as it used to. Consumer demand for smartphones continues to wane. While still up year over year, worldwide deliveries of smartphones nearly fell to their early-2020, pandemic-crimped levels during the second quarter.
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19619.0
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2022-08-26 00:00:00 UTC
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What Warren Buffett Can Teach You About Dividend Stocks
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AAPL
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https://www.nasdaq.com/articles/what-warren-buffett-can-teach-you-about-dividend-stocks
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nan
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nan
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Warren Buffett, who runs Berkshire Hathaway, is considered by many to be the greatest investor of all time, and looking at his performance through the years, it's hard to argue with that point.
The one thing I've admired most about Buffett's success isn't the 12-figure net worth; it's the fact that he's done it with a simple investing strategy that investors of any experience level can incorporate. It doesn't take off-the-wall technical analysis or luck -- it just takes time, patience, and an appreciation for the power of dividends.
Dividend cash cows
From 1965 to 2021, the S&P 500's total return was 32,209% (including dividends), meaning every $1,000 invested would be worth $322,090. During that same time span, Berkshire Hathaway's total return was 3,641,613%, meaning every $1,000 invested would be worth $36,416,130. Ironically enough, Berkshire Hathaway doesn't pay dividends to its shareholders, but a large part of its success can be attributed to its commitment to owning dividend stocks.
In 2021 alone, Berkshire Hathaway received $785 million worth of dividends from Apple (NASDAQ: AAPL), a company it owned 5.6% of at the end of the year. (For perspective, each 0.1% of Apple's 2021 earnings equals around $100 million.) The company also received $521 million in dividends from Kraft Heinz (NASDAQ: KHC), and that's just scratching the surface.
The total amount Buffett's company received in dividends in 2021 is over $13.4 billion. That's more than the 2021 revenue of Coinbase and Airbnb combined.
There's power in the drip
Dividend reinvestment programs (DRIPs) automatically take dividends you're paid and reinvest them into the stock that paid it.
The power of reinvested dividends can't be overstated. From 1960 to 2021, reinvested dividends made up 84% of the S&P 500's total return. If you invested $10,000 into an S&P 500 index fund, it'd be worth over $795,800 based on just stock price. If you look at the value of a $10,000 investment over that time period with reinvested dividends, it jumps up to around $4.95 million.
Warren Buffett's core investment philosophy is to buy great businesses and hold them for the long term. He once said, "If you are not willing to own a stock for 10 years, do not even think about owning it for 10 minutes." Investing often rewards the patient, but this is especially true if you own dividend stocks and are willing to put off cash dividend payouts until retirement.
If you invest $1,000 monthly into a stock with 8% average annual returns, you'd have over $549,000 after 20 years (while only personally investing $240,000) thanks to compound earnings. If that same stock had a steady 2% annual dividend yield that you reinvested each year, it would be worth around $687,300 after 20 years. Reinvested dividends add to the magic of compound earnings.
Sit back, relax, and enjoy the cash
Retirement is when you can really begin to enjoy the benefits of your patience. The purpose of reinvesting dividends is to increase your stake in a stock over time, so when retirement rolls around, it can be worth as much as possible before receiving dividends in cash. A 2% dividend payout isn't that much on $10,000, but when you manage to accumulate hundreds of thousands of dollars in dividend stocks, it becomes a different story. A 2% annual dividend yield on $600,000 is $12,000 in yearly payouts.
The best thing you can do to ensure you're financially prepared for retirement is plan to have multiple income sources. Many people will rely solely on their 401(k) or Social Security, but those don't have to be your only options. With consistency over time, you can manage to build a dividend portfolio that provides thousands in monthly retirement income.
Find out why Apple 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. Apple 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 August 17, 2022
Stefon Walters has positions in Apple. The Motley Fool has positions in and recommends Airbnb, Inc., Apple, Berkshire Hathaway (B shares), and Coinbase Global, Inc. The Motley Fool recommends Kraft Heinz and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), 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 2021 alone, Berkshire Hathaway received $785 million worth of dividends from Apple (NASDAQ: AAPL), a company it owned 5.6% of at the end of the year. Warren Buffett, who runs Berkshire Hathaway, is considered by many to be the greatest investor of all time, and looking at his performance through the years, it's hard to argue with that point. The one thing I've admired most about Buffett's success isn't the 12-figure net worth; it's the fact that he's done it with a simple investing strategy that investors of any experience level can incorporate.
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In 2021 alone, Berkshire Hathaway received $785 million worth of dividends from Apple (NASDAQ: AAPL), a company it owned 5.6% of at the end of the year. The Motley Fool has positions in and recommends Airbnb, Inc., Apple, Berkshire Hathaway (B shares), and Coinbase Global, Inc. The Motley Fool recommends Kraft Heinz and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple.
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In 2021 alone, Berkshire Hathaway received $785 million worth of dividends from Apple (NASDAQ: AAPL), a company it owned 5.6% of at the end of the year. Investing often rewards the patient, but this is especially true if you own dividend stocks and are willing to put off cash dividend payouts until retirement. The purpose of reinvesting dividends is to increase your stake in a stock over time, so when retirement rolls around, it can be worth as much as possible before receiving dividends in cash.
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In 2021 alone, Berkshire Hathaway received $785 million worth of dividends from Apple (NASDAQ: AAPL), a company it owned 5.6% of at the end of the year. During that same time span, Berkshire Hathaway's total return was 3,641,613%, meaning every $1,000 invested would be worth $36,416,130. The Motley Fool has positions in and recommends Airbnb, Inc., Apple, Berkshire Hathaway (B shares), and Coinbase Global, Inc.
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19620.0
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2022-08-26 00:00:00 UTC
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Finding the Supercharged EV Stocks to Power Up Your Portfolio
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AAPL
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https://www.nasdaq.com/articles/finding-the-supercharged-ev-stocks-to-power-up-your-portfolio
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Source: aanbetta / Shutterstock
[Editor’s note: This story was previously published in August 2022. It has since been updated to include the most relevant information available.]
I’ll get right to it. To put yourself in a position to potentially make fortunes over the next year, buy electric vehicle stocks today!
The logic is pretty straightforward.
It looks like we’re in the early stages of a bear-to-bull market transition. Stocks have retraced more than 50% of their losses in just two months. Inflation is falling, and the economy still hasn’t plunged into a deep recession. Historically speaking, what comes next is a bull market breakout.
In these breakout periods, stocks soar. Specifically, early-stage hypergrowth stocks soar. Every time we go from a bear to bull market, over two dozen stocks rise 1,000%-plus over the next year.
This time around, the early-stage hypergrowth stocks most likely to soar 1,000% are EV stocks.
Indeed, with sky-high gas prices, a significant increase in electric car supply and optionality, and the newly-passed ~$400 BILLION climate bill, the stage is set for the Great EV Revolution to meaningfully accelerate over the next 12 months.
We wouldn’t be surprised if a handful of EV stock soar more than 10X in the coming year.
Now, not all will soar. But a few will mint small fortunes for their investors. And at the top of our list of potential big-time winners are EV charging stocks.
Here’s why.
The Case for EV Charging Stocks
Let me ask you a question: What good is an EV without charge?
No good at all – it’s pretty much useless. And that, folks, is the basis for why you should invest in EV charging stocks. They are necessary to the mass deployment of EVs.
Here are the numbers.
Currently, there are about 130,000 EV charging ports across the U.S. That may seem like a big number, but we’ll need a lot more if everyone’s going to be driving an electric vehicle by 2030.
The International Energy Agency estimates that the number of EV chargers globally is going to have to increase by 12X by 2030 in order for companies and governments to reach the low-end of their targets for 30% of new car sales to be electric by then.
Said differently, the EV charging market is going to explode in size over the next decade. As it does, it will lay the foundation for the whole EV market to explode in size.
That’s why we’re excited about buying EV stocks here and now. They’ve been beaten up alongside every other stock in the market. But, unlike every other stock in the market, EV stocks are on the cusp of generational hypergrowth in the coming years.
Time to buy the dip? We think so.
Gaining an Edge in EV Charging
Considering what you just read, you’re probably thinking that it’s time to rush out and load up on some EV charging stocks, right?
Not so fast.
There are lots of EV charging companies out there today. Not all will make it. Indeed, only a handful will make it big. Most will fail. So, it’s important to make the distinction to buy the best EV charging stocks.
To know which are “the best,” we need to first understand EV charging technology.
That analysis starts with one fundamental question: How does electricity work?
In short, we generate energy at a power source, like a coal-fired power plant or a solar farm. Then, we promote the flow of electrons (charged particles that carry electric power) from that power source to the rest of the world via wires. This flow of electrons is called a “current.”
That current can take two forms: alternating current (AC) or direct current (DC). DC is a direct constant flow of electrons through the wire. It results in heavy power delivery but also in significant drain on the grid. AC is an oscillating flow of electrons that results in lower power delivery but a much more manageable load on the grid.
Since the grid has always been load-constrained, society decided long ago to build it on AC. But today’s batteries can only store power as DC. Indeed, AC is physically impossible to store.
That’s why most consumer electronics devices – like laptops – come with power cords with big “boxes” in the middle of them. Those boxes are AC/DC converters, which convert the AC power from the grid to DC power that can be stored in your laptop.
EV charging works in much the same way.
EV chargers plug into the grid, which provides AC power. That AC power is then pumped into the EV. On board every EV, there is an AC/DC converter that transforms the AC power from the charger into usable DC power, which is then stored in the car’s battery.
Simple enough, right?
How to Pick the Best EV Charging Stocks
Understanding how EV charging works isn’t all you need to know to pick the best EV charging stocks. You also need to know the different types of EV chargers out there so that you can pick the companies that make the most useful and highest-quality products.
There are two classifications of AC electric vehicle chargers – L1 and L2.
L1 chargers are the most basic . They’re slow but really cheap. They’ll give you about three to five miles of EV range per hour of charging. Given that they’re low-cost, low-performance in nature, L1 chargers are common as residential solutions. Bu they’re very rarely used beyond the home.
L2 chargers are a big step-up from L1s . They’re much faster but also much more expensive. They’ll give you around 30 miles of EV range per hour of charging. These L2s constitute the majority of chargers on the road today.
Now, there are also DC fast chargers. These are fundamentally distinct from AC chargers. They have built-in AC/DC converters, which convert AC power from the grid into DC power within the actual charger itself. What this enables, then, is for the charger to pump DC power directly into an EV battery, completely bypassing the AC/DC converter in the car and, therefore, resulting in a far more powerful charge.
These chargers are really fast — and really expensive. As a result, they can give you over 100 miles of EV range per hour of charging. But there aren’t many of them on the roads these days — a few thousand across the whole U.S.
Source: https://circuitdigest.com/
Considering this context, it’s important to understand that the future of the EV charging landscape will be a mix of mostly L2 chargers throughout urban areas with some DC fast chargers on interstate highways.
That’s because L2 chargers are good enough. The reality is that the enormous shift from gas stations to charging ports will be accompanied by an equally enormous paradigm shift in where we “fill up” our vehicles.
Since EV chargers are tiny and can be built anywhere there’s an electric connection, the days of dedicated gas stations are over. You won’t see EV charging stations replace gas stations. You’ll see gas stations become extinct. And EV charging ports will pop up everywhere from your gym parking lot to your local grocery store and mall lots.
The result? You’ll constantly be charging your EV on the go. So long as you aren’t traveling hundreds of miles and/or between cities and states, L2 chargers will do the job just fine because you’ll be charging every time you’re grocery shopping or working out.
For those long road trips… well, that’s where DC fast chargers will be super useful.
Source: Department of Transportation
Oh, and charging costs money… about $2 per 30 minutes of L2 charging in a public lot. To that end, the future of EV charging is super clear. Millions of L2 chargers will pop up across every parking lot in urban and suburban America, while DC fast-chargers will replace gas stations on interstate highways. And consumers will foot the bill for all of it.
That’s the future.
So… which EV stocks should you be buying right now to play that future?
The EV Charging Boom Has Arrived
We’ve followed the electric vehicle space closely over the past seven years. In that time, we’ve seen a lot. But we’ve never seen what we’re seeing right now.
The EV charging industry is “powering up” — no pun intended — right now in a way that it’s never done before.
Last week, Tesla (TSLA) announced that it’s doubling the size of its Supercharger design team in Canada as it looks to rapidly expand its charging network in that country.
A month ago, General Motors (GM) partnered with EV charging network operator EVgo (EVGO) to build 2,000 EV chargers at 500 Pilot’s locations across the U.S.
Over the past few months, Los Angeles International Airport has commenced the construction of 1,300 EV charging stations across its facilities.
Two weeks ago, IKEA announced that it will be installing more than 140 EV chargers at over 25 of its U.S. locations.
The U.K. government just pledged 20 million pounds to build 1,000 EV chargers across its country. And the U.S. government just passed an elephant-sized climate bill which includes nearly $2 billion in incentives for EV charger construction.
The writing is on the wall. The EV charging industry is on fire right now. So begins a decade of hypergrowth ahead for EV charging station operators.
The Final Word
At Hypergrowth Investing, we leverage a team of technology stock experts – including software engineers, data scientists, seasoned traders, and economists – to understand technological megatrends at their most fundamental level. We don’t just listen to management teams and read investor decks. We break down every company’s underlying technology at its most elementary level to assess its validity and capability – and its potential to change the world.
And we do this across every industry, for every technological breakthrough, and with every company. The end result? We identify early-stage hypergrowth tech stocks set for enormous long-term returns.
And… in the EV industry… we’ve found one stock that has developed astoundingly superior and creatively unique technology which should enable it to become a dominant tech supplier for the whole EV industry.
The best part? The company may have a secret partnership with Apple (AAPL) in the works since Apple is – as you may know – on the cusp of launching an iPhone-like autonomous electric car.
From current levels, this stock is a potential 40X investment opportunity. Find out how it could be the key company behind Apple’s next big product launch.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
The post Finding the Supercharged EV Stocks to Power Up Your Portfolio 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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The company may have a secret partnership with Apple (AAPL) in the works since Apple is – as you may know – on the cusp of launching an iPhone-like autonomous electric car. Indeed, with sky-high gas prices, a significant increase in electric car supply and optionality, and the newly-passed ~$400 BILLION climate bill, the stage is set for the Great EV Revolution to meaningfully accelerate over the next 12 months. The International Energy Agency estimates that the number of EV chargers globally is going to have to increase by 12X by 2030 in order for companies and governments to reach the low-end of their targets for 30% of new car sales to be electric by then.
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The company may have a secret partnership with Apple (AAPL) in the works since Apple is – as you may know – on the cusp of launching an iPhone-like autonomous electric car. To put yourself in a position to potentially make fortunes over the next year, buy electric vehicle stocks today! You won’t see EV charging stations replace gas stations.
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The company may have a secret partnership with Apple (AAPL) in the works since Apple is – as you may know – on the cusp of launching an iPhone-like autonomous electric car. The Case for EV Charging Stocks Let me ask you a question: What good is an EV without charge? How to Pick the Best EV Charging Stocks Understanding how EV charging works isn’t all you need to know to pick the best EV charging stocks.
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The company may have a secret partnership with Apple (AAPL) in the works since Apple is – as you may know – on the cusp of launching an iPhone-like autonomous electric car. To put yourself in a position to potentially make fortunes over the next year, buy electric vehicle stocks today! This time around, the early-stage hypergrowth stocks most likely to soar 1,000% are EV stocks.
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19621.0
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2022-08-26 00:00:00 UTC
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Let's Talk About Michael Burry Selling Every Stock but One
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AAPL
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https://www.nasdaq.com/articles/lets-talk-about-michael-burry-selling-every-stock-but-one
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nan
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nan
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The man who made a billion-dollar bet on the housing market by correctly calling its collapse during the run-up to the 2008 financial crisis seems to be making a new prediction: The stock market is about to crash.
Michael Burry, who was one of the main figures in the book The Big Short and its subsequent movie adaptation of the same name, recently sold every single stock his Scion Asset Management hedge fund owns and added just one -- private prison operator GEO Group (NYSE: GEO).
Image source: Getty Images.
Although he has not commented on why he made the move, a cryptic, since-deleted tweet from May read, "As I said about 2008, it is like watching a plane crash. It hurts, it is not fun, and I'm not smiling."
At the time, the markets seemed to be in free fall with the S&P 500 posting seven consecutive weeks of losses, and the first six months of 2022 would go on to be the worst start to a year in over 50 years.
It all raises a number of questions investors should ask: Will lightning strike twice for Burry? Should investors follow his lead? And what's up with his buying GEO Group?
Clouds on the horizon
Burry is not alone in thinking the stock market is due for a crash. Noted investor Jeremy Grantham -- who reportedly called the Japanese market crash in 1989, the dot-com bubble in 2000, and the housing market top in 2008 -- also thinks stocks are primed for a major devaluation, calling rising asset values a "superbubble."
Both he and Burry may be right, of course, but Grantham has been expecting stocks to "crack" since 2011 on the belief the Federal Reserve was creating the bubble. Over the ensuing decade, stocks nearly quadrupled in value, turning a $10,000 investment in the S&P 500 in into one worth almost $38,000.
That doesn't mean they are both wrong now, but it's important to keep in context from whom this message is coming.
Throwing out the baby with the bathwater
Panicking and withdrawing all the money in your portfolio to put it under your mattress seems a bit extreme, even if a crash were to come. While caution may be warranted, downturns are often excellent times to add to your holdings because you pick up previously expensive stocks at a discount.
History shows bull markets follow bear markets and where a bear market lasts less than 10 months on average, bull markets tend to go on for more than four years. That's backed up by data from the Schwab Center for Financial Research that found since 1974 the S&P 500 has risen by more than 24% one year after a market correction bottom, on average.
Burry's Scion had a portfolio of excellent stocks, including Apple, Alphabet, Bristol-Myers Squibb, and Meta Platforms. He sold off a dozen positions and purchased just the one, GEO Group.
That's an even more extreme bet than Warren Buffett's: He owns billions of dollars worth of stock in dozens of companies, but has almost half of Berkshire Hathaway's portfolio tied up in Apple stock.
As I wouldn't even recommend anyone following the lead like that of someone considered the greatest investor in our lifetime, it follows I don't think going to the roulette wheel and placing all your money on red -- the equivalent of just buying the private prison operator -- is a good choice, either.
Locking up an opportunity
While Burry didn't place all of Scion Asset Management's money into GEO Group (his equity positions went from $164 million at the end of the first quarter to $3.3 million at the end of June), it's a singular notion that this is the company he expects to win.
Geo is a global operator, but 90% of its revenue comes from the U.S. Its stock got a big boost from Burry's bet, but there is concern about whether it can keep growing, as one of the first acts President Biden took upon entering the White House was to sign an executive order directing the Justice Department to not renew its contracts with private prison operators like Geo and rival CoreCivic.
While many of Geo's contracts are with Immigration and Customs Enforcement, which falls under the Department of Homeland Security and is not subject to the executive order, it has three contracts expiring within the next year that would fall under this restriction. Those contracts represent 6% of its revenue.
The real concern with private prison operators is the lack of access to capital as virtually every major bank has cut off the flow of money to Geo Group and CoreCivic. JPMorgan, Bank of America, Wells Fargo, and most other known big lenders to the prison companies have ceased doing business with them.
Geo says six of the 65 banks in its lending syndicate will not renew their lending commitments when they expire, but those six banks account for 54% of its senior lending commitments. As a result, Geo was forced to sell assets to pay for outstanding debt maturities coming due over the next few years, but now believes it will be able to pay what's left through available liquidity, the free cash flow it generates, and selling off other non-core assets in the future.
The prison operator also suspended its dividend during the early stages of the pandemic, and last year it terminated its status as a real estate investment trust.
Its shares have an elevated short interest with about 16% of those outstanding being sold short. Shares enjoyed a big run-up last year as Reddit traders piled into the stock, sending it to a high of about $9.50 a stub. Even after the surge following Burry's buy, Geo's stock remains 16% below that peak.
Go your own way
Following what successful investors are buying isn't a bad strategy as long as you don't try to blindly copy them.
Even though Scion Asset Management's 13F filing with the Securities and Exchange Commission was published just this month, it's only a snapshot of what Burry's position was at the end of June. Remember, he was pessimistic about the direction of the market at the time, and since then the S&P 500 has rallied by more than 20%. It's also notable the filing is not required to disclose positions in foreign companies or stocks that he's sold short.
While there's nothing to suggest he's changed his mind, there's also no proof he's changed his mind. Burry's moves are certainly worthy of starting a discussion, and caution about the state of the economy is always worthwhile, but his investing style is not necessarily one worth mimicking.
10 stocks we like better than The Geo Group
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They just revealed what they believe are the ten best stocks for investors to buy right now... and The Geo Group 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 August 17, 2022
Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. 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. 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. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, Berkshire Hathaway (B shares), Bristol Myers Squibb, and Meta Platforms, Inc. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), 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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The real concern with private prison operators is the lack of access to capital as virtually every major bank has cut off the flow of money to Geo Group and CoreCivic. The prison operator also suspended its dividend during the early stages of the pandemic, and last year it terminated its status as a real estate investment trust. Even though Scion Asset Management's 13F filing with the Securities and Exchange Commission was published just this month, it's only a snapshot of what Burry's position was at the end of June.
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History shows bull markets follow bear markets and where a bear market lasts less than 10 months on average, bull markets tend to go on for more than four years. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, Berkshire Hathaway (B shares), Bristol Myers Squibb, and Meta Platforms, Inc. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple.
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Michael Burry, who was one of the main figures in the book The Big Short and its subsequent movie adaptation of the same name, recently sold every single stock his Scion Asset Management hedge fund owns and added just one -- private prison operator GEO Group (NYSE: GEO). Geo is a global operator, but 90% of its revenue comes from the U.S. Its stock got a big boost from Burry's bet, but there is concern about whether it can keep growing, as one of the first acts President Biden took upon entering the White House was to sign an executive order directing the Justice Department to not renew its contracts with private prison operators like Geo and rival CoreCivic. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple.
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History shows bull markets follow bear markets and where a bear market lasts less than 10 months on average, bull markets tend to go on for more than four years. He sold off a dozen positions and purchased just the one, GEO Group. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, Berkshire Hathaway (B shares), Bristol Myers Squibb, and Meta Platforms, Inc.
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19622.0
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2022-08-26 00:00:00 UTC
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3 Extremely Popular Robinhood Stocks That Warren Buffett Has Been Buying Hand Over Fist
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AAPL
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https://www.nasdaq.com/articles/3-extremely-popular-robinhood-stocks-that-warren-buffett-has-been-buying-hand-over-fist
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Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett and Vice Chairman Charlie Munger have been critical in the past of the popular online commission-free brokerage Robinhood Markets (NASDAQ: HOOD). At Berkshire's annual meeting in early 2021, Buffett said the popularity of the platform was "a very significant part of the casino aspect" that fueled the market last year.
But for all of that criticism, Berkshire in recent years has been buying several of the same stocks that are among Robinhood users' 100 most popular holdings. And Berkshire hasn't just been making small purchases, it's been buying these stocks hand over fist. That suggests not all Robinhood users are necessarily gambling with their picks. Let's take a look at three stocks popular with Buffett and with Robinhood account holders.
1. Apple
The consumer tech giant Apple (NASDAQ: AAPL) is the second-most commonly held stock by Robinhood users, according to the site. It also happens to be the largest position in Berkshire's portfolio by far, making up more than 42% of the company's roughly $363 billion equities portfolio.
Berkshire in the second quarter of this year purchased another 3.9 million shares of Apple and at the end of the quarter owned 894.8 million shares, which are currently valued at close to $150 billion. That gives Berkshire a nearly 5.6% stake in the company.
One of the reasons Buffett likes Apple is because of its extraordinary brand power, which gives it the ability to pass higher costs associated with making products onto its customer base without too much pushback. This makes Apple unique because it's a growth tech stock that can also hedge inflation to a certain extent. Apple's stock is only down about 4.7% this year, which compares favorably to the Nasdaq Composite, which is down nearly 19.8% this year. The company also continues to buy back a ton of stock, which we know Buffett and Berkshire love.
2. Bank of America
Bank stocks are not exactly popular among retail traders but further down on Robinhood's list of popular stocks is the second-largest bank in the U.S., Bank of America (NYSE: BAC). During the early months of the pandemic, as Berkshire was selling many of its large bank stocks, the conglomerate plowed more than $2 billion into Bank of America in 12 days.
Clearly, Buffett is happy with how CEO Brian Moynihan has turned the bank around following its struggles during the Great Recession. Berkshire now owns more than 1 billion shares of Bank of America, which are currently valued at more than $34.8 billion. Bank of America now makes up almost 10% of Berkshire's portfolio.
Bank of America has amassed a very large and sticky deposit base. Coupled with its large commercial lending portfolio, the bank is one of the largest beneficiaries of rising interest rates in the industry. Net interest income, the profit banks make on loans after funding those assets, has already begun to rise significantly and is expected to take off in the back half of this year, as well as in 2023, as the Federal Reserve continues to aggressively hike its benchmark overnight lending rate.
3. Berkshire Hathaway
Although it's lower on the list, Berkshire Hathaway also made Robinhood's list, and that's right, Berkshire has been buying up a lot of itself through share repurchases in recent years, signaling to the market that the company thinks it's undervalued.
While the company struggled to find stocks it wanted to invest in 2021, as the market was climbing at a rapid pace, Berkshire plowed $27 billion into share repurchases. Those have continued this year, although at a far slower rate, as Berkshire has returned to buying stocks after the market suffered the worst first half of the year in 2022 in five decades.
It turns out Buffett and Berkshire made the right decision. Class A shares of Berkshire are only down 2.7% this year, compared to the S&P 500, which is down nearly 13.7%. Berkshire owns a lot of different businesses, including insurance, railroads, mortgages, and energy that investors have found more stable and appealing during the intense market volatility.
Find out why Apple 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. Apple is on the list -- but there are nine others you may be overlooking.
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*Stock Advisor returns as of August 17, 2022
Bank of America is an advertising partner of The Ascent, a Motley Fool company. Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway (B shares). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), 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 The consumer tech giant Apple (NASDAQ: AAPL) is the second-most commonly held stock by Robinhood users, according to the site. One of the reasons Buffett likes Apple is because of its extraordinary brand power, which gives it the ability to pass higher costs associated with making products onto its customer base without too much pushback. Net interest income, the profit banks make on loans after funding those assets, has already begun to rise significantly and is expected to take off in the back half of this year, as well as in 2023, as the Federal Reserve continues to aggressively hike its benchmark overnight lending rate.
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Apple The consumer tech giant Apple (NASDAQ: AAPL) is the second-most commonly held stock by Robinhood users, according to the site. Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett and Vice Chairman Charlie Munger have been critical in the past of the popular online commission-free brokerage Robinhood Markets (NASDAQ: HOOD). Berkshire Hathaway Although it's lower on the list, Berkshire Hathaway also made Robinhood's list, and that's right, Berkshire has been buying up a lot of itself through share repurchases in recent years, signaling to the market that the company thinks it's undervalued.
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Apple The consumer tech giant Apple (NASDAQ: AAPL) is the second-most commonly held stock by Robinhood users, according to the site. Bank of America Bank stocks are not exactly popular among retail traders but further down on Robinhood's list of popular stocks is the second-largest bank in the U.S., Bank of America (NYSE: BAC). Berkshire Hathaway Although it's lower on the list, Berkshire Hathaway also made Robinhood's list, and that's right, Berkshire has been buying up a lot of itself through share repurchases in recent years, signaling to the market that the company thinks it's undervalued.
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Apple The consumer tech giant Apple (NASDAQ: AAPL) is the second-most commonly held stock by Robinhood users, according to the site. Bank of America now makes up almost 10% of Berkshire's portfolio. Berkshire Hathaway Although it's lower on the list, Berkshire Hathaway also made Robinhood's list, and that's right, Berkshire has been buying up a lot of itself through share repurchases in recent years, signaling to the market that the company thinks it's undervalued.
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19623.0
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2022-08-26 00:00:00 UTC
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Why Dividend Growth Stocks Should Be Part of Your Retirement Plan
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https://www.nasdaq.com/articles/why-dividend-growth-stocks-should-be-part-of-your-retirement-plan
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nan
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nan
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If you are saving for retirement, you should aim to include not just any dividend stocks, but stocks that regularly increase their payouts over time. They can add some important stability to your portfolio as they are normally safe businesses to hold and can pay off in the long haul -- just through their dividend payments.
Here's how the passive income you collect from these types of stocks can grow over time.
Rising dividend payments can add up over time
The real value in a dividend growth stock is that over the years, your dividend income can be much higher than it is today. For example, a company that increases its dividend payment by 5% each year for 25 years will have increased its dividend income by nearly 240%, more than three times what it is paying today.
Healthcare company AbbVie (NYSE: ABBV) is an example of a safe dividend stock to buy and hold, as the drugmaker has posted a profit margin of 22% over the past 12 months. It has also generated more than $22 billion in free cash flow during that time -- more than double the dividends it has paid out to its shareholders ($9.7 billion).
Today, AbbVie pays a dividend yield of 4%. If you were to invest $25,000 into the stock, you would be collecting approximately $1,000 in dividends on an annual basis.
That's a decent chunk of change, but it can be much more significant later on. That's because the stock is a Dividend King, meaning the business has increased its dividend payments for at least 50 years in a row. In just five years, its quarterly dividend payments have more than doubled.
Its most recent increase was an 8% bump-up in the quarterly dividend, from $1.30 to $1.41. If the company were to continue growing its dividend payments by 8% per year, here's how much dividend income an investor would be collecting on a $25,000 investment in AbbVie.
Data source: Chart by author.
After 25 years of increases, the dividend income would total more than $6,800 per year and be more than 27% of your original investment, as shown in the chart.
YEAR QUARTERLY DIVIDEND ANNUAL DIVIDEND % OF ORIGINAL INVESTMENT
0 $251.79 $1,007.14 4.03%
5 $369.96 $1,479.82 5.92%
10 $543.59 $2,174.35 8.70%
15 $798.71 $3,194.83 12.78%
20 $1,173.56 $4,694.25 18.78%
25 $1,724.35 $6,897.39 27.59%
Data source: Chart by author.
If you were to have invested $100,000 in AbbVie, you could be generating about $27,000 annually just in dividend income after 25 years.
It's not just Dividend Kings you can consider but also businesses that are generating huge amounts of free cash flow, such as tech giant Apple (NASDAQ: AAPL), which has reported more than $107 billion in free cash over the past year. Its yield is modest at only 0.6% (the S&P 500 averages a payout of 1.5%), but Apple has increased its dividend payments by 46% in five years, and it could make more aggressive hikes in the future given its impressive financials.
Investors should diversify their holdings
It's difficult to predict a stock's future dividend, since payouts are discretionary and years from now, a business may not be as profitable as it is now. You can, however, minimize that risk by investing in stocks with impressive track records like AbbVie or in businesses that are gushing cash such as Apple.
But even then, it's impossible to know how much their dividend payments might increase over the long term. That's why investors should aim to buy many of these types of stocks to diversify.
Dividend growth stocks can generate a significant amount of passive income during your retirement years if you just buy and hold. That's why any long-term retirement plan should include them.
10 stocks we like better than AbbVie
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 AbbVie 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 August 17, 2022
David Jagielski 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.
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It's not just Dividend Kings you can consider but also businesses that are generating huge amounts of free cash flow, such as tech giant Apple (NASDAQ: AAPL), which has reported more than $107 billion in free cash over the past year. Healthcare company AbbVie (NYSE: ABBV) is an example of a safe dividend stock to buy and hold, as the drugmaker has posted a profit margin of 22% over the past 12 months. Its yield is modest at only 0.6% (the S&P 500 averages a payout of 1.5%), but Apple has increased its dividend payments by 46% in five years, and it could make more aggressive hikes in the future given its impressive financials.
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It's not just Dividend Kings you can consider but also businesses that are generating huge amounts of free cash flow, such as tech giant Apple (NASDAQ: AAPL), which has reported more than $107 billion in free cash over the past year. For example, a company that increases its dividend payment by 5% each year for 25 years will have increased its dividend income by nearly 240%, more than three times what it is paying today. Dividend growth stocks can generate a significant amount of passive income during your retirement years if you just buy and hold.
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It's not just Dividend Kings you can consider but also businesses that are generating huge amounts of free cash flow, such as tech giant Apple (NASDAQ: AAPL), which has reported more than $107 billion in free cash over the past year. Rising dividend payments can add up over time The real value in a dividend growth stock is that over the years, your dividend income can be much higher than it is today. For example, a company that increases its dividend payment by 5% each year for 25 years will have increased its dividend income by nearly 240%, more than three times what it is paying today.
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It's not just Dividend Kings you can consider but also businesses that are generating huge amounts of free cash flow, such as tech giant Apple (NASDAQ: AAPL), which has reported more than $107 billion in free cash over the past year. For example, a company that increases its dividend payment by 5% each year for 25 years will have increased its dividend income by nearly 240%, more than three times what it is paying today. If the company were to continue growing its dividend payments by 8% per year, here's how much dividend income an investor would be collecting on a $25,000 investment in AbbVie.
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19624.0
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2022-08-26 00:00:00 UTC
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4 Blue-Chip Stocks to Steady Your Portfolio in 2022
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AAPL
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https://www.nasdaq.com/articles/4-blue-chip-stocks-to-steady-your-portfolio-in-2022
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
I generally associate growth stocks with an adrenaline rush. On the other hand, blue-chip stocks provide a peaceful night’s sleep. With global markets remaining significantly volatile, I would prefer to go overweight on blue-chip stocks.
Blue-chip stocks offer two main advantages. First, these are low-beta stocks and therefore help in capital preservation. Second, these stocks provide investors with regular cash flow through dividends. Even if the stock remains sideways, dividends make the portfolio look better.
In current market conditions, it’s also not difficult to find undervalued blue-chip stocks. These stocks can also provide healthy capital gains when market sentiment reverses. This column includes such undervalued names.
CVX Chevron $163.70
COST Costco $546.67
AAPL Apple $169.10
PFE Pfizer $47.40
Chevron Corporation
Source: tishomir / Shutterstock.com
Warren Buffett has been a big buyer of oil and gas stocks in 2022. A key reason is the possibility of energy prices remaining firm in the coming years.
This will translate into robust cash flows for oil and gas companies. Among blue-chip stocks, Chevron (NYSE:CVX) is the top name to consider.
After a rally of 67% in the last 12 months, the stock has been in a consolidation mode. The 3.57% dividend yield stock is worth considering before the next rally.
From a credit perspective, Chevron reported net debt of 8.3% as of Q2 2022. The company also reported an operating cash flow of $13.3 billion for the quarter. With a strong balance sheet, the company is positioned for aggressive investments and sustained dividends.
As a matter of fact, Chevron has planned to invest $15 to $17 billion annually through 2026. This will ensure steady production and a healthy reserve replacement ratio. Overall, CVX stock seems like a long-term value creator.
Costco Wholesale
Source: ARTYOORAN / Shutterstock.com
Retail stocks corrected sharply in May 2022 as the result of concerns related to inflation and its impact on margins. However, Costco (NASDAQ:COST) stock witnessed a sharp recovery. A key reason is that the company continues to report numbers that are better than peers.
For the forty-eight weeks ended July 2022, Costco reported revenue of $205.2 billion. On a year-on-year basis, revenue growth was 16.4%. With e-commerce operations supporting growth, it’s likely that comparable store sales will remain robust.
Costco also has 116.6 million cardholders with a 92.3% renewal rate in U.S. and Canada. In the last twelve months, the company reported $4.1 billion in membership fees.
It’s likely that membership fees will continue to swell as the company expands in the U.S. and internationally. As an example, the company only has two warehouses in China so far.
In terms of shareholder returns, Costco initiated dividends in May 2004. Through the years, the dividend has increased at a CAGR of 13%. With healthy growth in top line and a strong balance sheet, I expect dividend growth to sustain.
Apple (AAPL)
Source: dennizn / Shutterstock.com
In the technology space, Apple (NASDAQ:AAPL) is my choice among blue-chip stocks.
I believe that AAPL stock is attractive at a forward price-to-earnings ratio of 27.5. Further, with strong cash flows, dividend growth is likely in the coming years.
From a business perspective, the iPhone segment will remain the key cash flow driver. Steady growth momentum is likely with the increase in 5G phone sales. Also, Apple is diversified with segments like services and wearables increasingly contributing to top-line growth.
It’s also worth noting that Apple has a huge cash glut. This can be used for aggressive inorganic growth and entry into new segments. It seems probable that Apple will launch its electric car in 2024. This is a potential catalyst for the stock moving higher.
Overall, Apple has an innovation edge and that’s the key reason to remain bullish. After returns of 12% in the last 12 months, the stock seems to be poised for a bigger rally.
Pfizer (PFE)
Source: photobyphm / Shutterstock.com
I believe that Pfizer (NYSE:PFE) is the most undervalued name among pharmaceutical stocks. The blue-chip stock trades at a forward P/E of 7.5 and also offers a dividend yield of 3.25%.
I would not be surprised if PFE stock doubles in the next 24 months.
Pfizer reported windfall profits in 2021 on the back of covid-19 vaccine sales. The company reported free cash flow of $29 billion last year. On a relative basis, vaccine sales have decelerated in 2022.
However, there are two important points to note. First and foremost, Pfizer has a deep pipeline of drugs in various stages of clinical trials. These drug candidates provide revenue growth visibility.
For 2022, the company also plans research and development expenses of $12 billion. Big investments will help in accelerating the pipeline toward commercialization. Furthermore, Pfizer is utilizing the excess cash flows for acquisitions. This will further help in broadening the company’s portfolio.
Overall, PFE stock valuation indicates that the downside potential is capped from current levels. The upside potential is however significant and investors will continue to benefit from robust dividends.
On the date of publication, Faisal Humayun did not hold (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.
Faisal Humayun is a senior research analyst with 12 years of industry experience in the field of credit research, equity research and financial modeling. Faisal has authored over 1,500 stock specific articles with focus on the technology, energy and commodities sector.
The post 4 Blue-Chip Stocks to Steady Your Portfolio in 2022 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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CVX Chevron $163.70 COST Costco $546.67 AAPL Apple $169.10 PFE Pfizer $47.40 Chevron Corporation Source: tishomir / Shutterstock.com Warren Buffett has been a big buyer of oil and gas stocks in 2022. Apple (AAPL) Source: dennizn / Shutterstock.com In the technology space, Apple (NASDAQ:AAPL) is my choice among blue-chip stocks. I believe that AAPL stock is attractive at a forward price-to-earnings ratio of 27.5.
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CVX Chevron $163.70 COST Costco $546.67 AAPL Apple $169.10 PFE Pfizer $47.40 Chevron Corporation Source: tishomir / Shutterstock.com Warren Buffett has been a big buyer of oil and gas stocks in 2022. Apple (AAPL) Source: dennizn / Shutterstock.com In the technology space, Apple (NASDAQ:AAPL) is my choice among blue-chip stocks. I believe that AAPL stock is attractive at a forward price-to-earnings ratio of 27.5.
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CVX Chevron $163.70 COST Costco $546.67 AAPL Apple $169.10 PFE Pfizer $47.40 Chevron Corporation Source: tishomir / Shutterstock.com Warren Buffett has been a big buyer of oil and gas stocks in 2022. Apple (AAPL) Source: dennizn / Shutterstock.com In the technology space, Apple (NASDAQ:AAPL) is my choice among blue-chip stocks. I believe that AAPL stock is attractive at a forward price-to-earnings ratio of 27.5.
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Apple (AAPL) Source: dennizn / Shutterstock.com In the technology space, Apple (NASDAQ:AAPL) is my choice among blue-chip stocks. CVX Chevron $163.70 COST Costco $546.67 AAPL Apple $169.10 PFE Pfizer $47.40 Chevron Corporation Source: tishomir / Shutterstock.com Warren Buffett has been a big buyer of oil and gas stocks in 2022. I believe that AAPL stock is attractive at a forward price-to-earnings ratio of 27.5.
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19625.0
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2022-08-26 00:00:00 UTC
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Synopsys (SNPS) Boosts Shareholders' Wealth With $240M ASR Deal
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AAPL
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https://www.nasdaq.com/articles/synopsys-snps-boosts-shareholders-wealth-with-%24240m-asr-deal
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nan
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nan
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Synopsys Inc. SNPS recently announced that it would buy back $240 million worth of its common stocks under an accelerated share repurchase (“ASR”) program. This initiative not only reflects the California-based company’s sound financial position but also its sustained focus on enhancing shareholders’ wealth.
Synopsys entered into an agreement with Bank of America, N.A. Per the agreement, the company will initially receive approximately 535,000 shares, while the remaining shares will be received on or before Nov 18, 2022, depending on the completion of the purchase.
The number of shares to be repurchased during the stated period will be calculated based on Synopsys’ daily volume weighted average share price after adjusting for a discount.
The stock-buyback program at Synopsys has been in effect since 2002, and the allotted capital has been refilled depending on fund availability. However, SNPS is not obligated to buy back any specific number of shares, and the program might be terminated depending on the company’s decision.
Synopsys, Inc. Price and Consensus
Synopsys, Inc. price-consensus-chart | Synopsys, Inc. Quote
Synopsys completed its share-repurchase authorization through ASR arrangements. In the first three quarters of fiscal 2022, the company purchased $717 million worth of its common stock. Since 2015, it has bought back more than $3 billion of stocks.
Share repurchasing actions are a prudent way of maximizing shareholders’ wealth and generating more value. Hence, Synopsys’ latest stock-buyback program indicates its commitment to delivering a long-term shareholder value and reflects its confidence in the financial position and the ability to generate sufficient cash flows.
Speaking of Synopsys’ financial position, the company ended the third quarter of fiscal 2022 with cash and short-term investments of $1.53 billion. Also, it generated cash flow of $1.35 billion from operating activities during the first nine months of fiscal 2022.
Apart from strategic investments, a continued focus on shareholder-friendly initiatives should boost the company’s shares. Currently, Synopsys carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Companies that have a consistent record of returning value through share repurchases and dividend payouts are Apple AAPL, Cisco CSCO and Microsoft MSFT.
In fiscal 2021, Apple returned approximately $100.5 billion through dividend payouts ($14.5 billion) and share repurchases ($86 billion). Cisco bought back $7.7 billion of its common stock and paid $6.2 billion in dividends in fiscal 2022. Microsoft paid $18.1 billion in dividends and repurchased its common stock worth $32.7 billion in fiscal 2022.
Dividend and share repurchase initiatives likely raise the market value of the stock and enhance shareholder returns. Thus, companies boost investors’ confidence through share repurchases and dividend payouts, persuading them to either buy or hold the scrip.
Apple, Microsoft and Cisco each carry a Zacks Rank #3 (Hold). The long-term estimated earnings growth for AAPL, MSFT and CSCO is pegged at 12.7%, 11.7% and 6.5%, respectively.
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Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Cisco Systems, Inc. (CSCO): Free Stock Analysis Report
Synopsys, Inc. (SNPS): 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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Companies that have a consistent record of returning value through share repurchases and dividend payouts are Apple AAPL, Cisco CSCO and Microsoft MSFT. The long-term estimated earnings growth for AAPL, MSFT and CSCO is pegged at 12.7%, 11.7% and 6.5%, respectively. Apple Inc. (AAPL): Free Stock Analysis Report
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Companies that have a consistent record of returning value through share repurchases and dividend payouts are Apple AAPL, Cisco CSCO and Microsoft MSFT. The long-term estimated earnings growth for AAPL, MSFT and CSCO is pegged at 12.7%, 11.7% and 6.5%, respectively. Apple Inc. (AAPL): Free Stock Analysis Report
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Companies that have a consistent record of returning value through share repurchases and dividend payouts are Apple AAPL, Cisco CSCO and Microsoft MSFT. The long-term estimated earnings growth for AAPL, MSFT and CSCO is pegged at 12.7%, 11.7% and 6.5%, respectively. Apple Inc. (AAPL): Free Stock Analysis Report
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Companies that have a consistent record of returning value through share repurchases and dividend payouts are Apple AAPL, Cisco CSCO and Microsoft MSFT. The long-term estimated earnings growth for AAPL, MSFT and CSCO is pegged at 12.7%, 11.7% and 6.5%, respectively. Apple Inc. (AAPL): Free Stock Analysis Report
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19626.0
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2022-08-26 00:00:00 UTC
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Cheap Stocks Are Lurking Everywhere -- Don't Fall Into Their Trap
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AAPL
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https://www.nasdaq.com/articles/cheap-stocks-are-lurking-everywhere-dont-fall-into-their-trap
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nan
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nan
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At the beginning of the COVID-19 pandemic in early 2020, the stock market plunged. All three major indexes -- the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average -- fell 30%, 29%, and 34%, respectively, from mid-February to mid-March 2020. However, from then until the end of 2021, the stock market rallied and put on an impressive bull run. The S&P 500 increased 106%, the Nasdaq Composite increased 127%, and the Dow Jones increased 89%.
But then 2022 came, and reality in the form of a stock market correction hit. A stock market correction occurs when major indexes drop 10% to 20% (over 20% is considered a bear market). Although nobody likes seeing their portfolio value drop, stock market corrections can sometimes be good for long-term investors because great companies trade at lower prices.
However, investors need to look out for one thing during these times: value in disguise.
Image source: Getty Images.
Don't confuse price and value
Value investing is a strategy in which investors look for stocks priced below their intrinsic (or true) value, which is based more on a company's financials like revenue and profit. When investing in undervalued companies, investors hope one day the stock market prices the stock correctly, and they, at minimum, profit from that gain. For instance, if a stock is trading at $75 and a value investor believes its intrinsic value is $100, they would invest, hoping it reaches $100 and they could make a 33% return on investment.
Since stock prices in general have dropped in 2022, many more "cheap" stocks are out there -- cheap meaning strictly in price, not in value, and that's where some investors go wrong.
Just because a stock pice is low doesn't mean it's a good deal. There are overvalued $3 stocks, just as there can be undervalued $300 stocks. For example, it would be questionable for some penny stocks to be priced at $3. However, another stock might be undervalued by many investing standards even if it traded for $300 or even $3,000 per share. Stock price alone is irrelevant when trying to determine value.
Finding undervalued stocks
A great way to determine whether a stock is undervalued (or overvalued) is by looking at its price-to-earnings (P/E) ratio. You can find a company's P/E ratio by dividing its current stock price by its earnings per share (EPS). For example, if a stock is $200 and has an EPS of $10, its P/E ratio would be 20. This means if you buy a share, you're paying $20 for each $1 of the company's earnings.
The higher the P/E ratio, the more "expensive" a stock is, but you can't look at a company's P/E ratio by itself to determine value; you need to compare it to companies within the same industry. Some industries have P/E ratios that are naturally low or high, and if you make the mistake of comparing companies from different industries, you could get the wrong idea about a stock. You can't compare big oil to big banks, or big tech to big pharma. It needs to be apples to apples.
Microsoft has a P/E ratio of 28.6. If you compare that to Bank of America's 10.7 P/E ratio and Goldman Sachs' 7.6 P/E ratio, you'd think Microsoft was vastly overvalued. However, when you compare it to Apple's 27.6 P/E ratio, the comparison makes way more sense.
If a stock's P/E ratio is drastically lower than comparable companies, it's worth a closer look to see if it's undervalued.
It takes more time
Finding undervalued stocks isn't always easy or straightforward. If it were, many more investors would shift their focus there. Value investing takes more research than other "set-it-and-forget-it" strategies -- like investing in a few broad index funds -- which inevitably means it takes more time.
You don't have to spend hours every week going through financial statements (you can do a quick internet search and find a company's P/E ratio), but you will have to do more than just taking a stock's price at face value to determine worth. This extra bit of effort can pay off tremendously.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Apple, Goldman Sachs, 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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All three major indexes -- the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average -- fell 30%, 29%, and 34%, respectively, from mid-February to mid-March 2020. Although nobody likes seeing their portfolio value drop, stock market corrections can sometimes be good for long-term investors because great companies trade at lower prices. You don't have to spend hours every week going through financial statements (you can do a quick internet search and find a company's P/E ratio), but you will have to do more than just taking a stock's price at face value to determine worth.
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Although nobody likes seeing their portfolio value drop, stock market corrections can sometimes be good for long-term investors because great companies trade at lower prices. When investing in undervalued companies, investors hope one day the stock market prices the stock correctly, and they, at minimum, profit from that gain. The Motley Fool has positions in and recommends Apple, Goldman Sachs, and Microsoft.
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When investing in undervalued companies, investors hope one day the stock market prices the stock correctly, and they, at minimum, profit from that gain. Since stock prices in general have dropped in 2022, many more "cheap" stocks are out there -- cheap meaning strictly in price, not in value, and that's where some investors go wrong. Finding undervalued stocks A great way to determine whether a stock is undervalued (or overvalued) is by looking at its price-to-earnings (P/E) ratio.
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Although nobody likes seeing their portfolio value drop, stock market corrections can sometimes be good for long-term investors because great companies trade at lower prices. This means if you buy a share, you're paying $20 for each $1 of the company's earnings. The higher the P/E ratio, the more "expensive" a stock is, but you can't look at a company's P/E ratio by itself to determine value; you need to compare it to companies within the same industry.
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19627.0
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2022-08-26 00:00:00 UTC
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Is Trending Stock Apple Inc. (AAPL) a Buy Now?
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AAPL
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https://www.nasdaq.com/articles/is-trending-stock-apple-inc.-aapl-a-buy-now-1
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nan
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nan
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Apple (AAPL) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.
Shares of this maker of iPhones, iPads and other products have returned +8.1% over the past month versus the Zacks S&P 500 composite's +6.1% change. The Zacks Computer - Mini computers industry, to which Apple belongs, has gained 11.2% over this period. Now the key question is: Where could the stock be headed in the near term?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings Estimates
Here at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Apple is expected to post earnings of $1.25 per share for the current quarter, representing a year-over-year change of +0.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -4.9%.
The consensus earnings estimate of $6.10 for the current fiscal year indicates a year-over-year change of +8.7%. This estimate has changed +0.2% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $6.49 indicates a change of +6.3% from what Apple is expected to report a year ago. Over the past month, the estimate has changed -0.9%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Apple is rated Zacks Rank #3 (Hold).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Apple, the consensus sales estimate of $88.01 billion for the current quarter points to a year-over-year change of +5.6%. The $392.19 billion and $410.07 billion estimates for the current and next fiscal years indicate changes of +7.2% and +4.6%, respectively.
Last Reported Results and Surprise History
Apple reported revenues of $82.96 billion in the last reported quarter, representing a year-over-year change of +1.9%. EPS of $1.20 for the same period compares with $1.30 a year ago.
Compared to the Zacks Consensus Estimate of $81.99 billion, the reported revenues represent a surprise of +1.19%. The EPS surprise was +5.26%.
Over the last four quarters, Apple surpassed consensus EPS estimates three times. The company topped consensus revenue estimates three times over this period.
Valuation
Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Apple is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Apple. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
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
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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Apple (AAPL) has recently been on Zacks.com's list of the most searched stocks. Apple Inc. (AAPL): Free Stock Analysis Report We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends.
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Apple (AAPL) has recently been on Zacks.com's list of the most searched stocks. Apple Inc. (AAPL): Free Stock Analysis Report For the next fiscal year, the consensus earnings estimate of $6.49 indicates a change of +6.3% from what Apple is expected to report a year ago.
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Apple (AAPL) has recently been on Zacks.com's list of the most searched stocks. Apple Inc. (AAPL): Free Stock Analysis Report Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions.
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Apple (AAPL) has recently been on Zacks.com's list of the most searched stocks. Apple Inc. (AAPL): Free Stock Analysis Report And if earnings estimates go up for a company, the fair value for its stock goes up.
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19628.0
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2022-08-25 00:00:00 UTC
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US STOCKS-Nasdaq ends sharply up, fueled by Nvidia and Amazon
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AAPL
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https://www.nasdaq.com/articles/us-stocks-nasdaq-ends-sharply-up-fueled-by-nvidia-and-amazon
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nan
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nan
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By Noel Randewich and Bansari Mayur Kamdar
Aug 25 (Reuters) - The Nasdaq ended sharply higher on Thursday, lifted by gains in Nvidia and other technology-related stocks as investors focused on the Federal Reserve's Jackson Hole conference for clues about the central bank's policy outlook.
Fed Chair Jerome Powell is due to give a speech on Friday that investors will dissect for indications of how aggressively the Fed may move to raise interest rates as it battles decades-high inflation.
"We're in a period of time between the end of the second-quarter earnings season and meaningful additional data from the Federal Reserve. Markets are churning a bit with a reasonably low level of volatility," said Bill Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis.
The yield on the closely watched 10-year Treasury note US10YT=RR faded after recently hitting a two-month high. Declining interest rates tend to benefit technology stocks trading at high valuations.
"Lower interest rates have certainly put some support underneath some of the more growth-oriented sectors," Northey said.
Nvidia NVDA.O rose after the graphics chipmaker gave a weaker-than-expected quarterly forecast that many investors viewed as signaling the worst of a sales downturn may be over. That drove a rally in the Philadelphia semiconductor index .SOX.
Apple AAPL.O, Amazon AMZN.O and Google-owner Alphabet GOOGL.O also rose, making substantial contributions to the Nasdaq's increase.
Data earlier in the day showed the U.S. economy contracted less than initially thought in the second quarter, dispelling some fears that a recession was underway.
Traders see a slightly greater likelihood of a third 75-basis-point interest hike from the Fed at its policy meeting next month, compared with a 50-basis-point increase. FEDWATCH
Fed officials on Thursday were noncommittal about the size of the interest rate increase they plan to approve at their Sept. 20-21 meeting, but they continued hammering the point that rates will rise and stay high until such high rates of inflation have been squeezed from the economy.
Electric-vehicle maker Tesla Inc TSLA.O slid after a 3-for-1 stock split came into effect.
According to preliminary data, the S&P 500 .SPX gained 59.77 points, or 1.44%, to end at 4,200.54 points, while the Nasdaq Composite .IXIC gained 206.15 points, or 1.69%, to 12,641.26. The Dow Jones Industrial Average .DJI rose 332.74 points, or 1.01%, to 33,298.67.
Following Thurday's rally, the S&P 500 remains down about 12% in 2022, while the Nasdaq is down about 20%.
Citigroup Inc C.N climbed after saying it plans to close its consumer and commercial banking businesses in Russia starting this quarter.
Salesforce Inc CRM.N fell after it cut its annual forecasts over "measured" spending from clients and a hit from a stronger dollar.
Additional chipmakers rallying on Thursday included Advanced Micro Devices AMD.O and Broadcom AVGO.O.
Wall Street's busiest tradeshttps://tmsnrt.rs/3ww2xId
(Reporting by Bansari Mayur Kamdar, Devik Jain and Chavi Mehta in Bengaluru and by Noel Randewich in Oakland, Calif.; Editing by Maju Samuel, Aditya Soni and Grant McCool)
((noel.randewich@tr.com; Twitter: @randewich))
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, Amazon AMZN.O and Google-owner Alphabet GOOGL.O also rose, making substantial contributions to the Nasdaq's increase. By Noel Randewich and Bansari Mayur Kamdar Aug 25 (Reuters) - The Nasdaq ended sharply higher on Thursday, lifted by gains in Nvidia and other technology-related stocks as investors focused on the Federal Reserve's Jackson Hole conference for clues about the central bank's policy outlook. Markets are churning a bit with a reasonably low level of volatility," said Bill Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis.
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Apple AAPL.O, Amazon AMZN.O and Google-owner Alphabet GOOGL.O also rose, making substantial contributions to the Nasdaq's increase. By Noel Randewich and Bansari Mayur Kamdar Aug 25 (Reuters) - The Nasdaq ended sharply higher on Thursday, lifted by gains in Nvidia and other technology-related stocks as investors focused on the Federal Reserve's Jackson Hole conference for clues about the central bank's policy outlook. Nvidia NVDA.O rose after the graphics chipmaker gave a weaker-than-expected quarterly forecast that many investors viewed as signaling the worst of a sales downturn may be over.
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Apple AAPL.O, Amazon AMZN.O and Google-owner Alphabet GOOGL.O also rose, making substantial contributions to the Nasdaq's increase. By Noel Randewich and Bansari Mayur Kamdar Aug 25 (Reuters) - The Nasdaq ended sharply higher on Thursday, lifted by gains in Nvidia and other technology-related stocks as investors focused on the Federal Reserve's Jackson Hole conference for clues about the central bank's policy outlook. FEDWATCH Fed officials on Thursday were noncommittal about the size of the interest rate increase they plan to approve at their Sept. 20-21 meeting, but they continued hammering the point that rates will rise and stay high until such high rates of inflation have been squeezed from the economy.
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Apple AAPL.O, Amazon AMZN.O and Google-owner Alphabet GOOGL.O also rose, making substantial contributions to the Nasdaq's increase. FEDWATCH Fed officials on Thursday were noncommittal about the size of the interest rate increase they plan to approve at their Sept. 20-21 meeting, but they continued hammering the point that rates will rise and stay high until such high rates of inflation have been squeezed from the economy. According to preliminary data, the S&P 500 .SPX gained 59.77 points, or 1.44%, to end at 4,200.54 points, while the Nasdaq Composite .IXIC gained 206.15 points, or 1.69%, to 12,641.26.
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19629.0
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2022-08-25 00:00:00 UTC
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US STOCKS-Nasdaq rallies, fueled by Nvidia and Amazon
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AAPL
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https://www.nasdaq.com/articles/us-stocks-nasdaq-rallies-fueled-by-nvidia-and-amazon
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nan
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nan
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By Noel Randewich and Bansari Mayur Kamdar
Aug 25 (Reuters) - The Nasdaq rallied on Thursday, lifted by gains in Nvidia and other technology-related stocks as investors focused on the Federal Reserve's Jackson Hole conference for clues about the central bank's policy outlook.
Fed Chair Jerome Powell is due to give a speech on Friday that investors will dissect for indications of how aggressively the Fed may move to raise interest rates as it battles decades-high inflation.
"We're in a period of time between the end of the second-quarter earnings season and meaningful additional data from the Federal Reserve. Markets are churning a bit with a reasonably low level of volatility," said Bill Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis.
The yield on the closely watched 10-year Treasury note US10YT=RR faded after recently hitting a two-month high. Declining interest rates tend to benefit technology stocks trading at high valuations.
"Lower interest rates have certainly put some support underneath some of the more growth-oriented sectors," Northey said.
Nvidia NVDA.O rose 2.8% after the chipmaker gave a weaker-than-expected quarterly forecast that many investors viewed as signaling the worst of a sales downturn may be over. That drove a 2.9% rally in the Philadelphia semiconductor index .SOX.
Apple AAPL.O, Amazon AMZN.O and Google-owner Alphabet GOOGL.O rose more than 1% each, and they all made substantial contributions to the Nasdaq's increase.
Data earlier in the day showed the U.S. economy contracted less than initially thought in the second quarter, dispelling some fears that a recession was underway.
Traders see a slightly greater likelihood of a third 75-basis-point interest hike from the Fed at its policy meeting next month, compared with a 50-basis-point increase. FEDWATCH
Fed officials on Thursday were noncommittal about the size of the interest rate increase they plan to approve at their Sept. 20-21 meeting, but they continued hammering the point that rates will rise and stay high until such high rates of inflation has been squeezed from the economy.
Electric-vehicle maker Tesla Inc TSLA.O slid almost 1% after its 3-for-1 stock split came into effect.
In afternoon trading, the S&P 500 was up 0.79% at 4,173.32 points.
The Nasdaq gained 1.12% to 12,570.65 points, while the Dow Jones Industrial Average was up 0.37% at 33,091.39 points.
Of the 11 S&P 500 sector indexes, nine rose, led by communication services .SPLRCL, up 1.49%, followed by a 1.42% gain in materials .SPLRCM.
Citigroup Inc C.N rose 2% after saying it plans to close its consumer and commercial banking businesses in Russia starting this quarter.
Salesforce Inc CRM.N fell 4.6% after it cut its annual forecasts over "measured" spending from clients and a hit from a stronger dollar.
Additional chipmakers rising on Thursday included Advanced Micro Devices AMD.O, up 4.3%, and Broadcom AVGO.O, gaining 2.8%.
Advancing issues outnumbered falling ones within the S&P 500 .AD.SPX by a 4.2-to-one ratio.
The S&P 500 posted 3 new highs and 29 new lows; the Nasdaq recorded 47 new highs and 58 new lows.
(Reporting by Bansari Mayur Kamdar, Devik Jain and Chavi Mehta in Bengaluru and by Noel Randewich in Oakland, Calif.; Editing by Maju Samuel, Aditya Soni and Grant McCool)
((noel.randewich@tr.com; Twitter: @randewich))
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, Amazon AMZN.O and Google-owner Alphabet GOOGL.O rose more than 1% each, and they all made substantial contributions to the Nasdaq's increase. By Noel Randewich and Bansari Mayur Kamdar Aug 25 (Reuters) - The Nasdaq rallied on Thursday, lifted by gains in Nvidia and other technology-related stocks as investors focused on the Federal Reserve's Jackson Hole conference for clues about the central bank's policy outlook. Markets are churning a bit with a reasonably low level of volatility," said Bill Northey, senior investment director at U.S. Bank Wealth Management in Minneapolis.
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Apple AAPL.O, Amazon AMZN.O and Google-owner Alphabet GOOGL.O rose more than 1% each, and they all made substantial contributions to the Nasdaq's increase. By Noel Randewich and Bansari Mayur Kamdar Aug 25 (Reuters) - The Nasdaq rallied on Thursday, lifted by gains in Nvidia and other technology-related stocks as investors focused on the Federal Reserve's Jackson Hole conference for clues about the central bank's policy outlook. Nvidia NVDA.O rose 2.8% after the chipmaker gave a weaker-than-expected quarterly forecast that many investors viewed as signaling the worst of a sales downturn may be over.
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Apple AAPL.O, Amazon AMZN.O and Google-owner Alphabet GOOGL.O rose more than 1% each, and they all made substantial contributions to the Nasdaq's increase. By Noel Randewich and Bansari Mayur Kamdar Aug 25 (Reuters) - The Nasdaq rallied on Thursday, lifted by gains in Nvidia and other technology-related stocks as investors focused on the Federal Reserve's Jackson Hole conference for clues about the central bank's policy outlook. FEDWATCH Fed officials on Thursday were noncommittal about the size of the interest rate increase they plan to approve at their Sept. 20-21 meeting, but they continued hammering the point that rates will rise and stay high until such high rates of inflation has been squeezed from the economy.
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Apple AAPL.O, Amazon AMZN.O and Google-owner Alphabet GOOGL.O rose more than 1% each, and they all made substantial contributions to the Nasdaq's increase. FEDWATCH Fed officials on Thursday were noncommittal about the size of the interest rate increase they plan to approve at their Sept. 20-21 meeting, but they continued hammering the point that rates will rise and stay high until such high rates of inflation has been squeezed from the economy. Of the 11 S&P 500 sector indexes, nine rose, led by communication services .SPLRCL, up 1.49%, followed by a 1.42% gain in materials .SPLRCM.
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2022-08-25 00:00:00 UTC
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Dell revenue growth slows on strong dollar, China lockdowns
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https://www.nasdaq.com/articles/dell-revenue-growth-slows-on-strong-dollar-china-lockdowns-0
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Adds share movement, details on adjusted profit
Aug 25 (Reuters) - Dell Technologies Inc DELL.N posted its slowest revenue growth in six quarters on Thursday as a surge in the dollar and COVID-19 flare-ups in major market China offset a jump in its enterprise-focused business.
Shares of the company fell more than 7% in extended trading.
The greenback surge has this year eaten into the earnings of technology firms from Microsoft Inc MSFT.O to Apple Inc AAPL.O, compounding pressure from a drop in consumer spending on electronics such as personal computers and smartphones.
Dell's revenue rose 9% to $26.43 billion in the quarter to July 29 and was roughly in line with market expectations, according to Refinitiv data.
Consumer revenue fell 9%, echoing weakness seen at Intel Corp INTC.O and Lenovo Group 0992.HK as demand weakened after a pandemic-fueled boom and decades-high inflation prompted consumers to prioritize essentials.
But orders from businesses gearing up for the hybrid-work era pushed Dell's commercial revenue up by 15% to $12.1 billion. The storage and servers-focused unit also posted strong growth.
Net income from continuing operations fell to $506 million, from $629 million a year ago.
Excluding items, Dell earned $1.68 per share.
(Reporting by Eva Mathews in Bengaluru; Editing by Aditya Soni)
((Eva.Mathews@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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The greenback surge has this year eaten into the earnings of technology firms from Microsoft Inc MSFT.O to Apple Inc AAPL.O, compounding pressure from a drop in consumer spending on electronics such as personal computers and smartphones. Adds share movement, details on adjusted profit Aug 25 (Reuters) - Dell Technologies Inc DELL.N posted its slowest revenue growth in six quarters on Thursday as a surge in the dollar and COVID-19 flare-ups in major market China offset a jump in its enterprise-focused business. Dell's revenue rose 9% to $26.43 billion in the quarter to July 29 and was roughly in line with market expectations, according to Refinitiv data.
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The greenback surge has this year eaten into the earnings of technology firms from Microsoft Inc MSFT.O to Apple Inc AAPL.O, compounding pressure from a drop in consumer spending on electronics such as personal computers and smartphones. Adds share movement, details on adjusted profit Aug 25 (Reuters) - Dell Technologies Inc DELL.N posted its slowest revenue growth in six quarters on Thursday as a surge in the dollar and COVID-19 flare-ups in major market China offset a jump in its enterprise-focused business. Consumer revenue fell 9%, echoing weakness seen at Intel Corp INTC.O and Lenovo Group 0992.HK as demand weakened after a pandemic-fueled boom and decades-high inflation prompted consumers to prioritize essentials.
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The greenback surge has this year eaten into the earnings of technology firms from Microsoft Inc MSFT.O to Apple Inc AAPL.O, compounding pressure from a drop in consumer spending on electronics such as personal computers and smartphones. Adds share movement, details on adjusted profit Aug 25 (Reuters) - Dell Technologies Inc DELL.N posted its slowest revenue growth in six quarters on Thursday as a surge in the dollar and COVID-19 flare-ups in major market China offset a jump in its enterprise-focused business. Consumer revenue fell 9%, echoing weakness seen at Intel Corp INTC.O and Lenovo Group 0992.HK as demand weakened after a pandemic-fueled boom and decades-high inflation prompted consumers to prioritize essentials.
