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20400.0 | 2022-07-05 00:00:00 UTC | Apple (AAPL) Outpaces Stock Market Gains: What You Should Know | AAPL | https://www.nasdaq.com/articles/apple-aapl-outpaces-stock-market-gains%3A-what-you-should-know-4 | nan | nan | In the latest trading session, Apple (AAPL) closed at $141.56, marking a +1.89% move from the previous day. This move outpaced the S&P 500's daily gain of 0.16%. Elsewhere, the Dow lost 0.42%, while the tech-heavy Nasdaq added 0.49%.
Coming into today, shares of the maker of iPhones, iPads and other products had lost 4.93% in the past month. In that same time, the Computer and Technology sector lost 8.85%, while the S&P 500 lost 6.79%.
Investors will be hoping for strength from Apple as it approaches its next earnings release, which is expected to be July 28, 2022. The company is expected to report EPS of $1.14, down 12.31% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $82.36 billion, up 1.13% from the prior-year quarter.
AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.10 per share and revenue of $394.02 billion. These results would represent year-over-year changes of +8.73% and +7.71%, respectively.
Investors might also notice recent changes to analyst estimates for Apple. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.16% lower within the past month. Apple is currently sporting a Zacks Rank of #3 (Hold).
Looking at its valuation, Apple is holding a Forward P/E ratio of 22.77. This represents a premium compared to its industry's average Forward P/E of 7.39.
Investors should also note that AAPL has a PEG ratio of 1.82 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AAPL's industry had an average PEG ratio of 1.84 as of yesterday's close.
The Computer - Mini computers industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 227, putting it in the bottom 10% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
How to Profit from the Hot Electric Vehicle Industry
Global electric car sales in 2021 more than doubled their 2020 numbers. And today, the electric vehicle (EV) technology and very nature of the business is changing quickly. The next push for future technologies is happening now and investors who get in early could see exceptional profits.
See Zacks' Top Stocks to Profit from the EV Revolution >>
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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In the latest trading session, Apple (AAPL) closed at $141.56, marking a +1.89% move from the previous day. AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.10 per share and revenue of $394.02 billion. Investors should also note that AAPL has a PEG ratio of 1.82 right now. | AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.10 per share and revenue of $394.02 billion. In the latest trading session, Apple (AAPL) closed at $141.56, marking a +1.89% move from the previous day. Investors should also note that AAPL has a PEG ratio of 1.82 right now. | AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.10 per share and revenue of $394.02 billion. In the latest trading session, Apple (AAPL) closed at $141.56, marking a +1.89% move from the previous day. Investors should also note that AAPL has a PEG ratio of 1.82 right now. | Investors should also note that AAPL has a PEG ratio of 1.82 right now. In the latest trading session, Apple (AAPL) closed at $141.56, marking a +1.89% move from the previous day. AAPL's full-year Zacks Consensus Estimates are calling for earnings of $6.10 per share and revenue of $394.02 billion. |
20401.0 | 2022-07-05 00:00:00 UTC | Alphabet (GOOGL) Updates Gmail With Material You Redesign | AAPL | https://www.nasdaq.com/articles/alphabet-googl-updates-gmail-with-material-you-redesign | nan | nan | Alphabet’s GOOGL division Google is consistently working toward adding features to its email app, Gmail.
Reportedly, Google’s introduction of the Material You redesign to Gmail on the web testifies to the above-mentioned fact.
The recent Gmail update includes a Gmail-only view feature, which eliminates the combined Chat, Spaces and Meet layout. It lets users switch between inbox, important conversations and joining in meetings seamlessly without needing to switch between tabs or open a new window.
The redesigned version also shows the new shape of the compose floating action button, which matches the Android app.
This apart, Gmail rolled out Google Sans wherein Google Sans Text is designed for smaller point sizes, making it suitable for body text.
With the latest capabilities, GOOGL strives to provide a better experience to Gmail users. This is expected to boost the adoption rate of this application in the near term.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Strength in Google Workspace
The recent move added strength to Google Workspace, consisting of Gmail, Meet, Drive, Calendar, Docs, Tasks and more.
This is likely to drive Alphabet’s momentum across organizations that are highly demanding productivity and collaboration software applications amid the pandemic.
Apart from the latest effort, GOOGL added a feature to Gmail that allows users to pause mobile notifications while the desktop client remains active.
Google introduced a capability to Google Tasks through which users can star mark important reminders on the Android, iOS and web apps.
Google Meet was updated with picture-in-picture and multi-pinning features to help presenters and attendees stay glued to their meetings.
We believe that the strengthening of Google Workspace offerings will continue to drive customer momentum in the days ahead, which in turn, will benefit Alphabet’s financial performance. This will further aid GOOGL in winning investors’ confidence.
Shares of GOOGL have been down 24.9% in the year-to-date period, outperforming the Computer and Technology sector’s decline of 31.2%.
Competitive Market Scenario
With the updated Gmail version, Alphabet is expected to expand its presence in the booming business productivity software market.
The underlined market has been witnessing significant growth of late owing to increasing demand for large-scale business portfolio management at lower cost.
Per a ReportLinker report, the global business productivity software market is likely to reach $98.4 billion, witnessing a CAGR of 14.2% between 2022 and 2026.
Given the potential in the said market, other major technology companies like Microsoft MSFT and Apple AAPL are leaving no stone unturned to bolster their workspace tools and productivity applications with innovative features, thereby gaining market share.
Microsoft, which has lost 22.8% in the year-to-date period, offers powerful productivity and office tools to help users work, learn, organize and connect. Also, Microsoft Outlook comprising webmail, calendaring, contacts and task services helps users stay connected and productive anytime and anywhere.
In addition, Outlook’s Text Predictions feature helps users accept or ignore a suggestion, thus helping them being more productive while typing an email. The feature is available on both Outlook for Android and Outlook Online.
Apple has lost 21.7% in the same time frame. AAPL’s iWork provides an office suite of applications for users to create word-processing documents, spreadsheets and presentations. Recently, Apple updated its iWork suite of apps to release new features for Pages, Numbers and Keynote on both iOS devices and Mac.
Apple users can access its mail service iCloud mail for sending and receiving emails using a web browser.
Thus, Microsoft and Apple’s growing efforts in enriching their workspace tools and applications remain a threat to Alphabet’s market position.
Zacks Rank & Stock to Consider
Currently, Alphabet carries a Zacks Rank #4 (Sell).
Investors interested in the broader Zacks Computer & Technology sector can consider Aspen Technology AZPN, sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Aspen technology has returned 25.7% in the year-to-date period. The long-term earnings growth rate for AZPN is currently projected at 18.4%.
How to Profit from the Hot Electric Vehicle Industry
Global electric car sales in 2021 more than doubled their 2020 numbers. And today, the electric vehicle (EV) technology and very nature of the business is changing quickly. The next push for future technologies is happening now and investors who get in early could see exceptional profits.
See Zacks' Top Stocks to Profit from the EV Revolution >>
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
Microsoft Corporation (MSFT): Free Stock Analysis Report
Aspen Technology, Inc. (AZPN): Free Stock Analysis Report
Alphabet Inc. (GOOGL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Given the potential in the said market, other major technology companies like Microsoft MSFT and Apple AAPL are leaving no stone unturned to bolster their workspace tools and productivity applications with innovative features, thereby gaining market share. AAPL’s iWork provides an office suite of applications for users to create word-processing documents, spreadsheets and presentations. Apple Inc. (AAPL): Free Stock Analysis Report | Given the potential in the said market, other major technology companies like Microsoft MSFT and Apple AAPL are leaving no stone unturned to bolster their workspace tools and productivity applications with innovative features, thereby gaining market share. AAPL’s iWork provides an office suite of applications for users to create word-processing documents, spreadsheets and presentations. Apple Inc. (AAPL): Free Stock Analysis Report | Given the potential in the said market, other major technology companies like Microsoft MSFT and Apple AAPL are leaving no stone unturned to bolster their workspace tools and productivity applications with innovative features, thereby gaining market share. AAPL’s iWork provides an office suite of applications for users to create word-processing documents, spreadsheets and presentations. Apple Inc. (AAPL): Free Stock Analysis Report | Given the potential in the said market, other major technology companies like Microsoft MSFT and Apple AAPL are leaving no stone unturned to bolster their workspace tools and productivity applications with innovative features, thereby gaining market share. AAPL’s iWork provides an office suite of applications for users to create word-processing documents, spreadsheets and presentations. Apple Inc. (AAPL): Free Stock Analysis Report |
20402.0 | 2022-07-05 00:00:00 UTC | SPDR S&P 500 ETF Stock Has Invisible Allies This Month | AAPL | https://www.nasdaq.com/articles/spdr-sp-500-etf-stock-has-invisible-allies-this-month | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The equity markets finished last week strong, but they are still unable to find footing overall. The rallies in the S&P 500, for example, have not lasted enough to break out from the descending price trend. There might be light at the end of the tunnel, but the risk for another leg lower is still too real. Today, we will outline opportunities for the SPDR S&P 500 ETF Trust (NYSEARCA:SPY).
We will also highlight a few important support lines that must hold for the opportunities to pan out. In addition, we identify a few giga stocks that would make or break this campaign. These are stocks that have been more stubborn and refuse to fall. The goal is to flush out the entire 2020 and 2021 rallies.
But first, let’s put the blame where it belongs: squarely on the U.S. Federal Reserve’s strategy. The macroeconomic malaise is from Fed Chair Jerome Powell’s monetary policies. They were too aggressively accommodative for too long. And now they are scaring investors silly with a very hawkish tone. They have no middle ground because they went from extremely friendly to kind of hostile.
In reality, they have failed at their two mandates for two years straight. Last year, they created inflation on purpose, thereby breaking promise on one mandate. This year, they’re destroying the economy — their second mandate — on purpose to fix their 2021 creation. Now that experts admit the Fed was wrong, there are repercussions for stock prices.
Ticker Company Price
SPY SPDR S&P 500 ETF Trust $374.23
The SPY Stock Showdown
Source: Charts by Tradytics.com
Investors do not trust the financial leadership in this country anymore, so they lash out by selling stocks. Therefore, SPY stock has not mounted a serious rally in a while. We have had powerful bullish bursts, but these remain opportunities to book profits or fix broken trades.
Within three weeks, equities will hit a pivotal period and the outcome will settle this in a binary way. Meanwhile, the bears will continue having all the tailwinds, so they have an unfair advantage. The bulls’ primary focus is to muster up every ounce of strength to hold support. Otherwise, the floor will open up in a trap door and SPY stock would quickly fall another 20%.
High-Quality Stocks to Buy That Are Trading Below Fair Value
But if buyers miraculously hold support, then can try to chip away at prior failing zones. The most significant source of resistance will likely surface around $390 per share. This is where the buyers failed on Jun. 28 and where dark pools of money have interest. The fight will be harsh and the bears are not likely to cede it easily.
Conversely, there are equally important support zones below. They extend through $374, with a recent stand out support at $370.30. Most investors don’t pay much attention to level details, but giant pools of money do, according to Tradytics.
Bottom Line
The technical battle we just laid out should resolve itself this month. Both sides have a chance, but the bulls clearly have a tougher task. The stocks that will make a difference are Apple (NASDAQ:AAPL), Tesla (NASDAQ:TSLA), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG). These are hold out stocks that have so far refused to revisit the pre-pandemic breakout levels.
They stubbornly still have between 25% to 70% of froth from the 2020 to 2021 rallies. The worry now is that that they will finally join Amazon (NASDAQ:AMZN) and Salesforce.com (NYSE:CRM) down at the pandemic baseline. I am still optimistic that these leaders are holding the spot for the fallen to rejoin the green team. If so, then SPY can still make new highs this year. It is an unpopular opinion, but when everyone is blind to an opportunity, it becomes more interesting to market makers.
Options experts know that the job of markets is to punish the most investors possible. Currently, the prevailing theme is to own put options. My bet is that they will die for max loss. So, the bearish posture that retail investors have is actually silent support for SPY prices. This is an invisible advantage that most experts miss. It could be strong enough to help base these markets. I would hold long positions, but in a tactical matter, not an all-in investment.
On the date of publication, Nicolas Chahine 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.
The post SPDR S&P 500 ETF Stock Has Invisible Allies This Month 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. | The stocks that will make a difference are Apple (NASDAQ:AAPL), Tesla (NASDAQ:TSLA), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG). High-Quality Stocks to Buy That Are Trading Below Fair Value But if buyers miraculously hold support, then can try to chip away at prior failing zones. Most investors don’t pay much attention to level details, but giant pools of money do, according to Tradytics. | The stocks that will make a difference are Apple (NASDAQ:AAPL), Tesla (NASDAQ:TSLA), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG). InvestorPlace - Stock Market News, Stock Advice & Trading Tips The equity markets finished last week strong, but they are still unable to find footing overall. Ticker Company Price SPY SPDR S&P 500 ETF Trust $374.23 The SPY Stock Showdown Source: Charts by Tradytics.com Investors do not trust the financial leadership in this country anymore, so they lash out by selling stocks. | The stocks that will make a difference are Apple (NASDAQ:AAPL), Tesla (NASDAQ:TSLA), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG). InvestorPlace - Stock Market News, Stock Advice & Trading Tips The equity markets finished last week strong, but they are still unable to find footing overall. Ticker Company Price SPY SPDR S&P 500 ETF Trust $374.23 The SPY Stock Showdown Source: Charts by Tradytics.com Investors do not trust the financial leadership in this country anymore, so they lash out by selling stocks. | The stocks that will make a difference are Apple (NASDAQ:AAPL), Tesla (NASDAQ:TSLA), Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL, NASDAQ:GOOG). Therefore, SPY stock has not mounted a serious rally in a while. It is an unpopular opinion, but when everyone is blind to an opportunity, it becomes more interesting to market makers. |
20403.0 | 2022-07-05 00:00:00 UTC | Alphabet vs. Apple: Which FAANG Stock Does Wall Street Like the Most? | AAPL | https://www.nasdaq.com/articles/alphabet-vs.-apple%3A-which-faang-stock-does-wall-street-like-the-most | nan | nan | FAANG stocks have been unable to steer clear of the market hailstorm that's hit the tech sector. Though high-flying hyper-growth stocks have dragged stocks lower in the first half, the fallen FAANG stocks still appear like great long-term holds, even as rates and recession risks rise by the month.
Many may be quick to conclude that FAANG is dead. And although the acronym may be in need of an update following the epic blow-up of Meta and Netflix in the first half, I'd argue that the broader basket needs more time to demonstrate its resilience.
As America's top tech titans brace themselves for an economic slowdown, investors and analysts have been quick to temper expectations. Given their tremendous resilience, I'd argue it's likely that it's the FAANG stocks that could provide leadership as markets look to rebound.
In this piece, we used TipRanks' Comparison tool to have a closer look at two Strong Buy-rated FAANG stocks.
Alphabet (GOOGL)
Alphabet is a wonderful tech company that you can never count out. The company caused a bit of a stir when it reported a mild earnings miss in its first quarter, with $24.62 per-share earnings, missing the $25.89 estimate.
In a market that doesn't even reward earnings beats, you can bet that earnings misses will be met with tremendous selling pressure. Though Alphabet's rare quarterly flop may be viewed as the beginning of a disturbing trend, I'd argue that things weren't nearly as ugly as they seemed under the hood.
The search and cloud businesses were remarkably strong. Internet video behemoth YouTube acted as a major drag for the quarter, thanks in part to significant competition for user engagement and the reopening of the economy. Indeed, many shut-in consumers have been going out, rather than spending hours on custom-tailored videos served up by the YouTube algorithm.
Though lockdown tailwinds are unlikely to return, even as new COVID variants do, I view YouTube as a powerful platform that could recover ahead of an economic slowdown.
YouTube isn't just a magnificent entertainment platform. It's one that could be a lot more recession-resilient than skeptics think.
As the economy slows down, consumers won't be in a hurry to spend considerable sums anymore. Many may ditch their paid subscriptions, and start going out less to curb their monthly spending. As they do, people could spend more time engaging with YouTube's free, ad-based platform.
Though YouTube subscriptions could decline, I view the ad business as one that could take off as free entertainment tiers get a chance to shine.
There's nothing wrong with YouTube. Softness in the first quarter seems like more of a road bump than the beginning of an insidious trend. As YouTube bounces back, while search and cloud continue powering higher, GOOG stock makes for an exciting dip-buy. At writing, the stock trades at 5.3 times sales and 19.8 times trailing earnings.
Wall Street is upbeat, with the average Alphabet price target of $3,090.23, implying 36% upside.
Apple (AAPL)
Apple is another high-quality FAANG stock that investors don't seem to be giving the benefit of the doubt. Despite clocking in a solid Q1 earnings beat, the cautious guide startled investors. There are supply-side constraints that not even Apple can navigate through without enduring a bit of pain.
Still, as Apple moves past such issues in the second half, there are reasons to believe that demand could stay strong, as wealthier consumers continue to spend on the latest and greatest Apple devices and services. It's encouraging that Apple fans tend to have a bit more disposable income than more cost-conscious Android users.
Apple's strong brand may help it dampen downside in a recession. However, it's innovation that could help Apple shrug off a coming 2023 economic slide. The much-anticipated mixed-reality headset is rumored to launch in early 2023.
As you may remember, Apple unveiled the first iPhone in the face of the Great Financial Crisis. Looking back, the market crash of 2008 is just a small blip. Could Apple's big headset launch induce upside such that the 2022 plunge will be dwarfed in a few years' time? I'd argue it's likely.
Wall Street is staying bullish, with the average Apple price target of $186.09, implying 34% upside.
Conclusion
FAANG stocks still seem like great buys, even though they've faded alongside the broader market. At this juncture, analysts expect most from Alphabet over the year ahead. Personally, I find it hard to pick just one of the two Strong Buy rated FAANG stars.
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Read full Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (AAPL) Apple is another high-quality FAANG stock that investors don't seem to be giving the benefit of the doubt. And although the acronym may be in need of an update following the epic blow-up of Meta and Netflix in the first half, I'd argue that the broader basket needs more time to demonstrate its resilience. Internet video behemoth YouTube acted as a major drag for the quarter, thanks in part to significant competition for user engagement and the reopening of the economy. | Apple (AAPL) Apple is another high-quality FAANG stock that investors don't seem to be giving the benefit of the doubt. As YouTube bounces back, while search and cloud continue powering higher, GOOG stock makes for an exciting dip-buy. Wall Street is upbeat, with the average Alphabet price target of $3,090.23, implying 36% upside. | Apple (AAPL) Apple is another high-quality FAANG stock that investors don't seem to be giving the benefit of the doubt. Though high-flying hyper-growth stocks have dragged stocks lower in the first half, the fallen FAANG stocks still appear like great long-term holds, even as rates and recession risks rise by the month. Still, as Apple moves past such issues in the second half, there are reasons to believe that demand could stay strong, as wealthier consumers continue to spend on the latest and greatest Apple devices and services. | Apple (AAPL) Apple is another high-quality FAANG stock that investors don't seem to be giving the benefit of the doubt. Given their tremendous resilience, I'd argue it's likely that it's the FAANG stocks that could provide leadership as markets look to rebound. Indeed, many shut-in consumers have been going out, rather than spending hours on custom-tailored videos served up by the YouTube algorithm. |
20404.0 | 2022-07-05 00:00:00 UTC | Pre-Market Most Active for Jul 5, 2022 : TQQQ, SQQQ, OCFT, QQQ, FCX, CCL, REV, NIO, COP, CLVS, AAPL, AMD | AAPL | https://www.nasdaq.com/articles/pre-market-most-active-for-jul-5-2022-%3A-tqqq-sqqq-ocft-qqq-fcx-ccl-rev-nio-cop-clvs-aapl | nan | nan | The NASDAQ 100 Pre-Market Indicator is down -135.77 to 11,449.91. The total Pre-Market volume is currently 49,621,679 shares traded.
The following are the most active stocks for the pre-market session:
ProShares UltraPro QQQ (TQQQ) is -0.88 at $23.51, with 5,028,512 shares traded. This represents a 10.27% increase from its 52 Week Low.
ProShares UltraPro Short QQQ (SQQQ) is +2.12 at $59.74, with 3,311,523 shares traded. This represents a 112.22% increase from its 52 Week Low.
OneConnect Financial Technology Co., Ltd. (OCFT) is +0.22 at $2.07, with 1,325,451 shares traded. OCFT's current last sale is 125.45% of the target price of $1.65.
Invesco QQQ Trust, Series 1 (QQQ) is -3.49 at $278.64, with 1,109,225 shares traded. This represents a 3.48% increase from its 52 Week Low.
Freeport-McMoran, Inc. (FCX) is -0.96 at $28.24, with 859,761 shares traded. FCX's current last sale is 55.92% of the target price of $50.5.
Carnival Corporation (CCL) is -0.44 at $8.38, with 830,094 shares traded. CCL's current last sale is 59.86% of the target price of $14.
Revlon, Inc. (REV) is +0.42 at $5.58, with 722,778 shares traded. REV's current last sale is 65.65% of the target price of $8.5.
NIO Inc. (NIO) is -0.19 at $21.17, with 702,488 shares traded. As reported by Zacks, the current mean recommendation for NIO is in the "buy range".
ConocoPhillips (COP) is +0.09 at $91.07, with 672,976 shares traded. As reported by Zacks, the current mean recommendation for COP is in the "buy range".
Clovis Oncology, Inc. (CLVS) is -0.12 at $2.73, with 586,785 shares traded. CLVS's current last sale is 91% of the target price of $3.
Apple Inc. (AAPL) is -1.56 at $137.37, with 554,625 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Advanced Micro Devices, Inc. (AMD) is -1.29 at $72.38, with 544,250 shares traded., following a 52-week high recorded in prior regular session.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Apple Inc. (AAPL) is -1.56 at $137.37, with 554,625 shares traded. As reported by Zacks, the current mean recommendation for COP is in the "buy range". | As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Apple Inc. (AAPL) is -1.56 at $137.37, with 554,625 shares traded. As reported by Zacks, the current mean recommendation for NIO is in the "buy range". | Apple Inc. (AAPL) is -1.56 at $137.37, with 554,625 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The total Pre-Market volume is currently 49,621,679 shares traded. | Apple Inc. (AAPL) is -1.56 at $137.37, with 554,625 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The NASDAQ 100 Pre-Market Indicator is down -135.77 to 11,449.91. |
20405.0 | 2022-07-05 00:00:00 UTC | EU lawmakers pass landmark tech rules, but enforcement a worry | AAPL | https://www.nasdaq.com/articles/eu-lawmakers-pass-landmark-tech-rules-but-enforcement-a-worry | nan | nan | By Foo Yun Chee
BRUSSELS, July 5 (Reuters) - EU lawmakers gave the thumbs up on Tuesday to landmark rules to rein in the power of tech giants such as Alphabet GOOGL.O unit Google, Amazon AMZN.O, Apple AAPL.O, Facebook FB.O and Microsoft MSFT.O, but enforcing them could be an issue due to regulators' limited resources.
In addition to the rules known as the Digital Markets Act (DMA), lawmakers also approved the Digital Services Act (DSA), which requires online platforms to do more to police the internet for illegal content.
Companies face fines of up to 10% of annual global turnover for DMA violations and 6% for DSA breaches. Lawmakers and EU states had reached a political deal on both sets of rules earlier this year, leaving some details to be ironed out.
The two rule books for Big Tech built on EU antitrust chief Margrethe Vestager's experiences with investigations into the companies. She has set up an DMA taskforce, with about 80 officials expected to join up, which critics say is inadequate.
Lawmaker Andreas Schwab, who steered the issue through the European Parliament, has called for a bigger taskforce to counter Big Tech's deep pockets.
European Consumer Organisation (BEUC) echoed the same worries.
"We raised the alarm last week with other civil society groups that if the Commission does not hire the experts it needs to monitor Big Tech's practices in the market, the legislation could be hamstrung by ineffective enforcement," BEUC Deputy Director General Ursula Pachl said in a statement.
The DMA is set to force changes in companies' businesses, requiring them to make their messaging services interoperable and provide business users access to their data.
Business users would be able to promote competing products and services on a platform and reach deals with customers off the platforms.
Companies will not be allow to favour their own services over rivals' or prevent users from removing pre-installed software or apps, two rules that will hit Google and Apple hard.
The DSA bans targeted advertising aimed at children or based on sensitive data such as religion, gender, race and political opinions. Dark patterns, which are tactics that mislead people into giving personal data to companies online, will also be prohibited.
(Reporting by Foo Yun Chee; Editing by Alex Richardson)
((foo.yunchee@thomsonreuters.com; +32 2 287 6844; Reuters Messaging: foo.yunchee.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. | By Foo Yun Chee BRUSSELS, July 5 (Reuters) - EU lawmakers gave the thumbs up on Tuesday to landmark rules to rein in the power of tech giants such as Alphabet GOOGL.O unit Google, Amazon AMZN.O, Apple AAPL.O, Facebook FB.O and Microsoft MSFT.O, but enforcing them could be an issue due to regulators' limited resources. "We raised the alarm last week with other civil society groups that if the Commission does not hire the experts it needs to monitor Big Tech's practices in the market, the legislation could be hamstrung by ineffective enforcement," BEUC Deputy Director General Ursula Pachl said in a statement. Companies will not be allow to favour their own services over rivals' or prevent users from removing pre-installed software or apps, two rules that will hit Google and Apple hard. | By Foo Yun Chee BRUSSELS, July 5 (Reuters) - EU lawmakers gave the thumbs up on Tuesday to landmark rules to rein in the power of tech giants such as Alphabet GOOGL.O unit Google, Amazon AMZN.O, Apple AAPL.O, Facebook FB.O and Microsoft MSFT.O, but enforcing them could be an issue due to regulators' limited resources. In addition to the rules known as the Digital Markets Act (DMA), lawmakers also approved the Digital Services Act (DSA), which requires online platforms to do more to police the internet for illegal content. Lawmakers and EU states had reached a political deal on both sets of rules earlier this year, leaving some details to be ironed out. | By Foo Yun Chee BRUSSELS, July 5 (Reuters) - EU lawmakers gave the thumbs up on Tuesday to landmark rules to rein in the power of tech giants such as Alphabet GOOGL.O unit Google, Amazon AMZN.O, Apple AAPL.O, Facebook FB.O and Microsoft MSFT.O, but enforcing them could be an issue due to regulators' limited resources. In addition to the rules known as the Digital Markets Act (DMA), lawmakers also approved the Digital Services Act (DSA), which requires online platforms to do more to police the internet for illegal content. The DMA is set to force changes in companies' businesses, requiring them to make their messaging services interoperable and provide business users access to their data. | By Foo Yun Chee BRUSSELS, July 5 (Reuters) - EU lawmakers gave the thumbs up on Tuesday to landmark rules to rein in the power of tech giants such as Alphabet GOOGL.O unit Google, Amazon AMZN.O, Apple AAPL.O, Facebook FB.O and Microsoft MSFT.O, but enforcing them could be an issue due to regulators' limited resources. Companies face fines of up to 10% of annual global turnover for DMA violations and 6% for DSA breaches. Business users would be able to promote competing products and services on a platform and reach deals with customers off the platforms. |
20406.0 | 2022-07-05 00:00:00 UTC | 2 FAANG Stocks to Buy Hand Over Fist and 1 to Avoid Like the Plague | AAPL | https://www.nasdaq.com/articles/2-faang-stocks-to-buy-hand-over-fist-and-1-to-avoid-like-the-plague-0 | nan | nan | Although it might not seem like it at the moment, the stock market is one of the steadiest creators of long-term wealth. Including dividends, the benchmark S&P 500 has averaged a total annual return of around 10%. That handily outpaces the average annual returns for bonds, housing, and commodities.
But why settle for average? Over the past decade, the so-called FAANG stocks have left the S&P 500 eating their dust. When I say "FAANG," I'm referring to:
Meta Platforms (NASDAQ: META), formerly known as Facebook
Apple (NASDAQ: AAPL)
Amazon (NASDAQ: AMZN)
Netflix (NASDAQ: NFLX)
and Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), which was formerly known as Google.
Image source: Getty Images.
Over the trailing-10-year period through July 1, 2022, Meta, Apple, Amazon, Netflix, and Alphabet (Class A shares, GOOGL) were higher by 415%, 566%, 860%, 1,740%, and 650%, respectively. Meanwhile, the S&P 500 has gained 181% over this stretch.
The FAANGs are industry leaders, well-known innovators, and tend to generate a boatload of operating cash flow that's often reinvested in their businesses. In other words, there's a very good reason these five stocks have been such strong performers.
But not all FAANG stocks are worth your hard-earned money at the moment. While two FAANGs stand out as amazing values that can be bought hand over fist, another longtime winner is flashing clear "avoid" signals.
FAANG No. 1 to buy hand over fist: Meta Platforms
The first FAANG stock absolutely begging to be bought by opportunistic long-term investors is Meta Platforms.
Shares of Meta ended last week more than 58% below their all-time intraday high that was set less than a year ago. Wall Street is clearly concerned about how the company's ad-driven platform will cope with the growing likelihood of a domestic and/or global recession. To boot, analysts have also been critical of the company's aggressive metaverse spending, which has weighed on Meta's profitability.
Although these headwinds shouldn't be dismissed, they're either short term in nature or they overlook big-picture growth initiatives.
For instance, Meta remains a social media beast. Facebook, Facebook Messenger, Instagram, and WhatsApp, which are all owned by Meta, are consistently among the most-downloaded social media apps. In the March-ended quarter, the company's collection of apps drew 3.64 billion unique monthly users. This works out to more than half of the global adult population visiting a Meta-owned asset each month. Businesses fully understand that their best chance to reach a broad audience is with Meta's apps, which is why the company boasts such incredible ad-pricing power.
Even though the company's sizable metaverse investments are unlikely to generate significant sales or aid profitability for years, the company has the operating cash flow and balance sheet to support taking chances on what could very well be a multitrillion-dollar opportunity. Meta generated over $14 billion in cash from operations in the first quarter, and ended March with $43.9 billion in cash, cash equivalents, and marketable securities.
Opportunistic investors can buy shares of Meta Platforms right now for less than 12 times Wall Street's forecast earnings for 2023, or about 10 times projected profit if you exclude its cash. It's simply never been this inexpensive.
FAANG No. 2 to buy hand over fist: Alphabet
The other FAANG stock worthy of being bought hand over fist right now is Alphabet, the parent company of internet search engine Google and streaming platform YouTube.
Not to sound like a broken record, but the biggest worry for Alphabet is the potential for a U.S. or global recession. Like Meta, Alphabet brings in the lion's share of its revenue from advertising. Unfortunately, ad spending tends to be one of the first things to be reduced when recessions occur. This has the potential to be an overhang for Alphabet's ad business until the Federal Reserve is done aggressively hiking interest rates.
But these recession worries appear largely overblown. Though recessions are inevitable, they typically last for no more than a couple of quarters. By comparison, periods of economic expansion are measured in years. Over long periods, ad-driven companies should benefit from the natural expansion of the U.S. and global economy.
Alphabet's foundation continues to be internet search engine Google. Data from GlobalStats shows that it has controlled no less than 91% of the worldwide internet search market over the past two years. As a practical monopoly, it shouldn't come as a surprise that Google can command superior ad-pricing power.
While Google has the potential to maintain low double-digit sales growth, Alphabet's numerous ancillary revenue channels are really exciting. YouTube, for example, is now the second-most-visited social media site on the planet (2.56 billion monthly active users). This is helping to drive subscription revenue as well as ad placement.
Alphabet's cloud infrastructure segment, Google Cloud, also happens to be the global No. 3 in cloud service spending. Cloud growth remains in its early innings, as evidenced by Google Cloud's consistent 40% to 50% annual sales increases. Due to the juicy margins usually associated with cloud services, this segment could play an important role in growing Alphabet's operating cash flow.
Like Meta, Alphabet has never been cheaper. Shares can be confidently bought right now for about 16.5 times Wall Street's forecast earnings for 2023.
Image source: Apple.
The FAANG stock to avoid like the plague: Apple
On the other end of the spectrum is a FAANG stock that simply isn't worth investors' hard-earned money at the moment. At the risk of committing investment blasphemy, I'd suggest avoiding tech kingpin Apple.
Before I get into the reasons for avoiding Apple, let me clear the air: Apple is a solidly profitable company with an incredible balance sheet and capital return program. It's repurchased almost $500 billion worth of its common stock since the beginning of 2013 and doles out nearly $14.9 billion in dividends to its shareholders annually.
What's more, Apple has a globally recognized brand and is the dominant smartphone player in the United States. I'll reiterate: It's a well-run company.
However, bear markets have a tendency to compress earnings and sales multiples for growth stocks, and they're known for getting Wall Street refocused on value investments. Unfortunately for Apple, it offers the weakest growth prospects among the FAANGs and simply isn't all that inexpensive.
Apple enjoyed quite the pop following its introduction of 5G-capable iPhones during the fourth quarter of 2020. But each subsequent iPhone model only offers modest differences (for example, improved camera quality). This is going to make it increasingly tougher for the company to deliver sizable growth from its top-selling product.
Another concern for those willing to dig a bit is that Apple's share repurchase program is helping to mask its lack of growth. Buying back stock reduces the number of shares outstanding, which can make it appear as if earnings per share is climbing, even if operating income remains unchanged from one year to the next. For instance, adjusted earnings per share in the fiscal second quarter (ended March 26) grew 8.6% from the prior-year quarter; but operating income jumped by a less-impressive 5.8%.
If you back out the positive impact Apple's buybacks have had on its earnings, investors are paying about 21 times next year's forecast earnings for operating income growth of maybe 4% to 5%. That's not particularly intriguing in a bear market, which is what makes Apple such an easy pass at its current price.
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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. | When I say "FAANG," I'm referring to: Meta Platforms (NASDAQ: META), formerly known as Facebook Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) and Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), which was formerly known as Google. Businesses fully understand that their best chance to reach a broad audience is with Meta's apps, which is why the company boasts such incredible ad-pricing power. Due to the juicy margins usually associated with cloud services, this segment could play an important role in growing Alphabet's operating cash flow. | When I say "FAANG," I'm referring to: Meta Platforms (NASDAQ: META), formerly known as Facebook Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) and Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), which was formerly known as Google. 2 to buy hand over fist: Alphabet The other FAANG stock worthy of being bought hand over fist right now is Alphabet, the parent company of internet search engine Google and streaming platform YouTube. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., and Netflix. | When I say "FAANG," I'm referring to: Meta Platforms (NASDAQ: META), formerly known as Facebook Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) and Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), which was formerly known as Google. 2 to buy hand over fist: Alphabet The other FAANG stock worthy of being bought hand over fist right now is Alphabet, the parent company of internet search engine Google and streaming platform YouTube. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., and Netflix. | When I say "FAANG," I'm referring to: Meta Platforms (NASDAQ: META), formerly known as Facebook Apple (NASDAQ: AAPL) Amazon (NASDAQ: AMZN) Netflix (NASDAQ: NFLX) and Alphabet (NASDAQ: GOOGL)(NASDAQ: GOOG), which was formerly known as Google. The FAANG stock to avoid like the plague: Apple On the other end of the spectrum is a FAANG stock that simply isn't worth investors' hard-earned money at the moment. 10 stocks we like better than Meta Platforms, Inc. |
20407.0 | 2022-07-05 00:00:00 UTC | Meta Platforms (META) to Discontinue Its Crypto Wallet Novi | AAPL | https://www.nasdaq.com/articles/meta-platforms-meta-to-discontinue-its-crypto-wallet-novi | nan | nan | Meta Platforms META recently announced that it is discontinuing its cryptocurrency wallet pilot project — Novi. In a recent post, the company stated that both the Novi app and Novi on WhatsApp would not be available from Sep 1, 2022.
This is a major setback for Meta Platforms in its efforts to develop Metaverse as an independent commercial platform as both the crypto and NFT market came crashing down. Customers will be unable to add funds from July 2022 to their Novi wallet and are advised to withdraw funds before September 2022.
The Novi crypto wallet was initially launched as a pilot program in October in Guatemala and select areas of the United States. It had custody support from Coinbase Global and Paxos stablecoin USDP.
However, despite the custody support of Coinbase, which is the largest U.S. cryptocurrency exchange trading some 50 different digital assets, the market scenario and volatility have forced Meta Platforms to shut its operations for Novi.
The closure of the digital payments project marks the end of Meta Platforms' venture into the crypto market.
Previously, Meta Platforms' Diem cryptocurrency was shelved even before it commenced operations as several high-profile partners bailed out due to increasing scrutiny from lawmakers and financial regulators on the company.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
Meta's Metaverse Ambitions Take a Hit Due to Volatility
Meta Platforms is currently facing the worst downturn in the company's history due to the global macro-economic situation, geopolitical tensions, rising inflation and FED interest rate hikes.
Amid such market volatility, the company intends to make its way out of the crypto market at the moment. Meta Platforms' revenue growth was driven exponentially by the e-commerce boom amid the pandemic, which in turn has been funding its Metaverse dreams.
However, it was momentum growth and is finally slowing down. Meta's revenue growth has been significantly impacted by the Russia-Ukraine war, which can be described as a black swan event.
This kind of negative global geopolitical situation and inflation, which the war has aggravated, have hurt the company's stock price.
Shares of Meta Platforms, which currently has a Zacks Rank #4 (Sell), have tumbled 49.8% in the year-to-date period compared with the Zacks Internet – Softwareindustry decline of 48.6%.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The situation is not expected to get better in the near term as negative sentiments are evident with traders shorting shares of every major tech stock in the NASDAQ composite, including Meta Platforms' tech peers, who are looking to venture into the Metaverse, including Twitter TWTR, Microsoft MSFT and Apple AAPL.
Microsoft shares have lost 22.9% in the year-to-date period compared with the Zacks Computer-Softwareindustry's decline of 25.9%.
Apple's shares have fallen 20% in the year-to-date period compared with the Zacks Computer - Mini computersindustry's decline of 19.7%.
As a result of the current market volatility, traders and investors are bearish regarding the cryptocurrency markets. The global crypto market cap shrunk to $977 billion after touching the $3-trillion mark in November last year. The price of almost every major cryptocurrencies like Bitcoin and Ethereum is now worth half or even less than their all-time highs.
Even though Meta Platforms' short-term growth looks tepid, the company's decision to stop certain investments that are costing it huge amounts of money is in alignment with its long-term growth.
Meta Platforms is currently looking to increase its revenues from its Family of Apps business segment, which will fund the growth of its Metaverse.
As a result, Meta has been investing heavily in developing AI, which is expected to drive revenue growth across the ad business.
As Meta bets on building the Metaverse for the future, investment in AI is expected to bring lofty ROI for the company and separate its services from competitors. This will help the company regain lost market share in the long term.
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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. | The situation is not expected to get better in the near term as negative sentiments are evident with traders shorting shares of every major tech stock in the NASDAQ composite, including Meta Platforms' tech peers, who are looking to venture into the Metaverse, including Twitter TWTR, Microsoft MSFT and Apple AAPL. Apple Inc. (AAPL): Free Stock Analysis Report However, despite the custody support of Coinbase, which is the largest U.S. cryptocurrency exchange trading some 50 different digital assets, the market scenario and volatility have forced Meta Platforms to shut its operations for Novi. | The situation is not expected to get better in the near term as negative sentiments are evident with traders shorting shares of every major tech stock in the NASDAQ composite, including Meta Platforms' tech peers, who are looking to venture into the Metaverse, including Twitter TWTR, Microsoft MSFT and Apple AAPL. Apple Inc. (AAPL): Free Stock Analysis Report Meta Platforms, Inc. Price and Consensus Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote Meta's Metaverse Ambitions Take a Hit Due to Volatility Meta Platforms is currently facing the worst downturn in the company's history due to the global macro-economic situation, geopolitical tensions, rising inflation and FED interest rate hikes. | The situation is not expected to get better in the near term as negative sentiments are evident with traders shorting shares of every major tech stock in the NASDAQ composite, including Meta Platforms' tech peers, who are looking to venture into the Metaverse, including Twitter TWTR, Microsoft MSFT and Apple AAPL. Apple Inc. (AAPL): Free Stock Analysis Report Meta Platforms, Inc. Price and Consensus Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote Meta's Metaverse Ambitions Take a Hit Due to Volatility Meta Platforms is currently facing the worst downturn in the company's history due to the global macro-economic situation, geopolitical tensions, rising inflation and FED interest rate hikes. | The situation is not expected to get better in the near term as negative sentiments are evident with traders shorting shares of every major tech stock in the NASDAQ composite, including Meta Platforms' tech peers, who are looking to venture into the Metaverse, including Twitter TWTR, Microsoft MSFT and Apple AAPL. Apple Inc. (AAPL): Free Stock Analysis Report Meta Platforms META recently announced that it is discontinuing its cryptocurrency wallet pilot project — Novi. |
20408.0 | 2022-07-04 00:00:00 UTC | Will Apple TV+ Ever Become Profitable? | AAPL | https://www.nasdaq.com/articles/will-apple-tv-ever-become-profitable | nan | nan | Apple (NASDAQ: AAPL) is spending heavily on its Apple TV+ streaming service. While management has kept numbers close to the vest, estimates for its content budget range from $1 billion to $6 billion per year. That puts its spending in line with some of the biggest competitors in the space.
While Apple's series and films have garnered critical acclaim, it's not clear its strategy is paying off to become a profitable service for the tech giant.
Paying subscribers
While Apple hasn't released details on how many consumers are watching Apple TV+, one analyst estimates it has between 20 million and 40 million paid subscribers. Bernstein analyst Toni Sacconaghi estimates Apple generates between $1 billion and $2 billion per year in subscription revenue, but it's spending $3 billion per year on content.
Apple was very aggressive in offering extended free trials for the service. Customers buying an Apple device in 2019 and 2020 received at least one full year of Apple TV+ with their purchase. Those trials ended last summer, and Apple shortened the standard trial length to three months. As such, Apple saw very high churn rates this year, according to a survey from Whip Media.
That said, subscriber satisfaction is improving. The percentage of subscribers likely to keep their subscription improved to 73% from 54% a year ago.
Apple TV+ has a small library of films and series, with a focus on prestige content. The average IMDb score for its series is higher than any other streaming service, but the total number of hours of content available is also far lower than any other streaming service. The highly curated approach will take time for Apple to build out a substantial library and calendar of releases that keeps subscribers year round.
Still, it's difficult to see Apple TV+, with its heavy focus on prestige programming, reaching the audience levels of its biggest competitors. Its programming is more like HBO (not HBO Max), but Apple charges one-third of the price as Warner Bros. Discovery for its service. That curbs its revenue potential. While raising prices is certainly an option, Apple hasn't indicated any plans to change its pricing for its subscription services.
As the service matures, Apple will learn what draws in and keeps subscribers, and as the company aligns content spending with subscription revenue, Apple TV+ should move toward break-even profitability.
Sweetening the deal
The real value of Apple TV+, Sacconaghi argues, is in the potential for it to be part of a bundle of Apple subscriptions. Apple already bundles Apple TV+ with Apple One, which also includes Apple Music, Arcade, News, and more Apple services. But the streaming video service could be used to get people to subscribe to an iPhone and commit to periodic upgrades on their devices.
Indeed, access to some top critically acclaimed series and films on streaming may be an effective sweetener for customers considering an Apple subscription offering, even if they wouldn't consider the service by itself. That could, in turn, fuel Apple to spend more on content for Apple TV+, creating a virtuous cycle.
The bundle strategy worked extremely well for Amazon (NASDAQ: AMZN), which found bundling Prime Video with its Prime shipping program boosted overall sales, allowing it to invest more in video and grow its subscribers. It's unclear if Prime Video would be profitable as a stand-alone service, but it's certainly valuable to Amazon. Management says consumers who engage with digital content are more likely to renew Prime, and Prime members spend more on average than non-Prime customers.
So even if Apple is never able to make Apple TV+ profitable by itself, it could still be an extremely valuable chess piece for Apple in its efforts to keep its customers using its products and services year after year. That won't show up explicitly in any Apple earnings report, but it will make itself clear in Apple's overall bottom line long term.
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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. | Apple (NASDAQ: AAPL) is spending heavily on its Apple TV+ streaming service. While Apple's series and films have garnered critical acclaim, it's not clear its strategy is paying off to become a profitable service for the tech giant. The highly curated approach will take time for Apple to build out a substantial library and calendar of releases that keeps subscribers year round. | Apple (NASDAQ: AAPL) is spending heavily on its Apple TV+ streaming service. Bernstein analyst Toni Sacconaghi estimates Apple generates between $1 billion and $2 billion per year in subscription revenue, but it's spending $3 billion per year on content. The bundle strategy worked extremely well for Amazon (NASDAQ: AMZN), which found bundling Prime Video with its Prime shipping program boosted overall sales, allowing it to invest more in video and grow its subscribers. | Apple (NASDAQ: AAPL) is spending heavily on its Apple TV+ streaming service. As the service matures, Apple will learn what draws in and keeps subscribers, and as the company aligns content spending with subscription revenue, Apple TV+ should move toward break-even profitability. Apple already bundles Apple TV+ with Apple One, which also includes Apple Music, Arcade, News, and more Apple services. | Apple (NASDAQ: AAPL) is spending heavily on its Apple TV+ streaming service. Bernstein analyst Toni Sacconaghi estimates Apple generates between $1 billion and $2 billion per year in subscription revenue, but it's spending $3 billion per year on content. Indeed, access to some top critically acclaimed series and films on streaming may be an effective sweetener for customers considering an Apple subscription offering, even if they wouldn't consider the service by itself. |
20409.0 | 2022-07-04 00:00:00 UTC | POLL-Taiwan June exports seen rising faster as supply chains woes ease | AAPL | https://www.nasdaq.com/articles/poll-taiwan-june-exports-seen-rising-faster-as-supply-chains-woes-ease | nan | nan | For poll data click: reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=TWCPIY%3DECI
Exports median forecast +13.55% y/y (prior month +12.5%)
Imports median forecast +24% y/y (prior month +26.7%)
Balance median forecast $3.26 bln (prior month $2.41 bln)
CPI median forecast +3.5% y/y (prior month +3.39%)
Trade due Friday, July 8, 4:00 p.m. (0800 GMT)
CPI due Wednesday, July 6, 4:00 p.m. (0800 GMT)
TAIPEI, July 5 (Reuters) - Taiwan's exports likely rose for the 24th straight month in June and at a faster clip than in May, thanks to easing supply chain woes and stronger technology demand, a Reuters poll showed on Tuesday.
Taiwan, a global hub for chip production and a key supplier to Apple Inc AAPL.O, is one of Asia's leading exporters of technology goods, so the trade data is seen as an important gauge of world demand for tech gadgets.
Exports last month were estimated to have risen 13.55% from a year earlier, a Reuters poll of 18 analysts showed, faster than the 12.5% jump in May.
The export forecasts ranged between rises of 6% and 19.4%, reflecting uncertainties over the global economic recovery and supply chain disruptions caused by COVID-19 lockdowns in eastern China and Russia's invasion of Ukraine.
Separately, the consumer price index was expected to have risen 3.5% from a year earlier, a slightly quicker rate than an on-year increase of 3.39% in May.
The inflation data will be released on Wednesday, followed by the trade data on Friday.
(Poll compiled by Devayani Sathyan, Anant Chandak and Carol Lee; Reporting by Ben Blanchard; Editing by Sonali Desai)
((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. | Taiwan, a global hub for chip production and a key supplier to Apple Inc AAPL.O, is one of Asia's leading exporters of technology goods, so the trade data is seen as an important gauge of world demand for tech gadgets. The export forecasts ranged between rises of 6% and 19.4%, reflecting uncertainties over the global economic recovery and supply chain disruptions caused by COVID-19 lockdowns in eastern China and Russia's invasion of Ukraine. Separately, the consumer price index was expected to have risen 3.5% from a year earlier, a slightly quicker rate than an on-year increase of 3.39% in May. | Taiwan, a global hub for chip production and a key supplier to Apple Inc AAPL.O, is one of Asia's leading exporters of technology goods, so the trade data is seen as an important gauge of world demand for tech gadgets. For poll data click: reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=TWCPIY%3DECI Exports median forecast +13.55% y/y (prior month +12.5%) Imports median forecast +24% y/y (prior month +26.7%) Balance median forecast $3.26 bln (prior month $2.41 bln) CPI median forecast +3.5% y/y (prior month +3.39%) Trade due Friday, July 8, 4:00 p.m. (0800 GMT) CPI due Wednesday, July 6, 4:00 p.m. (0800 GMT) TAIPEI, July 5 (Reuters) - Taiwan's exports likely rose for the 24th straight month in June and at a faster clip than in May, thanks to easing supply chain woes and stronger technology demand, a Reuters poll showed on Tuesday. Exports last month were estimated to have risen 13.55% from a year earlier, a Reuters poll of 18 analysts showed, faster than the 12.5% jump in May. | Taiwan, a global hub for chip production and a key supplier to Apple Inc AAPL.O, is one of Asia's leading exporters of technology goods, so the trade data is seen as an important gauge of world demand for tech gadgets. For poll data click: reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/econ-polls?RIC=TWCPIY%3DECI Exports median forecast +13.55% y/y (prior month +12.5%) Imports median forecast +24% y/y (prior month +26.7%) Balance median forecast $3.26 bln (prior month $2.41 bln) CPI median forecast +3.5% y/y (prior month +3.39%) Trade due Friday, July 8, 4:00 p.m. (0800 GMT) CPI due Wednesday, July 6, 4:00 p.m. (0800 GMT) TAIPEI, July 5 (Reuters) - Taiwan's exports likely rose for the 24th straight month in June and at a faster clip than in May, thanks to easing supply chain woes and stronger technology demand, a Reuters poll showed on Tuesday. Exports last month were estimated to have risen 13.55% from a year earlier, a Reuters poll of 18 analysts showed, faster than the 12.5% jump in May. | Taiwan, a global hub for chip production and a key supplier to Apple Inc AAPL.O, is one of Asia's leading exporters of technology goods, so the trade data is seen as an important gauge of world demand for tech gadgets. Exports last month were estimated to have risen 13.55% from a year earlier, a Reuters poll of 18 analysts showed, faster than the 12.5% jump in May. The export forecasts ranged between rises of 6% and 19.4%, reflecting uncertainties over the global economic recovery and supply chain disruptions caused by COVID-19 lockdowns in eastern China and Russia's invasion of Ukraine. |
20410.0 | 2022-07-04 00:00:00 UTC | Taiwan's Foxconn raises full-year outlook on strong tech demand | AAPL | https://www.nasdaq.com/articles/taiwans-foxconn-raises-full-year-outlook-on-strong-tech-demand-0 | nan | nan | Adds analyst comment, stock reaction
TAIPEI, July 4 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker, raised its full-year business outlook on Monday thanks to strong sales of smartphones and servers despite concerns of slowing demand due to rising inflation.
Like other global manufacturers, the Taiwanese firm has grappled with a severe shortage of chips, which has hurt smartphone production including for its major client Apple AAPL.O, partly due to COVID-19 lockdowns in China.
But the company said in a statement late on Monday that June sales jumped 31% from a year earlier to a record high for the month, thanks to appropriate supply chain management and rising sales of consumer electronics. Smartphones make up the bulk of its revenue.
Foxconn's better-than-expected June sales come at a time when investors are concerned about slowing tech demand during a downturn in major markets due to high inflation and the war in Ukraine.
Chip stocks across the world tumbled on Friday after memory chip maker Micron Technology Inc MU.O forecast on Thursday significantly worse-than-expected revenue for the current quarter and said the market had "weakened considerably in a very short period of time."
Foxconn said it was optimistic about its business in the third quarter, adding it could see "significant growth" compared with a year earlier.
For 2022, Foxconn said the outlook has improved compared with earlier expectations for no growth, without providing details.
The company, formally called Hon Hai Precision Industry Co Ltd, said it has seen double-digit yearly growth in sales from servers and telecommunications products so far this year.
The company has said that COVID-19 controls in China only had a limited impact on its production as it kept workers on-site in a "closed loop" system.
Analysts at Daiwa Capital Markets in Taipei said in a report demand for servers from U.S.-based cloud service providers helped propel double-digit growth for the sector. They expected Foxconn's operating profit to grow 12-19% this year.
Morgan Stanley analysts said Foxconn's upbeat guidance for the third quarter showed that strong demand for cloud servers and iPhone assembly will continue.
The company's shares rose about 3% in Tuesday morning trade, outperforming the broader market .TWII which was up around 1%. They have dropped nearly 1% so far this year, giving the firm a market value of $46.52 billion.
(Reporting by Yimou Lee and Ben Blanchard, Editing by Louise Heavens and Sonali Desai)
((yimou.lee@thomsonreuters.com; +886-2-8729-5122;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Like other global manufacturers, the Taiwanese firm has grappled with a severe shortage of chips, which has hurt smartphone production including for its major client Apple AAPL.O, partly due to COVID-19 lockdowns in China. Adds analyst comment, stock reaction TAIPEI, July 4 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker, raised its full-year business outlook on Monday thanks to strong sales of smartphones and servers despite concerns of slowing demand due to rising inflation. Foxconn's better-than-expected June sales come at a time when investors are concerned about slowing tech demand during a downturn in major markets due to high inflation and the war in Ukraine. | Like other global manufacturers, the Taiwanese firm has grappled with a severe shortage of chips, which has hurt smartphone production including for its major client Apple AAPL.O, partly due to COVID-19 lockdowns in China. Adds analyst comment, stock reaction TAIPEI, July 4 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker, raised its full-year business outlook on Monday thanks to strong sales of smartphones and servers despite concerns of slowing demand due to rising inflation. Foxconn's better-than-expected June sales come at a time when investors are concerned about slowing tech demand during a downturn in major markets due to high inflation and the war in Ukraine. | Like other global manufacturers, the Taiwanese firm has grappled with a severe shortage of chips, which has hurt smartphone production including for its major client Apple AAPL.O, partly due to COVID-19 lockdowns in China. Adds analyst comment, stock reaction TAIPEI, July 4 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker, raised its full-year business outlook on Monday thanks to strong sales of smartphones and servers despite concerns of slowing demand due to rising inflation. Foxconn's better-than-expected June sales come at a time when investors are concerned about slowing tech demand during a downturn in major markets due to high inflation and the war in Ukraine. | Like other global manufacturers, the Taiwanese firm has grappled with a severe shortage of chips, which has hurt smartphone production including for its major client Apple AAPL.O, partly due to COVID-19 lockdowns in China. Adds analyst comment, stock reaction TAIPEI, July 4 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker, raised its full-year business outlook on Monday thanks to strong sales of smartphones and servers despite concerns of slowing demand due to rising inflation. Foxconn said it was optimistic about its business in the third quarter, adding it could see "significant growth" compared with a year earlier. |
20411.0 | 2022-07-04 00:00:00 UTC | Headwinds Will Slow Growth for Meta; Should Investors Sell Now? | AAPL | https://www.nasdaq.com/articles/headwinds-will-slow-growth-for-meta-should-investors-sell-now | nan | nan | Meta Platforms (NASDAQ: META) held an internal conference on June 30, during which CEO Mark Zuckerberg told employees to brace for impact. The social media giant that has turned into a metaverse business has, for several quarters, warned investors that it faces headwinds that are hurting its ability to grow revenue.
Those include changes from Apple (NASDAQ: AAPL) that make it more difficult for Meta to track its users across apps. Rising competition from short-form video site TikTok has also forced Meta to make adjustments, hurting sales in the near term. Let's look at the recent revelation and determine if investors should jump ship and sell the stock now.
Meta Platforms takes austerity measures amid slowing growth
One of the significant insights from reports of the meeting was Meta's reduced plans for hiring. The company had initially planned to hire 10,000 engineers. It has now reduced that goal to between 6,000 and 7,000. And the company is increasing performance goals, making work more challenging for existing staff.
Zuckerberg admitted this might cause some employees to quit, and that self-selection is something he said he would be totally fine with. Instead of outright layoffs, it looks like Meta is raising work standards. The result could be improved performance by many workers, while others quit.
"Part of my hope by raising expectations and having more aggressive goals, and just kind of turning up the heat a little bit, is that I think some of you might decide that this place isn't for you, and that self-selection is OK with me," Zuckerberg said.
The increased focus on cutting costs is no surprise considering earlier updates from Meta Platforms suggesting the slowest revenue growth in the company's history. In its most recent quarter, revenue increased by 7% from the same quarter in the prior year. Management expects revenue to be flat in the upcoming quarter.
META revenue (quarterly YoY growth). Data by YCharts.
For years, the company has benefited from collecting information on its users across apps and then using that data to sell targeted advertising. Marketers were willing to pay more for this type of advertising because it offers more precision and less waste. No longer were restaurants in San Diego paying for ads shown to folks in Boise, Idaho.
Another headwind is resulting from Meta's adjustment to changing consumer tastes. Folks are increasingly engaging with short-form videos in favor of photos. Meta's apps have been geared to benefit from interaction with photos. It will take time for Meta to optimize the platforms to the newer consumer habits, hurting revenue in the near term.
Those headwinds appear to be longer lasting than initially expected, hence the austerity measures mentioned above.
The challenges are already priced into Meta Platforms' stock
META P/E ratio. Data by YCharts. P/E = price to earnings.
While Meta's challenges should not be underestimated, they are no reason to sell now. The stock is already down 58% off its highs, so the risks mentioned above are arguably already priced in. Meta is trading at a price-to-earnings ratio of 12 and a price-to-free-cash-flow of 11, near the lowest the stock has sold for in the last five years.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Parkev Tatevosian has positions in Apple. The Motley Fool has positions in and recommends 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. | Those include changes from Apple (NASDAQ: AAPL) that make it more difficult for Meta to track its users across apps. The social media giant that has turned into a metaverse business has, for several quarters, warned investors that it faces headwinds that are hurting its ability to grow revenue. "Part of my hope by raising expectations and having more aggressive goals, and just kind of turning up the heat a little bit, is that I think some of you might decide that this place isn't for you, and that self-selection is OK with me," Zuckerberg said. | Those include changes from Apple (NASDAQ: AAPL) that make it more difficult for Meta to track its users across apps. And the company is increasing performance goals, making work more challenging for existing staff. The challenges are already priced into Meta Platforms' stock META P/E ratio. | Those include changes from Apple (NASDAQ: AAPL) that make it more difficult for Meta to track its users across apps. Meta Platforms takes austerity measures amid slowing growth One of the significant insights from reports of the meeting was Meta's reduced plans for hiring. The challenges are already priced into Meta Platforms' stock META P/E ratio. | Those include changes from Apple (NASDAQ: AAPL) that make it more difficult for Meta to track its users across apps. And the company is increasing performance goals, making work more challenging for existing staff. The challenges are already priced into Meta Platforms' stock META P/E ratio. |
20412.0 | 2022-07-04 00:00:00 UTC | Why Shares in Berkshire Hathaway Fell in June | AAPL | https://www.nasdaq.com/articles/why-shares-in-berkshire-hathaway-fell-in-june | nan | nan | What happened
Shares in Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) declined by 13.7% in June, underperforming the benchmark S&P 500 index's decline of 8.4%. The place to start when looking at why is by analyzing what's in the Berkshire Hathaway portfolio. So here's a table of all the holdings above 3% in the portfolio as of March 2022.
COMPANY
SECTOR
PORTFOLIO WEIGHT
Apple
Consumer electronics
42.1%
Bank of America
Bank
11.3%
American Express
Financial services
8%
Chevron
Energy
7%
Coca-Cola
Consumer staples
7%
Occidental Petroleum
Energy
3.6%
Kraft Heinz
Consumer staples
3.5%
Data source: Berkshire Hathaway SEC filings.
As you can see below, Apple's performance in June was pretty much in line with the market, and the leading consumer staples stocks (Coca-Cola and Kraft Heinz) outperformed the market. However, the finance and energy stocks significantly underperformed. For reference, Berkshire holds a further 7% in banking and finance stocks.
Data by YCharts
The performance in June marks a reversal of fortune because, going into the month, Berkshire Hathaway was up in 2022 with a 5.2% gain compared to a 13.3% decline in the index. In addition, energy and consumer staples led outperformance to the start of June.
So what
The reversal in Berkshire Hathaway's performance reflects the shift in the market's mood more than any fundamental change in the long-term prospects of the companies in the portfolio. Speculators likely bought into the type of stocks seen as benefiting from inflationary trends (energy) and kept buying until the Federal Reserve acted aggressively to combat inflation by hiking rates.
However, as the market anticipated and then digested the Federal Reserve rate hike in the middle of June, it sold off the "inflation plays" as well as the cyclical, banking, and financial stocks. The idea is that rising rates will make spending and investment more expensive, meaning end-market demand will tail off.
Now what
The market will do one thing, and Buffett will do another. Reacting to near-term market movements and trying to trade sentiment and mood changes among investors is rarely a winning strategy over the long term. Indeed, Buffett's success as an investor lies precisely in avoiding this kind of knee-jerk trading. Instead, Buffett tends to favor buying and holding companies for their long-term fundamental earnings power. And while the market is panicking, it's worth noting that Berkshire Hathaway is only down 1% on a year-over-year basis. Something to consider.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Lee Samaha 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 Kraft Heinz 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. | Data by YCharts The performance in June marks a reversal of fortune because, going into the month, Berkshire Hathaway was up in 2022 with a 5.2% gain compared to a 13.3% decline in the index. Speculators likely bought into the type of stocks seen as benefiting from inflationary trends (energy) and kept buying until the Federal Reserve acted aggressively to combat inflation by hiking rates. However, as the market anticipated and then digested the Federal Reserve rate hike in the middle of June, it sold off the "inflation plays" as well as the cyclical, banking, and financial stocks. | Apple Consumer electronics 42.1% Bank of America Bank 11.3% American Express Financial services 8% Chevron Energy 7% Coca-Cola Consumer staples 7% Occidental Petroleum Energy 3.6% Kraft Heinz Consumer staples 3.5% Data source: Berkshire Hathaway SEC filings. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool recommends Kraft Heinz 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. | Apple Consumer electronics 42.1% Bank of America Bank 11.3% American Express Financial services 8% Chevron Energy 7% Coca-Cola Consumer staples 7% Occidental Petroleum Energy 3.6% Kraft Heinz Consumer staples 3.5% Data source: Berkshire Hathaway SEC filings. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool recommends Kraft Heinz 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. | So what The reversal in Berkshire Hathaway's performance reflects the shift in the market's mood more than any fundamental change in the long-term prospects of the companies in the portfolio. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Bank of America is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway (B shares). |
20413.0 | 2022-07-04 00:00:00 UTC | Amazon (AMZN) Wins Champions League Rights, Boosts UK Reach | AAPL | https://www.nasdaq.com/articles/amazon-amzn-wins-champions-league-rights-boosts-uk-reach | nan | nan | Amazon AMZN is leaving no stone unturned to bolster its presence in the booming worldwide streaming market on the back of its strengthening content library across various nations.