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The greenback surge has this year eaten into the earnings of technology firms from Microsoft Inc MSFT.O to Apple Inc AAPL.O, compounding pressure from a drop in consumer spending on electronics such as personal computers and smartphones. Adds share movement, details on adjusted profit Aug 25 (Reuters) - Dell Technologies Inc DELL.N posted its slowest revenue growth in six quarters on Thursday as a surge in the dollar and COVID-19 flare-ups in major market China offset a jump in its enterprise-focused business. Shares of the company fell more than 7% in extended trading.
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2022-08-25 00:00:00 UTC
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Dell revenue growth slows on strong dollar, China lockdowns
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https://www.nasdaq.com/articles/dell-revenue-growth-slows-on-strong-dollar-china-lockdowns
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Aug 25 (Reuters) - Dell Technologies Inc DELL.N posted its slowest revenue growth in six quarters on Thursday as a surge in the dollar and COVID-19 flare-ups in major market China offset a jump in its enterprise-focused business.
The greenback surge has this year eaten into the earnings of technology firms from Microsoft Inc MSFT.O to Apple Inc AAPL.O, compounding pressure from a drop in consumer spending on electronics such as personal computers and smartphones.
Dell's revenue rose 9% to $26.43 billion in the quarter to July 29 and was roughly in line with market expectations, according to Refinitiv data.
Consumer revenue fell 9%, echoing weakness seen at Intel Corp INTC.O to Lenovo Group 0992.HK as demand weakened after a pandemic-fueled boom and decades-high inflation prompted consumers to prioritize essentials.
But strong orders from businesses gearing up for the hybrid-work era pushed up Dell's commercial revenue by 15% to $12.1 billion. The business focused on storage and servers also posted strong growth.
Net income from continuing operations fell to $506 million, from $629 million a year ago.
(Reporting by Eva Mathews in Bengaluru; Editing by Aditya Soni)
((Eva.Mathews@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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The greenback surge has this year eaten into the earnings of technology firms from Microsoft Inc MSFT.O to Apple Inc AAPL.O, compounding pressure from a drop in consumer spending on electronics such as personal computers and smartphones. Aug 25 (Reuters) - Dell Technologies Inc DELL.N posted its slowest revenue growth in six quarters on Thursday as a surge in the dollar and COVID-19 flare-ups in major market China offset a jump in its enterprise-focused business. Dell's revenue rose 9% to $26.43 billion in the quarter to July 29 and was roughly in line with market expectations, according to Refinitiv data.
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The greenback surge has this year eaten into the earnings of technology firms from Microsoft Inc MSFT.O to Apple Inc AAPL.O, compounding pressure from a drop in consumer spending on electronics such as personal computers and smartphones. Aug 25 (Reuters) - Dell Technologies Inc DELL.N posted its slowest revenue growth in six quarters on Thursday as a surge in the dollar and COVID-19 flare-ups in major market China offset a jump in its enterprise-focused business. Consumer revenue fell 9%, echoing weakness seen at Intel Corp INTC.O to Lenovo Group 0992.HK as demand weakened after a pandemic-fueled boom and decades-high inflation prompted consumers to prioritize essentials.
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The greenback surge has this year eaten into the earnings of technology firms from Microsoft Inc MSFT.O to Apple Inc AAPL.O, compounding pressure from a drop in consumer spending on electronics such as personal computers and smartphones. Aug 25 (Reuters) - Dell Technologies Inc DELL.N posted its slowest revenue growth in six quarters on Thursday as a surge in the dollar and COVID-19 flare-ups in major market China offset a jump in its enterprise-focused business. Consumer revenue fell 9%, echoing weakness seen at Intel Corp INTC.O to Lenovo Group 0992.HK as demand weakened after a pandemic-fueled boom and decades-high inflation prompted consumers to prioritize essentials.
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The greenback surge has this year eaten into the earnings of technology firms from Microsoft Inc MSFT.O to Apple Inc AAPL.O, compounding pressure from a drop in consumer spending on electronics such as personal computers and smartphones. Aug 25 (Reuters) - Dell Technologies Inc DELL.N posted its slowest revenue growth in six quarters on Thursday as a surge in the dollar and COVID-19 flare-ups in major market China offset a jump in its enterprise-focused business. Dell's revenue rose 9% to $26.43 billion in the quarter to July 29 and was roughly in line with market expectations, according to Refinitiv data.
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19632.0
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2022-08-25 00:00:00 UTC
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Twitter tunes in to podcasts through Spaces
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AAPL
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https://www.nasdaq.com/articles/twitter-tunes-in-to-podcasts-through-spaces
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Aug 25 (Reuters) - Twitter Inc TWTR.N is adding podcasts to a test version of its audio chat room Spaces, entering a space dominated by Spotify Technology SPOT.N and Apple Inc AAPL.O.
The social media firm said on Thursday the feature would be available to a random group of users who can listen to full shows through curated playlists based on their interests, initially only in English. (https://bit.ly/3Agti4s)
Podcasts will be integrated into Twitter Spaces, which launched in 2020 after the success of social audio chat app Clubhouse during the pandemic.
Podcasts boomed in the past two years when people stuck indoors because of COVID-19 curbs turned to them for content ranging from breaking news to true-crime documentaries.
Wall Street is also optimistic about the long-term potential of the format as podcasts engage listeners for hours, creating valuable advertising opportunities.
(Reporting by Eva Mathews in Bengaluru; Editing by Aditya Soni)
((Eva.Mathews@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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Aug 25 (Reuters) - Twitter Inc TWTR.N is adding podcasts to a test version of its audio chat room Spaces, entering a space dominated by Spotify Technology SPOT.N and Apple Inc AAPL.O. The social media firm said on Thursday the feature would be available to a random group of users who can listen to full shows through curated playlists based on their interests, initially only in English. Podcasts boomed in the past two years when people stuck indoors because of COVID-19 curbs turned to them for content ranging from breaking news to true-crime documentaries.
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Aug 25 (Reuters) - Twitter Inc TWTR.N is adding podcasts to a test version of its audio chat room Spaces, entering a space dominated by Spotify Technology SPOT.N and Apple Inc AAPL.O. (https://bit.ly/3Agti4s) Podcasts will be integrated into Twitter Spaces, which launched in 2020 after the success of social audio chat app Clubhouse during the pandemic. Wall Street is also optimistic about the long-term potential of the format as podcasts engage listeners for hours, creating valuable advertising opportunities.
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Aug 25 (Reuters) - Twitter Inc TWTR.N is adding podcasts to a test version of its audio chat room Spaces, entering a space dominated by Spotify Technology SPOT.N and Apple Inc AAPL.O. (https://bit.ly/3Agti4s) Podcasts will be integrated into Twitter Spaces, which launched in 2020 after the success of social audio chat app Clubhouse during the pandemic. (Reporting by Eva Mathews in Bengaluru; Editing by Aditya Soni) ((Eva.Mathews@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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Aug 25 (Reuters) - Twitter Inc TWTR.N is adding podcasts to a test version of its audio chat room Spaces, entering a space dominated by Spotify Technology SPOT.N and Apple Inc AAPL.O. The social media firm said on Thursday the feature would be available to a random group of users who can listen to full shows through curated playlists based on their interests, initially only in English. (https://bit.ly/3Agti4s) Podcasts will be integrated into Twitter Spaces, which launched in 2020 after the success of social audio chat app Clubhouse during the pandemic.
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2022-08-25 00:00:00 UTC
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Billionaire Och sues former firm Sculptor over escalating CEO pay
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https://www.nasdaq.com/articles/billionaire-och-sues-former-firm-sculptor-over-escalating-ceo-pay-0
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By Jonathan Stempel
NEW YORK, Aug 25 (Reuters) - The billionaire Daniel Och has sued Sculptor Capital Management Inc, accusing the asset manager he helped found of letting its chief executive officer wield his power over its board to extract "ever-escalating" pay despite subpar performance.
In a complaint filed on Wednesday in Delaware Chancery Court, Och said James Levin was paid $145.8 million in 2021, more than most other CEOs including Apple's AAPL.O Tim Cook, Goldman Sachs' GS.N David Solomon and JPMorgan Chase's JPM.N Jamie Dimon.
Och said Sculptor's annual revenue of $626 million "cannot possibly justify" making his protege the country's 14th highest-paid CEO, while the firm's stock price lags many peers and its funds suffer from "less than mediocre" performance.
According to the complaint by Och and four of Sculptor's other "original and largest shareholders," Levin's pay was 17.7 times the median of Sculptor's peers, as measured by proxy advisory firm Institutional Shareholder Services.
The lawsuit seeks books and records concerning Levin's pay, to assess whether there were breaches of fiduciary duty related to mismanagement and waste, and whether Sculptor's board was truly independent.
According to an April regulatory filing, Levin and Och are among Sculptor's largest shareholders, and controlled a respective 20.2% and 14.4% of its voting power.
Sculptor said Levin deserved pay that is "more competitive" with that of privately held alternative asset managers.
"Mr. Och's filing is misleading and full of falsehoods that present a grossly distorted view of board governance at the company," Sculptor said in a statement. "We look forward to setting the record straight through the legal process."
Sculptor also accused Och of holding a "grudge" against its leadership following his "acrimonious separation" from the company.
The lawsuit was reported earlier by the Financial Times. Och is worth $3.9 billion, according to Forbes magazine.
Once known as Och-Ziff Capital Management, Sculptor is one of only a handful of publicly traded hedge fund companies, overseeing about $36.8 billion of assets as of July 1.
Its stock price has fallen 56% this year, leaving it with a market value of about $552 million on Wednesday, according to Refinitiv.
Levin, who is known as Jimmy, joined Sculptor in 2006, and became CEO last year. He is also the New York-based firm's chief investment officer.
One Sculptor director, Morgan Rutman, resigned early this year in protest over Levin's pay.
Sculptor changed its name in 2019, three years after Och-Ziff reached a $412 million settlement of U.S. probes into alleged bribery to win business in five African countries.
Och said he requested the name change, which occurred after he retired as board chairman.
The case is Och et al v Sculptor Capital Management Inc, Delaware Chancery Court, No. 2022-0748.
(Reporting by Jonathan Stempel in New York; Editing by Leslie Adler and Cynthia Osterman)
((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters Messaging: jon.stempel.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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In a complaint filed on Wednesday in Delaware Chancery Court, Och said James Levin was paid $145.8 million in 2021, more than most other CEOs including Apple's AAPL.O Tim Cook, Goldman Sachs' GS.N David Solomon and JPMorgan Chase's JPM.N Jamie Dimon. Och said Sculptor's annual revenue of $626 million "cannot possibly justify" making his protege the country's 14th highest-paid CEO, while the firm's stock price lags many peers and its funds suffer from "less than mediocre" performance. The lawsuit seeks books and records concerning Levin's pay, to assess whether there were breaches of fiduciary duty related to mismanagement and waste, and whether Sculptor's board was truly independent.
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In a complaint filed on Wednesday in Delaware Chancery Court, Och said James Levin was paid $145.8 million in 2021, more than most other CEOs including Apple's AAPL.O Tim Cook, Goldman Sachs' GS.N David Solomon and JPMorgan Chase's JPM.N Jamie Dimon. By Jonathan Stempel NEW YORK, Aug 25 (Reuters) - The billionaire Daniel Och has sued Sculptor Capital Management Inc, accusing the asset manager he helped found of letting its chief executive officer wield his power over its board to extract "ever-escalating" pay despite subpar performance. According to the complaint by Och and four of Sculptor's other "original and largest shareholders," Levin's pay was 17.7 times the median of Sculptor's peers, as measured by proxy advisory firm Institutional Shareholder Services.
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In a complaint filed on Wednesday in Delaware Chancery Court, Och said James Levin was paid $145.8 million in 2021, more than most other CEOs including Apple's AAPL.O Tim Cook, Goldman Sachs' GS.N David Solomon and JPMorgan Chase's JPM.N Jamie Dimon. By Jonathan Stempel NEW YORK, Aug 25 (Reuters) - The billionaire Daniel Och has sued Sculptor Capital Management Inc, accusing the asset manager he helped found of letting its chief executive officer wield his power over its board to extract "ever-escalating" pay despite subpar performance. Och said Sculptor's annual revenue of $626 million "cannot possibly justify" making his protege the country's 14th highest-paid CEO, while the firm's stock price lags many peers and its funds suffer from "less than mediocre" performance.
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In a complaint filed on Wednesday in Delaware Chancery Court, Och said James Levin was paid $145.8 million in 2021, more than most other CEOs including Apple's AAPL.O Tim Cook, Goldman Sachs' GS.N David Solomon and JPMorgan Chase's JPM.N Jamie Dimon. By Jonathan Stempel NEW YORK, Aug 25 (Reuters) - The billionaire Daniel Och has sued Sculptor Capital Management Inc, accusing the asset manager he helped found of letting its chief executive officer wield his power over its board to extract "ever-escalating" pay despite subpar performance. Once known as Och-Ziff Capital Management, Sculptor is one of only a handful of publicly traded hedge fund companies, overseeing about $36.8 billion of assets as of July 1.
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2022-08-25 00:00:00 UTC
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Best Stocks To Buy Today? 3 Dow 30 Stocks To Watch
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https://www.nasdaq.com/articles/best-stocks-to-buy-today-3-dow-30-stocks-to-watch
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Are These The Best Dow 30 Stocks To Invest In Right Now?
Dow 30 stocks are the thirty stocks that make up the Dow Jones Industrial Average (DJIA), which is one of the oldest and most well-known stock market indices in the world. The DJIA is a price-weighted index, which means that it is based on the prices of the Dow 30 stocks, rather than their market capitalization. The Dow 30 stocks are typically large, publicly traded companies that are leaders in their respective industries.
Although the composition of the Dow 30 has changed over time, it currently includes companies such as Apple Inc. (NASDAQ: AAPL), Boeing (NYSE: BA), Chevron (NYSE: CVX), Visa (NYSE: V), and Amgen Inc. (NASDAQ: AMGN) among others. These companies are widely viewed as safe and stable investments, and they often have high dividend yields. As a result, the Dow 30 is often used as a benchmark for other stock indices and investment portfolios. With that being said, here are three top Dow 30 stocks to check out in the stock market today.
Dow 30 Stocks To Watch In The Stock Market Today
Salesforce Inc. (NYSE: CRM)
Honeywell International Inc. (NYSE: HON)
American Express Company (NYSE: AXP)
Salesforce (CRM Stock)
Starting off the list today, Salesforce Inc. is a cloud-based software company that specializes in customer relationship management (CRM). In recent years, Salesforce has expanded beyond CRM, offering a range of enterprise software solutions. This week, CRM stock is in the headlines today, after the company reported better-than-expected second-quarter 2023 financial results. Though, the company revised its full-year outlook.
In detail, Salesforce reported 2nd quarter 2022 earnings per share of $1.19, along with revenue of $7.7 billion. This is in comparison, to the analysts’ consensus estimates of earnings per share of $1.02 and revenue estimates of 7.7 billion. Additionally, CRM posted a 21.8% increase in revenue during the same period, a year prior. Moreover, the company announced it estimates full-year 2023 non-GAAP earnings per share between the range of $4.71 to $4.73 per share. While they estimate revenue in the range of $30.90 billion to $31.0 billion for the full-year fiscal 2023. For context, previously the company reported guidance estimates of earnings of $4.74 to $4.76 per share, with revenue of $31.70 billion to $31.80 billion.
The company’s Chair and Co-CEO Marc Benioff commented in his letter to shareholders, “We had another strong quarter, with revenue of $7.7B growing 22% year-over-year and 26% in constant currency, showing yet again the durability of our business model. And, we’re thrilled to initiate our first-ever share repurchase program to continue to deliver incredible value to our shareholders on our path to $50 billion in revenue in FY26.” Following this news, shares of CRM stock dropped over 6% on Thursday late morning at $168.64 per share. Could this present an opportunity to buy CRM stock at discounted price levels?
Source: TD Ameritrade TOS
[Read More] Good Stocks To Invest In Right Now? 4 Fertilizer Stocks In Focus
Honeywell International (HON Stock)
Next, Honeywell International (HON) is a diversified technology and manufacturing company that delivers products, services, and solutions to customers worldwide. The company operates in three segments: aerospace, automation, control solutions, performance, materials, and technologies. Just last month, HON announced its Board of Directors has declared a regular quarterly dividend payment of $0.98 per share.
Also, in July, the company reported a beat for its Q2 2022 financial results. In detail, Honeywell International posted second-quarter earnings of $2.10 per share. In addition, the company reported revenue of $9.0 billion for the quarter. Wall Street consensus estimates were earnings per share of $2.03, and revenue of $8.7 billion. What’s more, the company was able to deploy $2.3 billion in the capital, which includes $1.4 billion to share buybacks.
Moreover, Darius Adamczyk, chairman, and CEO of HON commented, “While we recognize macro crosscurrents are clouding the global economic growth outlook, we remain confident in our demand outlook for the back half of the year with orders up 12% year over year and closing backlog2 of $29.5 billion, up 12% year over year, led by our long-cycle businesses, which will help drive growth for quarters to come. We once again demonstrated our operational agility by staying ahead of the inflation curve, enabling us to expand margins and beat the high end of our adjusted EPS guidance.” In the last month of trading, shares of HON stock have rebounded by over 9%. HON stock currently trades at $198.45 per share as of Wednesday’s lunchtime session. Given this, will you be paying closer attention to HON stock in thestock market today
Source: TD Ameritrade TOS
[Read More] Top Stocks To Buy Now? 3 Dividend Paying Stocks To Watch Today
American Express (AXP Stock)
Following that, we have American Express Company (AXP). In brief, American Express provides its customers with access to insights, experiences, and products that build a business. Aside from that, the company also provides credit and charge cards to consumers and corporations worldwide. Investors should also consider that the company recently reported stronger-than-expected second-quarter 2022 financial results.
Diving in, AXP posted earnings per share of $2.57 for Q2, while notching in revenue of $13.4 billion. For context, analysts’ consensus estimates for this quarter were earnings per share of $2.37, with revenue of $12.4 billion. As a result, American Express reported a 30.8% increase in revenue during the same time period, in 2021. Furthermore, the company also provided guidance for its full-year 2022 financial results. Specifically, AXP said they continue to estimate 2022 earnings of $9.25 to $9.65 per share. Though, the company did announce they estimate revenue of $53.71 billion to $54.58 billion, versus their previous revenue estimates of $50.0 billion to $50.9 billion for the full-year fiscal 2022.
Stephen J. Squeri, Chairman and Chief Executive Officer commented, “Card Member spending was up 30 percent from a year earlier on an FX-adjusted basis, driven by the robust rebound in global Travel and Entertainment spending, which surpassed pre-pandemic levels for the first time in April and was led by strong growth in consumer and SME spending and a significant uptick in corporate travel.” In the last month of trading, shares of AXP have recovered over 4%. As of Wednesday afternoon, shares of AXP stock are currently trading at $160.62 a share. All in all, is AXP stock a good Dow 30 stock to invest in right now?
Source: TD Ameritrade TOS
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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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Although the composition of the Dow 30 has changed over time, it currently includes companies such as Apple Inc. (NASDAQ: AAPL), Boeing (NYSE: BA), Chevron (NYSE: CVX), Visa (NYSE: V), and Amgen Inc. (NASDAQ: AMGN) among others. The company’s Chair and Co-CEO Marc Benioff commented in his letter to shareholders, “We had another strong quarter, with revenue of $7.7B growing 22% year-over-year and 26% in constant currency, showing yet again the durability of our business model. We once again demonstrated our operational agility by staying ahead of the inflation curve, enabling us to expand margins and beat the high end of our adjusted EPS guidance.” In the last month of trading, shares of HON stock have rebounded by over 9%.
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Although the composition of the Dow 30 has changed over time, it currently includes companies such as Apple Inc. (NASDAQ: AAPL), Boeing (NYSE: BA), Chevron (NYSE: CVX), Visa (NYSE: V), and Amgen Inc. (NASDAQ: AMGN) among others. Dow 30 Stocks To Watch In The Stock Market Today Salesforce Inc. (NYSE: CRM) Honeywell International Inc. (NYSE: HON) American Express Company (NYSE: AXP) Salesforce (CRM Stock) Starting off the list today, Salesforce Inc. is a cloud-based software company that specializes in customer relationship management (CRM). 4 Fertilizer Stocks In Focus Honeywell International (HON Stock) Next, Honeywell International (HON) is a diversified technology and manufacturing company that delivers products, services, and solutions to customers worldwide.
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Although the composition of the Dow 30 has changed over time, it currently includes companies such as Apple Inc. (NASDAQ: AAPL), Boeing (NYSE: BA), Chevron (NYSE: CVX), Visa (NYSE: V), and Amgen Inc. (NASDAQ: AMGN) among others. Dow 30 Stocks To Watch In The Stock Market Today Salesforce Inc. (NYSE: CRM) Honeywell International Inc. (NYSE: HON) American Express Company (NYSE: AXP) Salesforce (CRM Stock) Starting off the list today, Salesforce Inc. is a cloud-based software company that specializes in customer relationship management (CRM). 3 Dividend Paying Stocks To Watch Today American Express (AXP Stock) Following that, we have American Express Company (AXP).
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Although the composition of the Dow 30 has changed over time, it currently includes companies such as Apple Inc. (NASDAQ: AAPL), Boeing (NYSE: BA), Chevron (NYSE: CVX), Visa (NYSE: V), and Amgen Inc. (NASDAQ: AMGN) among others. Dow 30 Stocks To Watch In The Stock Market Today Salesforce Inc. (NYSE: CRM) Honeywell International Inc. (NYSE: HON) American Express Company (NYSE: AXP) Salesforce (CRM Stock) Starting off the list today, Salesforce Inc. is a cloud-based software company that specializes in customer relationship management (CRM). In addition, the company reported revenue of $9.0 billion for the quarter.
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19635.0
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2022-08-25 00:00:00 UTC
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Is Apple Stock a Buy After Its Latest Earnings?
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AAPL
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https://www.nasdaq.com/articles/is-apple-stock-a-buy-after-its-latest-earnings
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nan
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nan
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2022 has been a challenging year for investors, for consumers, and for corporations. There has been some variation in the challenges each face, but all of them have had to deal with supply chain disruptions, rising interest rates, and inflated costs. Even the largest, most disruptive companies have had to deal with these variables in some form.
A big part of the challenge for companies is accurately gauging how the effects of inflation and rising interest rates will impact consumer spending and purchasing power. Apple (NASDAQ: AAPL), which generates much of its revenue from its premium-priced hardware devices, appears vulnerable to this systemic risk. But the company's most recent earnings report suggests the tech giant is managing the turbulence just fine. Let's dig into Apple's report and see if we can determine what it's doing right and explain why the company looks to be a good long-term buy.
Inflation doesn't seem to be slowing Apple down
The Federal Reserve has been working to combat the highest inflation the U.S. has seen in nearly four decades. There are textbook methods for getting inflation under control but investors need to understand that there are only so many levers the Fed can pull without creating new, potentially worse problems. In such a challenging economic environment, it is natural to think that companies like Apple, which primarily sells luxury consumer hardware, could struggle.
For the company's fiscal 2022 third quarter (ended June 25), Apple reported $82.9 billion in revenue, up 2% year over year. While this growth seems unimpressive, it's important to note where the company is seeing the most growth. The tables below break down Apple's revenue for the three months and nine months ended June 25, 2022, across product segments and geographies.
NET SALES BY REGION Q3 2022 Q3 2021 Q1-Q3 2022 Q1-Q3 2021
Americas $37.47 billion $35.87 billion $129.85 billion $116.49 billion
Europe $19.29 billion $18.94 billion $72.32 billion $68.51 billion
Greater China $14.6 billion $14.76 billion $58.73 billion $53.8 billion
Japan $5.45 billion $6.46 billion $20.28 billion $22.49 billion
Rest of Asia Pacific $6.15 billion $45.4 billion $23 billion $21.16 billion
Source: Apple. Note: Q3 in 2022 ended June 25 and Q3 in 2021 ended June 26.
NET SALES BY PRODUCT Q3 2022 Q3 2021 Q1-Q3 2022 Q1-Q3 2021
iPhone $40.67 billion $39.57 billion $162.86 billion $153.11 billion
Mac $7.38 billion $8.24 billion $28.67 billion $26.01 billion
iPad $7.22 billion $7.39 billion $22.12 billion $23.61 billion
Wearables $8.08 billion $8.78 billion $31.59 billion $29.58 billion
Services $19.6 billion $17.49 billion $58.94 billion $50.15 billion
Source: Apple. Note: Q3 in 2022 ended June 25 and Q3 in 2021 ended June 26.
Apple is generating robust growth across nearly all of its revenue streams, with iPhone and Services leading the charge. It's no secret that the iPhone is an expensive product, selling for more than $1,000 depending on which specs you purchase. However, through the first nine months of fiscal 2022, Apple's revenue from the iPhone is $162.9 billion, up 6% year over year. This level of growth at this magnitude showcases that Apple's decisions to release newer, premium-priced versions of the iPhone in tandem with lower-cost options such as the iPhone SE has been working. Perhaps even more encouraging is that despite elevated levels of inflation, consumers still appear to be buying higher-end products around the globe.
Moreover, the strength in iPhone sales has catapulted Services revenue, which is up 18% through the first nine months of fiscal 2022. Services revenue is derived from advertising, cloud services, and in-app purchases. When more iPhones are being purchased, Services revenue should increase as well thanks to additional spending items such as cloud storage and mobile apps.
This circularity is what makes Apple so attractive as an investment. The tight ecosystem around its products and services has helped fuel the company's growth and build a strong market position even in uncertain times.
Image source: Getty Images.
Apple's balance sheet gives it plenty of options
Apple's top line has powered past fears around consumer purchasing power, but investors should also take a look at the company's profitability profile. In Q3, Apple's net income was $19.4 billion, a decline from Q3 2021's net income of $21.7 billion. But for the first nine months of the fiscal year, Apple's profits of $79.1 billion are up nearly 7%. So headwinds are increasing, but Apple is still progressing.
Given this level of profit, Apple amassed a whopping $27.5 billion of cash on its balance sheet. The company is using some of this cash to reward shareholders in the form of a quarterly dividend of $0.23 per share. When combining its cash, cash equivalents, and marketable securities, it has a $179.3 billion war chest available to use.
Additionally, the company is rumored to be releasing a virtual reality headset sometime in 2023. I note this to point out that Apple has the financial flexibility to invest in innovative new products as well as reward shareholders even during times of economic volatility, all the while keeping strong levels of cash and liquidity on hand.
Does Apple's valuation affect any buy decision?
Apple's stock price is down about 6.1% year to date and is trading at 7.1 times trailing-12-month sales. By comparison, big-tech counterpart Microsoft, which also derives the majority of its sales from a combination of hardware and software services, trades at 10.5 times trailing-12-month sales. While Microsoft and Apple each have a unique position in the marketplace, Apple does appear less expensive when analyzing certain valuation metrics.
It is important to understand, though, that Apple has a $2.7 trillion market capitalization and is on its way to $3 trillion, which would be a historical market feat. While Apple is certainly not a cheap stock, its stock price looks reasonable compared to market cohorts and its proven track record. Now looks like a great time to buy and hold Apple stock for the long run, before the markets begin to turn around.
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Adam Spatacco has 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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Apple (NASDAQ: AAPL), which generates much of its revenue from its premium-priced hardware devices, appears vulnerable to this systemic risk. A big part of the challenge for companies is accurately gauging how the effects of inflation and rising interest rates will impact consumer spending and purchasing power. The tight ecosystem around its products and services has helped fuel the company's growth and build a strong market position even in uncertain times.
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Apple (NASDAQ: AAPL), which generates much of its revenue from its premium-priced hardware devices, appears vulnerable to this systemic risk. For the company's fiscal 2022 third quarter (ended June 25), Apple reported $82.9 billion in revenue, up 2% year over year. Americas $37.47 billion $35.87 billion $129.85 billion $116.49 billion Europe $19.29 billion $18.94 billion $72.32 billion $68.51 billion Greater China $14.6 billion $14.76 billion $58.73 billion $53.8 billion Japan $5.45 billion $6.46 billion $20.28 billion $22.49 billion Rest of Asia Pacific $6.15 billion $45.4 billion $23 billion $21.16 billion Source: Apple.
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Apple (NASDAQ: AAPL), which generates much of its revenue from its premium-priced hardware devices, appears vulnerable to this systemic risk. For the company's fiscal 2022 third quarter (ended June 25), Apple reported $82.9 billion in revenue, up 2% year over year. Americas $37.47 billion $35.87 billion $129.85 billion $116.49 billion Europe $19.29 billion $18.94 billion $72.32 billion $68.51 billion Greater China $14.6 billion $14.76 billion $58.73 billion $53.8 billion Japan $5.45 billion $6.46 billion $20.28 billion $22.49 billion Rest of Asia Pacific $6.15 billion $45.4 billion $23 billion $21.16 billion Source: Apple.
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Apple (NASDAQ: AAPL), which generates much of its revenue from its premium-priced hardware devices, appears vulnerable to this systemic risk. For the company's fiscal 2022 third quarter (ended June 25), Apple reported $82.9 billion in revenue, up 2% year over year. Apple is generating robust growth across nearly all of its revenue streams, with iPhone and Services leading the charge.
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19636.0
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2022-08-25 00:00:00 UTC
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How Mixed Reality Could Transform the Business World
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AAPL
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https://www.nasdaq.com/articles/how-mixed-reality-could-transform-the-business-world
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nan
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nan
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W
hen most people hear the term “mixed reality,” they probably think about entertainment and gaming. This technology offers a way to merge physical reality with virtual worlds, and we’ve already seen rudimentary applications on social media, such as Instagram filters that join the “real you” with a cat. It therefore might seem unlikely to imagine this same technology being used in the workplace.
However, as mixed reality continues to grow and new applications emerge, it’s clear that it has all kinds of professional applications and potential investing opportunities. Let’s look at how it can be used, along with the role of AI and a few companies to look out for.
What is mixed reality?
Virtual reality immerses you in an alternate reality through a screen, while augmented reality adds computer-generated images to your physical reality (think Pokemon Go). Mixed reality is an extension of AR that combines the two by allowing us to interact with virtual items without fully immersing us in an alternate reality.
It might sound unfamiliar, but we’ve been seeing representations of mixed reality in SciFi movies for decades. The technology makes it possible for us to view holograms of people and other 3D visuals as if they were in front of them — and considering the characters doing this are often scientists and researchers, perhaps it shouldn’t come as a surprise that some of the most exciting applications are in the working world.
The role of AI
One of the biggest challenges in mixed reality is ensuring that it interacts with the real world effectively, but this is no easy task considering how many possible cues it could be picking up from the environment and the different contexts or scenarios it could encounter.
AI and machine learning can help technology to recognize different objects and improve its understanding of an environment over time, making mixed reality even more powerful.
Professional uses of mixed reality
The most obvious use of mixed reality is in professions that require a lot of visualization and design, such as construction. In this field, workers are used to relying on a small screen to look at designs and plans, and having to relate them to a construction site themselves.
Trimble offers mixed reality solutions that add holographic data to our physical reality to wearers of its specialized glasses. These allow the workers to literally see the design come to life in front of them and map it out on top of the site, allowing them to find potential issues and understand the project more easily. They can also use the headset to measure sizes of space and carry out other work tasks to enhance their workflow.
This is far from the only application. Brainlab has developed a mixed reality viewer to help surgeons gain a better picture of the work they’re doing. Instead of comparing patient images on a screen and comparing them to the person in front of them in their head, the headset can map the images onto the patient to give surgeons a clearer perspective. Surgeons can also use the headset to visualize where to make incisions or perform other tasks during procedures.
In addition to helping professionals perform their work more efficiently and accurately, mixed reality offers a fantastic way to onboard and train new recruits. For example, in the case of surgery, mixed reality headsets could help them to visualize what different types of surgery with different patients may look like.
Companies to look out for
Plenty of public companies are also keen to get into the mixed reality space in the short term. Apple (AAPL) and Meta (META) are set to release mixed reality headsets in late 2022. However, these are currently targeted at consumers for leisure rather than businesses looking to take their technology to the next level.
Microsoft (MSFT) has been one of the pioneers of mixed reality, launching its Windows Mixed Reality HoloLens in 2016 and continuing to innovate. One of its latest projects is Microsoft Mesh, which is set to build on the existing Microsoft Teams by allowing colleagues to review 3D visuals and holograms together to improve workflows and communications when working remotely.
Ready for the shakeup?
With all the major tech companies fighting to get ahead in the mixed reality space and so many exciting new applications for different industries, it’s almost indisputable that mixed reality will play a role in the future, and those who invest early could end up ahead.
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) and Meta (META) are set to release mixed reality headsets in late 2022. This technology offers a way to merge physical reality with virtual worlds, and we’ve already seen rudimentary applications on social media, such as Instagram filters that join the “real you” with a cat. The technology makes it possible for us to view holograms of people and other 3D visuals as if they were in front of them — and considering the characters doing this are often scientists and researchers, perhaps it shouldn’t come as a surprise that some of the most exciting applications are in the working world.
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Apple (AAPL) and Meta (META) are set to release mixed reality headsets in late 2022. Virtual reality immerses you in an alternate reality through a screen, while augmented reality adds computer-generated images to your physical reality (think Pokemon Go). For example, in the case of surgery, mixed reality headsets could help them to visualize what different types of surgery with different patients may look like.
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Apple (AAPL) and Meta (META) are set to release mixed reality headsets in late 2022. Virtual reality immerses you in an alternate reality through a screen, while augmented reality adds computer-generated images to your physical reality (think Pokemon Go). Professional uses of mixed reality The most obvious use of mixed reality is in professions that require a lot of visualization and design, such as construction.
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Apple (AAPL) and Meta (META) are set to release mixed reality headsets in late 2022. What is mixed reality? The technology makes it possible for us to view holograms of people and other 3D visuals as if they were in front of them — and considering the characters doing this are often scientists and researchers, perhaps it shouldn’t come as a surprise that some of the most exciting applications are in the working world.
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19637.0
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2022-08-25 00:00:00 UTC
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4 of the Best Growth Stocks to Ride for the Rest of 2022
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AAPL
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https://www.nasdaq.com/articles/4-of-the-best-growth-stocks-to-ride-for-the-rest-of-2022
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nan
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nan
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InvestorPlace - Stock Market News, Stock Advice & Trading Tips
A few key factors exist in finding the best growth stocks to buy.
First, you want to find companies trading at a discount to their intrinsic value. This means that the stock is undervalued by the market and has the potential for significant upside.
Second, you want to find companies with strong fundamentals. This means they have strong financials, a solid management team, and a competitive edge.
Finally, you want to find companies with a history of positive earnings growth. It is the best indicator of future success and gives you the best chance of making a profit on your investment. Following these simple guidelines can dramatically improve your chances of finding the best growth stocks to buy.
The market’s recent retreat is not only a reflection of the general trend in the U.S. economy but also a consequence of several factors. These include inflation and interest rates rising, geopolitical uncertainty and fears of trade wars and the strong dollar.
However, there are now signs the economy might be getting better. The July data shows that inflation is on the way down, with prices rising just 8.5% as opposed to a year ago in July, which saw prices increase by 9.1%.
In addition, respondents to a new survey expect inflation to run at a much lower rate over the next year, an increase in positive sentiment from a survey conducted in June.
When we consider the positive news, the spotlight is now on growth stocks again. With that in mind, here are four stocks that you may want to consider adding to your portfolio.
KO Coca-Cola $64.36
AAPL Apple $167.53
PG Procter & Gamble $145.82
GOOGL Alphabet $113.69
Coca-Cola (KO)
Source: Fotazdymak / Shutterstock.com
Coca-Cola (NYSE:KO) is a global brand that is recognizable and trusted by consumers all over the world. This brand recognition gives Coca-Cola a significant competitive advantage in the beverage market.
Coca-Cola has a strong track record of financial stability and consistent growth. The company has been able to weather economic downturns and still maintain shareholder value.
The company’s diversified product portfolio includes high-margin products like sparkling water and juices. This product diversification gives Coca-Cola additional growth potential in the future.
For these reasons, Coca-Cola is a great investment for long-term growth.
Its recent financial results illustrate this point. The company posted $11.3 billion in sales during the year’s second quarter, a 12% increase year-over-year. The global sales volume also grew by 8% for the period.
Earnings per share came in at 44 cents, which indicates a 28% decline, but both these numbers beat analyst estimates by a healthy margin. Additionally, Coke’s organic sales are expected to be 12%-13% for the upcoming fiscal year, an improvement from the previous projection of 7%-8%.
Furthermore, Coca-Cola is also partnering with various brands of alcoholic products. One recent partnership is to produce a canned Jack and Coke cocktail. It builds on a relationship previously established with Molson Coors Beverage (NYSE:TAP) to make spiked lemonade. These partnerships will further diversify the company’s portfolio.
Apple (AAPL)
Source: dennizn / Shutterstock.com
Apple (NASDAQ:AAPL) is a very strong company. It has a large market share in several key product categories, including smartphones, tablets, and computers.
In addition, Apple generates a lot of cash flow, which gives it the flexibility to invest in growth opportunities and pay dividends to shareholders. Also, Apple’s share price is relatively low compared to its peers, which means there is potential for upside if the company continues to perform well.
One of the biggest keys to Apple’s success is the brand loyalty espoused by its clients. Compared to other smartphone operators, Apple has managed to keep an iron grip on its position as a top smartphone maker despite new companies cropping up consistently in the space.
Despite only four variants of the iPhone currently available, Apple has consistently ranked among the world’s top smartphone sellers.
Apple’s revenue for the third quarter of 2022 was a record-breaking $83 billion, which is 2% more than a year before. EPS was $1.20, and the net income for Q3 came out to be at $19.44 billion.
Apple reports that its services revenues rose by over 12% in Q3 year-over-year to $19.6 billion. This allows the company to reduce its dependence on selling iPhones and other hardware products.
Apple is an excellent example of how to do well by your investors. The tech giant paid $28 billion in share buybacks and dividend payments during the fiscal third quarter. Buybacks have become an important part of Apple’s investment case. They are especially critical when the volatile stock market, making it one of the best growth stocks.
Procter and Gamble (PG)
Source: Jonathan Weiss / Shutterstock.com
Procter & Gamble (NYSE:PG) stock has been one of the best-performing stocks on the market, delivering strong returns for investors.
The company has a strong track record of delivering shareholder value through disciplined execution and effective cost management. Procter & Gamble is well-positioned for continued growth.
Despite being a mature enterprise, Procter and Gamble recorded a 5% increase for the fiscal year 2022, and EPS jumped 6% from the previous year.
Although the growth figures are not massive, they underscore that the multinational continues to grow at a respectable place. This is despite lower sales volume in Russia and Covid-19-related lockdowns in China.
In addition, freight costs and general inflation have increased product prices but have not impacted profits. It is a big reason why this company is on a list of best growth stocks to buy.
P&G has raised its dividend for 66 consecutive years and is a dividend king. In aggregate, the company paid out $8.8 billion in dividends and $10 billion in stock buybacks in the last fiscal period.
The outlook for Procter & Gamble for fiscal 2023 is excellent. P&G expects a 2% growth in earnings per share and domestic sales to grow by 2%.
Again, these numbers might not impress investors used to high-growth prospects like Etsy (NASDAQ:ETSY) and MercadoLibre (NASDAQ:MELI). However, you need to give Procter & Gamble points for delivering in a troubling situation.
Alphabet (GOOGL)
Source: K.unshu / Shutterstock.com
Alphabet (NASDAQ:GOOGL) has a strong history of growth and profitability. Its core search engine business is well-entrenched, with Google accounting for over 92% of all searches on the internet.
In addition, the company has a large cash reserve that it can use to fund future growth initiatives. However, the stock is down this year due to a weaker-than-expected earnings report and negative macroeconomic trends.
Revenues for the second fiscal quarter came in at $69.7 billion, up 13% from $61.4 billion last year. Google Cloud saw its revenues increase 35% from last year’s quarter, and its total business was at $6.28 billion in the second quarter of 2022.
The company is investing further in technology to diversify and grow its business. The segment is unprofitable right now. However, this is an area of growth you cannot ignore.
Amazon (AMZN)
Source: Mike Mareen / Shutterstock.com
Amazon’s (NASDAQ:AMZN) cloud computing arm has prospered during the pandemic and beyond. With a 33% market share, it rules the roost. Still, with about $125 billion in cash as of June end, you can expect Alphabet to give Amazon significant competition.
The earnings misstep cost Alphabet big time. However, the tech conglomerate has a diversified business model that includes several different businesses, each of which is highly profitable. This provides Alphabet with a buffer against economic downturns. If you are looking for the best growth stocks, yet want some stability, this is a great investment.
On the publication date, Faizan Farooque 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.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.
The post 4 of the Best Growth Stocks to Ride for the Rest of 2022 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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KO Coca-Cola $64.36 AAPL Apple $167.53 PG Procter & Gamble $145.82 GOOGL Alphabet $113.69 Coca-Cola (KO) Source: Fotazdymak / Shutterstock.com Coca-Cola (NYSE:KO) is a global brand that is recognizable and trusted by consumers all over the world. Apple (AAPL) Source: dennizn / Shutterstock.com Apple (NASDAQ:AAPL) is a very strong company. These include inflation and interest rates rising, geopolitical uncertainty and fears of trade wars and the strong dollar.
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KO Coca-Cola $64.36 AAPL Apple $167.53 PG Procter & Gamble $145.82 GOOGL Alphabet $113.69 Coca-Cola (KO) Source: Fotazdymak / Shutterstock.com Coca-Cola (NYSE:KO) is a global brand that is recognizable and trusted by consumers all over the world. Apple (AAPL) Source: dennizn / Shutterstock.com Apple (NASDAQ:AAPL) is a very strong company. InvestorPlace - Stock Market News, Stock Advice & Trading Tips A few key factors exist in finding the best growth stocks to buy.
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KO Coca-Cola $64.36 AAPL Apple $167.53 PG Procter & Gamble $145.82 GOOGL Alphabet $113.69 Coca-Cola (KO) Source: Fotazdymak / Shutterstock.com Coca-Cola (NYSE:KO) is a global brand that is recognizable and trusted by consumers all over the world. Apple (AAPL) Source: dennizn / Shutterstock.com Apple (NASDAQ:AAPL) is a very strong company. InvestorPlace - Stock Market News, Stock Advice & Trading Tips A few key factors exist in finding the best growth stocks to buy.
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KO Coca-Cola $64.36 AAPL Apple $167.53 PG Procter & Gamble $145.82 GOOGL Alphabet $113.69 Coca-Cola (KO) Source: Fotazdymak / Shutterstock.com Coca-Cola (NYSE:KO) is a global brand that is recognizable and trusted by consumers all over the world. Apple (AAPL) Source: dennizn / Shutterstock.com Apple (NASDAQ:AAPL) is a very strong company. InvestorPlace - Stock Market News, Stock Advice & Trading Tips A few key factors exist in finding the best growth stocks to buy.
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19638.0
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2022-08-25 00:00:00 UTC
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Is Berkshire Hathaway Stock a Buy?
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AAPL
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https://www.nasdaq.com/articles/is-berkshire-hathaway-stock-a-buy
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nan
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nan
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It is always news when Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) reports its latest investment moves in its quarterly 13F filing. Last week, investors got a look at what Chairman and CEO Warren Buffett and his team were up to in the second quarter with the release of the latest 13F -- and there was plenty to digest there.
But what does this mean for Berkshire Hathaway's stock price? Let's take a look at the most recent portfolio moves, as well as other factors, to determine whether Berkshire Hathaway is a buy.
The bear market takes a bite out of profits
Berkshire Hathaway is a holding company that runs a $300 billion investment portfolio of 47 stocks, as of the second quarter of 2022. It also wholly owns or has a majority stake in some 70 companies, including well-known brands like GEICO and Fruit of the Loom, as well as various energy, utilities, railroad, retail, financial, and industrial companies. Whether it's a stock or a business, Buffett and his team look to invest in companies that are good values -- meaning they are priced below intrinsic value based on their criteria. He also looks for companies with excellent management, strong competitive advantages, and good margins and financials, among other attributes.
The strategy has been remarkably effective over the years. Berkshire's stock has gained 13% per year over the last 10 years, as of Aug. 22 -- outperforming the 11.4% annualized return of the S&P 500 over that same period. Even this year, with the S&P 500 down about 13%, Berkshire Hathaway has beaten the market, down about 2.6%.
BRK.B data by YCharts.
In the second quarter, the company posted an eye-popping net loss of $44 billion, versus a $28 billion gain in Q2 2021. That was due primarily to a $53 billion decline in the investment portfolio after the bear market took hold. However, as management noted in its earnings report, it is important to look beyond the performance of the investment portfolio: "We believe that investment gains/losses, whether realized from sales or unrealized from changes in market prices, are often meaningless in terms of understanding our reported consolidated earnings or evaluating our periodic economic performance. We continue to believe the investment gains/losses recorded in earnings in any given period has little analytical or predictive value."
Better measures are its revenue and operating profit. Berkshire Hathawayʻs businesses generated $76.2 billion in revenue in the quarter, up from $69.1 billion a year ago. Expenses were $65 billion, up from $61.2 billion a year ago, so the company had an operating profit of about $11 billion in the quarter.
Is it a buy?
The rocky second quarter proved to be a good buying opportunity for Buffett and Berkshire Hathaway. They bought some $6.2 billion in stocks and sold about $2.3 billion. What was Buffett buying? For starters, he piled more money into Berkshire Hathawayʻs largest holding, Apple, which is down about 5% this year. Buffett also added sizable stakes into two energy companies, Occidental Petroleum and Chevron, as well as financial specialists Ally Financial and Markel. Energy stocks have been among the best performers on the market, while the financials should benefit from rising interest rates.
But the company still has a massive $105 billion in cash and cash equivalents sitting on the sidelines. The truth is, Berkshire Hathaway is built to weather quarters like the one we have just gone through, with its massive pile of cash and its diversified portfolio of investments. The companies it owns are spread across different industries and the overall portfolio has shown that it can perform well in various market cycles. Its stock portfolio had one of its worst quarters in years, but the mostly value names it holds will likely bounce back as we exit the bear market.
The consensus estimate among analysts calls for a 23% return over the next 12 months. When you consider its track record, excellent management, sound financials, and relatively good value, Berkshire Hathaway encapsulates what Buffett himself looks for in an investment. And that makes it a good long-term buy.
10 stocks we like better than Berkshire Hathaway (A shares)
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Ally is an advertising partner of The Ascent, a Motley Fool company. Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway (B shares), and Markel. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), 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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The bear market takes a bite out of profits Berkshire Hathaway is a holding company that runs a $300 billion investment portfolio of 47 stocks, as of the second quarter of 2022. Its stock portfolio had one of its worst quarters in years, but the mostly value names it holds will likely bounce back as we exit the bear market. When you consider its track record, excellent management, sound financials, and relatively good value, Berkshire Hathaway encapsulates what Buffett himself looks for in an investment.
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It is always news when Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) reports its latest investment moves in its quarterly 13F filing. The bear market takes a bite out of profits Berkshire Hathaway is a holding company that runs a $300 billion investment portfolio of 47 stocks, as of the second quarter of 2022. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple.
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The bear market takes a bite out of profits Berkshire Hathaway is a holding company that runs a $300 billion investment portfolio of 47 stocks, as of the second quarter of 2022. Expenses were $65 billion, up from $61.2 billion a year ago, so the company had an operating profit of about $11 billion in the quarter. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple.
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The bear market takes a bite out of profits Berkshire Hathaway is a holding company that runs a $300 billion investment portfolio of 47 stocks, as of the second quarter of 2022. Berkshire's stock has gained 13% per year over the last 10 years, as of Aug. 22 -- outperforming the 11.4% annualized return of the S&P 500 over that same period. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway (B shares), and Markel.
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19639.0
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2022-08-25 00:00:00 UTC
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Top 5 Streaming Services: Apple TV Enters Top 5, HBO Max loses Spot
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AAPL
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https://www.nasdaq.com/articles/top-5-streaming-services%3A-apple-tv-enters-top-5-hbo-max-loses-spot
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nan
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nan
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Along the lines of our previous publication – top five streaming service providers (streaming companies ranked using TipRanks’ Website Traffic screener based on year-over-year growth), let’s see which service provider has won the streaming war in July. But before we see July data, let’s revisit the previous month’s top five list. The graph below shows the top five video streaming service providers in June. Hulu, Discovery+, Peacock, and FuboTV remained in the top five lists for July. Apple TV+ is a new entrant. Meanwhile, HBO MAX lost its spot.
FuboTV
Rank: #5
Year-over-year Traffic Growth: 43.28%
Parent Company: fuboTV Inc (NYSE:FUBO)
FuboTV is a leading live TV streaming platform primarily focused on sports, news, and entertainment. It mostly earns revenue from subscriptions and the sale of advertisements. Per TipRanks’ website traffic tool, the number of visits to fubotv.com was up 43.28% year-over-year in July. However, what’s concerning is that FuboTV is witnessing a decline in web visit trends on a month-over-month basis.
What is the Prediction for FUBO Stock?
Analysts are cautiously optimistic about FUBO stock. It has received two Buy and five Hold recommendations for a Moderate Buy rating consensus. Moreover, the analysts’ average price target of $6.20 implies 55.97% upside potential.
Discovery+
Rank: #4
Year-over-year Traffic Growth: 55.57%
Parent Company: Warner Bros. Discovery (NASDAQ:WBD)
Discovery+ is a streaming platform owned by Warner Bros. Discovery. The Discovery+ has expanded internationally and now includes original series and documentaries. Discovery+ service is available with ads or on an ad-free tier. This provides the company with dual revenue streams. According to TipRanks’ website traffic tool, Discovery+ dropped from the number two spot in June to the fourth position in July. The number of visits to discoveryplus.com was up 55.57% year-over-year in July 2022. Moreover, like FuboTV, Discovery+ witnessed a month-over-month slowdown in traffic.
What is Discovery Stock Worth?
Warner Bros. Discovery owns Discovery+. On average, analysts have a price target of $24.13 on WBD stock, implying 78.5% upside potential. Meanwhile, it has received eight Buy, eight Hold, and one Sell recommendations for a Moderate Buy raring consensus.
Peacock
Rank: #3
Year-over-year Traffic Growth: 68.56%Parent Company: Comcast Corporation (NASDAQ:CMCSA)
Peacock is a premium DTC (direct-to-consumer) streaming service owned by NBCUniversal, a subsidiary of Comcast Corporation. It features Peacock originals, current NBC and Telemundo shows, live sports, late-night comedy, and movies. It retained its number three position in July as well. The website traffic to peacocktv.com gained 68.56% year-over-year in July. What stands out is that traffic to peacocktv.com also improved month-over-month.
Is CMCSA a Buy or Sell?
Comcast owns peacock TV. CMCSA stock sports a Moderate Buy rating consensus on TipRanks based on 12 Buy, eight Hold, and three Sell recommendations. Further, their average price target of $46.83 implies 26.2% upside potential.
Apple TV+
Rank: #2
Year-over-year Traffic Growth: 92.80%
Parent Company: Apple (NASDAQ:AAPL)
Apple TV+ is a streaming service featuring Apple Originals. According to TipRanks’ website traffic tool, the number of visits to tv.apple.com was up 92.80% year-over-year in July 2022. Moreover, traffic also improved on a month-over-month basis, putting it in the top five.
Is Apple a Buy or Sell Now?
Wall Street is bullish about Apple’s prospects. It has received 23 Buy, four Hold, and one Sell recommendations for a Strong Buy rating consensus. Meanwhile, analysts’ average price target of $183.07 implies 9.3% upside potential.
Hulu
Rank: #1
Year-over-year Traffic Growth: 113.11%
Parent Company: Walt Disney (NYSE:DIS)
Hulu is a subscription-based DTC video streaming service owned by Walt Disney. It offers content that is either internally produced, commissioned, or licensed. Hulu derives revenue from subscription fees and advertising sales. Per the website traffic tool, the number of visits to hulu.com was up 113.11% year-over-year in July. Moreover, web visits continued to improve month-over-month, which is positive.
What is the Target Price for DIS Stock?
Hulu is owned by Disney, for which analysts have an average price target of $139.28, implying 19.7% upside potential. Meanwhile, DIS stock has received 16 Buy and three Hold recommendations for a Strong Buy rating consensus.
Bottom Line
Amid the weak macro environment and economic reopening, streaming service providers are striving hard to drive engagement and grab a larger share of consumers’ wallets. Thus, it is prudent to keep track of the web visit trends of these companies to identify future winners and losers.
Using TipRanks’ stock comparison tool, here is the summary of how the parent companies of these streaming service providers stack up on TipRanks’ other valuable datasets, such as analysts’ recommendations and insider and hedge fund signals.
Learn how Website Traffic can help you research your favorite stocks.
Disclosure
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 TV+ Rank: #2 Year-over-year Traffic Growth: 92.80% Parent Company: Apple (NASDAQ:AAPL) Apple TV+ is a streaming service featuring Apple Originals. According to TipRanks’ website traffic tool, Discovery+ dropped from the number two spot in June to the fourth position in July. It features Peacock originals, current NBC and Telemundo shows, live sports, late-night comedy, and movies.
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Apple TV+ Rank: #2 Year-over-year Traffic Growth: 92.80% Parent Company: Apple (NASDAQ:AAPL) Apple TV+ is a streaming service featuring Apple Originals. Peacock Rank: #3 Year-over-year Traffic Growth: 68.56%Parent Company: Comcast Corporation (NASDAQ:CMCSA) Peacock is a premium DTC (direct-to-consumer) streaming service owned by NBCUniversal, a subsidiary of Comcast Corporation. Hulu Rank: #1 Year-over-year Traffic Growth: 113.11% Parent Company: Walt Disney (NYSE:DIS) Hulu is a subscription-based DTC video streaming service owned by Walt Disney.
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Apple TV+ Rank: #2 Year-over-year Traffic Growth: 92.80% Parent Company: Apple (NASDAQ:AAPL) Apple TV+ is a streaming service featuring Apple Originals. Along the lines of our previous publication – top five streaming service providers (streaming companies ranked using TipRanks’ Website Traffic screener based on year-over-year growth), let’s see which service provider has won the streaming war in July. Peacock Rank: #3 Year-over-year Traffic Growth: 68.56%Parent Company: Comcast Corporation (NASDAQ:CMCSA) Peacock is a premium DTC (direct-to-consumer) streaming service owned by NBCUniversal, a subsidiary of Comcast Corporation.
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Apple TV+ Rank: #2 Year-over-year Traffic Growth: 92.80% Parent Company: Apple (NASDAQ:AAPL) Apple TV+ is a streaming service featuring Apple Originals. Along the lines of our previous publication – top five streaming service providers (streaming companies ranked using TipRanks’ Website Traffic screener based on year-over-year growth), let’s see which service provider has won the streaming war in July. Discovery+ Rank: #4 Year-over-year Traffic Growth: 55.57% Parent Company: Warner Bros.
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19640.0
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2022-08-25 00:00:00 UTC
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Wall St rises as investors await Fed's signals from Jackson Hole
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AAPL
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https://www.nasdaq.com/articles/wall-st-rises-as-investors-await-feds-signals-from-jackson-hole
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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.
Data shows mild U.S. economic contraction in second quarter
Salesforce falls after slashing outlook, citing macro concerns
Nvidia forecasts sharp drop in Q3 sales
Tesla slips as 3-for-1 stock split kicks in
Indexes up: Dow 0.16, S&P 0.54%, Nasdaq 0.63%
Updates prices to open
By Bansari Mayur Kamdar and Devik Jain
Aug 25 (Reuters) - Wall Street's main indexes rose in early trading on Thursday, supported by banks and megacap growth stocks, while focus was squarely on Federal Reserve's annual Jackson Hole symposium for clues on the central bank's monetary policy outlook.
Wall Street snapped its three-day losing streak on Wednesday, boosted by strong gains in energy stocks but closed the session off intraday highs as markets remained cautious on how the Fed plans to curb inflation amid rising concerns around slowing global growth.
"People are coming back to the market gradually with the assumption that a lot of the bad news has already been priced in," said Brian Vendig, president of MJP Wealth Advisors.
Chair Jerome Powell's speech due on Friday will be scrutinized for any indication that an economic slowdown might alter the Fed's strategy and if the central bank can achieve a "soft landing" for the economy.
"Investors are going to be really keen to hear whether or not the Fed is going to be blind to increasing interest rates and fighting inflation at the cost of economic growth," Vendig added.
Data earlier in the day showed the U.S. economy contracted at a moderate pace than initially thought in the second quarter as consumer spending blunted some of the drag from a slower pace of inventory accumulation, dispelling fears that a recession was underway.
Traders are seeing a slightly greater likelihood of a third 75 basis-point hike from the Fed at its policy meeting next month, compared to a smaller 50 basis-point rate hike. FEDWATCH
Kansas City Fed President Esther George said it was too soon to predict how much the U.S. central bank would raise interest rates next month, with key reports on inflation and the labor market still to come.
Investors will also be looking for details on the Fed's plans to reduce its nearly $9 trillion balance sheet, a process that started in June.
Most high-growth and technology stocks rose in early trading, with Apple Inc AAPL.O and Alphabet Inc GOOGL.O adding more than 1% each.
Electric vehicle maker Tesla Inc TSLA.O slipped 0.3% after its 3-for-1 stock split came into effect.
Nine of the 11 major S&P 500 sectors advanced on Thursday, with material stocks .SPLRCM leading gains.
Energy stocks .SPNY rose for a third straight session, as crude prices extended their rally on mounting supply tightness concerns. O/R
At 9:55 a.m. ET, the Dow Jones Industrial Average .DJIwas up 54.40 points, or 0.16%, at 33,023.63, the S&P 500 .SPXwas up 22.31 points, or 0.54%, at 4,163.08, and the Nasdaq Composite .IXICwas up 78.72 points, or 0.63%, at 12,510.24.
Big banks .SPXBK advanced 1% in early trading, with Citigroup C.N and Morgan Stanley MS.N leading gains.
Weighing on the blue-chip Dow, Salesforce Inc CRM.N slid 7.4% as it cut its annual revenue and profit forecasts over "measured" spending from clients and a hit from a stronger dollar.
Helped by better-than-feared results from corporate America, the S&P 500 .SPX has recovered about 13% from its bear market lows in mid-June.
The benchmark index is set to end the year a little above its current level, according to strategists recently polled by Reuters.
Graphics chip designer Nvidia Corp NVDA.O slipped 0.8% after it forecast a sharp drop in revenue for the current quarter on the back of a weaker gaming industry.
Semiconductor stocks .SOX, however, rose 1.5%.
The White House said President Joe Biden will sign an executive order on implementation of the $52.7 billion semiconductor chips manufacturing subsidy and research law.
Advancing issues outnumbered decliners by a 3.08-to-1 ratio on the NYSE and a 2.06-to-1 ratio on the Nasdaq.
The S&P index recorded two new 52-week highs and 29 new lows, while the Nasdaq recorded 29 new highs and 29 new lows.
(Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by Maju Samuel)
((BansariMayur.Kamdar@thomsonreuters.com; Twitter: @BansariKamdar))
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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Most high-growth and technology stocks rose in early trading, with Apple Inc AAPL.O and Alphabet Inc GOOGL.O adding more than 1% each. Data shows mild U.S. economic contraction in second quarter Salesforce falls after slashing outlook, citing macro concerns Nvidia forecasts sharp drop in Q3 sales Tesla slips as 3-for-1 stock split kicks in Indexes up: Dow 0.16, S&P 0.54%, Nasdaq 0.63% Updates prices to open By Bansari Mayur Kamdar and Devik Jain Aug 25 (Reuters) - Wall Street's main indexes rose in early trading on Thursday, supported by banks and megacap growth stocks, while focus was squarely on Federal Reserve's annual Jackson Hole symposium for clues on the central bank's monetary policy outlook. Wall Street snapped its three-day losing streak on Wednesday, boosted by strong gains in energy stocks but closed the session off intraday highs as markets remained cautious on how the Fed plans to curb inflation amid rising concerns around slowing global growth.
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Most high-growth and technology stocks rose in early trading, with Apple Inc AAPL.O and Alphabet Inc GOOGL.O adding more than 1% each. Data shows mild U.S. economic contraction in second quarter Salesforce falls after slashing outlook, citing macro concerns Nvidia forecasts sharp drop in Q3 sales Tesla slips as 3-for-1 stock split kicks in Indexes up: Dow 0.16, S&P 0.54%, Nasdaq 0.63% Updates prices to open By Bansari Mayur Kamdar and Devik Jain Aug 25 (Reuters) - Wall Street's main indexes rose in early trading on Thursday, supported by banks and megacap growth stocks, while focus was squarely on Federal Reserve's annual Jackson Hole symposium for clues on the central bank's monetary policy outlook. Graphics chip designer Nvidia Corp NVDA.O slipped 0.8% after it forecast a sharp drop in revenue for the current quarter on the back of a weaker gaming industry.
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Most high-growth and technology stocks rose in early trading, with Apple Inc AAPL.O and Alphabet Inc GOOGL.O adding more than 1% each. Data shows mild U.S. economic contraction in second quarter Salesforce falls after slashing outlook, citing macro concerns Nvidia forecasts sharp drop in Q3 sales Tesla slips as 3-for-1 stock split kicks in Indexes up: Dow 0.16, S&P 0.54%, Nasdaq 0.63% Updates prices to open By Bansari Mayur Kamdar and Devik Jain Aug 25 (Reuters) - Wall Street's main indexes rose in early trading on Thursday, supported by banks and megacap growth stocks, while focus was squarely on Federal Reserve's annual Jackson Hole symposium for clues on the central bank's monetary policy outlook. Wall Street snapped its three-day losing streak on Wednesday, boosted by strong gains in energy stocks but closed the session off intraday highs as markets remained cautious on how the Fed plans to curb inflation amid rising concerns around slowing global growth.
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Most high-growth and technology stocks rose in early trading, with Apple Inc AAPL.O and Alphabet Inc GOOGL.O adding more than 1% each. Data shows mild U.S. economic contraction in second quarter Salesforce falls after slashing outlook, citing macro concerns Nvidia forecasts sharp drop in Q3 sales Tesla slips as 3-for-1 stock split kicks in Indexes up: Dow 0.16, S&P 0.54%, Nasdaq 0.63% Updates prices to open By Bansari Mayur Kamdar and Devik Jain Aug 25 (Reuters) - Wall Street's main indexes rose in early trading on Thursday, supported by banks and megacap growth stocks, while focus was squarely on Federal Reserve's annual Jackson Hole symposium for clues on the central bank's monetary policy outlook. Big banks .SPXBK advanced 1% in early trading, with Citigroup C.N and Morgan Stanley MS.N leading gains.
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19641.0
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2022-08-25 00:00:00 UTC
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US STOCKS-Futures rise as investors await data, Jackson Hole
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AAPL
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https://www.nasdaq.com/articles/us-stocks-futures-rise-as-investors-await-data-jackson-hole
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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.
Futures up: Dow 0.30%, S&P 0.54%, Nasdaq 0.73%
Aug 25 (Reuters) - U.S. stock index futures rose on Thursday, supported by megacap growth stocks as Treasury bond yields dipped, while focus turned to the Federal Reserve's annual Jackson Hole symposium for clues on the central bank's monetary policy outlook.
Wall Street snapped its three-day losing streak on Wednesday boosted by strong gains in energy stocks but closed the session off intraday highs as markets remained cautious on how the Fed plans to curb inflation amid rising concerns around slowing global growth.
Chair Jerome Powell's speech due on Friday will be scrutinized for any indication that an economic slowdown might alter the Fed's strategy and if the central bank can achieve a "soft landing" for the economy.
Traders are seeing a slightly greater chance of a third 75 basis-point hike from the Fed at its policy meeting next month, compared to a smaller 50 basis-point rate hike. FEDWATCH
Atlanta Fed President Raphael Bostic said he has not decided if the central bank should increase interest rates by 50 bps or 75 bps in September, the Wall Street Journal reported.
Investors will also be looking for details on the Fed's plans to reduce its nearly $9 trillion balance sheet, a process that started in June.
The benchmark 10-year Treasury yield retreated after hitting its highest level since mid-June in the previous session, supporting rate-sensitive high-growth and technology stocks such as Apple Inc AAPL.O and Microsoft Corp MSFT.O in trading before the bell.
Electric vehicle maker Tesla Inc TSLA.O rose 1.7% after its 3-for-1 stock split came into effect.
Meanwhile, oil majors Exxon Mobil Corp XOM.N and Chevron Corp CVX.N rose 0.4% each, as crude prices extended their rally on mounting supply tightness concerns.
At 6:54 a.m. ET, Dow e-minis 1YMcv1 were up 99 points, or 0.3%, S&P 500 e-minis EScv1 were up 22.5 points, or 0.54%, and Nasdaq 100 e-minis NQcv1 were up 94.75 points, or 0.73%.
Investors also focused on a slew of economic data later in the day including the central bank's favored inflation gauge, the PCE price index, weekly jobless claims figures and the second estimate of second-quarter GDP.
Helped by better-than-feared results from corporate America, the S&P 500 .SPX has recovered about 13% from its bear market lows.
The benchmark index is set to end the year a little above its current level, according to strategists recently polled by Reuters.
Graphics chip designer Nvidia Corp NVDA.O fell 3.3% after it forecast a sharp drop in revenue for the current quarter on the back of a weaker gaming industry.
Salesforce Inc CRM.N slid 6.3% as it cut its annual revenue and profit forecasts over "measured" spending from clients and a hit from a stronger dollar.
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by Maju Samuel)
((BansariMayur.Kamdar@thomsonreuters.com; Twitter: @BansariKamdar))
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 benchmark 10-year Treasury yield retreated after hitting its highest level since mid-June in the previous session, supporting rate-sensitive high-growth and technology stocks such as Apple Inc AAPL.O and Microsoft Corp MSFT.O in trading before the bell. Wall Street snapped its three-day losing streak on Wednesday boosted by strong gains in energy stocks but closed the session off intraday highs as markets remained cautious on how the Fed plans to curb inflation amid rising concerns around slowing global growth. Investors also focused on a slew of economic data later in the day including the central bank's favored inflation gauge, the PCE price index, weekly jobless claims figures and the second estimate of second-quarter GDP.