The company’s latest win of rights to broadcast the UEFA Champions League — Europe’s top football tournament in the U.K. — testifies to the above-mentioned statement.
Amazon’s video streaming platform, Prime Video, will stream Champions League matches on Tuesday nights for three years from the 2024-2025 season. More precisely, Amazon will stream one game per week and 20 matches per season.
The latest win bodes well for the company’s growing efforts to strengthen its live sports streaming content portfolio on Prime Video.
The streaming of Champions League matches will likely aid the company in attracting viewers to its platform, which, in turn, will boost the demand for Prime Video in the U.K.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote
Growth Prospects
We believe that the latest move would expand the subscriber base of the Prime program in the underlined country, which has been acting as a key catalyst behind the growth of the company.
Consequently, this will drive the company’s subscription revenues, which, in turn, will aid its overall performance.
Notably, Amazon witnessed 11% year-over-year growth in its subscription services, which were $8.4 billion in first-quarter 2022.
In addition, strengthening Prime momentum will aid the company in winning investors’ confidence in the near term. Amazon has lost 34.3% on a year-to-date basis.
Rising Competition
The latest achievement bodes well for Amazon’s growing efforts to strengthen its presence in the growing video streaming market of the U.K.
The company’s total investment in British television, films and live sports content has exceeded £1 billion or $1.2 billion over the past few years.
Hence, Amazon, which currently carries a Zacks Rank #3 (Hold), remains well-poised to capitalize on the immense growth prospects in the underlined market.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per a Statista report, revenues in the U.K. video streaming space are likely to hit $3.2 billion in 2022. The figure is expected to see a CAGR of 15.5% between 2022 and 2026 and reach $5.8 billion by 2026.
Further, user penetration rates for 2022 and 2026 are pegged at 35.4% and 50.7%, respectively.
Given the upbeat scenario, not only Amazon but also streaming giants — Netflix NFLX, Disney DIS and Apple AAPL — are some noteworthy players in this promising market.
DIS’s Disney Plus is continuously witnessing solid customer momentum on the back of its impressive content library in the U.K., which include around 500 films, 350 series and 26 Disney Plus Originals.
The growing momentum of Disney Plus Star, which features more mature content from Disney-owned studios such as ABC and 20th Century Studios, remains another major positive.
Apple is also experiencing strong momentum on the back of its robust content portfolio comprising award-winning series, compelling dramas, groundbreaking documentaries, kids' entertainment content and a rising number of originals.
Meanwhile, Netflix has been witnessing weak customer momentum in the country due to the loss of the right to stream some hit and popular shows, including Modern Family, to Disney Plus.
However, the company’s growing investments in content library expansion and deepening focus on creating original productions remain noteworthy.
Nevertheless, Amazon’s aggressive content expansion strategy, along with a growing focus on live sports streaming, is expected to continue aiding its competitive position against the above-mentioned players.
Strong retail benefits of Prime, including ultra-fast delivery services, strengthening pick-up services, and robust cashback and reward offers that make Prime more attractive, are likely to continue driving Amazon Prime’s momentum in the country.
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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. | Given the upbeat scenario, not only Amazon but also streaming giants — Netflix NFLX, Disney DIS and Apple AAPL — are some noteworthy players in this promising market. Apple Inc. (AAPL): Free Stock Analysis Report Amazon AMZN is leaving no stone unturned to bolster its presence in the booming worldwide streaming market on the back of its strengthening content library across various nations. | Given the upbeat scenario, not only Amazon but also streaming giants — Netflix NFLX, Disney DIS and Apple AAPL — are some noteworthy players in this promising market. Apple Inc. (AAPL): Free Stock Analysis Report Amazon’s video streaming platform, Prime Video, will stream Champions League matches on Tuesday nights for three years from the 2024-2025 season. | Given the upbeat scenario, not only Amazon but also streaming giants — Netflix NFLX, Disney DIS and Apple AAPL — are some noteworthy players in this promising market. Apple Inc. (AAPL): Free Stock Analysis Report Amazon’s video streaming platform, Prime Video, will stream Champions League matches on Tuesday nights for three years from the 2024-2025 season. | Given the upbeat scenario, not only Amazon but also streaming giants — Netflix NFLX, Disney DIS and Apple AAPL — are some noteworthy players in this promising market. Apple Inc. (AAPL): Free Stock Analysis Report Amazon’s video streaming platform, Prime Video, will stream Champions League matches on Tuesday nights for three years from the 2024-2025 season. |
20414.0 | 2022-07-04 00:00:00 UTC | Taiwan's Foxconn raises full-year outlook on strong tech demand | AAPL | https://www.nasdaq.com/articles/taiwans-foxconn-raises-full-year-outlook-on-strong-tech-demand | nan | nan | TAIPEI, July 4 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker, raised its full-year business outlook on Monday thanks to strong tech sales from smartphones to servers despite concerns of slowing demand due to rising inflation.
The Taiwanese firm has grappled with a severe shortage of chips like other global manufacturers, which has hurt smartphone production including for its major client Apple AAPL.O, partly due to COVID-19 lockdowns in China.
But the company's June sales jumped 31% from a year earlier to a record high for the month, thanks to appropriate supply chain management and rising sales of consumer electronics, including smartphones, which make up the bulk of its revenue.
Foxconn's better-than-expected June sales come at a time when investors have raised concerns about slowing tech demand during a downturn in major markets due to high inflation and the war in Ukraine.
Chip stocks across the world tumbled on Friday after memory chip maker Micron Technology Inc MU.O forecast on Thursday significantly worse-than-expected revenue for the current quarter and said the market had "weakened considerably in a very short period of time."
Foxconn said in a statement it was optimistic about its business in the third quarter, saying it could see "significant growth" compared with a year earlier.
For 2022, Foxconn said the outlook has improved and it exceed its expectations for no growth, without providing details.
The company, named Hon Hai Precision Industry Co Ltd in full, said it has seen so far this year double-digit yearly growth in sales from servers and telecommunications products.
The company has said that COVID-19 controls in China only had a limited impact on its production as it kept workers on-site in a "closed loop" system.
The company's shares ended down 1% on Monday, largely in line with the broader market .TWII. They have dropped 3.9% so far this year, giving the firm a market value of $49.3 billion.
(Reporting by Yimou Lee and Ben Blanchard, Editing by Louise Heavens)
((yimou.lee@thomsonreuters.com; +886-2-8729-5122;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The Taiwanese firm has grappled with a severe shortage of chips like other global manufacturers, which has hurt smartphone production including for its major client Apple AAPL.O, partly due to COVID-19 lockdowns in China. TAIPEI, July 4 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker, raised its full-year business outlook on Monday thanks to strong tech sales from smartphones to servers despite concerns of slowing demand due to rising inflation. Foxconn's better-than-expected June sales come at a time when investors have raised concerns about slowing tech demand during a downturn in major markets due to high inflation and the war in Ukraine. | The Taiwanese firm has grappled with a severe shortage of chips like other global manufacturers, which has hurt smartphone production including for its major client Apple AAPL.O, partly due to COVID-19 lockdowns in China. TAIPEI, July 4 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker, raised its full-year business outlook on Monday thanks to strong tech sales from smartphones to servers despite concerns of slowing demand due to rising inflation. But the company's June sales jumped 31% from a year earlier to a record high for the month, thanks to appropriate supply chain management and rising sales of consumer electronics, including smartphones, which make up the bulk of its revenue. | The Taiwanese firm has grappled with a severe shortage of chips like other global manufacturers, which has hurt smartphone production including for its major client Apple AAPL.O, partly due to COVID-19 lockdowns in China. TAIPEI, July 4 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker, raised its full-year business outlook on Monday thanks to strong tech sales from smartphones to servers despite concerns of slowing demand due to rising inflation. But the company's June sales jumped 31% from a year earlier to a record high for the month, thanks to appropriate supply chain management and rising sales of consumer electronics, including smartphones, which make up the bulk of its revenue. | The Taiwanese firm has grappled with a severe shortage of chips like other global manufacturers, which has hurt smartphone production including for its major client Apple AAPL.O, partly due to COVID-19 lockdowns in China. TAIPEI, July 4 (Reuters) - Taiwan's Foxconn 2317.TW, the world's largest contract electronics maker, raised its full-year business outlook on Monday thanks to strong tech sales from smartphones to servers despite concerns of slowing demand due to rising inflation. Foxconn said in a statement it was optimistic about its business in the third quarter, saying it could see "significant growth" compared with a year earlier. |
20415.0 | 2022-07-04 00:00:00 UTC | Geely founder's venture in smartphone push after Meizu stake buy | AAPL | https://www.nasdaq.com/articles/geely-founders-venture-in-smartphone-push-after-meizu-stake-buy | nan | nan | By Josh Horwitz
July 4 (Reuters) - A venture run by the founder of Chinese automaker Zhejiang Geely Holding GEELY.UL said on Monday it will look to break uniformity in the smartphone industry, as it completed a purchase of a majority stake in handset brand Meizu.
The deal by Hubei Xingji Shidai Technology Co Ltd, which was launched by Geely's chairman Eric Li last year as part of a push by the automaker into premium smartphones, was first revealed to the public in June via a statement from China's market regulator.
The purchase brings Geely, an established Chinese auto company known overseas for its ownership of Volvo, one step closer to entering the hyper-competitive consumer hardware sector.
Xingji Technology completed its purchase of a 79.09% stake in Meizu, the companies said on Monday.
Meizu, a nearly two-decade old Chinese consumer electronics company, rose to prominence early in the 1ast decade as an up-and-coming Chinese Android. However, it was bested by rivals and now occupies a marginal market share.
While Meizu will remain as an independent brand, they would look to closely collaborate in areas such as software, they added.
At a livestreamed news conference, Shen Ziyu, chairman of Meizu and vice chairman of Xingji Technology, said the firms believed they could successfully attract customers by offering differentiated products, particularly at the premium level.
"We're from the car industry and overall car sales have been declining, but new energy vehicles are growing fast," Shen said.
With respect to smartphones, "there are very few choices at the high-end, and there are many choices at the low end, but the homogenisation is very serious," he added.
The companies' also said that Meizu had differentiated itself with FlymeOS, its homegrown Android-based customisation, and hopes to extend its software across a range of devices.
They did not reveal financial terms of the deal.
Xingji Technology also said it was currently developing a portfolio of next-generation smartphones, mobile devices, and wearable smart devices that will utilise extended reality technologies.
Reuters reported in September that Xingji Technology aims to release its first smartphone by 2023 and sell 3 million units in its first year, citing an internal memo.
Xingji Technology will compete with Huawei-spinoff Honor, which currently leads the market, as well as Xiaomi Corp 1810.HK, Oppo, Vivo, and Apple AAPL.O, which maintains a loyal following in China.
Geely's foray into the smartphone sector comes as Chinese consumers are demanding more smart technologies from their cars, favouring for example, the ability to use mobile apps from the car's dashboard. It also comes as the smartphone industry is struggling to grow, both in China and globally.
Worldwide smartphone shipments in the first quarter of 2022 fell 11% on year, while shipments in China fell 17% over the same period, according to research firm Canalys.
(Editing by Muralikumar Anantharaman and Jacqueline Wong)
((Josh.Horwitz@thomsonreuters.com; +86 21 20830007;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Xingji Technology will compete with Huawei-spinoff Honor, which currently leads the market, as well as Xiaomi Corp 1810.HK, Oppo, Vivo, and Apple AAPL.O, which maintains a loyal following in China. By Josh Horwitz July 4 (Reuters) - A venture run by the founder of Chinese automaker Zhejiang Geely Holding GEELY.UL said on Monday it will look to break uniformity in the smartphone industry, as it completed a purchase of a majority stake in handset brand Meizu. The deal by Hubei Xingji Shidai Technology Co Ltd, which was launched by Geely's chairman Eric Li last year as part of a push by the automaker into premium smartphones, was first revealed to the public in June via a statement from China's market regulator. | Xingji Technology will compete with Huawei-spinoff Honor, which currently leads the market, as well as Xiaomi Corp 1810.HK, Oppo, Vivo, and Apple AAPL.O, which maintains a loyal following in China. Xingji Technology completed its purchase of a 79.09% stake in Meizu, the companies said on Monday. Xingji Technology also said it was currently developing a portfolio of next-generation smartphones, mobile devices, and wearable smart devices that will utilise extended reality technologies. | Xingji Technology will compete with Huawei-spinoff Honor, which currently leads the market, as well as Xiaomi Corp 1810.HK, Oppo, Vivo, and Apple AAPL.O, which maintains a loyal following in China. By Josh Horwitz July 4 (Reuters) - A venture run by the founder of Chinese automaker Zhejiang Geely Holding GEELY.UL said on Monday it will look to break uniformity in the smartphone industry, as it completed a purchase of a majority stake in handset brand Meizu. The deal by Hubei Xingji Shidai Technology Co Ltd, which was launched by Geely's chairman Eric Li last year as part of a push by the automaker into premium smartphones, was first revealed to the public in June via a statement from China's market regulator. | Xingji Technology will compete with Huawei-spinoff Honor, which currently leads the market, as well as Xiaomi Corp 1810.HK, Oppo, Vivo, and Apple AAPL.O, which maintains a loyal following in China. The deal by Hubei Xingji Shidai Technology Co Ltd, which was launched by Geely's chairman Eric Li last year as part of a push by the automaker into premium smartphones, was first revealed to the public in June via a statement from China's market regulator. The companies' also said that Meizu had differentiated itself with FlymeOS, its homegrown Android-based customisation, and hopes to extend its software across a range of devices. |
20416.0 | 2022-07-04 00:00:00 UTC | 3 Tech Stocks To Watch In The Stock Market Today | AAPL | https://www.nasdaq.com/articles/3-tech-stocks-to-watch-in-the-stock-market-today | nan | nan | Here Are 3 Tech Stocks For Your July 2022 Watchlist Today
For investors wondering whether the stock market is open today, that would be a no. However, investors may still be looking for stocks to place in their watchlist, and tech stocks could be a viable play. With the Federal Reserve’s aggressive rate hike plans, some of the biggest tech stocks around are, arguably, trading at lower valuations. To highlight, tech firms such as Alphabet (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT) are currently down by over 20% year-to-date. This could make it a great entry point for investors looking to buy and hold tech stocks for the long term.
Take Coupang (NYSE: CPNG) for instance. According to Credit Suisse (NYSE: CS), Coupang is offering investors an attractive opportunity amid a “bottom line turnaround.” Credit Suisse believes that Coupang should start to harvest its traffic by leveraging the largest membership subscribers. With the accumulated user data, it can, ideally, generate ad sales and competitiveness in providing fulfillment for third-party merchants. With that, Credit Suisse has upgraded Coupang from a ‘Neutral’ rating to a ‘Buy’ rating.
Another company worth watching would be GoDaddy (NYSE: GDDY). Last week, the company announced that it has entered into an agreement to acquire the Dutch domain trading platform Dan.com. This deal will close in the third quarter of this year. Following the acquisition, employees of Dan will integrate into the Domains, Registrars, and Investors team in GoDaddy. Evidently, tech firms remain as busy as ever heading into the second half of the year. On that note, here are three more tech stocks for your watchlist today.
3 Tech Stocks To Buy [Or Sell] This July 2022
Micron Technology Inc. (NASDAQ: MU)
Apple Inc. (NASDAQ: AAPL)
Zscaler Inc. (NASDAQ: ZS)
Micron Technology Inc.
Starting us off today, we have Micron Technology, a tech company that produces computer memory and computer data storage products. This would include dynamic random-access memory, flash memory, and USB flash drives. Furthermore, its consumer products are marketed under the Crucial and Ballistix brands. It is also a leader in the industry as it continues to innovate to transform how the world uses information. Last week, Micron reported its third-quarter financials for fiscal 2022.
Diving in, it posted a revenue of $8.64 billion, an increase of 16.4% year-over-year. GAAP net income for the quarter was $2.63 billion or $2.34 per diluted share. Besides, the company ended the quarter with an operating cash flow of $3.84 billion. “Micron delivered record revenue in the fiscal third quarter driven by our team’s excellent execution across technology, products and manufacturing,” said Micron Technology President and CEO Sanjay Mehrotra. “Recently, the industry demand environment has weakened, and we are taking action to moderate our supply growth in fiscal 2023. We are confident about the long-term secular demand for memory and storage and are well positioned to deliver strong cross-cycle financial performance.”
On June 21, 2022, the company also announced expansions to its embedded product portfolio and ecosystem partnerships. This will deliver solutions optimized for complex memory and storage demand at the intelligent edge. To better provide its high-performance solutions to the market, Micron is also adding partners to its Industrial Quotient (IQ) partner program. All things considered, is MU stock worth investing in right now?
[Read More] Best Stocks To Invest In 2022? 3 Consumer Stocks For Your Watchlist
Apple Inc.
Following that, we have Apple, a consumer tech company that is one of the biggest companies in the world by market capitalization. The company is also known for its line of premium tech products like the iPhone and Macbook laptops. Also, among other things, it has a subscription streaming service called Apple TV+.
Last week, J.P. Morgan (NYSE: JPM ) Securities analyst Samik Chatterjee reiterated his ‘Overweight’ rating on Apple, saying he is not worried about Apple’s prospects like the others on Wall Street. The first has a December price target of $200 per share, $61 higher than its close on Friday. While Chatterjee notes that there are medium-term risks, he expects upcoming revenue and earnings to be resilient. To top things off, the analyst also notes that better supply chain dynamics will overwhelm the modest demand weakness and Apple’s warning of a $4 billion to $8 billion revenue hit in this latest quarter.
On June 14, 2022, the company announced together with Major League Soccer (MLS) that the Apple TV app will be the exclusive destination to watch every single live MLS match beginning in 2023. This partnership is a historic first for a major professional sports league, and will allow fans around the world to watch all MLS, Leagues Cup, and select MLS NEXT Pro and MLS NEXT matches in one place. Notably, this will be without any local broadcast blackouts or the need for a traditional pay TV bundle. Given all of this, should investors consider adding AAPL stock to their portfolios?
[Read More] Best Long-Term Stocks To Buy Now? 5 Semiconductor Stocks To Know
Zscaler Inc.
Topping our list today, we have Zscaler, a cybersecurity company that protects its customers from cyberattacks and data loss. It does this especially with its Zscaler Zero Trust Exchange, securely connecting users, devices, and applications in any location. Impressively, the SSE-based Zero Trust Exchange spans more than 150 data centers globally and is one of the world’s largest online cloud security platforms. On June 22, 2022, the company announced an extension to its relationship with Amazon’s (NASDAQ: AMZN) Amazon Web Services (AWS).
Through this partnership, the companies will consolidate and simplify cloud security operations while helping organizations advance their security architecture. This will facilitate a transition from ineffective legacy models to a modern Zero Trust approach. As the company said in its press release, both companies share a vision to deliver the highest quality security solutions for its customers and to help them navigate through the latest cloud security requirements. Ultimately, the expanded relationship will offer organizations simple yet powerful solutions built on and tightly integrated with AWS security, observability, and data protection services.
On that same day, it also announced its new Posture Control solution. The solution will give organizations unified Cloud-Native Application Protection Platform (CNAPP) functionality tailor-made to secure cloud workloads. After integration with the company’s Zero Trust Exchange, it will enable security teams to efficiently prioritize and remediate risks in cloud-native applications earlier in the development lifecycle. As such, is ZS stock a buy for you?
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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. | 3 Tech Stocks To Buy [Or Sell] This July 2022 Micron Technology Inc. (NASDAQ: MU) Apple Inc. (NASDAQ: AAPL) Zscaler Inc. (NASDAQ: ZS) Micron Technology Inc. Given all of this, should investors consider adding AAPL stock to their portfolios? We are confident about the long-term secular demand for memory and storage and are well positioned to deliver strong cross-cycle financial performance.” On June 21, 2022, the company also announced expansions to its embedded product portfolio and ecosystem partnerships. | 3 Tech Stocks To Buy [Or Sell] This July 2022 Micron Technology Inc. (NASDAQ: MU) Apple Inc. (NASDAQ: AAPL) Zscaler Inc. (NASDAQ: ZS) Micron Technology Inc. Given all of this, should investors consider adding AAPL stock to their portfolios? Here Are 3 Tech Stocks For Your July 2022 Watchlist Today For investors wondering whether the stock market is open today, that would be a no. | 3 Tech Stocks To Buy [Or Sell] This July 2022 Micron Technology Inc. (NASDAQ: MU) Apple Inc. (NASDAQ: AAPL) Zscaler Inc. (NASDAQ: ZS) Micron Technology Inc. Given all of this, should investors consider adding AAPL stock to their portfolios? Here Are 3 Tech Stocks For Your July 2022 Watchlist Today For investors wondering whether the stock market is open today, that would be a no. | 3 Tech Stocks To Buy [Or Sell] This July 2022 Micron Technology Inc. (NASDAQ: MU) Apple Inc. (NASDAQ: AAPL) Zscaler Inc. (NASDAQ: ZS) Micron Technology Inc. Given all of this, should investors consider adding AAPL stock to their portfolios? Starting us off today, we have Micron Technology, a tech company that produces computer memory and computer data storage products. |
20417.0 | 2022-07-03 00:00:00 UTC | Geely founder's venture completes purchase of majority stake in China's Meizu | AAPL | https://www.nasdaq.com/articles/geely-founders-venture-completes-purchase-of-majority-stake-in-chinas-meizu | nan | nan | SHANGHAI, July 4 (Reuters) - A venture run by the founder of Chinese automaker Zhejiang Geely Holding GEELY.UL announced on Monday it has completed the purchase of a 79.09% stake in smartphone brand Meizu, and that the two firms would work closely on mobile technologies.
The deal by Hubei Xingji Shidai Technology Co Ltd, which was launched by Geely's chairman Eric Li last year as part of a push by the automaker into premium smartphones, was first revealed to the public in June via a statement from China's market regulator. It did not provide financial details for the deal.
Meizu will continue to operate as an independent brand, under Xingji Technology, and they will look to closely collaborate in areas such as software development, the companies said in a joint statement.
Xingji Technology is currently developing a portfolio of next-generation smartphones, mobile devices and wearable smart devices that will utilise "extended reality" technologies, it added.
(Reporting by Josh Horwitz; Editing by Muralikumar Anantharaman)
((Josh.Horwitz@thomsonreuters.com; +86 21 20830007;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | SHANGHAI, July 4 (Reuters) - A venture run by the founder of Chinese automaker Zhejiang Geely Holding GEELY.UL announced on Monday it has completed the purchase of a 79.09% stake in smartphone brand Meizu, and that the two firms would work closely on mobile technologies. The deal by Hubei Xingji Shidai Technology Co Ltd, which was launched by Geely's chairman Eric Li last year as part of a push by the automaker into premium smartphones, was first revealed to the public in June via a statement from China's market regulator. Meizu will continue to operate as an independent brand, under Xingji Technology, and they will look to closely collaborate in areas such as software development, the companies said in a joint statement. | SHANGHAI, July 4 (Reuters) - A venture run by the founder of Chinese automaker Zhejiang Geely Holding GEELY.UL announced on Monday it has completed the purchase of a 79.09% stake in smartphone brand Meizu, and that the two firms would work closely on mobile technologies. Meizu will continue to operate as an independent brand, under Xingji Technology, and they will look to closely collaborate in areas such as software development, the companies said in a joint statement. Xingji Technology is currently developing a portfolio of next-generation smartphones, mobile devices and wearable smart devices that will utilise "extended reality" technologies, it added. | SHANGHAI, July 4 (Reuters) - A venture run by the founder of Chinese automaker Zhejiang Geely Holding GEELY.UL announced on Monday it has completed the purchase of a 79.09% stake in smartphone brand Meizu, and that the two firms would work closely on mobile technologies. The deal by Hubei Xingji Shidai Technology Co Ltd, which was launched by Geely's chairman Eric Li last year as part of a push by the automaker into premium smartphones, was first revealed to the public in June via a statement from China's market regulator. Xingji Technology is currently developing a portfolio of next-generation smartphones, mobile devices and wearable smart devices that will utilise "extended reality" technologies, it added. | SHANGHAI, July 4 (Reuters) - A venture run by the founder of Chinese automaker Zhejiang Geely Holding GEELY.UL announced on Monday it has completed the purchase of a 79.09% stake in smartphone brand Meizu, and that the two firms would work closely on mobile technologies. The deal by Hubei Xingji Shidai Technology Co Ltd, which was launched by Geely's chairman Eric Li last year as part of a push by the automaker into premium smartphones, was first revealed to the public in June via a statement from China's market regulator. It did not provide financial details for the deal. |
20418.0 | 2022-07-03 00:00:00 UTC | Validea's Top Five Technology Stocks Based On Warren Buffett - 7/3/2022 | AAPL | https://www.nasdaq.com/articles/valideas-top-five-technology-stocks-based-on-warren-buffett-7-3-2022 | nan | nan | The following are the top rated Technology stocks according to Validea's Patient Investor model based on the published strategy of Warren Buffett. This strategy seeks out firms with long-term, predictable profitability and low debt that trade at reasonable valuations.
APPLE INC (AAPL) is a large-cap growth stock in the Communications Equipment industry. The rating according to our strategy based on Warren Buffett is 100% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Apple Inc. designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. The Company's products include iPhone, Mac, iPad, and Wearables, Home and Accessories. iPhone is the Company's line of smartphones based on its iOS operating system. Mac is the Company's line of personal computers based on its macOS operating system. iPad is the Company's line of multi-purpose tablets based on its iPadOS operating system. Wearables, Home and Accessories includes AirPods, Apple TV, Apple Watch, Beats products, HomePod, iPod touch and other Apple-branded and third-party accessories. AirPods are the Company's wireless headphones that interact with Siri. Apple Watch is the Company's line of smart watches. Its services include Advertising, AppleCare, Cloud Services, Digital Content and Payment Services. Its customers are primarily in the consumer, small and mid-sized business, education, enterprise and government markets.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
EARNINGS PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS
Detailed Analysis of APPLE INC
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COPART, INC. (CPRT) is a large-cap growth stock in the Computer Services industry. The rating according to our strategy based on Warren Buffett is 99% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Copart, Inc. (Copart) is a provider of online auctions and vehicle remarketing services with operations in the United States (U.S.), Canada, the United Kingdom (U.K.), Brazil, the Republic of Ireland, Germany, Finland, the United Arab Emirates (U.A.E.), Oman, Bahrain, and Spain. The Company operates through two segments: United States and International. The Company provides vehicle sellers with a range of services to process and sell vehicles primarily over the Internet through its virtual bidding third generation Internet auction-style sales technology (VB3). Its vehicle sellers consist primarily of insurance companies, but also include banks, finance companies, charities, fleet operators, dealers and from individuals. It sells the vehicles to licensed vehicle dismantlers, rebuilders, repair licensees, used vehicle dealers, exporters, and in some jurisdictions, to the general public.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
EARNINGS PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: NEUTRAL
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS
Detailed Analysis of COPART, INC.
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EPAM SYSTEMS INC (EPAM) is a large-cap growth stock in the Computer Services industry. The rating according to our strategy based on Warren Buffett is 99% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: EPAM Systems, Inc. is a digital transformation services provider, which delivers end-to-end value to its customers. The Company provides services through software solutions, integrated advisory, business consulting and design. The Company maintains a group of testing and quality assurance professionals with experience across a range of technology platforms and industry verticals. This group performs software application testing, test management, automation and consulting services focused on helping customers improve their existing software testing and quality assurance practices. It has integrated consulting teams across business, experience, technology and data. The functional business is engaged in technology platforms and their interactions, as well as the application of data science and machine learning, to deliver insights into its customers' business. Its digital and service design practice provides strategy, design, creative and program management services for customers.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
EARNINGS PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: NEUTRAL
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS
Detailed Analysis of EPAM SYSTEMS INC
Full Guru Analysis for EPAM>
Full Factor Report for EPAM>
ACCENTURE PLC (ACN) is a large-cap growth stock in the Computer Services industry. The rating according to our strategy based on Warren Buffett is 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Accenture plc is a professional services company, providing a range of services in strategy and consulting, interactive, technology and operations. It also provides network engineering, operations and services. Its segments include Communications, Media and Technology; Financial Services; Health and Public Service; Products, and Resources. The Communications, Media & Technology segment serves communications, electronics, technology, media and entertainment industries. The Financial Services segment serves banking, capital markets and insurance industries. The Health & Public service segment serves healthcare payers and providers, and government departments and agencies, public service organizations, educational institutions and non-profit organizations. The Resources segment serves chemicals, energy, forest products, metals and mining, utilities and related industries. It offers digital advertising services. It also provides companies with content creation production and distribution.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
EARNINGS PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS
Detailed Analysis of ACCENTURE PLC
Full Guru Analysis for ACN>
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MICROSOFT CORPORATION (MSFT) is a large-cap growth stock in the Software & Programming industry. The rating according to our strategy based on Warren Buffett is 93% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Microsoft Corporation is a technology company. The Company develops and supports a range of software products, services, devices, and solutions. The Company's segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Company's products include operating systems; cross-device productivity applications; server applications; business solution applications; desktop and server management tools; software development tools; and video games. It also designs, manufactures, and sells devices, including personal computers (PCs), tablets, gaming and entertainment consoles, other intelligent devices, and related accessories. It offers an array of services, including cloud-based solutions that provide customers with software, services, platforms, and content, and it provides solution support and consulting services. It markets and distributes its products and services through original equipment manufacturers, direct, and distributors and resellers.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
EARNINGS PREDICTABILITY: PASS
DEBT SERVICE: PASS
RETURN ON EQUITY: PASS
RETURN ON TOTAL CAPITAL: PASS
FREE CASH FLOW: PASS
USE OF RETAINED EARNINGS: PASS
SHARE REPURCHASE: PASS
INITIAL RATE OF RETURN: PASS
EXPECTED RETURN: PASS
Detailed Analysis of MICROSOFT CORPORATION
Full Guru Analysis for MSFT>
Full Factor Report for MSFT>
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Warren Buffett Stock Ideas
About Warren Buffett: Warren Buffett is considered by many to be the greatest investor of all time. As the chairman of Berkshire Hathaway, Buffett has consistently outperformed the S&P 500 for decades, and in the process has become one of the world's richest men. (Forbes puts his net worth at $37 billion.) Despite his fortune, Buffett is known for living a modest lifestyle, by billionaire standards. His primary residence remains the gray stucco Nebraska home he purchased for $31,500 nearly 50 years ago, according to Forbes, and his folksy Midwestern manner and penchant for simple pleasures -- a cherry Coke, a good burger, and a good book are all near the top of the list -- have been well-documented.
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | APPLE INC (AAPL) is a large-cap growth stock in the Communications Equipment industry. Detailed Analysis of APPLE INC Full Guru Analysis for AAPL> Full Factor Report for AAPL> COPART, INC. (CPRT) is a large-cap growth stock in the Computer Services industry. The following are the top rated Technology stocks according to Validea's Patient Investor model based on the published strategy of Warren Buffett. | APPLE INC (AAPL) is a large-cap growth stock in the Communications Equipment industry. Detailed Analysis of APPLE INC Full Guru Analysis for AAPL> Full Factor Report for AAPL> COPART, INC. (CPRT) is a large-cap growth stock in the Computer Services industry. Detailed Analysis of EPAM SYSTEMS INC Full Guru Analysis for EPAM> Full Factor Report for EPAM> ACCENTURE PLC (ACN) is a large-cap growth stock in the Computer Services industry. | APPLE INC (AAPL) is a large-cap growth stock in the Communications Equipment industry. Detailed Analysis of APPLE INC Full Guru Analysis for AAPL> Full Factor Report for AAPL> COPART, INC. (CPRT) is a large-cap growth stock in the Computer Services industry. Detailed Analysis of EPAM SYSTEMS INC Full Guru Analysis for EPAM> Full Factor Report for EPAM> ACCENTURE PLC (ACN) is a large-cap growth stock in the Computer Services industry. | APPLE INC (AAPL) is a large-cap growth stock in the Communications Equipment industry. Detailed Analysis of APPLE INC Full Guru Analysis for AAPL> Full Factor Report for AAPL> COPART, INC. (CPRT) is a large-cap growth stock in the Computer Services industry. Company Description: Apple Inc. designs, manufactures and markets smartphones, personal computers, tablets, wearables and accessories, and sells a variety of related services. |
20419.0 | 2022-07-03 00:00:00 UTC | The Next Apple Product Launch Paves the Way for Major Gains | AAPL | https://www.nasdaq.com/articles/the-next-apple-product-launch-paves-the-way-for-major-gains | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Every once in a while, a revolutionary product comes along and changes everything. So said the late, great Steve Jobs of Apple (Nasdaq:AAPL) when he unveiled the first iPhone back in 2007.
Source: askarim / Shutterstock
At that launch, he implied that the newly released iPod-lookalike with Blackberry-level functionality would change everything.
And he couldn’t have been more right.
Today, there are more than a billion iPhones across the globe. Last quarter alone, Apple sold more than $50 billion worth of them. And it’s now the most valuable company in the world, with a $2.2 trillion market capitalization.
Talk about a revolutionary product. Since the iPhone was announced in early 2007, AAPL stock has risen more than 4,000%. That means every $10,000 investment at the time has now become more than $400,000!
Apple launched the iPhone in 2007, just a year before the U.S. economy plunged into its worst recession since 1930. And still, its stock rose more than 4,000% from that moment. The point, of course — revolutionary products grow right through recessions.
The Incoming Apple Innovation
Now… what if I told you that Apple was about to do it all over again?
That is, what if I told you the company will launch another revolutionary new product over the next 12 months? Better yet, what if I told you that this new product could be even more revolutionary than the iPhone? And perhaps best of all, what if I told you it was the last big idea from Steve Jobs himself?
Well, folks, all are true.
Apple is set to launch a brand-new product that will likely be more revolutionary than the iPhone. And it was an idea that Steve Jobs postulated as the next big breakthrough all the way back in 2008.
Make no mistake. This new product will change the world. It will generate enormous economic value. It will create a rising tide for all stocks related to this its development. And many of those stocks will soar thousands of percent.
And the time to discover the stocks to buy to play its huge breakout is now.
The iPhone Is Maxed Out
Before we talk about this brand-new product, we have to first understand why Apple is launching it
After all, aren’t things great at the company already?
They are. But every great innovation has a shelf life. And its biggest innovation — the iPhone — is about to expire.
When Apple first unveiled it back in 2007, only business execs had smartphones. That gave the company a long runway to scale its iPhone business.
Today, however, everyone who wants a smartphone already has one. Smartphone penetration in the U.S. is 85%. And given how long the iPhone has been around, it’s highly unlikely that the 15% of Americans who are smartphone holdouts suddenly give in over the next few years.
The smartphone market is saturated. You can see this in Apple’s iPhone sales. The number of iPhones sold per year by Apple soared from 11.6 million in 2008 to 231.2 million in 2015. Since then, annual unit sales have plateaued between 200- and 240 million units per year.
The iPhone business simply isn’t growing anymore.
If Apple wants to keep growing and remain the world’s most valuable company, it needs to reaccelerate its growth narrative.
It needs another new product with iPhone potential.
It needs a car.
Introducing “Project Titan”
In 2008, just a year after the launch of the iPhone, Steve Jobs speculated that the company’s next big breakthrough product would be an Apple car.
Nearly 15 years later, that vision is becoming a reality.
Dubbed “Project Titan” by insiders, Apple has been quietly developing an autonomous electric vehicle for years now.
The development has not been straightforward.
Rumors first broke about an Apple car back in 2015. Then in 2017, the company made a dramatic pivot. It decided to ditch making a car in favor of just developing self-driving technology. In another equally dramatic pivot in 2019, Apple switched back to its plans of making a full-scale EV. And just last year, Digitimes reported that Apple will mass produce its long-awaited and highly anticipated Apple car in 2024.
So, what’s with this whole “car” thing? Why isn’t Apple just making a better iPhone? Why an EV?
The answer has to do with technology adoption rates.
In terms of adoption, EV technology is today where smartphone technology was back when the iPhone launched.
In 2007, smartphone penetration rates in the U.S. were about 10%. Last year, global EV penetration rates were about 10%.
The company has learned from its success with the iPhone. The key to driving long-term growth through a revolutionary product is to launch when that tech’s adoption is around 10%.
That’s exactly where we are today with EVs. Naturally, Apple is planning to soon launch its own EV. It knows that if this car is a hit, it’ll be able to grow that business by leaps and bounds for the next 10-plus years!
Of course, its car will be a hit. Indeed, this is Apple we’re talking about. Everything it does is a hit — the iPhone, iPad, Mac, Watch.
Soon, we’ll be adding the Apple car to that list. And it’ll be the company’s biggest product yet. The auto market is significantly larger than the smartphone, computer, tablet, and smartwatch markets put together!
To play this coming megatrend, you could buy AAPL stock. But let’s face it. With a $2 trillion market cap, the stock’s days of scoring investors 10X-plus returns is behind it.
That’s why we’ve identified a far better, far higher-upside way to play the biggest consumer product launch since the iPhone.
Where the Big Bucks are Made With Apple Products
One thing you have to understand: When it comes to new product launches, Apple never goes at it alone.
That is, the company always wants to create the best product possible. To do that, it knows it needs help. It knows it’s not expert at everything. So, the company tends to partner with other companies to supply critical components to help build top-of-the-line products.
Historically, those suppliers have been fantastic investments.
Check out the stocks of companies that have partnered with Apple over the years. They’ve exploded in value. We’re talking investments that can turn $10,000 into as much as $140,000!
In other words, the best way to play a new Apple product launch isn’t to buy AAPL. It’s to buy supplier stocks related to that product launch.
And guess what?
We’ve found the No. 1 under-the-radar Apple supplier stock for the Apple Car.
The Final Word on the Apple Car
Want to know a fun fact about the iPhone that hardly anyone remembers? It launched in 2007, just months before the 2008 financial crisis and the worst economic recession since the 1930s.
It didn’t matter that the housing market was crashing, big banks were going under or unemployment rates were soaring. The story bigger than all that was that Apple was selling a lot of iPhones. And thanks to all those sales, AAPL investors made fortunes.
The lesson? When Apple launches a new product, forget everything else. Forget the economy and the market. Forget it all. Focus on the product — and buy Apple supplier stocks.
Right now, folks, the economy is in trouble. The markets are crashing. It’s ugly out there.
Yet, Apple is about to launch its biggest product since the iPhone. And if we want to not just survive the market volatility but also make fortunes in the long run, history shows us that the single best thing we can do right now is buy supplier stocks related to this product launch!
Our top pick is a $3 stock that will likely supply the vital tech to make the Apple Car go.
As this car changes the world, this tiny stock could soar more than 40X over the next decade.
This is a recession-proof, crash-proof investment idea that you need to hear about today.
Find out more.
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 The Next Apple Product Launch Paves the Way for Major Gains 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. | So said the late, great Steve Jobs of Apple (Nasdaq:AAPL) when he unveiled the first iPhone back in 2007. Since the iPhone was announced in early 2007, AAPL stock has risen more than 4,000%. To play this coming megatrend, you could buy AAPL stock. | So said the late, great Steve Jobs of Apple (Nasdaq:AAPL) when he unveiled the first iPhone back in 2007. Since the iPhone was announced in early 2007, AAPL stock has risen more than 4,000%. To play this coming megatrend, you could buy AAPL stock. | So said the late, great Steve Jobs of Apple (Nasdaq:AAPL) when he unveiled the first iPhone back in 2007. Since the iPhone was announced in early 2007, AAPL stock has risen more than 4,000%. To play this coming megatrend, you could buy AAPL stock. | So said the late, great Steve Jobs of Apple (Nasdaq:AAPL) when he unveiled the first iPhone back in 2007. Since the iPhone was announced in early 2007, AAPL stock has risen more than 4,000%. To play this coming megatrend, you could buy AAPL stock. |
20420.0 | 2022-07-03 00:00:00 UTC | Have $1,000? 2 Warren Buffett Stocks to Buy Right Now | AAPL | https://www.nasdaq.com/articles/have-%241000-2-warren-buffett-stocks-to-buy-right-now | nan | nan | Warren Buffett is sometimes referred to as "the Oracle of Omaha," a nickname earned by delivering decades of stellar investing performance. If you owned a $1,000 position in Berkshire Hathaway back in 1965 when Buffett acquired the company that would become the foundation for his market-crushing investment conglomerate, that stake would now be worth more than $22.7 million.
With a multitude of risk factors on the table, it might seem like a perilous time to be buying stocks, but market turbulence could also be creating worthwhile opportunities for investors. Read on to see why Snowflake (NYSE: SNOW) and Activision Blizzard (NASDAQ: ATVI) stand out as top companies in the Berkshire Hathaway portfolio to invest in right now.
Image source: The Motley Fool.
1. Snowflake
As Buffett has famously said, it can pay to be greedy when others are fearful. With that guiding wisdom in mind, I think it's a good time for long-term investors to be building a position in Snowflake.
Snowflake stock has gotten crushed as growth stocks have fallen out of favor this year. The company's share price is now down roughly 58% in 2022 and 66% from the lifetime high it hit last year. Its stock also trades down roughly 45% from the market close on the day of its initial public offering in September 2020.
Snowflake provides data-warehousing services that allow customers to combine data from different cloud infrastructure providers. Why is the ability to access, combine, and analyze information so important?
Data-analytics technology is changing the way businesses and institutions function. By gathering and analyzing huge swaths of information, it's possible to find ways to serve customers more efficiently and shift operations in accordance with unfolding trends. Snowflake's services make it easier to combine information from applications on walled-off cloud infrastructures and purchase information from third-party vendors.
Cloud-native applications built on the company's platform can more easily access a wider range of information and generate superior insights. Strong demand for the data specialist's services reflect the important role Snowflake is playing in the evolution of the Information Age.
SNOW Revenue (TTM) data by YCharts
The company's product revenue increased 106% annually last year, and management is guiding for product sales to increase roughly 66% in the current fiscal year. Investors have balked at the company's growth deceleration and forward-looking valuation amid high inflation and rising interest rates, but there's a good chance that Snowflake is still just scratching the surface of its long-term potential. I think patient investors have an opportunity to score multibagger returns with the stock at current prices.
2. Activision Blizzard
Berkshire's 13F filing for last year's fourth quarter revealed the investment conglomerate had initiated a position in Activision Blizzard, the video game publisher famous for Call of Duty, World of Warcraft, Candy Crush Saga, and other hit franchises. Buffett's company didn't have to wait long for the value of its investment to increase.
Microsoft announced in January that it would acquire Activision Blizzard in a $68.7 billion deal, working out to a price of $95 per share. The acquisition is expected to close less than a year from now, and the publisher's stock still offers 22% upside compared to the agreed-upon buyout price. However, there's a catch.
Right now, the big risk with Activision stock is that the acquisition will be blocked by regulators in the U.S. or other nations. In order for the deal to proceed, Microsoft will need approval from the U.S. Federal Trade Commission (FTC) and overseas governing regulatory bodies. The market seems to think there's a significant chance that it will be blocked on antitrust grounds.
Microsoft undeniably has strong positions in the gaming industry and the tech sector at large, and it's possible that the FTC will take a tougher stance on large acquisitions under the Biden administration. On the other hand, even larger acquisitions in the media and communications industry have received approval in recent years, and the tech giant would still have strong competition in relevant categories even if the deal goes through.
In the console market, Microsoft has trailed behind Sony Group and Nintendo in terms of market share for years, and the company also faces tough competition from Chinese tech conglomerate Tencent Holdings. Beyond just gaming, I think Microsoft can make a strong case that the acquisition is important for competing against other tech giants that have large product, platform, and service ecosystems -- such as Alphabet, Apple, and Amazon.
Berkshire recently increased its holdings in Activision Blizzard stock and now owns 9.5% of the company. Buffett and his team are betting that there's a high likelihood that the deal goes through, and I think they're right. With upside looking hard to find in the current market, Activision stock has an appealing risk-reward profile ahead of its pending acquisition.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Keith Noonan has positions in Activision Blizzard. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Snowflake Inc., and Tencent Holdings. The Motley Fool recommends Nintendo 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. | Investors have balked at the company's growth deceleration and forward-looking valuation amid high inflation and rising interest rates, but there's a good chance that Snowflake is still just scratching the surface of its long-term potential. On the other hand, even larger acquisitions in the media and communications industry have received approval in recent years, and the tech giant would still have strong competition in relevant categories even if the deal goes through. Beyond just gaming, I think Microsoft can make a strong case that the acquisition is important for competing against other tech giants that have large product, platform, and service ecosystems -- such as Alphabet, Apple, and Amazon. | Activision Blizzard Berkshire's 13F filing for last year's fourth quarter revealed the investment conglomerate had initiated a position in Activision Blizzard, the video game publisher famous for Call of Duty, World of Warcraft, Candy Crush Saga, and other hit franchises. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Snowflake Inc., and Tencent Holdings. The Motley Fool recommends Nintendo 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. | Activision Blizzard Berkshire's 13F filing for last year's fourth quarter revealed the investment conglomerate had initiated a position in Activision Blizzard, the video game publisher famous for Call of Duty, World of Warcraft, Candy Crush Saga, and other hit franchises. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Snowflake Inc., and Tencent Holdings. The Motley Fool recommends Nintendo 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. | Buffett's company didn't have to wait long for the value of its investment to increase. 10 stocks we like better than Snowflake Inc. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Snowflake Inc., and Tencent Holdings. |
20421.0 | 2022-07-02 00:00:00 UTC | 3 High-Growth Stocks That Could Be Worth $1 Trillion in 10 Years -- or Sooner | AAPL | https://www.nasdaq.com/articles/3-high-growth-stocks-that-could-be-worth-%241-trillion-in-10-years-or-sooner-0 | nan | nan | Among the thousands of publicly traded companies in the U.S., only four stocks have a market capitalization of $1 trillion or more: Apple, Microsoft, Alphabet, and Amazon. This year's market crash also means some stocks that joined the elite club last year, like Meta Platforms and Tesla, aren't there anymore.
The stock market sell-off also means stocks could find it harder to make the $1 trillion cut, but that doesn't mean they won't. Companies that are already growing fast enough and are equipped to exploit growth opportunities could hit $1 trillion in a few years. Here are three such high-growth stocks that could hit the milestone in just 10 years from now, or maybe even sooner.
Ready for the next leg of growth
Johnson & Johnson (NYSE: JNJ) isn't really a high-growth stock, but the company's plans could spur its growth and send its shares catapulting. The next 10 years are crucial as the company transforms itself, and if it can execute, J&J's current market cap of around $467 billion could slowly but steadily rise close to $1 trillion.
The thing is, J&J is in the process of spinning off its consumer health business into a separate publicly traded entity within the next 18 to 24 months. By doing so, the company wants to drop off a cyclical business and emerge as a healthcare pure-play with a focus on pharmaceuticals and medical devices. Pharmaceuticals alone brought in 55% of sales for J&J in 2021, and medical devices contributed 29% to its top line.
These two were also the largest contributors to J&J's earnings before tax (EBT) last year -- pharmaceuticals generated EBT margin of 34.9%, while medical devices reported EBT margin of 16.2% in 2021. Comparatively, consumer health's EBT margin came in at only 8.8%.
It's clear that the spin-off will allow J&J to focus on and invest in high sales-and-margin businesses, which should help drive its income and cash flows at a faster pace than now. That aside, J&J is also expected to boost shareholder returns in the form of larger dividends and share repurchases as its cash flows grow. Combined, both factors should reflect in J&J's stock price and push its market cap higher. Since J&J is also a Dividend King with 60 years of consecutive dividend increases, it's a rare stock that should mix dividend and growth to hit $1 trillion in market cap.
Just 5 years to $1 trillion?
Warren Buffett is known for his stock-picking prowess, and people who have invested in shares of his conglomerate, Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), have done so hoping to make money as the several companies that Berkshire owns grow. There's another embedded growth opportunity in Berkshire: Its stock portfolio.
Berkshire owns stakes in more than 50 publicly traded companies, including high-growth companies like Apple, Snowflake, and BYD, to name a few. In fact, it's a hugely diversified portfolio, so there are almost always some pockets of strengths. For instance, while growth stocks have tanked this year, Berkshire's stock portfolio is riding the boom in energy stocks like Chevron and Occidental Petroleum.
So although Berkshire's key businesses, including insurance, utilities, and railroad, must perform well for the company's market cap to rise, a rise in the value of its stock portfolio can also hugely help drive Berkshire's value higher. That, I believe, could make it easier for this company to reach $1 trillion in market cap. The most important point is that it could reach there in as few as five years.
Here's the thing. Between 1965 and 2021, Berkshire stock generated a compound annual return of 20%. The S&P 500 grew at 10.5% during the period. Even if Berkshire grows at the market's pace henceforth, which is almost half the company's own pace of growth over a period of more than 50 years, it'll take just a little over five years for the stock to surpass $1 trillion from its current market cap of around $600 billion. Berkshire has the leadership, portfolio, and cash to make it there.
The stock with indisputable growth catalysts
Visa (NYSE: V) currently commands a market cap of around $417 billion. That's a more than four-fold growth in just one decade, so it's not unreasonable to expect the stock to just more than double in another 10 years. Visa is the leader in the global payments processing industry and is growing its revenue, margins, and cash flows rapidly.
V Revenue (TTM) data by YCharts
While the COVID-19 pandemic proved to be a huge tailwind for e-commerce and digital transactions, restricted cross-border travel was a significant headwind for Visa. Yet, Visa's payments volume increased 16%, revenue grew 10%, and net income rose 13% in its financial year ended Sept. 30, 2021. Visa also increased its dividend by 17% in the year.
Visa's growth continues into 2022, with its revenue and net income rising by almost 24% each in the six months through March 31.
In the longer term, two factors will hold the key to Visa's growth: The global shift toward digital payments, and innovation. While the first is self-explanatory, Visa is doing a lot of things to diversify revenues. To name a few, it is expanding its merchant base including small businesses, getting Visa credentials into as many wallets as it can, launching products and services for business-to-business, business-to-consumer, and government-to-consumer transactions, and investing in value-added services like cybersecurity, data solutions, and analytics for clients and partners.
The global digital payments market is projected to grow by double-digit compound annual growth rates through 2030. That should lay the foundation for Visa's growth, and its stock price.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Neha Chamaria 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, BYD, Berkshire Hathaway (B shares), Meta Platforms, Inc., Microsoft, Snowflake Inc., Tesla, and Visa. The Motley Fool recommends Johnson & Johnson 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. | The next 10 years are crucial as the company transforms itself, and if it can execute, J&J's current market cap of around $467 billion could slowly but steadily rise close to $1 trillion. It's clear that the spin-off will allow J&J to focus on and invest in high sales-and-margin businesses, which should help drive its income and cash flows at a faster pace than now. V Revenue (TTM) data by YCharts While the COVID-19 pandemic proved to be a huge tailwind for e-commerce and digital transactions, restricted cross-border travel was a significant headwind for Visa. | Berkshire owns stakes in more than 50 publicly traded companies, including high-growth companies like Apple, Snowflake, and BYD, to name a few. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BYD, Berkshire Hathaway (B shares), Meta Platforms, Inc., Microsoft, Snowflake Inc., Tesla, and Visa. The Motley Fool recommends Johnson & Johnson 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. | For instance, while growth stocks have tanked this year, Berkshire's stock portfolio is riding the boom in energy stocks like Chevron and Occidental Petroleum. Even if Berkshire grows at the market's pace henceforth, which is almost half the company's own pace of growth over a period of more than 50 years, it'll take just a little over five years for the stock to surpass $1 trillion from its current market cap of around $600 billion. The Motley Fool recommends Johnson & Johnson 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. | Just 5 years to $1 trillion? Visa is the leader in the global payments processing industry and is growing its revenue, margins, and cash flows rapidly. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, BYD, Berkshire Hathaway (B shares), Meta Platforms, Inc., Microsoft, Snowflake Inc., Tesla, and Visa. |
20422.0 | 2022-07-02 00:00:00 UTC | Here Are 2 of the Best Stocks to Buy if the U.S. Avoids a Recession | AAPL | https://www.nasdaq.com/articles/here-are-2-of-the-best-stocks-to-buy-if-the-u.s.-avoids-a-recession | nan | nan | A recession is defined as two consecutive quarters of slowing economic growth, measured by gross domestic product (GDP) data. Over the last two years, interest rates have been at record lows while the U.S. government injected trillions of stimulus dollars into the economy to fight the pandemic, which led to strong growth.
Now, the Federal Reserve is raising interest rates back to normal levels, which could slow down the economy, and if it goes too far, it might even lead to a recession. Wall Street investment banks think the likelihood of that outcome within the next 12 months is around 30% to 40%.
But that might be too pessimistic
The stock market is paying close attention to that risk. The technology sector in particular, which is represented by the Nasdaq-100 index, has fallen 28% in 2022 so far, placing it firmly in a bear market. But are investors being too negative?
According to the most recent data, there are approximately 11.4 million job openings across the U.S. right now, but only 6 million people who are unemployed. It implies that businesses are feeling optimistic enough to hire more staff, and since there isn't enough available labor to fill all those jobs, employees might see their income continue to rise.
On that note, households are in great financial shape; their net worth (assets minus liabilities) is near all-time highs, and they have the highest cash balances on record. These conditions typically don't signal a looming recession, so what should investors do if one never comes?
Here are two great stocks investors will want to own if the U.S. economy remains strong and avoids the dreaded R-word.
1. Apple
Apple (NASDAQ: AAPL) is a quintessential consumer brand. If the economy remains strong and consumers feel confident about their financial future, it can be expected that Apple will sell more of its big-ticket devices like the iPhone and accessories, or its Mac line of computers.
And the company now offers far more than its innovative hardware products; it's a leading name in entertainment, attracting customer dollars for its Apple Music platform and its Apple TV+ streaming service.
These brands fall under its services segment along with Apple Pay, Apple News, and iCloud, among others. It accounted for 20% of Apple's total $97.2 billion in revenue during the recent second quarter of fiscal 2022 (ended March 26). But the story is the growth rate: Services revenue increased 17% year over year compared to 7% for Apple's products segment.
It has been a common theme in recent years, partly because devices like the iPhone are used by over 1.2 billion consumers, so it gradually becomes more difficult to generate user growth. But it's not necessarily a bad thing because the services segment is far more profitable, with a gross margin that hovers above 70% compared to around 35% for products.
By the end of the full fiscal year 2022, analysts expect Apple will have generated $393 billion in total revenue and $6.14 in earnings per share, which is equivalent to approximately $100 billion in net income. Given that Apple stock is currently down 24% from its all-time high, now might be an opportune time to take a position in the largest company in the world.
2. Upstart Holdings
Upstart Holdings (NASDAQ: UPST) listed on the public markets in December 2020 at $20 per share. It has since rocketed to an all-time high of $401, before falling back down to about $32, where it trades today. The company uses artificial intelligence to originate loans for 57 banks and credit unions (a number that's growing quickly), in a bid to compete with Fair Isaac's decades-old FICO credit scoring system.
Investors have sold Upstart stock heavily in recent months because rising interest rates typically result in consumers borrowing less money, less frequently. Since the company earns fees each time it originates a loan, that could deliver a hit to its revenue, and it has already revised its 2022 guidance down to $1.25 billion from $1.4 billion.
But if the economy does remain strong, Upstart is very well positioned to benefit. The company's Upstart Auto Retail sales and finance platform is now active in 525 car dealerships across America, a number that has grown 224% in the last 12 months alone. That places Upstart on the front lines when it comes to one of the largest purchases consumers typically make.
And the company's primary focus is unsecured lending for a range of purposes including home renovations and vacations, which are more segments of higher discretionary spending when consumers are feeling confident.
In the long run, Upstart's annual opportunity could exceed $6 trillion. So, picking up the stock while it's down over 90% from its all-time high might be a good purchase when looking back a few years from now.
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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Upstart Holdings, Inc. The Motley Fool recommends Fair Isaac 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. | Apple Apple (NASDAQ: AAPL) is a quintessential consumer brand. Over the last two years, interest rates have been at record lows while the U.S. government injected trillions of stimulus dollars into the economy to fight the pandemic, which led to strong growth. If the economy remains strong and consumers feel confident about their financial future, it can be expected that Apple will sell more of its big-ticket devices like the iPhone and accessories, or its Mac line of computers. | Apple Apple (NASDAQ: AAPL) is a quintessential consumer brand. But the story is the growth rate: Services revenue increased 17% year over year compared to 7% for Apple's products segment. By the end of the full fiscal year 2022, analysts expect Apple will have generated $393 billion in total revenue and $6.14 in earnings per share, which is equivalent to approximately $100 billion in net income. | Apple Apple (NASDAQ: AAPL) is a quintessential consumer brand. Given that Apple stock is currently down 24% from its all-time high, now might be an opportune time to take a position in the largest company in the world. Investors have sold Upstart stock heavily in recent months because rising interest rates typically result in consumers borrowing less money, less frequently. | Apple Apple (NASDAQ: AAPL) is a quintessential consumer brand. These brands fall under its services segment along with Apple Pay, Apple News, and iCloud, among others. But the story is the growth rate: Services revenue increased 17% year over year compared to 7% for Apple's products segment. |
20423.0 | 2022-07-02 00:00:00 UTC | Why Texas Instruments Is a Great Stock in the Current Market Environment | AAPL | https://www.nasdaq.com/articles/why-texas-instruments-is-a-great-stock-in-the-current-market-environment | nan | nan | Worries about the economy have influenced the attitudes of consumers and investors alike. Many believe we will soon enter a recession (if we have not entered one already), and some fear stagflation, a combination of high inflation and unemployment, reminiscent of the 1970s.
However, even if the economy experiences stagflation, low-cost dividend stocks can do well in such an environment. One of these stocks is Texas Instruments (NASDAQ: TXN).
The case for Texas Instruments
Texas Instruments produces analog and embedded chips. These semiconductors do not receive as much attention as higher-end processors made by the likes of Nvidia and AMD. Still, digital chips can only represent zeros and ones. Analog chips can recognize continuous signals, which means that digital semiconductors need analog chips to function. These processors function as a bridge between the crisply defined digital world and the messy, complex realm of real-world data. This makes Texas Instruments' products essential to the latest technological advancements.
That need for chips will probably increase, which should help the stock even if stagflation weighs on growth. Fortune Business Insights forecasts a compound annual growth rate of 9% for the semiconductor industry through 2029. That means its size will grow from $483 billion today to an estimated $893 billion by that year.
Also, a book of business that claims around 80,000 products and 100,000 customers keeps the performance of this enterprise solid. About 62% of its revenue came from the industrial and automotive sectors in 2021.
Additionally, it also supports other business segments, and 24% of its revenue came from personal electronics last year. One customer, widely believed to be Apple, accounted for 9% of its revenue in 2021 and similar percentages in previous years.
How Texas Instruments holds up financially
Texas Instruments claims a substantial share of the chip market. In 2021, it generated $18.3 billion in revenue, a 27% year-over-year increase.
Still, the economic environment has affected the company. In the first quarter, revenue came in at $4.9 billion. At a 14% rate of increase from year-ago levels, growth was robust but slower. Net income during that period grew 26% to $2.2 billion as the company reduced its cost of revenue during that time by 2%.
Still, the pain will not end immediately as the company forecasts second-quarter revenue of between $4.2 billion and $4.8 billion. This modest forecast could mean declining revenue for a time as the company reported $4.58 billion in revenue in the second quarter of 2021. The recent stock price action could also reflect the struggles in its approximate 25% decline from its peak of $202 per share in October.
Nonetheless, investors should consider Texas Instruments' massive growth since the 2008-09 financial crisis. During that time, the stock generally rose in a sustained upward move after bottoming at just under $14 per share in March 2009. Given the forecast industry growth, the increases will probably resume longer term.
Moreover, Texas Instruments also trades at around 17 times earnings. In comparison, Analog Devices, one of its closest competitors, currently supports a 40 price-to-earnings (P/E) ratio. Also, as profits grow, the P/E ratio will fall, a factor that could serve as a catalyst even in a less-robust economic climate.
Additionally, the company's dividend growth should make Texas Instruments an excellent source of passive income in most market environments. The payout grew at a compound annual rate of 25% between 2004 and 2021. The annual dividend has grown to $4.60 per year, a cash yield of about 3% at current prices. That payout growth could help an investment pay off regardless of any near-term price action.
Consider the stock
In the end, investors would probably drive positive, long-term returns in Texas Instruments stock, regardless of how the overall market behaves. Indeed, the stock has fallen along with other semiconductor stocks. Moreover, the possibility of stagflation is not a positive for stocks overall.
However, with positive long-term growth still predicted, those slowdowns are likely temporary. As semiconductor demand grows and Texas Instruments' chips appear in more products, its low multiple and fast-growing dividend should attract investors regardless of the overall market.
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Will Healy has positions in Advanced Micro Devices. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Nvidia, and Texas Instruments. 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. | These processors function as a bridge between the crisply defined digital world and the messy, complex realm of real-world data. Additionally, the company's dividend growth should make Texas Instruments an excellent source of passive income in most market environments. As semiconductor demand grows and Texas Instruments' chips appear in more products, its low multiple and fast-growing dividend should attract investors regardless of the overall market. | How Texas Instruments holds up financially Texas Instruments claims a substantial share of the chip market. Additionally, the company's dividend growth should make Texas Instruments an excellent source of passive income in most market environments. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Nvidia, and Texas Instruments. | The case for Texas Instruments Texas Instruments produces analog and embedded chips. How Texas Instruments holds up financially Texas Instruments claims a substantial share of the chip market. Consider the stock In the end, investors would probably drive positive, long-term returns in Texas Instruments stock, regardless of how the overall market behaves. | Consider the stock In the end, investors would probably drive positive, long-term returns in Texas Instruments stock, regardless of how the overall market behaves. Indeed, the stock has fallen along with other semiconductor stocks. Moreover, the possibility of stagflation is not a positive for stocks overall. |
20424.0 | 2022-07-02 00:00:00 UTC | Will the Apple and MLS Deal Attract a New Generation? | AAPL | https://www.nasdaq.com/articles/will-the-apple-and-mls-deal-attract-a-new-generation | nan | nan | From Apple's (NASDAQ: AAPL) perspective, the recent partnership with Major League Soccer could be quite beneficial. In this video segment from "The M&A Show" on Motley Fool Live, recorded on June 17, Fool.com contributors Jason Hall and Travis Hoium discuss a key element that may invigorate Apple's ecosystem.
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Jason Hall: My assumption, based on their willingness to now fork over billions of dollars over multiple years, is Apple's getting whatever it's looking for back from that. I think at this point, they're looking to increase the relevance to a larger market and get more exposure to their streaming platform.
Travis Hoium: That would be Apple TV+, which is an app on Roku (NASDAQ: ROKU) and other streaming devices. For a while, was exclusive to Apple devices, now that is no longer the case so they're trying to unbundle that from the Apple product ecosystem.