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The benchmark 10-year Treasury yield retreated after hitting its highest level since mid-June in the previous session, supporting rate-sensitive high-growth and technology stocks such as Apple Inc AAPL.O and Microsoft Corp MSFT.O in trading before the bell. Futures up: Dow 0.30%, S&P 0.54%, Nasdaq 0.73% Aug 25 (Reuters) - U.S. stock index futures rose on Thursday, supported by megacap growth stocks as Treasury bond yields dipped, while focus turned to the Federal Reserve's annual Jackson Hole symposium for clues on the central bank's monetary policy outlook. FEDWATCH Atlanta Fed President Raphael Bostic said he has not decided if the central bank should increase interest rates by 50 bps or 75 bps in September, the Wall Street Journal reported.
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The benchmark 10-year Treasury yield retreated after hitting its highest level since mid-June in the previous session, supporting rate-sensitive high-growth and technology stocks such as Apple Inc AAPL.O and Microsoft Corp MSFT.O in trading before the bell. Futures up: Dow 0.30%, S&P 0.54%, Nasdaq 0.73% Aug 25 (Reuters) - U.S. stock index futures rose on Thursday, supported by megacap growth stocks as Treasury bond yields dipped, while focus turned to the Federal Reserve's annual Jackson Hole symposium for clues on the central bank's monetary policy outlook. Wall Street snapped its three-day losing streak on Wednesday boosted by strong gains in energy stocks but closed the session off intraday highs as markets remained cautious on how the Fed plans to curb inflation amid rising concerns around slowing global growth.
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The benchmark 10-year Treasury yield retreated after hitting its highest level since mid-June in the previous session, supporting rate-sensitive high-growth and technology stocks such as Apple Inc AAPL.O and Microsoft Corp MSFT.O in trading before the bell. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window. Wall Street snapped its three-day losing streak on Wednesday boosted by strong gains in energy stocks but closed the session off intraday highs as markets remained cautious on how the Fed plans to curb inflation amid rising concerns around slowing global growth.
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19642.0
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2022-08-24 00:00:00 UTC
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BIL, NZUS: Big ETF Outflows
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AAPL
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https://www.nasdaq.com/articles/bil-nzus%3A-big-etf-outflows
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nan
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nan
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Looking at units outstanding versus one week prior within the universe of ETFs covered at ETF Channel, the biggest outflow was seen in the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), where 12,650,000 units were destroyed, or a 6.7% decrease week over week.
And on a percentage change basis, the ETF with the biggest outflow was the United States Fund Finder & ETF Screener (NZUS), which lost 2,120,000 of its units, representing a 34.2% decline in outstanding units compared to the week prior. Among the largest underlying components of NZUS, in morning trading today Apple (AAPL) is trading flat, and Microsoft Corporation (MSFT) is lower by about 0.1%.
VIDEO: BIL, NZUS: Big ETF Outflows
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 NZUS, in morning trading today Apple (AAPL) is trading flat, and Microsoft Corporation (MSFT) is lower by about 0.1%. Looking at units outstanding versus one week prior within the universe of ETFs covered at ETF Channel, the biggest outflow was seen in the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), where 12,650,000 units were destroyed, or a 6.7% decrease week over week. VIDEO: BIL, NZUS: Big ETF Outflows 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 NZUS, in morning trading today Apple (AAPL) is trading flat, and Microsoft Corporation (MSFT) is lower by about 0.1%. Looking at units outstanding versus one week prior within the universe of ETFs covered at ETF Channel, the biggest outflow was seen in the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), where 12,650,000 units were destroyed, or a 6.7% decrease week over week. And on a percentage change basis, the ETF with the biggest outflow was the United States Fund Finder & ETF Screener (NZUS), which lost 2,120,000 of its units, representing a 34.2% decline in outstanding units compared to the week prior.
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Among the largest underlying components of NZUS, in morning trading today Apple (AAPL) is trading flat, and Microsoft Corporation (MSFT) is lower by about 0.1%. Looking at units outstanding versus one week prior within the universe of ETFs covered at ETF Channel, the biggest outflow was seen in the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), where 12,650,000 units were destroyed, or a 6.7% decrease week over week. And on a percentage change basis, the ETF with the biggest outflow was the United States Fund Finder & ETF Screener (NZUS), which lost 2,120,000 of its units, representing a 34.2% decline in outstanding units compared to the week prior.
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Among the largest underlying components of NZUS, in morning trading today Apple (AAPL) is trading flat, and Microsoft Corporation (MSFT) is lower by about 0.1%. Looking at units outstanding versus one week prior within the universe of ETFs covered at ETF Channel, the biggest outflow was seen in the SPDR Bloomberg 1-3 Month T-Bill ETF (BIL), where 12,650,000 units were destroyed, or a 6.7% decrease week over week. And on a percentage change basis, the ETF with the biggest outflow was the United States Fund Finder & ETF Screener (NZUS), which lost 2,120,000 of its units, representing a 34.2% decline in outstanding units compared to the week prior.
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19643.0
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2022-08-24 00:00:00 UTC
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Billionaire Och sues former firm Sculptor over escalating CEO pay
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AAPL
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https://www.nasdaq.com/articles/billionaire-och-sues-former-firm-sculptor-over-escalating-ceo-pay
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nan
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nan
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By Jonathan Stempel
NEW YORK, Aug 24 (Reuters) - The billionaire Daniel Och on Wednesday sued Sculptor Capital Management Inc, accusing the asset manager he helped found of letting its chief executive officer wield his power over its board to extract "ever-escalating" pay despite subpar performance.
In a complaint filed in Delaware Chancery Court, Och said James Levin was paid $145.8 million in 2021, more than most other CEOs including Apple's AAPL.O Tim Cook, Goldman Sachs' GS.N David Solomon and JPMorgan Chase's JPM.N Jamie Dimon.
Och said Sculptor's annual revenue of $626 million "cannot possibly justify" making his protege the country's 14th highest-paid CEO, while the firm's stock price lags many peers and its funds suffer from "less than mediocre" performance.
According to the complaint by Och and four of Sculptor's other "original and largest shareholders," Levin's pay was 17.7 times the median of Sculptor's peers, as measured by proxy advisory firm Institutional Shareholder Services.
The lawsuit seeks books and records concerning Levin's pay, to assess whether there were breaches of fiduciary duty related to mismanagement and waste, and whether Sculptor's board was truly independent.
According to an April regulatory filing, Levin and Och are among Sculptor's largest shareholders, and controlled a respective 20.2% and 14.4% of its voting power.
Sculptor said Levin deserved pay that is "more competitive" with that of privately held alternative asset managers.
Sculptor and an outside spokesman were not immediately available for comment after market hours.
The lawsuit was reported earlier by the Financial Times. Och is worth $3.9 billion, according to Forbes magazine.
Once known as Och-Ziff Capital Management, Sculptor is one of only a handful of publicly traded hedge fund companies, overseeing about $36.8 billion of assets as of July 1.
Its stock price has fallen 56% this year, leaving it with a market value of about $552 million, according to Refinitiv.
Levin, who is known as Jimmy, joined Sculptor in 2006, and became CEO last year. He is also the New York-based firm's chief investment officer.
One Sculptor director, Morgan Rutman, resigned early this year in protest over Levin's pay.
Sculptor changed its name in 2019, three years after Och-Ziff reached a $412 million settlement of U.S. probes into alleged bribery to win business in five African countries.
The case is Och et al v Sculptor Capital Management Inc, Delaware Chancery Court, No. 2022-0748.
(Reporting by Jonathan Stempel in New York; Editing by Leslie Adler)
((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters Messaging: jon.stempel.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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In a complaint filed in Delaware Chancery Court, Och said James Levin was paid $145.8 million in 2021, more than most other CEOs including Apple's AAPL.O Tim Cook, Goldman Sachs' GS.N David Solomon and JPMorgan Chase's JPM.N Jamie Dimon. Och said Sculptor's annual revenue of $626 million "cannot possibly justify" making his protege the country's 14th highest-paid CEO, while the firm's stock price lags many peers and its funds suffer from "less than mediocre" performance. The lawsuit seeks books and records concerning Levin's pay, to assess whether there were breaches of fiduciary duty related to mismanagement and waste, and whether Sculptor's board was truly independent.
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In a complaint filed in Delaware Chancery Court, Och said James Levin was paid $145.8 million in 2021, more than most other CEOs including Apple's AAPL.O Tim Cook, Goldman Sachs' GS.N David Solomon and JPMorgan Chase's JPM.N Jamie Dimon. By Jonathan Stempel NEW YORK, Aug 24 (Reuters) - The billionaire Daniel Och on Wednesday sued Sculptor Capital Management Inc, accusing the asset manager he helped found of letting its chief executive officer wield his power over its board to extract "ever-escalating" pay despite subpar performance. According to the complaint by Och and four of Sculptor's other "original and largest shareholders," Levin's pay was 17.7 times the median of Sculptor's peers, as measured by proxy advisory firm Institutional Shareholder Services.
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In a complaint filed in Delaware Chancery Court, Och said James Levin was paid $145.8 million in 2021, more than most other CEOs including Apple's AAPL.O Tim Cook, Goldman Sachs' GS.N David Solomon and JPMorgan Chase's JPM.N Jamie Dimon. By Jonathan Stempel NEW YORK, Aug 24 (Reuters) - The billionaire Daniel Och on Wednesday sued Sculptor Capital Management Inc, accusing the asset manager he helped found of letting its chief executive officer wield his power over its board to extract "ever-escalating" pay despite subpar performance. Och said Sculptor's annual revenue of $626 million "cannot possibly justify" making his protege the country's 14th highest-paid CEO, while the firm's stock price lags many peers and its funds suffer from "less than mediocre" performance.
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In a complaint filed in Delaware Chancery Court, Och said James Levin was paid $145.8 million in 2021, more than most other CEOs including Apple's AAPL.O Tim Cook, Goldman Sachs' GS.N David Solomon and JPMorgan Chase's JPM.N Jamie Dimon. By Jonathan Stempel NEW YORK, Aug 24 (Reuters) - The billionaire Daniel Och on Wednesday sued Sculptor Capital Management Inc, accusing the asset manager he helped found of letting its chief executive officer wield his power over its board to extract "ever-escalating" pay despite subpar performance. Once known as Och-Ziff Capital Management, Sculptor is one of only a handful of publicly traded hedge fund companies, overseeing about $36.8 billion of assets as of July 1.
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19644.0
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2022-08-24 00:00:00 UTC
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Shopify (SHOP) Unveils Shopify Capital to Aid Base Down Under
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AAPL
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https://www.nasdaq.com/articles/shopify-shop-unveils-shopify-capital-to-aid-base-down-under
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Shopify SHOP recently announced the launch of its Shopify Capital in Australia to provide quick and easy funding of up to $2.5 million AUD for innumerable merchants.
This is the peak sales period in Australia and merchants across the country are piling up inventory, planning advertising campaigns and sorting logistics. However, to upscale their business operations, merchants require access to timely funding.
Management recently stated that while 62% of Australian merchants are comfortable with seeking funds for their business, two-thirds are deterred by high-interest rates, while more than half cannot access funds on time due to the time-consuming application process.
In fact, traditional lenders often do personal credit checks, take equity in the business, ask merchants for cash flow projections and provide a timeline to repay the funding provided.
Nevertheless, the ongoing global inflationary pressures, reduced consumer spending, decreasing cash flow in the market and worldwide supply-chain disruptions posed several challenges to retailers on the path to a profitable business.
Amid such market volatility, retail businesses grow wary of borrowing funds to boost business operations.
Shopify is banking on this macroeconomic condition in Australia to expand its footprint in the region by introducing Shopify Capital, which is unlike any traditional financing system.
Shopify Capital does not check credit scores or stake a claim in the business and ask for cash flow projections. Rather they provide merchants with $2.5 million AUD through the Shopify platform they use to run their store. SHOP then employs its own model to approve funding for the business In a short span of two working days.
As merchants make sales, they repay on the agreed fixed percentage of daily sales, which lowers cash flow risks by removing the uncertainty of compounding interest rates and hidden fees. Also, there is no stipulated time limit for repayment.
Shopify Inc. Price and Consensus
Shopify Inc. price-consensus-chart | Shopify Inc. Quote
Shopify Capital Aids SHOP to Expand Merchant Base in Australia
The current macroeconomic situation not only affected small retailers but also dented Shopify’s profitability. Inflation and possible signs of recession aggravated the current market scenario and slowed down e-commerce progress.
Also, rising inflation surged operating expenses. In the second quarter, non-GAAP operating expenses soared 75.7% year over year to $845.9 million, inducing an adjusted operating loss of $41.8 million.
Shares of Shopify, currently carrying a Zacks Rank #3 (Hold), have fallen 76.1% compared with the Zacks Internet Services industry’s decline of 24.6% in the year-to-date period. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shopify has been forging strategic alliances with major tech giants and spreading its operations globally to address the issues of local merchants to boost its e-commerce platform.
Shopify collaborated with companies like Apple’s AAPL iPhone tap-to-pay feature and the major social media platforms like Twitter TWTR and Meta Platforms’ META Facebook and Instagram.
The recent integration with Apple enables shoppers to use Apple smartphones against the terminal to pay for goods. While this may not be a new feature in retail, Apple’s recent Pay Later installments added a whole new dimension to retail marketing.
The Twitter sales channel allows merchants to connect with consumers directly from their Twitter profiles. Shopify’s integration with Twitter will benefit SHOP from the growing trend of influence marketing strategy.
Meta Platforms’ Facebook and Instagram are two of the most popular social media platforms among the creators and users alike. Integration with Meta Platforms will help Shopify address the growing trends and help merchants promote and sell their products via Facebook or Instagram at a much reasonable cost.
Also, at a time when the rising cost of capital is impacting the profitability of businesses in Australia negatively, retail businesses are cautious about investing further in their business through debt financing. However, the recent launch of Shopify Capital may lure merchants to the platform owing to its flexible funding program.
Since the global unveiling of Shopify Capital in 2016, SHOP has provided a funding worth of $3.8 billion USD, the average being 36%, higher than its peers' tally. With its recent offering in Australia, ahead of the nationwide peak sales season, SHOP is expected to generate a staggering ROI in the long haul.
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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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Shopify collaborated with companies like Apple’s AAPL iPhone tap-to-pay feature and the major social media platforms like Twitter TWTR and Meta Platforms’ META Facebook and Instagram. Apple Inc. (AAPL): Free Stock Analysis Report Nevertheless, the ongoing global inflationary pressures, reduced consumer spending, decreasing cash flow in the market and worldwide supply-chain disruptions posed several challenges to retailers on the path to a profitable business.
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Shopify collaborated with companies like Apple’s AAPL iPhone tap-to-pay feature and the major social media platforms like Twitter TWTR and Meta Platforms’ META Facebook and Instagram. Apple Inc. (AAPL): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis Report
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Shopify collaborated with companies like Apple’s AAPL iPhone tap-to-pay feature and the major social media platforms like Twitter TWTR and Meta Platforms’ META Facebook and Instagram. Apple Inc. (AAPL): Free Stock Analysis Report Shopify SHOP recently announced the launch of its Shopify Capital in Australia to provide quick and easy funding of up to $2.5 million AUD for innumerable merchants.
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Apple Inc. (AAPL): Free Stock Analysis Report Shopify collaborated with companies like Apple’s AAPL iPhone tap-to-pay feature and the major social media platforms like Twitter TWTR and Meta Platforms’ META Facebook and Instagram. However, to upscale their business operations, merchants require access to timely funding.
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19645.0
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2022-08-24 00:00:00 UTC
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What's Behind the Rise of the Individual Investor?
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AAPL
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https://www.nasdaq.com/articles/whats-behind-the-rise-of-the-individual-investor
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nan
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T
he internet, smartphone and the access they have brought have disrupted a number of industries. They have also changed the landscape of investing as well. Data published by BNY Mellon (BK) shows that the retail investor accounts for almost 25% of total equities trading volume in 2021, up sharply from 20% in 2020 and 10-15% during the prior decade. That’s a far cry from several decades ago in the 1970s. If an investor wanted a current stock price, other than connecting with a stockbroker at Morgan Stanley (MS) or Merrill Lynch (BAC), they would have few alternatives.
The ensuing decades saw the rise of electronic trading platforms such as TD Ameritrade, Fidelity, Charles Schwab (SCHW), and E*Trade, which helped individuals enter the stock market as direct participants, bypassing intermediaries by trading through their websites. The rise of the smartphone, its always on and connected capabilities and the debut of the App Store in 2008 would prove to be a combination that dramatically changes the individual investing landscape.
What we’ve once again seen is technology lowering the barriers to entry, driving the cost to the consumer lower, and increasing access to a growing array of investment options and sophisticated investment tools. Arguably, the rise of payments apps such as PayPal (PYPL) and others that have made money transfers far easier has also led to consumer adoption.
The result? In January 2021 alone, roughly six million Americans downloaded a trading app as compared to more than 10 million Americans who opened a new brokerage account in the full year 2020. Motivations span from wanting to put one’s money to work, saving for retirement to a new wave of empowerment that can, in part be attributed to social media and communal hubs. Also helping were the arrival of no-minimum investment accounts, zero-commission-trading, the introduction of fractional share trading and the growth in individuals trading stock options.
Today, there is a horde of investment apps across the various app stores, so much so that it seems every month there is a new listicle touting the best investing apps. Those low barriers to entry have led startup companies to bring a wide array of not only investment strategies to market but also programs that cater to different individual needs. For example, Acorn allows you to funnel your spare change into an investment account, Invstr caters to those looking to be educated about investing, while Ellevest has a socially responsible investing focus. And yes, there are a number of apps like Robinhood (HOOD), eToro and WeBull that allow one to invest in a variety of cryptocurrencies, not to mention apps distributed by the various trading venues themselves.
Traditional investment banks have their own apps, and some have even launched separately branded services like the Marcus app from Goldman Sachs (GS) that offer users managed portfolios. Some like Charles Schwab have offered curated thematic portfolios, but we have to point out that with more than 40+ such themes we wonder how useful some of them are. Then again maybe it’s just us and we’re missing the point behind a Caffeinated Drinks thematic portfolio.
Outside of traditional investment companies, there have been others that have rather quietly entered the investing space. One such company is Blok (SQ), which allows a person to invest in the stock market through its Cash App.
What’s rather interesting is the following found on the Cash App website: “Stock can be purchased using the funds in your Cash App balance. If you do not have enough funds available, the remaining amount will be debited from your linked debit card.”
Invested positions are displayed in the Cash App’s Investing tab. Like other investing apps, the Cash App allows customers to buy fractional amounts of a stock, ETF or even bitcoin starting for as little as a $1.
Blok competitor PayPal (PYPL) also helps facilitate stock trading provided the stockbroker platform accepts PayPal, which makes PayPal more of a conduit than an actual trading platform. And we have to wonder if Apple (AAPL) has any plans in its roadmap to leverage its Wallet App and Apple Cash offerings as it looks to grow its Services business.
That thought brings us to what’s likely to be next for investing app companies. As we’ve seen in the past, be it with TVs, PCs and mobile phones, a growth market will attract all sorts of entrants. Over time, however, as that growth market matures the number of companies shrinks, some exit the market while others sell their business to competitors looking to enter the market or build their scale and scope.
Looking at the investment app space, while it has done a lot of good to draw people into investing, there are questions surrounding gamification and suitability. Looking back over the above paragraphs, we wouldn’t disagree with the view that it is an increasingly crowded space. Given the state of the economy, more than 550 startups slashing over 73,000 jobs, and other companies ranging from Lyft (LYFT) to Ford Motor (F) announcing headcount reductions. The state of California, once the mecca for tech start-ups, collected 12% less in revenue than it expected in July, indicating that state coffers are taking a hit from a slowing economy and a cooldown in the once-booming technology industry. Further, data in the Flash August S&P Global PMI reports point to further economic slowing ahead. There is also the stock market performance of the first half of 2022 that has rattled investors as has the cryptocurrency market.
Challenging times are ahead for companies and consumers and that could put more than a wrinkle in the plans for some of these investment app companies. Odds are some of the less well-funded startup investing app companies could go belly up or be acquired by larger banks or investment firms looking to bulk up on the client base for their app. In some ways, it would be the digital equivalent of a large investment management firm acquiring a smaller one complete with its strategies, assets and accounts. One potential acquirer could be Morgan Stanley (MS) given its long-term target to grow its client assets under management to $10 trillion from its reported $6.5 trillion at the end of 2021.
Looking further ahead, one can envision more interactive investing experiences and more immersive and impactful education as AR/VR technologies mature and investing communities move from Twitter (TWTR) Spaces and Reddit’s Wall Street Bets to the metaverse. That has the potential to enhance investor education but also foster the individual’s ability to customize their investment process.
It also raises questions as to how company investor relations departments will furnish their current offerings including press releases, investor presentations, access to SEC filings and conference call replays in those more data rich environments. As that gets sorted, it likely will result in individual investors having greater access to data in more digestible formats. That sounds like the barriers to investing will continue to fall, driving further growth in the pool of increasingly informed individual investors.
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 we have to wonder if Apple (AAPL) has any plans in its roadmap to leverage its Wallet App and Apple Cash offerings as it looks to grow its Services business. Data published by BNY Mellon (BK) shows that the retail investor accounts for almost 25% of total equities trading volume in 2021, up sharply from 20% in 2020 and 10-15% during the prior decade. Motivations span from wanting to put one’s money to work, saving for retirement to a new wave of empowerment that can, in part be attributed to social media and communal hubs.
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And we have to wonder if Apple (AAPL) has any plans in its roadmap to leverage its Wallet App and Apple Cash offerings as it looks to grow its Services business. What we’ve once again seen is technology lowering the barriers to entry, driving the cost to the consumer lower, and increasing access to a growing array of investment options and sophisticated investment tools. Those low barriers to entry have led startup companies to bring a wide array of not only investment strategies to market but also programs that cater to different individual needs.
|
And we have to wonder if Apple (AAPL) has any plans in its roadmap to leverage its Wallet App and Apple Cash offerings as it looks to grow its Services business. Today, there is a horde of investment apps across the various app stores, so much so that it seems every month there is a new listicle touting the best investing apps. For example, Acorn allows you to funnel your spare change into an investment account, Invstr caters to those looking to be educated about investing, while Ellevest has a socially responsible investing focus.
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And we have to wonder if Apple (AAPL) has any plans in its roadmap to leverage its Wallet App and Apple Cash offerings as it looks to grow its Services business. Outside of traditional investment companies, there have been others that have rather quietly entered the investing space. Like other investing apps, the Cash App allows customers to buy fractional amounts of a stock, ETF or even bitcoin starting for as little as a $1.
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19646.0
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2022-08-24 00:00:00 UTC
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Apple sends invites for Sept 7 event, analysts expect new iPhones
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AAPL
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https://www.nasdaq.com/articles/apple-sends-invites-for-sept-7-event-analysts-expect-new-iphones
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nan
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By Stephen Nellis
Aug 24 (Reuters) - Apple Inc AAPL.O on Wednesday sent media invitations to a Sept. 7 event when analysts expect the company to unveil new iPhones, a week earlier than its traditional autumn event.
If Apple follows its pattern of shipping devices about a week and a half after it unveils them, it could add two weeks of iPhone sales to the company's fiscal fourth quarter.
Analysts expect Apple to introduce a new generation iPhone 14 model.
Reuters has previously reported that Apple told suppliers it expects the new generation of phones to sell better than its predecessors did.
Apple is also expected soon to unveil new models of the Apple Watch, iPad and Mac computers, some perhaps at the September event.
While the company has largely insulated the iPhone from supply chain turbulence, it warned in anearnings calllast month that parts shortages could hamper sales of some of those other products.
Apple plans to host the event at the Steve Jobs Theater at its headquarters in Cupertino, California.
The event would be the first in-person, indoor event since the coronavirus pandemic began in 2020.
Apple earlier this year held an event for developers, but the keynote presentation was given outdoors at its headquarters.
The invitation's artwork features the Apple logo surrounded by an outline of night-sky stars and the caption "far out."
(Reporting by Stephen Nellis in San Francisco and Akash Sriram in Bengaluru; Editing by Arun Koyyur and Howard Goller)
((Akash.Sriram@thomsonreuters.com; https://twitter.com/hoodieonveshti;))
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 Stephen Nellis Aug 24 (Reuters) - Apple Inc AAPL.O on Wednesday sent media invitations to a Sept. 7 event when analysts expect the company to unveil new iPhones, a week earlier than its traditional autumn event. Reuters has previously reported that Apple told suppliers it expects the new generation of phones to sell better than its predecessors did. While the company has largely insulated the iPhone from supply chain turbulence, it warned in anearnings calllast month that parts shortages could hamper sales of some of those other products.
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By Stephen Nellis Aug 24 (Reuters) - Apple Inc AAPL.O on Wednesday sent media invitations to a Sept. 7 event when analysts expect the company to unveil new iPhones, a week earlier than its traditional autumn event. If Apple follows its pattern of shipping devices about a week and a half after it unveils them, it could add two weeks of iPhone sales to the company's fiscal fourth quarter. Analysts expect Apple to introduce a new generation iPhone 14 model.
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By Stephen Nellis Aug 24 (Reuters) - Apple Inc AAPL.O on Wednesday sent media invitations to a Sept. 7 event when analysts expect the company to unveil new iPhones, a week earlier than its traditional autumn event. If Apple follows its pattern of shipping devices about a week and a half after it unveils them, it could add two weeks of iPhone sales to the company's fiscal fourth quarter. Apple is also expected soon to unveil new models of the Apple Watch, iPad and Mac computers, some perhaps at the September event.
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By Stephen Nellis Aug 24 (Reuters) - Apple Inc AAPL.O on Wednesday sent media invitations to a Sept. 7 event when analysts expect the company to unveil new iPhones, a week earlier than its traditional autumn event. Analysts expect Apple to introduce a new generation iPhone 14 model. While the company has largely insulated the iPhone from supply chain turbulence, it warned in anearnings calllast month that parts shortages could hamper sales of some of those other products.
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19647.0
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2022-08-24 00:00:00 UTC
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3 No-Brainer Stocks I'd Buy Right Now Without Hesitation
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AAPL
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https://www.nasdaq.com/articles/3-no-brainer-stocks-id-buy-right-now-without-hesitation-4
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Even after the mild recovery in the S&P 500 and Dow Jones Industrial Average these past two months, 2022 is serving as a stark reminder that stock market corrections can and do happen.
There are always plenty of reasons to sell: the market is crashing, housing is falling, interest rates are rising, China's economy is crumbling, and so on. A lot of times it sounds smart and you're tempted to sell all your stocks and sit on the sidelines, but don't do it. You're going to undermine your long-term profits.
Image source: Getty Images.
Over the past 20 years through 2021, the stock market went up an average of 9.5% a year, but if you missed the 10 best days in the market, your returns would be nearly cut in half to 5.3% a year. Literally just sitting on your hands is the best action you can take.
Corrections are actually the perfect time to invest in high-quality stocks that are now offered at discount prices. We never know how far "down" is or when the reversal will happen, but bull markets always follow bear markets -- and it's important to be invested when it happens. The following three stocks are no-brainers to buy now without even pausing to think about it.
Apple
There are few brands as iconic as Apple (NASDAQ: AAPL). Its technology, innovation, and styling have attracted legions of diehard loyalists who willingly immerse themselves in the company's ecosystem. That by itself is one of the reasons Apple stock should be a top-of-mind choice for investors: Because it has a loyal following like few other brands, it has a target consumer ready to buy its next innovation, or even reiteration, giving it a steady stream of revenue for years to come.
Warren Buffett certainly thinks so, making Apple the largest holding in Berkshire Hathaway, or some 41% of all the stocks holdings he manages. I don't think you should necessarily follow that lead and make the tech stock such a dominant position in your own portfolio, but Apple is worth your attention.
Revenue is running at record highs, but Services and its recurring income streams are where Apple's future lies. It's the fastest growing segment, and the tech giant now has more than 860 million paid subscriptions across the services on all of its platforms, up 23% over the last 12 months. That's another reason why Apple is a no-brainer buy.
Amazon
E-commerce leader Amazon (NASDAQ: AMZN) should also occupy a spot on this list if only because it has become so integral to how tens of millions of consumers regularly shop. Even during a technical recession, currency-adjusted sales jumped by double-digit rates to $121 billion. Sure, it's being impacted by rising inflation, energy, and labor costs just like every other retailer, but it's also able to achieve economies of scale unavailable to most other businesses.
Of course, it's not selling gadgets and groceries that make Amazon tick (or ring the register), but rather its cloud services operation, Amazon Web Services (AWS). Serving as the backbone for many businesses' online presence, AWS's revenue has risen by more than 30% over each of the first two quarters of this year. AWS is s further expanding its capabilities for leading-edge technologies such as streaming video, online gaming, and augmented and virtual reality. For example, the company is creating storage and database infrastructure closer to the customer, which allows for increased efficiency due to split-second data travel times.
Long the most profitable portion of Amazon's business, AWS also the cloud-infrastructure leader with a 33% market share, well ahead of runner-up Microsoft's Azure with a 21% share and Alphabet's Google Cloud at 8%.
No business is immune from macroeconomic influences, but Amazon's e-commerce and cloud services operations are on a skyrocketing trajectory, making it a winning investment for decades to come.
AT&T
I'm completing the trio of no-brainer stocks to buy now with yet another company starting with the letter A: AT&T (NYSE: T). The telecom giant has been a staple of investor portfolios for decades and has long been considered one of the original widow-and-orphan stocks because of its stability.
It had gotten away from those roots for awhile with forays into entertainment and elsewhere. However, the spinoff and merger of its Warner Media division into Warner Bros Discovery brings its focus back home and narrows it to just its telecom business once more. It also gives it some $43 billion that it can use to pay down its debt as well as invest in its 5G networks that will provide the next leg up for growth. It represents the first upgrade to wireless download speeds in about a decade, and that will continue to drive the smartphone upgrade cycle (another boost for Apple, too).
AT&T was a crucial investment for so many because of its lucrative dividend, and while the spinoff caused it to slash its payout in half (and lose its status as a Dividend Aristocrat), it still yields some of the highest percentages of similarly-situated corporations of its size.
The dividend currently yields 6.1% annually, the ninth-highest of all stocks in the S&P 500, and after the cut, it's even safer than it was before. With a payout ratio of 43%, AT&T has plenty of room to cover the payment and grow the dividend in the future.
The telecom stock is a no-brainer buy for its growth potential and the income stream it produces.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Rich Duprey has positions in AT&T and Warner Bros. Discovery, Inc. The Motley Fool has positions in and recommends Amazon, Apple, and Berkshire Hathaway (B shares). The Motley Fool recommends Warner Bros. Discovery, Inc. and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), 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 are few brands as iconic as Apple (NASDAQ: AAPL). Even after the mild recovery in the S&P 500 and Dow Jones Industrial Average these past two months, 2022 is serving as a stark reminder that stock market corrections can and do happen. That by itself is one of the reasons Apple stock should be a top-of-mind choice for investors: Because it has a loyal following like few other brands, it has a target consumer ready to buy its next innovation, or even reiteration, giving it a steady stream of revenue for years to come.
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Apple There are few brands as iconic as Apple (NASDAQ: AAPL). Of course, it's not selling gadgets and groceries that make Amazon tick (or ring the register), but rather its cloud services operation, Amazon Web Services (AWS). The Motley Fool has positions in and recommends Amazon, Apple, and Berkshire Hathaway (B shares).
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Apple There are few brands as iconic as Apple (NASDAQ: AAPL). Over the past 20 years through 2021, the stock market went up an average of 9.5% a year, but if you missed the 10 best days in the market, your returns would be nearly cut in half to 5.3% a year. That by itself is one of the reasons Apple stock should be a top-of-mind choice for investors: Because it has a loyal following like few other brands, it has a target consumer ready to buy its next innovation, or even reiteration, giving it a steady stream of revenue for years to come.
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Apple There are few brands as iconic as Apple (NASDAQ: AAPL). Over the past 20 years through 2021, the stock market went up an average of 9.5% a year, but if you missed the 10 best days in the market, your returns would be nearly cut in half to 5.3% a year. That's another reason why Apple is a no-brainer buy.
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19648.0
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2022-08-24 00:00:00 UTC
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3 Warren Buffett Stocks to Hold Forever
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AAPL
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https://www.nasdaq.com/articles/3-warren-buffett-stocks-to-hold-forever
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nan
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Warren Buffett is the textbook inspiration for long-term investors; he's been holding stocks longer than many people have been alive. Amazingly, he's worth $103 billion, but most of that has come over the past decade thanks to compounded returns.
So if you're looking to follow his buy-and-hold investment strategy, here are three stocks the Oracle of Omaha owns that have the fundamentals to remain in your diversified portfolio for the long run.
1. Buffett's largest holding is a good one
Electronic devices giant Apple (NASDAQ: AAPL) is one of Buffett's most recent investments; he began building his stake in 2016. Today, Apple is his largest holding, a staggering 42.6% of the portfolio in his holding company Berkshire Hathaway. The stake is worth more than $154 billion, roughly four times the size of Berkshire's next largest holding, Bank of America.
Apple's appeal is obvious; the company's become one of the most recognizable brands in the world, with more than 1.8 billion active devices worldwide. That's a huge distribution footprint for Apple to make money from app store sales, hardware sales, and subscription services. The company did $107 billion in free cash flow alone over the past year, more than most businesses do in sales.
Personal electronics are our gateway to the digital world, and it doesn't look like that's changing anytime soon. Apple has an enormous amount of user data and the deep pockets to innovate and protect its business from the competition. Its stock pays a dividend, a classic trait among Buffett stocks, and Berkshire's huge position shows Buffett's confidence in the company moving forward.
2. A timeless classic with future potential
The Coca-Cola Company (NYSE: KO) is a longtime holding for Buffett, who began buying up shares in the late 1980s. He's famous for taking photographed swigs of Cherry Coke flavor soda. The company is one of the world's largest beverage companies and owns different soda, juice, water, tea, and coffee brands. Berkshire's stake is worth just north of $25 billion and represents 7.1% of the company's portfolio.
Another company with immense brand power, Coca-Cola products can be found in virtually every grocery store, restaurant, and vending machine worldwide. The company's massive distribution network is a competitive advantage, blocking other brands from getting high exposure to consumers. Coca-Cola can also use its enormous reach to grow up-and-coming brands it's developing or acquiring.
For investors, Coca-Cola is one of Wall Street's most cherished dividend stocks. It's a Dividend King that's raised its dividend for a whopping 60 consecutive years. Investors have steadily built wealth by taking those dividends and reinvesting them over decades. Coca-Cola is a mature company today, but its dominant position in the beverage market gives it a long runway to slowly raise prices and sell more products incrementally as the global population grows.
3. An e-commerce giant with more to offer
Buffett is famous for a general aversion to technology companies, but he's made an exception for e-commerce titan Amazon (NASDAQ: AMZN). People do more shopping online today than ever before, and Amazon is the unquestioned leader in that game, with a 37.8% market share of e-commerce sales in the United States. The stock is one of Berkshire's smaller positions, worth just over $1.4 billion and logging in at 0.4% of the company's portfolio.
Most know Amazon for its e-commerce business, and that's probably not going to change anytime soon. But investors could benefit from the company's other business segments that have room to grow over the coming years. Amazon Web Services (AWS) has become the largest public cloud platform in the world; it's highly profitable and was responsible for all of Amazon's total operating income in the second quarter of 2022.
Research company Gartner estimates that end users will spend as much as $600 billion on public cloud services next year, up 46% from 2021 spending levels. AWS's revenue over the past year is $72 billion, which shows that there's still room to expand within an already rapidly growing market. Considering this, along with its tremendous e-commerce business, Amazon could remain a lucrative investment for years.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. 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 Amazon, Apple, and Berkshire Hathaway (B shares). The Motley Fool recommends Gartner and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), 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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Buffett's largest holding is a good one Electronic devices giant Apple (NASDAQ: AAPL) is one of Buffett's most recent investments; he began building his stake in 2016. A timeless classic with future potential The Coca-Cola Company (NYSE: KO) is a longtime holding for Buffett, who began buying up shares in the late 1980s. Coca-Cola is a mature company today, but its dominant position in the beverage market gives it a long runway to slowly raise prices and sell more products incrementally as the global population grows.
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Buffett's largest holding is a good one Electronic devices giant Apple (NASDAQ: AAPL) is one of Buffett's most recent investments; he began building his stake in 2016. Its stock pays a dividend, a classic trait among Buffett stocks, and Berkshire's huge position shows Buffett's confidence in the company moving forward. The Motley Fool has positions in and recommends Amazon, Apple, and Berkshire Hathaway (B shares).
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Buffett's largest holding is a good one Electronic devices giant Apple (NASDAQ: AAPL) is one of Buffett's most recent investments; he began building his stake in 2016. Today, Apple is his largest holding, a staggering 42.6% of the portfolio in his holding company Berkshire Hathaway. Its stock pays a dividend, a classic trait among Buffett stocks, and Berkshire's huge position shows Buffett's confidence in the company moving forward.
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Buffett's largest holding is a good one Electronic devices giant Apple (NASDAQ: AAPL) is one of Buffett's most recent investments; he began building his stake in 2016. Today, Apple is his largest holding, a staggering 42.6% of the portfolio in his holding company Berkshire Hathaway. Most know Amazon for its e-commerce business, and that's probably not going to change anytime soon.
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19649.0
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2022-08-24 00:00:00 UTC
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Index Fund Investors Might Not Be as Diversified as They Think
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https://www.nasdaq.com/articles/index-fund-investors-might-not-be-as-diversified-as-they-think
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Investing in an S&P 500 index fund is one of the simplest ways to grow your money. The large-cap stock index is used as a barometer for the overall stock market, and many say an index fund will provide instant diversification.
But an S&P 500 index fund merely reflects the market. And the market is currently favoring big technology stocks like Apple and Microsoft, meaning S&P 500 index fund investors may currently find themselves overweight in technology stocks when that's not what they were aiming for.
A very top-heavy index
As of mid-August, Apple's weight in the S&P 500 index reached 7.4%. That's the highest weighting of any single company in the index since 1980, when IBM and AT&T were battling to be the most valuable company in the world (with a whole bunch of energy companies close behind).
Microsoft, which has spent some time as the No. 1 company, is 6.0% of the index. The top five companies combined -- Apple, Microsoft, Amazon, Tesla, and Alphabet -- account for almost 23% of the S&P 500. That's an unprecedented level of concentration for the index.
What's more, at least four of those companies (and arguably all five) have exposure to the technology sector. Microsoft, Amazon, and Alphabet's Google are the biggest public cloud computing providers. Apple, Microsoft, and Google are all heavily reliant on personal computing devices. Microsoft is a leading enterprise software provider.
That said, only Apple and Microsoft fall into the information technology sector. Amazon and Tesla are considered consumer discretionary, and Alphabet is a communications services company.
In total, information technology companies account for around 28% of the index.
Is it a bubble?
Twenty-eight percent of the index in tech is certainly a heavy concentration, especially when you consider big companies like Amazon and Alphabet aren't included in that number.
In fact, it echoes the concentration of the index in tech stocks near the height of the dot-com bubble, or the concentration of energy stocks in 1980.
Tech stocks took the brunt of the losses in the market downturn during the first half of this year, but considering they still make up more than a quarter of the S&P 500, are we looking at more losses to come?
A key difference between today and the bubbles of 2000 and 1980 are valuations. Apple and Microsoft are two of the most profitable companies in history. Their valuations are much more reasonable than the prices the market put on unprofitable tech stocks in the late '90s.
Apple, Microsoft, and Alphabet trade at price-to-earnings (P/E) ratios between 1.0 and 1.4 times that of the S&P 500. When Microsoft was one of the biggest names in the S&P 500 in 2000, its P/E ratio was more than 2.7 times the S&P 500 average.
It doesn't look like we're in another bubble, but that still doesn't mean you're diversified.
Lose your concentration
If you're looking to own a diversified portfolio of stocks across all sectors and market caps, you'll need to invest in something other than (or in addition to) an S&P 500 index fund.
There are several options. You might simply add exposure to more small-cap stocks by buying a small-cap index fund. Putting more of your portfolio into an index fund that excludes the biggest companies can help balance the weighting of the top companies held in the large-cap index.
You might also considering shifting your portfolio to an equal-weighted index fund, which allocates the same amount of the portfolio to every stock in the index.
That said, these strategies have lagged in recent years. After all, there's a reason the S&P 500 is more concentrated among the top companies than it's ever been: Those top businesses continue to outperform. But there's no guarantee that trend will continue. If you're seeking diversification, you may want to consider how much weight you want in big tech, and what your alternatives are.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. Adam Levy has positions in Alphabet (C shares), Amazon, Apple, and Microsoft. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Microsoft, 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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Twenty-eight percent of the index in tech is certainly a heavy concentration, especially when you consider big companies like Amazon and Alphabet aren't included in that number. Their valuations are much more reasonable than the prices the market put on unprofitable tech stocks in the late '90s. Lose your concentration If you're looking to own a diversified portfolio of stocks across all sectors and market caps, you'll need to invest in something other than (or in addition to) an S&P 500 index fund.
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The top five companies combined -- Apple, Microsoft, Amazon, Tesla, and Alphabet -- account for almost 23% of the S&P 500. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Microsoft, and Tesla. 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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The large-cap stock index is used as a barometer for the overall stock market, and many say an index fund will provide instant diversification. And the market is currently favoring big technology stocks like Apple and Microsoft, meaning S&P 500 index fund investors may currently find themselves overweight in technology stocks when that's not what they were aiming for. Putting more of your portfolio into an index fund that excludes the biggest companies can help balance the weighting of the top companies held in the large-cap index.
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The large-cap stock index is used as a barometer for the overall stock market, and many say an index fund will provide instant diversification. 1 company, is 6.0% of the index. Lose your concentration If you're looking to own a diversified portfolio of stocks across all sectors and market caps, you'll need to invest in something other than (or in addition to) an S&P 500 index fund.
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19650.0
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2022-08-24 00:00:00 UTC
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Authors in August: Game Designer Jesse Schell
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https://www.nasdaq.com/articles/authors-in-august%3A-game-designer-jesse-schell
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Entrepreneur, author, and game designer Jesse Schell joins the podcast to talk about the art of design, the creation of experience, and the future of games.
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 Aug. 10, 2022.
David Gardner: How many books have you read on game design? For most of us, the answer is probably zero. But if I do a good job this week interviewing author, entrepreneur, and game designer Jesse Schell, I hope I might convince you to read at least one. And it is a masterpiece. The Art of Game Design, only on this week's Rule Breaker Investing.
[music]
Welcome back to Rule Breaker Investing. If my audio quality in the intros this week is not up to snuff, it's because I recorded it from Scotland. However, good news: It's about to get a lot better as the rest of this interview comes from our normal environs in the good old U.S. of A. Jesse Schell is an American video game designer, author, CEO of Schell games, and a distinguished professor of the practice of entertainment technology at Carnegie Mellon University in Pittsburgh, Pennsylvania. After reading Jesse's book The Art of Game Design more than a decade ago I reached out to him, as one of our kids was touring Carnegie Mellon. Had a wonderful chance than to connect with Jesse in his offices. Because in addition to being the superstar author of The Art of Game Design, Jesse is an entrepreneur. Having worked in partnership with some of the best brands in entertainment to design for them everything from mobile and VR games to amusement park rides. Jesse kicks off Authors in August this week with our wide ranging conversation from philosophy to practice. I hope, and trust there's something in this for everyone. Without further ado. Let's get started. Jesse Schell, great to have you on Rule Breaker Investing. How are you doing?
Jesse Schell: Hey, doing great, so glad to be here.
David Gardner: Thanks a lot. I said in my introduction, well, I'm an acknowledged fan of this book and it's one of those books that stayed with me. I think I first read it, well, definitely more than a decade ago. I know it's now out in a third edition. I may have missed the second edition, but I'm a huge fan of the first edition, which I assume mostly carries through. The comprehensive nature of looking at games from all angles, philosophically, technically, the stories, the elements -- we're going to get into that some. But Jesse, I know this is obviously in some ways an outgrowth of your work, your wonderful work over decades and probably continues to inform what you're doing. I hope it continues making connections with you, or if I were a Carnegie Mellon student, I'd be like "I read that guy's book. I want to make sure I get that class." Thank you for a wonderful work of nonfiction which has enriched by life for 15 years and counting.
Jesse Schell: Yeah, I'm so glad to know that it was meaningful to you. Yeah, it was a special book where I was able to take a lot of different lessons from a lot of things i did and bring them together. It was great when it came out in 2008, it got up very positive reception and that was nice, and here we are 14 years later and it could be continuously in prints and still continues to be popular and useful in ways that I never had imagined it might be.
David Gardner: That's wonderful. Well, of course, when a lot of people think games, they start with childhood. That's what I think about. I was a big gamer. I bet you were too, Jesse, but tell me a little bit about where you grew up and your early life at games.
Jesse Schell: Yeah, sure. Let's see. I grew up I was in New Jersey, suburban New Jersey there. I definitely loved games of all kinds growing up. I was fascinated by board games and card games. Of course I'm of the age, and I was born in 1970, and so when I was really young, there weren't no video games. Then slowly video games started to appear, and so it was exciting to see that world of games emerge. I've always loved games just across the spectrum. Party games and athletic games and board games, card games, video games, all of them and what was nice about writing Art of Game Design, it was an opportunity to show, let's look at the principles that connect all of these kinds of games together.
David Gardner: Indeed you do. It starts really in the first chapter of the book. Really, you're speaking to the designer, the artist in us all. Now not everybody, Jesse fancy's themselves a world-famous game designer, as are you. But a lot of us might tinker, a lot of us might dream. I love how you start the book. You call it magic words, the first page of the book. What are the magic words?
Jesse Schell: Magic words are, "I am a game designer." That was really important to me because Stephen King has an amazing book called On Writing, where he just gives advice about how to write good books. He talks a bit about imagining your ideal reader. I kept thinking, OK, when I'm writing this, who's my ideal reader? I remembered myself back in high school. I started making video games and things when I was maybe 12 years old and started to get a little more serious about understanding it when I was in high school and I was trying to figure out, is there a way, is there a career in games and that thing? I kept imagining what would I have wanted someone to explain to me when I was at that age. That ended up being a lot of the focus of that was always an anchor for me. One thing that I knew was confidence was something people often don't have when it comes to something like game design. There are some things where the path toward learning it is well charted. You want to learn to play the piano. Everyone understands about piano lessons and going to school for piano. This is well understood.
Game design. [laughs] Where do you go? What do you do? Where do you start? People often have this idea that you are either born to it or you're not. It makes people think, "Well, since I don't know what I'm doing I must not be a game designer." They feel stuck and they feel foolish trying to do it because they're like, "I must not supposed to be doing this" and they feel really weird about it. It was very important to give the reader permission. More than just permission, allow them to accept it into their identity. Because one of the things that we talk about sometimes is, what you pretend to be, you will become. I encourage the readers to say, "I am a game designer" out loud because it makes a difference. This was a thing I learned with my students because I saw when I would work with students that lack of confidence, they didn't feel they had the right to try and design games. I would do a simple exercise where I'd ask people, "OK, hey, it's first day of class raise your hand if you're already a game designer?" [laughs] You'd see one or two hands go up and a lot of people just, "I don't, I'm not, I'm not really sure." Then I'd make them say it out loud. Then afterwards I'd say, OK, now raise your hand if you're a game designer. And all the hands would go up. It seems something so simple of these little games of confidence can do a lot in order to change the way you approach something.
David Gardner: I really appreciate that, especially because most of us listening who've listened to one or more of these podcasts or might be a longtime Motley Fool investor and fan. No, that that's exactly what we want everybody to say about their money. That "I am an investor." How many times do I think I or my brother Tom, in front of a crowd of people who said raise your hand. If you're an investor, and of course the wrong answer is not to be raising your hand because we're all investing time all the time. Money, whether it's a dollar for stick a chewing gum or a dollar toward your 401(k). Democratizing and including, these are just one of course, wonderful spirit, you said, because they feel foolish, because they're not a game designer. But of course we would say yes, small f, Jesse, but capital F, we want you to feel Foolish by saying, I am an investor and it does challenge the conventional wisdom or what we would expect as kids, especially when we're sitting in a classroom with again, a world-famous game designing professor asking who's a game designer here [laughs] in the room. Just as you do for your students, so do you do for the book right up front. I thought it'd be fun as we talked through the art of game design. First of all, this is an incredibly engaging book. My addition comes to 450 pages. Now I'm a slow reader. I loved every page of this book. Some people will be listening right now. "I don't know if I would read a 450-page book about game design," and especially if they're not a game designer, but each of the chapters is so engaged. Yeah, thought the first seven chapters tell a story with their title, gives us a flow for this conversation. If you're OK with it, I wanted to start right there. Chapter 1 is entitled in the beginning, there is the designer. I am a game designer and then Chapter 2, Jesse goes onto to be called the designer creates an experience. Now a lot of people might think, wait, doesn't the designer create a game? But you've pointed out it's actually about the experience, not the components, not the rules, the experience of the imagination as we experienced anybody's game: card game, video game, etc.
Jesse Schell: Yeah, I mean, that's it's something very important to understand. Novice designers often get caught up in the game itself. They're thinking about the rules. They're thinking about the characters. They're thinking about the story elements. They're thinking about these concrete things about the game. They think of themselves as designing those things and wanting those things to be great. But in truth, we don't care about any of those things. Those things are just a means to an end. A game is a dead object. If you make a game and no one plays it. What have you done? Nothing has happened. That's not what we care about. We don't care about unplayed games. What we care about is when someone plays a game, they have a particular experience. It's that experience, which is what we are trying to design. If we had some magic technology that let us, just create the experience directly. I could just like put this on your head and you would just have this interactive experience, that would be great. But we can't do that. Instead we're designing the game. It's very important to keep that in mind. That the experience supersedes everything. It often makes a lot of sense to take on the approach of what do I want this experience to be like? Then figure out, well, what game is going to bring about that experience?
David Gardner: Love it. You mentioned in the book at one point, you said it here that if you could somehow get away without making components and having to print up rules and just give people that experience. I'm sure a lot of people would do an economic shortcut and just deliver that experience. Now some people think of that as the metaverse where I can just sort of be lying there, I guess in my meta chair, and just experience with my imagination some of these game without having to roll out supply chain logistics printed off in China, and all these kinds of things. Where are you right now in terms of your thinking around virtual reality, metaverse, sole experiences for gamers or game designers?
Jesse Schell: Well, virtual reality is something very near and dear to me. I've been doing virtual reality for about 30 years now. [laughs]. Back in the '90s I was the creative director of the Disney Virtual Reality Studio. We created a place called DisneyQuest, which was Disney's VR theme park that ran for about 20 years. And when VR started to come into the mainstream about seven years ago, my company Schell Games got very involved in it. Because again, I did that stuff at Disney. I've been teaching virtual reality classes at Carnegie Mellon.
David Gardner: How could you not?
Jesse Schell: Yeah, exactly. It was really hard to resist, and it's worked out incredibly well for us. We've had great successes with games like I Expect You to Die and Until You Fall. We recently did a cooking game or lost recipe. Like the world of VR games has gone really well. Honestly, I think we've done 15 or 20 VR games at this point. We're very much immersed in it. It's a really exciting time because those technologies are really, they're growing, they're expanding, they're allowing kinds of gameplay that simply wasn't possible previously.
David Gardner: That's great. You know, thinking back to how you're speaking to the young game designer, and that person thinks they need to have their rules in place to have the game. Not thinking as much about the experience kind of reminds me of how I started with Dungeons & Dragons [D&D] back in the day.
Jesse Schell: Yeah.
David Gardner: You and I are very near the same age. Maybe you also have a first-edition [Gary] Gygax rulebooks or I'm not sure. But I know one thing about me as a Dungeon Master. I loved doing it and I was pretty technical about it. I think what I was missing a lot of the spirit of role-playing games. Having grown up with things like Strat-O-Matic baseball or very often sports game. Very rules-based. I was treating D&D, like "Let's stop right now because I need to look up on Page 37 because I think you can't do this or we need to add plus one." It's a reminder again about, it's the experience.
Jesse Schell: Yeah.
David Gardner: Not so much the stuff that is the game, but especially you talked about the VR, the deep experience you have. Of course, when I read the book in 2008, VR wasn't as much a thing. I definitely knew your background in VR, but really it has been emerging in recent years.
Jesse Schell: Yeah. I will say I'm absolutely with you. I was definitely of the time when Dungeons & Dragons was emerging and it was incredibly influential to me as a game designer. Being a Dungeon Master and learning to lead adventures. It teaches you so much about game design because not only are you crafting a world with rules and how it works, but you're weaving a story into it. But more than that, as the players are enjoying it, not enjoying it, you have the opportunity to change anything you want in order to make it a better experience for them. You have this ability to iterate and change it on the fly. I found this such a meaningful and influential design experience, and when I teach classes and game design, I make the students do this. We went through a period where many students were not. Digital games have completely replaced tabletop games. Tabletop games are having a resurgence now. Now I'm seeing more and more students who have had that experience. Thank you, Stranger Things. [laughs] But it really is a very powerful way. Role-playing is an incredibly powerful way to get better as a game designer.
David Gardner: Chapter 3. After the designer creates an experience, which is what we just talked about, Chapter 2. Chapter 3, the experience rises out of a game. We do acknowledge that we're back to games. But importantly in that chapter, and I'm wondering if this has changed over time. You define game. You challenge yourself, you sift through. It's hard to put a definition on a word that means so many things to so many different people. Can you refresh my memory or redefine in 2022, what is a game?
Jesse Schell: Yeah, the definition I like to use for "game," because you think, game, everyone knows what a game is, but when you're trying to define it, it's interesting that many people define it in many different ways. I looked at lots of different definitions that different philosophers and designers have put together. What I ended up arriving at is that a game is a problem-solving activity approached with a playful attitude. This is important. The idea that all games are problem-solving activities isn't immediately obvious, but it's definitely true. But not all problem-solving activities are games. This is why the playful-attitude part is very important because approaching things with a playful attitude with the spirit of curiosity is part of what makes games and play special. Play is the opposite of work. What distinguishes play from work is this level of freedom. It's almost always a freedom where you are satisfying your own curiosity about something. Understanding what a game really is is important, and the thing I talked about in the book and hearing my specific definition isn't especially important. But I definitely encourage people to explore like, well, what do you think a game is and why do you think that? That act of trying to define it yourself and looking at other people's definitions: That's where the real value is because that's when you start to get insights.
David Gardner: Love it. Yes, games have been defined by, certainly it goes back to the Greeks. In fact, I think this has been attributed to either Aristotle or Plato, although a lot of quotes, I'm not sure either of those gentlemen ever said this. But have you heard this one before, Jesse? It's something like, "You can learn more in one hour of gaming with a man than in a lifetime of conversation."
Jesse Schell: Yeah, I will say often attributed to Plato. I have hunted and hunted. I've gone all the way through the works. I don't think it's there. [laughter] But at the same time, it's something I bring up all the time. I would love to know the origin of that phrase. It certainly came from somewhere, but it's definitely true. There's something very important about the nature of play when it comes to getting to know a person. Because when we play, we open ourselves up in a way that we don't in normal discourse. We make ourselves vulnerable in a way because when we talk, we might talk about what we might do. But when we play, we do things and we see how they end up. And again, we're working on this right now. There's a popular game called Among Us, and we're making the virtual reality version, about Among Us. Among Us is a very interesting game because it's a party game. A bunch of people get together and do this silly pretend situation. You're pretending that you're on a spaceship. One of you is the murderer. Everyone goes to do their spaceship jobs. One person is the murderer and is going to try and secretly murder somebody. If someone finds, "Oh, no, someone's been murdered," then they call an emergency meeting and a big discussion happens. Who did it? It ends up being a game, partly about being a detective, hey, who did it, partly about sneaking and lying. These elements end up being really powerful for people because they break the rules of normal discourse.
David Gardner: Yes, yes.
Jesse Schell: Normally we don't lie and betray one another in our normal day-to-day interactions with our friends. But now we get to see our friends trying to do this. It stretches the bounds of our friendship. In doing so, in creating these extreme situations, it creates memorable things and we learn a lot about each other at the same time. I think that's been part of why Among Us has been so successful. We're very excited bringing the VR version into play because it gives you a way to connect with your friends in an even stronger way.
David Gardner: Yes. I've experienced games like that, I certainly know of Among Us looking forward to the VR version. I have friends who said, I don't like to lie. I'm not comfortable doing that. We do learn a lot. I guess one thing we learned about that friend in an hour of play that we wouldn't have learned in a year of conversations that they've never been lying to us because they won't do in an hour of play, which I guess is good news. I did check one of my 20 favorite websites in the world, Quote Investigator.com. Sure enough, you're absolutely right, Jesse. It has been attributed to Plato, but Quote Investigator, its conclusion: no substantive evidence that Plato employed this saying. A precursor was published in 1670 by Richard Lingard. This early instance referred to gambling in a time period of seven years' conversations instead of a year of conversation. Anyway, now it occurs to me, I think I encountered that line in your book, not that you are attributing it to Plato, but this is exactly the thing you have in The Art of Game Design. Timeless thoughts, fresh thoughts in terms what a game is and what we're doing when we're gaming. Well, thank you for speaking a little bit to what a game is. In Chapter 4, you talk about the game consists of elements and there are four. I love the analytical breakdown of this big shaggy-dog word game into these four elements, mechanics, story, aesthetics, technology.
David Gardner: Now, I think you mean technology. Even if I'm playing Parcheesi, there's technology. There's certainly aesthetics. Not sure there's much story there. Admittedly, I haven't played Parcheesi by choice for 30 years. But this modern view of mechanics, story, aesthetics, technology, that was really helpful for me. Like a lot of your work at stretches across from video games right through to social games that were just with each other. Would you like to speak to any of those elements?
Jesse Schell: Sure. It's important. Once you start to design something, you'd be able to break it down into its component elements, it's really important. Those four are ones that I evolved over time. They're all important in their own ways because everything has technology, even if the technology is really simple, like sure, bits of paper and to use it to roll a die to get an answer, that's a simple technology. Aesthetics, very important because that's all about the look, the feel, the artwork, and how does that make you feel? Story is important. You look at a game like Parcheesi, and you're like well, there's really no story here, but there is because the thing about story is a little story goes a long way. You could say Parcheesi is a game about getting this little token onto this square. You could say that, but go look at the game board, it's about going home.
David Gardner: Going home.
Jesse Schell: This is a game about going home. In Parcheesi, you don't go home alone. You don't just move one piece like you do in a lot of games, you have multiple different pieces. And then of course you have other people trying to stop you from going home. One of the things we've talked about with story a lot is not only is the explicit story that the designer might be trying to create. But then games are story machines. They produce stories. Every game does this, like baseball is a great example. Baseball is a story machine. It has no explicit story laid over it, but the stories that come out of it when people play it, they end up being stories that are worth telling. Those are the two sides of a story in games, and that ends up being really important. Then of course, the fourth element, mechanics. The game mechanics, the rules for how the game works is a huge part of what game designers have to deal with. But to be able to separate these things, to realize aesthetics, mechanics, story, and technology, each needs to be addressed in its own way. Then all four of those things need to work together to be harmonious. That's what really makes a great game is, when those things work together in a harmonious way.
David Gardner: Really well put. I think in particular of aesthetics, I would actually truly say that in our lifetimes, we're both in our 50s, all four of those elements have consistently gotten, I would say, way better. In many cases, more sophisticated, sometimes simpler, better. But wow, consistently, pretty. Let's go to aesthetics briefly. The quality of wooden pieces or of the artwork that is common, or even Kickstarter's unproven games popping out these days at a rate I've never seen before is so far ahead of the look and feel of games of my youth. I look at old Avalon Hill war games with counters that are tiny and thin, the iconography isn't good. Or it's hard to read the text. And these days, bigger, brighter, sometimes it's overdone, but just the beauty, in particular, I would say, of tabletop games is shocking. If you were the proverbial person showing up from the 1950s saying, let's play a game today, I think you'd be blown away.
Jesse Schell: We're in an incredible renaissance when it comes to games. Both board games, card games, video games, and the aesthetics, in particular, all of these things have advanced to incredible levels. That probably has to do with the nature of economics, mass production technology, 3D printing has helped. I think you and I both remember when Trivial Pursuit was a new game, and that ended up being a huge breakthrough. You'd actually was headed economically. It was a huge breakthrough because previous to that, board games simply cost between $5 to $12, and that's it. The idea of a board game that costs more than that was just seemed insane. There were a few rare examples. I think Strat-O-Matic might've been one of those you mentioned. But they're very rare. We'd never had a mass-market one. Suddenly, Trivial Pursuit appears, a $20 game.
David Gardner: Sensational game.
Jesse Schell: No one had ever seen like, whoa, a $20 board gaming, you're kidding. That'll never succeed. It's a huge hit and the whole board-game world all start to look at each other like, wait a minute. You can have a $20 board game and have it be a huge hit, what else is possible? [laughs] It blew open these doors. Anyway, so it is a really exciting time for the world of games without [inaudible ].
David Gardner: I do think back on just the frequency of game releases, this is my made-up view of history. Monopoly, 1933, I'm making up the year. You have to skip five years ahead before, I'm totally making this up. Parcheesi shows up, and then four years after that, let's go with Othello and then which was Go, but then Sid Saxon shows up and Acquire pops up in 1961. But what I'm trying to make light of is, well, this is probably not a true view of history; it's definitely not.
Jesse Schell: Definitely not.
David Gardner: There was only one new game every five years or so. War kids in the 1970s, Avalon Hill [inaudible 00:29:01] start popping up. Dungeons & Dragons and others start to effloresce. But leading up to that point, there was a real dearth of choices. Don't you think a lot of abstracts?
Jesse Schell: Yeah. Nowadays we take it for granted that there are board games as an adult hobby. That's the thing we know people who do that, it's not for everybody. But board games as an adult hobby that exists -- 50 years ago, if you were an adult playing board games, you were playing chess. That's pretty much what you were planning. Other board games were fundamentally children's games. That started to change. I don't want to oversimplify, there always have been a few exceptions, but even the ones that were exceptions. Camelot is one that I think it was like a game from the '20s, is really interesting board game for adults, but even it used to masquerade as a game for children when it really wasn't. The thing that happened in the '70s with this opening of like, oh, maybe these games can go broader and start to appeal to more people and it's fascinating is we went through the world of war games and then the whole revolution of European and German board games being, just being so different from what was going on in America. And this is one thing that's just fascinating is gaming culturally in different places has had a huge, huge influence. The way, the way games are played and flavored in Germany really ended up influencing the entire board-game world. It had to do with the way families saw games because the attitude there was games were not for children. Games were a thing for the family, that the family would play together. There became this notion of, well, how do you make a game that both, that's simple enough for a child to play, but interesting enough for an adult to play, that they could play together? That really started to grow there, and that's such a successful formula. It started to spread across the whole world.
David Gardner: To me it's already getting very big, bigger every year. We'll talk about the future, maybe near the end. But let's, let's go back to the book. Just for our listeners who might not have come across The Art of Game Design before. What I'm doing is Jesse and I are just talking through the first several chapters of his book because I think it's a nice way to do an interview on a podcast and not everybody's a game or listened to Rule Breaker Investing. Everybody knows the host is a longtime gamer. So that's why I keep bringing back the Jesse Schells and Richard Garfields and [garbled] can attest to this podcast because of my love for this topic. But this is a 33-chapter book that goes deep across all aspects of game and designs. So for us to just talk through the first seven, that's really all we're gonna do. But let's keep plugging here. Chapter 5, again, just where, where do we come from? First-part chapters tell a story here or there. Chapter titles again, in the beginning, there's the designer. The designer creates an experience. The experience rises out of a game. The game consists of elements, mechanics, story, aesthetics, and technology.
Chapter 5, the elements support a theme. Now, one of the things that runs is a unique structure through The Art of Game Design. Jesse is you create 100 lenses ways of looking. It's sidebar material, ways of looking at whatever topic we're talking about right now. You number them. Not only do you number them, we'll talk about this later again. But you've turned them into a deck of cards, and I own a couple of copies of these decks of cards. We'll talk about that in a little bit, but these lenses each have a title and then asked you a few questions as you contemplate as a game designer, your creation. For the elements support a theme, lens 9 pops up in this chapter of the book. The two questions it's asking you to ask yourself: What is my theme? Am I using every means possible to reinforce that theme? That is such a strong lens. It's a lens that the world has gotten much, much better at over the years. In part because you've whipped us into shape and gotten us thinking so much more thematically than we were before. I do agree with you, Parcheesi is about coming home, but man, do I have games that tell the story, coming home, so much better.
David Gardner: Yeah.
Jesse Schell: Then Parcheesi does so it's the theming.
David Gardner: Yeah, there's a reason we don't play Parcheesi that much. It has some elements, but it is missing a number of things.
Jesse Schell: Yeah, I think theme is incredibly important. Just to note on the notion of lenses. The way I got there. When I started trying to write the book in a serious way, there were not a lot of game design books out at that time. It was maybe, I would say around, I don't know, 2003. I was probably looking at this in a really serious way.
David Gardner: Yeah.
Jesse Schell: As I started talking to experienced game designers, and I would tell them, I'm thinking I'm trying to write a book about game design. A few of them shook their head and said, "No, no, it can't be done. You can't do it." I said what do you mean you can't do it? They said the problem you're going to have, the point of your book is to give people advice about their game. Advice that's good for one game, is bad advice for another game. Any advice you give is going to be bad advice, and so your book won't be very good for that reason. I thought about that and I'm like, wow, that's wisdom and there's real truth in that. Because I could think of many times where there was a thing true for one game, not true for another game. I was sort of set back by this. I'm like, wow, maybe this can't be done well. It hit me all of a sudden. Questions can't be wrong. Advice can be wrong, but questions are never wrong. A question might not be appropriate. A question might not be needed at a certain time, but it won't be wrong. That at that point I realize this book should be about are what questions should I ask myself and thinking of questions is different perspectives. That's the idea of it being a book of lenses. That there are just so many different perspectives you can take because making a game is not do this, then this, then this, now you've got game. Making a game is about looking at it from many different points of view and trying to figure out which points of view are going to help give you the insight to make this a great game. That's what the lenses are, that's what the questions are. To the point of theme, unification of theme. I learned this at Disney. Disney makes theme parks. It's right in the nation.