Hall: I think one of the things that's interesting though is you go from baseball, which the average baseball fan tends to skew a little older, a little white-maler and the demographics of MLS fans tend to be more multicultural and younger.
It doesn't surprise me that this was the sport that they choose to go after this because a couple of billion dollars is nothing compared to the amount of money that goes to things like NFL rights and these more popular U.S. sports.
It is a smaller amount of money, but I think it points toward where Apple wants to put its money. From a demographic perspective focus on younger viewers and start bringing them into its ecosystem for streaming.
Jason Hall has positions in Roku. Travis Hoium has positions in Apple. The Motley Fool has positions in and recommends Apple and Roku. 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. | From Apple's (NASDAQ: AAPL) perspective, the recent partnership with Major League Soccer could be quite beneficial. In this video segment from "The M&A Show" on Motley Fool Live, recorded on June 17, Fool.com contributors Jason Hall and Travis Hoium discuss a key element that may invigorate Apple's ecosystem. From a demographic perspective focus on younger viewers and start bringing them into its ecosystem for streaming. | From Apple's (NASDAQ: AAPL) perspective, the recent partnership with Major League Soccer could be quite beneficial. In this video segment from "The M&A Show" on Motley Fool Live, recorded on June 17, Fool.com contributors Jason Hall and Travis Hoium discuss a key element that may invigorate Apple's ecosystem. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Jason Hall: My assumption, based on their willingness to now fork over billions of dollars over multiple years, is Apple's getting whatever it's looking for back from that. | From Apple's (NASDAQ: AAPL) perspective, the recent partnership with Major League Soccer could be quite beneficial. In this video segment from "The M&A Show" on Motley Fool Live, recorded on June 17, Fool.com contributors Jason Hall and Travis Hoium discuss a key element that may invigorate Apple's ecosystem. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Jason Hall: My assumption, based on their willingness to now fork over billions of dollars over multiple years, is Apple's getting whatever it's looking for back from that. | From Apple's (NASDAQ: AAPL) perspective, the recent partnership with Major League Soccer could be quite beneficial. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. Travis Hoium: That would be Apple TV+, which is an app on Roku (NASDAQ: ROKU) and other streaming devices. |
20425.0 | 2022-07-02 00:00:00 UTC | These 2 Metrics Spell More Bad News for Netflix's Beaten-Down Stock | AAPL | https://www.nasdaq.com/articles/these-2-metrics-spell-more-bad-news-for-netflixs-beaten-down-stock | nan | nan | Investors had a pretty good idea it was coming, and soon. But Netflix (NASDAQ: NFLX) co-CEO Ted Sarandos confirmed it last week at the Cannes Lions advertising festival: The streaming giant will launch an ad-supported tier, possibly before the end of this year.
The decision reverses the company's long-standing policy of avoiding a less-than-premium option at a less-than-premium price. But Netflix has to adapt as the streaming market is quickly changing. Two new sets of consumer data underscore this reality.
The question is, will this strategic shift be too little, too late?
None too soon, if even soon enough
Most of Netflix's streaming video rivals offer lower-priced or free tiers of their services to consumers who are willing to watch ads during their programming. But the leading streamer had always dismissed the idea ... that is, until April, when the company reported its first subscriber net loss in a decade.
Concerned this contraction might reflect more than just the fallout from the shutdown of Russian business after the country's invasion of Ukraine, co-CEO Reed Hastings conceded that "allowing consumers who would like to have a lower price and are advertising-tolerant [to] get what they want makes a lot of sense. So that's something we're looking at now [...] think of us as quite open to offering even lower prices with advertising as a consumer choice."
Investors and analysts alike took that ball and ran with it, so to speak, but the company has done the same. Sarandos' comment from last week further clarifies its plans.
And none too soon.
The streaming business isn't just changing, it's changing fast. A survey from market research outfit NPD indicates that just within the past year, cost jumped up two spots to become the second-most common reason a consumer canceled a streaming subscription. A service's content catalog remains the top reason someone might sign-up for or cancel an on-demand service. The fact that consumers are becoming noticeably more price-sensitive, however, is telling.
Credit the rise of competitors like HBO Max, Disney+, and Paramount+ for the change. When there were fewer peers (with less robust offerings) in the space, there was no meaningful price comparison to be made. With these rival streaming platforms all offering cheaper -- and often ad-supported -- plans though, cost is becoming a more obvious differentiator.
This works against Netflix more than any other service, too, as the typical monthly cost of its subscriptions is higher than alternative streaming services. In fact, fresh data from Whip Media show that it's a uniquely big problem for Netflix.
Simply put, of the eight major streaming services available in the United States, Netflix ranks last in terms of overall perceived value. The service with the highest perceived value was HBO Max, followed by Disney+. Those two boast 2022 "value satisfaction scores" of 85% and 83%, respectively, according to Whip. Hulu's up there too. Netflix's score, on the other hand, lags them all at 62%.
Image source: Whip Media.
Netflix also scores the highest on the value dissatisfaction scale, although this isn't necessarily the diametrical opposite of a satisfaction score. In this same vein, among those survey respondents who had canceled Netflix within the past few months, the majority of them specifically cited the recent price increase or the lack of value among their reasons.
Image source: Whip Media.
While 81% of Netflix subscribers surveyed still say they're likely to keep the service, that number was down from 93% last year -- the biggest drop of all the streaming platforms examined.
Buckle up
It's not the end of the world for Netflix. Despite waning perceptions of its value, it's still the service most U.S. consumers would keep if they could only keep one, according to Whip Media. And giving people the option of switching to a lower-cost, ad-supported version of the service should shore up at least some of the brewing churn.
The ad-supported learning curve could prove steep for Netflix, however. It doesn't even have access to experienced and in-house expertise on the topic. At least Walt Disney will be able to apply lessons learned from its ad-supported Hulu tier when it launches an ad-supported Disney+ tier (probably later this year), while Comcast's Peacock seems like it was built from the ground up to deliver ads. Comcast's ad-tech is so powerful, in fact, that the company is rumored to be in the running to help Netflix handle its foray into the ad-supported streaming arena, according to The Wall Street Journal. Alphabet's Google has been suggested as a contender too.
That's fine, but either choice would ultimately force Netflix to partner with a company it's also competing against. Never even mind the fact that Hastings and Sarandos will be learning the ad-supported ropes after they're already in the business.
Shareholders may want to buckle up for what could be a bumpy ride well into next year.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. James Brumley has positions in Alphabet (A shares) and Warner Bros. Discovery, Inc. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, and Walt Disney. The Motley Fool recommends Comcast 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, 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. | But Netflix (NASDAQ: NFLX) co-CEO Ted Sarandos confirmed it last week at the Cannes Lions advertising festival: The streaming giant will launch an ad-supported tier, possibly before the end of this year. Concerned this contraction might reflect more than just the fallout from the shutdown of Russian business after the country's invasion of Ukraine, co-CEO Reed Hastings conceded that "allowing consumers who would like to have a lower price and are advertising-tolerant [to] get what they want makes a lot of sense. A survey from market research outfit NPD indicates that just within the past year, cost jumped up two spots to become the second-most common reason a consumer canceled a streaming subscription. | The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, and Walt Disney. The Motley Fool recommends Comcast 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, and short March 2023 $130 calls on Apple. | But Netflix (NASDAQ: NFLX) co-CEO Ted Sarandos confirmed it last week at the Cannes Lions advertising festival: The streaming giant will launch an ad-supported tier, possibly before the end of this year. None too soon, if even soon enough Most of Netflix's streaming video rivals offer lower-priced or free tiers of their services to consumers who are willing to watch ads during their programming. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, and Walt Disney. | So that's something we're looking at now [...] think of us as quite open to offering even lower prices with advertising as a consumer choice." Never even mind the fact that Hastings and Sarandos will be learning the ad-supported ropes after they're already in the business. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Netflix, and Walt Disney. |
20426.0 | 2022-07-02 00:00:00 UTC | Why Meta Platforms Sank 16.7% in June | AAPL | https://www.nasdaq.com/articles/why-meta-platforms-sank-16.7-in-june | nan | nan | What happened
Shares of Meta Platforms (NASDAQ: META) dipped 16.7% in June, according to data from S&P Global Market Intelligence. The social media conglomerate that owns Facebook, Instagram, and WhatsApp is slowing down hiring this year and was probably affected by the broad market sell-off in technology stocks last month. Shares of the stock are now down more than 50% this year, marking one of the worst drawdowns in the company's history.
So what
There was no official news from Meta Platforms this month, but, being one of the most valuable companies in the world, there was plenty of other news to dig into.
First, on June 30, Reuters reported that CEO Mark Zuckerberg told employees the company would be slowing down hiring this year. That's better than layoffs, which a lot of technology companies are going through right now, so I don't think it's a huge concern for Meta Platforms shareholders, but the stock was still down big following the news. Zuckerberg and the executive staff are scaling back hiring because they're seeing what they're calling one of the worst business drawdowns in the company's history. Since Facebook and Instagram both make money selling digital advertising space, an economic downturn is likely to hurt its bottom line -- less consumer spending means less spending on advertising.
Image source: Getty Images.
This may already be showing up in Meta's financial results. Revenue grew only 7% year over year last quarter, one of the slowest in the company's history, and could be headed for worse results in the next few quarters. It's also dealing with Apple's new iOS privacy changes, which severely impeded Meta's ability to target advertisements effectively. Investors are also probably worried about TikTok, the gigantic social network that exploded out of China a few years back. It's very popular among younger social media users and could threaten Instagram's business this decade.
Lastly, the downturn in the Nasdaq 100 Index put a hurt on Meta's stock, as it did for most technology companies last month. The index was down a little less than 10% in the month.
Now what
Down so much this year, Meta Platforms now trades at a market cap of "only" $450 billion. With $40 billion in free cash flow generated over the past 12 months, the stock trades at a very cheap price-to-free cash flow (P/FCF) multiple. While there are some short-term concerns to be worried about with Meta's business, now could be a solid time to buy if you're a long-term believer in the company.
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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. | The social media conglomerate that owns Facebook, Instagram, and WhatsApp is slowing down hiring this year and was probably affected by the broad market sell-off in technology stocks last month. That's better than layoffs, which a lot of technology companies are going through right now, so I don't think it's a huge concern for Meta Platforms shareholders, but the stock was still down big following the news. Zuckerberg and the executive staff are scaling back hiring because they're seeing what they're calling one of the worst business drawdowns in the company's history. | What happened Shares of Meta Platforms (NASDAQ: META) dipped 16.7% in June, according to data from S&P Global Market Intelligence. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. The Motley Fool has positions in and recommends Apple and Meta Platforms. | Lastly, the downturn in the Nasdaq 100 Index put a hurt on Meta's stock, as it did for most technology companies last month. 10 stocks we like better than Meta Platforms When our award-winning analyst team has a stock tip, it can pay to listen. See the 10 stocks *Stock Advisor returns as of June 2, 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. | The social media conglomerate that owns Facebook, Instagram, and WhatsApp is slowing down hiring this year and was probably affected by the broad market sell-off in technology stocks last month. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Meta Platforms wasn't one of them! The Motley Fool has positions in and recommends Apple and Meta Platforms. |
20427.0 | 2022-07-02 00:00:00 UTC | Facebook Slams the Brakes on Hiring: Should You Sell Meta Stock? | AAPL | https://www.nasdaq.com/articles/facebook-slams-the-brakes-on-hiring%3A-should-you-sell-meta-stock | nan | nan | Things are going from bad to worse for Meta Platforms (NASDAQ: META).
The Facebook parent is coming off the slowest growth in its history, with revenue up just 7% in the first quarter, and the company said that growth will be even slower in the second quarter.
Meta is facing a swirl of challenges, including Apple's crackdown on ad targeting, the rise of TikTok, tightening privacy laws in Europe, headwinds in digital advertising, and a questionable rebrand to prioritize its metaverse business, Reality Labs, which is currently a giant money pit.
Now Facebook's problems are hitting home.
According to Reuters, CEO Mark Zuckerberg issued a warning to employees in a weekly Q&A session, saying, "If I had to bet, I'd say that this might be one of the worst downturns that we've seen in recent history."
Among the changes the company is making to adjust to the slowdown is a cut in its hiring plans. Meta now expects to add just 6,000 to 7,000 engineers this year, down from a previous target of 10,000.
Zuckerberg also promised to raise performance expectations for current employees, in part to weed out weaker employees. He told his staff, "Part of my hope by raising expectations and having more aggressive goals, and just kind of turning up the heat a little bit, is that I think some of you might decide that this place isn't for you, and that self-selection is OK with me."
Chief Product Officer Chris Cox echoed that urgency, saying, "We need to execute flawlessly in an environment of slower growth" and that the company must "prioritize more ruthlessly."
What it means for Meta investors
The Facebook parent is no stranger to controversy, having previously navigated the Cambridge Analytica scandal and general criticism over the negative influence of social media. It's also overcome business obstacles like the transition to mobile.
However, something feels different about the current moment. Arguably, Meta has never had to defend itself on so many fronts at once, and its slowing growth makes the company look more vulnerable than ever before. The combination of privacy challenges from both Apple and the EU, TikTok's rise to social media prominence, macro-level challenges, and a confusing rebrand seem to have thrown the company off course.
Previously, when critics raised doubts about the company's future, Facebook answered them with blockbuster growth and mountains of profits, but with revenue growth slowing to single digits and the company warning again about future growth, the business looks less reliable than it used to.
Zuckerberg's call to arms also brings up questions about Facebook's internal culture. While high performance expectations aren't unusual among the world's foremost tech companies, Facebook's reputation as a top workplace has also taken a hit in recent years. The company was once ranked No. 1 on Glassdoor's list of best places to work, but it has since fallen all the way to No. 47.
The news of hiring slowdowns and stricter employee demand is unlikely to help it attract the best engineers.
Is it time to sell Meta stock?
The good news for investors here seems to be that these concerns are already priced into the stock. Meta shares are down nearly 60% from their peak last September, considerably more than peers like Alphabet, Amazon, and Apple in the tech sell-off.
Investors seem to be skeptical of the company's pivot to the metaverse, which is costing it more than $10 billion a year, and it's unclear if Meta revenue growth will bounce back to prior levels.
Still, Facebook's core attributes remain strong. The company has roughly 3 billion users across its platforms and is one of the world's strongest advertising businesses. Considering those strengths and the company's forward price-to-earnings ratio of just 13, selling the stock with so much bad news priced in seems like the wrong move here.
However, Zuckerberg's latest warning should be sobering for anyone hoping for a quick turnaround.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Amazon 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. | Meta is facing a swirl of challenges, including Apple's crackdown on ad targeting, the rise of TikTok, tightening privacy laws in Europe, headwinds in digital advertising, and a questionable rebrand to prioritize its metaverse business, Reality Labs, which is currently a giant money pit. What it means for Meta investors The Facebook parent is no stranger to controversy, having previously navigated the Cambridge Analytica scandal and general criticism over the negative influence of social media. Investors seem to be skeptical of the company's pivot to the metaverse, which is costing it more than $10 billion a year, and it's unclear if Meta revenue growth will bounce back to prior levels. | Previously, when critics raised doubts about the company's future, Facebook answered them with blockbuster growth and mountains of profits, but with revenue growth slowing to single digits and the company warning again about future growth, the business looks less reliable than it used to. 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, and Meta Platforms, Inc. | Previously, when critics raised doubts about the company's future, Facebook answered them with blockbuster growth and mountains of profits, but with revenue growth slowing to single digits and the company warning again about future growth, the business looks less reliable than it used to. 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, and Meta Platforms, Inc. | The Facebook parent is coming off the slowest growth in its history, with revenue up just 7% in the first quarter, and the company said that growth will be even slower in the second quarter. Zuckerberg also promised to raise performance expectations for current employees, in part to weed out weaker employees. 10 stocks we like better than Meta Platforms, Inc. |
20428.0 | 2022-07-02 00:00:00 UTC | Bear Markets and Recessions Are No Match for These 3 Top Stocks | AAPL | https://www.nasdaq.com/articles/bear-markets-and-recessions-are-no-match-for-these-3-top-stocks | nan | nan | The S&P 500 index has been pushed into bear-market territory and now trades down roughly 21% year to date. Unfortunately, it's not just a matter of wavering investor confidence. The actual economy has weakened as well.
U.S. gross domestic product (GDP) unexpectedly fell 1.6% in this year's first quarter, and recently released data modeling from the Atlanta Federal Reserve estimates that the country's GDP contracted 1% in the recently completed second quarter. If so, that means the economy will have notched two consecutive quarters in decline and likely have entered a recession.
As such, the stock market may continue to struggle in the near term. However, a panel of Fool.com contributors has identified three investment candidates that are positioned to thrive in tough conditions. Read on to see why they think these stocks will deliver gains for your portfolio.
Get in the zone
James Brumley (AutoZone): While it's true that prolonged weakness upends most stocks, there are a few exceptions. One of these likely exceptions is AutoZone (NYSE: AZO). Yes, I'm talking about the auto parts and car-maintenance chain of stores.
It sounds strange at first. Generally speaking, retailers struggle when investors are feeling a financial pinch, and people might put off putting new tires on their car if their current ones are looking "good enough." However, in that repair and replacement parts are a huge chunk of the company's business -- and repairs are rarely optional -- the auto parts business is surprisingly resilient. This company breezed right through the fallout of 2008's subprime mortgage meltdown as if it wasn't even happening. Notably, the stock did, too.
AZO data by YCharts
The economic weakness that's currently brewing is marked by supply chain problems that haven't excluded the aftermarket auto parts business. Given that we've not yet seen this slowdown in AutoZone's top- and bottom-line growth, I think it's safe to say AutoZone (and its peers) are sidestepping the brunt of any supply chain woes.
In fact, I can't help but think that most auto parts stores are actually beneficiaries of the world's supply chain problems, which has limited production of new vehicles. IHS Markit recently lowered its estimated production of new cars for 2020 to only 80.6 million units, still down from 2019's tally of 89 million. Consumers may have little choice but to keep their current vehicles in working order.
A stalwart you can count on
Daniel Foelber (Lockheed Martin): The war in Ukraine has cast a spotlight on defense contractors like Lockheed Martin that make aircraft, missile systems, and provide support services. Despite increased orders from U.S. allies for Lockheed Martin's (NYSE: LMT) products, the company reported a rather muted first quarter of 2022. The lesson here is that investors shouldn't approach the pure-play defense contractor as a short-term investment, but rather understand why its gradual growth can be an excellent form of passive income over the long term.
The U.S. government is its main customer (over 75% of its business comes from the U.S. government and the rest is from U.S.-approved allies). Lockheed's backlog of contracts gives it a steady stream of revenue for future years.
The main criticism of Lockheed has been its lack of growth. While it's true that Lockheed's sales and profits have been climbing at low single-digit rates in recent years, Lockheed makes up for its lack of growth with its strong dividend and a reasonable valuation.
Lockheed has raised its dividend for 20 consecutive years and has a dividend yield of 2.6%. If it maintains its streak, it will become a Dividend Aristocrat -- an S&P 500 component that has paid and raised its dividend for at least 25 consecutive years -- by 2027. Lockheed also has a price-to-earnings ratio under 19 even though its stock price is up 20% year to date.
LMT data by YCharts
So far this year, Lockheed has outperformed many of its defense contractor peers and is easily beating the S&P 500 and the industrial sector. Some context is in order, as Lockheed stock had been a market underperformer leading up to 2022 but is now about even with the S&P 500 over the last five years.
Lockheed isn't the kind of company that is going to wow investors with exceptional growth. And given the stodgy process for winning bids and executing on contracts, a lot of Lockheed's growth is out of its control and depends on government funding. However, the barriers to entry for defense contracts are high, which protects Lockheed from competition.
Investors looking for a dividend stock that can do well despite the market cycle could consider Lockheed Martin now.
A pending acquisition leaves room for attractive upside
Keith Noonan (Activision Blizzard): Under normal circumstances, Activision Blizzard (NASDAQ: ATVI) might seem like an odd pick for a stock that's well suited to posting gains amid bear-market and recession conditions. The video game publisher has typically traded at growth-dependent valuations that open the door for volatility, and its business hasn't been completely immune to economic pressures despite demand for interactive entertainment holding up relatively well in tough times. However, the company is on track to be acquired by Microsoft within the next year, and its stock still trades at a substantial discount to the buyout price.
With Activision Blizzard stock currently trading at roughly $78 per share, it offers approximately 22% upside in relation to the $95-per-share price that Microsoft is poised to acquire the publisher at. Why can shares be purchased at such a big discount when the deal is seemingly on track to close in the near future? Well, the market thinks there's a big risk that the deal will fail to get the necessary approvals from the Federal Trade Commission and other regulators.
Microsoft is one of the most powerful tech companies in the world, and it's also got a strong position in the gaming industry thanks to its Xbox and PC platforms and services. With that in mind, it's not shocking that investors think there will be some antitrust hangups that could ultimately cause the Activision deal to fall apart.
On the other hand, Microsoft has actually been lagging far behind rivals Sony Group and Nintendo when it comes to console market share, and its real competition extends beyond those heavily gaming-focused players. Companies including Amazon, Meta Platforms, Apple, Alphabet, and Tencent Holdings also have encompassing platform-and-services ecosystems, and Microsoft can make the case that its acquisition of Activision doesn't meaningfully tip the scales (or even increases competition) in the world of big tech. Walt Disney and AT&T made similar arguments when successfully pursuing even larger media acquisitions of their own within the last few years.
The market is pricing in a significant chance the deal won't go through, but the risk appears overblown, and the prospect of netting a 22% return within roughly a year's time is attractive given the current market conditions and the fact that it's an all-cash deal. I own Activision Blizzard stock and intend to hold on to my shares until the acquisition is completed.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Daniel Foelber has positions in Walt Disney and has the following options: long January 2024 $145 calls on Walt Disney, long January 2024 $195 calls on Walt Disney, long July 2022 $145 calls on Walt Disney, short August 2022 $100 calls on Walt Disney, short January 2024 $150 calls on Walt Disney, short January 2024 $200 calls on Walt Disney, short July 2022 $150 calls on Walt Disney, and short July 2022 $95 calls on Walt Disney. James Brumley has positions in AT&T and Alphabet (A shares). Keith Noonan has positions in AT&T, Activision Blizzard, and Walt Disney. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Microsoft, Tencent Holdings, and Walt Disney. The Motley Fool recommends Lockheed Martin and Nintendo 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. | The lesson here is that investors shouldn't approach the pure-play defense contractor as a short-term investment, but rather understand why its gradual growth can be an excellent form of passive income over the long term. The video game publisher has typically traded at growth-dependent valuations that open the door for volatility, and its business hasn't been completely immune to economic pressures despite demand for interactive entertainment holding up relatively well in tough times. Companies including Amazon, Meta Platforms, Apple, Alphabet, and Tencent Holdings also have encompassing platform-and-services ecosystems, and Microsoft can make the case that its acquisition of Activision doesn't meaningfully tip the scales (or even increases competition) in the world of big tech. | Daniel Foelber has positions in Walt Disney and has the following options: long January 2024 $145 calls on Walt Disney, long January 2024 $195 calls on Walt Disney, long July 2022 $145 calls on Walt Disney, short August 2022 $100 calls on Walt Disney, short January 2024 $150 calls on Walt Disney, short January 2024 $200 calls on Walt Disney, short July 2022 $150 calls on Walt Disney, and short July 2022 $95 calls on Walt Disney. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Microsoft, Tencent Holdings, and Walt Disney. The Motley Fool recommends Lockheed Martin and Nintendo 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. | Daniel Foelber has positions in Walt Disney and has the following options: long January 2024 $145 calls on Walt Disney, long January 2024 $195 calls on Walt Disney, long July 2022 $145 calls on Walt Disney, short August 2022 $100 calls on Walt Disney, short January 2024 $150 calls on Walt Disney, short January 2024 $200 calls on Walt Disney, short July 2022 $150 calls on Walt Disney, and short July 2022 $95 calls on Walt Disney. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Microsoft, Tencent Holdings, and Walt Disney. The Motley Fool recommends Lockheed Martin and Nintendo 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. | Lockheed isn't the kind of company that is going to wow investors with exceptional growth. Investors looking for a dividend stock that can do well despite the market cycle could consider Lockheed Martin now. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Meta Platforms, Inc., Microsoft, Tencent Holdings, and Walt Disney. |
20429.0 | 2022-07-02 00:00:00 UTC | How Many of Your Stocks Are Based in California? (And Is That a Bad Thing?) | AAPL | https://www.nasdaq.com/articles/how-many-of-your-stocks-are-based-in-california-and-is-that-a-bad-thing | nan | nan | Here's an idea: Go through your portfolio and look up where are all your stocks are based. If it's tech heavy like mine, one state is going to pop up over and over again: California.
In my own portfolio that includes names like Apple, The Trade Desk, Intuitive Surgical, Airbnb, Roku, Doximity, Unity Software, PayPal, Disney, and many more. About half of the stocks in my portfolio are in companies headquartered in California.
Why are so many of my stocks based in one state? And is this a problem that needs fixing? Let's take a look.
Image source: Getty Images.
California is home to the VC industry and Silicon Valley
It's obvious why Disney makes California its home -- Hollywood is famous for its film production. And so it makes sense for a major film studio to be located there. It's perhaps less obvious why so many tech companies are based in California. I think perhaps it's related to California's other major industry: venture capital. Tech startups need seed capital, so if you want to create a new company, you might go where the money is.
Silicon Valley is based in California, too. Back in the 1940s and 1950s, the dean of Stanford's engineering department, Frederick Terman, encouraged his faculty to start their own companies in the area. Hewlett Packard got its start this way. Silicon Valley is where the computer chip was invented. Two major VC firms, Kleiner Perkins and Sequoia Capital, started up adjacent to the Stanford campus.
This is why today so many tech companies are based in the area. Hewlett Packard was started in Palo Alto. Intel was created in Santa Clara. Larry Page and Sergey Brin, the founders of Alphabet (parent of Google), were students at Stanford. Mark Zuckerberg, who was a student at Harvard, co-founded his company Meta Platforms (formerly Facebook) in Menlo Park.
If you're a tech investor, you've probably heard of tiny cities in California like Sunnyvale, Redwood City, Mountain View, Palo Alto, Menlo Park, and Cupertino. These are all located in Silicon Valley. Sunnyvale is the birthplace of Atari and the video game industry.
Technology often requires collaboration. So it's natural for hubs to develop. Over many decades, Silicon Valley has become a critical hub for tech companies and a major location for companies working in computer software, hardware, the internet, and blockchain technology.
Is too many Cali stocks a bad thing?
One of the dangers in investing is lack of diversity. So it might be a risk if your portfolio has too many tech stocks. And there is a risk in geographical concentration as well. For instance, suppose a major earthquake hits California. That could do a lot of damage. It's estimated that a quake in or around San Jose might cost more than $1 billion in repair and replacements.
Another problem is politics. California is largely a one-party state, ruled by Democrats. Some people on the left are hostile to large corporations and believe they should be highly regulated and taxed. So while there are certainly benefits for tech companies operating in California, there might also be headwinds. Recently two large companies, Tesla and Charles Schwab, have moved their headquarters from California to Texas.
Other companies, like Coinbase and Block, have recently gone from having their headquarters in California to having "no headquarters." Coinbase abandoned San Francisco and decided its business is now "wholly remote." Block is doing the same. Twilio is closing its San Francisco office as it transitions to a "remote-first" environment. PayPal is also closing its San Francisco location.
Some of this may be specific to San Francisco and reports of rising crime and homelessness in the city. For investors, this is largely a nonissue. Companies can and will move if it becomes necessary. And the rise of remote work is arguably making the location of a company's headquarters largely irrelevant.
The value of diversity
I think it's important for investors to consider diversity when making investments. In particular, I think it's important to have investments in several different market verticals. If all you own are tech stocks, your portfolio can take a massive hit in any "tech wreck" in the stock market. So it's a good idea to own some healthcare or financials or other types of businesses.
Geographic diversity is important, too. It might be a good idea to think hard about the political situation. For instance, I avoid investing in stocks based in mainland China because that country is ruled by autocratic dictators.
In the U.S., the political climate is much less relevant. If a particular state becomes unfriendly to a company, the business can fairly easily pick up and move to another state. And with remote work, we are seeing more and more decentralization. So while many of my stocks are based in California, for now I think the positives outweigh the negatives. So I think any danger from having too many stocks based in California is remote (in part because many tech companies are now remote).
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Charles Schwab 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. Taylor Carmichael has positions in Airbnb, Inc., Apple, Block, Inc., Charles Schwab, Coinbase Global, Inc., Doximity, Inc., Intuitive Surgical, PayPal Holdings, Roku, The Trade Desk, Unity Software Inc., and Walt Disney. The Motley Fool has positions in and recommends Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Apple, Block, Inc., Coinbase Global, Inc., Doximity, Inc., Intel, Intuitive Surgical, Meta Platforms, Inc., PayPal Holdings, Roku, Tesla, The Trade Desk, Twilio, Unity Software Inc., and Walt Disney. The Motley Fool recommends Charles Schwab and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, 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. | In my own portfolio that includes names like Apple, The Trade Desk, Intuitive Surgical, Airbnb, Roku, Doximity, Unity Software, PayPal, Disney, and many more. Taylor Carmichael has positions in Airbnb, Inc., Apple, Block, Inc., Charles Schwab, Coinbase Global, Inc., Doximity, Inc., Intuitive Surgical, PayPal Holdings, Roku, The Trade Desk, Unity Software Inc., and Walt Disney. The Motley Fool has positions in and recommends Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Apple, Block, Inc., Coinbase Global, Inc., Doximity, Inc., Intel, Intuitive Surgical, Meta Platforms, Inc., PayPal Holdings, Roku, Tesla, The Trade Desk, Twilio, Unity Software Inc., and Walt Disney. | Taylor Carmichael has positions in Airbnb, Inc., Apple, Block, Inc., Charles Schwab, Coinbase Global, Inc., Doximity, Inc., Intuitive Surgical, PayPal Holdings, Roku, The Trade Desk, Unity Software Inc., and Walt Disney. The Motley Fool has positions in and recommends Airbnb, Inc., Alphabet (A shares), Alphabet (C shares), Apple, Block, Inc., Coinbase Global, Inc., Doximity, Inc., Intel, Intuitive Surgical, Meta Platforms, Inc., PayPal Holdings, Roku, Tesla, The Trade Desk, Twilio, Unity Software Inc., and Walt Disney. The Motley Fool recommends Charles Schwab and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. | Over many decades, Silicon Valley has become a critical hub for tech companies and a major location for companies working in computer software, hardware, the internet, and blockchain technology. So I think any danger from having too many stocks based in California is remote (in part because many tech companies are now remote). The Motley Fool recommends Charles Schwab and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2024 $145 calls on Walt Disney, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, short January 2024 $155 calls on Walt Disney, and short March 2023 $130 calls on Apple. | Why are so many of my stocks based in one state? It's perhaps less obvious why so many tech companies are based in California. Over many decades, Silicon Valley has become a critical hub for tech companies and a major location for companies working in computer software, hardware, the internet, and blockchain technology. |
20430.0 | 2022-07-01 00:00:00 UTC | These 2 Sectors Comprise 71% of Warren Buffett's Portfolio: Are They Recession-Resistant? | AAPL | https://www.nasdaq.com/articles/these-2-sectors-comprise-71-of-warren-buffetts-portfolio%3A-are-they-recession-resistant | nan | nan | Warren Buffett is a master investor, with the wealth and track record to prove it. He's been investing successfully for decades on his own terms, often with heavy concentrations in sectors and individual stocks.
Buffett has openly labelled diversification as a technique that's only needed by less-skilled investors. The portfolio at Berkshire Hathaway, the company Buffett runs, reflects that belief. Specifically, two sectors account for 71% of Berkshire's holdings: technology and finance.
Diversification is a risk management strategy. The goal is to avoid having all your assets move in lockstep together -- which would create extreme portfolio volatility. You might not mind upside volatility, but no one likes downside volatility.
With the possibility of a U.S. recession looming, is Buffett taking a gamble on these two sectors? Let's take a closer look.
Buffett's holdings in finance
Berkshire owns 14 financial stocks. As you can see in the table below, the top four of these financial companies comprise 23% of the overall portfolio.
COMPANY NAME AND TICKER
PERCENTAGE OF PORTFOLIO
RANK IN PORTFOLIO (IN TERMS OF VALUE)
Bank of America (NYSE: BAC)
11.27%
2
American Express (NYSE: AXP)
7.67%
3
Moody's (NYSE: MCO)
2.25%
8
US Bancorp (NYSE: USB)
1.82%
9
Data source: 1Q22 13F filing.
The broader financial sector usually enjoys relatively stable demand in all types of economic climates. Some areas, like bookkeeping and tax prep services, can even get a boost in a recession.
Buffett's exposure, however, is in banks -- which have their own behaviors in down economies. Banks can do well in mild downturns, when credit card interest rates tick up and borrowing levels increase. But banks will struggle as defaults rise.
Interestingly, Buffett opened smaller positions in two banks in the first quarter -- Citigroup (NYSE: C) and Ally Financial (NYSE: ALLY), which has a consumer banking division. Buffett is not one to move in and out of a stock or sector based on short-term market conditions. So unfortunately, you can't interpret the increased banking concentration as a prediction for a softer (bank-friendly) downturn.
It's more appropriate to surmise that Buffett feels good about the longer-term prospects for these stocks. Even if a sharp recession materializes, Buffett sees these banks weathering the storm.
Buffett's holdings in technology
The table below shows Berkshire's technology stocks -- all five of them.
COMPANY NAME AND TICKER
PERCENTAGE OF PORTFOLIO
RANK IN PORTFOLIO (IN TERMS OF VALUE)
Apple (NASDAQ: AAPL)
42.11%
1
Activision (NASDAQ: ATVI)
1.39%
10
HP (NYSE: HPQ)
1.14%
11
Snowflake (NYSE: SNOW)
0.38%
25
Nu Holdings (NYSE: NU)
0.22%
29
Data source: 1Q22 13F filing.
The tech sector, like financial services, likely won't demonstrate a uniform response to recession. Mature tech companies like Apple, Microsoft, and Alphabet obviously have advantages over their smaller counterparts. Those advantages include diverse revenue streams, wide-scale brand recognition, and access to capital. These factors, along with an ongoing business push toward digitization, kept these tech stocks resilient in the brief recession of 2020.
A recession this year, though, might play out differently. Investors are already nervous about tech valuations, which has pushed share prices down this year. That negative investor sentiment could create more extreme reactions to softer-than-expected guidance or results.
Smaller tech stocks have more risk in a recession. Their less-stable business performance exacerbates the challenges of a nervous investor climate and rising interest rates.
Buffett owns a few small tech stocks, but this exposure pales in comparison to his Apple holdings. And with Apple, Buffett shows no concern. When Apple's share price dipped in the first quarter, he increased Berkshire's position by nearly 3.8 million shares.
Buffett also bought more Activision shares in the first quarter, on the news that Microsoft will purchase the video game maker.
Buffett held positions in HP, Snowflake, and Nu Holdings stable in the first quarter. Snowflake is a data warehousing company with a positive outlook for this fiscal year. Nu Holdings is a digital banking platform with about 60 million customers in South America.
Diversification and recession investing
The finance and technology sectors both have complicated histories with recession. Still, Buffett's picks in these areas are strategic. He's proven his ability to identify companies with staying power -- which, in his view, offers better protection than diversification.
Even so, most investors benefit from diversifying more than Buffett. It's too challenging to predict accurately how certain sectors or stocks will respond to constantly changing circumstances. Diversification protects you from being wrong -- which can keep you in the game to win another day.
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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Ally is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. American Express is an advertising partner of The Ascent, a Motley Fool company. Catherine Brock has positions in Microsoft. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Apple, Berkshire Hathaway (B shares), HP, Microsoft, Moody's, and Snowflake 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. | Apple (NASDAQ: AAPL) 42.11% 1 Activision (NASDAQ: ATVI) 1.39% 10 Banks can do well in mild downturns, when credit card interest rates tick up and borrowing levels increase. Their less-stable business performance exacerbates the challenges of a nervous investor climate and rising interest rates. | Apple (NASDAQ: AAPL) 42.11% 1 Activision (NASDAQ: ATVI) 1.39% 10 Interestingly, Buffett opened smaller positions in two banks in the first quarter -- Citigroup (NYSE: C) and Ally Financial (NYSE: ALLY), which has a consumer banking division. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Apple, Berkshire Hathaway (B shares), HP, Microsoft, Moody's, and Snowflake Inc. | Apple (NASDAQ: AAPL) 42.11% 1 Activision (NASDAQ: ATVI) 1.39% 10 Interestingly, Buffett opened smaller positions in two banks in the first quarter -- Citigroup (NYSE: C) and Ally Financial (NYSE: ALLY), which has a consumer banking division. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Apple, Berkshire Hathaway (B shares), HP, Microsoft, Moody's, and Snowflake Inc. | Apple (NASDAQ: AAPL) 42.11% 1 Activision (NASDAQ: ATVI) 1.39% 10 The goal is to avoid having all your assets move in lockstep together -- which would create extreme portfolio volatility. Diversification and recession investing The finance and technology sectors both have complicated histories with recession. |
20431.0 | 2022-07-01 00:00:00 UTC | Berkshire Hathaway buys 9.9 mln more Occidental shares, has 17.4% stake | AAPL | https://www.nasdaq.com/articles/berkshire-hathaway-buys-9.9-mln-more-occidental-shares-has-17.4-stake | nan | nan | By Jonathan Stempel and Akriti Sharma
July 1 (Reuters) - Warren Buffett's Berkshire Hathaway Inc BRKa.N said it has bought another 9.9 million shares of Occidental Petroleum Corp OXY.N, giving it a 17.4% stake in the oil company.
Berkshire paid about $582 million for the shares, which it bought between Wednesday and Friday, according to a Friday night filing with the U.S. Securities and Exchange Commission.
Buffett's company is Occidental's largest shareholder, now owning 163.4 million shares worth about $9.9 billion.
Its stake is about 60% larger than that of Vanguard, the next largest shareholder, according to Refinitiv data.
Berkshire also owns warrants to buy another 83.9 million Occidental shares for $5 billion.
Occidental's share price has more than doubled this year, benefiting from Berkshire's purchases as well as rising oil prices following Russia's invasion of Ukraine.
The Berkshire investment has prompted market speculation that Buffett's Omaha, Nebraska-based conglomerate might eventually buy all of Occidental.
In a June 23 research report, Truist Securities analyst Neal Dingmann saw a "good chance" of a Berkshire takeover once Occidental became an investment-grade credit, saying a purchase would help diversify Berkshire's energy portfolio.
Occidental has been reducing debt, which swelled when it bought Anadarko Petroleum Corp for $35.7 billion in 2019.
Berkshire bought $10 billion of Occidental preferred stock to help finance that purchase, and obtained the warrants at that time.
It also had a $25.9 billion stake in oil company Chevron Corp CVX.N at the end of March.
Berkshire's share price has fallen 8% this year, compared with a 20% decline in the Standard & Poor's 500 .SPX.
Buffett's company owns dozens of businesses, including the BNSF railroad, Geico car insurer and its namesake energy business, as well as stocks including Apple Inc AAPL.O and Bank of America Corp BAC.N.
(Reporting by Jonathan Stempel in New York and Akriti Sharma in Bengaluru; Editing by William Mallard)
((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. | Buffett's company owns dozens of businesses, including the BNSF railroad, Geico car insurer and its namesake energy business, as well as stocks including Apple Inc AAPL.O and Bank of America Corp BAC.N. By Jonathan Stempel and Akriti Sharma July 1 (Reuters) - Warren Buffett's Berkshire Hathaway Inc BRKa.N said it has bought another 9.9 million shares of Occidental Petroleum Corp OXY.N, giving it a 17.4% stake in the oil company. The Berkshire investment has prompted market speculation that Buffett's Omaha, Nebraska-based conglomerate might eventually buy all of Occidental. | Buffett's company owns dozens of businesses, including the BNSF railroad, Geico car insurer and its namesake energy business, as well as stocks including Apple Inc AAPL.O and Bank of America Corp BAC.N. By Jonathan Stempel and Akriti Sharma July 1 (Reuters) - Warren Buffett's Berkshire Hathaway Inc BRKa.N said it has bought another 9.9 million shares of Occidental Petroleum Corp OXY.N, giving it a 17.4% stake in the oil company. Buffett's company is Occidental's largest shareholder, now owning 163.4 million shares worth about $9.9 billion. | Buffett's company owns dozens of businesses, including the BNSF railroad, Geico car insurer and its namesake energy business, as well as stocks including Apple Inc AAPL.O and Bank of America Corp BAC.N. By Jonathan Stempel and Akriti Sharma July 1 (Reuters) - Warren Buffett's Berkshire Hathaway Inc BRKa.N said it has bought another 9.9 million shares of Occidental Petroleum Corp OXY.N, giving it a 17.4% stake in the oil company. Buffett's company is Occidental's largest shareholder, now owning 163.4 million shares worth about $9.9 billion. | Buffett's company owns dozens of businesses, including the BNSF railroad, Geico car insurer and its namesake energy business, as well as stocks including Apple Inc AAPL.O and Bank of America Corp BAC.N. By Jonathan Stempel and Akriti Sharma July 1 (Reuters) - Warren Buffett's Berkshire Hathaway Inc BRKa.N said it has bought another 9.9 million shares of Occidental Petroleum Corp OXY.N, giving it a 17.4% stake in the oil company. Buffett's company is Occidental's largest shareholder, now owning 163.4 million shares worth about $9.9 billion. |
20432.0 | 2022-07-01 00:00:00 UTC | Apple: The iPhone Upgrade Cycle Is Underappreciated, Says 5-Star Analyst | AAPL | https://www.nasdaq.com/articles/apple%3A-the-iphone-upgrade-cycle-is-underappreciated-says-5-star-analyst | nan | nan | Now that Q2 has come to end, the focus on Wall Street will turn to the second quarter results. In Apple’s (AAPL) case, the past 3 months have been defined by the Covid lockdowns in China which will adversely affect revenue by between $4 billion and $8 billion.
However, recent checks made by Wedbush analyst Daniel Ives regarding the Asia iPhone supply chain indicate that over the past few weeks the situation has been “steady with slight improvements.”
“As of now we believe iPhone demand is holding up slightly better than expected (despite the various supply issues that have plagued Apple and the rest of the tech sector),” the 5-star analyst noted. “That said, the Street is well aware of weakness this quarter and we believe ultimately is looking past June numbers to the September and December quarters with all eyes on the iPhone 14 production/demand cycle for the Fall.”
So, the China issues and supply chain woes should hit a peak in the June quarter and should subside as the year progresses – right in time for the launch of the iPhone 14.
Ives thinks initial expectations for the latest model of Apple’s flagship product are “flat to slightly higher” compared to the iPhone 13, which indicates that despite the “jittery macro,” Apple is still confident demand for the latest version remains healthy.
In fact, Ives thinks Apple’s “unparalleled” installed base of 1 billion iPhones is not properly appreciated and provides the company with a big advantage over other tech giants. The analyst is of the mind investors are underestimating the “stickiness” of the iPhone upgrade cycle and estimates that around 240 million of the 1 billion iPhones have yet to upgrade to a new smartphone over the past 3.5 years. “This importantly speaks to the Apple growth path over the next 12 to 18 months as iPhone 14 is set to be unveiled in the September timeframe,” Ives confidently wrapped up.
All in all, Ives maintained an Outperform (i.e., Buy) rating on Apple shares, while his $200 price targe tindicates room for 45% upside by this time next year. (To watch Ives’ track record, click here)
So, that’s the Wedbush view, what does the rest of the Street think? Most agree with Ives’ stance although not all are on board; however, despite 6 fencesitters, with 21 positive reviews, the stock boasts a Strong Buy consensus rating. Shares are expected to appreciate by ~35% over the next year, given the average price target currently stands at $186.09. (See Apple stock forecast on TipRanks)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In Apple’s (AAPL) case, the past 3 months have been defined by the Covid lockdowns in China which will adversely affect revenue by between $4 billion and $8 billion. In fact, Ives thinks Apple’s “unparalleled” installed base of 1 billion iPhones is not properly appreciated and provides the company with a big advantage over other tech giants. “This importantly speaks to the Apple growth path over the next 12 to 18 months as iPhone 14 is set to be unveiled in the September timeframe,” Ives confidently wrapped up. | In Apple’s (AAPL) case, the past 3 months have been defined by the Covid lockdowns in China which will adversely affect revenue by between $4 billion and $8 billion. However, recent checks made by Wedbush analyst Daniel Ives regarding the Asia iPhone supply chain indicate that over the past few weeks the situation has been “steady with slight improvements.” “As of now we believe iPhone demand is holding up slightly better than expected (despite the various supply issues that have plagued Apple and the rest of the tech sector),” the 5-star analyst noted. “That said, the Street is well aware of weakness this quarter and we believe ultimately is looking past June numbers to the September and December quarters with all eyes on the iPhone 14 production/demand cycle for the Fall.” So, the China issues and supply chain woes should hit a peak in the June quarter and should subside as the year progresses – right in time for the launch of the iPhone 14. | In Apple’s (AAPL) case, the past 3 months have been defined by the Covid lockdowns in China which will adversely affect revenue by between $4 billion and $8 billion. However, recent checks made by Wedbush analyst Daniel Ives regarding the Asia iPhone supply chain indicate that over the past few weeks the situation has been “steady with slight improvements.” “As of now we believe iPhone demand is holding up slightly better than expected (despite the various supply issues that have plagued Apple and the rest of the tech sector),” the 5-star analyst noted. “That said, the Street is well aware of weakness this quarter and we believe ultimately is looking past June numbers to the September and December quarters with all eyes on the iPhone 14 production/demand cycle for the Fall.” So, the China issues and supply chain woes should hit a peak in the June quarter and should subside as the year progresses – right in time for the launch of the iPhone 14. | In Apple’s (AAPL) case, the past 3 months have been defined by the Covid lockdowns in China which will adversely affect revenue by between $4 billion and $8 billion. However, recent checks made by Wedbush analyst Daniel Ives regarding the Asia iPhone supply chain indicate that over the past few weeks the situation has been “steady with slight improvements.” “As of now we believe iPhone demand is holding up slightly better than expected (despite the various supply issues that have plagued Apple and the rest of the tech sector),” the 5-star analyst noted. “That said, the Street is well aware of weakness this quarter and we believe ultimately is looking past June numbers to the September and December quarters with all eyes on the iPhone 14 production/demand cycle for the Fall.” So, the China issues and supply chain woes should hit a peak in the June quarter and should subside as the year progresses – right in time for the launch of the iPhone 14. |
20433.0 | 2022-07-01 00:00:00 UTC | Alphabet's (GOOGL) Google Docs to Bring eSignature Feature | AAPL | https://www.nasdaq.com/articles/alphabets-googl-google-docs-to-bring-esignature-feature | nan | nan | Alphabet’s GOOGL division Google is leaving no stone unturned to advance its document tool, Google Docs by bringing innovative capabilities.
Reportedly, Google Docs is gearing up to introduce an eSignature capability, enabling users to quickly complete customer agreements from any Docs interface without switching on other tabs or apps.
The eSignature feature lets users create copies of existing contracts and make the required modifications. It also enables users to view the status of pending signatures and easily find completed or signed contracts.
Per the report, the capability will soon be available in Beta for Google Workspace Individual users.
With the latest capability, GOOGL strives to provide an enhanced experience to Google Docs users. This is expected to boost the adoption rate of Google Docs in the days ahead.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Efforts to Bolster Google Workspace
With the eSignature capability, GOOGL will add strength to the Google Workspace, consisting of Gmail, Meet, Drive, Calendar, Docs, Tasks and more.
Google Workspace has been driving Alphabet’s momentum across organizations for a while, demanding productivity and collaboration tools.
The latest move apart, Google Meet was updated with picture-in-picture and multi-pinning features to help presenters and attendees stay glued to their meetings.
Google introduced a capability to Google Tasks through which users can star mark important reminders on the Android, iOS and web apps.
Gmail introduced a feature that allows users to pause mobile notifications, while the desktop client remains active.
All these endeavors are expected to continuously bolster the adoption rate of Google Workspace, which will likely drive Alphabet’s top line in the days ahead.
This, in turn, will help GOOGL win investors’ confidence in the near as well as the long term.
Shares of GOOGL have been down 24.7% in the year-to-date period, outperforming the Computer and Technology sector’s decline of 30.1%.
Competitive Scenario
We believe that the eSignature feature will provide some competitive advantage to GOOGL over other major organizations like Microsoft MSFT and Apple AAPL.
Alphabet already faces intense competitive pressures from Microsoft and Apple, which also offer workspace tools as well as productivity applications to gain momentum among customers.
Microsoft, which has lost 23.6% in the year-to-date period, offers powerful productivity and office tools to help users work, learn, organize and connect. Additionally, Microsoft Outlook, consisting of webmail, calendaring, contacts and tasks services, helps users stay connected and productive anytime and anywhere.
Further, Apple has provided a negative return of 23% in the same time frame. AAPL’s iWork provides an office suite of applications for users to create word-processing documents, spreadsheets and presentations. Additionally, Apple recently updated iWork with new features, which help users seamlessly work with documents.
Zacks Rank & Stock to Consider
Currently, Alphabet carries a Zacks Rank #4 (Sell).
Investors interested in the broader Zacks Computer & Technology sector can consider Aspen Technology AZPN, carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Aspen technology has returned 20.7% in the year-to-date period. The long-term earnings growth rate for AZPN is currently projected at 18.4%.
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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. | Competitive Scenario We believe that the eSignature feature will provide some competitive advantage to GOOGL over other major organizations like Microsoft MSFT and Apple AAPL. AAPL’s iWork provides an office suite of applications for users to create word-processing documents, spreadsheets and presentations. Apple Inc. (AAPL): Free Stock Analysis Report | Competitive Scenario We believe that the eSignature feature will provide some competitive advantage to GOOGL over other major organizations like Microsoft MSFT and Apple AAPL. AAPL’s iWork provides an office suite of applications for users to create word-processing documents, spreadsheets and presentations. Apple Inc. (AAPL): Free Stock Analysis Report | Competitive Scenario We believe that the eSignature feature will provide some competitive advantage to GOOGL over other major organizations like Microsoft MSFT and Apple AAPL. AAPL’s iWork provides an office suite of applications for users to create word-processing documents, spreadsheets and presentations. Apple Inc. (AAPL): Free Stock Analysis Report | Competitive Scenario We believe that the eSignature feature will provide some competitive advantage to GOOGL over other major organizations like Microsoft MSFT and Apple AAPL. AAPL’s iWork provides an office suite of applications for users to create word-processing documents, spreadsheets and presentations. Apple Inc. (AAPL): Free Stock Analysis Report |
20434.0 | 2022-07-01 00:00:00 UTC | This Famous 'Big Short' Investor Is Betting Big Against Apple, but Buying This Stock | AAPL | https://www.nasdaq.com/articles/this-famous-big-short-investor-is-betting-big-against-apple-but-buying-this-stock | nan | nan | Michael Burry, the investor who gained fame thanks to the film The Big Short, is betting against the largest company in the world, Apple (NASDAQ: AAPL). Scion Asset Management's latest 13-F (the disclosure document that funds must file with the Securities and Exchange Commission each quarter), reveals that as of the end of the first quarter, nearly 18% of the value of its portfolio was in Apple put options, which become more profitable as the stock price falls. That's a bold bet -- but is it a smart strategy?
Apple: Great when the consumer is strong
It's hard to ignore the warning signs that the financial situation of the average U.S. consumer is weakening: Credit card debt is at an all-time high, inflation has soared, and housing has become unusually expensive. This weakness could prove a drag on Apple, as its devices are nice, but people can live with their old models if they need to. However, Apple hasn't seen its profits or revenue fall yet.
For its fiscal 2022 second quarter (which ended March 26), revenue and diluted earnings per share (EPS) both rose by 9% year over year to $97.3 billion and $1.52, respectively. The real question, though, is how it did in its just-ended fiscal third quarter, as the previously mentioned consumer problems have intensified during the past three months.
Apple is undoubtedly ingrained in American society -- it's nearly impossible to go anywhere without seeing people using iPhones, Airpods, or MacBooks. But will consumers keep paying the premium for the company's devices in these tough economic conditions? Burry is betting that the answer is no, and according to the stock price, he's not alone in his view. Apple is down 23% this year, but the shares could tumble further if its revenue or profits decline.
Trading at 22.2 times earnings, Apple isn't expensive, but it still trades at a premium to the market -- the broad S&P 500 index is valued at 19.1 times earnings. As the Federal Reserve continues to raise benchmark interest rates (which reduces the real value of companies' future profits) the market's multiple is likely to keep dropping, and that trend could drag Apple down too.
This outlook isn't great for Apple or its investors, which is why Burry bought puts against Apple. However, Burry is also investing in another stock that I also think has greater upside.
Alphabet: One of the world's most dominant companies
Scion Asset Management's fifth-largest holding, Alphabet (NASDAQ: GOOG), represents nearly 9% of its portfolio. Alphabet has some dominant brands under its umbrella: Google, YouTube, and the Android operating system. Worldwide, these brands have a significant market share and are generating increasing amounts of revenue.
In Q1, Alphabet's sales grew 23% year over year, and it converted 23% of that revenue into free cash flow of $15 billion. However, Alphabet could also see some economic-induced headwinds.
Companies often cut their advertising budgets during recessions, and 80% of Alphabet's revenue in Q1 was derived from advertising. However, the broad audience Alphabet attracts to its products gives businesses a vast pool of consumers to advertise to. Throw in the ability to reliably target consumers, and the odds that businesses will cut their ad spending with Alphabet are reduced.
I'm not saying Alphabet won't have a tougher time during a recession, but it makes sense that it may not struggle as severely as other advertising-reliant companies.
Alphabet trades at 19.5 times earnings, slightly less than Apple, but still above the market average. With both companies sporting similar profit margins, the question of which is the better buy comes down to which is the most resilient.
AAPL Profit Margin data by YCharts
I think Alphabet has the more resilient business, as it isn't entirely dependent on consumer spending. Additionally, Alphabet is growing faster than Apple -- and, again, its valuation is slightly cheaper.
While I'm not advocating shorting or buying puts against Apple (even though that would have worked as an investment strategy so far this year), I agree with Burry that Alphabet is a great buy now.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Alphabet (C shares). The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), and Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Michael Burry, the investor who gained fame thanks to the film The Big Short, is betting against the largest company in the world, Apple (NASDAQ: AAPL). AAPL Profit Margin data by YCharts I think Alphabet has the more resilient business, as it isn't entirely dependent on consumer spending. The real question, though, is how it did in its just-ended fiscal third quarter, as the previously mentioned consumer problems have intensified during the past three months. | Michael Burry, the investor who gained fame thanks to the film The Big Short, is betting against the largest company in the world, Apple (NASDAQ: AAPL). AAPL Profit Margin data by YCharts I think Alphabet has the more resilient business, as it isn't entirely dependent on consumer spending. Alphabet: One of the world's most dominant companies Scion Asset Management's fifth-largest holding, Alphabet (NASDAQ: GOOG), represents nearly 9% of its portfolio. | Michael Burry, the investor who gained fame thanks to the film The Big Short, is betting against the largest company in the world, Apple (NASDAQ: AAPL). AAPL Profit Margin data by YCharts I think Alphabet has the more resilient business, as it isn't entirely dependent on consumer spending. While I'm not advocating shorting or buying puts against Apple (even though that would have worked as an investment strategy so far this year), I agree with Burry that Alphabet is a great buy now. | Michael Burry, the investor who gained fame thanks to the film The Big Short, is betting against the largest company in the world, Apple (NASDAQ: AAPL). AAPL Profit Margin data by YCharts I think Alphabet has the more resilient business, as it isn't entirely dependent on consumer spending. Burry is betting that the answer is no, and according to the stock price, he's not alone in his view. |
20435.0 | 2022-07-01 00:00:00 UTC | Are Netflix and Roku a Match Made in Heaven? | AAPL | https://www.nasdaq.com/articles/are-netflix-and-roku-a-match-made-in-heaven | nan | nan | As Netflix (NASDAQ: NFLX) prepares to launch its ad-supported tier, rumors have swirled that an acquisition could be in the company's future to make the transition easier. One company that analysts have repeatedly mentioned as an option is the hardware and streaming service Roku (NASDAQ: ROKU). Here's why Netflix would greatly benefit from joining forces with Roku.
Experience with advertising
At the Cannes Lions advertising festival on June 23, Netflix Co-CEO Ted Sarandos confirmed that the company would launch an ad-supported tier soon. Sarandos explained, "We've left a big customer segment off the table, which is people who say: 'Hey, Netflix is too expensive for me, and I don't mind advertising.'"
After losing 200,000 subscribers in the first quarter of 2022, Netflix is looking at new ways to attract members. An ad-supported tier is a potentially lucrative way to do so, and few companies have the relative experience that Roku does. Initially launching in 2008 as a collaboration with Netflix, Roku offers a variety of TV-related devices, software, and The Roku Channel -- the company's streaming service.
The Roku Channel offers a library of more than 100,000 movies and TV shows, as well as over 100 channels, all of which are free and ad-supported. From 2020 to 2021, Roku's platform revenue, which makes up 82% of the company's total revenue and includes digital advertising sales from The Roku Channel, increased by $1 billion -- an 80% rise.
After years of rejecting the idea of ads, Netflix doesn't have the infrastructure or experience it now requires. However, Roku's success with advertising and the fact that the companies were once closely aligned could make for a fruitful reunion.
A move into hardware
Long before the introduction of the Roku Channel, Roku's main business was hardware. Roku developed its first device in partnership with Netflix, aiming to create a machine that allowed consumers to stream Netflix content. While that project was never fully realized, Roku has gone on to have significant success with its products. In September 2021, the company announced its tenth generation of devices, including two Roku Streaming Sticks and the Roku Ultra LT, a powerful 4K streaming player.
Roku's hardware knowledge could help Netflix expand its venture into gaming. Netflix announced it was adding games to its subscription in November 2021 and has so far stuck primarily to mobile games. However, a move into hardware would allow Netflix to develop a device that perfectly suits its games and give it the opportunity to create more powerful titles.
Comparatively, Apple has steadily grown its gaming division, adding Apple Arcade to its subscription service in September 2019. While the Arcade library has many mobile games, several are also playable on the company's Apple TV streaming device. From 2020 to 2021, Apple's streaming sector, including the Apple TV, had a 25% rise in sales while the company's services sector, which includes Apple Arcade, rose 27%.
Netflix desperately needs an additional revenue stream, and it clearly knows this with its recent ventures into advertising and gaming. While Roku does not have gaming experience, it has the hardware capabilities to aid Netflix's journey into the competitive market. Roku's high-end Ultra streaming machine is a competitive device against the Apple TV, offering similar specs for less money. If Netflix can use Roku's foothold in the market, the company might be able to turn things around.
Will the acquisition happen?
Netflix released a statement in early June saying: "We are still in the early days of deciding how to launch a lower-priced, ad-supported option, and no decisions have been made. So this is all just speculation at this point."The comment came after persistent rumors that, in addition to Roku, the company had met with Alphabet's Google, NBCUniversal, and Comcast to discuss its future in advertising.
Netflix has plans to introduce its ad-supported tier by the fourth quarter of 2022, so investors might not have long to wait to find out the company's next moves. Additionally, the rumors that Netflix would acquire Roku began at the beginning of June when employees could not sell their stock due to a block, boosting the company's stock price. While it remains up in the air in which direction Netflix will go with advertising, significant fluctuations in Roku stock could signify something interesting happening internally.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, Netflix, and Roku. The Motley Fool recommends Comcast 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. | As Netflix (NASDAQ: NFLX) prepares to launch its ad-supported tier, rumors have swirled that an acquisition could be in the company's future to make the transition easier. However, a move into hardware would allow Netflix to develop a device that perfectly suits its games and give it the opportunity to create more powerful titles. "The comment came after persistent rumors that, in addition to Roku, the company had met with Alphabet's Google, NBCUniversal, and Comcast to discuss its future in advertising. | From 2020 to 2021, Apple's streaming sector, including the Apple TV, had a 25% rise in sales while the company's services sector, which includes Apple Arcade, rose 27%. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, Netflix, and Roku. The Motley Fool recommends Comcast and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | One company that analysts have repeatedly mentioned as an option is the hardware and streaming service Roku (NASDAQ: ROKU). Initially launching in 2008 as a collaboration with Netflix, Roku offers a variety of TV-related devices, software, and The Roku Channel -- the company's streaming service. Additionally, the rumors that Netflix would acquire Roku began at the beginning of June when employees could not sell their stock due to a block, boosting the company's stock price. | Experience with advertising At the Cannes Lions advertising festival on June 23, Netflix Co-CEO Ted Sarandos confirmed that the company would launch an ad-supported tier soon. While Roku does not have gaming experience, it has the hardware capabilities to aid Netflix's journey into the competitive market. Netflix has plans to introduce its ad-supported tier by the fourth quarter of 2022, so investors might not have long to wait to find out the company's next moves. |
20436.0 | 2022-07-01 00:00:00 UTC | 5 Top Stocks to Buy in July | AAPL | https://www.nasdaq.com/articles/5-top-stocks-to-buy-in-july | nan | nan | July has arrived, and I have five top stocks for you to explore! I believe these stocks are attractive at current prices and lower.
In the video below, I provide stock analysis on five picks that I believe have significant upside for long-term investors. I provide a blend of stock picks, from hypergrowth stocks to dividend stocks.
One of my favorite stocks on the list is Nvidia (NASDAQ: NVDA). It's simple to understand why some investors would shy away from Nvidia, even at these levels. The stock price has delivered nearly 5,000% returns over the past decade. A $10,000 investment would be worth approximately half a million dollars today. But the company is firing on all cylinders, and when you look under the hood, you will find that its future looks very bright, which can arguably justify the premium share price. Nvidia has its hands in gaming, cloud data centers, cryptocurrency, machine learning, artificial intelligence (AI), professional visualization, electric vehicles, autonomous driving, 5G, and more!
Please watch the below video for four additional stock picks, stock analysis, and potential price entries.