The idea of a theme is something that can be quite deep. Herman Melville said, "To write a mighty book, you must choose a mighty theme." In other words, when you create something, it should be about something, and you should know what that is. Stephen King tells a story about this. Talking about his first successful novel, Carrie. He'd written it, and there, he had written it all out and he was revising it and going through it. At some point he realized, "Oh, I know what this book is about. This is, isn't just a book about this girl has this experience. This is a book about blood." He realized blood was the theme in the blood of the family. The blood of violence. The blood associated with becoming a woman. Like this was about blood in its many forms and once he realized that, he didn't like rewrite the book, but he went back and found ways to heighten that because he saw it as a theme, as a thread that went through the whole thing. Again and again for great games, this is often so important to understand what is this game actually about? Then to go back and figure out how to heighten those themes so that it can be as strong as an experience as possible.
David Gardner: As you say in the lens, am I using? We ask ourselves, am I using every means possible to reinforce that theme. While I love me, some German euros that are rather seamless but still mechanically brilliant. If you can actually reinforce a real theme and make me feel like I'm managing an aviary wingspan, a good recent example. It does stick with the people. It also just invites more people to the table, or at least they're walking by a table going, "What does that game you guys are playing?" The games that do theme brilliantly. I do find myself defaulting somewhat to tabletop games, but I want to make it clear. I play hours and hours of video games here at the age of 56 every bit as much as I did at 46, 36, 26, and 16, playing Pong back in our day, hate to use that phrase, but yeah, themes just being pulled through story. Obviously, there's so powerful.
Jesse Schell: What I love is this story of Rob Daviau creating Risk Legacy. It's just fascinating. Most people know the board game of Risk is this old war game again, design for children. Because of that, it has a lot of problems. Rob Daviau, working at Hasbro, was asked like hey, can you make a better version of this? What if you redesigned with, what would that be? He has a wonderful design technique he uses, which is this design by opposites where he thinks about, what am I taking for granted about this? What if I did the opposite? Risk as a board game, what do I take for granted? I take for granted that it's on the table. What if it wasn't on the table? That's not great. I take for granted that it has two to four players. What if I have 20 players? It's not really working. I take for granted that every time you play it, it resets to the beginning and nothing changes. It's like, oh, wait a minute, what if I do change that? The idea of Risk Legacy was that there are changes that happen in the game that are permanent forever. Anyone whoever plays this game again going forward, those changes are there.
An example, when you win the game, you take out a pen and you mark a territory on the board and any future time that you get that territory, you get all kinds of bonuses, so the world changes. This is an interesting game mechanic and novel and different and it's now spawned like this was the beginning of an entire genre, which we now call legacy games. But in terms of theme, part of what was so beautiful was that Rob recognized that this is a great mechanic. That's fine, but he realized Risk is a game about war. Of course, this is a good idea because war changes a world. He realized that was the theme: war changes a world. He talked about using everything you can possibly use because you can imagine how hesitant people are to take out a pen and write on the board of the game, and Rob just rubs it in your face from the get-go because the box is gorgeous, it's got this handle. You carry a suitcase. But in order to open it, there's nicely made label that goes over and, and to open the game, you have to cut this label. What the label says on it is, what is done cannot be unveiling. Then the first thing I have you do in the game is like, everybody take two of the different country groups. I forgot what they call on them? What they call the races or what, but they're basically different nations. Everybody take two of them, pick the one you like, and then take the other one and rip it up and throw it in the trash. No one will ever be them. It's just fascinating. It was a wonderful use of using theme to unite a game to make a very strong experience.
David Gardner: Absolutely, and longtime listeners may remember, and this might sound like a brag for anybody new. But on June 22 of 2016 on this podcast, Rob Daviau came on and talked about Risk Legacy. I hope Rob's not listening, Jesse, because I actually think you did a better job explaining about Rob has done [laughs]. Of course you've had some more years that thinking about it. As Rob to know, Rob was a wonderful guests, but absolutely the Legacy innovation. I know that innovation spawns so much of what we're discussing and you talk about throughout your book, you've done it in your life with your company. We'll get to that in just a little bit, but let's close the loop on just the last two chapters out what I mentioned, Chapter 6 and 7. Again, we've just done the elements supportive theme. Now here comes No. 6, the game begins with an idea, and No. 7, the game improves through iteration. Now, at the risk of prompting you because you wrote this book 14 years ago, you may or may not remember that the game begins with an idea. You start to talk about how you were a professional juggler and you learn something, I'm going to say, as a boy from an older juggler at the time, which helps inform what you are conveying to game designers about beginning with an idea.
Jesse Schell: That was a story I just had to put in there because it was something very meaningful to me when I was young. I picked up juggling as a hobby, and when I was a teenager, I later went on to do it a bit more professionally traveling with some circus troupes. But before I had that level of confidence, I went to my first juggling festival. I'd never been to a juggling convention or festival, and I didn't really know what to expect, but I was like, wow, I learned to juggle on my own from a book, and I think I want to go see what this is. I remember going to the door and the person says, "OK, well, are you a juggler?" I remember, just like, are you a game designer?
David Gardner: Magic words.
Jesse Schell: Really, the only reason he was asking is there was different prices for spectators and for jugglers, but here I was confronted with the question. Was I real juggler? I'm pretty sure I said no, because I wasn't ready to commit. I also think this got me in at a lower rate, which I didn't realize until after, but I'm very shy. I brought three rubber balls that I have in the pockets of my windbreaker, but I don't take them out because I'm not sure what's what. I'm walking around this place and I see all these amazing jugglers doing things I've never seen, never could have comprehended. This is just very exciting, and the nature of juggling festivals is wonderful because it's very much about sharing. It's all about just sharing what you do and comparing techniques. It's very open, very supportive community, but it was all new to me and I'd never seen any of this. I walked around and I saw these different people doing these different things. I was very intimidated because everyone is so much better than I was. But eventually, I got up the courage to, OK, I'm going to take out my juggling balls and I could do maybe two tricks, and so I'm there, I'm doing my little tricks and just doing some of that. As I'm doing that, I look over and I see there's this older man in this powder blue jumpsuit and he is doing these tricks that are just amazing. I can't even believe what I'm looking at. There's one where like, I swear he's throwing the balls and they're going at right angles. Some of them are just beautiful and different. I'm just, wow, he's so different than what everybody else is doing, and I'm just captivated, just watching these tricks. Then I realized that I see one trick and I'm like, wait, that's one of the tricks. I can only do two tricks and that's one of them, but it sure doesn't look like that when I do it. I'm just absolutely hypnotized and suddenly he stops and he stares right at me.
He says, "Well." I'm like well, what? He says, "Well, aren't you going to copy me?" I said, "I don't think I could." He says, "Yeah, none of them can. Look around." I'm looking around and he says, 'See that guy over there, see what he's trying to do. He's trying to do this," and he does this trick. It looks like the balls are fluttering and flying. He says, "But he can't do it." I felt OK, and he says, "Where do you think I learned to juggle like this?" I thought about it, and of course, the only way I'd learned was from books. I'm like from books, and he says, "From books? No. Nope, not from books. I'll tell you where I learn these things." He shows me the move with the right angle in it, and he says, "See that, I learned that from a paper punch out on Long Island." Then he does one that where he twirls around and ball is kind of fluttering, and he says, "I learned that watching a ballerina in New York City." Then he does one where the ball is like coast off of each other and glide up high, and he says, "This one I learned watching a flock of geese take off from a lake." He says, "So, kid, this is what you should remember. People can steal your moves, but they can never steal your inspiration." I was like, "Oh, OK, Mister, thanks." I think I got to go to a workshop or something. I was so intimidated by this guy. But it stayed with me and I realized that this wasn't just good advice for jugglers. This is good advice for everything. The idea that no one can steal your inspiration, that where you get your ideas from is really important, and that you shouldn't, as game designer, don't just copy other games. Sure, look at other games, study other games, learn from other games. But you should be taking the inspiration from the things in your life that the experiences you've had that no one else has had. Those are going to be what let you make the games and experiences that no one can make except for you.
David Gardner: Beautifully told, and thank you for bringing that story back to my memory. You told it just as beautifully in the book and it is from the chapter, the game begins with an idea, and your point is, it's your idea. We can copy mechanics, we can copy themes. Hey, maybe I'll also do a traditional swords and sorcery fantasy theme. We can copy themes, but the inspiration, the lived experience, what each of us has seen and what our attitude was about, that's unique. Yeah. We're definitely not all jugglers, but I think we all can be game designers, but more to your point and what I love about this work of nonfiction that you have now put into a third edition in recent years is that it's really a book about design. I love games. I think that's very evident. I know you love games, but what I especially love is that this is bigger than games. You're writing about design. When people say stuff like Stanford D school is the new B school, I'm sure you hear things like that around Carnegie Mellon. I think Carnegie Mellon has a business school. But I know one thing: It's got Jesse Schell teaching people how to design entertainment in it as well. I know it does have a business school. But anyway, it's that design sensibility that I was not exposed to as an undergrad and I've admired it and looking at some of my favorite products, like anything that I own by Apple or some of the beautiful games on my shelves. I've grown over time to realize it's the design, stupid, and design itself is so deep and so worth pursuing over the course of one's life. Your book, we're going to stop with Chapter 7 here, but improving through iteration. You introduce a rule, an important one that a lot of us can appreciate, especially the older we are, perhaps. The game improves through iteration, the rule of the loop, which you coin and call it like this. The more times you test and improve your design, the better your game will be. Now, there's probably not true in every instance. I can imagine there are cases where somebody does it too much and they ruin it for some reason. But, really the spirit of it is of course, iterate, iterate, loop, loop, loop. The faster you can loop, the quicker you are going to improve a game, and the more you loop, the better that game will be.
Jesse Schell: Yeah, and that makes your ability to iterate as fast as possible critically important, and this is the thing novice designers fail to understand. They often imagine that the way a game is made is that you sit around and think hard, and then you write a big document, like some weird movie scripts, but for a game, and then you just execute what's in that document, and there's your perfect game. That's just not ever how it happens. Not ever. What happens is, you come up with an idea for what you think might be good, and you build it, and the act of building it and playing it makes you realize, oh, this is how it really works. It doesn't work the way I thought, it works differently than I thought. Then you want to iterate and improve it and improve it and improve it. So it is very important to create situations where you can iterate as fast as possible. Video game designers often talk a lot about paper prototyping because early versions of your game, they don't need to be done digitally because the thing is digitally can take time. You've got to write code, you're going to make digital assets. When I can, a lot of times get out a pair of scissors and some paper and a pen, and I can make a fake version of the game where I pretend to be the computer and someone else plays the game, and we can see, is this fun at all? Is this worth spending three weeks to code up, or should we just chuck this idea and do something else? Iterating as fast as possible is really crucial and critical. Again, one more reason that as a designer, if you want to become a video game designer, start by making card games and board games because you can make them so fast. Anybody can make a card game in an hour,. You got a pair of scissors and paper and a pen. You can make a card game in an hour. It's probably going to not be very good. But now you'll know, well, that wasn't good the way I thought. What if I change it like this? What if I change it like that? Some of the best-known games, you look at a game like Scrabble and you think, oh, that's simple as letters and things. How long could that have taken to make? It took years. It was years figuring out like, well, how many tiles should you have? Where should the triple word score go? Is triple word score a good idea? Why? In order to do that, you have to play it over and over, and you have to start to understand, well, what is going to make this game stronger, weaker? It really is a process of evolution that you would just want to accelerate as much as you possibly can.
David Gardner: Do you know what an OODA loop is?
Jesse Schell: I don't know that I do.
David Gardner: Well, you've already correctly intuited it and you've written in support of it, maybe without knowing, but I came across this. This is one of those tropes you'll encountering business books and some other things. But it comes from, I'm looking it up now, U.S. Air Force Colonel John Boyd, and he used to go up and compete against the new recruits up in the air tactics, and he won every single time. Nobody could beat Colonel Boyd up there in the air, and they eventually said, how do you do it? It's simple. I was doing OODA loops. And OODA is an acronym, OODA, observe, orient, decide, act. And that's what we do, not just when we're up there, I'll never be in a fighter plane an Air Force professional. Well, that's what we do all the time in life, we observe something, we orient ourselves to it, we decide we're going to do it, then we act, and you were just saying, Jesse, just a couple of minutes ago, the more faster you do that and that's what Boyd did so well. He did 40 of them before one of his new recruits could do three of them. That's the way he described his mastery, and it's back to your rule of the loop, in this case, it's got a military acronym tied to it, of course, because it's the military. But observe, orient, decide, act over and over as fast as possible.
Jesse Schell: There's a famous game design essay called Less Talk, More Rock, and the people's instinct is, I wanted to design again, let me talk about it, let's all talk about talk and talk and talk about what this should be and then maybe we'll go build it. With the essay says is like, look, until you build something, you don't actually have something to talk about.
David Gardner: Nice.
Jesse Schell: You have an idea, build it quick, and then look at and talk about that, and then do something else and talk about that, so the talking should come after the doing. The talking should not stop you from getting the doing done.
David Gardner: Words to live by, wow, that's great. Well Jesse, I really could spend easily another hour. I feel like I haven't even touched on things like, well, maybe I can still ask you one or two questions, I'm curious whether anything is impressing you these days out there in the gaming world, either the work of a designer or any new trend. I certainly want to ask you briefly just to say where you are with your own company, Schell Games? You are a very successful, lauded entrepreneur, you are operating out of Pittsburgh, Pennsylvania. I've visited you in your lovely offices once before, I'm just curious. We heard some of your work, but maybe some mix of how about these two closing questions? What's cool out there that more of us should be paying attention to right now? And how are things going with you and your career, what are you looking forward to?
Jesse Schell: Yeah, Schell Games is a studio are run out in Pittsburgh, we're pretty sizable for an independent game studio, we have about 150 people. We've been at it for about 20 years now, typically working on about eight games at a time. We're an interesting studio because half the projects we do are our own projects that we made up. Projects like, I Expect You to Die, I may have mentioned before. But then the other half the projects are projects we do either for hire or partnerships, and some of those are educational, some of those are entertainment projects. We end up doing it a huge mix of things. Recently, the virtual reality, augmented reality, mixed reality spaces are the places where we've been really dug in making all kinds of things. Everything from Star Wars games to cooking games, to everything in-between, but really just the world of VR and AR has really changed us as a studio.
David Gardner: Whatever one might think of the metaverse or whatever that word means, one thing is clear, Jesse: You and your studio, fairy invested in augmented reality and virtual reality for somebody like me, I haven't actually bought an Oculus yet. I have a brother who has one and gives it out as gifts to friends, I feel like PlayStation VR has been important. I feel like it's clearly becoming a bigger and more used platform, but I'm not there yet, so Jesse, you're telling me that I'm getting there because that's where we're headed.
Jesse Schell: Yeah. Over the course of the pandemic, VR became surprisingly popular. We're at a point now where there are more Oculus Quest headsets on the market than Xbox One consoles. But most people have no concept of that. They think of VR is a thing that, very few people do it, but we're, we're in the realm of, I believe, 14 [million] or 15 million of these headsets being out there. What's fascinating about the Quest headset because it's so inexpensive and because it's wireless.
David Gardner: It's not tethered.
Jesse Schell: It's not tethered at all, it's so easy to pick up and use, the people who buy it, they don't buy to play a couple of games and put on the shelf, they tend to keep playing, keep buying new things, and so we've just seen it has quickly dominated the VR market. We feel like we've been seeing a doubling just in terms of number of headsets that are out there. A few years ago it was 2 million and then it was 5 million and then 10 million, and now we're approaching, over the course of this year, I think we're going to approach 20 million, and I do think that we'd be on track for 40 million by the end of 2023. You really are in a place where this is going to becoming mainstream, and right now it's mostly about virtual reality over the next couple of years, it's clear that mixed reality, augmented reality is going to be part of these headsets if you look at what's already happening on the Quest headsets and some of the rumors about forthcoming headsets. I think we're going to see this becoming really mainstream for the next couple of years. In terms of what's cool out there, I think one of the biggest trends happening right now is the whole trend of games inside games. We're seeing games like Roblox and Fortnite that started out as just Roblox was like, oh, it's about building places, and Fortnite it's, oh, it's this is arena shooter game. Now, both of them have grown into these experiences that Roblox has thousands of experiences in it, and even Fortnite now has a library of different games inside the game. It's interesting because people talk about, oh, the metaverse is if they have any idea what they're talking about, [laughs] and most of that talk is nonsense. But if you want to understand the future of the metaverse, you should be looking at this notion of games inside games, because I think that's really what we're going to see, not a metaverse, but instead a collection of metaverses, Roblox is going to be one, Fortnite is going to be one. I don't have any information about this, have a strong suspicion Grand Theft Auto VI is going to be one of the these [laughs] that's going to allow people to create their own games.
David Gardner: Wow.
Jesse Schell: Inside the other games.
David Gardner: I laugh only because Grand Theft Auto V, which has had a good 10 years, just kept adding DLC download. It just kept iterating, entering in a way it feels like a thousand games to me.
Jesse Schell: Right. But I think again, I have zero information, but like when I stare into my crystal ball, unlike when I look at where all the trends are going and I look at how much success they've had taking that 10-year-old game and making it incredibly successful, continuing to sell well over time. Why wouldn't they make it so other people can make games and put inside it? I think it's likely to happen.
David Gardner: Love it. Jesse, off the air before we started today, you mentioned you're working on another book right now.
Jesse Schell: Yeah. I am, this hasn't been broadly announced, but I'm willing to talk about it here. Working on a book that in a sense as a sequel to The Art of Game Design, a lot of what I've done at Schell Games over the last 20 years has been in the realm of educational games. We do education, entertainment, health games, even theme parks and museums, and also a lot of the work had done Carnegie Mellon has been about making educational games. I teamed up with Barbara Chamberlain, who's another amazing game designer who makes wonderful educational games, and the two of us are working together on the art of educational game design, looking at the principles of how you best create games that are not just fun, but games that are designed to change the player.
David Gardner: Love it. Games are problem-solving with the playful attitude, we do that in school and the longer we live as adults we learned, we're living in the school of life, which we never really leave until we leave. Constant lifelong learning, constant problem-solving, if that's the way I can now justify my many game nights that I have in my mid-50s. I look forward to more deep insights from you and guidance for this generation of game designers, many of whom, of course, are working in and around schools, everything from academia at a high-end to, I don't know, how to make it a better version of Parcheesi for the kids these days. Jesse, I've just had so much fun with you. Thank you so much for joining us on Rule Breaker Investing. I do see a lot of overlap between investing is a game and how to play it, and really how to design a portfolio. When I first read the art of game design some 15 years ago, I was doing it with my investment cap on, saying, I think a lot of what he's pointing out here, if you just substitute the word investing for games or game designer portfolio, you come away with all creative insights and ways to see things with a new lens. I do want to put a real plug-in. Not the Jesse needs this or asked for this, but I wanted to say that I love The Art of Game Design, deck of lenses. The book, The Art of Game Design, has as its subtitle, A Book of Lenses, but anybody who's a big fan like I am can buy a deck of cards off Amazon these days that takes each of your 100 or so lenses, puts it on a playing card and enables me anytime I want to be creative, are challenged myself or look at things from different angles shuffle it up, deal out a few. Some people look at Taro cards, I don't and try to think what their future is going to hold, I don't, but others flip out the deck of lenses and start go, how can I think about this smarter or in a way that will make me happier or challenge those around me. So whether you're a game designer, a portfolio builder, a non-fiction writer, the list goes on all the makers out there, all of us, the makers in us, I think are designed, can be improved not just by the narrative game design book, but that deck of lenses, which has been really fun. There is a prolonged plug for one of the lesser-known awesome things you combined Amazon these days.
Jesse Schell: Definitely appreciate it, and I'll also, there is a free web app if, for people who want to check out and see a digital version as well, again, you go to Arctic game design.com, you can find all of that.
David Gardner: Thank you for mentioning that, and it just it gives me I have that on my phone, but I never think of that because I look at my deck of cards each day, thanks Jesse Schell, Foolish best wishes and let's talk again sometime.
John Mackey, 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 and Walt Disney. The Motley Fool has positions in and recommends Amazon, Apple, Roblox Corporation, 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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Now some people think of that as the metaverse where I can just sort of be lying there, I guess in my meta chair, and just experience with my imagination some of these game without having to roll out supply chain logistics printed off in China, and all these kinds of things. He talked about using everything you can possibly use because you can imagine how hesitant people are to take out a pen and write on the board of the game, and Rob just rubs it in your face from the get-go because the box is gorgeous, it's got this handle. I look forward to more deep insights from you and guidance for this generation of game designers, many of whom, of course, are working in and around schools, everything from academia at a high-end to, I don't know, how to make it a better version of Parcheesi for the kids these days.
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Entrepreneur, author, and game designer Jesse Schell joins the podcast to talk about the art of design, the creation of experience, and the future of games. However, good news: It's about to get a lot better as the rest of this interview comes from our normal environs in the good old U.S. of A. Jesse Schell is an American video game designer, author, CEO of Schell games, and a distinguished professor of the practice of entertainment technology at Carnegie Mellon University in Pittsburgh, Pennsylvania. 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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Party games and athletic games and board games, card games, video games, all of them and what was nice about writing Art of Game Design, it was an opportunity to show, let's look at the principles that connect all of these kinds of games together. Again, one more reason that as a designer, if you want to become a video game designer, start by making card games and board games because you can make them so fast. I teamed up with Barbara Chamberlain, who's another amazing game designer who makes wonderful educational games, and the two of us are working together on the art of educational game design, looking at the principles of how you best create games that are not just fun, but games that are designed to change the player.
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It makes people think, "Well, since I don't know what I'm doing I must not be a game designer." Jesse Schell: As I started talking to experienced game designers, and I would tell them, I'm thinking I'm trying to write a book about game design. Again, one more reason that as a designer, if you want to become a video game designer, start by making card games and board games because you can make them so fast.
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19651.0
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2022-08-24 00:00:00 UTC
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This Streaming Stock Could Make a Mighty Move In Sports Entertainment
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https://www.nasdaq.com/articles/this-streaming-stock-could-make-a-mighty-move-in-sports-entertainment
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Sports entertainment and media company World Wrestling Entertainment (WWE) (NYSE: WWE) has had an exclusive streaming relationship with Peacock -- part of Comcast's (NASDAQ: CMCSA) NBCUniversal segment-- since the spring of 2020. This deal has given Peacock's premium subscribers access to WWE's extensive back catalog of classic wrestling matches and the ability to view live events such as Royal Rumble, WrestleMania, and SummerSlam. However, the WWE's weekly live programs, Raw and SmackDown, still debut on linear TV, and only arrive on Peacock a day later.
During WWE's second-quarter investor call, co-CEO Nick Khan suggested the company is open to the idea of transferring the live broadcast rights for Raw and SmackDown to streaming. Here's why forging an even closer relationship could be a smart move for both WWE and Peacock.
The linear TV landscape is changing
WWE last negotiated its Raw and SmackDown deals in 2018. Raw airs on USA Network -- also owned by NBCUniversal -- in a deal reportedly worth $1.3 billion over five years. Fox Corporation's FOX network broadcasts SmackDown in an arrangement worth about $1 billion, also over five years.
Raw draws approximately 2 million live viewers per week over its three-hour runtime, while SmackDown attracts around 2 million during its two-hour weekly broadcasts. For comparison, these figures are in the range of the average viewership for a National Basketball Association game. However, with cord-cutting on the rise and some experts anticipating a drop in live TV ad spending over the coming years, this could be an opportune time for WWE to move its flagship weekly shows to Peacock.
WWE is not new to the streaming space
WWE first entered the US streaming market with WWE Network, which it launched in February 2014. Within a year, WWE Network had over 1 million subscribers. But, despite that promising start, it struggled to grow. Its US subscriber base peaked at around 1.9 million in 2017.
By the time WWE signed its deal with Peacock in early 2020, the WWE Network had just 1.1 million subscribers. It's estimated that 1 million of them subsequently moved over to Peacock. However, a year after the deal went into effect, Khan revealed that more than a third of Peacock's premium subscribers had watched WWE content.
Streaming services are embracing live content
As Khan noted on WWE's investor call, streaming companies are "hungry" for premium live content. The executive cited Apple's $2.5 billion contract with Major League Soccer and Amazon's $11 billion deal with the National Football League. As a provider of live programming, Khan went on to suggest the WWE is in a unique position because it attracts mass audiences and operates year-round.
For NBCUniversal, its standing relationship as both a partner for WWE Networks and Raw surely puts it in a strong position should WWE decide the time is right to fully jump to streaming. As Khan stated on theearnings call "We always talk to [NBCUniversal] first about anything going on."
Peacock is operating on a relatively slim budget
Comcast reported Peacock had 13 million premium customers as of the end of 2022's second quarter -- the same figure it had three months prior. The potential to attract millions of additional viewers with live WWE weekly programming is surely an appealing prospect for Comcast -- depending on how much such a deal would cost.
NBCUniversal reportedly spent more than $1 billion to secure the WWE Network rights for Peacock through 2025. Considering WWE earned more than $2.3 billion the last time it sold the TV broadcast rights for Raw and SmackDown, it's reasonable to wonder whether NBCUniversal has the appetite to spend heavily to make both shows exclusive to Peacock. But as Khan has noted, Peacock's major streaming competitors are already shelling out billions of dollars a year for premium live content.
Should WWE decide to shift Raw and SmackDown solely to streaming, Peacock would do well to secure the rights. By its nature, pro wrestling is scripted, meaning that viewers are presented with feuds and storylines that often continue for months, if not years. In a world where subscribers can and do cancel and add streaming services on a month-to-month basis, live WWE content could bolster Peacock's stickiness -- and its growth.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Tom Wilton has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Apple. The Motley Fool recommends Comcast and World Wrestling Entertainment 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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This deal has given Peacock's premium subscribers access to WWE's extensive back catalog of classic wrestling matches and the ability to view live events such as Royal Rumble, WrestleMania, and SummerSlam. However, with cord-cutting on the rise and some experts anticipating a drop in live TV ad spending over the coming years, this could be an opportune time for WWE to move its flagship weekly shows to Peacock. Considering WWE earned more than $2.3 billion the last time it sold the TV broadcast rights for Raw and SmackDown, it's reasonable to wonder whether NBCUniversal has the appetite to spend heavily to make both shows exclusive to Peacock.
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Sports entertainment and media company World Wrestling Entertainment (WWE) (NYSE: WWE) has had an exclusive streaming relationship with Peacock -- part of Comcast's (NASDAQ: CMCSA) NBCUniversal segment-- since the spring of 2020. Streaming services are embracing live content As Khan noted on WWE's investor call, streaming companies are "hungry" for premium live content. The Motley Fool recommends Comcast and World Wrestling Entertainment and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple.
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Sports entertainment and media company World Wrestling Entertainment (WWE) (NYSE: WWE) has had an exclusive streaming relationship with Peacock -- part of Comcast's (NASDAQ: CMCSA) NBCUniversal segment-- since the spring of 2020. WWE is not new to the streaming space WWE first entered the US streaming market with WWE Network, which it launched in February 2014. By the time WWE signed its deal with Peacock in early 2020, the WWE Network had just 1.1 million subscribers.
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Within a year, WWE Network had over 1 million subscribers. By the time WWE signed its deal with Peacock in early 2020, the WWE Network had just 1.1 million subscribers. Considering WWE earned more than $2.3 billion the last time it sold the TV broadcast rights for Raw and SmackDown, it's reasonable to wonder whether NBCUniversal has the appetite to spend heavily to make both shows exclusive to Peacock.
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19652.0
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2022-08-24 00:00:00 UTC
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Warren Buffett Just Did Something He Hasn't Done This Century
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https://www.nasdaq.com/articles/warren-buffett-just-did-something-he-hasnt-done-this-century
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When Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett buys or sells stock, everyday investors and Wall Street professionals all pay close attention. That's because the Oracle of Omaha has led his company's Class A shares (BRK.A) to a jaw-dropping average annual return of 20.1% since taking the reins in 1965. For those of you keeping score at home, we're talking about an aggregate gain of 3,641,613% over 57 years, through the end of 2021.
The best news for investors is that following Buffett's trading activity, and riding his coattails, if you choose to do so, is pretty easy. That's because Berkshire Hathaway is required to file Form 13F with the Securities and Exchange Commission on a quarterly basis. A 13F provides an under-the-hood look at what money managers with at least $100 million in assets under management were buying, selling, and holding in the most-recent quarter.
Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.
Three sectors have captivated the Oracle of Omaha's attention for more than 20 years
Since the beginning of the century, predicting where Buffett would put his money to work hasn't been a mystery. That's because three sectors have dominated Berkshire Hathaway's portfolio for the better part of the past 22 years.
Although it's the current No. 2 in Buffett's portfolio, financial stocks are, unquestionably, Buffett's favorite sector to invest in. Even though banks and insurance companies are cyclical, and therefore exposed to the inevitable downturns that arise in the U.S. economy, they benefit from the disproportionate amount of time the U.S. spends expanding. This allows major holdings like Bank of America (NYSE: BAC) and U.S. Bancorp (NYSE: USB) to grow their loans and deposits over time. And it certainly doesn't hurt that bank stocks like Bank of America and U.S. Bancorp have a knack for paying superior dividends, relative to the average yield of the benchmark S&P 500.
The Oracle of Omaha is also a huge fan of consumer staples stocks. These are companies that provide goods and services that people will consume no matter how well or poorly the U.S. economy and stock market are performing. Beverage stock Coca-Cola (NYSE: KO), which is the longest-tenured holding in Berkshire Hathaway's portfolio, is an excellent example of a consumer staple stock that continues to grow over time. Because Buffett's company has been holding shares of Coca-Cola shares for 34 consecutive years, it's generating an eye-popping 54% annual yield, relative to its cost basis.
The third sector that Buffett and his investing team have piled into is technology. Although the Oracle of Omaha isn't the biggest fan of tech stocks, he's been known to make sizable bets on a select few companies. Innovative kingpin Apple (NASDAQ: AAPL) accounted for 42.6% of Berkshire Hathaway's $368.5 billion of invested assets, as of this past weekend. Apple has an easily recognized brand, an exceptionally loyal customer base, the top-selling smartphone in the U.S., and is delivering sustained double-digit sales growth from its high-margin subscription services segment.
Image source: Getty Images.
This is a first for Warren Buffett in this century
However, Berkshire Hathaway's latest 13F filing, which covers the company's buying and selling activity during the second quarter, revealed a big change. For the first time this century, the energy sector accounts for more than 10% of the Oracle of Omaha's invested assets -- 10.9%, as of June 30, 2022.
Even more interesting is the fact that only two energy stocks comprise the entirety of this 10.9% stake: Chevron (NYSE: CVX) and Occidental Petroleum (NYSE: OXY). Note, this percentage doesn't include the $10 billion in preferred stock Berkshire Hathaway owns of Occidental Petroleum.
For Buffett to aggressively pile into oil stocks like Chevron and Occidental signals his belief that oil and natural gas prices will remain elevated for a long time to come. There's certainly evidence to suggest that energy commodities can deliver big gains to drilling and exploration companies for years.
For example, oil majors substantially reduced their capital spending during the COVID-19 pandemic due to energy commodity price uncertainty and a historic drop-off in demand. Add to this Russia's invasion of Ukraine, which threatens to cripple the flow of oil and gas into certain parts of the world (e.g., Europe). These supply chain challenges aren't going to be resolved overnight, which sets the stage for oil and natural gas prices to stay well above their historic norms.
Buffett is probably also a big fan of Chevron and Occidental Petroleum as being integrated operators. "Integrated" oil and gas stocks generate the bulk of its profits from drilling, but also operate midstream and/or downstream assets. Midstream assets, such as transmission pipelines, offer transparent operating cash flow thanks to fixed-fee or volume-based contracts. Meanwhile, downstream assets, such as refineries and chemical plants, benefit from lower input costs and (generally) higher consumer/enterprise demand when crude oil prices decline. In other words, Chevron and Occidental are reasonably well-hedged in the event that oil and gas prices decline.
Big Oil is also known for its big dividends. Chevron has increased its base annual payout in each of the past 35 years and is currently doling out a 3.6% yield. Although Occidental's 0.7% yield is nothing to write home about, Berkshire does hold an aforementioned $10 billion in preferred stock yielding 8% per year.
Perhaps the biggest oddity of Buffett's new-found love of energy stocks is why he chose to pair Occidental Petroleum with Chevron. While Chevron has what's arguably the safest balance sheet among the global oil majors, Occidental Petroleum has one of the most-levered balance sheets in the industry thanks to its pricey acquisition of Anadarko in 2019. Occidental absolutely needs crude prices to remain elevated if it's going to dig itself out of a sizable net-debt position. Chasing after a company as indebted as Occidental is very un-Buffett-like.
For the moment, Buffett's new energy-focused investment strategy appears to be working. With the Oracle of Omaha getting permission from the Federal Energy Regulatory Commission to potentially increase Berkshire's stake in Occidental Petroleum to as much as 50%, energy has a chance to eventually supplant consumer staples as Buffett's third-biggest sector by invested assets.
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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 and Berkshire Hathaway (B shares). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), 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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Innovative kingpin Apple (NASDAQ: AAPL) accounted for 42.6% of Berkshire Hathaway's $368.5 billion of invested assets, as of this past weekend. Apple has an easily recognized brand, an exceptionally loyal customer base, the top-selling smartphone in the U.S., and is delivering sustained double-digit sales growth from its high-margin subscription services segment. This is a first for Warren Buffett in this century However, Berkshire Hathaway's latest 13F filing, which covers the company's buying and selling activity during the second quarter, revealed a big change.
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Innovative kingpin Apple (NASDAQ: AAPL) accounted for 42.6% of Berkshire Hathaway's $368.5 billion of invested assets, as of this past weekend. When Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett buys or sells stock, everyday investors and Wall Street professionals all pay close attention. Because Buffett's company has been holding shares of Coca-Cola shares for 34 consecutive years, it's generating an eye-popping 54% annual yield, relative to its cost basis.
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Innovative kingpin Apple (NASDAQ: AAPL) accounted for 42.6% of Berkshire Hathaway's $368.5 billion of invested assets, as of this past weekend. For Buffett to aggressively pile into oil stocks like Chevron and Occidental signals his belief that oil and natural gas prices will remain elevated for a long time to come. With the Oracle of Omaha getting permission from the Federal Energy Regulatory Commission to potentially increase Berkshire's stake in Occidental Petroleum to as much as 50%, energy has a chance to eventually supplant consumer staples as Buffett's third-biggest sector by invested assets.
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Innovative kingpin Apple (NASDAQ: AAPL) accounted for 42.6% of Berkshire Hathaway's $368.5 billion of invested assets, as of this past weekend. This is a first for Warren Buffett in this century However, Berkshire Hathaway's latest 13F filing, which covers the company's buying and selling activity during the second quarter, revealed a big change. Buffett is probably also a big fan of Chevron and Occidental Petroleum as being integrated operators.
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19653.0
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2022-08-24 00:00:00 UTC
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EXCLUSIVE-Tinder-owner Match ups antitrust pressure on Apple in India with new case
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https://www.nasdaq.com/articles/exclusive-tinder-owner-match-ups-antitrust-pressure-on-apple-in-india-with-new-case
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By Aditya Kalra
NEW DELHI, Aug 24 (Reuters) - Tinder-owner Match Group MTCH.O has filed an antitrust case against Apple AAPL.O with the competition regulator in India, accusing it of "monopolistic conduct" that forces developers to pay high commissions for in-app purchases, a legal filing seen by Reuters shows.
Apple is fending off a raft of antitrust challenges around the globe and Match's July filing adds to two other cases in India though Match is the first foreign company to mount such a challenge against the iPhone maker in the country.
Apple and the Competition Commission of India (CCI) did not respond to Reuters queries, while a Match spokesperson declined to comment on its filing.
In the previously unreported India filing, Match argues Apple's conduct restricts innovation and development of app developers that offer digital services by enforcing the use of its proprietary in-app purchase system and "excessive" 30% commission.
A similar dispute in the Netherlands resulted in a 50 million euro fine for Apple and an agreement to allow different payment methods in Dutch dating applications.
The U.S. giant has long mandated use of its in-app payment system, which charges commissions that some developers like Match have argued globally are too high.
Match argues in its India filing that users in other countries often prefer to use payment methods which Apple does not permit, and in India a state-backed online transfer system was preferred.
"Apple is therefore leveraging its dominant position in the iOS App Store market, to promote the exclusive use of its own payment solution," Mark Buse, head of global government relations for Match, said in the filing.
In India, the CCI in December started investigating allegations from a local non-profit group that alleged Apple's in-app purchase system hurts competition by raising costs for app developers and customers, while also acting as a barrier to market entry.
The watchdog ordered the probe after Apple denied any wrongdoing, saying it was not the dominant player in India where it has an "insignificant" 0-5% market share, arguing it was Google's Android that commanded a 90-100% share.
The investigation will now cover each of the three separate cases that have been filed against Apple, according to three sources with knowledge of the proceedings.
Match's Tinder is one of India's most popular dating apps, and accounted for about 51% of consumer spending in the top five dating apps during the second quarter of this year, data from Sensor Tower shows.
In recent years, Apple has loosened some restrictions for developers globally, like allowing them to use communications - such as email - to share information about payment alternatives outside of their iOS app and lowering commissions for smaller developers to 15%.
"Such commission rate does not apply to the apps of Match's portfolio brands," Match's filing stated.
Apple says in India, 87% of apps on its App Store are those which don't pay any commissions at all.
Match has also complained that Apple considers ride-hailing apps in India such as Uber and SoftBank-backed Ola as those providing "physical goods/services", allowing them to provide alternate payment solutions, even though they perform "a similar matchmaking function" like a dating app.
"Both dating and ridesharing apps share the same fundamental purpose i.e. matching two people online to meet in the real world ... Apple has arbitrarily declared that the two are different," Match said.
(Reporting by Aditya Kalra in New Delhi;Additional reporting by Munsif Vengatill; Editing by Elaine Hardcastle)
((aditya.kalra@tr.com; Twitter @adityakalra;))
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 Aditya Kalra NEW DELHI, Aug 24 (Reuters) - Tinder-owner Match Group MTCH.O has filed an antitrust case against Apple AAPL.O with the competition regulator in India, accusing it of "monopolistic conduct" that forces developers to pay high commissions for in-app purchases, a legal filing seen by Reuters shows. Apple and the Competition Commission of India (CCI) did not respond to Reuters queries, while a Match spokesperson declined to comment on its filing. A similar dispute in the Netherlands resulted in a 50 million euro fine for Apple and an agreement to allow different payment methods in Dutch dating applications.
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By Aditya Kalra NEW DELHI, Aug 24 (Reuters) - Tinder-owner Match Group MTCH.O has filed an antitrust case against Apple AAPL.O with the competition regulator in India, accusing it of "monopolistic conduct" that forces developers to pay high commissions for in-app purchases, a legal filing seen by Reuters shows. In the previously unreported India filing, Match argues Apple's conduct restricts innovation and development of app developers that offer digital services by enforcing the use of its proprietary in-app purchase system and "excessive" 30% commission. In India, the CCI in December started investigating allegations from a local non-profit group that alleged Apple's in-app purchase system hurts competition by raising costs for app developers and customers, while also acting as a barrier to market entry.
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By Aditya Kalra NEW DELHI, Aug 24 (Reuters) - Tinder-owner Match Group MTCH.O has filed an antitrust case against Apple AAPL.O with the competition regulator in India, accusing it of "monopolistic conduct" that forces developers to pay high commissions for in-app purchases, a legal filing seen by Reuters shows. In the previously unreported India filing, Match argues Apple's conduct restricts innovation and development of app developers that offer digital services by enforcing the use of its proprietary in-app purchase system and "excessive" 30% commission. Match has also complained that Apple considers ride-hailing apps in India such as Uber and SoftBank-backed Ola as those providing "physical goods/services", allowing them to provide alternate payment solutions, even though they perform "a similar matchmaking function" like a dating app.
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By Aditya Kalra NEW DELHI, Aug 24 (Reuters) - Tinder-owner Match Group MTCH.O has filed an antitrust case against Apple AAPL.O with the competition regulator in India, accusing it of "monopolistic conduct" that forces developers to pay high commissions for in-app purchases, a legal filing seen by Reuters shows. The U.S. giant has long mandated use of its in-app payment system, which charges commissions that some developers like Match have argued globally are too high. In recent years, Apple has loosened some restrictions for developers globally, like allowing them to use communications - such as email - to share information about payment alternatives outside of their iOS app and lowering commissions for smaller developers to 15%.
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19654.0
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2022-08-23 00:00:00 UTC
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US STOCKS-Futures edge up ahead of business activity data
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https://www.nasdaq.com/articles/us-stocks-futures-edge-up-ahead-of-business-activity-data
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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 up: Dow 0.21%, S&P 0.22%, Nasdaq 0.24%
Aug 23 (Reuters) - U.S. stock index futures ticked higher on Tuesday after a steep selloff on Wall Street in the previous session on concerns about aggressive signals from the Federal Reserve on interest rate increases, with manufacturing and services data on tap.
The S&P flash composite Purchasing Managers' Index (PMI) due at 9:45 a.m. ET, which would provide clues on the strength of the U.S. economy, will follow weak readings from Europe earlier in the day that compounded expectations of a recession in the region and pressured global markets.
Wall Street has closed sharply lower in the last two sessions as investors worried over a Fed gathering later this week in Jackson Hole, Wyoming, where the central bank chair Jerome Powell is expected to reinforce a strong commitment to stamp out inflation running at four-decades high. .N
After a rough start to the year, markets rallied since mid-June on hopes inflation has peaked but the summer rally snapped last week on renewed fears around an aggressive monetary policy tightening path by the Fed.
Traders remain split between a 50 basis point and a 75 basis point hike by the central bank at its meeting next month, though economists polled by Reuters expect a 50 basis-point hike. FEDWATCH
U.S. Treasury yields retreated a little on Tuesday, a day after scaling past 3% for the first time since July 21, supporting battered megacap growth and technology stocks.
High-growth stocks such as Apple Inc AAPL.O and Amazon.com Inc AMZN.O added 0.3% each in trading before the bell, while most banks also edged higher.
At 06:47 a.m. ET, Dow e-minis 1YMcv1 were up 70 points, or 0.21%, S&P 500 e-minis EScv1 were up 9.25 points, or 0.22%, and Nasdaq 100 e-minis NQcv1 were up 31.25 points, or 0.24%.
Pandemic favorite Zoom Video Communications Inc ZM.O tumbled 11% after the company cut its annual profit and revenue forecasts.
Palo Alto Networks PANW.O gained 8.5% after the cybersecurity firm posted upbeat quarterly results and announced a stock split plan.
U.S.-listed shares of Chinese e-commerce giant Pinduoduo PDD.O rose 2.4% on plans to launch a cross-border e-commerce platform next month which will target the United States as its first market, a source with direct knowledge of the matter said.
JD.com Inc JD.O climbed 5.2% on beating Wall Street estimates for quarterly revenue as lockdowns in China to control the spread of the coronavirus boosted online shopping and the company's "618" shopping event.
(Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by Sriraj Kalluvila)
((BansariMayur.Kamdar@thomsonreuters.com; Twitter: @BansariKamdar))
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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High-growth stocks such as Apple Inc AAPL.O and Amazon.com Inc AMZN.O added 0.3% each in trading before the bell, while most banks also edged higher. ET, which would provide clues on the strength of the U.S. economy, will follow weak readings from Europe earlier in the day that compounded expectations of a recession in the region and pressured global markets. Wall Street has closed sharply lower in the last two sessions as investors worried over a Fed gathering later this week in Jackson Hole, Wyoming, where the central bank chair Jerome Powell is expected to reinforce a strong commitment to stamp out inflation running at four-decades high.
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High-growth stocks such as Apple Inc AAPL.O and Amazon.com Inc AMZN.O added 0.3% each in trading before the bell, while most banks also edged higher. Futures up: Dow 0.21%, S&P 0.22%, Nasdaq 0.24% Aug 23 (Reuters) - U.S. stock index futures ticked higher on Tuesday after a steep selloff on Wall Street in the previous session on concerns about aggressive signals from the Federal Reserve on interest rate increases, with manufacturing and services data on tap. Traders remain split between a 50 basis point and a 75 basis point hike by the central bank at its meeting next month, though economists polled by Reuters expect a 50 basis-point hike.
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High-growth stocks such as Apple Inc AAPL.O and Amazon.com Inc AMZN.O added 0.3% each in trading before the bell, while most banks also edged higher. Futures up: Dow 0.21%, S&P 0.22%, Nasdaq 0.24% Aug 23 (Reuters) - U.S. stock index futures ticked higher on Tuesday after a steep selloff on Wall Street in the previous session on concerns about aggressive signals from the Federal Reserve on interest rate increases, with manufacturing and services data on tap. Wall Street has closed sharply lower in the last two sessions as investors worried over a Fed gathering later this week in Jackson Hole, Wyoming, where the central bank chair Jerome Powell is expected to reinforce a strong commitment to stamp out inflation running at four-decades high.
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High-growth stocks such as Apple Inc AAPL.O and Amazon.com Inc AMZN.O added 0.3% each in trading before the bell, while most banks also edged higher. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window. Futures up: Dow 0.21%, S&P 0.22%, Nasdaq 0.24% Aug 23 (Reuters) - U.S. stock index futures ticked higher on Tuesday after a steep selloff on Wall Street in the previous session on concerns about aggressive signals from the Federal Reserve on interest rate increases, with manufacturing and services data on tap.
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19655.0
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2022-08-23 00:00:00 UTC
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After Hours Most Active for Aug 23, 2022 : APE, USMC, ETWO, JWN, PSC, NLY, AAPL, KR, INTC, IBM, FOLD, MCHP
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AAPL
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https://www.nasdaq.com/articles/after-hours-most-active-for-aug-23-2022-%3A-ape-usmc-etwo-jwn-psc-nly-aapl-kr-intc-ibm-fold
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The NASDAQ 100 After Hours Indicator is down -3.15 to 12,878.64. The total After hours volume is currently 65,662,625 shares traded.
The following are the most active stocks for the after hours session:
AMC Entertainment Holdings, Inc. (APE) is +0.05 at $7.07, with 16,784,130 shares traded.
Principal U.S. Mega-Cap ETF (USMC) is +0.0181 at $39.24, with 3,400,000 shares traded. This represents a 11.27% increase from its 52 Week Low.
E2open Parent Holdings, Inc. (ETWO) is unchanged at $7.07, with 3,225,850 shares traded. As reported by Zacks, the current mean recommendation for ETWO is in the "strong buy range".
Nordstrom, Inc. (JWN) is -2.96 at $20.24, with 2,871,110 shares traded. JWN's current last sale is 77.85% of the target price of $26.
Principal U.S. Small-Cap Multi-Factor ETF (PSC) is -0.0576 at $42.15, with 2,800,000 shares traded. This represents a 14.29% increase from its 52 Week Low.
Annaly Capital Management Inc (NLY) is unchanged at $6.55, with 2,590,449 shares traded. NLY's current last sale is 93.57% of the target price of $7.
Apple Inc. (AAPL) is -0.11 at $167.12, with 2,256,191 shares traded. Over the last four weeks they have had 6 up revisions for the earnings forecast, for the fiscal quarter ending Jun 2023. The consensus EPS forecast is $1.34. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Kroger Company (The) (KR) is unchanged at $49.60, with 1,976,933 shares traded. KR's current last sale is 92.71% of the target price of $53.5.
Intel Corporation (INTC) is unchanged at $33.95, with 1,793,093 shares traded. INTC's current last sale is 87.05% of the target price of $39.
International Business Machines Corporation (IBM) is unchanged at $134.74, with 1,717,345 shares traded. IBM's current last sale is 90.43% of the target price of $149.
Amicus Therapeutics, Inc. (FOLD) is unchanged at $12.08, with 1,387,105 shares traded. As reported in the last short interest update the days to cover for FOLD is 7.157002; this calculation is based on the average trading volume of the stock.
Microchip Technology Incorporated (MCHP) is unchanged at $69.12, with 1,187,133 shares traded. Over the last four weeks they have had 9 up revisions for the earnings forecast, for the fiscal quarter ending Sep 2022. The consensus EPS forecast is $1.37. As reported by Zacks, the current mean recommendation for MCHP 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 -0.11 at $167.12, with 2,256,191 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". As reported by Zacks, the current mean recommendation for ETWO is in the "strong buy range".
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Apple Inc. (AAPL) is -0.11 at $167.12, with 2,256,191 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The total After hours volume is currently 65,662,625 shares traded.
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Apple Inc. (AAPL) is -0.11 at $167.12, with 2,256,191 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The total After hours volume is currently 65,662,625 shares traded.
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Apple Inc. (AAPL) is -0.11 at $167.12, with 2,256,191 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". E2open Parent Holdings, Inc. (ETWO) is unchanged at $7.07, with 3,225,850 shares traded.
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19656.0
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2022-08-23 00:00:00 UTC
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SPECIAL REPORT-New breed of video sites thrives on misinformation and hate
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AAPL
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https://www.nasdaq.com/articles/special-report-new-breed-of-video-sites-thrives-on-misinformation-and-hate
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By Andrew R.C. Marshall and Joseph Tanfani
Aug 22 (Reuters) - A day after a mass shooting in Buffalo, New York last May, the video-sharing website BitChute was amplifying a far-right conspiracy theory that the massacre was a so-called false flag operation, meant to discredit gun-loving Americans.
Three of the top 15 videos on the site that day blamed U.S. federal agents instead of the true culprit: a white-supremacist teenager who had vowed to “kill as many blacks as possible” before shooting 13 people, killing 10. Other popular videos uploaded by BitChute users falsely claimed COVID-19 vaccines caused cancers that “literally eat you” and spread the debunked claim that Microsoft founder Bill Gates caused a global baby-formula shortage.
BitChute has boomed as YouTube, Twitter and Facebook tighten rules to combat misinformation and hate speech. An upstart BitChute rival, Odysee, has also taken off. Both promote themselves as free-speech havens, and they’re at the forefront of a fast-growing alternative media system that delivers once-fringe ideas to millions of people worldwide.
Searching the two sites on major news topics plunges viewers into a labyrinth of outlandish conspiracy theories, racist abuse and graphic violence. As their viewership has surged since 2019, they have cultivated a devoted audience of mostly younger men, according to data from digital intelligence firm Similarweb SMWB.N.
Online misinformation, though usually legal, triggers real-world harm. U.S. election workers have faced a wave of death threats and harassment inspired by former President Donald Trump’s false claims that the 2020 election was rigged, which also fueled the deadly Jan. 6, 2021 U.S. Capitol riot. Reuters interviews with a dozen people accused of terrorizing election workers revealed that some had acted on bogus information they found on BitChute and almost all had consumed content on sites popular among the far-right.
BitChute and Odysee both host hundreds of videos inspired by the QAnon conspiracy theory, whose supporters have been arrested for threatening politicians, abducting children and blocking a bridge near Arizona’s Hoover Dam with an armored truck full of guns and ammunition.
“Platforms such as BitChute and Odysee have had a seismic impact on the disinformation landscape,” said Joe Ondrak of Logically, a British firm that works with governments and other organizations to reduce the harm of misinformation. The sites, he said, had become the “first port of call” for conspiracists to publish videos.
BitChute and Odysee say they comply with the law by, for example, removing terrorism-related material, and that they have rules banning racist content or incitement of violence. At the same time, the companies defended the rights of extremists to express themselves on their sites and downplayed the importance of their content.
“Bitchute’s North Star is free speech, which is the cornerstone of a free and democratic society,” BitChute said in a statement to Reuters. Odysee said that right-wing and conspiracy content didn’t define the platform, which it said is focusing on generating science- and technology-related videos.
Despite the platforms’ rules, their users routinely publish overtly racist videos and post comments that call for violence, a Reuters review of the sites found. BitChute and Odysee didn’t respond to questions about content that appeared to violate the sites’ guidelines.
All social media platforms publish standards saying they don’t accept extreme or hateful content, said Callum Hood of the Center for Countering Digital Hate in London. “The real test is: Do they live up to those standards? With BitChute and Odysee, the answer is an emphatic no.”
Some academics who have researched BitChute and Odysee say their relaxed content-moderation practices result in sites that are dominated by incendiary content that most online publishers routinely reject. Benjamin Horne, a social scientist at the University of Tennessee, Knoxville, and two colleagues reviewed more than 440,000 BitChute videos and found that 12% of channels received more than 85% of the engagement. “Almost all of those channels contain far-right conspiracies or extreme hate speech,” their report concluded.
Reuters searches of the sites show that their most popular videos are often full of abusive content and misinformation that grossly distort news events.
The top BitChute and Odysee videos in searches for “Buffalo shooting” assert that the massacre never happened. Three of the top 10 on Odysee claimed that Black survivors and witnesses were actors. “It’s payday in the ghetto,” said one commentator. Another video defended the racist theory that motivated the shooter: that whites are being “replaced” by non-whites through migration and population growth. The only purely factual video among BitChute’s top 10 results attracted a slew of racist comments, with one viewer describing the shooter as a “patriot” and his victims as “dumb n‑‑‑‑‑s.”
Searching for “COVID” on BitChute one recent day produced a short film called Plandemic as the top result. Plandemic was banned by YouTube and Facebook for its potentially harmful misinformation, including the claim that wearing a facemask “literally activates your own virus” and makes you sick. At least seven of the top 10 “COVID” search results on Odysee also contained falsehoods – for example, that vaccines contain dangerous nanoparticles or have side-effects that are “like a nuclear bomb.”
It’s a similar story with a widely reported atrocity of the Russia-Ukraine war. Nine out of the top 10 search results on BitChute for “Bucha massacre” theorized that the killing by Russian soldiers of Ukrainian citizens was a hoax intended to escalate U.S. involvement in the war, or that it was the work of Ukrainian soldiers, British agents or “Nazis.”
Identical YouTube searches on these topics produced almost all factual reports from established news organizations. This is consistent with YouTube’s policy of prioritizing information from what it calls “authoritative sources” on sensitive topics or events.
BitChute and Odysee are hardly the only sites spreading misinformation. Social media giants such as Facebook and YouTube have also struggled to contain such content, but they have responded with more aggressive moderation policies and practices.
A more direct competitor to BitChute and Odysee is Rumble, a larger video-sharing site that attracts right-wing users. Rumble also touts itself as a free-speech champion and attracts thousands of videos promoting conspiracy theories. But Rumble has mainstream ambitions and better financial backing, and the company moderates its content enough to make it palatable to app stores run by Apple AAPL.O and Google GOOGL.O – a key growth driver for any digital business.
Founded in 2013 by Chris Pavlovski, a Canadian entrepreneur, Rumble started as a clearing house for viral videos about children and animals. By 2020, Pavlovski was capitalizing on anti-Big Tech sentiment to attract prominent right-wing commentators, and the following year won financial backing from billionaire Peter Thiel, a Republican kingmaker. Thiel didn’t reply to a request for comment.
Today, Rumble offers a mix of pets and politics, with one foot in the febrile, pro-Trump world where the 2020 election was stolen and climate change doesn’t exist. Rumble said in a statement that the platform offered a “wide variety” of information, including a channel featuring Reuters content. A Reuters spokesperson said Rumble is a customer that pays to publish Reuters content.
Rumble said its audience is growing rapidly because it trusts adults “to make up their own minds after hearing all sides.” But the platform does limit some extreme speech. Search for the N-word on Rumble, for instance, and you get a message: “No videos found.”
The same search on BitChute and Odysee returns hundreds of racist videos. BitChute co-founder and Chief Executive Ray Vahey and Odysee co-founder Jeremy Kauffman are self-styled libertarians who see their creations as safe zones for free speech – no matter how false or repellent.
The onslaught of vile content attracted by that philosophy caused one of BitChute’s three founders to quit and got the platform banned from mainstream app stores. Odysee has managed to stay in the Apple app store, but only by blocking searches for COVID-19 in its app.
Apple said in a statement that it only permits COVID-19 information in apps from governments and other “recognized entities.” The company did not answer questions about whether the extremists and white supremacists on Odysee are permitted under Apple guidelines, which ban offensive references to racial, religious and other groups.
Both BitChute and Odysee have struggled to find workable financial models in an increasingly crowded market, even as both quickly amassed huge audiences, attracting hundreds of millions of site visits annually.
Odysee’s story starts with a frisbee-playing American eccentric who sought to finance the site by inventing a new cryptocurrency. BitChute has roots in northern Thailand, where a reclusive British expat decided that something had to be done about internet censorship.
'KILL 'EM ALL'
Vahey, 45, is a software designer who lives in the sleepy suburbs of Chiang Mai. Before starting BitChute, Vahey created animated nursery rhymes for a YouTube channel called RockstarLittle. The songs, among them “Incy Wincy Spider” and “Twinkle Twinkle Little Star,” also appear on BitChute under its “Education” category, where they’re mixed with videos about chemtrails – the conspiracy theory that governments are secretly spraying toxins from aircraft – and security-camera footage of a hooded man shooting a Brazilian shop assistant in the head.
Vahey declined to be interviewed for this story but has detailed his vision in recorded talks with BitChute users posted to the site. In one recent talk, he recalled a “golden age” when the internet had fewer restrictions. “It seems like the more censorship has grown, the more society has been ripped apart,” he said.
Bit Chute Ltd was incorporated in Britain in 2017 by Vahey and two other Brits. Rich Jones, a software developer by training, is the company’s chief operations officer. He is 53, lives in England and, on his LinkedIn page, describes Vahey as “a former classmate and long-time friend.” Jones also declined to comment.
Andy Munarriz, a 53-year-old telecoms expert, is BitChute’s third co-founder. “Around this time YouTube, Facebook and others were removing contributors, and Ray felt free speech was under attack,” Munarriz told Reuters. Vahey started BitChute in his spare time, running it from his Chiang Mai home.
Vahey was shocked when his platform “took off like a rocket,” he recalled in an interview published on BitChute in December. “It was overwhelming. The next day, I had to scale up. And the next day, I had to scale up again.”
Horne, the BitChute researcher, said the platform owes its early success to the prominent U.S. conspiracy theorist Alex Jones. His Infowars show joined BitChute in late 2017 and gained popularity as YouTube and other platforms evicted Jones the following year.
Among other falsehoods, Jones championed the theory that the 2012 Sandy Hook school massacre was a hoax. Twenty children and six staff members were fatally shot; Jones claimed their families were actors and the shooting was a false-flag operation concocted by a government that wanted to seize citizens’ guns. Today, videos from a variety of content creators on BitChute and Odysee make strikingly similar claims about the Buffalo shooting.
A Texas jury recently ordered Jones to pay $50 million in damages to the parents of one child killed in the shooting. A spokesperson for Infowars and a lawyer for Jones did not respond to requests for comment.
Horne’s team collected and analyzed more than three million videos from 61,000 BitChute channels posted between June 2019 and December 2021, finding that almost all of the platform’s most popular videos were full of misinformation and hate speech. Horne said the researchers found a “recruitment video” for Atomwaffen Division, which the Southern Poverty Law Center describes as a “terroristic neo-Nazi organization.” Federal and state authorities have charged Atomwaffen members with crimes including murder.
Horne said he reported the video to the Federal Bureau of Investigation but didn’t hear back. The FBI declined to comment. The video is no longer available on BitChute, which didn’t respond to questions about what happened to it.
Experts say Atomwaffen Division disbanded in 2020. A former leader of the group, John Denton, pleaded guilty in 2020 for his part in a racially motivated campaign of harassment and was sentenced to 41 months in prison. Neither Denton nor his lawyer responded to requests for comment.
The comment sections beneath some of the BitChute videos that Horne’s team reviewed contained “high amounts of hate speech, most of it anti-Semitic,” Horne said. Reuters also found dozens of videos featuring white men fighting Black men, with comments extolling the violence: “N‑‑‑‑‑ stompin fuck yeah.” One video consisted of graphic footage of a man being burned to death. “They are the scum of the world,” commented one viewer, referring to Black people. “Kill ‘em all.”
In the December interview, Vahey said he often sees opinions he disagrees with on BitChute, but “that’s part of accepting what free speech is.” For Munarriz, one of the company’s co-founders, it was too much. He quit in January 2019, alarmed at BitChute’s direction.
“No matter what community guidelines you put in place, or how hard you police, objectionable content would still make its way onto the platform under the guise of ‘free speech,’” Munarriz told Reuters. “Why take on that fight? The intention of BitChute is not to be a destination for objectionable content, but in the real world that’s what happens.”
In theory, BitChute users can filter the content they see by choosing one of three “sensitivity” settings: “Normal,” “NSFW” (“not safe for work”) and “NSFL” (“not safe for life”). In practice, because BitChute’s uploaders choose these settings, even “Normal” videos can include disturbing footage of suicides and killings.
The Buffalo shooter livestreamed his rampage on Twitch, a platform owned by Amazon AMZN.O, which quickly removed it. But the gruesome footage was reposted on BitChute, where it stayed for days, before eventually being taken down for depicting what BitChute called “abhorrent violence” on a page explaining the removal.
BitChute didn’t respond to a request for comment on why the video wasn’t taken down sooner.
Since 2020, under rules enforced by the British media regulator Ofcom, BitChute must protect the public from “harmful content.” This means, primarily, content that would be deemed a criminal offense under laws relating to terrorism and child sexual abuse, or content that incites violence or hatred against particular groups. Ofcom can impose heavy fines or even suspend a platform.
Ofcom and BitChute told Reuters they had consulted with each other on content to ensure compliance – “while maintaining our free speech guidelines,” added BitChute. But that doesn’t mean BitChute has removed all potentially harmful content. Ofcom told Reuters that the regulations don’t require BitChute to proactively police itself; rather, BitChute only has to remove content that someone – for example, a user or advocacy group – has reported as a violation of its terms and conditions. Moreover, the regulations apply only to BitChute’s videos and not to its user comments.
A Reuters review of BitChute’s British site found myriad examples of content promoting hate and violence, including the videos of white men beating black men and the racial slurs in their comment sections.
Ofcom said it hadn’t launched any investigations or issued any fines under the 2020 regulations against BitChute or any other company.
BitChute issued a public report in June on how it had moderated tens of thousands of videos. Most were flagged for copyright issues; others promoted terrorism, violent extremism or incited hatred. BitChute said that, in most cases, it either removed the videos or restricted their distribution in certain countries.
Reuters found that some videos blocked by BitChute in Europe remain on BitChute in the United States, where free-speech protections for social media are especially robust. In addition to constitutional protections, Section 230 of the 1996 Communications Decency Act stipulates that social media firms cannot be held legally responsible for the content that users post on their platforms.
The BitChute content blocked in Britain, but still freely available in America, includes swastika-adorned videos that attacked Jews and Blacks, and adoring montages about Adolf Hitler with names such as, “We Need You Now – Happy Birthday Mein Fuhrer.”
'A LIZARD PERSON'
BitChute’s online traffic grew 63% in 2021 over the previous year, to 514 million visits, according to Similarweb, the digital intelligence firm. For comparison, that’s more than double the online audience of MSNBC.com, the website of the cable news channel known for left-leaning opinion hosts.
But BitChute’s funding model appears fragile. In the December interview, Vahey said he had turned down investors because he refused to compromise on free speech. He said he mostly covered his monthly running costs of $50,000 through donations and subscriptions. The site also has some advertising.
BitChute’s closest rival, Odysee, attracted 292 million visits last year. But it has taken a different path to get there.
Odysee grew from a company called LBRY (pronounced “library”), co-founded in 2015 by Jeremy Kauffman, a U.S. tech entrepreneur and radical libertarian who financed LBRY by creating his own cryptocurrency. The company’s other founders did not respond to requests for comment.
Kauffman, 37, lives in New Hampshire, where he’s running a long-shot campaign for the U.S. Senate on the state’s Libertarian Party ticket in November’s midterm elections. His hardline version of the Party’s anti-government philosophy includes abolishing the Federal Reserve, the Internal Revenue Service and child-labor laws.
Kauffman promoted his Senate campaign with a bizarre video posted on Twitter in May. He addresses the camera in an ill-fitting crocodile costume and speaks as images flash on the screen of snarling aliens, Godzilla and President Joe Biden with a forked tongue. “I want to become a lizard person,” Kauffman says. “I would like to rule you.”
The act appeared to reference the lizard-people conspiracy theory, which holds that governing elites are really blood-sucking alien reptiles in human form.
Kauffman also posts provocative statements on Twitter. “Being unvaccinated and being Black are both choices,” he tweeted in August 2021, with a picture of a light-skinned Michael Jackson. He told Reuters the tweet was a joke.
“I think it’s funny,” said Kauffman, the sole occupant of LBRY’s plainly furnished headquarters in downtown Manchester, New Hampshire. “If you don’t think it’s funny,” he said, “you don’t have to look at it.”
In college at Rensselaer Polytechnic Institute in Troy, New York, Kauffman studied computer science and physics, and played competitive frisbee. He had little experience in publishing when, in 2015, he set up LBRY with four others, promising to bring “freedom back to the web,” according to an early investor pitch.
LBRY’s business model relied on sales of its own cryptocurrency, called LBC. Launched on the cusp of a crypto boom, the price jumped, pushing the company’s value to $1.2 billion.
But in March 2021, the Securities and Exchange Commission sued LBRY, alleging that selling a cryptocurrency to finance its operations amounted to an unregistered securities offering. Kauffman attacked the commission in tweets and interviews as “monsters,” and told Reuters he had spent $2 million on legal fees on a “Kafka-esque” fight. The Securities and Exchange Commission declined to comment on the case, which is still pending.
Even before the suit, demand for LBC was faltering. After its 2016 launch, the currency’s value swung up and down, reaching $1.29 in early 2018 before collapsing, according to CoinGecko, a website that tracks cryptocurrency values. It now trades at about two cents.
The company started a streaming platform in late 2019 called LBRY.TV. It courted creators who specialized in technology, cryptocurrencies or science, but also attracted conspiracy theorists and extremists seeking an alternative to YouTube. Paul Webb, a web developer who joined LBRY in 2017, said he raised objections when he found out the site featured videos of a leader of the Proud Boys, the far-right group whose current leader and four associates are now charged in connection with the Jan. 6 Capitol riot.
On a video call with Kauffman, Webb presented research on the Proud Boys by groups that track extremists. Webb said he argued that “we have a responsibility not to give people like that a platform.” Kauffman disagreed and said the controversy generated publicity for LBRY, according to Webb, who now works at a digital design agency based in Canada.
Asked about the exchange, Kauffman said: “Even morally questionable groups, such as Reuters journalists or the Proud Boys, should be allowed to speak to others that want to hear them.”
LBRY.TV was rebuilt and rebranded as a new website, Odysee, in late 2020. The following year, the operation was put into a new subsidiary of LBRY called Odysee Holdings Inc, with a new chief executive. Kauffman remains the CEO of LBRY, but Odysee is now run by Julian Chandra, both men said in interviews. Chandra had worked at the popular Chinese-owned short-video app TikTok before joining LBRY and taking over Odysee.
He told Reuters he wants to make Odysee a profitable platform that serves a bigger, more mainstream audience, moving beyond Kauffman’s libertarian politics and his original vision for the video-sharing site. Odysee is seeking to grow revenue through advertising and premium ad-free subscriptions.
Odysee’s traffic has grown exponentially. Like BitChute, it has fed off the turbulence surrounding COVID-19 lockdowns, mass vaccinations and Trump’s false claims about the U.S. election in November 2020. That month, Odysee’s visits doubled to about 6 million, according to Similarweb. In January 2021 – the month Trump supporters stormed the U.S. Capitol – it almost tripled again, to 17 million. By August, the total almost doubled again, to 33 million.
Odysee still bills itself as a bulwark for free speech. When YouTube last year removed several videos condemning alleged human rights abuses by China against Uyghur Muslims, Odysee provided an alternative home. It did the same for RT and Sputnik after YouTube and Facebook blocked the Russian propaganda channels in March. In a statement on Twitter, Odysee said: “We are not banning any news network. It’s a slippery slope.”
It remains a sanctuary for controversial figures. Megan Squire, a professor at Elon University in North Carolina who researches online extremism, has identified more than 100 channels on Odysee from right-wing extremists and conspiracy theorists.
Chandra acknowledged that such content existed on Odysee but said it didn’t define the platform. He said the company removes content that promotes terrorism, hatred or violence towards other groups.
Yet Odysee remains a home to neo-Nazis. Joseph Jordan, who produces videos under the pseudonym of “Eric Striker,” co-founded the white supremacist National Justice Party. In his videos on Odysee, he praises Hitler, denies the Holocaust happened and argues for policies protecting whites against Blacks. Jordan did not respond to a request for comment.
“You want me to delete this person because of what exactly? He hasn’t broken any laws,” Chandra said. “You don’t like a channel, don’t watch the channel. It’s very simple.”
Campaign of Fear: Trump world's assault on U.S. election workershttps://www.reuters.com/investigates/section/campaign-of-fear/
SPECIAL REPORT-How a former leftie fell into the pro-Trump conspiracy rabbit holehttps://www.reuters.com/investigates/special-report/usa-election-threats-vermont/
SPECIAL REPORT-Reuters unmasks Trump supporters who terrorized U.S. election officialshttps://www.reuters.com/investigates/special-report/usa-election-threats/
(Reporting by Andrew R.C. Marshall and Joseph Tanfani; additional reporting by Helen Coster; Editing by Jason Szep and Brian Thevenot)
((andrew.marshall@thomsonreuters.com; joseph.tanfani@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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But Rumble has mainstream ambitions and better financial backing, and the company moderates its content enough to make it palatable to app stores run by Apple AAPL.O and Google GOOGL.O – a key growth driver for any digital business. Marshall and Joseph Tanfani Aug 22 (Reuters) - A day after a mass shooting in Buffalo, New York last May, the video-sharing website BitChute was amplifying a far-right conspiracy theory that the massacre was a so-called false flag operation, meant to discredit gun-loving Americans. BitChute and Odysee both host hundreds of videos inspired by the QAnon conspiracy theory, whose supporters have been arrested for threatening politicians, abducting children and blocking a bridge near Arizona’s Hoover Dam with an armored truck full of guns and ammunition.
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But Rumble has mainstream ambitions and better financial backing, and the company moderates its content enough to make it palatable to app stores run by Apple AAPL.O and Google GOOGL.O – a key growth driver for any digital business. Despite the platforms’ rules, their users routinely publish overtly racist videos and post comments that call for violence, a Reuters review of the sites found. Reuters also found dozens of videos featuring white men fighting Black men, with comments extolling the violence: “N‑‑‑‑‑ stompin fuck yeah.” One video consisted of graphic footage of a man being burned to death.
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But Rumble has mainstream ambitions and better financial backing, and the company moderates its content enough to make it palatable to app stores run by Apple AAPL.O and Google GOOGL.O – a key growth driver for any digital business. With BitChute and Odysee, the answer is an emphatic no.” Some academics who have researched BitChute and Odysee say their relaxed content-moderation practices result in sites that are dominated by incendiary content that most online publishers routinely reject. The only purely factual video among BitChute’s top 10 results attracted a slew of racist comments, with one viewer describing the shooter as a “patriot” and his victims as “dumb n‑‑‑‑‑s.” Searching for “COVID” on BitChute one recent day produced a short film called Plandemic as the top result.
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But Rumble has mainstream ambitions and better financial backing, and the company moderates its content enough to make it palatable to app stores run by Apple AAPL.O and Google GOOGL.O – a key growth driver for any digital business. Despite the platforms’ rules, their users routinely publish overtly racist videos and post comments that call for violence, a Reuters review of the sites found. BitChute and Odysee didn’t respond to questions about content that appeared to violate the sites’ guidelines.
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19657.0
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2022-08-23 00:00:00 UTC
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Apple (AAPL) Provides Self-Service Overhaul for Mac Notebooks
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AAPL
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https://www.nasdaq.com/articles/apple-aapl-provides-self-service-overhaul-for-mac-notebooks
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nan
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nan
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Apple AAPL has announced the expansion of its self-service repair services for MacBook Air and MacBook Pro notebooks, which are installed with the M1 chip. The manual and genuine Apple parts required for repairing Apple notebooks are made available for users at the Apple self-service repair store from today (Aug 23, 2022).
AAPL launched the self-service repair program earlier this year for iPhone users in the United States and the program will expand operations to countries in Europe later this year. The self-service repair program for MacBook Air and MacBook Pro offers more than a dozen different repair types for each model, including the display, top case with battery and a track pad.
This recent service offered by Apple is in order to attract customers who are experienced with the knowledge of repairing electronic devices and can complete repairs on these Mac notebooks, with access to many of the same parts and tools available at Apple Store locations and with AAPL-authorized service providers.
Apple’s recent provision for customers will likely aid MacBook sales growth. AAPL is facing fierce competition from companies like Dell Technologies DELL in the area of desktop and other computing devices.
AAPL is operating in a highly competitive space where companies like Dell are vying for market share with aggressive pricing competition, frequent introduction of products and services and easy availability of products in the market, which users can use to repair their products comfortably. Dell beat Apple in opening its own accessories store where customers buy computing devices like laptop parts, batteries and upgrades.
In the last reported third quarter 2022, Mac sales of $7.38 billion decreased 10.4% from the year-ago quarter’s level and accounted for 8.9% of total sales. To increase sales of its Mac products, Apple is expanding its accessibility features to attract new customers.
AAPL also nearly doubled the number of service centers worldwide. Globally, there are more than 5,000 Apple-authorized service providers with above 100,000 active technicians.
Apple Inc. Price and Consensus
Apple Inc. price-consensus-chart | Apple Inc. Quote
Apple Widens Service Menu to Drive Product Sales
Apple’s revenue-generating abilities are impacted negatively by adverse macroeconomic conditions. These include inflation, probable recession due to the Fed-hiked interest rates, increased tariffs and other barriers to trade due to geopolitical tensions, massive unemployment worldwide and unfavorable currency fluctuations, which affected AAPL’s product and service demand.
Except for the iPhone, its flagship product, demand for Apple’s other products like Mac, iPad, plus Wearables and other accessories declined year over year in the third quarter 2022.
However, these grim macroeconomic conditions are not just weighing on Apple. The current market volatility affected the revenue-generating capabilities of the entire cyclical industry, including AAPL’s major FAAMG peers like Meta Platforms META and Microsoft MSFT.
Apple, which currently carries a Zacks Rank #3 (Hold), has seen its stock lose 5.7% in the year-to-date period compared with the Zacks Computer - Mini computers industry and the Zacks Computer and Technology sector’s decline of 5.4% and 24.6%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Meta has seen its stock lose 51.5% in the year-to-date period compared with the Zacks Internet – Software industry’s decline of 48.3%.
The current macroeconomic turmoil deterred META’s bottom-line growth. This downtrend is reflected in Meta Platforms’share price movement.
Meta Platforms’ last reported second-quarter 2022 earnings of $2.46 per share decreased 32% year over year.
Same goes for Microsoft, earnings of which were hit hard by a sharp slowdown in its cloud business, declining videogame sales and the effects of forex woes.
Shares of Microsoft have lost 17.5% year to date compared with the Zacks Computer - Software industry’s decline of 20.3%.
Nevertheless, to increase demand for its products, Apple unveiled a suite of services along with easy accessibility to its products. AAPL launched unique features like door detection to support users with disabilities, a pay-later feature for all Apple users and the recent launch of a self-service feature for users with tech-repairing experience. AAPL is developing its products and services in such a way that so that its portfolio can tap the overall market and attract new users to its offerings.
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Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Dell Technologies Inc. (DELL): Free Stock Analysis Report
Meta Platforms, Inc. (META): 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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Apple AAPL has announced the expansion of its self-service repair services for MacBook Air and MacBook Pro notebooks, which are installed with the M1 chip. AAPL launched the self-service repair program earlier this year for iPhone users in the United States and the program will expand operations to countries in Europe later this year. This recent service offered by Apple is in order to attract customers who are experienced with the knowledge of repairing electronic devices and can complete repairs on these Mac notebooks, with access to many of the same parts and tools available at Apple Store locations and with AAPL-authorized service providers.
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Apple AAPL has announced the expansion of its self-service repair services for MacBook Air and MacBook Pro notebooks, which are installed with the M1 chip. AAPL launched the self-service repair program earlier this year for iPhone users in the United States and the program will expand operations to countries in Europe later this year. This recent service offered by Apple is in order to attract customers who are experienced with the knowledge of repairing electronic devices and can complete repairs on these Mac notebooks, with access to many of the same parts and tools available at Apple Store locations and with AAPL-authorized service providers.
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This recent service offered by Apple is in order to attract customers who are experienced with the knowledge of repairing electronic devices and can complete repairs on these Mac notebooks, with access to many of the same parts and tools available at Apple Store locations and with AAPL-authorized service providers. Apple AAPL has announced the expansion of its self-service repair services for MacBook Air and MacBook Pro notebooks, which are installed with the M1 chip. AAPL launched the self-service repair program earlier this year for iPhone users in the United States and the program will expand operations to countries in Europe later this year.
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This recent service offered by Apple is in order to attract customers who are experienced with the knowledge of repairing electronic devices and can complete repairs on these Mac notebooks, with access to many of the same parts and tools available at Apple Store locations and with AAPL-authorized service providers. Apple AAPL has announced the expansion of its self-service repair services for MacBook Air and MacBook Pro notebooks, which are installed with the M1 chip. AAPL launched the self-service repair program earlier this year for iPhone users in the United States and the program will expand operations to countries in Europe later this year.
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19658.0
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2022-08-23 00:00:00 UTC
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Google Wallet launches in South Africa as digital payments boom
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AAPL
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https://www.nasdaq.com/articles/google-wallet-launches-in-south-africa-as-digital-payments-boom
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nan
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nan
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Aug 23 (Reuters) - Alphabet Inc GOOGL.O launched Google Wallet in South Africa on Tuesday, as the tech giant tries to gain a foothold in the country's rapidly growing digital payments space.
The COVID-19 pandemic has accelerated the shift to digital transactions and people increasingly prefer making contactless payments via their smart devices. High smartphone penetration has also helped adoption rates.
The Google Wallet app stores a consumer's credit or debit card information and allows shoppers to pay for goods by tapping their phone against a retail store's point of sale at the checkout counter.
From Tuesday, cardholders of FirstRand Bank FSRJ.J, Discovery Bank, Investec INLJ.J, Standard Bank SBKJ.J, ABSA ABGJ.J and Nedbank NEDJ.J will be able to add their cards to Google Wallet, Google said.
They will then be able to pay with their Android phones or use OS devices where contactless payments are accepted.
Last year, rival Apple Inc AAPL.O launched its Apple Pay mobile payment system in South Africa.
(Reporting by Nqobile Dludla; Editing by Anait Miridzhanian and Jan Harvey)
((nqobile.dludla@thomsonreuters.com; +27103461066;))
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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Last year, rival Apple Inc AAPL.O launched its Apple Pay mobile payment system in South Africa. Aug 23 (Reuters) - Alphabet Inc GOOGL.O launched Google Wallet in South Africa on Tuesday, as the tech giant tries to gain a foothold in the country's rapidly growing digital payments space. The COVID-19 pandemic has accelerated the shift to digital transactions and people increasingly prefer making contactless payments via their smart devices.
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Last year, rival Apple Inc AAPL.O launched its Apple Pay mobile payment system in South Africa. Aug 23 (Reuters) - Alphabet Inc GOOGL.O launched Google Wallet in South Africa on Tuesday, as the tech giant tries to gain a foothold in the country's rapidly growing digital payments space. From Tuesday, cardholders of FirstRand Bank FSRJ.J, Discovery Bank, Investec INLJ.J, Standard Bank SBKJ.J, ABSA ABGJ.J and Nedbank NEDJ.J will be able to add their cards to Google Wallet, Google said.
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Last year, rival Apple Inc AAPL.O launched its Apple Pay mobile payment system in South Africa. Aug 23 (Reuters) - Alphabet Inc GOOGL.O launched Google Wallet in South Africa on Tuesday, as the tech giant tries to gain a foothold in the country's rapidly growing digital payments space. The Google Wallet app stores a consumer's credit or debit card information and allows shoppers to pay for goods by tapping their phone against a retail store's point of sale at the checkout counter.
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Last year, rival Apple Inc AAPL.O launched its Apple Pay mobile payment system in South Africa. Aug 23 (Reuters) - Alphabet Inc GOOGL.O launched Google Wallet in South Africa on Tuesday, as the tech giant tries to gain a foothold in the country's rapidly growing digital payments space. The COVID-19 pandemic has accelerated the shift to digital transactions and people increasingly prefer making contactless payments via their smart devices.
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19659.0
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2022-08-23 00:00:00 UTC
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Apple Sees This Business Reaching $10 Billion Soon
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AAPL
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https://www.nasdaq.com/articles/apple-sees-this-business-reaching-%2410-billion-soon
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nan
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nan
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About three months ago, Apple (NASDAQ: AAPL) made a small but notable change to its corporate structure. Its VP of advertising, Todd Teresi, started reporting directly to Eddy Cue, who oversees all of Apple's Services business.
That's apparently just the start of a big push for the advertising business. Since then, Apple's made more moves to grow the business, and Teresi said his goal is to grow the business to more than $10 billion in annual revenue.
Two recent changes
Apple's advertising business is relatively small for a company with an installed base of over 1.8 billion devices. The company currently generates about $4 billion in annual revenue, which pales in comparison to advertising giants like Meta Platforms, Alphabet, or even Amazon. The smallest of that group, Amazon, has an advertising business nearly an order of magnitude larger than Apple.
Apple currently advertises in the App Store, News, and Stocks apps. But the success of its big-tech companions in advertising suggests it can build a much bigger ad business.
That will start with Apple's plans to expand advertising inventory within the App Store. Apple currently shows display ads when someone clicks the Search tab on the App Store, and it has promoted listings in the search results.
Soon, it'll show display ads on the Today tab, which provides personalized suggestions for new apps to download. It'll also start showing display ads within third-party app pages, which means apps will be able to advertise their product on their competitor's product page.
The second big change in the app business is a new job listing spotted by Digiday. The company is looking to build a demand-side platform, also known as a DSP. A DSP would allow marketers to automate ad purchases across Apple's inventory, which can lead to greater ad spending. It could also attract advertisers with smaller budgets, increasing competition for each ad spot, leading to higher average ad prices. Owning its own advertising technology can also lead to higher operating margins for the ad business.
Where does Apple go from here?
Apple has a lot of opportunities to insert more advertising into the apps and services iPhone users interact with most often.
It's reportedly already explored the potential for advertisements within Maps. That could include sponsored search listings as well as highlighting locations along a route or an area of focus.
Other potential areas for advertising, as Bloomberg's Mark Gurman points out, include Podcasts and Books. Both have search and discovery features, which could lend themselves well to straightforward display and keyword advertisements.
Expanding the ad business could also lead to things like a podcast advertising network or video ads on Apple TV+. In fact, Apple's already responsible for selling a small amount of commercials during its Friday night baseball broadcasts on Apple TV+. Apple could expand that to more ad-supported video content in the service in the future.
Another interesting long-term opportunity is building an internet search engine a la Google. While Apple has a lucrative contract with Google today, the search giant could face regulatory pressure in the future, ending such deals.
Teresi's goal of reaching $10 billion in ad revenue shouldn't be too difficult. And with the high margins of digital advertising, it could play a significant role in growing Apple's bottom line over the next few years.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. 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. Adam Levy has positions in Alphabet (C shares), Amazon, Apple, and Meta Platforms, Inc. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Meta Platforms, Inc. 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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About three months ago, Apple (NASDAQ: AAPL) made a small but notable change to its corporate structure. Its VP of advertising, Todd Teresi, started reporting directly to Eddy Cue, who oversees all of Apple's Services business. While Apple has a lucrative contract with Google today, the search giant could face regulatory pressure in the future, ending such deals.
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About three months ago, Apple (NASDAQ: AAPL) made a small but notable change to its corporate structure. Apple currently shows display ads when someone clicks the Search tab on the App Store, and it has promoted listings in the search results. 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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About three months ago, Apple (NASDAQ: AAPL) made a small but notable change to its corporate structure. Apple currently advertises in the App Store, News, and Stocks apps. Apple currently shows display ads when someone clicks the Search tab on the App Store, and it has promoted listings in the search results.
|
About three months ago, Apple (NASDAQ: AAPL) made a small but notable change to its corporate structure. Apple currently shows display ads when someone clicks the Search tab on the App Store, and it has promoted listings in the search results. The second big change in the app business is a new job listing spotted by Digiday.
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19660.0
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2022-08-23 00:00:00 UTC
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Dell Technologies (DELL) to Post Q2 Earnings: What's in Store?
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AAPL
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https://www.nasdaq.com/articles/dell-technologies-dell-to-post-q2-earnings%3A-whats-in-store
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nan
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nan
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Dell Technologies DELL is set to report second-quarter fiscal 2023 results on Aug 25.
Dell expects second-quarter revenues in the range of $26.1-$27.1 billion, suggesting 10% growth on a year-over-year basis at the midpoint. Earnings are expected between $1.55 and $1.70 per share, suggesting 10% growth on a year-over-year basis at the midpoint.
The Zacks Consensus Estimate for revenues is pegged at $26.50 billion, suggesting 1.39% growth from the figure reported in the year-ago quarter.
The consensus mark for quarterly earnings is pegged at $1.63 per share, indicating a 27.23% decline from the year-ago quarter’s figure. The consensus estimate for earnings has been steady in the past 30 days.
Dell's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters but missed the same in the remaining one. The company delivered a trailing four-quarter earnings surprise of 8.13%, on average.
Let's see how things have shaped up for DELL before this announcement.
Factors to Watch
Although the global chip shortage and supply-chain constraints are leading to unpredictability in the technology sector, Dell is expected to have benefited from the ongoing digital transformation and strong demand environment in the to-be-reported quarter.
However, unfavorable foreign exchange is expected to have been a headwind.
Dell is expected to have benefited from strong growth in servers and networking revenues in the to-be-reported quarter. IT spending is now expected to be higher for servers and networking, as well as storage solutions. This is expected to have benefited Infrastructure Solutions Group revenues in the to-be-reported quarter.
Nevertheless, Client Solutions Group revenues are expected to have suffered from a declining PC demand.
Per IDC, worldwide PC shipments in the second quarter of 2022 witnessed a year-over-year decrease of 15.3%, reaching 71.3 million units. Dell was ranked third among all PC vendors trailing Lenovo LNVGY and HP HPQ, but beating Apple AAPL.
This Zacks Rank #3 (Hold) shipped 13.2 million units, witnessing a 5.3% year-over-year decline in the second quarter of 2022, per the IDC report. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Lenovo, HP and Apple shipped 17.5 million, 13.5 million and 4.8 million, respectively.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Zacks' Top Picks to Cash in on Electric Vehicles
Big money has already been made in the Electric Vehicle (EV) industry. But, the EV revolution has not hit full throttle yet. There is a lot of money to be made as the next push for future technologies ramps up. Zacks’ Special Report reveals 5 picks investors
See 5 EV Stocks With Extreme Upside Potential >>
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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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Dell was ranked third among all PC vendors trailing Lenovo LNVGY and HP HPQ, but beating Apple AAPL. Apple Inc. (AAPL): Free Stock Analysis Report The Zacks Consensus Estimate for revenues is pegged at $26.50 billion, suggesting 1.39% growth from the figure reported in the year-ago quarter.
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Dell was ranked third among all PC vendors trailing Lenovo LNVGY and HP HPQ, but beating Apple AAPL. Apple Inc. (AAPL): Free Stock Analysis Report The Zacks Consensus Estimate for revenues is pegged at $26.50 billion, suggesting 1.39% growth from the figure reported in the year-ago quarter.
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Dell was ranked third among all PC vendors trailing Lenovo LNVGY and HP HPQ, but beating Apple AAPL. Apple Inc. (AAPL): Free Stock Analysis Report The Zacks Consensus Estimate for revenues is pegged at $26.50 billion, suggesting 1.39% growth from the figure reported in the year-ago quarter.
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Dell was ranked third among all PC vendors trailing Lenovo LNVGY and HP HPQ, but beating Apple AAPL. Apple Inc. (AAPL): Free Stock Analysis Report Dell's earnings beat the Zacks Consensus Estimate in three of the trailing four quarters but missed the same in the remaining one.
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19661.0
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2022-08-23 00:00:00 UTC
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Streaming Is Now Bigger Than Cable TV
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AAPL
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https://www.nasdaq.com/articles/streaming-is-now-bigger-than-cable-tv
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nan
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nan
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Americans are now spending more time streaming video than they are watching cable TV. In fact, streaming hours in July surpassed their peak from the start of the pandemic in 2020, according to the most recent report from Nielsen.
There are several takeaways from the latest Nielsen report that are important for any investor in media companies to know.
Sports is a major factor
There was a dearth of big live sports events in July. Both the NBA and NHL held their championship series in June, the MLB entered the dog days of summer, and football fans await the start of the NCAA and NFL seasons.
Nielsen notes broadcast networks experienced a 41% drop in sports viewing versus June, and a 43% drop from July of last year when fans watched the NBA and NHL finals in addition to the Olympic Games. Cable sports viewing dropped 15% from June and 34% year over year.
The cyclical impact of sports on cable and broadcast television watching shouldn't worry traditional media and cable company investors, but the shift of more sports rights to streaming services should.
Amazon (NASDAQ: AMZN) will become the exclusive home of Thursday Night Football this year. Apple (NASDAQ: AAPL) owns the rights to MLS soccer starting next year. It also has the rights to some Friday night MLB games, and Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) YouTube has a deal with the MLB as well.
More sports are shifting to streaming. Apple may end up with the rights to NFL Sunday Ticket if YouTube doesn't steal them away. Even Netflix (NASDAQ: NFLX), which long eschewed sports, expressed interest in certain sports rights recently. And as more people cut the cord and streaming companies vie to pick up those viewers, more sports rights will end up on streaming services instead of cable television.
Cord-cutting will cement the trend
It's likely streaming will fall back behind cable TV this fall as sports get back into full swing. But cord-cutting will eventually cement the trend of streaming taking over as the predominant form of television entertainment. In fact, cord-cutting is accelerating.
Over the past 12 months, approximately 5.43 million American households cut the cord, according to Leichtman Research. That compares to 4.55 million in the preceding 12 months.
What's particularly noticeable is that leading virtual pay-TV providers like Disney's (NYSE: DIS) Hulu and fuboTV saw declines in subscribers. That may be connected to the ease of cancelling or pausing subscriptions for these newer services during sports off-seasons versus traditional cable. Nonetheless, these new services cannot be relied upon by cable networks to offset losses in traditional pay-TV indefinitely.
The big streamers are still big
There are more streaming options than ever. From premium subscriptions to ad-supported to entirely free streaming options, Americans have a ton of content at their fingertips. Indeed, Nielsen suggests "Americans are expanding their streaming consumption and the platforms that they use."
And while people are streaming across more services than they have in the past, the biggest streaming services are still very big. The top-five streaming apps -- Netflix, YouTube, Hulu, Amazon Prime, and Disney+ -- accounted for 68% of total streaming hours in July. That's up about half a percentage point share from June. It's down more than 2.5 percentage points from last July, but most of that is due to a drop in Disney+ viewership (Black Widow premiered and Loki had its season finale last July).
Netflix has seen its share of streaming hours remain steady throughout the year, accounting for between 22% and 23% of the total. It's down slightly from the second half of last year, but with the climb in total streaming hours, Netflix has remained a key part of most American's viewing habits in 2022. And while Netflix lost nearly two million subscribers in the U.S. and Canada in the first six months of the year, those that have kept the service are using it even more, justifying its price hike at the start of the year.
Overall, Nielsen's report shows that the leaders in streaming are still a strong investment in the future of television as streaming will soon become the most popular source of living room entertainment.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. Adam Levy has positions in Alphabet (C shares), Amazon, Apple, Netflix, and Walt Disney. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, Walt Disney, and fuboTV, Inc. 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) owns the rights to MLS soccer starting next year. Both the NBA and NHL held their championship series in June, the MLB entered the dog days of summer, and football fans await the start of the NCAA and NFL seasons. That may be connected to the ease of cancelling or pausing subscriptions for these newer services during sports off-seasons versus traditional cable.
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Apple (NASDAQ: AAPL) owns the rights to MLS soccer starting next year. The cyclical impact of sports on cable and broadcast television watching shouldn't worry traditional media and cable company investors, but the shift of more sports rights to streaming services should. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, Walt Disney, and fuboTV, Inc.
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Apple (NASDAQ: AAPL) owns the rights to MLS soccer starting next year. The cyclical impact of sports on cable and broadcast television watching shouldn't worry traditional media and cable company investors, but the shift of more sports rights to streaming services should. And as more people cut the cord and streaming companies vie to pick up those viewers, more sports rights will end up on streaming services instead of cable television.
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Apple (NASDAQ: AAPL) owns the rights to MLS soccer starting next year. Cable sports viewing dropped 15% from June and 34% year over year. The cyclical impact of sports on cable and broadcast television watching shouldn't worry traditional media and cable company investors, but the shift of more sports rights to streaming services should.
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19662.0
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2022-08-23 00:00:00 UTC
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3 Things About Unity Software That Smart Investors Know
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AAPL
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https://www.nasdaq.com/articles/3-things-about-unity-software-that-smart-investors-know
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nan
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nan
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Unity Software's (NYSE: U) stock hit an all-time high of more than $200 last November. But today, it trades below its IPO price of $52. This red-hot tech stock lost its momentum for three simple reasons.
First, revenue growth cooled off significantly after Unity Ads, a core component of the Operate Solutions segment -- which generated 64% of its revenue last year -- ingested "bad data" from a large customer that rendered its advertising algorithms obsolete.
That blunder, which was most likely caused by Apple's privacy changes on iOS, forced it to rebuild the Unity Ads algorithm and buy the controversial Israeli ad tech company ironSource to accelerate those repairs.
Image source: Getty Images.
Second, Unity's stock simply got too expensive. At its peak, it was worth $57.5 billion, or 52 times the revenue it would generate in 2021. And third, it still wasn't profitable.
As a result, Unity's slowing growth, ongoing losses, and nosebleed valuation made it an easy target for the bears as rising rates crushed the market's more speculative stocks. I recently took a deeper dive into Unity's problems and concluded that despite all of its challenges, its business is gradually stabilizing. But today, I'll focus on three lesser-known facts about the company that investors might have overlooked.
1. It has a "shovelware" reputation
Unity's video-game engine powers more than half of the world's mobile, console, and PC games. However, a large portion of those games can be considered "shovelware," or software that was hastily made to be "shoveled" to consumers to make some quick cash.
Unity's engine is often used to create shovelware because it's free, easy to use, provides access to pre-made assets, and lets developers easily create cross-platform games for mobile, console, and PC platforms.
That reputation can be a double-edged sword for Unity. On the one hand, it lowers the barriers for game development, makes it easier for small developers to create games, and ensures that it keeps growing. On the other, bad games can tarnish the game engine's reputation, and gamers will naturally start to associate Unity's splash screen with cheaper and lower-quality games.
However, Unity's free users can upgrade to its paid plans -- plus, pro, and enterprise -- to remove that pesky splash screen, which can be perceived as the difference between amateur and professional game developers. That barrier could convince more of Unity's free users to upgrade to paid plans.
2. Its CEO previously led Electronic Arts
Before becoming Unity's CEO in late 2014, John Riccitiello was the CEO of Electronic Arts from April 2007 to March 2013. EA's stock lost nearly two-thirds of its value during those six years as the company struggled with sluggish growth, market share losses to Activision Blizzard, and expensive and misguided acquisitions.
Under Riccitiello's watch, EA was named the "worst company in America" in Consumer Reports' annual Consumerist poll in 2012 and 2013 after several disastrous game releases. But since Riccitiello's departure, EA's stock has soared nearly 650%.
Therefore, Unity's investors might have a gnawing fear that Riccitiello could repeat his previous mistakes. For example, its recent acquisition of Peter Jackson's special-effects studio Weta Digital and its planned takeover of ironSource indicate Riccitiello still relies heavily on acquisitions, and it could struggle to integrate both platforms into its core gaming ecosystem.
3. It's expanding far beyond the gaming market
Lastly, Unity's expansion into nongaming markets could reduce its dependence on the gaming industry. It's already been promoting its use to develop nongaming virtual reality (VR) and augmented reality (AR) applications, while its takeover of Weta -- which created special effects for The Lord of the Rings and Game of Thrones -- expands its reach into the theatrical market. Unity has also been expanding into the "digital twin" market with tools that can help its customers create digital replicas of physical spaces and objects.
These nongaming tools aren't generating enough revenue to offset Unity's dependence on its game engine and Unity Ads yet, but they might eventually transform it into a more diversified cloud-based software company like Adobe or Autodesk. But if these services fail to catch on, they could merely become distractions that erode Unity's defenses against Epic and its other competitors.
Do these lesser-known facts matter?
These facts probably won't mean anything to Unity's near-term growth, which relies on its ability to fix Unity Ads and smoothly integrate ironSource. Nevertheless, Unity's reputation as a shovelware engine, its CEO's spotty track record, and its overly ambitious plans to expand beyond video games could all still affect its long-term growth trajectory.
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Leo Sun has positions in Adobe Inc., Apple, and Unity Software Inc. The Motley Fool has positions in and recommends Activision Blizzard, Adobe Inc., Apple, Autodesk, and Unity Software Inc. The Motley Fool recommends Electronic Arts and recommends the following options: long January 2024 $420 calls on Adobe Inc., long March 2023 $120 calls on Apple, short January 2024 $430 calls on Adobe Inc., 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 a result, Unity's slowing growth, ongoing losses, and nosebleed valuation made it an easy target for the bears as rising rates crushed the market's more speculative stocks. However, Unity's free users can upgrade to its paid plans -- plus, pro, and enterprise -- to remove that pesky splash screen, which can be perceived as the difference between amateur and professional game developers. Nevertheless, Unity's reputation as a shovelware engine, its CEO's spotty track record, and its overly ambitious plans to expand beyond video games could all still affect its long-term growth trajectory.
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These nongaming tools aren't generating enough revenue to offset Unity's dependence on its game engine and Unity Ads yet, but they might eventually transform it into a more diversified cloud-based software company like Adobe or Autodesk. The Motley Fool has positions in and recommends Activision Blizzard, Adobe Inc., Apple, Autodesk, and Unity Software Inc. The Motley Fool recommends Electronic Arts and recommends the following options: long January 2024 $420 calls on Adobe Inc., long March 2023 $120 calls on Apple, short January 2024 $430 calls on Adobe Inc., and short March 2023 $130 calls on Apple.
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On the other, bad games can tarnish the game engine's reputation, and gamers will naturally start to associate Unity's splash screen with cheaper and lower-quality games. These nongaming tools aren't generating enough revenue to offset Unity's dependence on its game engine and Unity Ads yet, but they might eventually transform it into a more diversified cloud-based software company like Adobe or Autodesk. These facts probably won't mean anything to Unity's near-term growth, which relies on its ability to fix Unity Ads and smoothly integrate ironSource.
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On the one hand, it lowers the barriers for game development, makes it easier for small developers to create games, and ensures that it keeps growing. EA's stock lost nearly two-thirds of its value during those six years as the company struggled with sluggish growth, market share losses to Activision Blizzard, and expensive and misguided acquisitions. These nongaming tools aren't generating enough revenue to offset Unity's dependence on its game engine and Unity Ads yet, but they might eventually transform it into a more diversified cloud-based software company like Adobe or Autodesk.
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19663.0
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2022-08-23 00:00:00 UTC
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Ex-Apple Engineer Accused Of Stealing Trade Secrets Pleads Guilty
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AAPL
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https://www.nasdaq.com/articles/ex-apple-engineer-accused-of-stealing-trade-secrets-pleads-guilty
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nan
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nan
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(RTTNews) - A former employee of IPhone maker Apple Inc. (AAPL), Xiaolang Zhang, has pleaded guilty to stealing company trade secrets when he was working on a self-driving car project from the year 2015 to 2018. Zhang pleaded guilty to all the charges at a federal court in San Jose on Monday.
According to court filings, Zhang's plea deal with the American government is under seal. The former Apple employee can be sentenced to maximum 10 years in prison and be charged a $250,000 fine. The court has set aside the sentencing for November.
When Zhang left his job in Apple, he informed his seniors that he was going to take a job with Guangzhou Xiaopeng Motors Technology, a Chinese Electric Vehicle start-up, also known as XPeng. At Apple, Zhang was employed on the autonomous car project's Compute Team, which designed and tested circuit boards for sensors.
Zhang first came under the cloud of suspicion when he travelled to China for paternity leave. After coming back, he expressed his intention to move back to China for a longer period of time.
Apple made use of its internal software technology to find out that Zhang had downloaded information from the company's databases and he was planning to sell the trade secrets about Apple's car division to Chinese patrons.
The federal court found Zhang guilty of downloading internal Apple files about its car project, and more importantly, a 25-page document about engineering schematics of a circuit board for an autonomous vehicle. He had also misused reference manuals and PDFs mentioning in detail about Apple's prototypes and prototype requirements. Schematics for circuit designs are considered among the most valuable trade secrets in the electronics industry.
Zhang was picked up from the San Jose airport on July 2018, when he was boarding a flight to China. The charges against Zhang again highlight the secret project of Apple, its electric vehicle manufacturing section, which has been completely kept off the public eye.
In the earlier mentioned documents, an FBI agent said that Apple had about 5,000 "disclosed" employees, who knew about the project and 2,700 "core employees" with access to project materials and databases.
Till date, Apple has not made any mentioned of a self-driving car and looking ahead, the project seems to be a difficult one for the company. This is because of the contrast between engineers who have to work with high turnover pressure and a lack of support for the project from Apple's higher officials.
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) - A former employee of IPhone maker Apple Inc. (AAPL), Xiaolang Zhang, has pleaded guilty to stealing company trade secrets when he was working on a self-driving car project from the year 2015 to 2018. At Apple, Zhang was employed on the autonomous car project's Compute Team, which designed and tested circuit boards for sensors. The federal court found Zhang guilty of downloading internal Apple files about its car project, and more importantly, a 25-page document about engineering schematics of a circuit board for an autonomous vehicle.
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(RTTNews) - A former employee of IPhone maker Apple Inc. (AAPL), Xiaolang Zhang, has pleaded guilty to stealing company trade secrets when he was working on a self-driving car project from the year 2015 to 2018. Zhang pleaded guilty to all the charges at a federal court in San Jose on Monday. The federal court found Zhang guilty of downloading internal Apple files about its car project, and more importantly, a 25-page document about engineering schematics of a circuit board for an autonomous vehicle.
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(RTTNews) - A former employee of IPhone maker Apple Inc. (AAPL), Xiaolang Zhang, has pleaded guilty to stealing company trade secrets when he was working on a self-driving car project from the year 2015 to 2018. Apple made use of its internal software technology to find out that Zhang had downloaded information from the company's databases and he was planning to sell the trade secrets about Apple's car division to Chinese patrons. The federal court found Zhang guilty of downloading internal Apple files about its car project, and more importantly, a 25-page document about engineering schematics of a circuit board for an autonomous vehicle.
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(RTTNews) - A former employee of IPhone maker Apple Inc. (AAPL), Xiaolang Zhang, has pleaded guilty to stealing company trade secrets when he was working on a self-driving car project from the year 2015 to 2018. The former Apple employee can be sentenced to maximum 10 years in prison and be charged a $250,000 fine. The federal court found Zhang guilty of downloading internal Apple files about its car project, and more importantly, a 25-page document about engineering schematics of a circuit board for an autonomous vehicle.
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19664.0
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2022-08-23 00:00:00 UTC
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Apple plans to make iPhone 14 in India - Bloomberg News
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AAPL
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https://www.nasdaq.com/articles/apple-plans-to-make-iphone-14-in-india-bloomberg-news
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nan
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nan
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Aug 23 (Reuters) - Apple Inc AAPL.O plans to start manufacturing iPhone 14 in India about two months after the product's initial release out of China, Bloomberg News reported on Tuesday.
The company has been working with suppliers to ramp up production in India and shorten the lag in manufacturing new iPhones from the typical six to nine months for previous launches, the report said citing people familiar with the matter. (https://bloom.bg/3PKqMcB)
Apple did not immediately respond to Reuters' request for comment.
(Reporting by Shivani Tanna in Bengaluru; Editing by Sherry Jacob-Phillips)
((ShivaniJayesh.Tanna@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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Aug 23 (Reuters) - Apple Inc AAPL.O plans to start manufacturing iPhone 14 in India about two months after the product's initial release out of China, Bloomberg News reported on Tuesday. The company has been working with suppliers to ramp up production in India and shorten the lag in manufacturing new iPhones from the typical six to nine months for previous launches, the report said citing people familiar with the matter. (https://bloom.bg/3PKqMcB) Apple did not immediately respond to Reuters' request for comment.
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Aug 23 (Reuters) - Apple Inc AAPL.O plans to start manufacturing iPhone 14 in India about two months after the product's initial release out of China, Bloomberg News reported on Tuesday. The company has been working with suppliers to ramp up production in India and shorten the lag in manufacturing new iPhones from the typical six to nine months for previous launches, the report said citing people familiar with the matter. (Reporting by Shivani Tanna in Bengaluru; Editing by Sherry Jacob-Phillips) ((ShivaniJayesh.Tanna@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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Aug 23 (Reuters) - Apple Inc AAPL.O plans to start manufacturing iPhone 14 in India about two months after the product's initial release out of China, Bloomberg News reported on Tuesday. The company has been working with suppliers to ramp up production in India and shorten the lag in manufacturing new iPhones from the typical six to nine months for previous launches, the report said citing people familiar with the matter. (Reporting by Shivani Tanna in Bengaluru; Editing by Sherry Jacob-Phillips) ((ShivaniJayesh.Tanna@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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Aug 23 (Reuters) - Apple Inc AAPL.O plans to start manufacturing iPhone 14 in India about two months after the product's initial release out of China, Bloomberg News reported on Tuesday. The company has been working with suppliers to ramp up production in India and shorten the lag in manufacturing new iPhones from the typical six to nine months for previous launches, the report said citing people familiar with the matter. (https://bloom.bg/3PKqMcB) Apple did not immediately respond to Reuters' request for comment.
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19665.0
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2022-08-23 00:00:00 UTC
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Should Motley Fool 100 Index ETF (TMFC) Be on Your Investing Radar?
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AAPL
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https://www.nasdaq.com/articles/should-motley-fool-100-index-etf-tmfc-be-on-your-investing-radar-2
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nan
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nan
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If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Motley Fool 100 Index ETF (TMFC), a passively managed exchange traded fund launched on 01/30/2018.
The fund is sponsored by Motley Fool Asset Management. It has amassed assets over $440.83 million, making it one of the average sized 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. Further, growth stocks have a higher level of volatility associated with them. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
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 0.50%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.29%.
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 46.30% of the portfolio. Telecom and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 13.20% of total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc (GOOG).
The top 10 holdings account for about 57.92% of total assets under management.
Performance and Risk
TMFC seeks to match the performance of the MOTLEY FOOL 100 INDEX before fees and expenses. The Motley Fool 100 Index is an index of US stocks, recommended by The Motley Fool, LLC (TMF) analysts, either in the Motley Fool IQ analyst opinion database or TMF research publications. From this recommendation pool, the index chooses the 100 largest US companies by market cap and weights them according to market capitalization. The index undergoes quarterly reconstitution.
The ETF has lost about -19.46% so far this year and is down about -12.57% in the last one year (as of 08/23/2022). In the past 52-week period, it has traded between $30.80 and $44.66.
The ETF has a beta of 1.08 and standard deviation of 26.48% for the trailing three-year period. With about 103 holdings, it effectively diversifies company-specific risk.
Alternatives
Motley Fool 100 Index 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, TMFC 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 $77.16 billion in assets, Invesco QQQ has $174.89 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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.
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
Motley Fool 100 Index ETF (TMFC): ETF Research Reports
Alphabet Inc. (GOOG): 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.
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 13.20% of total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc (GOOG). Apple Inc. (AAPL): Free Stock Analysis Report If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Motley Fool 100 Index ETF (TMFC), a passively managed exchange traded fund launched on 01/30/2018.
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Looking at individual holdings, Apple Inc (AAPL) accounts for about 13.20% of total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc (GOOG). Apple Inc. (AAPL): Free Stock Analysis Report If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Motley Fool 100 Index ETF (TMFC), a passively managed exchange traded fund launched on 01/30/2018.
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Looking at individual holdings, Apple Inc (AAPL) accounts for about 13.20% of total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc (GOOG). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives Motley Fool 100 Index 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 13.20% of total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc (GOOG). Apple Inc. (AAPL): Free Stock Analysis Report If you're interested in broad exposure to the Large Cap Growth segment of the US equity market, look no further than the Motley Fool 100 Index ETF (TMFC), a passively managed exchange traded fund launched on 01/30/2018.
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19666.0
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2022-08-23 00:00:00 UTC
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Is WisdomTree U.S. LargeCap ETF (EPS) a Strong ETF Right Now?
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AAPL
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https://www.nasdaq.com/articles/is-wisdomtree-u.s.-largecap-etf-eps-a-strong-etf-right-now-2
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nan
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nan
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Launched on 02/23/2007, the WisdomTree U.S. LargeCap ETF (EPS) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Wisdomtree, EPS has amassed assets over $648.41 million, making it one of the average sized ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the WisdomTree U.S. Earnings 500 Index.
The WisdomTree U.S. LargeCap Index is a fundamentally weighted index that measures the performance of earnings-generating companies within the large-capitalization segment of the U.S. Stock Market.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for EPS are 0.08%, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.77%.
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.
EPS's heaviest allocation is in the Information Technology sector, which is about 24.50% of the portfolio. Its Healthcare and Financials round out the top three.
Taking into account individual holdings, Apple Inc (AAPL) accounts for about 5.66% of the fund's total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc-Cl A (GOOGL).
EPS's top 10 holdings account for about 28.36% of its total assets under management.
Performance and Risk
So far this year, EPS has lost about -12.08%, and is down about -5.87% in the last one year (as of 08/23/2022). During this past 52-week period, the fund has traded between $39.74 and $50.92.
The fund has a beta of 1.01 and standard deviation of 23.93% for the trailing three-year period, which makes EPS a medium risk choice in this particular space. With about 503 holdings, it effectively diversifies company-specific risk.
Alternatives
WisdomTree U.S. LargeCap ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
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 $53.73 billion in assets, Vanguard Value ETF has $100.77 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.
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
WisdomTree U.S. LargeCap ETF (EPS): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Alphabet Inc. (GOOGL): 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, Apple Inc (AAPL) accounts for about 5.66% of the fund's total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc-Cl A (GOOGL). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 02/23/2007, the WisdomTree U.S. LargeCap ETF (EPS) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
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Taking into account individual holdings, Apple Inc (AAPL) accounts for about 5.66% of the fund's total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc-Cl A (GOOGL). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 02/23/2007, the WisdomTree U.S. LargeCap ETF (EPS) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
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Taking into account individual holdings, Apple Inc (AAPL) accounts for about 5.66% of the fund's total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc-Cl A (GOOGL). Apple Inc. (AAPL): Free Stock Analysis Report 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, Apple Inc (AAPL) accounts for about 5.66% of the fund's total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc-Cl A (GOOGL). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 02/23/2007, the WisdomTree U.S. LargeCap ETF (EPS) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.
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19667.0
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2022-08-23 00:00:00 UTC
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Is iShares U.S. Equity Factor ETF (LRGF) a Strong ETF Right Now?
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AAPL
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https://www.nasdaq.com/articles/is-ishares-u.s.-equity-factor-etf-lrgf-a-strong-etf-right-now-0
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nan
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nan
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Launched on 04/28/2015, the iShares U.S. Equity Factor ETF (LRGF) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Managed by Blackrock, LRGF has amassed assets over $1.18 billion, making it one of the largest ETFs in the Style Box - All Cap Value. Before fees and expenses, this particular fund seeks to match the performance of the MSCI USA Diversified Multiple-Factor Index.
The STOXX U.S. Equity Factor Index composes of U.S. large and mid-capitalization stocks that have favourable exposure to target style factors subject to constraints.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for LRGF are 0.08%, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.47%.
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.
LRGF's heaviest allocation is in the Information Technology sector, which is about 29.30% of the portfolio. Its Consumer Discretionary and Healthcare round out the top three.
Taking into account individual holdings, Apple Inc (AAPL) accounts for about 5.96% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
LRGF's top 10 holdings account for about 25.04% of its total assets under management.
Performance and Risk
So far this year, LRGF has lost about -9.65%, and is down about -4.05% in the last one year (as of 08/23/2022). During this past 52-week period, the fund has traded between $36.62 and $46.80.
The fund has a beta of 0.97 and standard deviation of 24.53% for the trailing three-year period, which makes LRGF a medium risk choice in this particular space. With about 311 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares U.S. Equity Factor ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Dimensional U.S. Targeted Value ETF (DFAT) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $7.12 billion in assets, iShares Core S&P U.S. Value ETF has $12.11 billion. DFAT has an expense ratio of 0.29% and IUSV 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 - All 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.
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
iShares U.S. Equity Factor ETF (LRGF): 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
iShares Core S&P U.S. Value ETF (IUSV): ETF Research Reports
Dimensional U.S. Targeted Value ETF (DFAT): 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, Apple Inc (AAPL) accounts for about 5.96% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 04/28/2015, the iShares U.S. Equity Factor ETF (LRGF) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Value category of the market.
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Taking into account individual holdings, Apple Inc (AAPL) accounts for about 5.96% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 04/28/2015, the iShares U.S. Equity Factor ETF (LRGF) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Value category of the market.
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Taking into account individual holdings, Apple Inc (AAPL) accounts for about 5.96% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report 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.
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Taking into account individual holdings, Apple Inc (AAPL) accounts for about 5.96% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 04/28/2015, the iShares U.S. Equity Factor ETF (LRGF) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Value category of the market.
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19668.0
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2022-08-23 00:00:00 UTC
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2 Simple Reasons Why Apple's Next iPhone Could Be a Roaring Success
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AAPL
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https://www.nasdaq.com/articles/2-simple-reasons-why-apples-next-iphone-could-be-a-roaring-success
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Apple (NASDAQ: AAPL) has held its ground in the smartphone market so far this year, as its iPhones have witnessed healthy demand at a time when major Android manufacturers have found it difficult to increase sales.
The tech giant looks set to enjoy solid iPhone sales growth in the second half of the year as well because it will update its smartphone lineup soon. Apple is expected to unveil the rumored iPhone 14 models in September, with the new lineup expected to go on sale later next month. Let's look at the two reasons why Apple's upcoming iPhones could set the sales registers ringing.
1. The iPhone upgrade cycle is still solid
IDC reports that global smartphone shipments were down 8.9% in the first quarter of 2022, followed by an 8.7% drop in the second quarter. But Apple saw growth in iPhone shipments in both quarters. In Q1, iPhone shipments were up 2.2% year over year to 56.5 million units. Second-quarter iPhone shipments increased by a small margin of 0.5% over the prior-year period.
One reason why Apple has been able to defy the smartphone slowdown is because of a large installed base of users that are in an upgrade window. Last month, Wedbush analyst Daniel Ives estimated that there are 240 million iPhone users in Apple's installed base that haven't upgraded their devices in three and a half years. These users are likely using the iPhone XR (launched in September 2018) or older devices from Apple.
As a result, a large chunk of Apple's installed base of 1 billion iPhones is yet to be 5G-enabled, as the iPhone 12 lineup launched in 2020 was the first from the company's stable to support the latest wireless standard. With 5G networks now available to a quarter of the global population, according to Ericsson, as compared to 2019, when the wireless standard was still in infancy, it won't be surprising to see a sizable chunk of Apple users upgrade to its upcoming iPhones.
Not surprisingly, Apple seems upbeat about the demand for its next-generation smartphones. The company has reportedly placed orders to make 90 million units of the new iPhone models in 2022. For comparison, the company produced an estimated 80 million units of the iPhone 13 models last year, owing to the supply crunch.
This explains why there are expectations that this year's iPhones could sell better than last year's offerings.
2. The Android-to-iOS switch could be another tailwind for Apple
The smartphone sales trends in 2022 so far indicate that Apple may have been attracting more users from the Android ecosystem. CFO Luca Maestri indicated the same on Apple's July earnings conference call: "We also attracted a record number of switchers for the June quarter, with strong double-digit year-over-year growth."
Switchers refer to those iPhone users who moved to the iOS ecosystem from other platforms. The smartphone shipment data backs up Apple's claims, as Android heavyweights such as Xiaomi, Oppo, and Vivo have witnessed a steep sales decline this year. Even smartphone market leader Samsung had seen its shipments drop 1.2% year over year in Q1 when Apple's numbers headed higher.
There is one big reason why Apple has been able to attract users from the Android ecosystem. The advent of 5G smartphones has led to an increase in the average selling price of smartphones. As a result, customers in emerging markets such as India, Indonesia, and Vietnam are buying iPhones even though they may be more expensive than their Android rivals in those markets.
The good part is that 5G smartphone sales are expected to head higher in the long run. According to Statista, 5G smartphones reportedly accounted for 43% of global smartphone shipments last year. By 2023, that proportion is expected to jump to 69%, indicating that there will still be a lot of room for growth in this segment. As such, the growth of the 5G smartphone market could give iPhone sales a boost in the long run by helping it win more users from the Android fold.
All this indicates why Apple seems upbeat about the performance of its upcoming iPhone models. The company was expected to produce 220 million iPhones in 2022, and the shipment figures for the first half of the year suggest that it may have produced close to 101 million units. So, Apple could enjoy a terrific second half thanks to the potential success of its next iPhone lineup.
That's because the iPhone has produced 53% of Apple's revenue in the first nine months of the current fiscal year, so it moves the needle in a big way for this tech stock. Shares of Apple have gained 10% in the past month, and they could head higher thanks to the potential success of the next iPhone.
Find out why Apple 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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*Stock Advisor returns as of August 17, 2022
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.
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Apple (NASDAQ: AAPL) has held its ground in the smartphone market so far this year, as its iPhones have witnessed healthy demand at a time when major Android manufacturers have found it difficult to increase sales. With 5G networks now available to a quarter of the global population, according to Ericsson, as compared to 2019, when the wireless standard was still in infancy, it won't be surprising to see a sizable chunk of Apple users upgrade to its upcoming iPhones. CFO Luca Maestri indicated the same on Apple's July earnings conference call: "We also attracted a record number of switchers for the June quarter, with strong double-digit year-over-year growth."
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Apple (NASDAQ: AAPL) has held its ground in the smartphone market so far this year, as its iPhones have witnessed healthy demand at a time when major Android manufacturers have found it difficult to increase sales. Last month, Wedbush analyst Daniel Ives estimated that there are 240 million iPhone users in Apple's installed base that haven't upgraded their devices in three and a half years. Even smartphone market leader Samsung had seen its shipments drop 1.2% year over year in Q1 when Apple's numbers headed higher.
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Apple (NASDAQ: AAPL) has held its ground in the smartphone market so far this year, as its iPhones have witnessed healthy demand at a time when major Android manufacturers have found it difficult to increase sales. Last month, Wedbush analyst Daniel Ives estimated that there are 240 million iPhone users in Apple's installed base that haven't upgraded their devices in three and a half years. The Android-to-iOS switch could be another tailwind for Apple The smartphone sales trends in 2022 so far indicate that Apple may have been attracting more users from the Android ecosystem.
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Apple (NASDAQ: AAPL) has held its ground in the smartphone market so far this year, as its iPhones have witnessed healthy demand at a time when major Android manufacturers have found it difficult to increase sales. Apple is expected to unveil the rumored iPhone 14 models in September, with the new lineup expected to go on sale later next month. But Apple saw growth in iPhone shipments in both quarters.
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19669.0
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2022-08-23 00:00:00 UTC
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Down Between 51% and 78%: 3 Nasdaq Growth Stocks That Are Worth a Look
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AAPL
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https://www.nasdaq.com/articles/down-between-51-and-78%3A-3-nasdaq-growth-stocks-that-are-worth-a-look
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nan
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nan
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The broader stock market has rebounded nicely since its mid-June lows, with all three major indices officially out of a bear market. However, there are still plenty of companies that are down big off their highs.
Cognex (NASDAQ: CGNX), Luminar Technologies (NASDAQ: LAZR), and TPI Composites (NASDAQ: TPIC) are three growth stocks that could be worth a look. Here's why.
Image source: Getty Images.
Cognex's long-term growth opportunity remains intact
Lee Samaha (Cognex): It's been a tough year for Cognex, and the stock's 38% decline says a lot about it. The three major end markets for its machine-vision solutions are consumer electronics, automotive, and logistics (e-commerce warehousing). All three have been challenged this year. If it isn't production curtailments in light-vehicle production, it's downgrades to expectations for smartphone production. It gets worse. The slowdown in consumer spending and cooling off of red-hot investment in e-commerce facilities negatively impacted Cognex's logistics sales. Throw in a fire at its primary contractor and destruction of inventory, and the company seems to be hit from all sides.
That said, Cognex is doing many things right to secure future growth. It already has Apple as a significant customer, and, although not named, it likely has Amazon.com too. As such, Cognex is building long-term relationships with industry leaders that should help encourage the adoption of machine vision with lower-tier customers.
Moreover, Cognex has been absorbing costs (paying high prices to secure components, etc.) to adequately service its customers -- a good trait in a growth company. It all adds up to a company preparing for long-term growth, and when its end markets turn up again, Cognex will be ready to service them.
A lidar company to potentially park in your portfolio
Scott Levine (Luminar Technologies): Starting the year on an auspicious note, Luminar announced a major deal with the Mercedes-Benz unit of Daimler, and shares, subsequently, accelerated upwards. Shortly afterwards though, the lidar stock hit a pothole and failed to recover. In fact, shares of Luminar have plunged 35% since the start of the year.
CGNX data by YCharts.
The primary cause for the decline in the lidar technology's stock stems from fears of inflation and an economic slowdown -- two things that have suggested to the market that the company will see decreased demand from automakers. While there may be some truth to this speculation, it's extremely unlikely that demand for its lidar solutions has stalled indefinitely. The company hasn't reported anything that suggests its growth potential is irreparably compromised. Patient investors may want to take a closer look at this lidar specialist.
During its second-quarter 2022 earnings report, Luminar allayed some concerns that it was facing decreased demand for its products. The company announced upward revisions of its 2022 order book and revenue forecasts. Whereas Luminar had previously expected its order book (the future cumulative sales estimates for its hardware and software products) to grow 40% in 2022 from the $2.1 billion it had at the end of 2021, management now foresees it growing 60%. With regards to its original 2022 revenue estimates of $40 million, Luminar nudged it slightly higher to a range of $40 million to $45 million.
Besides an increasingly bullish outlook on 2022, Luminar also seems poised for growth in 2023. The company recently acknowledged that it is on track to start wide-scale production of its Iris hardware and software by the end of 2022. In addition, Luminar remains on track with the development of a new manufacturing facility. Expected to commence operations in the second half of 2023, the manufacturing facility will have annual production capacity of 250,000 units.
Like many growth stocks, shares of Luminar have fallen out of favor with investors who fear that an economic slowdown will reduce demand for the company's lidar products. But those who have long investing horizons and who are willing to ride out the current pessimism may be rewarded for their patience as the company continues to execute its growth plans.
This wind blade manufacturer is getting the wind back in its sails
Daniel Foelber (TPI Composites): The passing of the 2022 Inflation Reduction Act has been a boon for renewable energy companies like TPI Composites. The bill includes $370 billion to fight climate change and boost clean energy infrastructure.
TPI Composites has had a rough couple of years. The independent wind blade manufacturer invested heavily in its global manufacturing capacity in key end markets across Europe, Asia, the Middle East, and North America. Unfortunately, the timing was terrible, as the heightened expenses came right before the COVID-19 pandemic. TPI Composites has been struggling to achieve profitability in the wake of higher operating costs to run its additional production lines, as well as challenges booking multiyear contracts with its key customers, such as General Electric, Siemens Gamesa, Nordex, and Vestas. The below chart illustrates how TPI Composites' revenue has flatlined over the last few years, while losses have widened.
TPIC Revenue (TTM) data by YCharts.
Down 78% from its all-time high, TPI Composites stock is starting to look more attractive. Its price-to-sales ratio is 0.4, which is reasonable, especially if it can gradually reach and maintain profitability. In its Q2 2022earnings call the company reported some good news. It met its Q2 production targets in China; most of its plants are performing at or above expectations; and it has successfully reorganized its supply chain to reduce unforeseen costs.
TPI Composites still has a lot to prove. But the long-term future of the wind energy industry across the globe looks brighter than ever as costs have come down and countries look to diversify their energy mix away from fossil fuels. For investors looking for a high-risk, high-reward turnaround play, TPI Composites could be worth considering now.
10 stocks we like better than Cognex
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 Cognex 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 August 17, 2022
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Daniel Foelber has the following options: long June 2024 $180 puts on Apple and short June 2024 $175 puts on Apple. 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 Amazon, Apple, Cognex, and TPI Composites. 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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The primary cause for the decline in the lidar technology's stock stems from fears of inflation and an economic slowdown -- two things that have suggested to the market that the company will see decreased demand from automakers. Like many growth stocks, shares of Luminar have fallen out of favor with investors who fear that an economic slowdown will reduce demand for the company's lidar products. TPI Composites has been struggling to achieve profitability in the wake of higher operating costs to run its additional production lines, as well as challenges booking multiyear contracts with its key customers, such as General Electric, Siemens Gamesa, Nordex, and Vestas.
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Cognex (NASDAQ: CGNX), Luminar Technologies (NASDAQ: LAZR), and TPI Composites (NASDAQ: TPIC) are three growth stocks that could be worth a look. Daniel Foelber has the following options: long June 2024 $180 puts on Apple and short June 2024 $175 puts on Apple. 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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Cognex (NASDAQ: CGNX), Luminar Technologies (NASDAQ: LAZR), and TPI Composites (NASDAQ: TPIC) are three growth stocks that could be worth a look. Cognex's long-term growth opportunity remains intact Lee Samaha (Cognex): It's been a tough year for Cognex, and the stock's 38% decline says a lot about it. Like many growth stocks, shares of Luminar have fallen out of favor with investors who fear that an economic slowdown will reduce demand for the company's lidar products.
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Cognex's long-term growth opportunity remains intact Lee Samaha (Cognex): It's been a tough year for Cognex, and the stock's 38% decline says a lot about it. Like many growth stocks, shares of Luminar have fallen out of favor with investors who fear that an economic slowdown will reduce demand for the company's lidar products. The Motley Fool has positions in and recommends Amazon, Apple, Cognex, and TPI Composites.
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19670.0
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2022-08-23 00:00:00 UTC
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Apple plans to make iPhone 14 in India amid China woes - Bloomberg News
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AAPL
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https://www.nasdaq.com/articles/apple-plans-to-make-iphone-14-in-india-amid-china-woes-bloomberg-news
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nan
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Updates with details and background
Aug 23 (Reuters) - Apple Inc AAPL.O plans to start manufacturing iPhone 14 in India as the U.S. tech giant seeks alternatives to China after Xi administration's clashes with Washington and lockdowns across the country disrupted production, Bloomberg News reported.
The company has been working with suppliers to ramp up production in India and shorten the lag in manufacturing new iPhones from the typical six to nine months for previous launches, the report said on Tuesday, citing people familiar with the matter. (https://bloom.bg/3PKqMcB)
According to the report, Apple's Taiwan-based supplier Foxconn 2317.TW has studied the process of shipping items from China and assembling the iPhone 14 at its plant outside southern Indian city of Chennai.
Production of the first iPhone 14s from India is likely to be completed in late-October or November, the report added.
Apple did not immediately respond to Reuters' request for comment.
The company has been shifting some areas of iPhone production from China to other markets including India, the world's second-biggest smartphone market, and is also planning to assemble iPad tablets there.
India and countries such as Mexico and Vietnam are becoming increasingly important to contract manufacturers supplying American brands as they try to diversify production away from China.
Last week, Nikkei reported the tech giant's suppliers are in talks to produce Apple Watch and MacBook in Vietnam for the first time.
(Reporting by Shivani Tanna in Bengaluru; Editing by Sherry Jacob-Phillips)
((ShivaniJayesh.Tanna@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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Updates with details and background Aug 23 (Reuters) - Apple Inc AAPL.O plans to start manufacturing iPhone 14 in India as the U.S. tech giant seeks alternatives to China after Xi administration's clashes with Washington and lockdowns across the country disrupted production, Bloomberg News reported. The company has been working with suppliers to ramp up production in India and shorten the lag in manufacturing new iPhones from the typical six to nine months for previous launches, the report said on Tuesday, citing people familiar with the matter. (https://bloom.bg/3PKqMcB) According to the report, Apple's Taiwan-based supplier Foxconn 2317.TW has studied the process of shipping items from China and assembling the iPhone 14 at its plant outside southern Indian city of Chennai.
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Updates with details and background Aug 23 (Reuters) - Apple Inc AAPL.O plans to start manufacturing iPhone 14 in India as the U.S. tech giant seeks alternatives to China after Xi administration's clashes with Washington and lockdowns across the country disrupted production, Bloomberg News reported. The company has been shifting some areas of iPhone production from China to other markets including India, the world's second-biggest smartphone market, and is also planning to assemble iPad tablets there. Last week, Nikkei reported the tech giant's suppliers are in talks to produce Apple Watch and MacBook in Vietnam for the first time.
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Updates with details and background Aug 23 (Reuters) - Apple Inc AAPL.O plans to start manufacturing iPhone 14 in India as the U.S. tech giant seeks alternatives to China after Xi administration's clashes with Washington and lockdowns across the country disrupted production, Bloomberg News reported. The company has been working with suppliers to ramp up production in India and shorten the lag in manufacturing new iPhones from the typical six to nine months for previous launches, the report said on Tuesday, citing people familiar with the matter. (https://bloom.bg/3PKqMcB) According to the report, Apple's Taiwan-based supplier Foxconn 2317.TW has studied the process of shipping items from China and assembling the iPhone 14 at its plant outside southern Indian city of Chennai.
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Updates with details and background Aug 23 (Reuters) - Apple Inc AAPL.O plans to start manufacturing iPhone 14 in India as the U.S. tech giant seeks alternatives to China after Xi administration's clashes with Washington and lockdowns across the country disrupted production, Bloomberg News reported. The company has been working with suppliers to ramp up production in India and shorten the lag in manufacturing new iPhones from the typical six to nine months for previous launches, the report said on Tuesday, citing people familiar with the matter. (https://bloom.bg/3PKqMcB) According to the report, Apple's Taiwan-based supplier Foxconn 2317.TW has studied the process of shipping items from China and assembling the iPhone 14 at its plant outside southern Indian city of Chennai.
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19671.0
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2022-08-23 00:00:00 UTC
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Is Franklin U.S. Large Cap Multifactor Index ETF (FLQL) a Strong ETF Right Now?
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AAPL
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https://www.nasdaq.com/articles/is-franklin-u.s.-large-cap-multifactor-index-etf-flql-a-strong-etf-right-now
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nan
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nan
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The Franklin U.S. Large Cap Multifactor Index ETF (FLQL) made its debut on 04/26/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Franklin Templeton Investments, and has been able to amass over $957.45 million, which makes it one of the larger ETFs in the Style Box - Large Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the LibertyQ US Large Cap Equity Index.
The LibertyQ US Large Cap Equity Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell 1000 Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell 1000 Index that have favorable exposure to four investment style factors quality, value, momentum and low volatility.
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 FLQL are 0.15%, which makes it one of the cheaper products in the space.
FLQL's 12-month trailing dividend yield is 2.02%.
Sector Exposure and Top Holdings
ETFs offer 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.
Representing 20.50% of the portfolio, the fund has heaviest allocation to the Healthcare sector; Information Technology and Consumer Staples round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.55% of total assets, followed by Microsoft Corp (MSFT) and Exxon Mobil Corp (XOM).
FLQL's top 10 holdings account for about 27.26% of its total assets under management.
Performance and Risk
The ETF has lost about -10.07% and is down about -4.49% so far this year and in the past one year (as of 08/23/2022), respectively. FLQL has traded between $37.43 and $47.20 during this last 52-week period.
The ETF has a beta of 0.91 and standard deviation of 22.56% for the trailing three-year period. With about 218 holdings, it effectively diversifies company-specific risk.