*Stock prices used in the below video were during the trading day of June 29, 2022. The video was published on June 30, 2022.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Eric Cuka has positions in Apple, Bank of America, KnowBe4, Inc., Nvidia, and SoFi Technologies, Inc. and has the following options: long January 2023 $35 calls on SoFi Technologies, Inc. The Motley Fool has positions in and recommends Apple and Nvidia. 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. Eric is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In the video below, I provide stock analysis on five picks that I believe have significant upside for long-term investors. But the company is firing on all cylinders, and when you look under the hood, you will find that its future looks very bright, which can arguably justify the premium share price. Nvidia has its hands in gaming, cloud data centers, cryptocurrency, machine learning, artificial intelligence (AI), professional visualization, electric vehicles, autonomous driving, 5G, and more! | After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. Eric Cuka has positions in Apple, Bank of America, KnowBe4, Inc., Nvidia, and SoFi Technologies, Inc. and has the following options: long January 2023 $35 calls on SoFi Technologies, Inc. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | I provide a blend of stock picks, from hypergrowth stocks to dividend stocks. Please watch the below video for four additional stock picks, stock analysis, and potential price entries. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Bank of America is an advertising partner of The Ascent, a Motley Fool company. | In the video below, I provide stock analysis on five picks that I believe have significant upside for long-term investors. *Stock prices used in the below video were during the trading day of June 29, 2022. The Motley Fool has positions in and recommends Apple and Nvidia. |
20437.0 | 2022-07-01 00:00:00 UTC | 3 Green Flags for Snap's Future | AAPL | https://www.nasdaq.com/articles/3-green-flags-for-snaps-future | nan | nan | Snap's (NYSE: SNAP) stock has tumbled about 70% this year and currently trades nearly 20% below its initial public offering price of $17. The social media company lost its luster amid concerns about its slowing growth, widening losses, and Snapchat's ability to adapt to Apple's (NASDAQ: AAPL) iOS changes.
Rising interest rates exacerbated that pain by driving investors away from unprofitable growth stocks, and Snap's abrupt decision to slash its second-quarter guidance in late May -- just one month after posting its original downbeat guidance with its first-quarter report -- spooked investors.
Image source: Getty Images.
Nevertheless, the bulls will point out that Snapchat's daily active users (DAUs) and average revenue per user (ARPU) continue to climb, and that it could lock in more users with its expanding ecosystem of short videos and augmented reality (AR) features.
They'll also claim its stock is cheap at four times this year's sales, since analysts still expect its revenue to rise 25% this year and grow another 35% in 2023. Three other recent developments -- which can be considered green flags for Snap's future -- might support that thesis.
1. A potential ban on TikTok
Piper Sandler's latest Taking Stock with Teens survey revealed a troubling new problem for Snap. For the first time ever, ByteDance's TikTok overtook Snapchat as the top social media platform for U.S. teens.
In the semiannual survey, 33% of respondents chose TikTok in the spring (compared to 30% in the fall) while Snapchat's share declined from 35% to 31%. Meta Platforms' (NASDAQ: META) Instagram stayed in third place with a 22% share during both periods.
TikTok had 1.6 billion monthly active users at the end of March, according to Data.ai, making it one of the world's largest social media platforms alongside Meta's Facebook and Instagram. Snap has tried to counter TikTok with a similar short video platform called Spotlight, but it's struggled to attract top creators even after subsidizing its videos with cash prizes. Meta has also been playing catch-up with Facebook Watch and Instagram Reels.
That's why a ban on TikTok would be a huge catalyst for Snap and Meta. The Trump Administration previously tried to ban TikTok over its Chinese ownership and alleged ties to the Chinese government, but the Biden Administration rescinded that executive order last June.
However, Federal Communications Commission (FCC) head Brendan Carr recently sent letters to Apple and Alphabet's Google to demand the removal of TikTok from their app stores, calling it "sheep's clothing" for a service that "harvests swaths of sensitive data that new reports show are being accessed in Beijing." It's unclear if the FCC will force Apple and Google to comply, but the removal of TikTok's app could send Snap's stock soaring.
2. The launch of Snapchat Plus
Snap recently started rolling out Snapchat Plus, a subscription service that lets subscribers customize the style of the app's icon, see who rewatched their stories, and categorize other Snapchat users as "BFFs" for $3.99 a month. Other features could also be added to the service in the future.
In a recent interview with the website The Verge, Snap's senior vice president for product Jacob Andreou said Snapchat Plus would target "the people who spend most of their time communicating with their closest friends on Snap." However, he dismissed the possibility of an ad-free tier, and said Snapchat Plus wouldn't become a "material" new source of fresh revenue anytime soon.
Nonetheless, Snapchat Plus still sets up the foundation for the addition of other subscription-based perks across its videos, games, and AR lenses. Those new features could widen its moat and lock in its higher-value users.
3. The "super app" plan starts to emerge
In an interview with Axios, Snap CEO Evan Spiegel endorsed Elon Musk's idea of turning Twitter into a "super app" like Tencent's (OTC: TCEHY) WeChat, which allows its Chinese users to send messages, buy products, make payments, play games, and access a wide range of other services without launching any external apps.
Spiegel also confirmed that Snap had plans to turn Snapchat into a similar super app over the long term. It isn't surprising to see Snap follow Tencent's lead, since the Chinese tech giant previously acquired a 12% stake in Snap back in 2017 when many investors had lost faith in the company.
Snapchat already hosts a mini-ecosystem of messages, videos, games, AR features, and mapping services. The company also previously discussed its ongoing development of integrated e-commerce, payment, and digital token services during its investor day presentation last year.
If Snap successfully pulls all those pieces together into a sprawling app like WeChat, it could attract more third-party partners -- which would likely rush to integrate their services into Snapchat to reach more Gen Z and millennial consumers.
But do these green flags make Snap worth buying?
Snap would certainly benefit from a new ban on TikTok. And the expansion of its ecosystem with Snapchat Plus and new super app features could certainly make it a more diversified social media platform like Facebook.
But on their own, these green flags won't resolve the company's pressing issues of slowing ad sales, Apple's platform changes, and its glaring lack of profits. For now, investors should focus on those near-term issues instead of Snap's longer-term ambitions.
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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. | The social media company lost its luster amid concerns about its slowing growth, widening losses, and Snapchat's ability to adapt to Apple's (NASDAQ: AAPL) iOS changes. However, Federal Communications Commission (FCC) head Brendan Carr recently sent letters to Apple and Alphabet's Google to demand the removal of TikTok from their app stores, calling it "sheep's clothing" for a service that "harvests swaths of sensitive data that new reports show are being accessed in Beijing." If Snap successfully pulls all those pieces together into a sprawling app like WeChat, it could attract more third-party partners -- which would likely rush to integrate their services into Snapchat to reach more Gen Z and millennial consumers. | The social media company lost its luster amid concerns about its slowing growth, widening losses, and Snapchat's ability to adapt to Apple's (NASDAQ: AAPL) iOS changes. The "super app" plan starts to emerge In an interview with Axios, Snap CEO Evan Spiegel endorsed Elon Musk's idea of turning Twitter into a "super app" like Tencent's (OTC: TCEHY) WeChat, which allows its Chinese users to send messages, buy products, make payments, play games, and access a wide range of other services without launching any external apps. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, Meta Platforms, Inc., Tencent Holdings, and Twitter. | The social media company lost its luster amid concerns about its slowing growth, widening losses, and Snapchat's ability to adapt to Apple's (NASDAQ: AAPL) iOS changes. The launch of Snapchat Plus Snap recently started rolling out Snapchat Plus, a subscription service that lets subscribers customize the style of the app's icon, see who rewatched their stories, and categorize other Snapchat users as "BFFs" for $3.99 a month. In a recent interview with the website The Verge, Snap's senior vice president for product Jacob Andreou said Snapchat Plus would target "the people who spend most of their time communicating with their closest friends on Snap." | The social media company lost its luster amid concerns about its slowing growth, widening losses, and Snapchat's ability to adapt to Apple's (NASDAQ: AAPL) iOS changes. The "super app" plan starts to emerge In an interview with Axios, Snap CEO Evan Spiegel endorsed Elon Musk's idea of turning Twitter into a "super app" like Tencent's (OTC: TCEHY) WeChat, which allows its Chinese users to send messages, buy products, make payments, play games, and access a wide range of other services without launching any external apps. 10 stocks we like better than Snap Inc. |
20438.0 | 2022-07-01 00:00:00 UTC | 3 Reasons to Sell a Stock, and 1 Big Reason Not To | AAPL | https://www.nasdaq.com/articles/3-reasons-to-sell-a-stock-and-1-big-reason-not-to | nan | nan | If you're a buy-and-hold investor, it's easy to push the topic of selling aside. After all, if you're investing well, you'll hopefully rarely be selling.
That being said, it's important to understand when you should sell a stock, even if the scenarios are few and far between.
Image source: Getty images.
Reason No. 1: You were wrong
This one is the hardest to come to terms with. But being wrong about a thesis for a company from time to time is just part of the process of investing. Being able to recognize your erroneous thesis early is key to mitigating any losses you might incur.
This is why having a written thesis is important. When I was a new investor, I came up with reasons why I liked a certain company but often failed to take the time to document them. Years later, I found myself questioning why I had bought the stock in the first place. On more than one occasion, I sold it for a loss due to my lack of conviction.
If you put pen to paper (or more likely, fingers to keyboard) and write out your thesis for why you're bullish on the company, it will be easy to revisit during times of turmoil to see if your original thesis is still on track or completely busted.
Reason No. 2: The stock hit its ceiling
One of the most important numbers to estimate when you're researching a potential investment is the market-cap ceiling for the company. The market cap is the total value of all the company's outstanding shares, and the ceiling is your estimated pinnacle of growth for a company's market cap. In simpler terms, if Company A has a market cap of $1 billion and it's addressable market is $5 billion, the ceiling represents how much of that addressable market you believe company A can capture.
Take Upstart Holdings (NASDAQ: UPST) for example. The lending-software company saw its stock shoot up from $44 at its IPO to nearly $400 less than a year later. That's a 784% return in less than 12 months!
The unsecured personal-loan market is about a $144 billion industry. While Upstart is disrupting that industry with its artificial intelligence (AI)-based alternative to underwriting, in 2021, the stock market had priced in a nearly 25% market share for Upstart at a market cap of $33 billion. At that price, it's hard to see significant upside for the business, even if it executes perfectly.
Of course, hindsight is 20/20, but this example highlights the importance of having a rough estimation of the ceiling in case the stock gets way ahead of itself, like Upstart did. If the stock exceeds your ceiling price, you should either recalculate your ceiling (due to unforeseen optionality) or seriously consider exiting or at least trimming your position.
One reason you might reestimate your ceiling is if the company has expanded into a new markets or developed new products since developing your thesis. This is called optionality.
If you're invested in growth companies, you should revisit your ceilings regularly. High-growth businesses are dynamic and often part of the bull case is the company's optionality. Amazon is a great example of a company that most investors likely would not have dreamed of achieving a trillion-dollar market cap back in the late 1990's.
Yet, if you had stayed current with the business throughout its growth story, you would have recognized the incredible new markets and products it continually introduced (Amazon Web Services, the entertainment business, logistics, etc.) and adjusted the ceiling accordingly.
Reason No. 3: You need the money for something important
We all have our reasons for investing. Those goals might include things like buying a house, paying for your kid's college tuition, helping out family, or even starting a business.
While ideally you should try to save up for these expenditures outside of your stock portfolio, life doesn't always work on our timeline, and selling stocks to pursue really important things can make sense on occasion.
If you do sell for this reason, have a system in place. If you're someone that doesn't like to see single positions grow too concentrated, consider trimming some of your winners.
If, on the other hand, you like to run your portfolio concentrated in your highest convictions, consider selling your lowest conviction holdings.
A really bad reason to sell
Perhaps the worst reason to sell a stock is simply because it's going down. Unfortunately, the pressure from social media and thefinancial newsto do this is strong when the market is crashing.
The price of admission to the greatest wealth building machine in the world -- the U.S. stock market -- is enduring corrections from time to time. That doesn't mean you should never sell a stock if it's crashing; you just shouldn't do it solely because it's crashing.
It's perfectly plausible that there is a thesis-busting development in the business that's causing the price to crater, in which case selling may make sense. But as we've witnessed in this current macro-fueled bear market, stock prices can very easily become disconnected from the underlying business. And for patient, long-term investors, that usually spells opportunity.
Conclusion: Have a good reason to sell
Just like you wouldn't buy a stock without doing your due diligence, you shouldn't sell one without having a really strong reason to do so. There are certainly other legitimate reasons investors might sell stocks besides the ones listed above (like to lower your capital gains tax bill), but long-term investors need to establish a well-researched justification before selling.
Once you've come to terms with that reality, you'll find the best decision is usually to do nothing.
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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. | Those goals might include things like buying a house, paying for your kid's college tuition, helping out family, or even starting a business. It's perfectly plausible that there is a thesis-busting development in the business that's causing the price to crater, in which case selling may make sense. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. | While Upstart is disrupting that industry with its artificial intelligence (AI)-based alternative to underwriting, in 2021, the stock market had priced in a nearly 25% market share for Upstart at a market cap of $33 billion. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Upstart Holdings, Inc. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | In simpler terms, if Company A has a market cap of $1 billion and it's addressable market is $5 billion, the ceiling represents how much of that addressable market you believe company A can capture. While Upstart is disrupting that industry with its artificial intelligence (AI)-based alternative to underwriting, in 2021, the stock market had priced in a nearly 25% market share for Upstart at a market cap of $33 billion. Conclusion: Have a good reason to sell Just like you wouldn't buy a stock without doing your due diligence, you shouldn't sell one without having a really strong reason to do so. | When I was a new investor, I came up with reasons why I liked a certain company but often failed to take the time to document them. While Upstart is disrupting that industry with its artificial intelligence (AI)-based alternative to underwriting, in 2021, the stock market had priced in a nearly 25% market share for Upstart at a market cap of $33 billion. Conclusion: Have a good reason to sell Just like you wouldn't buy a stock without doing your due diligence, you shouldn't sell one without having a really strong reason to do so. |
20439.0 | 2022-07-01 00:00:00 UTC | Better Augmented Reality Stock: Apple vs. Nvidia | AAPL | https://www.nasdaq.com/articles/better-augmented-reality-stock%3A-apple-vs.-nvidia | nan | nan | In the technology sector, there are always new trends and fads, each with the promise of becoming "the next big thing." One of the more prominent emerging technologies over the past several years has been augmented reality (AR). Put simply, AR is the ability to combine the real world with a digital one. Two prominent examples of this technology are the popular mobile game Pokémon Go and the app Snapchat.
Because there are already use cases for AR, it's easy to see this as more of an ongoing trend than a passing fad. Therefore, it's natural for future-minded investors to seek ways to invest in the space. There are two companies that I think are particularly well positioned to be at the center of AR for years to come: Apple (NASDAQ: APPL) and Nvidia (NASDAQ: NVDA). Let's see which is the better stock to own.
1. Apple
Already one of the largest companies in the world, Apple has made an indelible mark on our society with its line of consumer electronics like phones, tablets, smartwatches, and computers. Part of what has made Apple so successful is its ability to consistently innovate and enter new product lines. At any given time, there are numerous rumors swirling around about what might be Apple's next big product.
Apple has long been expected to release some kind of AR product, likely in the form of glasses or goggles. Recently, Apple CEO Tim Cook made comments that seem to indicate something may be on the horizon, teasing, "I couldn't be more excited about the opportunities we've seen in this space. And sort of stay tuned and you'll see what we have to offer."
To be clear, rumors and vague interview comments are not an investing thesis, but Apple does have a track record of launching new products that go on to see great success. Additionally, Apple has been a player in this space for years, introducing AR capabilities on its iPhone and iPad starting in 2017.
Even without a confirmed AR product, Apple continues to be a good investment. In the second quarter of 2022, Apple posted a record $93.7 billion in quarterly revenue, a 9% year-over-year increase. That comes on top of 54% revenue growth in the year-ago quarter, and was driven by year-over-year growth in every product category other than the iPad. Additionally, Apple is trading for a price to earnings (P/E) multiple of 23, which is slightly below the S&P 500's average of 24.
2. Nvidia
From its start building PC graphics cards, Nvidia has grown to be a leading provider of chips for a variety of use cases, including gaming, data centers, and the automotive industry. As it pertains to AR, Nvidia's technology is already being used in a variety of ways by large enterprise customers. Nvidia's chips are powering virtual car showrooms, surgical training, and architectural walkthroughs, showing the everyday use cases for this technology.
One of the most commonly cited consumer uses for AR is in gaming, which comprises approximately 43% of Nvidia's sales. In Q1 of 2023, gaming revenue was a record $3.6 billion, good for a 31% year-over-year increase. One of the Nvidia products that led to this growth was its Nvidia RTX technology, which can help deliver AR experiences over 5G networks. As AR expands in the gaming space, Nvidia stands to benefit from the secular tailwinds.
Even after the tech sell-off we've seen this year, Nvidia trades at a premium, with its current P/E at 41. However, that is the lowest that multiple has been since late 2019. Nvidia grew its revenue more than 46%, is profitable, and generated more than $1 billion in free cash flow in Q1, so this premium price is to be expected.
Which is the better buy?
From a valuation standpoint, it could be argued that Apple is a bargain at its current valuation. That said, until we see an actual AR product, its role in this emerging technology is uncertain. For that reason, I think Nvidia is the better AR stock. It's already producing the chips that are powering AR technologies in a variety of industries and doesn't rely on one consumer product for its AR exposure. For investors who feel the premium valuation is worth it, Nvidia is my pick for the better augmented reality stock.
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Jeff Santoro has positions in Apple and Nvidia. The Motley Fool has positions in and recommends Apple and Nvidia. 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. | Recently, Apple CEO Tim Cook made comments that seem to indicate something may be on the horizon, teasing, "I couldn't be more excited about the opportunities we've seen in this space. To be clear, rumors and vague interview comments are not an investing thesis, but Apple does have a track record of launching new products that go on to see great success. Nvidia's chips are powering virtual car showrooms, surgical training, and architectural walkthroughs, showing the everyday use cases for this technology. | There are two companies that I think are particularly well positioned to be at the center of AR for years to come: Apple (NASDAQ: APPL) and Nvidia (NASDAQ: NVDA). In the second quarter of 2022, Apple posted a record $93.7 billion in quarterly revenue, a 9% year-over-year increase. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | There are two companies that I think are particularly well positioned to be at the center of AR for years to come: Apple (NASDAQ: APPL) and Nvidia (NASDAQ: NVDA). One of the Nvidia products that led to this growth was its Nvidia RTX technology, which can help deliver AR experiences over 5G networks. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Jeff Santoro has positions in Apple and Nvidia. | There are two companies that I think are particularly well positioned to be at the center of AR for years to come: Apple (NASDAQ: APPL) and Nvidia (NASDAQ: NVDA). It's already producing the chips that are powering AR technologies in a variety of industries and doesn't rely on one consumer product for its AR exposure. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! |
20440.0 | 2022-07-01 00:00:00 UTC | Pre-Market Most Active for Jul 1, 2022 : TQQQ, SQQQ, KSS, NIO, QQQ, MU, AAPL, SNY, CCL, XPEV, DAL, BP | AAPL | https://www.nasdaq.com/articles/pre-market-most-active-for-jul-1-2022-%3A-tqqq-sqqq-kss-nio-qqq-mu-aapl-sny-ccl-xpev-dal-bp | nan | nan | The NASDAQ 100 Pre-Market Indicator is down -50.62 to 11,453.1. The total Pre-Market volume is currently 41,775,862 shares traded.
The following are the most active stocks for the pre-market session:
ProShares UltraPro QQQ (TQQQ) is -0.44 at $23.56, with 4,348,586 shares traded. This represents a 10.51% increase from its 52 Week Low.
ProShares UltraPro Short QQQ (SQQQ) is +0.87 at $59.71, with 2,674,805 shares traded. This represents a 112.11% increase from its 52 Week Low.
Kohl's Corporation (KSS) is -6.65 at $29.04, with 1,441,332 shares traded. KSS's current last sale is 55.31% of the target price of $52.5.
NIO Inc. (NIO) is +0.42 at $22.14, with 1,187,015 shares traded. As reported by Zacks, the current mean recommendation for NIO is in the "buy range".
Invesco QQQ Trust, Series 1 (QQQ) is -1.45 at $278.83, with 1,144,107 shares traded. This represents a 3.55% increase from its 52 Week Low.
Micron Technology, Inc. (MU) is -2.56 at $52.72, with 746,508 shares traded. As reported by Zacks, the current mean recommendation for MU is in the "buy range".
Apple Inc. (AAPL) is -0.92 at $135.80, with 638,958 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Sanofi (SNY) is +0.1679 at $50.20, with 569,221 shares traded. As reported by Zacks, the current mean recommendation for SNY is in the "buy range".
Carnival Corporation (CCL) is -0.09 at $8.56, with 417,740 shares traded., following a 52-week high recorded in prior regular session.
XPeng Inc. (XPEV) is +0.7 at $32.44, with 352,679 shares traded. As reported by Zacks, the current mean recommendation for XPEV is in the "buy range".
Delta Air Lines, Inc. (DAL) is +0.38 at $29.35, with 222,298 shares traded. Over the last four weeks they have had 7 up revisions for the earnings forecast, for the fiscal quarter ending Jun 2022. The consensus EPS forecast is $1.7. As reported by Zacks, the current mean recommendation for DAL is in the "buy range".
BP p.l.c. (BP) is -0.47 at $27.88, with 207,764 shares traded. BP's current last sale is 77.44% of the target price of $36.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple Inc. (AAPL) is -0.92 at $135.80, with 638,958 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". ProShares UltraPro Short QQQ (SQQQ) is +0.87 at $59.71, with 2,674,805 shares traded. | As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Apple Inc. (AAPL) is -0.92 at $135.80, with 638,958 shares traded. As reported by Zacks, the current mean recommendation for NIO is in the "buy range". | Apple Inc. (AAPL) is -0.92 at $135.80, with 638,958 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The total Pre-Market volume is currently 41,775,862 shares traded. | Apple Inc. (AAPL) is -0.92 at $135.80, with 638,958 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 NIO is in the "buy range". |
20441.0 | 2022-07-01 00:00:00 UTC | Should BNY Mellon US Large Cap Core Equity ETF (BKLC) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-bny-mellon-us-large-cap-core-equity-etf-bklc-be-on-your-investing-radar-1 | nan | nan | Looking for broad exposure to the Large Cap Blend segment of the US equity market? You should consider the BNY Mellon US Large Cap Core Equity ETF (BKLC), a passively managed exchange traded fund launched on 04/09/2020.
The fund is sponsored by Bny Mellon. It has amassed assets over $430.26 million, making it one of the average sized ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Typically holding a combination of both growth and value stocks, blend ETFs also demonstrate qualities seen in value and growth investments.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0%, making it the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.48%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 32.20% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 8.16% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN).
The top 10 holdings account for about 32.97% of total assets under management.
Performance and Risk
BKLC seeks to match the performance of the MORNINGSTAR U.S. LARGE CAP INDEX before fees and expenses. The Morningstar US Large Cap Index is a float-adjusted market capitalization weighted index designed to measure the performance of U.S. large-capitalization stocks.
The ETF has lost about -22.23% so far this year and is down about -12.82% in the last one year (as of 07/01/2022). In the past 52-week period, it has traded between $67.72 and $90.50.
The ETF has a beta of 1.05 and standard deviation of 19.48% for the trailing three-year period. With about 231 holdings, it effectively diversifies company-specific risk.
Alternatives
BNY Mellon US Large Cap Core Equity 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, BKLC is a sufficient 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 $278.14 billion in assets, SPDR S&P 500 ETF has $346.55 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
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BNY Mellon US Large Cap Core Equity ETF (BKLC): ETF Research Reports
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
To read this article on Zacks.com click here.
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. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 8.16% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report You should consider the BNY Mellon US Large Cap Core Equity ETF (BKLC), a passively managed exchange traded fund launched on 04/09/2020. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 8.16% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report You should consider the BNY Mellon US Large Cap Core Equity ETF (BKLC), a passively managed exchange traded fund launched on 04/09/2020. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 8.16% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives BNY Mellon US Large Cap Core Equity ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 8.16% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report You should consider the BNY Mellon US Large Cap Core Equity ETF (BKLC), a passively managed exchange traded fund launched on 04/09/2020. |
20442.0 | 2022-07-01 00:00:00 UTC | Roku Stock Looks as If It Is Ready to Bounce and Keep Going | AAPL | https://www.nasdaq.com/articles/roku-stock-looks-as-if-it-is-ready-to-bounce-and-keep-going | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Roku (NASDAQ:ROKU) stock is more volatile than the average NASDAQ stock.
If you’ve been in it since the September 2017 IPO, you’re up 272%, but if you have been in it for just a year, you’re down 81%.
Roku was early in the streaming excitement, but as competition from Amazon.Com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) has intensified, shares have come down hard.
7 Warren Buffett Stocks to Buy and Hold for the Next Decade
Roku stock is still not cheap. The market cap of $13.4 billion is still nearly five times last year’s $2.7 billion in revenue. The price-to-earnings multiple is nearly 100. You’re still speculating. The question is whether the time is right to take another plunge.
ROKU Roku $82.14
A Closer Look at ROKU Stock
Roku began as a streaming hardware company. Then it became an advertising company. Now it may become an e-commerce company.
A recent deal with Walmart (NYSE:WMT) shows what’s possible. The idea is that a product offer is overlaid on a Roku ad, and people can buy it by simply pausing the program and pressing the OK button on their remote.
Roku’s OneView platform will measure the ads’ performance. Credit cards are already maintained by Roku for streaming services. Roku’s Brand Studio will create the ads. It’s all ready for other merchants if there’s any success. Shares jumped on the news.
Roku is also continuing to expand its offerings, especially in the fast-growing Hispanic market. Its own Roku Channel programs are drawing audiences and it has production facilities for its own shows and ads.
Another reason to buy Roku stock is that it might be bought.
Netflix (NASDAQ:NFLX) was seen kicking the tires on it in the last month. As the only independent streaming hardware company, and one of the few independent streamers, a single bid for Roku could easily launch a bidding war.
There are potential buyers on both the hardware and streaming side. In addition to Netflix and Walmart, Walt Disney (NYSE:DIS) might be interested. So, too, might Comcast (NASDAQ:CMCSA), which was looking at it last year.
This might be the last chance for Warner Brothers Discovery (NASDAQ:WBD) to diversify and stay independent.
Potential Downside
Competition is a growing issue. Google, Amazon, and Apple can out-bid anyone for programs. They all offer direct competition with Roku hardware.
Roku is also angering its content providers. Giving Roku 45% of net ad revenues and being required to use both its Content Delivery Network (CDN) and ad insertion technology, isn’t sitting well. The new boss looks a lot like the old boss.
If you see inflation and high-interest rates landing us into a recession, you may also question Roku’s ability to compete.
The company had just $2.2 billion in cash on its books at the end of March. Roku lost money last quarter as revenue went into reverse after years of hyper-growth. Another loss is expected for the June quarter, with revenues just 10% higher than in March.
The Bottom Line
No one will buy Roku until you pry it from founder and CEO Anthony Wood’s hands. He sold shares near the top but still controls the Class B shares holding voting power.
Right now, he doesn’t seem interested in that final transaction. But if Roku results are pressed further, that could change. This creates a floor under Roku’s value.
Meanwhile, Roku stock is at its most attractive valuation in years. If you can handle the risk, the potential reward is there. It remains a good speculation for a young investor.
On the date of publication, Dana Blankenhorn held a long position in AAPL, GOOGL and AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The post Roku Stock Looks as If It Is Ready to Bounce and Keep Going 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. | On the date of publication, Dana Blankenhorn held a long position in AAPL, GOOGL and AMZN. Roku was early in the streaming excitement, but as competition from Amazon.Com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) has intensified, shares have come down hard. The idea is that a product offer is overlaid on a Roku ad, and people can buy it by simply pausing the program and pressing the OK button on their remote. | Roku was early in the streaming excitement, but as competition from Amazon.Com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) has intensified, shares have come down hard. On the date of publication, Dana Blankenhorn held a long position in AAPL, GOOGL and AMZN. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Roku (NASDAQ:ROKU) stock is more volatile than the average NASDAQ stock. | Roku was early in the streaming excitement, but as competition from Amazon.Com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) has intensified, shares have come down hard. On the date of publication, Dana Blankenhorn held a long position in AAPL, GOOGL and AMZN. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Roku (NASDAQ:ROKU) stock is more volatile than the average NASDAQ stock. | Roku was early in the streaming excitement, but as competition from Amazon.Com (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) has intensified, shares have come down hard. On the date of publication, Dana Blankenhorn held a long position in AAPL, GOOGL and AMZN. ROKU Roku $82.14 A Closer Look at ROKU Stock Roku began as a streaming hardware company. |
20443.0 | 2022-07-01 00:00:00 UTC | 7 Undervalued Reddit Stocks to Buy Before Wall Street Catches On | AAPL | https://www.nasdaq.com/articles/7-undervalued-reddit-stocks-to-buy-before-wall-street-catches-on | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Reddit stocks have been so successful (or at least intriguing) that Reddit has quickly become an investing hub.
The site has a huge community of investors and traders who use it as a platform for their investments. The trading community is also big on Reddit, and many subreddits are dedicated to trading.
Investors are increasingly looking towards Reddit stocks as a reputable source ofinvestment advicebecause of the new trend.
7 Warren Buffett Stocks to Buy and Hold for the Next Decade
When choosing Reddit stocks to invest in, there are a few things you have to take into consideration. The first is the company’s financial stability. This can be determined by looking at its balance sheet, income statement and cash flow statement. You should also consider how much money has been coming in recently and what its debt level is like.
Another thing to look out for with Reddit stocks is management quality. This can be determined by their track record of past successes or failures, how they handle crises, and whether they have a history of being honest with shareholders.
AAPL Apple $136.72
IT Gartner $241.83
HOOD Robinhood $8.22
WBD Warner Bros. Discovery $13.42
ME 23andMe $2.48
TLRY Tilray $3.12
TA TravelCenters of America $34.47
Apple (AAPL)
Source: Bloomicon / Shutterstock.com
YTD Performance: -24.88%
Apple (NASDAQ:AAPL) has always been a leader in innovation. It was the first company to introduce a personal computer, the iPod, and the iPhone. The company has also introduced other products like the Apple Watch and Apple TV.
The company is known for its focus on design, simplicity, and ease of use. They have also created a loyal customer base with its brand value of “Think Different.”
Apple is also known for its ecosystem of products that work seamlessly together to make our lives easier.
The company’s first-quarter results highlight its performance and financial strength. It has a strong customer base and an innovative product line that is well received by its target market. It also has a well-developed infrastructure, with experienced members of the management team in place.
Gartner (IT)
Source: Undrey / Shutterstock.com
YTD Performance: -24.89%
Gartner (NYSE:IT) is a research and advisory firm. It provides insights into the global IT market.
Gartner is one of the global IT industry’s leading providers of information technology research, advisory services and events.
Gartner helps organizations in various industries understand what is happening in the marketplace and how to make better decisions about their future IT investments.
7 REITs to Buy for a Bear Market
It has made a name for itself in its ability to seemingly predict future technological trends and their potential effects on the business world. Due to an asset-light approach, the research company has done very well for itself. It reported over $4.73 billion in revenue in 2021, a 15.48% increase from the year-ago figure.
Now more than ever, businesses and investors need insights. Gartner can help in this regard and make an excellent return on the way, making it one of the Reddit stocks worth keeping an eye on.
Robinhood (HOOD)
Source: dennizn / Shutterstock.com
YTD Performance: -55.42%
Robinhood (NASDAQ:HOOD) is a trading platform that is designed for the next generation. The company’s mission is to democratize access to America’s financial system.
The app has grown rapidly and now has over four million users who invest in stocks and other investments through the app. Robinhood offers commission-free trades on stocks, ETFs, options and cryptocurrency trading.
The application was behind the Reddit revolution, which is why it’s among the more popular Reddit stocks. Investors active on subreddits got together and used the app to enter into short squeezes.
Stock trading use is declining as people return to their normal lives. Plus, with stimulus money maxing out and inflation on the rise, it’s not very easy for retail investors to trade stocks. These are important factors to keep in mind when investing in this one.