Alternatives
Franklin U.S. Large Cap Multifactor Index ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core S&P 500 ETF (IVV) tracks S&P 500 Index and the SPDR S&P 500 ETF (SPY) tracks S&P 500 Index. IShares Core S&P 500 ETF has $309.77 billion in assets, SPDR S&P 500 ETF has $377.84 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
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 Blend.
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.
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
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Franklin U.S. Large Cap Multifactor Index ETF (FLQL): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Exxon Mobil Corporation (XOM): 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.
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 6.55% of total assets, followed by Microsoft Corp (MSFT) and Exxon Mobil Corp (XOM). Apple Inc. (AAPL): Free Stock Analysis Report 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.
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Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.55% of total assets, followed by Microsoft Corp (MSFT) and Exxon Mobil Corp (XOM). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives Franklin U.S. Large Cap Multifactor Index ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market.
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Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.55% of total assets, followed by Microsoft Corp (MSFT) and Exxon Mobil Corp (XOM). Apple Inc. (AAPL): Free Stock Analysis Report The Franklin U.S. Large Cap Multifactor Index ETF (FLQL) made its debut on 04/26/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
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Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.55% of total assets, followed by Microsoft Corp (MSFT) and Exxon Mobil Corp (XOM). Apple Inc. (AAPL): Free Stock Analysis Report The Franklin U.S. Large Cap Multifactor Index ETF (FLQL) made its debut on 04/26/2017, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Large Cap Blend category of the market.
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19672.0
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2022-08-23 00:00:00 UTC
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For "Big Retail," It's All About Inventory
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AAPL
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https://www.nasdaq.com/articles/for-big-retail-its-all-about-inventory
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nan
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nan
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In this podcast, Motley Fool senior analysts Emily Flippen and Ron Gross discuss:
Expectations around more interest rate hikes in the near future.
Inventory being the key story around big retailers like Walmart and Target.
Deere's mixed 3rd-quarter results and potential for a bright future.
The incredible roller coaster for Bed Bath and Beyond shareholders.
Foot Locker's surprising 2nd-quarter results and new CEO.
The latest from Home Depot, Lowe's, and Starbucks.
Motley Fool producer Ricky Mulvey talks with Bloomberg entertainment industry reporter Lucas Shaw about Warner Brothers Discovery and how the media conglomerate is consolidating and evolving.
Emily and Ron analyze the latest innovation from Papa John's and share two stocks on their radar: Rover Group and American Tower.
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 Home Depot
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 Home Depot 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 August 17, 2022
This video was recorded on August 19, 2022.
Chris Hill: Wall Street tries to keep its winning streak intact, while one company deconstructs its signature product. Motley Fool Money starts now.
It's the Motley Fool Money radio show. I'm Chris Hill. Joining me in studio, Motley Fool Senior Analyst, Emily Flippen and Ron Gross. Good to see you both.
Emily Flippen: Hey, Chris.
Ron Gross: How you doing, Chris?
Chris Hill: We've got the latest in retail restaurants and more. We've got some shake-ups in the executive ranks, and as always, we've got a couple of stocks on our radar. But we begin with the market in general. The recent rise of the stock market hit a speed bump this week after minutes from the Federal Reserve's July meeting indicated more interest rate hikes are coming in the near term. Ron, were you surprised by this? [laughs] Because I wasn't, but apparently some investors were.
Ron Gross: They shouldn't have been. I mean, the Fed has been signaling for quite some time now that higher interest rates are necessary to bring inflation down. In fact, the market is actually baking in at least another 50-basis-point hike in September, so the market as a whole should really have not been surprised. I think what the market reacted to in a good way is that officials said they would be cautious, acknowledging that too much tightening would be too big a risk to the economy.
Again, they're trying to engineer that so-called soft landing and not put us into a recession. I think investors cheered the fact that once again, the Fed's telling us all they get, it doesn't mean they'll be able to do it, but they get it and they have to try to just do this just right to get to their 2% inflation target were much higher than that now, but not throw us into recession. We do see some signs that the economy is weakening. We do see some signs that inflation is coming down. We got home-sale data that was weak recently and some other pockets of the economy are showing some weakness as well, job markets still strong though.
Emily Flippen: I think what the market likes is predictability and the good news is is that with each passing month, the Federal Reserve is becoming a bit more predictable. If you read through their minutes, the language is becoming more of what they've repeated in the past, which is exactly what Ron said, slowly rising interest rates. Trying to engineer that soft landing, we'll see if it's possible without a big recession, but the idea is that the market doesn't like when the economy and rates and such are unpredictable. We saw that in the first half of the year, so hopefully this means headed into the second half of the year, we just see a decrease in general volatility even if interest rates continue to rise.
Ron Gross: What's interesting is with this somewhat of a rebound in the market recently, stock market is once again not so cheap. This is going to depend on what earnings companies can put out in the face of things like inflation with some decreasing margins and some weakening economic numbers, so let's keep an eye on this because it's not a given that the market just go straight up from here.
Chris Hill: Speaking of earnings, let's start with big retail -- Walmart and Target both out with second-quarter reports this week. The headline for Walmart was a beat on the top and bottom lines with revenue of nearly $153 billion. Target's profits were nearly 90% lower than a year ago due to ongoing challenges with inventory and, Emily, both of these companies had lowered expectations heading into their earnings reports. What stood out to you?
Emily Flippen: Well, big retail to me this quarter is just a story about inventory. In fact, I think you can summarize which retailers performed relatively well and which did relatively poor simply by looking at how they managed inventory over the past year. If you take Target, for instance, Target's inventory has nearly doubled since its pre-pandemic average. They invested really heavily into things that consumers were buying -- a lot of discretionary items, electronics, and those are the things that were left sitting in these Target stores as consumers pulled back expectations for spending. Walmart also invested into inventory although not extreme the way Target did.
Well, they had more inventory than they've had in the past. It wasn't at the same level that Target experienced, so while they had somewhat disappointing guidance, it didn't quite come to that 90% cut back that we're looking at in terms of Target's expected profits. Those two businesses themselves, it just comes down to the quality of merchandising, and anytime I'm looking at a retailer, I want to know what's their merchandise strategy. Target's done really well in the past, but over the past year, they've admitted it, but they miss the mark with their merchandising, so I want to see how they're iterating on that moving forward. The good news is that discount retailers where I bought my outfit I'm wearing today from the Burlington and the TJ Maxx of the world. They'd benefit from these inventory write-downs.
Chris Hill: Target's CEO, Brian Cornell, in referring to their inventory and the levels are still where they were three months ago, but Cornell says we have a better mix now. Given his track record at the company, I'm inclined to give them the benefit of the doubt, but it seems like the statement that three months from now, we're going to find out whether or not he was right.
Emily Flippen: Definitely and you have to be super careful with guidance in this quarter, and that's what we're seeing companies do, and they're pointing to what could be a continued softening of the American economy and consumer spending, but at the same time, you don't want to be scaring off investors with really strong statements that we're going to continue to have inventory problems for foreseeable quarters. It's all about managing expectations but also being realistic; we're meeting the consumer where they may be in the second half of the year.
Chris Hill: From big retail to big home improvement, Home Depot's second-quarter report was stronger than Lowe's, but both companies saw their average ticket rise, and shares of both Home Depot and Lowe's are up a little bit this week, Ron.
Ron Gross: Yeah. Home Depot is definitely the stronger report. The stock is still off 23% from its 52-week high, but I don't think we shouldn't necessarily be surprised by that. But I did like specifically some of the metrics that Home Depot released: sales were up about 6.5 percent. Higher prices, that's important here, higher prices more than offset a drop in transactions. The average amount spent per transaction was up at 9.1%, but transactions fell 3%, and they've fallen in each of the past five quarters.
Something to keep an eye on because pricing can't fix problems forever, so we do want people coming into the stores and shopping. Same-store sales up 5.8%; Home Depot saw an 11.6% increase in transactions that were over $1,000 which is an indication that the professional customer -- not do-it- yourself for the schlub like me who look good in there looking for a wrench -- is actually an important part of Home Depot's business.
In fact, it's more important to Home Depot than it is to Lowe's, as we'll see in some of the numbers, because Home Depot's look strong, yields, 2.3% trading at 19 times forward earnings. I think Home Depot remains a nice company to own. Lowe's, not as strong, share still up about 18% from the 52 week high. Declining sales for the second quarter in a row, results were hurt by decreased demand from the nonprofessional customer base. Those do-it-yourself make up 75% of Lowe's customer base. Sales to professional customers were up 13%, so we do see some strength there. It's just not a big enough portion of Lowe's business the way Home Depot says, but the company didn't manage inventory well.
Interestingly, we saw that operating income was up a bit, but net income was down because taxes were too high, but earnings per share were up because this company is buying back so much stock. Don't be fooled sometimes by the numbers -- you got to look behind things like earnings per share to say, why is earnings per share up if net income was down and get a good understanding of why.
Chris Hill: I don't think any of us put Home Depot and Lowe's in the category of companies that have great pricing power, but it is interesting. As you indicated, both of them were able to see their average ticket rise due largely to inflation and essentially pass the inflationary costs on the customers without missing too much of a beat. In terms of Home Depot, that stat of traffic dropping five quarters in a row. How many more quarters does that happen before investors start to make that the No. 1 worry?
Ron Gross: It shouldn't probably be the No. 1 worry right now. Now to offset that the average transaction value has increased over the past five quarters, so there's your offset, but maybe that offset can't continue forever, and that is something we have to keep an eye on for sure.
Chris Hill: Shares of Deere down a bit on Friday after a mixed third-quarter report, the heavy equipment maker's revenue came in higher than expected, but profits were light and Deere also cut guidance for the full fiscal year. This doesn't make anybody's list of high-flying stocks, Emily, but interesting to see that Deere has held up relative to the market pretty nicely this year.
Emily Flippen: I was going to say maybe it should be on your list if you're looking for great businesses. While this quarter was somewhat disappointing, sales were still really incredibly strong. They rose 22% year over year, so if you're looking at this business as just a tractor business, you're probably evaluating it the wrong way. Now they did have to cut guidance though, but if you get into the details of the drivers behind why their guidance changed, it's not as concerning as the headline numbers.
They are continuing to struggle against supply chain disruptions. Nearly 50 percent of their business is outside North America, so they have very wide-ranging manufacturers across the world depending on lots of different supplies, and they're having to pay more to get those deliveries to meet backlogs for demand, so this is very much a narrative we've heard over the past couple of years, which is supply really just not meeting demand.
Demand outstripping the supply, and that's still the case for John Deere and their core tractors as well as other products, but that slowdown is expected to continue. But the backlog, like I said, still incredible for this business. I think the big question mark is where they bring their technology after this, because as I mentioned, they have incredible revenue growth, they're a really strong business that operates in some sense a monopoly on the technology that they own, which they put into things like AI, machine learning, big data collection.
If you want to automate your crop production process, excuse me, I'm not a farmer, [laughs] but my understanding is improvements that you want to make to your crop production. John Deere's meeting you there, but they have a very close ecosystem for this technology, so once you come in to the John Deere family, if you will, you are really stuck. It's great for business, but it does irritate some farmers.
Chris Hill: One restaurant is shaking up its executive team and one retailer took shareholders on the mother of all roller coaster rides this week. Details after the break, you're listening to Motley Fool Money.
Welcome back to Motley Fool Money. Chris Hill here in studio with Emily Flippen and Ron Gross. Quick word about FoolFest. Our annual investing conference is a two-day event, August 29th and 30th. We've got breakout sessions on different investing strategies. We've got a great lineup of speakers. Trex CEO Bryan Fairbanks, venture capitalist Jenny Abramson, best-selling author Morgan Housel just to name a few. FoolFest is free if you are a Motley Fool member, and if you're not yet a member, good news, you can sign up for our Stock Advisor service and get a complimentary digital pass to this two-day event. Just go to fool.com/foolfest for more details, fool.com/foolfest, Ron, I know we like to focus on the business, not the stock, but in the case of Bed Bath & Beyond this week we have to talk about this stuff.
Ron Gross: We make an exception.
Chris Hill: Yeah. Because shares of the challenged retailer started the week at $13 more than doubled due to the company's popularity among meme stock traders, and then shares plummeted on Friday after activist investor Ryan Cohen sold his entire stake more than 7 million shares. Ron, shares went from $13 to $29 and then down to $11 in the span of one week.
Ron Gross: [laughs] Where do I go at this, Chris? First, full disclosure, I was a shareholder, but I sold all my stock last Friday and Monday, August 12 and 15, thinking I was being given a gift by the Reddit folks and the meme stock people because the business is struggling. I originally purchased this company. My thesis being that Mark Tritton, who came over from Target, was going to transform this company in a major way. He did make some good moves, but he also made some stumbles, and that's where Ryan Cohen entered the picture and said, I want some board seats. Eventually, he was successful in getting Mark Tritton out. That was interesting to watch, and he owned quite a bit of stock as you said.
Then he came out and said he owned a call option where he would really only start to make money if the stock was $60 or above. Again, the stock is around $10, $15. That got some Reddit people really interested, and that's when we saw like a 75% increase in the stock in one day. Subsequent to that, he ends up selling everything.
Now there are calls for the SEC to investigate saying that this sounds like market manipulation where he made the stock rise significantly so he could unload. I don't have an opinion about whether that is the definition of manipulation or not. It certainly was a weird week, I'll say that for sure. But Bed Bath now does continue to struggle. The question really on my mind is, do they have the balance sheet to transform themselves once again? Do they have the time? They probably don't, unless they sell something like buybuy Baby or make some major changes.
Chris Hill: It's worth remembering. Ryan Cohen started Chewy. He affected some manner of turnaround at GameStop. It's reasonable to go back in time when he entered the picture for Bed Bath & Beyond and think, well, here's someone who has a pretty good track record with retailers. Maybe he can help this one. But as you said, in his wake is a business that is going to have to raise money one way or the other.
Ron Gross: For sure. What Tritton did when he came in is he started selling noncore businesses like the Christmas Tree Shops, and some real estate, and some other things. I said, OK, this is good. He wiped out the whole C-suite and put in new executives. I said, OK, now this is good. He's going to move to private label as he did with Target. I said, OK, this all makes sense. He went way too far. He went private label to the max and really hurt the business, and now they've got to a day [sic] off from under that.
Chris Hill: Starbucks Chief Operating Officer John Culver is leaving the company after more than 20 years with the coffee chain. Rather than replace him, Starbucks announced it is eliminating the position of Chief Operating Officer. Three-time CEO Howard Schultz has promised bold changes with more details expected on September 13 at Starbucks Investor Day, which Emily, fairly or unfairly, I feel like Starbucks is raising expectations for a lot of big news on September 13.
Emily Flippen: Yeah. I mean, here's what Starbucks promised on their Investor Day. They promised insight into Starbucks "reinvention plan," which includes elevating employees and the customer in-store experience, as well as "a very exciting new digital initiative that will build on the current experience."
They spent a lot of time in their most recent quarterly report building up excitement for this, but here's what the market heard. The market heard, we're going to get a new CEO. I think a lot of investors are sitting here on the edge of their seat thinking, OK, come Investor Day, we're going to be hearing about this new CEO, and with the departure of the COO role, it leads to a question of, OK, what is the new CEO going to do with the C-suite? Because I personally, when I see the departure of an important role at a big company like Chief Operating Officer, it's a little bit of a yellow flag for me. But if we have a CEO who's coming in and really sold on this reinvention plan and has a vision that extends beyond just doing more of what Starbucks has done in the past, then maybe it makes sense.
Chris Hill: Shares of Foot Locker up 20% on Friday after the second-quarter results for the athletic apparel retailer were better than expected. The company also announced that former Ulta Beauty CEO Mary Dillon will be taking over as CEO of Foot Locker on September 1. Ron, that is a huge get. That is a massive win in terms of hiring.
Ron Gross: Mary Dillon is probably one of the most respected retail CEOs out there right now. As you say, that is huge. Her experience with moving a retailer which is primarily brick and mortar to more of an online presence like she did with Ulta will bode well, I think, for Foot Locker shareholders and for the company. That is, I think, mostly what the market is reacting to with that stock being up so much.
The quarter was better than the expected, but it was a little bit blind. Sales were down 9%, comp sales down 10%. The company is in this transition right now, moving away from Nike as its primary supplier. Nike accounted for 70% of merchandise in 2021. It's essential that they move away and move toward people like Adidas to really right-size that business. Mary Dillon has her work cut out for her both going multichannel as well as moving away from Nike. If there's anyone that can do it, I think she's got a fighting chance. But this is a relatively struggling retailer, only trading at nine times. If you believe in Mary Dillon, it might be an interesting nibble to take.
Chris Hill: On the flip side, if someone with her track record of success can't turn this business around, I mean, that may be time to say goodbye to Foot Locker.
Emily Flippen: Let me play devil's advocate here because I'm a huge Mary Dillon fan, I'm an Ulta shareholder. But we've seen big executives come into struggling businesses in the past and really just get a nice paycheck and then move on. I think about Marvin Ellison at JCPenney as an example. You want to make sure this is not just a stepping stone for Dillon where she's going to get a pretty penny and then walk away, leaving shareholders holding the bag.
Ron Gross: Foot Locker, the next JCPenney. [laughs]
Chris Hill: Emily Flippen, Ron Gross, we will see you later on in the show. But up next, a closer look at the entertainment industry, Bloomberg reporter Lucas Shaw. Stay right here. You're listening to Motley Fool Money.
Welcome back to Motley Fool Money. I'm Chris Hill. Lucas Shaw is a reporter for Bloomberg. He covers the entertainment industry and writes a newsletter about Hollywood called "Screen Time." Ricky Mulvey caught up with Shaw to talk about Warner Brothers Discovery. The company's stock has been cut in half this year. The conversation focused on how Warner Brothers Discovery is consolidating and evolving.
Ricky Mulvey: Warner Brothers CEO David Zaslav isn't out here to make friends. He shut down the CNN Plus streaming service just weeks after its launch. More recently, he's axed $130 million worth of nearly finished films, and he's laying off workers at HBO Max. Lucas, what is Zaslav's strategy here -- is it just cutting and consolidating? I'm confused of what he's going for other than slashing and burning.
Lucas Shaw: Anytime you have a merger of two big companies that have a lot of overlapping businesses, you can expect there to be some cut sense, the layoffs and all of those synergies or redundancies or whatever language the corporate Chief likes to use. Zaslav promised a lot of them in this case -- I think he initially promised three billion that he could trim from the combined budget. He has since said there might even be more of that. There's a degree to which there's just a lot of cutting that was going to be inevitable. I also think look Zaslav historically run a very tight ship at Discovery, they make low-cost programming. They do so with a relatively small staff, Warner Media, which he's now merged and turned into Warner Brothers.
Discovery has historically been, it's much larger, it's like three or four times the size of Discovery. They make high-end programming, very expensive movies, and very expensive television shows. They have a lot of different projects in development, which is something that you have when you're doing scripted programming as opposed to unscripted. I think he just sees a lot of fat, if you will, a lot of things that he can cut. He's still figuring out the big-picture strategy. They have two different streaming services. There's HBO Max and Discovery. Plus he has made clear that he wants to push them together and then sell it at three different price points. Likely one that's free, one that's maybe ad-supported and cheaper, and then one that's premium and no ads, and he's in the process of figuring out what that looks like, and that means a lot of shuffling, and unfortunately people losing their jobs.
Ricky Mulvey: Projects are canceled all the time. Creators are then upset about that. The story feels a little different with some of the movies and cancellations at Warner Brothers Discovery -- is it because these projects were so close to completion or the relationship management that Zaslav has with a lot of these creators. I guess why does this story seem different than other cancellations?
Lucas Shaw: Why it is pretty unusual, in the case of a movie like a Bat Girl to have something that is almost done that you have already spent about $90 million on and decide to just eat it. You're not going to put it on. You're not going to release in theaters, you're not going to release it on the streaming service. I think there's a couple of things at play here. One is just a shift in strategy at the company. Jason Kilar, who had run Warner Media under AT&T, was a big believer in streaming. He was commissioning original movies for the streaming service. He was collapsing the window or the time between when a movie is released in theaters and then made available at home on streaming, Zaslav's taking the company in the other direction. He is reprioritizing the theatrical release and having a longer exclusive window and exclusive running theaters, and Bat Girl is in part a casualty of that.
It was a relatively expensive movie as far as streaming movies go, and he doesn't want to make movies at that budget there. There is also a tax benefit to releasing it or to cutting it in this way. He's just trying to write off as much as he can right after doing this deal because he can get some kind of tax break on it, and so that's why I think you're seeing something that is quite unusual in the case of those movies getting shelved.
You're also seeing TV shows and movies that were released being scrubbed from the platform and written down because they feel like there's not much of an audience for it, and those cases, it's pretty forgettable projects, projects that not a lot of people watch. There was a Seth Rogen movie, American Pickle. There was a couple of reality shows like Craftopia and Baketopia. I don't think that longer term you're going to see him do that with a bunch of projects. I think a lot of this is related to the fact that the merger was just completed.
Ricky Mulvey: In a recent "Screen Time" column: "It's common for executives to criticize their predecessors when they take over a new company, buy some time to deliver results, Zaslav has turned it into an art form, repudiating Jason Kilar at every opportunity." How is this so different and why does this repudiation stand out in your mind?
Lucas Shaw: Just how consistent and thorough they've been in saying how bad the people before them were. It's pretty common. But for example, Disney acquired a lot of assets from Fox. They acquired the Fox film and TV studio. They acquired Fox cable networks like FX. They acquired Fox's stake and Hulu, and most of the Fox movies have been dogs. They have not performed well. The CEO of Disney did acknowledge that there were some problems with that, but they didn't come out and be like, you know what, we just acquired a bunch of shitty movies, and the people we bought this from they didn't know what they're doing and we just have to clean it up. They were a little more diplomatic about it.
I think Zaslav and his team have a tendency to be pretty direct, but also they're trying to manage expectations. Look, they've taken on a much bigger challenge than they've ever had before. Jason Kilar had a very particular vision, and he comes from a tech background, Zaslav's the opposite. He comes from a cable network background, and so I think their views of the world are just opposed in a pretty fundamental way, and so that's leading to him coming out and talking about all the problems in the business that they did not anticipate.
Ricky Mulvey: Kilar did have some issues with talent, particularly under the same-day streaming release strategy, famously getting Christopher Nolan to leave Warner Brothers. Now with these cuts of movies and cancellations, do you think there's a longer-term threat for Warner Brothers in terms of alienating top-level talent?
Lucas Shaw: It's hard to say. There was a narrative that Kilar alienated talent, and he certainly pissed off some of their representatives, who then squawk to the press because agents, lawyers, managers, they tend to be pretty good sources for people like me. I will say I think a lot of that was overblown. If you look in the big picture, they ended up paying everyone a lot of money and treating every movie released in theaters and streaming at the same time like it was a hit, which most of them would not have been. In that case, the money can heal a lot of the wounds.
One of the issues was definitely around communication at the time that people didn't feel like they knew ahead of time. My understanding is that the folks at Warner Brothers started to reach out to people to talk to them about it, and it almost immediately started to leak, and it's not like they had a bunch, I mean, it's easier to communicate like that on a one-off project basis like, say, Disney did with some of its individual titles than a whole slate, and Disney still got in trouble with Scarlett Johansson on that movie.
Look, creative people are still happy to work at Warner Media. They have had no problem reupping and keeping people. There are a lot of talent relationships that the head of Warner Brothers television studio has at the head of HBO programming and content have. But there are people looking somewhat skeptically at David as I haven't, being like, are you just going to come in and cut costs, do you respect what we're doing? Do you understand what we're doing? I think that happens whenever a relative outsider, or even just a new boss comes into Hollywood, which is a very clubby community. If he is willing to spend money on projects, then people will be fine with him. If he developed a reputation as someone who micromanages, someone who doesn't want to spend money, someone who just meddles in the creative process, that could damage relationships long term.
Ricky Mulvey: It was interesting under Kilar's leadership when they were sharing statistics about movies coming out, particularly in 2020 and declaring every one of them being a hit when they weren't really sharing many statistics about why they were a hit. Looking at the whole streaming landscape, you've written about how these services are now no longer growing in the United States. The exception would be Paramount Plus probably. Streaming is only about 1/3 of TV viewing. Do you think that's the ceiling for it?
Lucas Shaw: No. I think you'll see the streaming share has been growing. I mean, it's not like a rocket ship anymore, but it's still picking up, and it's cyclical a little bit in that. The summer is a good time for streaming because it's got a lot of sports, and sports is really what people watch on pay-TV for the most part. I think in the fall, TV share will go up both because of sports and because of the midterm elections, which again, news people watch on linear but longer term, the number of people who pay for a TV service is going down, the amount of time people spend watching linear live TV is going down, and more and more of that will shift to the Internet.
The question is just how fast and also can these streaming services balance their investment with the growth? They were investing an insane amount of money because they expected this very rapid growth, which some of them have gotten. But we're now in a moment where investors want to see profit, and so people are being a little more rational about spending, and there'll be a balancing act. But I think streaming share of overall TV consumption will certainly get closer to 40 and 50%. It just a question of when.
Ricky Mulvey: Closing out. Your colleagues, Felix Gillette and allies are [sic] Ronald Hannon wrote a great feature on AMC and CEO Adam Aron. The piece discusses very much how Aaron understands loyalty management, building excitement. Do you think there are any lessons from the AMC story from Adam Aron about building customer loyalty that these streamers could learn from, especially when the switching costs are so low?
Lucas Shaw: Not really. Only because look, the AMC case is so unique. It was a business that was in deep trouble that where the leadership had not come up I think with the obvious answer. As much as I do think that Adam Aron has a decorated history of coming up with customer loyalty programs, they got failed out by this meme stock and retail investor movement that I don't think at the time, it's not like they were greasing the wheels for that. They were not ready for it to happen. It happened to them, and then they have managed to very ably ride that wave. But if you're one of these other media companies, would it be fun if a bunch of people decided to celebrate you and start buying your shares? Sure, but that's not something that you're going to plan for.
I mean, I think what they do have to think about is, are there ways to continue to reduce cancellations, or what's known as churn in the industry, and do you do that? That's one of the reasons you're seeing maybe lower-cost add tiers. It's one of the reasons that you're seeing people play around with the weights of bundling their service, whether it's with a phone product like your phone bill or your cable bill or anything like that. That consumer loyalty they want to look at, but I would actually argue that there's a lot of the new developments in streaming are less customer-friendly than they have been. Streaming has always been an incredibly consumer-friendly product. But now that there's more pressure to profit, there is experimentation with business practices better more about earnings on Wall Street than about the customer.
Ricky Mulvey: Are you specifically talking about ad tiers there in perspective?
Lucas Shaw: Ads cracking down on password sharing, raising prices. Some of the movement away from making movies available at home for streaming earlier. I just think that there's a lot of things that people are doing that are less consumer-friendly than they have been because streaming is still a better experience than cable. If you go back in time, there was a point at which pretty much anything you could want to watch was on either Netflix, Hulu, or Amazon, and the prices were pretty low, and then if you wanted, there were no ads. Now, content is fragmented and prices are going up and the experiences getting cluttered with other add-ons.
Ricky Mulvey: Bloomberg's Lucas Shaw. Thank you for your time.
Lucas Shaw: Thank you for having me.
Chris Hill: Up next, Emily Flippen and Ron Gross return with a couple of stocks on their radar. Stay right here. You're listening to Motley Fool Money. 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. Don't buy or sell stocks based solely on what you hear.
Welcome back to Motley Fool Money. Chris Hill here in studio once again with Emily Flippen and Ron Gross. You can hear this show on radio stations across America every week, and you can find the podcast on your favorite podcast app: Apple, Spotify, Google Play, iHeart, Overcast. We're on all the podcast apps, people, and if you're an NFL fan, you're going to want to check out the episode we've got coming this Sunday. It's a conversation with ESPN's NFL analysts, Mina Kimes. Why is an NFL analyst on a show about business and investing, you may ask? Because Mina Kimes started her journalism career covering Wall Street, first for Fortune Magazine, then for Bloomberg. Follow Motley Fool Money on your favorite podcast app so you do not miss a single episode.
Shares of Papa John's are down 30% over the past year. But the pizza chain has a new innovation to turn things around. Introducing Papa bowls, a combination of pizza toppings baked together and served in a bowl instead of on a crust. Emily, I guess this is going after the low-carb market?
Emily Flippen: Here's the thing, Papa John's [laughs] needs to offer me a job because I fix this product for them. Here you go. First of all, don't call it pizza bowl. It sounds like rose bowl. I'm expecting some type of pizza-eating competition. It doesn't sound appealing. Here's what you do. You take the bowl, you serve it with breadsticks. You call it deconstructed pizza. Suddenly it's an elevated experience. Suddenly you have millennials, Gen Z, everybody wants their deconstructed pizza. There, fixed it for you, Papa John's.
Ron Gross: Wow, I'm speechless.
Chris Hill: Yeah, I don't have anything to add, do you?
Ron Gross: I was going to say this is no good. Pizza is the best thing ever created whether you're a calzone, a stromboli, or a pizza, the common element includes bread. Don't take my bread away.
Chris Hill: Let's go to our man behind the glass. Dan Boyd. Dan, I'm sure you have thoughts on this.
Dan Boyd: I want to point something out. In their press release for this abomination, [laughs] they said that they're trying to get people excited about pizza again, which is the stupidest thing I've ever heard, [laughs] because everybody is constantly excited about pizza the world over. [laughs]
Chris Hill: It's so true. I think Emily just solved this.
Ron Gross: She's a big thing.
Emily Flippen: I'm in the wrong industry clearly. I think too much about pizza, to Dan's points. Way too much time thinking about pizza, not enough time thinking about stocks.
Chris Hill: No, but I'll just build on Dan's comment because it reminds me of Dippin Dots, the horrific company that claims to have invented the future of ice cream. When really the future of ice cream is what we have right now. It's ice cream, ice cream's fine, don't try and fix it. Let's get to the Radar stocks. I'm all upset now. Ron Gross, what are you looking at?
Ron Gross: I'm looking at American Tower, AMT down only 9% from its 52-week high. We've seen a bit of a rebound here, 25% office, it's low. American Tower is a real estate investment trust. They own 220,000 communications towers in 20 countries. They lease space on those towers to wireless carriers. Think AT&T, Verizon, Sprint, T-Mobile, so those companies can place hardware needed to provide their services. They also operate 1,800 indoor and outdoor antenna systems, 27 datacenters in the US. Their expansion into datacenters, I think will lead to multiple expansion opportunities for this company. They are in a very strong position in the interconnected world we live in. Keep an eye on the balance sheet, $49 billion in debt. They're not afraid to make an acquisition, and that's important to keep an eye on. Stock has delivered 17% total annualized returns over the last decade. I still think it looks good from here.
Chris Hill: Dan, question about American Tower?
Dan Boyd: Numbers. How many towers do they have?
Ron Gross: 220,000.
Dan Boyd: How much debt do they have?
Ron Gross: 49 billion.
Dan Boyd: You had me here until you said debt of 49 billion. What's their revenue?
Ron Gross: It's significant. I don't have the exact number in front of me, I will admit, but let me throw one more number, 37 consecutive quarters of dividend increases, 2% yields at the moment, not too shabby.
Dan Boyd: Well, these numbers are wild. [laughs]
Chris Hill: Emily Flippen, what are you looking at this week?
Emily Flippen: Well, I'm looking at a company that will wake everybody up from that nice little nap they had. Well, Ron [laughs], I'm talking about AMT. I'm teasing, but it is a very exciting company. The company is Rover Group, that ticker is ROVR. Rover runs a marketplace for pet services like dog walking and cat sitting, and they had an amazing second-quarter results. Their revenue was up 77%, gross booking value, up nearly 60%, free cash flow margins of 35% in the quarter. But more importantly, they're also growing their market share. They are now 13 times larger than our next largest competitor. They're dominating this space. A really underappreciated company. Demand might fall depending on travel and such, but I think the company itself fundamentally is really strong.
Chris Hill: Dan, question about Rover Group?
Dan Boyd: I mean, I feel like Emily stepping on my toes here by roasting Ron in his morning stock picks. [laughs] I feel Rover sure, good company, whatever, who cares. Maybe Emily should stay in our lane though. [laughs]
Emily Flippen: Very good point if I can wake everybody up again. Let me put myself back in my lane here. There are questions about Rover that may make you less excited. One of them being the experience, you have one bad experience on Rover. You have a bad pet sitter. Something happens to your pet, that ruins this company for you, and I'll tell you what, the word of mouth that they have, it can also go in the opposite direction as well. You really want to make sure the quality is staying high.
Chris Hill: We've seen businesses like Airbnb benefit from word of mouth in that they don't have to spend a lot on advertising. Is that similar to Rover Group where they depend more on word of mouth and they're not paying a lot for marketing?
Emily Flippen: Exactly that. Their marketing expenses are extremely low, which allows them to generate a lot of cash flow. The vast majority of customers are gained via word of mouth. But again, one bad experience, that goes the other way in.
Dan Boyd: Which we had at the Fool.
Emily Flippen: Which we had at the Fool.
Dan Boyd: Everyone was up in arms.
Emily Flippen: Myself included.
Ron Gross: That's how the company came to my attention. Very interesting.
Chris Hill: Two very different businesses, Dan. You got a stock you want to add to your watchlist.
Dan Boyd: I tell you what, I think my brain is probably a little too smooth to figure out the numbers involved in AMT, [laughs] to be honest. I'm going to go with Rover. I do have pets at home, and whenever we leave for a vacation or something, getting care for them, it can be a pain in the neck. I think I'm interested in Rover.
Chris Hill: Emily Flippen, Ron Gross. Thanks so much for being here.
Emily Flippen: Thanks, Chris.
Ron Gross: Thanks, Chris.
Chris Hill: That's going to do it for this week's Motley Fool Money radio show. The show is mixed by Dan Boyd. I'm Chris Hill. Thanks for listening. We'll see you next time.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. Chris Hill has positions in Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Amazon, American Tower, Apple, Chewy, Inc., Home Depot, Lowe's, Starbucks, Target, The TJX Companies, Trex, and Walt Disney. Dan Boyd has positions in Amazon and Walt Disney. Emily Flippen has positions in Airbnb, Inc., Chewy, Inc., Home Depot, Spotify Technology, and Ulta Beauty. Ricky Mulvey has positions in Home Depot, Netflix, Spotify Technology, and Walt Disney. Ron Gross has positions in Airbnb, Inc., Amazon, American Tower, Apple, Nike, Starbucks, Target, The TJX Companies, Verizon Communications, and Walt Disney. The Motley Fool has positions in and recommends Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Amazon, American Tower, Apple, Chewy, Inc., Home Depot, Netflix, Nike, Rover Group, Inc., Spotify Technology, Starbucks, Target, Trex, Ulta Beauty, Walmart Inc., and Walt Disney. The Motley Fool recommends Foot Locker, Lowe's, T-Mobile US, The TJX Companies, Verizon Communications, and Warner Bros. Discovery, Inc. and 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, short March 2023 $130 calls on Apple, and short October 2022 $85 calls on Starbucks. 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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Motley Fool producer Ricky Mulvey talks with Bloomberg entertainment industry reporter Lucas Shaw about Warner Brothers Discovery and how the media conglomerate is consolidating and evolving. The recent rise of the stock market hit a speed bump this week after minutes from the Federal Reserve's July meeting indicated more interest rate hikes are coming in the near term. Lucas Shaw: Anytime you have a merger of two big companies that have a lot of overlapping businesses, you can expect there to be some cut sense, the layoffs and all of those synergies or redundancies or whatever language the corporate Chief likes to use.
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Chris Hill has positions in Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Amazon, American Tower, Apple, Chewy, Inc., Home Depot, Lowe's, Starbucks, Target, The TJX Companies, Trex, and Walt Disney. The Motley Fool has positions in and recommends Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Amazon, American Tower, Apple, Chewy, Inc., Home Depot, Netflix, Nike, Rover Group, Inc., Spotify Technology, Starbucks, Target, Trex, Ulta Beauty, Walmart Inc., and Walt Disney. Discovery, Inc. and 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, short March 2023 $130 calls on Apple, and short October 2022 $85 calls on Starbucks.
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Emily Flippen: Definitely and you have to be super careful with guidance in this quarter, and that's what we're seeing companies do, and they're pointing to what could be a continued softening of the American economy and consumer spending, but at the same time, you don't want to be scaring off investors with really strong statements that we're going to continue to have inventory problems for foreseeable quarters. Chris Hill: From big retail to big home improvement, Home Depot's second-quarter report was stronger than Lowe's, but both companies saw their average ticket rise, and shares of both Home Depot and Lowe's are up a little bit this week, Ron. Chris Hill has positions in Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Amazon, American Tower, Apple, Chewy, Inc., Home Depot, Lowe's, Starbucks, Target, The TJX Companies, Trex, and Walt Disney.
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In this podcast, Motley Fool senior analysts Emily Flippen and Ron Gross discuss: Expectations around more interest rate hikes in the near future. Chris Hill: Dan, question about American Tower? Chris Hill: Two very different businesses, Dan.
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19673.0
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2022-08-22 00:00:00 UTC
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US STOCKS-Wall Street ends sharply lower on fears of aggressive Fed
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AAPL
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https://www.nasdaq.com/articles/us-stocks-wall-street-ends-sharply-lower-on-fears-of-aggressive-fed-0
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By Noel Randewich and Bansari Mayur Kamdar
Aug 22 (Reuters) - Wall Street ended sharply lower on Monday as investors fretted about a U.S. Federal Reserve gathering later this week in Jackson Hole, Wyoming, that is expected to reinforce a strong commitment by the central bank to stamp out inflation.
All 11 S&P 500 sector indexes declined, led lower by consumer discretionary .SPLRCD, down 2.84%, followed by a 2.78% loss in information technology .SPLRCT.
Nvidia Corp NVDA.O dropped 4.6% and Amazon.com Inc AMZN.O fell 3.6%, while Microsoft Corp MSFT.O and Apple Inc AAPL.O each lost more than 2% as the benchmark 10-year U.S. Treasury yield rose to its highest since July 21. US/
Technology and other higher-growth stocks often fall when bond yields rise.
After a summer rally on Wall Street ended last week, the S&P 500 .SPX remains down about 13% so far in 2022, and the Nasdaq .IXIC is down more than 20%.
The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.9, its highest in over two weeks.
Focus is on Fed Chair Jerome Powell's speech on Friday at the central banking conference in Jackson Hole for further cues on how aggressively the Fed is likely to be with future interest rate hikes.
"Powell is going to try to sound hawkish to tamp down inflationary expectations and tighten financial conditions. So that's most likely going to be a negative catalyst for the market," warned Jay Hatfield, chief investment officer at Infrastructure Capital Management in New York.
The Fed will probably raise interest rates by 50 basis points in September, according to economists polled by Reuters.
However, traders are split between a 50 bps hike and a 75 bps hike by the central bank after several policymakers recently pushed back against expectations of a dovish pivot and emphasized the Fed's commitment to fight against inflation. FEDWATCH
Investors will also be looking for details on the Fed's plans to reduce its nearly $9 trillion balance sheet, a process that started in June.
The S&P 500 declined 2.14% to end the session at 4,137.99 points.
The Nasdaq declined 2.55% to 12,381.57 points, while Dow Jones Industrial Average declined 1.91% to 33,063.61 points.
Slowdown fears hit markets globally. China's central bank trimmed some key lending rates on Monday in a bid to support a slowing economy and a stressed housing sector.
Also bleeding into negative sentiment on Wall Street, European shares dropped after Russia's Gazprom GAZP.MM said last week it would halt natural gas supplies to Europe for three days at the end of August.
AMC Entertainment Holdings Inc AMC.N tumbled 42% after the cinema chain's preferred stock listing started trading and its UK-based rival Cineworld Group CINE.L warned of a possible bankruptcy filing.
Signify Health Inc SGFY.N surged 32% following a report on Sunday that UnitedHealth Group Inc UNH.N, Amazon, CVS Health Corp CVS.N and Option Care Health Inc OPCH.O were bidding to acquire the company.
Declining stocks outnumbered rising ones within the S&P 500 .AD.SPX by a 19.9-to-one ratio.
The S&P 500 posted one new high and 32 new lows; the Nasdaq recorded 30 new highs and 171 new lows.
Volume on U.S. exchanges was relatively light, with 9.9 billion shares traded, compared with an average of 10.8 billion shares over the previous 20 sessions.
Wall Street's busiest tradeshttps://tmsnrt.rs/3wpwiuu
(Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru, and by Noel Randewich in Oakland, Calif.; Editing by Marguerita Choy)
((noel.randewich@tr.com; Twitter: @randewich))
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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Nvidia Corp NVDA.O dropped 4.6% and Amazon.com Inc AMZN.O fell 3.6%, while Microsoft Corp MSFT.O and Apple Inc AAPL.O each lost more than 2% as the benchmark 10-year U.S. Treasury yield rose to its highest since July 21. By Noel Randewich and Bansari Mayur Kamdar Aug 22 (Reuters) - Wall Street ended sharply lower on Monday as investors fretted about a U.S. Federal Reserve gathering later this week in Jackson Hole, Wyoming, that is expected to reinforce a strong commitment by the central bank to stamp out inflation. Also bleeding into negative sentiment on Wall Street, European shares dropped after Russia's Gazprom GAZP.MM said last week it would halt natural gas supplies to Europe for three days at the end of August.
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Nvidia Corp NVDA.O dropped 4.6% and Amazon.com Inc AMZN.O fell 3.6%, while Microsoft Corp MSFT.O and Apple Inc AAPL.O each lost more than 2% as the benchmark 10-year U.S. Treasury yield rose to its highest since July 21. By Noel Randewich and Bansari Mayur Kamdar Aug 22 (Reuters) - Wall Street ended sharply lower on Monday as investors fretted about a U.S. Federal Reserve gathering later this week in Jackson Hole, Wyoming, that is expected to reinforce a strong commitment by the central bank to stamp out inflation. The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.9, its highest in over two weeks.
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Nvidia Corp NVDA.O dropped 4.6% and Amazon.com Inc AMZN.O fell 3.6%, while Microsoft Corp MSFT.O and Apple Inc AAPL.O each lost more than 2% as the benchmark 10-year U.S. Treasury yield rose to its highest since July 21. By Noel Randewich and Bansari Mayur Kamdar Aug 22 (Reuters) - Wall Street ended sharply lower on Monday as investors fretted about a U.S. Federal Reserve gathering later this week in Jackson Hole, Wyoming, that is expected to reinforce a strong commitment by the central bank to stamp out inflation. The Nasdaq declined 2.55% to 12,381.57 points, while Dow Jones Industrial Average declined 1.91% to 33,063.61 points.
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Nvidia Corp NVDA.O dropped 4.6% and Amazon.com Inc AMZN.O fell 3.6%, while Microsoft Corp MSFT.O and Apple Inc AAPL.O each lost more than 2% as the benchmark 10-year U.S. Treasury yield rose to its highest since July 21. By Noel Randewich and Bansari Mayur Kamdar Aug 22 (Reuters) - Wall Street ended sharply lower on Monday as investors fretted about a U.S. Federal Reserve gathering later this week in Jackson Hole, Wyoming, that is expected to reinforce a strong commitment by the central bank to stamp out inflation. The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.9, its highest in over two weeks.
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19674.0
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2022-08-22 00:00:00 UTC
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US STOCKS-Wall St slumps more than 1% on fears of aggressive Fed
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AAPL
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https://www.nasdaq.com/articles/us-stocks-wall-st-slumps-more-than-1-on-fears-of-aggressive-fed
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nan
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By Bansari Mayur Kamdar and Devik Jain
Aug 22 (Reuters) - Wall Street's main indexes tumbled more than 1% on Monday in a dour start to the week as investors worried about hawkish signals from Federal Reserve policymakers against the backdrop of slowing economic growth.
All the 11 major S&P 500 sectors declined in early trading, with rate-sensitive information technology .SPLRCT, consumer discretionary .SPLRCT and communication services .SPLRCL stocks among the top losers.
High-growth companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.4% and 2.4%, respectively.
A four-week summer rally for the Nasdaq and the S&P 500 snapped last week after growth stocks tumbled as the benchmark 10-year Treasury yield hit nearly 3% on inflation fears. US/
Banks .SPXBK fell 2.1% on Monday, with lenders JPMorgan Chase & Co JPM.N and Bank of America BAC.N down nearly 2% each.
Banking giants collectively face more than $1 billion in regulatory fines for employees' use of unapproved messaging tools, including email and apps such as WhatsApp.
The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.26, its highest level in over two weeks.
Hopes of a dovish pivot by the Fed and strong quarterly earnings helped the benchmark S&P 500 .SPX rebound nearly 14.5% from its mid-June lows after a rough start to the year.
Focus this week is on Fed Chair Jerome Powell's speech at a central banking conference in Jackson Hole on Friday for further cues on the monetary policy tightening path.
"The market convinced itself that the CPI last month suggested peak inflation has been reached ... but that was short sighted," said Kenny Polcari, managing partner at Kace Capital Advisors.
"Jackson Hole will give Powell an opportunity to reset the narrative and suggest the Fed is going to remain vigilant and aggressive."
The Fed will raise rates by 50 basis points (bps) in September, according to economists polled by Reuters.
Traders are also expecting a slightly higher chance of a 50 bps hike over a third 75 bps hike, even as several policymakers have pushed back against expectations of a dovish pivot and emphasized the fight against inflation.
Investors will also be looking for details on the Fed's plans to reduce its nearly $9 trillion balance sheet, a process that started in June.
The Fed's favored inflation gauge, the PCE price index, will also be released this week.
Investors eager for clues about the economy's strength amid rising fears of a recession will also closely track the flash readings on business activity, the second estimate of second-quarter GDP and University of Michigan consumer sentiment.
At 09:39 a.m. ET, the Dow Jones Industrial Average .DJI was down 397.64 points, or 1.18%, at 33,309.10, the S&P 500 .SPX was down 59.65 points, or 1.41%, at 4,168.83, and the Nasdaq Composite .IXIC was down 212.19 points, or 1.67%, at 12,493.03.
Slowdown fears also knocked out markets globally. China's central bank trimmed some key lending rates on Monday in a bid to support a slowing economy and a stressed housing sector.
Signify Health Inc SGFY.N jumped 37.8% following a report on Sunday that UnitedHealth Group Inc UNH.N, Amazon.com Inc AMZN.O, CVS Health Corp CVS.N and Option Care Health Inc OPCH.O were bidding to acquire the company.
AMC Entertainment Holdings Inc AMC.N tumbled 36.6% after the American cinema chain's preferred stock listing started trading and its UK-based rival Cineworld Group CINE.L warned of a possible bankruptcy filing.
Declining issues outnumbered advancers for a 8.41-to-1 ratio on the NYSE and a 4.21-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and 29 new lows, while the Nasdaq recorded 13 new highs and 78 new lows.
(Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila)
((BansariMayur.Kamdar@thomsonreuters.com; Twitter: @BansariKamdar))
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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High-growth companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.4% and 2.4%, respectively. By Bansari Mayur Kamdar and Devik Jain Aug 22 (Reuters) - Wall Street's main indexes tumbled more than 1% on Monday in a dour start to the week as investors worried about hawkish signals from Federal Reserve policymakers against the backdrop of slowing economic growth. Investors eager for clues about the economy's strength amid rising fears of a recession will also closely track the flash readings on business activity, the second estimate of second-quarter GDP and University of Michigan consumer sentiment.
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High-growth companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.4% and 2.4%, respectively. By Bansari Mayur Kamdar and Devik Jain Aug 22 (Reuters) - Wall Street's main indexes tumbled more than 1% on Monday in a dour start to the week as investors worried about hawkish signals from Federal Reserve policymakers against the backdrop of slowing economic growth. The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.26, its highest level in over two weeks.
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High-growth companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.4% and 2.4%, respectively. By Bansari Mayur Kamdar and Devik Jain Aug 22 (Reuters) - Wall Street's main indexes tumbled more than 1% on Monday in a dour start to the week as investors worried about hawkish signals from Federal Reserve policymakers against the backdrop of slowing economic growth. A four-week summer rally for the Nasdaq and the S&P 500 snapped last week after growth stocks tumbled as the benchmark 10-year Treasury yield hit nearly 3% on inflation fears.
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High-growth companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.4% and 2.4%, respectively. By Bansari Mayur Kamdar and Devik Jain Aug 22 (Reuters) - Wall Street's main indexes tumbled more than 1% on Monday in a dour start to the week as investors worried about hawkish signals from Federal Reserve policymakers against the backdrop of slowing economic growth. US/ Banks .SPXBK fell 2.1% on Monday, with lenders JPMorgan Chase & Co JPM.N and Bank of America BAC.N down nearly 2% each.
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19675.0
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2022-08-22 00:00:00 UTC
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Taiwan July export orders unexpectedly slip, outlook mixed
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AAPL
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https://www.nasdaq.com/articles/taiwan-july-export-orders-unexpectedly-slip-outlook-mixed
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nan
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nan
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Recasts, adds details and comments
July export orders -1.9% y/y vs +3.6% poll forecast
Export orders from China -22.6% y/y vs -14.5% in June
Ministry sees Aug orders between -0.9% and -3.7% y/y
Ministry sees outlook mixed on tech demand, consumer weakness
TAIPEI, Aug 22 (Reuters) - Taiwan's export orders unexpectedly fell in July on weakening demand for technology and continued economic troubles in its largest market China, and the government said the outlook for tech demand was mixed though not totally negative.
Export orders, a bellwether for global technology demand, last month fell 1.9% from a year earlier to $54.26 billion, the Ministry of Economic Affairs said on Monday. Analysts had expected 3.6% growth.
July's drop followed a 9.5% annual expansion in June. April logged the first fall since February 2020, when the pandemic had just begun sweeping the world.
Orders for telecommunications products in July slipped 0.8% on a year before on weaker end-consumer demand, but also off a high base from last year, the ministry said.
However, orders for electronic products jumped 8.8%, driven by semiconductor demand for high-end computing, automobiles and other appliances, it said.
The trend towards working and studying from home has fuelled growth in orders for Taiwanese electronics for more than two years, more recently reinforced by a global semiconductor shortage that has filled Taiwanese chipmakers' order books.
The ministry said it expected August export orders to be between 0.9% and 3.7% lower than those of August 2021.
Looking ahead, it said that new consumer products released in the second half of the year and stockbuilding of these goods - typically ahead of the year-end holiday season in Western countries - could help support export order momentum.
The ministry added that global inflation remains high, end-consumer demand continues to be weak, there are increased geopolitical risks and the emergence of new COVID-19 strains, all of which are uncertainties pressuring export order growth.
Woods Chen, head of macroeconomics at Yuanta Securities Investment Consulting in Taipei, said export orders would likely register more falls as the year progressed.
"What we don't know though is just how weak it will get," he added.
Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd 2330.TWTSM.N are major suppliers to Apple Inc AAPL.O, Qualcomm Inc QCOM.O and other global tech firms.
Taiwan's July orders from China plummeted 22.6% from a year earlier, compared with an annual fall of 14.5% in June. Month-on-month, orders from China fell 9.7%.
Orders from the United States rose 6.9% on a year before, a weaker pace compared with the previous 13.3% rise.
Export orders from Europe fell 5.1%, versus an annual expansion of 18.8% in June, while those from Japan rose just 0.1%.
(Reporting by Emily Chan and Ben Blanchard; Editing by Jacqueline Wong)
((ben.blanchard@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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Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd 2330.TWTSM.N are major suppliers to Apple Inc AAPL.O, Qualcomm Inc QCOM.O and other global tech firms. Export orders, a bellwether for global technology demand, last month fell 1.9% from a year earlier to $54.26 billion, the Ministry of Economic Affairs said on Monday. The ministry added that global inflation remains high, end-consumer demand continues to be weak, there are increased geopolitical risks and the emergence of new COVID-19 strains, all of which are uncertainties pressuring export order growth.
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Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd 2330.TWTSM.N are major suppliers to Apple Inc AAPL.O, Qualcomm Inc QCOM.O and other global tech firms. Recasts, adds details and comments July export orders -1.9% y/y vs +3.6% poll forecast Export orders from China -22.6% y/y vs -14.5% in June Ministry sees Aug orders between -0.9% and -3.7% y/y Ministry sees outlook mixed on tech demand, consumer weakness TAIPEI, Aug 22 (Reuters) - Taiwan's export orders unexpectedly fell in July on weakening demand for technology and continued economic troubles in its largest market China, and the government said the outlook for tech demand was mixed though not totally negative. The ministry added that global inflation remains high, end-consumer demand continues to be weak, there are increased geopolitical risks and the emergence of new COVID-19 strains, all of which are uncertainties pressuring export order growth.
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Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd 2330.TWTSM.N are major suppliers to Apple Inc AAPL.O, Qualcomm Inc QCOM.O and other global tech firms. Recasts, adds details and comments July export orders -1.9% y/y vs +3.6% poll forecast Export orders from China -22.6% y/y vs -14.5% in June Ministry sees Aug orders between -0.9% and -3.7% y/y Ministry sees outlook mixed on tech demand, consumer weakness TAIPEI, Aug 22 (Reuters) - Taiwan's export orders unexpectedly fell in July on weakening demand for technology and continued economic troubles in its largest market China, and the government said the outlook for tech demand was mixed though not totally negative. The trend towards working and studying from home has fuelled growth in orders for Taiwanese electronics for more than two years, more recently reinforced by a global semiconductor shortage that has filled Taiwanese chipmakers' order books.
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Taiwanese companies such as Taiwan Semiconductor Manufacturing Co Ltd 2330.TWTSM.N are major suppliers to Apple Inc AAPL.O, Qualcomm Inc QCOM.O and other global tech firms. Recasts, adds details and comments July export orders -1.9% y/y vs +3.6% poll forecast Export orders from China -22.6% y/y vs -14.5% in June Ministry sees Aug orders between -0.9% and -3.7% y/y Ministry sees outlook mixed on tech demand, consumer weakness TAIPEI, Aug 22 (Reuters) - Taiwan's export orders unexpectedly fell in July on weakening demand for technology and continued economic troubles in its largest market China, and the government said the outlook for tech demand was mixed though not totally negative. Orders for telecommunications products in July slipped 0.8% on a year before on weaker end-consumer demand, but also off a high base from last year, the ministry said.
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19676.0
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2022-08-22 00:00:00 UTC
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After Hours Most Active for Aug 22, 2022 : APE, CSX, BAC, MSFT, AAPL, VTWO, WEN, C, GM, IBKR, INFY, LUMN
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AAPL
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https://www.nasdaq.com/articles/after-hours-most-active-for-aug-22-2022-%3A-ape-csx-bac-msft-aapl-vtwo-wen-c-gm-ibkr-infy
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nan
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nan
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The NASDAQ 100 After Hours Indicator is up 14.86 to 12,905.4. The total After hours volume is currently 92,994,035 shares traded.
The following are the most active stocks for the after hours session:
AMC Entertainment Holdings, Inc. (APE) is -0.05 at $5.95, with 13,188,147 shares traded.
CSX Corporation (CSX) is unchanged at $33.56, with 8,042,165 shares traded. Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Sep 2022. The consensus EPS forecast is $0.5. As reported by Zacks, the current mean recommendation for CSX is in the "buy range".
Bank of America Corporation (BAC) is unchanged at $34.72, with 5,677,579 shares traded. As reported by Zacks, the current mean recommendation for BAC is in the "buy range".
Microsoft Corporation (MSFT) is +0.15 at $277.90, with 2,638,601 shares traded. Over the last four weeks they have had 4 up revisions for the earnings forecast, for the fiscal quarter ending Jun 2023. The consensus EPS forecast is $2.68. As reported by Zacks, the current mean recommendation for MSFT is in the "buy range".
Apple Inc. (AAPL) is +0.12 at $167.69, with 2,327,263 shares traded. Over the last four weeks they have had 6 up revisions for the earnings forecast, for the fiscal quarter ending Jun 2023. The consensus EPS forecast is $1.36. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Vanguard Russell 2000 ETF (VTWO) is -0.0472 at $76.87, with 2,301,791 shares traded. This represents a 16.72% increase from its 52 Week Low.
Wendy's Company (The) (WEN) is unchanged at $19.93, with 2,245,351 shares traded. Over the last four weeks they have had 6 up revisions for the earnings forecast, for the fiscal quarter ending Sep 2022. The consensus EPS forecast is $0.23. WEN's current last sale is 83.04% of the target price of $24.
Citigroup Inc. (C) is +0.03 at $51.28, with 2,233,667 shares traded. C's current last sale is 85.47% of the target price of $60.
General Motors Company (GM) is unchanged at $38.55, with 2,210,249 shares traded. Over the last four weeks they have had 4 up revisions for the earnings forecast, for the fiscal quarter ending Sep 2022. The consensus EPS forecast is $2.04. As reported by Zacks, the current mean recommendation for GM is in the "buy range".
Interactive Brokers Group, Inc. (IBKR) is -0.01 at $62.46, with 2,015,736 shares traded. As reported by Zacks, the current mean recommendation for IBKR is in the "buy range".
Infosys Limited (INFY) is -0.005 at $19.52, with 1,824,500 shares traded. INFY's current last sale is 92.95% of the target price of $21.
Lumen Technologies, Inc. (LUMN) is unchanged at $10.71, with 1,592,639 shares traded. LUMN's current last sale is 97.36% of the target price of $11.
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 +0.12 at $167.69, with 2,327,263 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Sep 2022.
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Apple Inc. (AAPL) is +0.12 at $167.69, with 2,327,263 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Sep 2022.
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Apple Inc. (AAPL) is +0.12 at $167.69, with 2,327,263 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". CSX Corporation (CSX) is unchanged at $33.56, with 8,042,165 shares traded.
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Apple Inc. (AAPL) is +0.12 at $167.69, with 2,327,263 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Sep 2022.
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19677.0
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2022-08-22 00:00:00 UTC
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GE workers in Alabama launch union organizing campaign
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AAPL
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https://www.nasdaq.com/articles/ge-workers-in-alabama-launch-union-organizing-campaign
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nan
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nan
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By Rajesh Kumar Singh
CHICAGO, Aug 22 (Reuters) - General Electric Co's GE.N workers at a plant in Alabama said on Monday they have launched a campaign to form a union for better pay and job security.
The plant in Auburn, Alabama, employs 179 workers. It builds a fuel nozzle on the widely used LEAP jet engine which powers planes of Airbus AIR.PA and Boeing Co BA.N.
In a statement, the workers said they have submitted cards seeking to organize as part of IUE-CWA to the U.S. National Labor Relations Board (NLRB). A spokesperson for the NLRB confirmed that the board has received the union petition.
To hold a union election, the NLRB requires signed union authorization cards from 30% of eligible members. The workers did not say how many members signed the authorization cards.
The workers said their wages are not able to keep up with rising inflation, making it harder for them to support their families. Meanwhile, the Boston-based industrial conglomerate's planned spinoffs are creating more uncertainty for them, they said.
The Auburn plant experienced layoffs during the pandemic, which led to a two-year slump in the aviation industry. The company, however, said it has rehired all "interested" employees and added more than 30 new employees since the start of 2022.
A GE spokesperson said the company pays "competitive" wages in every community where it operates and has invested more than $1 billion in its U.S. facilities since 2016, including in Auburn.
"We are committed to a direct relationship with our employees based on teamwork, cooperation, and actively pursuing mutually beneficial goals," the spokesperson said.
After decades of declining power and influence, the COVID-19 pandemic and labor shortage have sparked a resurgence in union organizing across the United States. Union leaders say efforts by President Joe Biden to put unions at the center of policy have also given the U.S. labor movement significant momentum.
The unionization efforts have resulted in some notable union victories at companies including Apple Inc AAPL.O, Starbucks Corp SBUX.O and Amazon.com Inc AMZN.O.
At the end of 2021, GE had about 55,000 workers in the United States. Of those, about 10.5% were union-represented employees.
(Reporting by Rajesh Kumar Singh in Chicago Editing by Matthew Lewis)
((rajeshkumar.singh@thomsonreuters.com; +1-313-484-5370; Reuters Messaging: rajeshkumar.singh.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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The unionization efforts have resulted in some notable union victories at companies including Apple Inc AAPL.O, Starbucks Corp SBUX.O and Amazon.com Inc AMZN.O. By Rajesh Kumar Singh CHICAGO, Aug 22 (Reuters) - General Electric Co's GE.N workers at a plant in Alabama said on Monday they have launched a campaign to form a union for better pay and job security. In a statement, the workers said they have submitted cards seeking to organize as part of IUE-CWA to the U.S. National Labor Relations Board (NLRB).
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The unionization efforts have resulted in some notable union victories at companies including Apple Inc AAPL.O, Starbucks Corp SBUX.O and Amazon.com Inc AMZN.O. By Rajesh Kumar Singh CHICAGO, Aug 22 (Reuters) - General Electric Co's GE.N workers at a plant in Alabama said on Monday they have launched a campaign to form a union for better pay and job security. To hold a union election, the NLRB requires signed union authorization cards from 30% of eligible members.
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The unionization efforts have resulted in some notable union victories at companies including Apple Inc AAPL.O, Starbucks Corp SBUX.O and Amazon.com Inc AMZN.O. By Rajesh Kumar Singh CHICAGO, Aug 22 (Reuters) - General Electric Co's GE.N workers at a plant in Alabama said on Monday they have launched a campaign to form a union for better pay and job security. To hold a union election, the NLRB requires signed union authorization cards from 30% of eligible members.
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The unionization efforts have resulted in some notable union victories at companies including Apple Inc AAPL.O, Starbucks Corp SBUX.O and Amazon.com Inc AMZN.O. By Rajesh Kumar Singh CHICAGO, Aug 22 (Reuters) - General Electric Co's GE.N workers at a plant in Alabama said on Monday they have launched a campaign to form a union for better pay and job security. The plant in Auburn, Alabama, employs 179 workers.
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19678.0
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2022-08-22 00:00:00 UTC
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Former Apple car engineer pleads guilty to trade secret theft
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AAPL
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https://www.nasdaq.com/articles/former-apple-car-engineer-pleads-guilty-to-trade-secret-theft
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nan
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nan
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By Stephen Nellis
Aug 22 (Reuters) - A former Apple Inc AAPL.O engineer on Monday pleaded guilty to trade secret theft - one of two people accused of stealing trade secrets from the iPhone maker's nascent self-driving car program.
U.S. federal prosecutors have alleged that Xiaolang Zhang downloaded the plan for a circuit board for Apple's self-driving after disclosing his intentions to work for a Chinese self-driving car startup and booking a last-minute flight to China.
He was arrested at the San Jose airport after he passed through a security checkpoint.
Zhang initially pleaded not guilty to the charges but according to court documents on Monday, he had reached a plea deal with prosecutors and changed his plea to guilty. The plea deal is sealed and sentencing is set for November.
Zhang's attorney confirmed the plea agreement but declined further comment. Apple and the U.S. Department of Justice did not immediately respond to a request for comment.
Jizhong Chen, the other former Apple engineer charged with trade secret theft, has pleaded not guilty. He has a court hearing set for Aug. 29.
(Reporting by Stephen Nellis in San Francisco; Editing by Edwina Gibbs)
((Stephen.Nellis@thomsonreuters.com; (415) 344-4934;))
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 Stephen Nellis Aug 22 (Reuters) - A former Apple Inc AAPL.O engineer on Monday pleaded guilty to trade secret theft - one of two people accused of stealing trade secrets from the iPhone maker's nascent self-driving car program. U.S. federal prosecutors have alleged that Xiaolang Zhang downloaded the plan for a circuit board for Apple's self-driving after disclosing his intentions to work for a Chinese self-driving car startup and booking a last-minute flight to China. Jizhong Chen, the other former Apple engineer charged with trade secret theft, has pleaded not guilty.
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By Stephen Nellis Aug 22 (Reuters) - A former Apple Inc AAPL.O engineer on Monday pleaded guilty to trade secret theft - one of two people accused of stealing trade secrets from the iPhone maker's nascent self-driving car program. Zhang initially pleaded not guilty to the charges but according to court documents on Monday, he had reached a plea deal with prosecutors and changed his plea to guilty. Jizhong Chen, the other former Apple engineer charged with trade secret theft, has pleaded not guilty.
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By Stephen Nellis Aug 22 (Reuters) - A former Apple Inc AAPL.O engineer on Monday pleaded guilty to trade secret theft - one of two people accused of stealing trade secrets from the iPhone maker's nascent self-driving car program. U.S. federal prosecutors have alleged that Xiaolang Zhang downloaded the plan for a circuit board for Apple's self-driving after disclosing his intentions to work for a Chinese self-driving car startup and booking a last-minute flight to China. Zhang initially pleaded not guilty to the charges but according to court documents on Monday, he had reached a plea deal with prosecutors and changed his plea to guilty.
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By Stephen Nellis Aug 22 (Reuters) - A former Apple Inc AAPL.O engineer on Monday pleaded guilty to trade secret theft - one of two people accused of stealing trade secrets from the iPhone maker's nascent self-driving car program. U.S. federal prosecutors have alleged that Xiaolang Zhang downloaded the plan for a circuit board for Apple's self-driving after disclosing his intentions to work for a Chinese self-driving car startup and booking a last-minute flight to China. He was arrested at the San Jose airport after he passed through a security checkpoint.
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19679.0
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2022-08-22 00:00:00 UTC
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Stock Market News for Aug 22, 2022
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AAPL
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https://www.nasdaq.com/articles/stock-market-news-for-aug-22-2022
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nan
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nan
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Wall Street closed sharply lower on Friday following concerns about the future trajectory of interest rate movement. Fed’s upcoming Jackson Hole Symposium scheduled next week also remained market participants’ focus. All the three major stock indexes ended in negative territory. For the week as a whole, these indexes finished in the red, snapping a four-week winning streak.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) dropped 0.9% or 292.30 points to close at 33,706.74. Notably, 24 components of the 30-stock index ended in negative territory while 6 in green. The tech-heavy Nasdaq Composite finished at 12,705.22, tumbling 2% or 260.13 points due to weak performance of large-cap technology stocks.
The S&P 500 slid 1.3% to end at 4,228.28. Ten out of the 11 broad sectors of the benchmark index closed in negative zone while one in green. The Consumer Discretionary Select Sector SPDR (XLY), the Financials Select Sector SPDR (XLF), the Materials Select Sector SPDR (XLB), the Technology Select Sector SPDR (XLK) and the Communication Services Select Sector SPDR (XLC) tanked 2.1%, 2%, 1.8%, 1.8% and 1.6%, respectively.
The fear-gauge CBOE Volatility Index (VIX) was up 5.3% to 20.60. A total of 10.01 billion shares were traded Friday, lower than the last 20-session average of 10.90 billion. Decliners outnumbered advancers on the NYSE by a 6.06-to-1 ratio. On Nasdaq, a 3.59-to-1 ratio favored declining issues.
Volatility Emerges on Wall Street
After a two-month ,long bull run, volatility has reappeared on Wall Street. Thursday’s sharp decline in shares price of U.S. stocks had several reasons. Investors remained concerned regarding the future path of the interest rate movement after hawkish comment from a few top Fed officials.
St. Louis Fed President James Bullard said that he would “lean toward” a 75 basis point rate hike in September. Richmond Fed President Tom Barkin said the Fed “will do what it takes” to drive inflation back toward its 2% target.
Moreover, market participants remained cautious about the annual Jackson Hole Symposium of the Fed scheduled on Aug 25-27. Though no decision on interest rate hike will be taken in the meeting, the central bank will provide an important indication regarding its near-term policy prescription. This year, policies will be centered around mounting inflation.
Additionally, on Aug 19, the yield on the benchmark 10-Year U.S. Treasury Note climbed 10.8 basis points to 2.987%, marking its highest since Jul 20. The yield on the short-term 2-Year U.S. Treasury Note also rose as this yield is more sensitive to future interest rate increase.
Higher interest rate is detrimental to growth sectors like technology. Consequently, shares of technology bigwigs like Apple Inc. AAPL, Microsoft Corp. MSFT and Alphabet Inc. GOOGL declined 1.5%, 1.4% and 2.5%, respectively. All three stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Finally, Friday was the monthly settlement day for $2.3 trillion equity-linked options and index options. Volatility generally remains higher on derivative settlement days. MarketWatch said, “Heavy buying of options has created a buffer for the market by forcing options dealers to buy stocks to hedge their exposure.”
Weekly Roundup
Last week was a disappointing for Wall Street. The three major stock indexes – the Dow, the S&P 500 and the Nasdaq Composite – have fallen 0.2%, 1.2% and 2.6%, respectively. All the three large-cap benchmarks recorded their biggest weekly drop since the week ending Jul 1. Concerns regarding the Fed’s future policy prescriptions, several weak economic data and higher stock valuations are primary reasons for last week’s meltdown.
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Apple Inc. (AAPL): Free Stock Analysis Report
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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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Consequently, shares of technology bigwigs like Apple Inc. AAPL, Microsoft Corp. MSFT and Alphabet Inc. GOOGL declined 1.5%, 1.4% and 2.5%, respectively. Apple Inc. (AAPL): Free Stock Analysis Report Investors remained concerned regarding the future path of the interest rate movement after hawkish comment from a few top Fed officials.
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Consequently, shares of technology bigwigs like Apple Inc. AAPL, Microsoft Corp. MSFT and Alphabet Inc. GOOGL declined 1.5%, 1.4% and 2.5%, respectively. Apple Inc. (AAPL): Free Stock Analysis Report Fed’s upcoming Jackson Hole Symposium scheduled next week also remained market participants’ focus.
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Consequently, shares of technology bigwigs like Apple Inc. AAPL, Microsoft Corp. MSFT and Alphabet Inc. GOOGL declined 1.5%, 1.4% and 2.5%, respectively. Apple Inc. (AAPL): Free Stock Analysis Report The Consumer Discretionary Select Sector SPDR (XLY), the Financials Select Sector SPDR (XLF), the Materials Select Sector SPDR (XLB), the Technology Select Sector SPDR (XLK) and the Communication Services Select Sector SPDR (XLC) tanked 2.1%, 2%, 1.8%, 1.8% and 1.6%, respectively.
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Consequently, shares of technology bigwigs like Apple Inc. AAPL, Microsoft Corp. MSFT and Alphabet Inc. GOOGL declined 1.5%, 1.4% and 2.5%, respectively. Apple Inc. (AAPL): Free Stock Analysis Report Higher interest rate is detrimental to growth sectors like technology.
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19680.0
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2022-08-22 00:00:00 UTC
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Apple expands self-repair support to MacBooks
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AAPL
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https://www.nasdaq.com/articles/apple-expands-self-repair-support-to-macbooks
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nan
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nan
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Aug 22 (Reuters) - Apple Inc AAPL.O said on Monday it would offer customers tools and know-how to repair and service their MacBook laptops at home, months after launching the service for iPhones.
Apple said genuine parts and service tools will be available starting Aug. 23. Customers can buy the repair kits or rent it for one-time use for $49.
Self repairs are possible only on MacBook Air and MacBook Pro models with the M1 chips.
In April, Apple launched self-repair services for select iPhones models in the United States, with plans to expand the service to Europe this year.
The development comes close on the heels of Apple agreeing to pay $50 million to settle a class-action lawsuit related to "butterfly" keyboards on some models of MacBook laptop. (https://reut.rs/3QW7a6e)
(Reporting by 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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Aug 22 (Reuters) - Apple Inc AAPL.O said on Monday it would offer customers tools and know-how to repair and service their MacBook laptops at home, months after launching the service for iPhones. The development comes close on the heels of Apple agreeing to pay $50 million to settle a class-action lawsuit related to "butterfly" keyboards on some models of MacBook laptop. (https://reut.rs/3QW7a6e) (Reporting by 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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Aug 22 (Reuters) - Apple Inc AAPL.O said on Monday it would offer customers tools and know-how to repair and service their MacBook laptops at home, months after launching the service for iPhones. In April, Apple launched self-repair services for select iPhones models in the United States, with plans to expand the service to Europe this year. The development comes close on the heels of Apple agreeing to pay $50 million to settle a class-action lawsuit related to "butterfly" keyboards on some models of MacBook laptop.
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Aug 22 (Reuters) - Apple Inc AAPL.O said on Monday it would offer customers tools and know-how to repair and service their MacBook laptops at home, months after launching the service for iPhones. In April, Apple launched self-repair services for select iPhones models in the United States, with plans to expand the service to Europe this year. The development comes close on the heels of Apple agreeing to pay $50 million to settle a class-action lawsuit related to "butterfly" keyboards on some models of MacBook laptop.
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Aug 22 (Reuters) - Apple Inc AAPL.O said on Monday it would offer customers tools and know-how to repair and service their MacBook laptops at home, months after launching the service for iPhones. Customers can buy the repair kits or rent it for one-time use for $49. Self repairs are possible only on MacBook Air and MacBook Pro models with the M1 chips.
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19681.0
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2022-08-22 00:00:00 UTC
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Should Franklin U.S. Large Cap Multifactor Index ETF (FLQL) Be on Your Investing Radar?
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AAPL
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https://www.nasdaq.com/articles/should-franklin-u.s.-large-cap-multifactor-index-etf-flql-be-on-your-investing-radar
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nan
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nan
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Launched on 04/26/2017, the Franklin U.S. Large Cap Multifactor Index ETF (FLQL) 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 Franklin Templeton Investments. It has amassed assets over $976.23 million, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile 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 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.98%.
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 Healthcare sector--about 20.50% of the portfolio. Information Technology and Consumer Staples round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.55% of total assets, followed by Microsoft Corp (MSFT) and Exxon Mobil Corp (XOM).
The top 10 holdings account for about 27.26% of total assets under management.
Performance and Risk
FLQL seeks to match the performance of the LibertyQ US Large Cap Equity Index before fees and expenses. The LibertyQ US Large Cap Equity Index seeks to achieve a lower level of risk and higher risk-adjusted performance than the Russell 1000 Index over the long term by applying a multi-factor selection process, which is designed to select equity securities from the Russell 1000 Index that have favorable exposure to four investment style factors quality, value, momentum and low volatility.
The ETF has lost about -8.31% so far this year and is down about -2% in the last one year (as of 08/22/2022). In the past 52-week period, it has traded between $37.43 and $47.20.
The ETF has a beta of 0.91 and standard deviation of 22.51% for the trailing three-year period. With about 218 holdings, it effectively diversifies company-specific risk.
Alternatives
Franklin U.S. Large Cap Multifactor Index 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, FLQL 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 $316.40 billion in assets, SPDR S&P 500 ETF has $385.45 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are 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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Franklin U.S. Large Cap Multifactor Index ETF (FLQL): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Exxon Mobil Corporation (XOM): 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.
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 6.55% of total assets, followed by Microsoft Corp (MSFT) and Exxon Mobil Corp (XOM). Apple Inc. (AAPL): Free Stock Analysis Report It has amassed assets over $976.23 million, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
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Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.55% of total assets, followed by Microsoft Corp (MSFT) and Exxon Mobil Corp (XOM). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 04/26/2017, the Franklin U.S. Large Cap Multifactor Index ETF (FLQL) 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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Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.55% of total assets, followed by Microsoft Corp (MSFT) and Exxon Mobil Corp (XOM). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives Franklin U.S. Large Cap Multifactor Index 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 6.55% of total assets, followed by Microsoft Corp (MSFT) and Exxon Mobil Corp (XOM). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 04/26/2017, the Franklin U.S. Large Cap Multifactor Index ETF (FLQL) 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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19682.0
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2022-08-22 00:00:00 UTC
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US STOCKS-Nasdaq slumps more than 2% on fears of aggressive Fed
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AAPL
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https://www.nasdaq.com/articles/us-stocks-nasdaq-slumps-more-than-2-on-fears-of-aggressive-fed
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nan
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nan
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By Bansari Mayur Kamdar and Devik Jain
Aug 22 (Reuters) - Wall Street's main indexes tumbled on Monday in a dour start to the week as investors worried about hawkish signals from U.S. Federal Reserve policymakers against the backdrop of slowing economic growth.
Ten of the 11 major S&P 500 sectors declined in mid-day trading, with information technology .SPLRCT, consumer discretionary .SPLRCD and communication services .SPLRCL stocks down 2% each.
High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.7% and 2.8%, respectively, as the benchmark 10-year U.S. Treasury yield rose past 3% for the first time since July 21. US/
A four-week summer rally for the Nasdaq and the S&P 500 snapped last week after growth stocks tumbled on Friday.
Banks .SPXBK fell 1.9% on Monday, with lenders JPMorgan Chase & Co JPM.N and Bank of America BAC.N down more than 1% each.
Banking giants collectively face more than $1 billion in regulatory fines for employees' use of unapproved messaging tools, including email and apps such as WhatsApp.
The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.26, its highest level in over two weeks.
Expectations of a less aggressive stance by the Fed and strong quarterly earnings had helped the benchmark S&P 500 .SPX rebound nearly 14% from its mid-June lows after a rough start to the year.
Focus this week is on Fed Chair Jerome Powell's speech at a central banking conference in Jackson Hole for further cues on the monetary policy tightening path.
"Powell speaks on Friday and there's a risk that he becomes a little bit more hawkish when talking about the interest rates," said Paul Nolte, portfolio manager at Kingsview Investment Management.
"At this point, a little bit of a correction in the market is not anything to get worried about just yet."
The Fed will raise rates by 50 basis points in September, according to economists polled by Reuters.
Meanwhile, traders are split between a 50 bps hike and a 75 bps hike by the central bank, even as several policymakers have pushed back against expectations of a dovish pivot and emphasized the fight against inflation. FEDWATCH
Investors will also be looking for details on the Fed's plans to reduce its nearly $9 trillion balance sheet, a process that started in June.
The central bank's favored inflation gauge, the PCE price index, will be released this week.
Market participants eager for clues about the economy's strength amid rising fears of a recession will also closely track the flash readings on business activity, the second estimate of second-quarter GDP and University of Michigan consumer sentiment.
At 11:38 a.m. ET, the Dow Jones Industrial Average .DJI was down 448.82 points, or 1.33%, at 33,257.92, the S&P 500 .SPX was down 69.34 points, or 1.64%, at 4,159.14, and the Nasdaq Composite .IXIC was down 266.40 points, or 2.10%, at 12,438.82.
Slowdown fears hit markets globally. China's central bank trimmed some key lending rates on Monday in a bid to support a slowing economy and a stressed housing sector.
Signify Health Inc SGFY.N jumped 33.7% following a report on Sunday that UnitedHealth Group Inc UNH.N, Amazon.com Inc AMZN.O, CVS Health Corp CVS.N and Option Care Health Inc OPCH.O were bidding to acquire the company.
AMC Entertainment Holdings Inc AMC.N tumbled 39.4% after the cinema chain's preferred stock listing started trading and its UK-based rival Cineworld Group CINE.L warned of a possible bankruptcy filing.
Declining issues outnumbered advancers for a 5.01-to-1 ratio on the NYSE and a 3.49-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 31 new lows, while the Nasdaq recorded 22 new highs and 127 new lows.
(Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by Sriraj Kalluvila and Shounak Dasgupta)
((BansariMayur.Kamdar@thomsonreuters.com; Twitter: @BansariKamdar))
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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High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.7% and 2.8%, respectively, as the benchmark 10-year U.S. Treasury yield rose past 3% for the first time since July 21. By Bansari Mayur Kamdar and Devik Jain Aug 22 (Reuters) - Wall Street's main indexes tumbled on Monday in a dour start to the week as investors worried about hawkish signals from U.S. Federal Reserve policymakers against the backdrop of slowing economic growth. Market participants eager for clues about the economy's strength amid rising fears of a recession will also closely track the flash readings on business activity, the second estimate of second-quarter GDP and University of Michigan consumer sentiment.
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High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.7% and 2.8%, respectively, as the benchmark 10-year U.S. Treasury yield rose past 3% for the first time since July 21. By Bansari Mayur Kamdar and Devik Jain Aug 22 (Reuters) - Wall Street's main indexes tumbled on Monday in a dour start to the week as investors worried about hawkish signals from U.S. Federal Reserve policymakers against the backdrop of slowing economic growth. The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.26, its highest level in over two weeks.
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High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.7% and 2.8%, respectively, as the benchmark 10-year U.S. Treasury yield rose past 3% for the first time since July 21. By Bansari Mayur Kamdar and Devik Jain Aug 22 (Reuters) - Wall Street's main indexes tumbled on Monday in a dour start to the week as investors worried about hawkish signals from U.S. Federal Reserve policymakers against the backdrop of slowing economic growth. Focus this week is on Fed Chair Jerome Powell's speech at a central banking conference in Jackson Hole for further cues on the monetary policy tightening path.
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High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.7% and 2.8%, respectively, as the benchmark 10-year U.S. Treasury yield rose past 3% for the first time since July 21. By Bansari Mayur Kamdar and Devik Jain Aug 22 (Reuters) - Wall Street's main indexes tumbled on Monday in a dour start to the week as investors worried about hawkish signals from U.S. Federal Reserve policymakers against the backdrop of slowing economic growth. "At this point, a little bit of a correction in the market is not anything to get worried about just yet."
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19683.0
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2022-08-22 00:00:00 UTC
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Pre-Market Most Active for Aug 22, 2022 : AMC, SQQQ, MSPR, TQQQ, BBBY, GCT, PRTY, AAPL, CCL, SNAP, SGFY, F
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AAPL
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https://www.nasdaq.com/articles/pre-market-most-active-for-aug-22-2022-%3A-amc-sqqq-mspr-tqqq-bbby-gct-prty-aapl-ccl-snap
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The NASDAQ 100 Pre-Market Indicator is down -196.29 to 13,046.61. The total Pre-Market volume is currently 44,423,360 shares traded.
The following are the most active stocks for the pre-market session:
AMC Entertainment Holdings, Inc. (AMC) is -6.52 at $11.50, with 8,484,887 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 $-0.18. AMC's current last sale is 230% of the target price of $5.
ProShares UltraPro Short QQQ (SQQQ) is +1.66 at $38.32, with 3,977,944 shares traded. This represents a 36.13% increase from its 52 Week Low.
MSP Recovery, Inc. (MSPR) is +0.44 at $2.59, with 3,815,595 shares traded.
ProShares UltraPro QQQ (TQQQ) is -1.6 at $33.75, with 3,416,197 shares traded. This represents a 58.3% increase from its 52 Week Low.
Bed Bath & Beyond Inc. (BBBY) is -1.47 at $9.56, with 2,617,966 shares traded. BBBY's current last sale is 239% of the target price of $4.
GigaCloud Technology Inc (GCT) is +7.91 at $55.92, with 1,114,103 shares traded., following a 52-week high recorded in prior regular session.
Party City Holdco Inc. (PRTY) is +0.34 at $2.40, with 1,038,842 shares traded. PRTY's current last sale is 120% of the target price of $2.
Apple Inc. (AAPL) is -2.82 at $168.70, with 978,200 shares traded. Over the last four weeks they have had 6 up revisions for the earnings forecast, for the fiscal quarter ending Jun 2023. The consensus EPS forecast is $1.36. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Carnival Corporation (CCL) is -0.38 at $9.49, with 906,572 shares traded. CCL's current last sale is 70.3% of the target price of $13.5.
Snap Inc. (SNAP) is -0.35 at $11.21, with 784,021 shares traded. SNAP's current last sale is 80.07% of the target price of $14.
Signify Health, Inc. (SGFY) is +8.55 at $29.75, with 629,616 shares traded. As reported by Zacks, the current mean recommendation for SGFY is in the "buy range".
Ford Motor Company (F) is -0.57 at $15.31, with 571,358 shares traded. Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Dec 2022. The consensus EPS forecast is $0.52. F's current last sale is 90.06% of the target price of $17.
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 -2.82 at $168.70, with 978,200 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Mar 2023.
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Apple Inc. (AAPL) is -2.82 at $168.70, with 978,200 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Mar 2023.
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Apple Inc. (AAPL) is -2.82 at $168.70, with 978,200 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The total Pre-Market volume is currently 44,423,360 shares traded.
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Apple Inc. (AAPL) is -2.82 at $168.70, with 978,200 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". AMC's current last sale is 230% of the target price of $5.
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19684.0
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2022-08-22 00:00:00 UTC
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US STOCKS-Wall St set for lower open as rate hike worries persist
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AAPL
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https://www.nasdaq.com/articles/us-stocks-wall-st-set-for-lower-open-as-rate-hike-worries-persist
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nan
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nan
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By Bansari Mayur Kamdar and Devik Jain
Aug 22 (Reuters) - Wall Street's main indexes were set for a dour start to the week as investors worried about hawkish signals from U.S. Federal Reserve policymakers in the face of slowing economic growth.
A four-week summer rally for the Nasdaq and the S&P 500 snapped last week as megacap growth companies slumped on Friday, with the benchmark 10-year Treasury yield hitting nearly 3% on inflation fears. US/
High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.6% and 1.8%, respectively, in trading before the bell on Monday.
Lenders JPMorgan Chase & Co JPM.N and Bank of America BAC.N fell more than 1% each amid a broader risk-off mood. Banking giants collectively face more than $1 billion in regulatory fines for employees' use of unapproved messaging tools, including email and apps such as WhatsApp.
The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.16, its highest level in over two weeks.
After a rough start to the year, the benchmark S&P 500 .SPX recovered nearly 16% from its mid-June lows helped by strong earnings and hopes of a dovish pivot by the Fed.
Focus this week is on Fed Chair Jerome Powell's speech at a central banking conference in Jackson Hole on Friday for further cues on the central bank's monetary policy tightening path.
"The market convinced itself that the CPI last month suggested peak inflation has been reached ... but that was short sighted," said Kenny Polcari, managing partner at Kace Capital Advisors.
"Jackson Hole will give Powell an opportunity to reset the narrative and suggest the Fed is going to remain vigilant and aggressive."
According to economists polled by Reuters, the Fed will raise rates by 50 basis points in September.
Traders are also expecting a slightly higher chance of a 50 bps hike over a third 75 bps hike, even as several Fed policymakers have pushed back against expectations of a dovish pivot and emphasized the fight against inflation is ongoing.
Investors will also be looking for details on the central bank's plans to reduce its nearly $9 trillion balance sheet, a process that started in June.
The Fed's favored inflation gauge, the PCE price index, will also be released this week.
With recession fears lingering and investors eager for any clues about the economy's strength, other U.S. data will be closely awaited this week, including flash PMIs, the second estimate of second quarter GDP and University of Michigan consumer sentiment.
Economic slowdown fears have hit markets globally, with China's central bank trimming some key lending rates on Monday in a bid to support a slowing economy and a stressed housing sector.
At 8:32 a.m. ET, Dow e-minis 1YMcv1 were down 323 points, or 0.96%, S&P 500 e-minis EScv1 were down 48.5 points, or 1.15%, and Nasdaq 100 e-minis NQcv1 were down 194 points, or 1.46%.
Signify Health Inc SGFY.N jumped 40.2% following a report on Sunday that UnitedHealth Group Inc UNH.N, Amazon.com Inc AMZN.O, CVS Health Corp CVS.N and Option Care Health Inc OPCH.O are bidding to acquire the company.
AMC Entertainment Holdings Inc AMC.N tumbled 37.7% after UK-based rival Cineworld Group CINE.L, the world's second-largest cinema operator, warned of a possible bankruptcy filing.
(Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta)
((BansariMayur.Kamdar@thomsonreuters.com; Twitter: @BansariKamdar))
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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US/ High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.6% and 1.8%, respectively, in trading before the bell on Monday. By Bansari Mayur Kamdar and Devik Jain Aug 22 (Reuters) - Wall Street's main indexes were set for a dour start to the week as investors worried about hawkish signals from U.S. Federal Reserve policymakers in the face of slowing economic growth. With recession fears lingering and investors eager for any clues about the economy's strength, other U.S. data will be closely awaited this week, including flash PMIs, the second estimate of second quarter GDP and University of Michigan consumer sentiment.
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US/ High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.6% and 1.8%, respectively, in trading before the bell on Monday. By Bansari Mayur Kamdar and Devik Jain Aug 22 (Reuters) - Wall Street's main indexes were set for a dour start to the week as investors worried about hawkish signals from U.S. Federal Reserve policymakers in the face of slowing economic growth. The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.16, its highest level in over two weeks.
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US/ High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.6% and 1.8%, respectively, in trading before the bell on Monday. By Bansari Mayur Kamdar and Devik Jain Aug 22 (Reuters) - Wall Street's main indexes were set for a dour start to the week as investors worried about hawkish signals from U.S. Federal Reserve policymakers in the face of slowing economic growth. Focus this week is on Fed Chair Jerome Powell's speech at a central banking conference in Jackson Hole on Friday for further cues on the central bank's monetary policy tightening path.
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US/ High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.6% and 1.8%, respectively, in trading before the bell on Monday. By Bansari Mayur Kamdar and Devik Jain Aug 22 (Reuters) - Wall Street's main indexes were set for a dour start to the week as investors worried about hawkish signals from U.S. Federal Reserve policymakers in the face of slowing economic growth. The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.16, its highest level in over two weeks.
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19685.0
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2022-08-22 00:00:00 UTC
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Is iShares MSCI ACWI Low Carbon Target ETF (CRBN) a Strong ETF Right Now?
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AAPL
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https://www.nasdaq.com/articles/is-ishares-msci-acwi-low-carbon-target-etf-crbn-a-strong-etf-right-now-3
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nan
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Launched on 12/08/2014, the iShares MSCI ACWI Low Carbon Target ETF (CRBN) is a smart beta exchange traded fund offering broad exposure to the World ETFs 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
Managed by Blackrock, CRBN has amassed assets over $918.47 million, making it one of the larger ETFs in the World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the MSCI ACWI Low Carbon Target Index.
The MSCI ACWI Low Carbon Target Index is designed to address two dimensions of carbon exposure ? carbon emissions and potential carbon emissions from fossil fuel reserves.
Cost & Other Expenses
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.
Operating expenses on an annual basis are 0.20% for CRBN, making it one of the least expensive products in the space.
CRBN's 12-month trailing dividend yield is 2.06%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 4.06% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
CRBN's top 10 holdings account for about 15.95% of its total assets under management.
Performance and Risk
Year-to-date, the iShares MSCI ACWI Low Carbon Target ETF has lost about -14.35% so far, and is down about -9.21% over the last 12 months (as of 08/22/2022). CRBN has traded between $133.43 and $176.38 in this past 52-week period.
The fund has a beta of 0.93 and standard deviation of 22.34% for the trailing three-year period, which makes CRBN a low risk choice in this particular space. With about 1333 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares MSCI ACWI Low Carbon Target ETF is a reasonable option for investors seeking to outperform the World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares ESG Aware MSCI EAFE ETF (ESGD) tracks MSCI EAFE ESG Focus Index and the iShares ESG Aware MSCI USA ETF (ESGU) tracks MSCI USA ESG Focus Index. IShares ESG Aware MSCI EAFE ETF has $6.69 billion in assets, iShares ESG Aware MSCI USA ETF has $23.78 billion. ESGD has an expense ratio of 0.20% and ESGU charges 0.15%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the World ETFs.
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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iShares MSCI ACWI Low Carbon Target ETF (CRBN): 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
iShares ESG Aware MSCI EAFE ETF (ESGD): ETF Research Reports
iShares ESG Aware MSCI USA ETF (ESGU): 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 4.06% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting.
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Looking at individual holdings, Apple Inc (AAPL) accounts for about 4.06% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 12/08/2014, the iShares MSCI ACWI Low Carbon Target ETF (CRBN) is a smart beta exchange traded fund offering broad exposure to the World ETFs category of the market.
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Looking at individual holdings, Apple Inc (AAPL) accounts for about 4.06% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 12/08/2014, the iShares MSCI ACWI Low Carbon Target ETF (CRBN) is a smart beta exchange traded fund offering broad exposure to the World ETFs category of the market.
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Looking at individual holdings, Apple Inc (AAPL) accounts for about 4.06% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Launched on 12/08/2014, the iShares MSCI ACWI Low Carbon Target ETF (CRBN) is a smart beta exchange traded fund offering broad exposure to the World ETFs category of the market.
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19686.0
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2022-08-22 00:00:00 UTC
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Why Shares of Enovix Are Powering Higher Today
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AAPL
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https://www.nasdaq.com/articles/why-shares-of-enovix-are-powering-higher-today
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nan
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What happened
While markets are dipping lower to start the week, shares of Enovix (NASDAQ: ENVX) are jumping considerably higher. The lithium-ion battery manufacturer received some favorable coverage from an analyst this morning, and the market is taking note.
As of 10:18 a.m. ET on Monday, shares of Enovix are up 9.3%, having retreated from their earlier climb of 14.2%.
So what
Ananda Baruah, an analyst at Loop Capital, lifted the price target on Enovix's stock to $100 from $50, providing an extremely bullish opinion on how much room the stock has to run. Based on where shares opened today, the new price target implies upside of 415%. According to Thefly.com, Baruah predicated the price target hike on the strength of its battery partnerships with industry leaders like Apple, Samsung, and Meta Platforms.
Juxtaposed with the opinions of other analysts, Baruah's price target stands out even more. Earlier this month, after the company reported its second-quarter 2022 earnings, Gus Richard, an analyst at Northland, raised his price target to $25 from $22, while Craig-Hallum analyst Anthony Stoss lifted his price target to $25 from $20.
Now what
It's no wonder that shares of Enovix are soaring today, considering Loop Capital's extremely bullish outlook. But investors should pause before charging their portfolios with the lithium battery developer.
Baruah's price target is simply an individual belief on how high shares can rise; in fact, it's an outlier among other analysts' opinions. Instead of blindly following one bullish analyst, investors should monitor the company's progress in the coming months with regard to its targets: ramping up production at its Fab-1 factory and growing revenue.
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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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What happened While markets are dipping lower to start the week, shares of Enovix (NASDAQ: ENVX) are jumping considerably higher. According to Thefly.com, Baruah predicated the price target hike on the strength of its battery partnerships with industry leaders like Apple, Samsung, and Meta Platforms. Instead of blindly following one bullish analyst, investors should monitor the company's progress in the coming months with regard to its targets: ramping up production at its Fab-1 factory and growing revenue.
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So what Ananda Baruah, an analyst at Loop Capital, lifted the price target on Enovix's stock to $100 from $50, providing an extremely bullish opinion on how much room the stock has to run. Now what It's no wonder that shares of Enovix are soaring today, considering Loop Capital's extremely bullish outlook. The Motley Fool has positions in and recommends Apple and Meta Platforms, Inc.
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So what Ananda Baruah, an analyst at Loop Capital, lifted the price target on Enovix's stock to $100 from $50, providing an extremely bullish opinion on how much room the stock has to run. Earlier this month, after the company reported its second-quarter 2022 earnings, Gus Richard, an analyst at Northland, raised his price target to $25 from $22, while Craig-Hallum analyst Anthony Stoss lifted his price target to $25 from $20. See the 10 stocks *Stock Advisor returns as of August 17, 2022 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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So what Ananda Baruah, an analyst at Loop Capital, lifted the price target on Enovix's stock to $100 from $50, providing an extremely bullish opinion on how much room the stock has to run. Juxtaposed with the opinions of other analysts, Baruah's price target stands out even more. The Motley Fool has positions in and recommends Apple and Meta Platforms, Inc.
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19687.0
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2022-08-22 00:00:00 UTC
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US STOCKS-Futures drop as rate hike worries persist
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AAPL
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https://www.nasdaq.com/articles/us-stocks-futures-drop-as-rate-hike-worries-persist
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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
Futures down: Dow 0.85%, S&P 1.09%, Nasdaq 1.46%
Aug 22 (Reuters) - Wall Street futures fell on Monday, setting all three major U.S. stock indexes for a dour start to the week, as investors worried about hawkish signals from Federal Reserve policymakers in the face of slowing economic growth.
A four-week summer rally for the Nasdaq and the S&P 500 snapped last week as megacap growth companies slumped on Friday, with the benchmark 10-year Treasury yield hitting nearly 3% on inflation fears.
High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.5% and 2.1%, respectively, in trading before the bell on Monday.
Lenders JPMorgan Chase & Co JPM.N and Bank of America BAC.N fell more than 1% each amid a broader risk-off mood. Banking giants collectively face more than $1 billion in regulatory fines for employees' use of unapproved messaging tools, including email and apps such as WhatsApp.
The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.10, its highest level in over two weeks.
Focus this week is on Fed Chair Jerome Powell's speech at a central banking conference in Jackson Hole on Friday for further cues on the central bank's monetary policy tightening path.
"The market is now going through a digestion phase, triggered by weaker-than-expected economic reports and anxiety ahead of statements and policy indications expected to emerge from the Jackson Hole Economic Symposium," said Sam Stovall, chief investment strategist at CFRA Research.
"The big uncertainty remains the size of the rate hike at the September FOMC meeting."
According to economists in a Reuters poll, the Fed will raise rates by 50 basis points in September amid expectations inflation has peaked and growing recession worries.
Traders are also expecting a slightly higher chance of a 50 bps hike over a third 75 bps hike, even as several Fed policymakers have pushed back against expectations of a dovish pivot and emphasized the fight against inflation is ongoing.
Investors will also be looking for details on the central bank's plans to reduce its nearly $9 trillion balance sheet, a process that started in June.
The Fed's favored inflation gauge, the PCE price index, will also be released this week.
With recession fears lingering and investors eager for any clues about the economy's strength, other U.S. data will be closely awaited this week, including flash PMIs, the second estimate of second quarter GDP and University of Michigan consumer sentiment.
At 07:07 a.m. ET, Dow e-minis 1YMcv1 were down 286 points, or 0.85%, S&P 500 e-minis EScv1 were down 46 points, or 1.09%, and Nasdaq 100 e-minis NQcv1 were down 193.25 points, or 1.46%.
Signify Health Inc SGFY.N jumped 40.5% following a report on Sunday that UnitedHealth Group Inc UNH.N, Amazon.com Inc AMZN.O, CVS Health Corp CVS.N and Option Care Health Inc OPCH.O are bidding to acquire the company.
AMC Entertainment Holdings AMC.N tumbled 31.5% after peer Cineworld CINE.L, the world's second-largest cinema operator warned of a possible bankruptcy filing.
(Reporting by Bansari Mayur Kamdar and Devik Jain in Bengaluru; Editing by Shounak Dasgupta)
((BansariMayur.Kamdar@thomsonreuters.com; Twitter: @BansariKamdar))
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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High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.5% and 2.1%, respectively, in trading before the bell on Monday. A four-week summer rally for the Nasdaq and the S&P 500 snapped last week as megacap growth companies slumped on Friday, with the benchmark 10-year Treasury yield hitting nearly 3% on inflation fears. According to economists in a Reuters poll, the Fed will raise rates by 50 basis points in September amid expectations inflation has peaked and growing recession worries.
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High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.5% and 2.1%, respectively, in trading before the bell on Monday. 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 0.85%, S&P 1.09%, Nasdaq 1.46% Aug 22 (Reuters) - Wall Street futures fell on Monday, setting all three major U.S. stock indexes for a dour start to the week, as investors worried about hawkish signals from Federal Reserve policymakers in the face of slowing economic growth. The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.10, its highest level in over two weeks.
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High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.5% and 2.1%, respectively, in trading before the bell on Monday. 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 0.85%, S&P 1.09%, Nasdaq 1.46% Aug 22 (Reuters) - Wall Street futures fell on Monday, setting all three major U.S. stock indexes for a dour start to the week, as investors worried about hawkish signals from Federal Reserve policymakers in the face of slowing economic growth. Focus this week is on Fed Chair Jerome Powell's speech at a central banking conference in Jackson Hole on Friday for further cues on the central bank's monetary policy tightening path.
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High-growth and technology companies such as Apple Inc AAPL.O and Tesla Inc TSLA.O fell 1.5% and 2.1%, respectively, in trading before the bell on Monday. The CBOE Volatility index .VIX, Wall Street's fear gauge, rose to 23.10, its highest level in over two weeks. Focus this week is on Fed Chair Jerome Powell's speech at a central banking conference in Jackson Hole on Friday for further cues on the central bank's monetary policy tightening path.
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19688.0
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2022-08-22 00:00:00 UTC
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3 Stocks to Buy if They Take a Dip
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AAPL
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https://www.nasdaq.com/articles/3-stocks-to-buy-if-they-take-a-dip-2
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nan
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nan
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There's a lot to be said for delayed gratification -- and it's true in investing, too. For example, imagine you think the Progressive insurance company is terrific, with a golden future, and you're eager to be a shareholder. You might buy shares now -- but they seem overvalued, with their forward-looking price-to-earnings (P/E) ratio recently 25, well above the five-year average of 17. At such a level, there's a decent chance they'll drop closer to their intrinsic value instead of continuing to climb higher.
For best results, aim to buy into great companies at great -- or at least good -- prices. You might add Progressive to your watch list and wait for a better price. Here are three great performers you might also add to that watch list, waiting for a better entry point.
1. Apple
Apple (NASDAQ: AAPL), with a recent market value near $2.8 trillion, is an interesting beast. While many popular technology-heavy companies have seen their stocks plummet in the recent market downturn, Apple shares were recently only 5% off their 52-week high. The company's forward P/E was recently 27, well above its five-year average of 22, and suggesting that it's overvalued.
There's a decent case to be made to just buy the stock now, even if it's somewhat overvalued, because it appears to have a long runway of growth ahead of it. For example, it's still growing, despite its massive size -- in part due to regular introductions of new products, such as Apple Watches and Apple TV+. Apple's future offerings may well include cars and healthcare.
But if you think the stock, recently trading for around $173 per share, will be worth $300 per share in a few years, your gain will be greater if you can buy into it for, say, $140 instead of $173. Do your own thinking, though, as you should with all investment decisions, to arrive at your own thoughts on a given stock's value.
2. Axon Enterprise
Axon Enterprise (NASDAQ: AXON) is another very promising stock to consider for your portfolio, and to consider waiting on. You might know it by its former name, Taser. The company used to focus on weaponry, but it has since broadened its scope, embracing a range of law enforcement technology. That includes body cameras and monitoring software.
On Axon's website, it notes that it has saved 270,877 lives from death or serious injury, and that its offerings have been used more than five million times worldwide, 99.75% of the time resulting in no serious injury. The Axon Evidence platform, meanwhile, is hosting more than 109 petabytes of data.
If you keep up with news, you'll be aware that many are calling for police forces to use less force and to be more accountable, such as via body cameras. That bodes well for Axon's future. Another promising angle is that the company is looking to offer more for consumers, which can introduce a huge new market.
Axon's forward P/E was recently below its five-year average, suggesting that it's not wildly overvalued and may be reasonably valued. After digging into the company more, you might buy it at its recent price near $132 per share, or you might just add it to a watch list, waiting for a lower entry point. There's no guarantee the stock will fall much anytime soon, but a lower price can deliver larger eventual gains.
3. Costco
Then there's Costco (NASDAQ: COST), which needs little introduction. The warehouse retailer recently sported 834 warehouses, with 575 in the U.S. and Puerto Rico, 107 in Canada, 40 in Mexico, and dozens elsewhere. (Clearly, it has plenty of room to grow further.) Despite a recent market value topping $240 billion, Costco is still growing at a good clip, with third-quarter revenue up 16% year over year to more than $50 billion. It's become the third largest global retailer, with 300,000 employees worldwide.
Costco is facing pressures from inflation, which may lead to it raising prices, but it's not facing those pressures alone -- they also affect its peers and rivals. It has some advantages over many rivals, too, in its membership program that generates billions of dollars and that features a recent renewal rate of more than 92%, reflecting loyal customers. It's been pleasing customers with offerings from new brands, among other things -- such as Timberland, Banana Republic, iMac, and several major airlines, too.
Costco recently sported a forward-looking P/E of 37, above its five-year average of 33, so it seems far from undervalued. Consider adding it to your watch list -- it may see its shares pull back somewhat if inflationary or other pressures end up leading to disappointing results over the short term. And, of course, sometimes shares pull back temporarily for no good reason at all.
Give these companies a closer look if any of them interest you, and know that there are gobs of other strong and growing companies out there -- many of which are now undervalued due to the recent market downturn.
Find out why Apple is one of the 10 best stocks to buy now
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Selena Maranjian has positions in Apple, Axon Enterprise, and Costco Wholesale. The Motley Fool has positions in and recommends Apple, Axon Enterprise, and Costco Wholesale. The Motley Fool recommends Progressive 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 Apple (NASDAQ: AAPL), with a recent market value near $2.8 trillion, is an interesting beast. After digging into the company more, you might buy it at its recent price near $132 per share, or you might just add it to a watch list, waiting for a lower entry point. It has some advantages over many rivals, too, in its membership program that generates billions of dollars and that features a recent renewal rate of more than 92%, reflecting loyal customers.
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Apple Apple (NASDAQ: AAPL), with a recent market value near $2.8 trillion, is an interesting beast. Axon Enterprise Axon Enterprise (NASDAQ: AXON) is another very promising stock to consider for your portfolio, and to consider waiting on. The Motley Fool has positions in and recommends Apple, Axon Enterprise, and Costco Wholesale.
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Apple Apple (NASDAQ: AAPL), with a recent market value near $2.8 trillion, is an interesting beast. While many popular technology-heavy companies have seen their stocks plummet in the recent market downturn, Apple shares were recently only 5% off their 52-week high. Axon Enterprise Axon Enterprise (NASDAQ: AXON) is another very promising stock to consider for your portfolio, and to consider waiting on.
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Apple Apple (NASDAQ: AAPL), with a recent market value near $2.8 trillion, is an interesting beast. You might add Progressive to your watch list and wait for a better price. Axon Enterprise Axon Enterprise (NASDAQ: AXON) is another very promising stock to consider for your portfolio, and to consider waiting on.
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19689.0
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2022-08-22 00:00:00 UTC
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Investors add $10 trln activist wrench to H2O risk
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AAPL
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https://www.nasdaq.com/articles/investors-add-%2410-trln-activist-wrench-to-h2o-risk
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nan
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nan
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Reuters
Reuters
MELBOURNE (Reuters Breakingviews) - Get ready to hear rafts of executives blame “drought”, “flood” and “natural disaster” for poor earnings in the next few months. On some levels, that’s understandable: large swathes of the Americas, Europe, Asia and Oceania have been suffering from either too little or too much water, and sometimes both in quick succession. But it’s also tired old language that obfuscates how such financial pain is a consequence of long allowing water risk to play second fiddle to greenhouse-gas emissions in battling climate change. Now DWS, Fidelity International, CalPERS and some 60 other investors with almost $10 trillion in assets between them are trying to change that.
The group has just launched the Valuing Water Finance Initiative after more than two years https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.breakingviews.com%2Fconsidered-view%2Fan-ever-drier-world-will-unleash-investment-flood%2F&data=05%7C01%7CThomas.Shum%40thomsonreuters.com%7Cf83c3a4a2fd047333be308da83fb9691%7C62ccb8646a1a4b5d8e1c397dec1a8258%7C0%7C0%7C637967413838877179%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=2jreJ2umjytNd00kRJw%2BrEhEWhU7fxt2rh0vpf%2BR764%3D&reserved=0 of constructing the scientific case for action. Despite its somewhat airy name, the VWFI will target 72 food, beverage, technology and apparel companies from Microsoft to McDonalds to properly assess their exposure to the resource, as well as better manage and protect it. It’s modelled on the Climate Action 100+, a carbon-focused initiative led by 700 investors holding $68 trillion in assets; climate nonprofit organisation Ceres is a founding member of both.
It's not that water risk is completely ignored. A smaller Ceres-led investor campaign in the past targeted fast-food chains, while another nonprofit, CDP, has warned that the cost of ignoring water risks costs companies five times https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcdn.cdp.net%2Fcdp-production%2Fcms%2Freports%2Fdocuments%2F000%2F005%2F577%2Foriginal%2FCDP_Water_analysis_report_2020.pdf%3F1617987510&data=05%7C01%7CThomas.Shum%40thomsonreuters.com%7Cf83c3a4a2fd047333be308da83fb9691%7C62ccb8646a1a4b5d8e1c397dec1a8258%7C0%7C0%7C637967413839033403%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=SThVdh4r9ro4U%2FOGCBdf%2FKvVp%2FuZa298fnGLUVIBmZs%3D&reserved=0 as much as dealing with them. Shareholders, too, are starting to take companies to task for downplaying the risks. Earlier this month, for example, more than 60% https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fir.tesla.com%2F_flysystem%2Fs3%2Fsec%2F000156459022028207%2Ftsla-8k_20220804-gen.pdf&data=05%7C01%7CThomas.Shum%40thomsonreuters.com%7Cf83c3a4a2fd047333be308da83fb9691%7C62ccb8646a1a4b5d8e1c397dec1a8258%7C0%7C0%7C637967413839033403%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=aFOkm3Fh9VBrckxPFU6r0jh83fhW82HPKxRH6S5ZZYM%3D&reserved=0 of independent shareholders backed an investor proposal https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fir.tesla.com%2F_flysystem%2Fs3%2Fsec%2F000156459022022992%2Ftsla-pre14a_20220804-gen.pdf&data=05%7C01%7CThomas.Shum%40thomsonreuters.com%7Cf83c3a4a2fd047333be308da83fb9691%7C62ccb8646a1a4b5d8e1c397dec1a8258%7C0%7C0%7C637967413839033403%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=9gST5zdRPLeWFE0ox0laMi71eg6iQNeUa4N4ibiJHKQ%3D&reserved=0 calling on Tesla to develop a better water strategy. But such resolutions are rare and infrequent.
There are good examples of corporate water action to draw on, including strategies from AB InBev, Coca-Cola and Intel; these range from making their plants water-efficient to helping their supply chains and the communities they operate in to be more water aware and secure. Some of these companies are on the VWFI’s initial target list – a smart move that should help more speedily develop best practices for the laggards. With recent global events showing yet again how the effects of the changing climate are felt most through water, it’s past time to pipe in a concerted investor solution.
Follow @AntonyMCurrie https://twitter.com/antonymcurrie on Twitter
CONTEXT NEWS
A group of 64 investment firms collectively managing almost $10 trillion in assets on Aug. 16 launched the Valuing Water Finance Initiative [VWFI] to push companies with a high water footprint to value the resource properly, to understand its potential to pose a financial risk and to adapt their strategy accordingly.
Among the 64 founding members of the VWFI are Fidelity International, Franklin Templeton, DWS, AustralianSuper and the California Public Employees’ Retirement System.
The group is initially targeting 72 companies in the food, beverage, apparel and technology sectors, including Coca Cola, Anheuser-Busch InBev, Adidas, Lululemon Athletica, Apple, Alphabet, Kraft Heinz and Unilever.
The initiative, which was spearheaded by U.S.-based climate nonprofit Ceres and the Government of the Netherlands, is based on six major targets for companies. These encompass: water quantity and quality; ecosystem protection; universal and equitable access to water and sanitation; proper board oversight; and ensuring policy lobbying is aligned with sustainable water resource management.
(Editing by Robyn Mak and Thomas Shum)
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 it’s also tired old language that obfuscates how such financial pain is a consequence of long allowing water risk to play second fiddle to greenhouse-gas emissions in battling climate change. Despite its somewhat airy name, the VWFI will target 72 food, beverage, technology and apparel companies from Microsoft to McDonalds to properly assess their exposure to the resource, as well as better manage and protect it. The group is initially targeting 72 companies in the food, beverage, apparel and technology sectors, including Coca Cola, Anheuser-Busch InBev, Adidas, Lululemon Athletica, Apple, Alphabet, Kraft Heinz and Unilever.
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It’s modelled on the Climate Action 100+, a carbon-focused initiative led by 700 investors holding $68 trillion in assets; climate nonprofit organisation Ceres is a founding member of both. A group of 64 investment firms collectively managing almost $10 trillion in assets on Aug. 16 launched the Valuing Water Finance Initiative [VWFI] to push companies with a high water footprint to value the resource properly, to understand its potential to pose a financial risk and to adapt their strategy accordingly. The group is initially targeting 72 companies in the food, beverage, apparel and technology sectors, including Coca Cola, Anheuser-Busch InBev, Adidas, Lululemon Athletica, Apple, Alphabet, Kraft Heinz and Unilever.
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A smaller Ceres-led investor campaign in the past targeted fast-food chains, while another nonprofit, CDP, has warned that the cost of ignoring water risks costs companies five times https://nam02.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcdn.cdp.net%2Fcdp-production%2Fcms%2Freports%2Fdocuments%2F000%2F005%2F577%2Foriginal%2FCDP_Water_analysis_report_2020.pdf%3F1617987510&data=05%7C01%7CThomas.Shum%40thomsonreuters.com%7Cf83c3a4a2fd047333be308da83fb9691%7C62ccb8646a1a4b5d8e1c397dec1a8258%7C0%7C0%7C637967413839033403%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=SThVdh4r9ro4U%2FOGCBdf%2FKvVp%2FuZa298fnGLUVIBmZs%3D&reserved=0 as much as dealing with them. A group of 64 investment firms collectively managing almost $10 trillion in assets on Aug. 16 launched the Valuing Water Finance Initiative [VWFI] to push companies with a high water footprint to value the resource properly, to understand its potential to pose a financial risk and to adapt their strategy accordingly. These encompass: water quantity and quality; ecosystem protection; universal and equitable access to water and sanitation; proper board oversight; and ensuring policy lobbying is aligned with sustainable water resource management.
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Now DWS, Fidelity International, CalPERS and some 60 other investors with almost $10 trillion in assets between them are trying to change that. Despite its somewhat airy name, the VWFI will target 72 food, beverage, technology and apparel companies from Microsoft to McDonalds to properly assess their exposure to the resource, as well as better manage and protect it. A group of 64 investment firms collectively managing almost $10 trillion in assets on Aug. 16 launched the Valuing Water Finance Initiative [VWFI] to push companies with a high water footprint to value the resource properly, to understand its potential to pose a financial risk and to adapt their strategy accordingly.
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19690.0
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2022-08-21 00:00:00 UTC
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2 Reasons Why Skyworks Solutions Is Due to Outperform
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AAPL
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https://www.nasdaq.com/articles/2-reasons-why-skyworks-solutions-is-due-to-outperform
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nan
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nan
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Despite significant tailwinds in the company's favor, Skyworks Solutions (NASDAQ: SWKS) investors have only lost money in the stock over the last two years. Moreover, with prominent economic experts predicting a worldwide recession, you might wonder if now is the time to invest in a company that has underperformed the semiconductor industry and the S&P 500 over the last year.
Here are two reasons Skyworks Solutions is due to outperform.
Image source: Getty Images.
1. Apple's upgrade cycle drives Skyworks' results
Since Apple (NASDAQ: AAPL) makes up 55% of Skyworks' business, it generally means that how Apple's business goes, so goes Skyworks. Consequently, many analysts and investors have learned to read Apple's press clippings for leading indicators of what's coming down the road for Skyworks.
Fortunately for Skyworks, it looks like it will have favorable Apple tailwinds over the back half of 2022.
Numerous media outlets have reported that the new iPhone 14 will be revealed sometime in September, and pre-orders should occur shortly after that. Historically, new iPhone releases boost Skyworks results. And you can see the iPhone 14 uplift in Skyworks guidance for the September 2022 quarter, where Chief Financial Officer Kris Sennesael forecasted sequential revenue and non-GAAP (generally accepted accounting principles) diluted earnings-per-share growth of 14% and 19%, respectively. Additionally, Sennesael announced an 11% dividend increase from the prior quarter -- showing confidence in the company's future cash flow generation.
2. Tailwinds from 5G and increasing wireless device usage
Since Skyworks produces its best results in the September and December quarters and weakest results in the March and June quarters, trailing-12-month (TTM) numbers are the best gauge of its performance, as TTM eliminates the effects of seasonality. And one significant observation should stick out when an astute investor uses TTM to measure the company's growth, free cash flow (FCF), and net income over the last five years and compares it to the evolution of 5G wireless devices.
SWKS Revenue (TTM) data by YCharts.
In 2018, before the wireless industry introduced 5G, the global smartphone market shrank for the first time and went into the doldrums for two years. In addition, you can see on the chart above that Skyworks essentially flatlined during the same period. Only after 5G smartphone production started ramping up across 2020 did the smartphone market return to growth in the fourth quarter of that year. As a result, Skyworks' revenues, net income, and FCF turned sharply up near the end of 2020 -- denoting the link between the company's results and the growth of 5G devices.
Terrible economic conditions have temporarily stunted smartphone growth
However, the pandemic and the ensuing supply chain disruptions have restrained smartphone growth in late 2021 and the first half of 2022 -- which you can see by Skyworks revenues, FCF, and net income subsequently stalling.
SWKS Free Cash Flow data by YCharts.
Apple, the most significant smartphone manufacturer, has noted in a recent earnings report that it is not immune to COVID-driven supply chain disruptions and chip shortages. For example, in its September 2021 results, Apple reported losing approximately $6 billion in revenues due to supply chain constraints. And if Apple is encountering pain, Skyworks' other smartphone manufacturer customers like Samsung are likely dealing with similar problems. All bad news for Skyworks and a prime reason the stock is down 26% year to date.
Additionally, a global recession could stall smartphone growth even if the wireless industry solves its supply chain problems, and Skyworks' stock could remain moribund. Of course, a recession is an unavoidable risk that would be terrible for all companies. However, should the economy enter a recession, Skyworks has the financial health to survive a downturn and thrive as the economy eventually rebounds.
On the positive side, Apple's June quarter results suggest that its supply chain difficulties are already easing. And with industry experts predicting that the global supply chain chip shortage will soon end, the smartphone market could reaccelerate, resulting in a quick rebound of Skyworks' stock.
Skyworks today trades at a price-to-earnings (P/E) ratio of 13.4, below its median P/E valuation of 19.68 over the past 13 years. This valuation is also undervalued compared to the S&P 500 P/E ratio of 21.6. This terrible economic environment has opened an opportunity to invest in a great company when it is down. Therefore, if you are looking for a growth company well positioned to succeed in the post-pandemic era, few companies are as good an investment as Skyworks.
10 stocks we like better than Skyworks Solutions
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They just revealed what they believe are the ten best stocks for investors to buy right now... and Skyworks Solutions wasn't one of them! That's right -- they think these 10 stocks are even better buys.
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{%sfr%}
Rob Starks Jr has positions in Skyworks Solutions. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends Skyworks Solutions 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's upgrade cycle drives Skyworks' results Since Apple (NASDAQ: AAPL) makes up 55% of Skyworks' business, it generally means that how Apple's business goes, so goes Skyworks. And you can see the iPhone 14 uplift in Skyworks guidance for the September 2022 quarter, where Chief Financial Officer Kris Sennesael forecasted sequential revenue and non-GAAP (generally accepted accounting principles) diluted earnings-per-share growth of 14% and 19%, respectively. And one significant observation should stick out when an astute investor uses TTM to measure the company's growth, free cash flow (FCF), and net income over the last five years and compares it to the evolution of 5G wireless devices.
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Apple's upgrade cycle drives Skyworks' results Since Apple (NASDAQ: AAPL) makes up 55% of Skyworks' business, it generally means that how Apple's business goes, so goes Skyworks. Despite significant tailwinds in the company's favor, Skyworks Solutions (NASDAQ: SWKS) investors have only lost money in the stock over the last two years. Additionally, a global recession could stall smartphone growth even if the wireless industry solves its supply chain problems, and Skyworks' stock could remain moribund.
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Apple's upgrade cycle drives Skyworks' results Since Apple (NASDAQ: AAPL) makes up 55% of Skyworks' business, it generally means that how Apple's business goes, so goes Skyworks. Terrible economic conditions have temporarily stunted smartphone growth However, the pandemic and the ensuing supply chain disruptions have restrained smartphone growth in late 2021 and the first half of 2022 -- which you can see by Skyworks revenues, FCF, and net income subsequently stalling. Additionally, a global recession could stall smartphone growth even if the wireless industry solves its supply chain problems, and Skyworks' stock could remain moribund.
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Apple's upgrade cycle drives Skyworks' results Since Apple (NASDAQ: AAPL) makes up 55% of Skyworks' business, it generally means that how Apple's business goes, so goes Skyworks. Despite significant tailwinds in the company's favor, Skyworks Solutions (NASDAQ: SWKS) investors have only lost money in the stock over the last two years. And one significant observation should stick out when an astute investor uses TTM to measure the company's growth, free cash flow (FCF), and net income over the last five years and compares it to the evolution of 5G wireless devices.
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19691.0
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2022-08-21 00:00:00 UTC
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Alphabet's Genius Move Could Mean It's Coming for These Streaming Stocks
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AAPL
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https://www.nasdaq.com/articles/alphabets-genius-move-could-mean-its-coming-for-these-streaming-stocks
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nan
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nan
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Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) is not typically the first company that comes to mind when investors think about video-streaming stocks. However, a new YouTube service could change that. Is the streaming industry about to get even more crowded as Alphabet enters the market? Let's assess.
Alphabet moves into streaming
YouTube reportedly plans to launch a channel store for video-streaming services and is talking with entertainment companies about participating in the platform. The streaming marketplace would allow consumers to subscribe to various services directly through the YouTube App, similar to hubs already offered by Amazon, Apple, and Roku.
The new marketplace has been in development for 18 months and is expected to be released by the fall of 2022. Alphabet is now at work convincing various streaming platforms that the YouTube service is worth joining and giving up a cut of the revenue generated for the privilege. YouTube's argument is not baseless; along with its attractive number of 2.6 billion users, the video platform is the most used service on which other companies share trailers for their new content.
As for what Alphabet stands to gain, a move to create a new revenue stream via streaming is not a bad idea considering the company's second-quarter results for 2022. On July 26, it reported weaker-than-expected Q2 earnings, as many of Alphabet's segments came in just a few points below expectations. For instance, the company's earnings per share landed at $1.21 versus the expectation of $1.28, while revenue hit $69.69 billion versus previous projections of $69.9 billion.
Similarly, YouTube advertising revenue reached $7.34 billion, which had been projected at $7.52 billion. Google Cloud revenue also slightly missed the mark, making $6.28 billion when $6.41 billion was expected. All in all, revenue growth fell to 13% in Q2 2022 from 62% the previous year.
The most glaring deceleration in revenue in Alphabet's report came from YouTube, where sales rose 5%, a stark contrast to the 84% jump it made exactly a year ago. Considering YouTube's slowed growth, a new service that allows the company to take a slice out of the $80.83 billion streaming-industry pie isn't a bad idea.
Should Netflix and Disney be worried?
As the titans of the industry, Netflix (NASDAQ: NFLX) and Disney (NYSE: DIS) stand to gain the least from Alphabet's coming YouTube service. The two companies rank first and second in number of streaming subscribers, with Disney No. 1 at 221 million spread among Disney+, Hulu, and ESPN+. Meanwhile, Netflix is a close second with 220.7 million subscribers worldwide. The immense popularity of Netflix and Disney means those platforms' participation in YouTube's channel store will not benefit them as much as it would smaller services.
YouTube's attempt to take a piece of the streaming pie is not likely to put Alphabet in direct competition with Netflix and Disney, but it does have the potential to boost smaller platforms enough to steal subscribers from the giants. Smaller players such as Comcast's Peacock, Paramount+, and AMC Networks' slew of streaming offerings would benefit greatly from joining a service that attracts more than 122 million daily users.
Netflix and Disney could see their competition grow stronger as Alphabet profits from their success, weakening the streaming titans' hold on the market.
What's next
Despite an 8% dip in Alphabet's stock between July 21 and July 26 after the company reported less-than-ideal Q2 2022 results, the stock has climbed significantly. As of August 15, the stock had risen 16.2% since July 26, reaching a height it hadn't seen since May. However, the stock is about 17% down since January, which may suggest it's not done rising. Alphabet's new streaming marketplace has the potential to boost revenue and restore the growth YouTube enjoyed in 2021, meaning investors might have the opportunity to buy the stock at a bargain before the new service launches.
As for Netflix and Disney, those stocks are unlikely to feel any immediate effects from YouTube's service. The real test will be which smaller players sign up for YouTube's marketplace, which will potentially create more competition for Netflix and Disney. It also might be worth investing in the more minor streaming services that join YouTube's channel store because a boost to their businesses could strengthen their stocks.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, Roku, and Walt Disney. The Motley Fool recommends Comcast and 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.
|
YouTube's attempt to take a piece of the streaming pie is not likely to put Alphabet in direct competition with Netflix and Disney, but it does have the potential to boost smaller platforms enough to steal subscribers from the giants. Smaller players such as Comcast's Peacock, Paramount+, and AMC Networks' slew of streaming offerings would benefit greatly from joining a service that attracts more than 122 million daily users. Alphabet's new streaming marketplace has the potential to boost revenue and restore the growth YouTube enjoyed in 2021, meaning investors might have the opportunity to buy the stock at a bargain before the new service launches.
|
Alphabet moves into streaming YouTube reportedly plans to launch a channel store for video-streaming services and is talking with entertainment companies about participating in the platform. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, Roku, and Walt Disney. The Motley Fool recommends Comcast and 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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YouTube's attempt to take a piece of the streaming pie is not likely to put Alphabet in direct competition with Netflix and Disney, but it does have the potential to boost smaller platforms enough to steal subscribers from the giants. Alphabet's new streaming marketplace has the potential to boost revenue and restore the growth YouTube enjoyed in 2021, meaning investors might have the opportunity to buy the stock at a bargain before the new service launches. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, Roku, and Walt Disney.
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Considering YouTube's slowed growth, a new service that allows the company to take a slice out of the $80.83 billion streaming-industry pie isn't a bad idea. Alphabet's new streaming marketplace has the potential to boost revenue and restore the growth YouTube enjoyed in 2021, meaning investors might have the opportunity to buy the stock at a bargain before the new service launches. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, Roku, and Walt Disney.
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19692.0
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2022-08-21 00:00:00 UTC
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How Small-Cap Companies Can Help You Beat the Market
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AAPL
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https://www.nasdaq.com/articles/how-small-cap-companies-can-help-you-beat-the-market
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In this podcast, Motley Fool producer Ricky Mulvey, Motley Fool analyst Dylan Lewis, and Bill Mann, director of small-cap research at The Motley Fool, kick off their series on small-cap investing. They discuss topics including:
Why small-cap investors have an opportunity to beat the market.
The metrics that really matter for small caps.
One small-cap trend catching Bill's attention.
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 August 13, 2022.
Bill Mann: Some of the most profitable investments you will ever make are companies that don't seem like they're growing very fast but they are growing very consistently. The lower the raw growth rate, the more I would want to see a company that if it disappeared tomorrow, would be painful to the consumers that buy it.
Dylan Lewis: I'm Dylan Lewis and that's The Motley Fool's Bill Mann. Today we're kicking off our series on small-cap investing, it's the secret sauce of what we do here. Producer Ricky Mulvey caught up with Bill to talk about why small-caps can help investors beat the market, the traits of great leaders in this space, and why it's even more important to watch these CEOs and one investing trend that has some serious staying power. Today we're kicking off a series on small-cap investing. Joining us now is Bill Mann. We don't normally do the full titles at the Fool, but you are the director of small sap research here, so it does seem appropriate to establish that. Thanks for doing this.
Bill Mann: It's no problem. You're right, we don't do titles and I'm glad we don't but in this case, hopefully I've got something to say.
Ricky Mulvey: Well, we got about a half-hour and if you have nothing to say, it's going to be a very difficult podcast. [laughs]
Bill Mann: That's right. Hey Ricky, what do you got?
Ricky Mulvey: If you're new to this, why do you like small-cap investing? Why is this stuff more fun than the other kind?
Bill Mann: I love the fact that you've described it as fun and it really is. Small-cap investing is where you get to go treasure hunting. The reality of small-cap investing is that when you bring up these companies at cocktail parties, at softball games, wherever it is that you go and interact with other people, a lot of times you are not going to get the same level of a response people than if you say, oh, yeah, I own Apple or I own Berkshire Hathaway. These tend to be companies that very few people have heard of. It is fun to me because it is also an area where you can truly go on a treasure hunt and there are fewer people and less money fishing in these waters. One of the things we're going to talk about in a little bit is why individual investors actually have a structural advantage when it comes to smaller companies.
Ricky Mulvey: Let's do that now. Look, we've got to do a daily show here at Motley Fool Money. We got to talk about a lot of things. [laughs] This is the secret sauce. Find a small company, if they've products, customers if they got the right numbers on them and you buy enough for those companies, you can possibly beat the market over a long stretch of time.
Bill Mann: I'd say probably. Can I say probably? We're not going to get the podcast please, it's going to come down on us if we say probably. It is in order to invest in small caps and to make it a large component of your portfolio. You do have to have the right mindset, you are going to be wrong more often. That's just full-stop. There is less information on them. You are not going to be able to find much in the way of institutional research on these companies. It doesn't make any sense for the big banks to go out and research them because it doesn't make any sense for them to go out and buy them, the money is not there for them. If you are committed to owning a larger number of companies, and if you are committed to recognizing the fact that you're going to be wrong a lot and just embrace it. You're going to be wrong a lot, even more often with small caps. Then there is a path there to making a tremendous return over time. Small caps have historically constituted the lion's share of the returns for The Motley Fool from our recommendations, by which I say, for example, one of the companies that we have done best on is Netflix. I know Netflix has had a hard stretch in 2022 but we invested in it as a small cap. We invested in a company called Marvel that became Disney, and it was a small cap. David Gardner recommended a little tiny company called Amazon in 1998 and never wavered and it was a small cap when he picked it and I understand, Ricky, that that's a little bit of gilding the Lilly pointing out those three companies right away. But the great thing about small-cap investing is that you can be wrong often but if you're right once and you have that tenacity to hold on, it will make all the difference.
Ricky Mulvey: Let's go to the flip side because we can play the hits but you talk about how you have to be comfortable losing and that's probably even more so the case with this than the large caps. But can you think of a time that maybe you got burned with a small cap company with big promises?
Bill Mann: Oh, God. There are a bunch. The one that was probably most embarrassing for me. I used the term embarrassing because I do have to tell a little bit of a story behind it but in 2001, I was invited as an expert witness to testify before the US Senate Banking Committee after the collapse of Enron as an expert and I sat there before these senators and explain to them exactly why it was that some investors were able to see what was happening with Enron. I felt like a million bucks. This was at the point in time, the greatest honor that I had had as an investor and as a follower of the markets. That same day I returned to our offices, we were down on Pit Street in Alexandria, Virginia and I came in and a company that I had not just invest it myself, I had recommended and it was called ACLN and it was a small cap company that was a car carrier company based in Belgium. Its stated business was that these car carriers would come from Korea or they would come from Japan and drop cars off in Europe and the US and they would go back empty. ACLN said, hey yeah, what we're going to do is fill these car carriers with used cars and we're going to take them to Africa, which is a huge used car market. This all sounds awesome and it also sounds the thing that one really needs to happen and too is actually happening. All of those things were true except for the is actually happening part. It was a complete and utter fraud. The same day that I was being held up as an expert in finding fraud, I fell into one absolutely directly and very publicly. You know what they say, [laughs] if you want to be laid low first be made proud. [laughs] That happened awfully fast. It happens in this segment and you've got to be able to recognize the fact that, that thing is, maybe not that, that was somewhat spectacular but companies disappointing you in this segment is a reality.
Ricky Mulvey: Yeah. That's one reason that's more challenging. You have to get ready to lose more often, you have thinner information, you're dealing with younger companies. I'm trying to think any general reasons that this is, let's say harder than picking who I like, Microsoft and Ford.
Bill Mann: Well, I have a friend named Ian Cassel who runs a site called the MicroCapClub and he put out a book called the Intelligent Fanatics Project. I love the framing of the term Intelligent Fanatics and it actually was coined by Charlie Munger, who is the vice chairman of Berkshire Hathaway. It talks about the types of business leaders that they want to see running companies. One of the most important things and why small-cap investing offers so much promise and so much challenge is that unlike the American Expresses of the world or the MasterCard's or the Apples of the world, small caps are almost by definition, driven by great management. The quality of the management means so much in this segment, it is a much more important factor in smaller companies than it is in larger companies. Larger companies, they've got staffs of hundreds, if not thousands doing all the things and in some ways the people at the top of the business don't have any idea what's going on in large parts of the business. If that's happening at most small cap companies, the company is probably on its way into the rocks.
Ricky Mulvey: Let's focus on leadership in a sec. I feel like I'm doing an ad break now but I do think we got to knockout some of the allocations stuff.
Bill Mann: Okay. [laughs] Fair enough. Let's take our spinach.
Ricky Mulvey: Let's do the quick allocation. We always say at the Motley Fool, you've got to own 25-30 stocks. Do you think that number increases if you're playing the small cap game?
Bill Mann: Well, it depends on how you do it and specifically, I would say this, if you're going to buy small cap companies, you need to be fairly sure that your companies are internally diverse. It's easy enough to say 25-30 but if you own 25 SaaS companies and then a biotech company for diversity, you're not actually diverse and I don't care what the number of companies that you own. Yes. I would absolutely positively encourage to own on the high side of smaller cap companies in terms of the number. But at the same time, you do also have to make sure I always think about my portfolios. You have a risk on a company basis, but you also have a risk on a thematic basis. If you own all Chinese companies, that you are exposed 100 percent to China. It doesn't matter that you own two companies or 50, you still are absolutely positively exposed to something exogenous to any of the individual companies. Yes I would suggest that you own more smaller cap companies. I would suggest that you give yourself the grace to know that in any case, owning more companies means that you will be able to study them less. We all have the same number of hours in the day. Therefore, you are likely to be wrong more often and in smaller cap companies, even if you have the best source of knowledge that there is, sometimes these companies are going to disappoint you.
Ricky Mulvey: It's not the number of slices on the pie chart, not just that it's the colors on the pie chart.
Bill Mann: Exactly, like like, hey I've got 17 shades of green. Is this a rainbow? No, it's not a rainbow.
Ricky Mulvey: I've heard this from Jason Moser. I've heard it from John Rotonti. The ideas when you're playing the speculative game, make sure you essentially buy for each speculative company, you buy one that's not going to keep you up at night.
Bill Mann: Right, exactly and we've been talking about small caps as if they are some like monolithic beast. Maybe put it a little bit of definition around what a small cap. What's that?
Ricky Mulvey: I said that would have been helpful if I did that episode.
Bill Mann: Yeah exactly [laughs] so what are we talking about here? We're talking about essentially at this point in time, companies that are $8 billion and below, so $8 billion it turns out, if you are the only owner of a company worth $8 billion, you have a billion-dollars. Which is a lot of money, but from a company perspective an $8 billion company barely moves the needle for the S&P 500, for example, for the index that it's in. Anything sub $8 billion, I would consider to be a smaller cap company. Now, you can definitionally go smaller than that and say between 300 million and two billion as a small cap company, which is absolutely fine. I wouldn't get too wrapped up around the definitions, but I really, to me, the ceiling is about eight billion.
Ricky Mulvey: Okay.
Bill Mann: The way I come up with that number, Ricky, is that that is the market cap of the 490th sized company in the S&P 500.
Ricky Mulvey: We picked 490 for what reason?
Bill Mann: Because there's always companies that are within the S&P 500 that are so deeply impacted that they're going to be pulled out.
Ricky Mulvey: Got you.
Bill Mann: Right there are companies at all times that are in the S&P 500 that are on their way out because they are something deeply wrong. Again, don't get too spun on this. That's not a scientific number. It just seems like a good rough cut. When you're talking about small cap companies, you have to recognize a couple of things. One is there are small cap banks. There are 30 tiny banks in the state of Indiana that are publicly traded companies. There are also revenue-less biotech companies that are small cap companies. There are SaaS companies that are biotech companies, there are manufacturing companies that are small cap companies. It is a segment that is defined by being smaller, but you need to be careful about taking too much in the way of rules like small-cap means this because some of these companies are small caps, have been public, have been small caps for 50 years, and to the extent that they will survive will always be small-caps. There are other companies, like when we were talking earlier about Amazon. At a trillion plus and market cap, it's obviously no longer a small cap. A lot of small cap companies are on their way to being something else. Hopefully that's something else is a much bigger company. That's an extra minute before I get to answering the question that you asked, which was Jason Moser's point and John Rotonti's point about buying something that speculative and matching it against something that is much more dependable. Like for example, a biotech company at a bank. I think in some ways you have to know yourself. Like you need to make sure that to the best of your ability, that you are buying risks that are compensated for. You don't want uncompensated risks in any single company. That doesn't mean that things aren't going to go wrong, but if you are someone who is not comfortable with your portfolio going down 30 or 40 percent, you absolutely need to make sure that you are much more loaded with companies that aren't going to do that. I know 2022 has been painful for a lot of people but in even in years like 2020, small-cap companies, you just look at their 52-week low and their 52 week high, and they're usually 70 or 80 percent apart from each other. These companies move a lot. To the extent that you're comfortable with that, you can take a little bit more risk with the companies that you are putting into your portfolio, to the extent that you're not, you should be a little bit more conservative.
Ricky Mulvey: I want to go back on a point you made about how yes this is a market cap. This is a definition of market cap and there is an impossibly large number of sectors within that. When we had a conversation earlier, you said essentially a good beginning point. If you're looking at small caps is, what problem does this company solve? Do they have the resources to do so and then also, how's their leadership?
Bill Mann: Yeah it's a good way of thinking about it and just to put a little bit of meat around this concept. In the US stock market, small caps, and I mean, companies that are smaller than mid and large caps make up 90 percent of the number of companies in the market. That goes all the way down to micro caps. But it only makes up about seven percent of the total market cap of US stock market of the three of the major exchanges. You are talking about a large number of companies, but a smaller component of the market.
Ricky Mulvey: Let's get even smaller. How about some leadership as small cap companies? Among these small-caps who are some leaders that you particularly admire right now?
Bill Mann: We talk a lot at The Motley Fool about Arista Networks, which is a company that is incredibly important to the development of Cloud computing. They are a network company and their CEO is a woman named Jayshree Ullal, who when she and Andy Bechtolsheim founded Arista, they took no money. They didn't buy, they took no money. They obviously got paid as human beings, but they didn't go out and do huge amounts of capital raises once they became a public company. They have grown in a very intelligent way. They've never reached out and it's interesting because a lot of times you look at these companies that are based in Silicon Valley and it really seems like they're being run like a fraternity house. She has made sure that the culture at Arista is incredibly accommodative. To the extent that she's just said that what she wants from herself and her employees is that she just knows that human beings all crave appreciation and they want to be recognized for having done a good job.
Ricky Mulvey: I've heard that in a few interviews, which is at a conversation with Bill George on last week's show. He had this theme of look for the we leaders and hear that in Jayshree is interviews where she's very quick to point out like the members of her team and who's doing what well, and it's taken the spotlight away from her and that's something you'd like to see.
Bill Mann: She is actually interacted a quite a bit with the Motley Fool. She's been wonderfully giving over time, but she actually really doesn't like for herself to be in the spotlight. It's funny you can pick this up and this just takes a few minutes to do with any company that you're interested in. I mean, especially with small caps, one thing that you can do and it doesn't take more than five minutes, is read the letter from the CEO or the Chairman in the last annual report, and you will see that in spades. Now first of all, one thing you have to make sure of is you know how you can tell when something's been written by a committee or it's been written by a professional.
Ricky Mulvey: They're good statements.
Bill Mann: Yeah, exactly but you can tell. But one of the real tip-offs for me is that exact thing you're looking for. We CEO and you are also looking for someone who in the course of the single most read document that they will produce that they both give credit for things that have gone well, but then they also take blame for and don't make excuses for things that have gone poorly. Ricky, every company in some ways is dysfunctional but some companies dysfunction in a positive direction. Every single company faces challenges, every company has things happen both internal and external that impact their operations, impacts their trajectory. How do they respond to them and how do they communicate them? It's so important.
Ricky Mulvey: You look at a lot of small cap companies, and I would also say that in our interactions, you seem to have a pretty good BS radar. Let's talk about some of the BS among leadership. What does your radar spike when you're reading those letters, you're listening to a quarterly call and just maybe a yellow flag goes up?
Bill Mann: Like so, for example. Gosh, we're about to get in trouble, are you ready?
Ricky Mulvey: Let's go.
Bill Mann: Get your hand on the button. I am not saying that a lot of companies have not been impacted by supply chain issues and in particular by the Russian invasion of Ukraine, but if you are a small cap bank in Indiana and you make the excuse that the invasion of Ukraine has somehow impacted your operations. You should always have your detector up and understand that even the great communicators, they're trying to put their best foot forward. If the best foot is always, "Hey, we've got complete control," that to me is a red flag. Again, I'm going to give just a tiny bit more homework because one of the ways that you can find this. There's a CEO of a company that's really struggled this year, but I think the world of him, Glenn Kelman at Redfin. If you go back and you read three years of his letters to shareholders, just three years, so we've gone now from five minutes of homework to 15 minutes of homework, you will see that he is talking about the same exact goals. He's not saying on this year, we've done great because of the number of houses we've sold, and the next year, we've done great because the revenues, and the next year, we've done great because our price to phone number is really low. He's absolutely consistent. He's responsive to things that are happening, but he's not changing what he wants you to look at to show, hey, this is a super successful company. Companies just don't succeed all the time, and it's fine. It's really OK and the CEOs at small cap companies who embrace that are the ones that you can trust them more.
Ricky Mulvey: If you're looking to dig into some small cap companies, four metrics to watch. Is you're looking through to see if the company is healthy, if it's sustainably profitable. Number one is company sales, is that one that you have a cut off for? It ranges based on are you looking at a consumer goods company or a biotech company? But is there a general level in which you're just like, you know what? This is a biotech company with no sales falls outside of my circle of competence. No, thank you.
Bill Mann: You hit on the exact right term. For me, you don't want to listen to me about biotech companies. You just don't. For me, I own one biotech company in my portfolio and it's because my daughter does this, and she was the one who recommended it to me, but it's not an area where I'm going to be reaching out over my skis. Some of the most profitable investments you will ever make, our companies that don't seem like they're growing very fast, but they are growing very consistently. The lower the raw growth rate, the more I would want to see a company that if it disappeared tomorrow, would be painful to the consumers that buy it. Like for example, in 2001, I actually had the opportunity to have a conversation with Warren Buffett, and I pitched a company called Church & Dwight Tim. Church & Dwight is ARM & HAMMER Baking Soda. It does a number of other things. It bought other companies along the way. It didn't grow very fast, but it had an unbelievable franchise. If you go to the market and ARM & HAMMER Baking Soda is 79 cents and off-brand baking soda is 59 cents, you're paying that 20 cents. Full stop. That's how it goes. With no real expectation that it's going to perform better, but you just do. Company sales to me, I do like to own profitable companies. I do like to own companies that are currently showing growing sales, but I don't really need to see that big of a number if I believe that the company's franchise and its moat is big enough.
Ricky Mulvey: It's a question beyond just the sales and net profit margin.
Bill Mann: I think a lot of investors get wrapped up a little too much of saying, "I want a company that's growing at 25 percent." Then so suddenly, if a company is growing 23 percent like, is that good enough? I made the mistake of selling Starbucks in 1999 and it's grown 23 percent a year since then. Would that have been OK? I think that would have been just fine.
Ricky Mulvey: Then minimum share price, daily dollar volume, are you checking boxes on those or is that a skim over?
Bill Mann: No, I think that that's a really interesting point and it doesn't exist so much anymore, but generally speaking, the target price range for a US company used to be about $10 to about $100. When companies got above $100, they would split. That all had to do with the mechanics of trading, and I don't really know that we need to get into that, but it is still the case. It's still the case that companies that are trading below $10 a share have something that has gone wrong or has something that the market has perceived as having gone wrong. When you get into the lower, and Ricky, I know there are a lot of people who say, "Well, if the shares are priced lower, I can get more of them." But it's not really the way it works. For me if a company is trading below $10 a share and you said seven, and I actually think that's actually a great number that I'm now going to embrace wholeheartedly as being scientific, you need to understand that something has probably gone wrong or is going wrong at the company, and you should sort out what it is. Doesn't mean you should stay away from the company, but knowing what the risks are is super-important, and ignoring risks doesn't mean that the risks go away.
Ricky Mulvey: You've been listening for a while. We've been talking a lot about how to do this. Let's get to some meat and potatoes. What's the trend in small-cap investing you're excited about right now? Something you're watching out for is the director of small cap research.
Bill Mann: One of the great things is that we're starting to see every once in a while, there is a turnover in brands and brands happen. They happen in waves. It is not for nothing that Chipotle and Buffalo Wild Wings and a number of other restaurants styles exploded onto the scene in the mid 2000. I think that we're seeing that now as well in other areas. Like for example, one of the big trends that happened during COVID, but it was already happening was that people in this country were going out and buying RVs. They're down with camping, not getting on planes as much as they have in the past. I stopped and thought about this and said, well, who are the best operators in this business? Perhaps, the best operator is Marcus Lemonis and Camping World Holdings, which owns dozens of gigantic sales sites for RVs all around the country. I think that we're beginning to see a changeover in habits, and maybe some of it's been driven by the pandemic. I think some of it probably been just changed by, as we're moving into the dominance of the millennials and the fade-out of vast Gen Xs. I think that, that is a huge area of exploration. The new brands that are coming along.
Ricky Mulvey: Bill Mann, thank you for your time. Hey, maybe we will see you for part two.
Bill Mann: If I did OK, I hope you have me back.
Dylan Lewis: 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 anything based solely on what you hear. I'm Dylan Lewis, thanks for listening. We'll see you tomorrow.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Bill Mann has positions in Berkshire Hathaway (A shares), Berkshire Hathaway (B shares), Camping World Holdings, Mastercard, and Starbucks. Dylan Lewis has positions in Amazon and Apple. Ricky Mulvey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, Arista Networks, Berkshire Hathaway (B shares), Chipotle Mexican Grill, Mastercard, Redfin, and Starbucks. The Motley Fool recommends Camping World Holdings and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short August 2022 $13 calls on Redfin, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), short March 2023 $130 calls on Apple, short October 2022 $85 calls on Starbucks, and short September 2022 $27 puts on Camping World Holdings. 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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Producer Ricky Mulvey caught up with Bill to talk about why small-caps can help investors beat the market, the traits of great leaders in this space, and why it's even more important to watch these CEOs and one investing trend that has some serious staying power. Dylan Lewis: 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 anything based solely on what you hear. The Motley Fool has positions in and recommends Amazon, Apple, Arista Networks, Berkshire Hathaway (B shares), Chipotle Mexican Grill, Mastercard, Redfin, and Starbucks.
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In this podcast, Motley Fool producer Ricky Mulvey, Motley Fool analyst Dylan Lewis, and Bill Mann, director of small-cap research at The Motley Fool, kick off their series on small-cap investing. Bill Mann has positions in Berkshire Hathaway (A shares), Berkshire Hathaway (B shares), Camping World Holdings, Mastercard, and Starbucks. The Motley Fool recommends Camping World Holdings and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short August 2022 $13 calls on Redfin, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), short March 2023 $130 calls on Apple, short October 2022 $85 calls on Starbucks, and short September 2022 $27 puts on Camping World Holdings.
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That same day I returned to our offices, we were down on Pit Street in Alexandria, Virginia and I came in and a company that I had not just invest it myself, I had recommended and it was called ACLN and it was a small cap company that was a car carrier company based in Belgium. There are SaaS companies that are biotech companies, there are manufacturing companies that are small cap companies. In the US stock market, small caps, and I mean, companies that are smaller than mid and large caps make up 90 percent of the number of companies in the market.
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There are SaaS companies that are biotech companies, there are manufacturing companies that are small cap companies. That doesn't mean that things aren't going to go wrong, but if you are someone who is not comfortable with your portfolio going down 30 or 40 percent, you absolutely need to make sure that you are much more loaded with companies that aren't going to do that. In the US stock market, small caps, and I mean, companies that are smaller than mid and large caps make up 90 percent of the number of companies in the market.
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19693.0
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2022-08-21 00:00:00 UTC
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3 Reasons to Buy GoPro Stock and 1 Reason to Sell
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AAPL
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https://www.nasdaq.com/articles/3-reasons-to-buy-gopro-stock-and-1-reason-to-sell
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GoPro (NASDAQ: GPRO) has long struggled to make its business into one that attracts a diverse group of users across multiple markets, and it has had to find ways to stand out and compete. Its stock struggled right along with it, amid market conditions limiting it as well. With high-resolution cameras available on many smartphones, GoPro has had to somewhat settle for being a niche company supported by sports and thrill-seeking enthusiasts.
GoPro has used this niche market to grow revenue over time directly and indirectly from its core business. And that is helping its stock. There are at least three reasons to think this tech stock can continue to find success down this path. There is also at least one key challenge it faces that potential investors need to factor in.
Reason to buy: Domination within its niche
A perception of being an app without an ecosystem has long hurt GoPro stock. With sophisticated cameras built into smartphones and manufacturers continuing to make improvements, GoPro's cameras held little appeal.
However, GoPro seems to have taken a page from Garmin's playbook. When smartphones added GPS functionality, Garmin pivoted into non-automotive GPS products, a move that probably saved its business. Likewise, GoPro has built cameras with functionality not feasible for an Apple iPhone or Samsung Galaxy to offer.
Unlike smartphone cameras, GoPro explicitly designs its cameras to take sports and action shots. Its cameras are small, portable, and wearable. More importantly, they can hold up in unstable environments and are usable underwater. Moreover, it can take high-resolution shots under such conditions and offers 4k and 5k video quality levels.
Also, its cameras range from approximately $280 to $580. With iPhones selling for as much as $999, these allow for better pictures without risking the destruction or theft of an expensive smartphone.
Reason to buy: High-profit service offerings
GoPro continues to find ways to drive income besides selling cameras. For example, it has worked to increase subscription and service revenue. For a $49.99 yearly subscription fee, GoPro now provides its users unlimited cloud backup, live streaming tools, access to a premium editing tool, and guaranteed camera replacement. It also offers the editing app only for $9.99 per year.
These offerings helped to grow its subscriber base by 65% year over year in the second quarter. With that increase, subscription and service revenue claimed $39 million of GoPro's $467 million revenue in the first two quarters of 2022, increasing by 72% yearly.
Additionally, this segment has likely become a source of high-margin profit. Producing hardware is typically a low-margin business. However, GoPro reported a gross profit margin of 40% in the first half of 2022, indicating that the subscription and service segment is responsible for such margins.
Reason to buy: Valuation
Amid worries about competition, investors have wiped out most of this company's stock price value. Since peaking above $98 per share in late 2014, GoPro stock steadily dropped, reaching the single digits by late 2016. Today, it trades in the $7 per-share range.
GPRO data by YCharts.
Nonetheless, during that time, GoPro evolved into a profitable company. Today, its trailing price-to-earnings (P/E) ratio stands at under eight. This is significantly lower than Apple at 29 times earnings and Garmin, which faces a similar competitive situation, at a 19 P/E ratio.
Reason to sell: The ongoing competitive threat
By pivoting into action cameras, GoPro has managed to build a profitable business. However, Apple, Samsung, and other smartphone manufacturers continue to make technical improvements to their cameras. These manufacturers could choose to develop sports cameras tied to the iOS and Android ecosystems.
Thus, GoPro needs to keep investing in its technology to make its new cameras better and cheaper. If it stops fighting this battle, users will have little incentive to use GoPro products or subscription services.
Investors also remember that the fear of competition has contributed to its stock selling at more than a 90% discount to its all-time high. Both the stock price and the company depend on making GoPro and its ecosystem valuable to its users.
Should I consider GoPro?
The ongoing competitive threat to GoPro remains a concerning issue. That threat of technical change is always going to make GoPro stock risky.
Nonetheless, a low P/E ratio and the growth of its subscription business could justify a speculative position for more risk-tolerant investors. As long as it continues to dominate its niche, it increasingly looks like a growth stock that could soar.
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Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Garmin. 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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GoPro (NASDAQ: GPRO) has long struggled to make its business into one that attracts a diverse group of users across multiple markets, and it has had to find ways to stand out and compete. Reason to buy: High-profit service offerings GoPro continues to find ways to drive income besides selling cameras. Reason to sell: The ongoing competitive threat By pivoting into action cameras, GoPro has managed to build a profitable business.
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With sophisticated cameras built into smartphones and manufacturers continuing to make improvements, GoPro's cameras held little appeal. Reason to sell: The ongoing competitive threat By pivoting into action cameras, GoPro has managed to build a profitable business. 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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With sophisticated cameras built into smartphones and manufacturers continuing to make improvements, GoPro's cameras held little appeal. Reason to buy: High-profit service offerings GoPro continues to find ways to drive income besides selling cameras. Reason to sell: The ongoing competitive threat By pivoting into action cameras, GoPro has managed to build a profitable business.
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Nonetheless, during that time, GoPro evolved into a profitable company. Reason to sell: The ongoing competitive threat By pivoting into action cameras, GoPro has managed to build a profitable business. The Motley Fool has positions in and recommends Apple and Garmin.
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19694.0
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2022-08-20 00:00:00 UTC
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Stock Market Keeping You Up at Night? Buy These 2 Stable Tech Stocks
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AAPL
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https://www.nasdaq.com/articles/stock-market-keeping-you-up-at-night-buy-these-2-stable-tech-stocks
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Many investors believe that buying high-growth, speculative businesses is the only way to see outstanding returns over the long term. While that view has some validity, it also takes an investor who can stomach the volatility that comes with owning young, disruptive companies.
But there are stable companies out there too with steady revenue and free-cash-flow improvements that have proven to be worthwhile investments. These unsung heroes tamp down the stock price volatility by generating consistently high returns, helping you sleep better at night and remain invested. Both Apple (NASDAQ: AAPL) and Veeva Systems (NYSE: VEEV) fit this latter description, and each has outperformed the Nasdaq Composite index so far this year while also handily beating the index every year since 2014.
Let's take a closer look at these two sturdy tech stocks providing relatively low volatility and see if they are worth considering for your portfolio.
1. Apple
Apple has only fallen 2.5% so far in 2022, which is a better performance than most indices. That's because Apple is one of the largest businesses in the world with one of the most powerful brand names. Some estimates put Apple's share of the U.S. smartphone market at 50%, with no rival coming close to Apple's dominance. This has allowed the company to prosper in any environment.
AAPL data by YCharts
Even now, Apple is continuing to post robust results. In the company's third fiscal quarter (ended June 25, 2022), revenue reached a Q3 record of $83 billion, which increased 2% year over year. While that might not be the most impressive expansion rate, in an environment where demand for discretionary goods (like expensive phones or computers) is dramatically falling, it shows that Apple's brand reputation is still holding up.
However, Apple also has a few opportunities on the horizon that could help this business expand and provide strong returns to shareholders over the long term. There are rumors of Apple getting into augmented reality (AR) and virtual reality (VR) in the coming years, with products potentially on the way in 2023 and 2025. The company has hundreds of people working on AR and VR, showing that Apple is serious about succeeding in this emerging industry.
Considering the AR, VR, and mixed-reality spaces combined could be worth over $250 billion by 2028, Apple could see significant growth if it can capture some of this emerging industry. Importantly, Apple has generated over $107.5 billion in free cash flow and almost $100 billion in net income over the trailing 12 months, which can help fuel its success in this emerging space.
Apple has the right combination of business stability and speculation, which could result in attractive long-term shareholder returns. Therefore, owning Apple might help some investors sleep better at night.
2. Veeva Systems
Veeva is much smaller than Apple, but it has provided the same stock price sturdiness so far this year: Shares are only down 13.9% year to date, beating the Nasdaq.
^IXIC data by YCharts
Most investors might not know Veeva as well as Apple because Veeva provides cloud-based tools for life sciences businesses. The company is the leader in the space, helping life sciences companies improve the efficiency of everything from drug testing to marketing, all while maintaining regulatory compliance.
Veeva's tools are critical to its customers' operations, which is why the company has reported stable results this year, despite the challenging macroeconomic environment. Revenue in the company's fiscal first quarter (ended April 30, 2022) grew 16% year over year to $505 million. It also expects revenue of $2.17 billion for the full fiscal year -- representing a steady expansion of 17% compared to the year-ago period. This is indicative of the company's criticality and shows that Veeva expects continued adoption, even when business budgets are tightening.
Veeva also believes it has a $13 billion industry ahead of it, leaving significant room to flourish. As the top dog with a need-to-have product suite, Veeva looks poised to be the primary beneficiary of this immense potential. Importantly, it has the cash flow to invest in capturing this. Veeva has a free cash flow margin of 40% on a trailing-12-month basis, so it is -- and will likely continue -- generating tons of cash to make the most of this opportunity.
Shares are expensive at 50 times free cash flow, but if you're looking for high-quality businesses with the right balance of stability and potential, there aren't that many better than Veeva. Therefore, you might consider paying a premium for this top-notch company.
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Jamie Louko has positions in Apple and Veeva Systems. The Motley Fool has positions in and recommends Apple and Veeva Systems. 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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Both Apple (NASDAQ: AAPL) and Veeva Systems (NYSE: VEEV) fit this latter description, and each has outperformed the Nasdaq Composite index so far this year while also handily beating the index every year since 2014. AAPL data by YCharts Even now, Apple is continuing to post robust results. These unsung heroes tamp down the stock price volatility by generating consistently high returns, helping you sleep better at night and remain invested.
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Both Apple (NASDAQ: AAPL) and Veeva Systems (NYSE: VEEV) fit this latter description, and each has outperformed the Nasdaq Composite index so far this year while also handily beating the index every year since 2014. AAPL data by YCharts Even now, Apple is continuing to post robust results. ^IXIC data by YCharts Most investors might not know Veeva as well as Apple because Veeva provides cloud-based tools for life sciences businesses.
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Both Apple (NASDAQ: AAPL) and Veeva Systems (NYSE: VEEV) fit this latter description, and each has outperformed the Nasdaq Composite index so far this year while also handily beating the index every year since 2014. AAPL data by YCharts Even now, Apple is continuing to post robust results. Veeva Systems Veeva is much smaller than Apple, but it has provided the same stock price sturdiness so far this year: Shares are only down 13.9% year to date, beating the Nasdaq.
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Both Apple (NASDAQ: AAPL) and Veeva Systems (NYSE: VEEV) fit this latter description, and each has outperformed the Nasdaq Composite index so far this year while also handily beating the index every year since 2014. AAPL data by YCharts Even now, Apple is continuing to post robust results. Considering the AR, VR, and mixed-reality spaces combined could be worth over $250 billion by 2028, Apple could see significant growth if it can capture some of this emerging industry.
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19695.0
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2022-08-20 00:00:00 UTC
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Michael Burry Sold All of His Holdings and Bought This Controversial Stock
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AAPL
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https://www.nasdaq.com/articles/michael-burry-sold-all-of-his-holdings-and-bought-this-controversial-stock
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nan
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nan
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Michael Burry has made a name for himself within the investing world and beyond over the years, as his bet on the subprime housing market crash was the basis for the movie The Big Short. Because of the prescience of this investment and the additional attention it garnered thanks to the movie, many investors like to track Burry's portfolio moves.
His trades during the most recent quarter have certainly captured the imagination of investors. According to the latest 13F filing, Burry's Scion Asset Management sold out of all of its previous holdings, including the likes of Booking Holdings, Bristol Myers Squibb, and even his infamous Apple puts, and now holds just one newly initiated position in a single controversial stock: Geo Group (NYSE: GEO).
Image source: Getty Images.
Chump change?
Geo Group, with a market cap of less than $1 billion, is a company that provides private correctional, detention, mental health, and residential treatment facilities in the U.S. and overseas. While Burry's investment in Geo Group certainly raises eyebrows, here's the reason that I don't think it lives up to some of the hype it has been getting online: It's not a particularly big bet for Burry. Burry owns 500,000 shares of Geo Group, with a reported average purchase price of $6.60, making it about a $3.3 million position for him.
For investors like you and me, this sounds like a large position but it's not a big investment as far as institutional investors or hedge funds are concerned. For example, during the first quarter of 2022, before Burry sold out of all of his prior positions, his portfolio was valued at $165 million. So with a $3 million investment, it's not as if Burry is going all in on Geo Group.
A statement on the broader market
The small position leads me to believe that selling everything besides Geo Group is more of a way for Burry to express his view on the market itself than pound the table for Geo Group, per se. Burry is known for going against Wall Street consensus, and with bullish sentiment returning to the market as the major indexes have rallied off of their lows, it's likely that Burry feels the market is overheated in the short term and decided to go to cash. For example, he recently tweeted about the Nasdaq's recent rally and historic bear market rallies, before deleting the tweet, as is his modus operandi.
This isn't to say that Geo Group isn't without its merits, which likely also have played some part in attracting Burry's investment. Without delving into politics, the company's core business is providing private correctional and detention facilities, which some investors will always shy away from. This sentiment is music to a contrarian like Burry's ears, and going against the grain can lead to opportunities to acquire undervalued stocks. Geo Group trades at 15 times earnings but just 7 times next year's earnings, which is far below the average market multiple.
The position could also be a directional bet by Burry. Many pundits believe that Republicans will gain control of one or both houses of Congress in the upcoming midterm elections, which could lead to a return of policies that are tougher on crime. There's certainly some merit to this viewpoint and Geo Group could indeed be a beneficiary in this scenario.
Should investors follow Burry's lead?
Ultimately, there are a few reasons I don't think investors need to follow Burry into this position. As mentioned above, it is a fairly small stake by Burry and not a meaningful position in the grand scheme of things. Secondly, looking at a five- or 10-year chart shows that shares of Geo Group have lagged the S&P 500 badly over the past decade. While shares may be getting a short-term bump, the stock doesn't have a track record of creating good returns for shareholders, and many investors would be better off simply investing in companies that have created long-term value.
Lastly, 13F filings only show a snapshot of the previous quarter, but more than six weeks into the third quarter, it's possible that Burry no longer even owns this stock. With a current price of about $7.70, shares have already gained about 16% since his purchase. It's possible that Burry has already sold out and pocketed a nice gain on the stock, especially given his view that the market is frothy.
I love to follow 13Fs and the moves of iconic investors as much as anyone, and the stock may have its merits. But in this case, I think investors would be better off doing their own due diligence and buying some long-term winners with proven track records instead of simply following Burry.
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They just revealed what they believe are the ten best stocks for investors to buy right now... and The Geo Group 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 August 17, 2022
Michael Byrne has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Booking Holdings, and Bristol Myers Squibb. 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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Michael Burry has made a name for himself within the investing world and beyond over the years, as his bet on the subprime housing market crash was the basis for the movie The Big Short. Geo Group, with a market cap of less than $1 billion, is a company that provides private correctional, detention, mental health, and residential treatment facilities in the U.S. and overseas. But in this case, I think investors would be better off doing their own due diligence and buying some long-term winners with proven track records instead of simply following Burry.
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Burry owns 500,000 shares of Geo Group, with a reported average purchase price of $6.60, making it about a $3.3 million position for him. The Motley Fool has positions in and recommends Apple, Booking Holdings, and Bristol Myers Squibb. 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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According to the latest 13F filing, Burry's Scion Asset Management sold out of all of its previous holdings, including the likes of Booking Holdings, Bristol Myers Squibb, and even his infamous Apple puts, and now holds just one newly initiated position in a single controversial stock: Geo Group (NYSE: GEO). While Burry's investment in Geo Group certainly raises eyebrows, here's the reason that I don't think it lives up to some of the hype it has been getting online: It's not a particularly big bet for Burry. A statement on the broader market The small position leads me to believe that selling everything besides Geo Group is more of a way for Burry to express his view on the market itself than pound the table for Geo Group, per se.
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Burry owns 500,000 shares of Geo Group, with a reported average purchase price of $6.60, making it about a $3.3 million position for him. Should investors follow Burry's lead? * They just revealed what they believe are the ten best stocks for investors to buy right now... and The Geo Group wasn't one of them!
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19696.0
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2022-08-20 00:00:00 UTC
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Apple supplier Foxconn to invest $300 mln more in northern Vietnam - media
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AAPL
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https://www.nasdaq.com/articles/apple-supplier-foxconn-to-invest-%24300-mln-more-in-northern-vietnam-media
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nan
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HANOI, Aug 20 (Reuters) - Apple supplier Foxconn 2317.TW has signed a $300 million memorandum of understanding with Vietnamese developer Kinh Bac City KBC.HM to expand its facility in the north of the country to diversify and boost production, state media said on Saturday.
The Taiwanese company's new factory, on a plot of 50.5 hectares (125 acres) in Bac Giang province, will generate 30,000 local jobs, the Tuoi Tre newspaper said.
Foxconn, formally called Hon Hai Precision Industry Co, and Kinh Bac City did not immediately respond to requests for comment.
The move follows a report this week that Foxconn has started test production of the Apple Watch in northern Vietnam.
Foxconn, which has been in Bac Giang for 15 years, has moved part of its iPad and AirPods production to Bac Giang's Quang Chau Industrial Park, Tuoi Tre reported. It did not say which type of products would be produced at the new factory or its capacity.
The Vietnamese government said last year Foxconn had invested $1.5 billion in the Southeast Asian country.
(Reporting by Phuong Nguyen; Editing by William Mallard)
((phuong.nguyen@thomsonreuters.com; +84-24-3852-9623;))
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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HANOI, Aug 20 (Reuters) - Apple supplier Foxconn 2317.TW has signed a $300 million memorandum of understanding with Vietnamese developer Kinh Bac City KBC.HM to expand its facility in the north of the country to diversify and boost production, state media said on Saturday. The Taiwanese company's new factory, on a plot of 50.5 hectares (125 acres) in Bac Giang province, will generate 30,000 local jobs, the Tuoi Tre newspaper said. Foxconn, formally called Hon Hai Precision Industry Co, and Kinh Bac City did not immediately respond to requests for comment.
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HANOI, Aug 20 (Reuters) - Apple supplier Foxconn 2317.TW has signed a $300 million memorandum of understanding with Vietnamese developer Kinh Bac City KBC.HM to expand its facility in the north of the country to diversify and boost production, state media said on Saturday. Foxconn, formally called Hon Hai Precision Industry Co, and Kinh Bac City did not immediately respond to requests for comment. Foxconn, which has been in Bac Giang for 15 years, has moved part of its iPad and AirPods production to Bac Giang's Quang Chau Industrial Park, Tuoi Tre reported.
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HANOI, Aug 20 (Reuters) - Apple supplier Foxconn 2317.TW has signed a $300 million memorandum of understanding with Vietnamese developer Kinh Bac City KBC.HM to expand its facility in the north of the country to diversify and boost production, state media said on Saturday. The move follows a report this week that Foxconn has started test production of the Apple Watch in northern Vietnam. Foxconn, which has been in Bac Giang for 15 years, has moved part of its iPad and AirPods production to Bac Giang's Quang Chau Industrial Park, Tuoi Tre reported.
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HANOI, Aug 20 (Reuters) - Apple supplier Foxconn 2317.TW has signed a $300 million memorandum of understanding with Vietnamese developer Kinh Bac City KBC.HM to expand its facility in the north of the country to diversify and boost production, state media said on Saturday. The Taiwanese company's new factory, on a plot of 50.5 hectares (125 acres) in Bac Giang province, will generate 30,000 local jobs, the Tuoi Tre newspaper said. Foxconn, formally called Hon Hai Precision Industry Co, and Kinh Bac City did not immediately respond to requests for comment.
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19697.0
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2022-08-20 00:00:00 UTC
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Things Just Got Tougher for Peloton
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AAPL
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https://www.nasdaq.com/articles/things-just-got-tougher-for-peloton
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nan
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nan
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In this podcast, Motley Fool senior analyst Jim Gillies discusses:
How challenging Peloton Interactive's balance sheet is right now.
Why Peloton will almost certainly have to raise money.
The retail landscape.
Why Costco Wholesale is his favorite retail stock, followed closely by Home Depot.
Some companies are pulling back on investments, but others aren't stopping. Motley Fool producer Ricky Mulvey and Motley Fool analyst Sanmeet Deo look at some businesses playing offense in a tough environment.
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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Stock Advisor returns as of 2/14/21
This video was recorded on August 15, 2022.
Chris Hill: It's a big week for retail, but before that, things just got tougher for Peloton. Motley Fool money starts now. I'm Chris Hill and I am joined by Motley Fool Senior Analyst, Jim Gillies. Happy Monday. Thanks for being here.
Jim Gillies: Thanks for inviting me, Chris.
Chris Hill: But let's start with Peloton, which is [laughs] cutting nearly 800 jobs, closing some amount of its locations. Along with these moves, Peloton is raising prices on some of its equipment. I'll just spot you up with the most illuminating comment from CEO Barry McCarthy, who said in a memo to employees, "We have to make our revenues stop shrinking and start growing again, cash is oxygen, oxygen is life." I don't disagree with that, Jim, but when you and I were chatting earlier today, I said to you, when I first saw this story, the immediate thought I had was this seems a panic move.
Jim Gillies: You're going to get me in trouble, Chris.
Chris Hill: It's one of those shows, good.
Jim Gillies: [laughs] Peloton. It's a panic move and yes, he's entirely correct of everything he said. Might've been nice if the founder, former management, who ran this truck into the dirt might've actually, I don't know, thought about that once or twice before, as I said, running this truck into the dirt. Where's my notes for this here? This is a company that has in the most recent balance sheet, I think, they're going to report their fourth-quarter fiscal earnings, I think they have a June fiscal year, so they're reporting late August if last year's anything to go on. Most recent balance sheet, $1.4 billion in inventory moldering on the balance sheet, $1.9 billion in cash burned in the first three quarters of the present fiscal year. Nice of the CEO to tell us that cash is oxygen after starving the business. Not his fault, but the term management suite starve the business.
This is a business where the CFO, I believe last November, the now former CFO on the conference call. No, we don't need to raise capital and I think eight days later they raise capital. It's the company with $880 million in cash on the balance sheet, roughly the same amount of the debt on their balance sheet. Now, fortunately for Peloton, the debt on the balance sheet is all convertible. Debt doesn't convert, I believe until 2026. The convert price is well over $100, there's no danger of this. When we get there, there's certainly no danger of this company needing to put shares. They'll have to pay that back. But hey, you know what? If the fire is not out by then it won't matter. I don't know what credit line avail of it. This is a company, that's probably going to have to raise capital again, frankly, in the next quarter or two because they're burning $600 million a quarter for the last three or four quarters in a row.
They have got negative product gross margin, which I guess makes sense why they're saying, hey, we're going to raise prices, might be nice to not lose money on every single bike and treadmill they put out the door. Product revenue was down 40% year over year, 25% quarter over quarter, Q2 to Q3. Put into perspective that $1.4 billion in inventory on the books, that's up from $937 million at the start of this fiscal year. It's up from $245 million at the end of fiscal 2020. This is a company that is inventory bloated themselves to frankly near death. I am reminded when I see what the CEO said. Again, it's not his fault, he came in from I believe Spotify and I think he's put Pandora before that, which of course was, I believe purchased by Spotify or maybe that was Sirius anyway, the man has some.
Chris Hill: He was at Netflix in one point.
Jim Gillies: I'm reading his bio here off Cap IQ. I think his most recent gig, no, I don't really know. You said Netflix as a CFO, I think from '99 to 2010, it says here, more recently he was at Spotify. He does have financial chops. That's good, because that's the guy who's going to understand, hey, we're in trouble. I am concerned he's come along a little too late and when something like this comes along, I'm reminded of as I'm often reminded in situations like this by, I quote from Warren Buffett or uncle Warren E. Buffett. The quote is, "When a management team with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact." The economics for Peloton went over the cliff real fast. Like I said, in their most recent quarter, they burned over $700 million. They've got $800 million in cash. Do you really want to be raising? I mentioned that prior capital raise that the CFO apparently didn't even have a week's view into her business at the time, or eight days, sorry.
They raise capital, I believe in the lower early 40s, dollar per share. Stock's in the low teens right now, the more you have to raise capital via equity means, the more you're going to dilute present shareholders. For those who have held through a 90% drop, and I'm sorry, I'm so dour out of the gate, you fed me the disaster going here, we'll be better in a bit. If they do have to raise capital and I hope they don't for shareholders who still own this thing, but I'm not seeing a lot of turnaround potential. Just to go back to one more point, when they said, that we need to raise prices, they are going to raise prices. They're raising prices on their bikes by 500 bucks a bike, and I think it's 800 bucks per unit by the treadmill. But remember how I mentioned they had negative gross margin, they're moving products just to get it at the door the last three quarters. It's already not selling and now you're raising the price, good luck. I don't have a lot sunnier disposition to say here. I'm afraid.
Chris Hill: Well, I didn't ask you to come on just for your sunny disposition.
Jim Gillies: [laughs] Good.
Chris Hill: But before we move on to retail though, what would you ask McCarthy on the conference call? Assuming they come out with a report that does not indicate some radical reversal of fortune, what is the question you would ask? Would it be around a capital raise? Because when you just run the numbers, it's hard to imagine they don't get money somehow somewhere.
Jim Gillies: They have to get money somehow somewhere. I have a difficult time believing. Belief is always a terrible word to use with investing, because I can believe a great many things, but cash doesn't lie. This is a company that burned about $735 million in the most recent quarter, about $550 million in the quarter before that, about $645 million in the quarter before that. Like I said, they've got about $880 million cash on the books. Pretty much their value that, where is your cash coming from, Barry? Where is your next capital coming from? Because I think this is a business that you have to demonstrate you're going to survive the next year.
Then you can talk about growth and maybe adding to those subscriptions. The subscriptions are actually monetizing fairly well. People who loved their Pelotons, the number of fitness sessions after spiking during the pandemic with a reopening world, the degradation there has trailed off and they look they're doing fairly decently. It's a small sample set, so I don't want to draw any great conclusions there, but there's some optimism. To get to be optimistic in three years and have this turnaround and they talk very directly and which I like. On the most recent shareholder letter, the third-quarter shareholder letter, although that's a pet peeve of mine as well, that they talk about, hey, turnarounds are hard, we're in a turnaround now.
Chris Hill: Good, you seem to have a reasonable appreciation of where you are in the pecking order at this point, my questions would circle around, what is your fire suppression plan for the next year? Once the fire is out, then we can talk about your turnaround because how especially heading into a recession. Assuming we have a recession, I have some thoughts on that as well, but assuming that the popular opinion of we're heading into a recession is in fact true. Jacking a price on a souped-up treadmill that I have to pay 60 bucks a month for to get a subscription. It's probably not going to clear the books of that bloated inventory.
Chris Hill: Let's move on to retail then because it's a big week.
Jim Gillies: Now that I've just killed it.
Chris Hill: It's a big week for retail. We've got the earnings reports coming later in the week from Walmart, Target, Home Depot. I don't remember big retail being as weird as it is right now and when I say weird, I'm referring to the fact that in general, the major retailers tend to travel in a pack. The fortunes of one tend to reflect the fortunes of another. This is certainly the case for years now with Home Depot and Lowe's where they report earnings one right after the other and whatever. It's much more newsworthy if they don't have similar results than if they do. But at the moment, in part because of what we got three months prior from Walmart and Target with their inventory debacle, I don't have a great sense of the retail landscape, which is why I'm looking forward to this week because I feel like we're going to get some more clues into things like inventory controls, back-to-school shopping, and possibly even the earliest of indications around year-end holidays. When you step back and look at retail, does anything standout to you in particular?
Jim Gillies: We certainly got that negative surprise, negative reporting from Walmart and Target last go-round. Neither of those companies terribly excite me. They are certainly bellwethers and we should pay attention to them. It wasn't just Walmart and Target of course, even going down the quality chain to guys like Big Lots or whatever, it was pretty ugly across the spectrum. Because yeah, inflation seems to have caught them flat-footed so everybody had their inventory spike, inventory spiked because in part or I know a lot of their expenses also got quashed because the higher-cost inventory is now moving through your system. Like I said, as an investor, I'm not real interested in these large specialty, non-differentiated, names. The one I love to watch and love to follow is, which you didn't mention, maybe I'll hit that before we get over to the home improvement folks, is Costco. They have a bit of a different reporting schedule. I think they report third week of September because I believe they're on a June or September fiscal year. I think Costco is hitting on all cylinders. Every time I walk into Costco and walk out of Costco having dropped 250 bucks on an order that I plan to be under 50, I'm just like man, I don't own enough Costco.
The really interesting thing to me about Costco is for years, a lot of people would talk about how Costco passed on so much. Basically, you were buying most goods close to cost because they were making up all their profits essentially on selling memberships. For a time that was true, about 75% of operating profit over I was just looking at this last week. The first half of the last decade, about three-quarters of their operating profit was subscriptions, was memberships. Then it fell to 70%. And then it fell to 65% and in the most recent year, it was 57%. Costco is not only growing and doing well in operating profit, I think, is up 10 or 11% annualized over the past decade, perfectly acceptable. But they've also started to actually make a little bit more profit while keeping that hotdog at $1.50. My favorite retailer, both as an investment as well as just on a personal level, is absolutely Costco. A close second is another one you mentioned though, which is Home Depot and Home Depot and Lowe's. Yes, you're right, they walk lockstep.
I like Home Depot because well, first off, they decided about a decade ago that they were done breakneck expansion and they have gone to a couple of stores a year, opened a few retrofitted. But they've really turned that company into running it for cash and you just have to look at how the dividend has moved has skyrocketed up over the last few years, as well as the share repurchase. When they run that business for cash, all of a sudden they are returning it, all of it to people. I'm remembering the Bob Nardelli days back in the late 2000s. When he was just ruining that company because he wanted to apply GE earnings metrics or whatever and since his ouster, it's just done so much better and also too, I hold them as semi-Amazon proof because you're probably not buying a couple of thousand square feet of drywall from Amazon Prime and having it delivered, I imagine you're still going through the Home Depots.
Chris Hill: Am I wrong to assume that out of both Home Depot and Lowe's, we're going to get some color around presumably the benefit of commodity prices coming down?
Jim Gillies: Absolutely.
Chris Hill: That has to help them, all you have to do is look at the cost of lumber in 2022 and that's got to be accretive for them.
Jim Gillies: I think so. Now my question is going to be, I don't know the exact number, so I'm going to make them up.
Chris Hill: Fantastic.
Jim Gillies: Let's just say a little bit it, because it's it's more about presenting a point. Let's say lumber crisis have come down 50% has Home Depot past all that 50% to their buyers? Has Lowe's passed all that 50%, have they passed 30% back to, I'm reminded here, here in the Great White North, we just raised interest rates about a month ago, we went up a full percentage point. The Bank of Canada raised it by 100 basis points and that day I got an email from my local credit union talking about the higher interest rates they were paying on short-term deposits, certainly on three months to five years. Miraculously Chris, they went up between 10 and 40 basis points.
Chris Hill: Did they pass all those savings onto you?
Jim Gillies: Funny thing, isn't it? I'm wondering if Home Depot and Lowe's and I'm wondering if they've passed all those savings onto you. I'm willing to bet they haven't. Of course, Home Depot, we are emerging from pandemic closures. Those are further and further in the rearview. Thankfully. But people spend a lot of time on their houses because they had nothing else to do for almost two years. People spend a lot of time and money on their houses. I wonder what if that's going to carry over or people have gotten used to continued cocooning. How many companies have gone to a more hybrid work model so there's more people working from home on a regular basis. Someone like me has been doing it for 20 years. It's irrelevant, but for folks who have been doing it for maybe two years and now have the option to work from home three days a week or what have you maybe they want some more creature comforts than Home Depot and Lowe's can provide. I'm a lot more optimistic about those than I'm about the Walmart and the Target.
Chris Hill: Jim Gillies, it always great talking to you. Thanks for being here.
Jim Gillies: Thank you.
Chris Hill: Shopify is one company tied to retail that's tapping the brakes on its growth. But some companies are hitting the gas pedal. Ricky Mulvey and Sanmeet Deo look at a few businesses playing offense in a tough environment.
Ricky Mulvey: You're in a recession, we're not in a recession. Today we're looking at some of the companies playing offense in a challenging environment. Joining us now is Motley Fool Senior Analyst, Sanmeet Deo. Good to see you, Sanmeet.
Sanmeet Deo: Good to see you, Ricky.
Ricky Mulvey: Playing offense is a lot easier when the market is raging upward. That's what Shopify did during COVID and now, some of those companies are feeling a little bit of a hangover.
Sanmeet Deo: Tobi Lütke wrote in a companywide memo to Shopify, "We bet that the channel mix, the share of dollars that traveled through e-commerce rather than physical retail would permanently leap ahead by five or even 10 years. We couldn't know for sure at the time, but we knew that if there was a chance that this was true, we would have to expand the company to match." It's now clear that bet didn't pay off."
Ricky Mulvey: It's this idea that you can go on offense when your stock price is soaring, upward, interest rates are low, but then it becomes a lot more difficult when you're in a more challenging market environment and then Tobi was very open in saying that we made these assumptions about the e-commerce market and adoption in that just didn't play out. Is that fundamentally what changed for Shopify?
Sanmeet Deo: It's interesting because they made this big strategic bet, like he said, and one of their biggest mistake and one of the mistakes a lot of companies have made during the pandemic that was at its industry growth to the extent for a long period of time and possibly even be a permanent shift and so they grew their headcount expenses a scale up to kind of anticipate that growth. Of course, they didn't take into consideration the effects on e-commerce, Shopify here, from a reopening of the economy and shifting consumer shopping habits once that occurs. This ultimately lead to a rapid ascent expense growth followed by slowing revenue and decline in margins. Now the company has got to play defense, laying off staff, cutting operating expenses to meet those lower revenue levels. While investors should be happy, Shopify is acknowledging this mistake and rightsizing. Big problem I see is a company may need to be more aggressive with implementing strategies to grow revenues and gross profits. But because of what's happened they're playing defense and catching back up.
Ricky Mulvey: In your view, are they playing smart defense?
Sanmeet Deo: It's interesting because I read an interesting take about how their take rates are much lower than the competitors of Amazon, eBay. It's almost like when I read this analysis, they're almost under earning and maybe it's time to close that gap and earn more and take more offense because you can only cut expenses for so long until you really need to ramp that revenue growth.
Ricky Mulvey: Let's talk about some of the companies going on offense right now. That's not just an idea, that's a good idea in and of itself. But when liquidity dries up, the market's down relative to all-time highs. That's when some companies are really able to grab market share. Any companies you follow that you see going on offense right now.
Sanmeet Deo: One company comes to mind is Axon. They make Tasers and body cameras. CEO Rick Smith, recently told The Wall Street Journal "right now I smell opportunity," he said, "yes, winter's coming now let's embrace it." He's buckling down on expenses for business travel and company swag, but he's also encouraging an aggressive mindset in terms of playing offense in their business.
Ricky Mulvey: There's a good Wall Street Journal article about it and he's got a swag czar and he lamented to the reporter that not every single event needs a T-shirt. While the labor market is hot, you're still seeing a lot of these tech companies implement layoffs and Axon is very much, in some ways, welcoming that, saying, "Cool. More computer engineers, that's good for us. Let's go find some talented ones for a company."
Sanmeet Deo: There's a lot of shifts happening in the marketplace with companies, maybe people, employees leaving companies or things happening. Now is the time when you can take advantage of those opportunities.
Ricky Mulvey: Trade Desk also had a blockbuster quarter recently. That's another company that seems to be going on offense in a challenging environment.
Sanmeet Deo: Trade Desk is, they had great earnings report recently, raised guidance in this environment, which is very, very impressive raising guidance when some companies are pulling back or not giving guidance. Many adtech companies, ad companies like [Meta's] Facebook and ad platform companies are feeling the pinch from advertisers pulling back on spend and some of those advertisers will pull back on the low-hanging fruit, stuff that they don't really need to do, with things like [Alphabet's] Google advertising is a much more prominent and impactful for them. But with companies pulling ad spend, Apple IDFA privacy changes continue to ripple through the industry, Trade Desk is playing the offense and they have been for a while with their new UID2 ad platform, which is gaining tractions, gaining partnerships and integrations with companies like Disney and AWS. It's showing the results and they're very bullish on connected TV advertising and where they play in the market and how they can capture share.
Ricky Mulvey: Speaking of companies playing offense. I think one frame to use is you look at a growing industry, take a little bit of a macro view, and then you look at the specific companies that are poised to take market share. A few months ago we looked at a company called Xponential Fitness. You see, a lot of fitness companies that are able to use COVID as an excuse or you see some companies kind of shrinking their footprint. This is one that has CEO Anthony Geisler has really never leaned on COVID as an excuse and he's also very much leaning into an international expansion for Xponential.
Sanmeet Deo: When COVID hit, he was very aggressive and thought very hard for his franchisees when it came to rent abatements, fighting the government to get COVID relief and pausing royalties for his franchisees and launching online platforms and digital platform for his franchise, he did a very good job of, instead of blaming COVID, going on the offense. That's continued especially now with them signing more international agreements, master franchise agreements in Japan and all across the world. One interesting story that recently came out that was very impressive to me was, on July 26th of 2022, it's competitor, F45 Holdings, came out with some rough news announcing a departure of CEO, reduction in global workforce, sharp cut in its full-year guidance for revenue and earnings and removal of financing facility for its franchisees, stock pulling over 60 percent in a day and usually this would be a not such a great read through for the boutique fitness industry. The next day in the morning, Xponential announced, "We expects to deliver strong results for the second quarter of 2022, has continued to reinforce his position as a leading provider boutique fitness globally, additionally, 'is on track to meet or exceed guidance metrics for the year.'" So in that press release as well they announced her preliminary Second-quarter results, strong member growth, store visits, sales, AUVs, your average unit volume growth for the stores. Very offensive move after F45's disaster, reassuring investors that were OK. I'm an investor in it myself and I was very pleased by it as well.
Ricky Mulvey: I earn shares as well. The only way you can play offense in a tough environment is if you have the balance sheet to back it up. Some of the companies we've talked about, Axon, Xponential, Trade Desk, any balance sheets there, stand out to you as for companies that could continue to play offense in a tough environment.
Sanmeet Deo: Yeah, absolutely. Trade Desk, which we were talking about earlier offline about how you and think like tech companies or some of these kinds of companies might have super strong balance sheets, but they have 1.2 billion of cash on their balance sheet and no debt so they're well positioned to continue to play offense like they've been doing. Axon as well, no debt on their balance sheet, $377 million in cash. Again, strong balance sheets that put them in a position to take the offensive maneuvers. Xponential's balance sheet has some debt and it's OK, but the main advantage for Xponential is, is a franchisor, so launching in international markets, growing their stores. As a franchisor, those costs are typically on the franchisees to open up stores so they can grow and expand in an environment without taking on too much heavy costs in this kind of environment.
Ricky Mulvey: We've talked about some of the companies with strong balance sheets playing offense. Which companies would you like to see off play offense? But maybe their balance sheet is holding them back. They don't have the ability now to go out and make smart acquisitions or really expand into new territories.
Sanmeet Deo: The first thing that came to mind is Netflix. They're in a very competitive space, they're looking to find their next leg of growth. They've done very well on stream, but now there's a lot of competitors out there. You saw Disney recently reported that they have in combination more streaming subscribers that Netflix, they have plenty of cash on their balance sheet, but they have about $14 billion of debt and they have a large content spend annually of about $17 billion. That's been management recently said that that's kind of where they're going to tap out at and they're not going to continue to go higher. But I feel like the obligations that they have is going to keep them from making any big splash on the acquisition front to build as ad platform or growths gaming business. They're working with Microsoft for their advertising platform and that's probably going to be good. In fact, Trade Desk actually mentioned that that would be a good move for them. But the gaming business, they've made some small acquisitions, but to make a bigger acquisition, to really drive home their position in that industry. They might be held back a little bit and they'd have to grow it more organically than otherwise.
Ricky Mulvey: Sanmeet Deo, thank you for your time.
Sanmeet Deo: Thank you, Ricky!
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.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, 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. 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. Chris Hill has positions in Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Axon Enterprise, Costco Wholesale, Home Depot, Lowe's, Microsoft, Target, The Trade Desk, Walt Disney, and eBay. Jim Gillies has positions in Amazon, Apple, Big Lots, Costco Wholesale, and eBay and has the following options: long January 2023 $45 calls on eBay, short January 2023 $45 puts on eBay, and short January 2023 $70 calls on eBay. Ricky Mulvey has positions in Axon Enterprise, Home Depot, Meta Platforms, Inc., Netflix, Spotify Technology, The Trade Desk, Walt Disney, and Xponential Fitness, Inc. Sanmeet Deo has positions in Alphabet (A shares), Amazon, Netflix, Peloton Interactive, Walmart Inc., Walt Disney, and Xponential Fitness, Inc. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Axon Enterprise, Costco Wholesale, Home Depot, Meta Platforms, Inc., Microsoft, Netflix, Peloton Interactive, Spotify Technology, Target, The Trade Desk, Walmart Inc., and Walt Disney. The Motley Fool recommends Big Lots, Lowe's, Sirius XM Holdings Inc., and eBay and 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, short March 2023 $130 calls on Apple, and short October 2022 $50 calls on eBay. 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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When he was just ruining that company because he wanted to apply GE earnings metrics or whatever and since his ouster, it's just done so much better and also too, I hold them as semi-Amazon proof because you're probably not buying a couple of thousand square feet of drywall from Amazon Prime and having it delivered, I imagine you're still going through the Home Depots. One interesting story that recently came out that was very impressive to me was, on July 26th of 2022, it's competitor, F45 Holdings, came out with some rough news announcing a departure of CEO, reduction in global workforce, sharp cut in its full-year guidance for revenue and earnings and removal of financing facility for its franchisees, stock pulling over 60 percent in a day and usually this would be a not such a great read through for the boutique fitness industry. The next day in the morning, Xponential announced, "We expects to deliver strong results for the second quarter of 2022, has continued to reinforce his position as a leading provider boutique fitness globally, additionally, 'is on track to meet or exceed guidance metrics for the year.'"
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Ricky Mulvey has positions in Axon Enterprise, Home Depot, Meta Platforms, Inc., Netflix, Spotify Technology, The Trade Desk, Walt Disney, and Xponential Fitness, Inc. Sanmeet Deo has positions in Alphabet (A shares), Amazon, Netflix, Peloton Interactive, Walmart Inc., Walt Disney, and Xponential Fitness, Inc. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Axon Enterprise, Costco Wholesale, Home Depot, Meta Platforms, Inc., Microsoft, Netflix, Peloton Interactive, Spotify Technology, Target, The Trade Desk, Walmart Inc., and Walt Disney. The Motley Fool recommends Big Lots, Lowe's, Sirius XM Holdings Inc., and eBay and 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, short March 2023 $130 calls on Apple, and short October 2022 $50 calls on eBay.
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Many adtech companies, ad companies like [Meta's] Facebook and ad platform companies are feeling the pinch from advertisers pulling back on spend and some of those advertisers will pull back on the low-hanging fruit, stuff that they don't really need to do, with things like [Alphabet's] Google advertising is a much more prominent and impactful for them. Trade Desk, which we were talking about earlier offline about how you and think like tech companies or some of these kinds of companies might have super strong balance sheets, but they have 1.2 billion of cash on their balance sheet and no debt so they're well positioned to continue to play offense like they've been doing. Ricky Mulvey has positions in Axon Enterprise, Home Depot, Meta Platforms, Inc., Netflix, Spotify Technology, The Trade Desk, Walt Disney, and Xponential Fitness, Inc. Sanmeet Deo has positions in Alphabet (A shares), Amazon, Netflix, Peloton Interactive, Walmart Inc., Walt Disney, and Xponential Fitness, Inc.
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Chris Hill: Let's move on to retail then because it's a big week. Chris Hill: Jim Gillies, it always great talking to you. Which companies would you like to see off play offense?
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19698.0
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2022-08-20 00:00:00 UTC
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Better Bear Market Buy: Apple vs. Microsoft
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AAPL
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https://www.nasdaq.com/articles/better-bear-market-buy%3A-apple-vs.-microsoft
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nan
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nan
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Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) are two titans of the technology industry -- and two of the largest companies in the world. While Microsoft generates most of its revenue from its software businesses, Apple's bread and butter has historically been its mobile hardware products. Which of these big tech leaders is the better buy right now?
Read on to see why two Motley Fool contributors come down on different sides of the issue.
Apple has been innovating for decades
Parkev Tatevosian: Apple is one of the most iconic businesses in the world. It has achieved that status by repeatedly creating innovative products, including the iPhone, iPod, iPad, Apple Watch, and AirPods. This history of innovation is one of the primary reasons to invest in Apple. It would be a less lucrative stock if its only claim to fame were the iPhone. Multiple products with billions in sales show evidence of a capability to repeatedly deliver products consumers love.
That skill has helped Apple grow from $156 billion in revenue in 2012 to $366 billion in sales in 2021. Consumers so desire its items that they command premium prices, allowing Apple's operating income to explode from $55 billion to $109 billion in that same time. An added benefit to shareholders is that Apple has developed a sticky ecosystem.
Once customers buy an iPhone and customize it to their liking, they are less likely to switch to another brand when upgrading. A switch could mean losing content, playlists, and preferences that some spend hours personalizing.
The one reason to hesitate before buying Apple stock is that its excellent prospects are no secret to the market. Apple's stock is trading at a relatively expensive valuation at a price-to-earnings ratio of 28.6 and a price-to-free-cash-flow ratio of 26.5.
AAPL Price to Free Cash Flow data by YCharts.
Those are near the higher end of its historical averages along those metrics. Still, paying a small premium for an excellent business can deliver exceptional returns for investors in the long run.
Microsoft: The software giant is built for the future
Keith Noonan: Apple's hardware business, associated software ecosystem, and brand strength are undeniably fantastic, but I think that Microsoft's greater focus on software makes it a better play for the long term. Growth for cloud-based applications and services is still just getting started, and Microsoft is poised to benefit as companies carry out digital-transformation initiatives and adopt and launch new software.
Microsoft's Azure cloud infrastructure service stands as one of the largest and most profitable offerings in the category, and it has a huge runway for profitable growth over the long term. Despite the somewhat challenging macroeconomic backdrop, Microsoft reported that it added record numbers of new contracts in the greater-than-$100-million and greater-than-$1-billion categories last quarter.
Cloud infrastructure is a secular growth market, and Azure's strengths have Microsoft poised to benefit from its long-term expansion. Spending on digital transformation initiatives and migration to the cloud will still continue even if economic conditions are unfavorable in the near term, and I think this dynamic gives Microsoft an edge over Apple at today's prices.
Apple has been able to generate fantastic margins on mobile hardware, and its user base spends far more on app purchases compared to users of Alphabet's Android operating system. However, the company's heavy reliance on hardware sales could make growth harder to deliver going forward -- particularly if attempts to branch into new product categories don't prove successful.
Which big tech giant should you buy today?
For investors who are confident in the long-term growth of the technology sector, investing in both Microsoft and Apple could be the right play. Otherwise, choosing between the two tech giants should come down to which company's respective product offerings and growth opportunities you think look stronger.
If you're aiming to benefit from the evolution of cloud infrastructure and productivity software services, Microsoft is probably the better fit. However, if you see more promise in Apple's high-margin hardware and evolving software and services ecosystem, the iPhone company's stock should be an obvious portfolio addition.
Find out why Apple 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. Apple is on the list -- but there are nine others you may be overlooking.
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*Stock Advisor returns as of August 11, 2022
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), 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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Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) are two titans of the technology industry -- and two of the largest companies in the world. AAPL Price to Free Cash Flow data by YCharts. Growth for cloud-based applications and services is still just getting started, and Microsoft is poised to benefit as companies carry out digital-transformation initiatives and adopt and launch new software.
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Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) are two titans of the technology industry -- and two of the largest companies in the world. AAPL Price to Free Cash Flow data by YCharts. Microsoft: The software giant is built for the future Keith Noonan: Apple's hardware business, associated software ecosystem, and brand strength are undeniably fantastic, but I think that Microsoft's greater focus on software makes it a better play for the long term.
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Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) are two titans of the technology industry -- and two of the largest companies in the world. AAPL Price to Free Cash Flow data by YCharts. While Microsoft generates most of its revenue from its software businesses, Apple's bread and butter has historically been its mobile hardware products.
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Apple (NASDAQ: AAPL) and Microsoft (NASDAQ: MSFT) are two titans of the technology industry -- and two of the largest companies in the world. AAPL Price to Free Cash Flow data by YCharts. While Microsoft generates most of its revenue from its software businesses, Apple's bread and butter has historically been its mobile hardware products.
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19699.0
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2022-08-19 00:00:00 UTC
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Apple Warns Of Security Flaws In IPhones, IPads, Macs
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AAPL
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https://www.nasdaq.com/articles/apple-warns-of-security-flaws-in-iphones-ipads-macs
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nan
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nan
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(RTTNews) - Apple Inc. has released an emergency security update noting that some of its iPhones, iPads and Macs had certain vulnerabilities. The tech major said the flaws potentially allow full admin access to devices.
The models affected by the issue include iPhone 6S and later models, several models of the newer iPads, and Mac computers running macOS Monterey and above. The flaws also affect the iPod Touch 7th generation models.
The software update was made to safeguard its products. Security experts warned users to be aware of the issues.
The company noted that in the first issue, an application may be able to execute arbitrary code with kernel privileges. An out-of-bounds write issue was addressed with improved bounds checking.
The second issue was in WebKit, a layout engine designed to allow web browsers to render web pages. The company said processing maliciously crafted web content may lead to arbitrary code execution.
Apple received reports that both issues may have been actively exploited.
The update comes ahead of its planned launch event in September to unveil its latest iPhone 14 line as well as latest version of three Apple Watch models including Series 8.
Last year, the company had issued an emergency software patch in its Messages app to block a no-click spyware that could infect iPhones and iPads.
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. has released an emergency security update noting that some of its iPhones, iPads and Macs had certain vulnerabilities. The company said processing maliciously crafted web content may lead to arbitrary code execution. Last year, the company had issued an emergency software patch in its Messages app to block a no-click spyware that could infect iPhones and iPads.
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(RTTNews) - Apple Inc. has released an emergency security update noting that some of its iPhones, iPads and Macs had certain vulnerabilities. The models affected by the issue include iPhone 6S and later models, several models of the newer iPads, and Mac computers running macOS Monterey and above. The company noted that in the first issue, an application may be able to execute arbitrary code with kernel privileges.
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The models affected by the issue include iPhone 6S and later models, several models of the newer iPads, and Mac computers running macOS Monterey and above. The update comes ahead of its planned launch event in September to unveil its latest iPhone 14 line as well as latest version of three Apple Watch models including Series 8. Last year, the company had issued an emergency software patch in its Messages app to block a no-click spyware that could infect iPhones and iPads.
|
(RTTNews) - Apple Inc. has released an emergency security update noting that some of its iPhones, iPads and Macs had certain vulnerabilities. The models affected by the issue include iPhone 6S and later models, several models of the newer iPads, and Mac computers running macOS Monterey and above. The company said processing maliciously crafted web content may lead to arbitrary code execution.
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