Warner Bros. Discovery (WBD)
Source: Ingus Kruklitis / Shutterstock.com
YTD Performance: -47.37%
In April, AT&T’s (NYSE:T) WarnerMedia and Discovery just announced that completed a merger, forming a new company — Warner Bros. Discovery (NASDAQ:WBD). The new media company is one of the leading players in the industry.
However, since the merger closed, the stock has not done too well. You can chalk that up to the issues surrounding Netflix (NASDAQ:NFLX).
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The streaming giant lost 200,000 subscribers in Q1. To put into perspective how bad the number was, Netflix had a target of adding 2.5 million subscribers this quarter. It also did not help the streaming giant suspended operations in Russia, costing it 700,000 paid subscribers.
All of these developments weighed down heavily on WBD stock. However, shares are very attractive at the current price multiples, especially considering WBD’s extensive content library, with 200,000 content hours.
23andMe (ME)
Source: nevodka / Shutterstock.com
YTD Performance: -65.17%
23andMe (NASDAQ:ME) is a company that provides genetic testing kits.
It offers personal DNA tests for health-related purposes, such as detecting genetic predisposition to certain diseases or determining biological relationships. The company also offers genetic testing kits for research purposes, including population and medical research studies.
23andMe is an interesting company because there are multiple use cases. The company can make personalized genetic sequencing more accessible, allowing consumers to explore health risks and benefits.
It also has a business side that offers research services for pharmaceutical companies for a fee. 23andMe’s business model interprets customers’ genetic data and provides insights into physical traits, ancestral origins, inherited traits, and health-related traits.
The market cap for 23andMe is valued at $1.19 billion, but it may take some time before the company can grow into its valuation. Its revenues for last year were $272 million, an 11% increase in the fiscal year.
Although a respectable number, it needs more top-line growth to remain one of the more interesting Reddit stocks.
Tilray (TLRY)
Source: Jarretera / Shutterstock.com
YTD Performance: -57.78%
Tilray (NASDAQ:TLRY) has grown to be the largest cannabis company in Canada and is the world’s most valuable marijuana company.
It produces and supplies medical cannabis products and services to patients, physicians, pharmacies, governments, hospitals, and researchers worldwide. Tilray is also the largest cannabis company in Canada and the world after its merger with Aphria.
7 Dividend Stocks to Buy and Hold Forever
It was one of the biggest arbitrage opportunities in recent memory. However, the cannabis company has done well since the merger closed.
Tilray’s adjusted EBITDA came in at $10 million for Q3, which is around 24% lower after its cannabis sales plummeted to $55 million. The company has reported 12 consecutive quarters of profitable adjusted EBITDA, the top measure of profitability in the industry.
TravelCenters of America (TA)
Source: IgorGolovniov / Shutterstock.com
YTD Performance: -33.76%
TravelCenters of America (NASDAQ:TA), or TA, is a company that provides travel-related services.
It has a network of more than 275 travel centers near major highways, airports, and cities across the country. TravelCenters of America also owns and operates big-box retail stores that offer truck accessories, RV supplies, tires, batteries, generators, and other items for travelers.
The company operates in three segments: convenience stores (primarily under the TravelCenters of America brand), travel center operations (primarily under the TA brand), and truck stop operations (primarily under the Petro Stopping Centers brand).
TravelCenters of America was particularly hard hit during the pandemic — its airport revenue decreased sharply because people weren’t flying.
However, things are back on track now. Its latest quarterly results show $2.3 billion in revenue, up 50.22% from the year-ago period. Net income, meanwhile, jumped 380.19% as passengers returned. TSA checkpoint travel numbers also point to a resurgence in travel. Therefore, among Reddit stocks, TA is a great comeback story.
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.
The post 7 Undervalued Reddit Stocks to Buy Before Wall Street Catches On 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. | AAPL Apple $136.72 IT Gartner $241.83 HOOD Robinhood $8.22 WBD Warner Bros. Discovery $13.42 ME 23andMe $2.48 TLRY Tilray $3.12 TA TravelCenters of America $34.47 Apple (AAPL) Source: Bloomicon / Shutterstock.com YTD Performance: -24.88% Apple (NASDAQ:AAPL) has always been a leader in innovation. They have also created a loyal customer base with its brand value of “Think Different.” Apple is also known for its ecosystem of products that work seamlessly together to make our lives easier. | Discovery $13.42 ME 23andMe $2.48 TLRY Tilray $3.12 TA TravelCenters of America $34.47 Apple (AAPL) Source: Bloomicon / Shutterstock.com YTD Performance: -24.88% Apple (NASDAQ:AAPL) has always been a leader in innovation. AAPL Apple $136.72 IT Gartner $241.83 HOOD Robinhood $8.22 WBD Warner Bros. Tilray (TLRY) Source: Jarretera / Shutterstock.com YTD Performance: -57.78% Tilray (NASDAQ:TLRY) has grown to be the largest cannabis company in Canada and is the world’s most valuable marijuana company. | AAPL Apple $136.72 IT Gartner $241.83 HOOD Robinhood $8.22 WBD Warner Bros. Discovery $13.42 ME 23andMe $2.48 TLRY Tilray $3.12 TA TravelCenters of America $34.47 Apple (AAPL) Source: Bloomicon / Shutterstock.com YTD Performance: -24.88% Apple (NASDAQ:AAPL) has always been a leader in innovation. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Reddit stocks have been so successful (or at least intriguing) that Reddit has quickly become an investing hub. | AAPL Apple $136.72 IT Gartner $241.83 HOOD Robinhood $8.22 WBD Warner Bros. Discovery $13.42 ME 23andMe $2.48 TLRY Tilray $3.12 TA TravelCenters of America $34.47 Apple (AAPL) Source: Bloomicon / Shutterstock.com YTD Performance: -24.88% Apple (NASDAQ:AAPL) has always been a leader in innovation. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Reddit stocks have been so successful (or at least intriguing) that Reddit has quickly become an investing hub. |
20444.0 | 2022-07-01 00:00:00 UTC | 2 Stocks Down 50% or More to Buy Now | AAPL | https://www.nasdaq.com/articles/2-stocks-down-50-or-more-to-buy-now | nan | nan | The steep declines we've seen this year have been awfully painful to folks who already own the stocks that have plunged. Luckily, times like these often create opportunities to start new positions or average down on the ones that fell.
These stocks are more than 50% below the high-water marks they set not long ago. Scooping up shares at their recently reduced prices could go a long way to boost your overall portfolio in the years ahead.
PubMatic
PubMatic (NASDAQ: PUBM) is an up-and-coming player in the rapidly shifting advertising industry. Publishers and app developers use the sell-side platform to auction off their ad inventory to the highest bidders.
PubMatic's revenue mostly comes from revenue share agreements with its publishers, and they're obviously happy with the service. The company's net dollar-based retention rate during the 12 months ended March 31, 2022, was 140%. This means existing ad buyers are spending more on PubMatic's platform and its publishers are committing more of their inventory.
In the first quarter, PubMatic earned $17 million before subtracting interest, taxes, depreciation, and amortization (EBITDA). That was 17% more than the previous year's period, but this wasn't good enough for the market. The stock has fallen 77% from its peak last year.
PubMatic sports an $843 billion market cap at recent prices, which is minuscule compared to its addressable market. According to eMarketer, U.S. advertisers spent $106 billion on programmatic display ads in 2021, and that was 41% more than they spent a year earlier.
Global spending on advertising reached $772 billion in 2021, and this figure is expected to reach $1 trillion in 2026. PubMatic could grow to many more times its current size, as programmatic ad buying accounts for an increasing share of this already enormous market.
Duolingo
Duolingo (NASDAQ: DUOL) is an education company that specializes in languages. The company consistently crushes Wall Street estimates, but the stock is down about 57% from the peak it reached in 2021.
Duolingo operates the language learning application of the same name. The app had 2.9 million paid subscribers at the end of March, which was 60% more than it had a year earlier. All of those subscribers make it the highest-grossing education application on Apple's App Store and Alphabet's Google Play Store.
The Duolingo app employs a "freemium" model, and the vast majority of its 49.2 million monthly active users aren't paying. They are, however, providing the company with lots of data, so it knows which lessons to keep and which ones to prune.
Native English-speaking Americans typically use Duolingo to casually brush up on a language before traveling. In non-English-speaking countries, though, learners are more highly motivated by career opportunities. When the company went public last July, there was a single paid subscription price for every country. This year the company started adjusting its prices on a country-by-country basis, which could result in heaps more paid subscriptions from international customers.
Duolingo's also boosting its international footprint with an English proficiency test that is already accepted by Yale, Johns Hopkins, and more than 3,500 other institutions. In the first quarter, Duolingo reported $8 million in English test revenue, a 60% rise year over year, and there's clearly a lot of room for more growth in this niche. Duolingo's largest competitor for English proficiency testing, IDP Education of Australia, expects over $300 million in revenue from its proficiency test, called IELTS, this year.
At the moment, shares of Duolingo trade at just 11.3 times trailing sales. That's an awfully low multiple for a company that expects its sales to grow by 56% this year. With an attractive price, a blazing fast growth rate, and a huge addressable market, this stock is a screaming buy right now.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Cory Renauer has positions in Duolingo, Inc. and PubMatic, Inc. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, and PubMatic, 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. | PubMatic could grow to many more times its current size, as programmatic ad buying accounts for an increasing share of this already enormous market. The Duolingo app employs a "freemium" model, and the vast majority of its 49.2 million monthly active users aren't paying. This year the company started adjusting its prices on a country-by-country basis, which could result in heaps more paid subscriptions from international customers. | Duolingo's largest competitor for English proficiency testing, IDP Education of Australia, expects over $300 million in revenue from its proficiency test, called IELTS, this year. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, and PubMatic, Inc. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | In the first quarter, Duolingo reported $8 million in English test revenue, a 60% rise year over year, and there's clearly a lot of room for more growth in this niche. Duolingo's largest competitor for English proficiency testing, IDP Education of Australia, expects over $300 million in revenue from its proficiency test, called IELTS, this year. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, and PubMatic, Inc. | The app had 2.9 million paid subscribers at the end of March, which was 60% more than it had a year earlier. 10 stocks we like better than PubMatic, Inc. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, and PubMatic, Inc. |
20445.0 | 2022-07-01 00:00:00 UTC | ANALYSIS-Some investors bet top growth stocks will thrive in U.S. recession | AAPL | https://www.nasdaq.com/articles/analysis-some-investors-bet-top-growth-stocks-will-thrive-in-u.s.-recession | nan | nan | By David Randall
NEW YORK, July 1 (Reuters) - Concerns about a possible U.S. recession are prompting some fund managers to rotate back into the big tech and growth winners of the last decade in the hope that they can better weather an economic storm.
Many stalwarts like Microsoft Corp MSFT.O, Apple APPL.O and Google-parent Alphabet Inc GOOGL.O have suffered declines on par with or exceeding those in broader stock indexes this year, as jumbo rate hikes delivered by an inflation-fighting Federal Reserve hit the tech and growth names that led markets in previous years.
Since growth companies tend to be less affected by the broader economy’s performance, however, some investors believe the category’s most profitable names may outperform the rest of the market if the Fed’s hawkish policy stance drags the U.S. into recession.
"You are starting to see some cracks in economic growth, which will help select companies that are very well positioned in the technology space," said Saira Malik, chief investment officer at Nuveen, who has been increasing her positions in companies including Amazon.com Inc AMZN.O and Salesforce.com Inc CRM.N.
"The conceptual companies that don't have profitability will continue to be challenged because you need real fundamentals to back it up," she said.
The trade is still a nascent one. Global fund managers have increased their allocations to tech by approximately seven basis points as measured by the latest survey from BofA Global Research, although they remain bearish on the sector as a whole.
Retail investors, meanwhile, have been buying "evergreen large tech companies" such as Apple Inc AAPL.O on recent market dips, according to Vanda Research.
Overall, the Russell 1000 Growth index .RLG is down 28.4% year-to-date, well behind the 13.9% decline for the Russell 1000 Value index .RLV, which contains stocks in more economically-sensitive sectors like energy. The benchmark S&P 500 index is down 20.7%, marking its worst first-half of the year since 1970.
Some names in tech have suffered even steeper losses: Cathie Wood’s ARK Innovation ETF ARKK.P, which holds an array of newer companies including Zoom Video Communications and Teladoc, is down 57.7% year-to-date.
Meanwhile, recession worries have grown in recent weeks. A global poll of investors by Deutsche Bank in June found that 90% now expect a U.S. recession by the end of 2023, up from 78% the month before.
'ATTRACTIVE VALUATIONS'
For Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions, those concerns are a good reason to increase positions in companies such as Google-parent Alphabet. Janasiewicz is also betting that the pounding their shares have taken has lowered valuations to attractive levels.
The forward price to earnings ratio for the S&P 500 technology sector, for instance, is down to 19.1, its lowest level since early 2020, according to Yardeni Research.
"We are seeing some of the most attractive valuations for this space that we've seen in a long time," Janasiewicz said.
Of course, signs of continued high inflation could further ramp up expectations for Fed hawkishness, potentially driving up bond yields and dealing another blow to tech and growth stocks.
Higher yields dull the allure of companies in technology and other high-growth sectors, whose cash flows are often heavily weighted in the future and are diminished when discounted at higher rates.
Earnings season, which kicks off in July, may present another risk. One important factor for tech companies is likely to be the strength of the dollar, which cuts into profits from overseas earnings. Microsoft cited the strong dollar when it cut forecasts June 2.
"We think a better approach for global investors is to stay diversified and rely upon stock selection to extract value from markets," said Brian Jacobsen, senior investment strategist at Allspring Global Investments.
Others, however, are betting that a tech bounce may be ahead.
Signs that commodity prices may have peaked could pave the way for the Fed to pull back from its aggressive rate hiking path in September, said Lindsey Houghton, a portfolio manager on Harbor Capital’s Multi-Asset Solutions Team.
Houghton's firm has been selling some of its energy holdings to rotate shares of large technology companies, which he believes could rally by 20% or more a year over the next several years due to their depressed valuations and increasing market share.
"Over the last two months, those valuations have started to get to a point where they look quite attractive to us," he said.
(Reporting by David Randall Editing by Ira Iosebashvili and Nick Zieminski)
((David.Randall@thomsonreuters.com; 646-223-6607; Reuters Messaging: david.randall.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. | Retail investors, meanwhile, have been buying "evergreen large tech companies" such as Apple Inc AAPL.O on recent market dips, according to Vanda Research. By David Randall NEW YORK, July 1 (Reuters) - Concerns about a possible U.S. recession are prompting some fund managers to rotate back into the big tech and growth winners of the last decade in the hope that they can better weather an economic storm. Since growth companies tend to be less affected by the broader economy’s performance, however, some investors believe the category’s most profitable names may outperform the rest of the market if the Fed’s hawkish policy stance drags the U.S. into recession. | Retail investors, meanwhile, have been buying "evergreen large tech companies" such as Apple Inc AAPL.O on recent market dips, according to Vanda Research. By David Randall NEW YORK, July 1 (Reuters) - Concerns about a possible U.S. recession are prompting some fund managers to rotate back into the big tech and growth winners of the last decade in the hope that they can better weather an economic storm. For Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions, those concerns are a good reason to increase positions in companies such as Google-parent Alphabet. | Retail investors, meanwhile, have been buying "evergreen large tech companies" such as Apple Inc AAPL.O on recent market dips, according to Vanda Research. Many stalwarts like Microsoft Corp MSFT.O, Apple APPL.O and Google-parent Alphabet Inc GOOGL.O have suffered declines on par with or exceeding those in broader stock indexes this year, as jumbo rate hikes delivered by an inflation-fighting Federal Reserve hit the tech and growth names that led markets in previous years. "You are starting to see some cracks in economic growth, which will help select companies that are very well positioned in the technology space," said Saira Malik, chief investment officer at Nuveen, who has been increasing her positions in companies including Amazon.com Inc AMZN.O and Salesforce.com Inc CRM.N. | Retail investors, meanwhile, have been buying "evergreen large tech companies" such as Apple Inc AAPL.O on recent market dips, according to Vanda Research. Many stalwarts like Microsoft Corp MSFT.O, Apple APPL.O and Google-parent Alphabet Inc GOOGL.O have suffered declines on par with or exceeding those in broader stock indexes this year, as jumbo rate hikes delivered by an inflation-fighting Federal Reserve hit the tech and growth names that led markets in previous years. Janasiewicz is also betting that the pounding their shares have taken has lowered valuations to attractive levels. |
20446.0 | 2022-07-01 00:00:00 UTC | Apple hikes Japan price of iPhone by nearly a fifth | AAPL | https://www.nasdaq.com/articles/apple-hikes-japan-price-of-iphone-by-nearly-a-fifth | nan | nan | TOKYO, July 1 (Reuters) - Apple Inc AAPL.O has hiked by nearly a fifth the cost of its flagship iPhone phone in Japan, which is battling a weakening yen currency and rising inflation.
The Cupertino, California-based manufacturer's entry level iPhone 13 now costs 117,800 yen ($870), Apple's website showed, compared to 99,800 yen previously.
With the dollar up 18% against the yen year-to-date, the higher cost of the iPhone, which dominates Japan's smartphone market, comes as consumers' wallets are being squeezed by price hikes for daily necessities.
Such widespread hikes are a change for most Japanese following years of stable prices for many products.
Apple did not immediately respond to a request for comment.
($1=135.6900 yen)
(Reporting by Sam Nussey; Editing by Clarence Fernandez)
((sam.nussey@tr.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | TOKYO, July 1 (Reuters) - Apple Inc AAPL.O has hiked by nearly a fifth the cost of its flagship iPhone phone in Japan, which is battling a weakening yen currency and rising inflation. With the dollar up 18% against the yen year-to-date, the higher cost of the iPhone, which dominates Japan's smartphone market, comes as consumers' wallets are being squeezed by price hikes for daily necessities. Such widespread hikes are a change for most Japanese following years of stable prices for many products. | TOKYO, July 1 (Reuters) - Apple Inc AAPL.O has hiked by nearly a fifth the cost of its flagship iPhone phone in Japan, which is battling a weakening yen currency and rising inflation. The Cupertino, California-based manufacturer's entry level iPhone 13 now costs 117,800 yen ($870), Apple's website showed, compared to 99,800 yen previously. With the dollar up 18% against the yen year-to-date, the higher cost of the iPhone, which dominates Japan's smartphone market, comes as consumers' wallets are being squeezed by price hikes for daily necessities. | TOKYO, July 1 (Reuters) - Apple Inc AAPL.O has hiked by nearly a fifth the cost of its flagship iPhone phone in Japan, which is battling a weakening yen currency and rising inflation. The Cupertino, California-based manufacturer's entry level iPhone 13 now costs 117,800 yen ($870), Apple's website showed, compared to 99,800 yen previously. With the dollar up 18% against the yen year-to-date, the higher cost of the iPhone, which dominates Japan's smartphone market, comes as consumers' wallets are being squeezed by price hikes for daily necessities. | TOKYO, July 1 (Reuters) - Apple Inc AAPL.O has hiked by nearly a fifth the cost of its flagship iPhone phone in Japan, which is battling a weakening yen currency and rising inflation. The Cupertino, California-based manufacturer's entry level iPhone 13 now costs 117,800 yen ($870), Apple's website showed, compared to 99,800 yen previously. With the dollar up 18% against the yen year-to-date, the higher cost of the iPhone, which dominates Japan's smartphone market, comes as consumers' wallets are being squeezed by price hikes for daily necessities. |
20447.0 | 2022-07-01 00:00:00 UTC | Block: Buy, Sell, or Hold? | AAPL | https://www.nasdaq.com/articles/block%3A-buy-sell-or-hold | nan | nan | In addition to growth tech stocks, one of the hardest-hit sectors in the recent market rout has been fintech businesses. And probably the most popular among them, Block (NYSE: SQ), has been particularly beaten down, as shares of this digital payments innovator have fallen more than 60% this year.
Now is a great time to consider what, if any, portfolio changes need to be made. Let's examine the investment merits of Block, which I believe make the stock a compelling buy right now.
Powerful two-sided ecosystem
At a high level, Block operates two primary segments. The first one is the seller ecosystem, known as Square, which offers small- and medium-sized businesses a range of different software, hardware, and financial services products to do things like accept payments, set up customer loyalty programs, and manage inventory. This segment produced a gross profit of $661 million in the first quarter of 2022, up 41% year over year.
Then there's Cash App, the popular personal finance app that now has 44 million monthly active users. While many people know Cash App as a tool to send money to friends, the platform also has additional services like direct deposit, a linked debit card, and buying and selling stocks and Bitcoin (CRYPTO: BTC). Cash App generated a gross profit of $624 million in the first quarter, up 26% compared to the same period last year.
While both Square and Cash App are fantastic fintech businesses on their own, what makes Block truly special is how both segments work together to strengthen the entire company. A feature known as Cash App Pay lets Cash App users pay with their balances directly at Square merchants. And with Block's acquisition of buy now, pay later specialist Afterpay, both Square merchants and Cash App users can use this innovative payment option.
As Block continues introducing new features that further integrate its Square and Cash App ecosystems, the company's network effects soar. With more consumers on Cash App, a greater number of small businesses will want to sign up to be Square merchants because they immediately have tens of millions of potential customers. And the more retailers that accept payments from Cash App, the more appealing having a Cash App account becomes. This situation gives Block a powerful competitive advantage.
Huge growth opportunity
Block has had tremendous growth in recent years, but the future still looks incredibly bright. As I've discussed above, both Square and Cash App already provide numerous services. But as the business continues to introduce new features, its customer base will become even stickier as revenue increases.
Additionally, the company can penetrate international markets. Currently, Block is in the U.S., Canada, Japan, Australia, the U.K., Ireland, France, and Spain. Yet in Q1 2022, the U.S. accounted for 94% of total sales. Therefore, there is still a huge opportunity to expand in foreign markets.
Block also owns and operates other lesser-known ventures. Tidal is a music streaming platform akin to Apple Music or Spotify, but that focuses on driving deeper connections between musicians and fans. Similar to Square and Cash App, Tidal aims to bring economic empowerment to those who have traditionally been ignored by larger incumbents.
Then there's Block's focus on advancing the use of Bitcoin, of which Chief Executive Officer Jack Dorsey is a huge proponent. With TBD, the goal is to develop a decentralized exchange to buy and sell Bitcoin without the need for a centralized service provider. And with Spiral, Dorsey wants developers to find ways to integrate the Lightning Network with crypto wallets and applications.
Block's business is ingrained in the world of digital payments and Bitcoin, so there are plenty of expansion opportunities ahead as the world moves toward cashless transactions and crypto becomes more mainstream.
Current valuation
A company's qualitative characteristics could be outstanding, but if the price isn't right, then investors should proceed with caution. But with Block's recent price crash, shares currently sell for a price-to-sales ratio of just under two, which is close to the cheapest valuation ever for the stock.
The right question to ask is why Block's stock price is so far removed from the company's underlying performance. Because of the Federal Reserve's intention to aggressively raise interest rates this year in an effort to curb inflation that's at a 40-year high, the threat of a looming recession is real. And investors have sold off expensive, high-growth stocks in favor of more conservative investments. Unfortunately, Block's shares have been among them.
But for long-term investors, this is a rare opportunity. Block is a fantastic business selling at a below-average valuation, making the stock a no-brainer buy.
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Neil Patel has positions in Apple, Bitcoin, and Block, Inc. The Motley Fool has positions in and recommends Apple, Bitcoin, Block, Inc., and Spotify Technology. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The first one is the seller ecosystem, known as Square, which offers small- and medium-sized businesses a range of different software, hardware, and financial services products to do things like accept payments, set up customer loyalty programs, and manage inventory. While many people know Cash App as a tool to send money to friends, the platform also has additional services like direct deposit, a linked debit card, and buying and selling stocks and Bitcoin (CRYPTO: BTC). Because of the Federal Reserve's intention to aggressively raise interest rates this year in an effort to curb inflation that's at a 40-year high, the threat of a looming recession is real. | A feature known as Cash App Pay lets Cash App users pay with their balances directly at Square merchants. As Block continues introducing new features that further integrate its Square and Cash App ecosystems, the company's network effects soar. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | While both Square and Cash App are fantastic fintech businesses on their own, what makes Block truly special is how both segments work together to strengthen the entire company. And with Block's acquisition of buy now, pay later specialist Afterpay, both Square merchants and Cash App users can use this innovative payment option. As Block continues introducing new features that further integrate its Square and Cash App ecosystems, the company's network effects soar. | A feature known as Cash App Pay lets Cash App users pay with their balances directly at Square merchants. And the more retailers that accept payments from Cash App, the more appealing having a Cash App account becomes. 10 stocks we like better than Block, Inc. |
20448.0 | 2022-06-30 00:00:00 UTC | Apple Allows App Developers To Use 3rd-party Payment Systems In South Korea | AAPL | https://www.nasdaq.com/articles/apple-allows-app-developers-to-use-3rd-party-payment-systems-in-south-korea | nan | nan | (RTTNews) - Tech giant Apple Inc. (AAPL) on Thursday announced that it will allow developers in South Korea to use a third-party payment system.
"To comply with the new South Korean law, developers can use the StoreKit External Purchase Entitlement," the company said in a developer update. "This entitlement allows apps distributed on the App Store solely in South Korea the ability to provide an alternative in-app payment processing option".
Last year, the South Korean National Assembly passed a bill that restricted tech giants like Google (GOOG) and Apple from forcing developers to make use of only their in-app billing systems, while developing applications for their flagship app stores.
Meanwhile, the new provision from Apple comes with few riders, as few features like Ask to Buy and Family Sharing will not be available.
"If you're considering using this entitlement, it's important to understand that some App Store features, such as Ask to Buy and Family Sharing, will not be available to your users, in part because we cannot validate payments that take place outside of the App Store's private and secure payment system," the company said.
The benefit to qualifying developers is that instead of paying Apple 30% of every transaction, Apple will now only charge 26%.
"Apple will charge a 26% commission on the price paid by the user, gross of any value-added taxes," says the further detailed developer documentation. "This is a reduced rate that excludes value related to payment processing and related activities."
Developers will have to report all sales monthly. "Please note that Apple has audit rights pursuant to the entitlement's terms and conditions," says Apple's documentation.
"Failure to pay Apple's commission could result in the offset of proceeds owed to you in other markets," it continues, "removal of your app from the App Store or removal from the Apple Developer program."
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (RTTNews) - Tech giant Apple Inc. (AAPL) on Thursday announced that it will allow developers in South Korea to use a third-party payment system. Last year, the South Korean National Assembly passed a bill that restricted tech giants like Google (GOOG) and Apple from forcing developers to make use of only their in-app billing systems, while developing applications for their flagship app stores. "Apple will charge a 26% commission on the price paid by the user, gross of any value-added taxes," says the further detailed developer documentation. | (RTTNews) - Tech giant Apple Inc. (AAPL) on Thursday announced that it will allow developers in South Korea to use a third-party payment system. Last year, the South Korean National Assembly passed a bill that restricted tech giants like Google (GOOG) and Apple from forcing developers to make use of only their in-app billing systems, while developing applications for their flagship app stores. "Failure to pay Apple's commission could result in the offset of proceeds owed to you in other markets," it continues, "removal of your app from the App Store or removal from the Apple Developer program." | (RTTNews) - Tech giant Apple Inc. (AAPL) on Thursday announced that it will allow developers in South Korea to use a third-party payment system. Last year, the South Korean National Assembly passed a bill that restricted tech giants like Google (GOOG) and Apple from forcing developers to make use of only their in-app billing systems, while developing applications for their flagship app stores. "If you're considering using this entitlement, it's important to understand that some App Store features, such as Ask to Buy and Family Sharing, will not be available to your users, in part because we cannot validate payments that take place outside of the App Store's private and secure payment system," the company said. | (RTTNews) - Tech giant Apple Inc. (AAPL) on Thursday announced that it will allow developers in South Korea to use a third-party payment system. "This entitlement allows apps distributed on the App Store solely in South Korea the ability to provide an alternative in-app payment processing option". "If you're considering using this entitlement, it's important to understand that some App Store features, such as Ask to Buy and Family Sharing, will not be available to your users, in part because we cannot validate payments that take place outside of the App Store's private and secure payment system," the company said. |
20449.0 | 2022-06-30 00:00:00 UTC | After Hours Most Active for Jun 30, 2022 : MU, TAL, AAPL, IUSV, MRK, QQQ, EQT, AMZN, GSK, MSFT, WFC, ZYME | AAPL | https://www.nasdaq.com/articles/after-hours-most-active-for-jun-30-2022-%3A-mu-tal-aapl-iusv-mrk-qqq-eqt-amzn-gsk-msft-wfc | nan | nan | The NASDAQ 100 After Hours Indicator is down -8.1 to 11,495.62. The total After hours volume is currently 96,787,908 shares traded.
The following are the most active stocks for the after hours session:
Micron Technology, Inc. (MU) is -1.51 at $53.77, with 4,341,269 shares traded. Smarter Analyst Reports: Micron to Unveil Memory Design Center in Atlanta
TAL Education Group (TAL) is unchanged at $4.87, with 4,100,757 shares traded. TAL's current last sale is 90.19% of the target price of $5.4.
Apple Inc. (AAPL) is +0.06 at $136.78, with 4,048,733 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
iShares Core S&P U.S. Value ETF (IUSV) is -0.0259 at $66.85, with 3,840,000 shares traded. This represents a 3.89% increase from its 52 Week Low.
Merck & Company, Inc. (MRK) is unchanged at $91.17, with 2,233,993 shares traded. MRK's current last sale is 98.03% of the target price of $93.
Invesco QQQ Trust, Series 1 (QQQ) is -0.42 at $279.86, with 2,217,636 shares traded. This represents a 3.93% increase from its 52 Week Low.
EQT Corporation (EQT) is -0.0001 at $34.40, with 2,149,842 shares traded. As reported by Zacks, the current mean recommendation for EQT is in the "buy range".
Amazon.com, Inc. (AMZN) is +0.06 at $106.27, with 1,981,778 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. As reported by Zacks, the current mean recommendation for AMZN is in the "buy range".
GSK plc (GSK) is -0.28 at $43.25, with 1,912,894 shares traded. GSK's current last sale is 85.64% of the target price of $50.5.
Microsoft Corporation (MSFT) is unchanged at $256.83, with 1,768,161 shares traded. As reported by Zacks, the current mean recommendation for MSFT is in the "buy range".
Wells Fargo & Company (WFC) is unchanged at $39.17, with 1,578,247 shares traded. As reported by Zacks, the current mean recommendation for WFC is in the "buy range".
Zymeworks Inc. (ZYME) is -0.2 at $5.10, with 1,508,873 shares traded. As reported by Zacks, the current mean recommendation for ZYME 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. | Apple Inc. (AAPL) is +0.06 at $136.78, with 4,048,733 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Smarter Analyst Reports: Micron to Unveil Memory Design Center in Atlanta | As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Apple Inc. (AAPL) is +0.06 at $136.78, with 4,048,733 shares traded. As reported by Zacks, the current mean recommendation for EQT is in the "buy range". | Apple Inc. (AAPL) is +0.06 at $136.78, with 4,048,733 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The total After hours volume is currently 96,787,908 shares traded. | Apple Inc. (AAPL) is +0.06 at $136.78, with 4,048,733 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The NASDAQ 100 After Hours Indicator is down -8.1 to 11,495.62. |
20450.0 | 2022-06-30 00:00:00 UTC | 3 Questions Investors Should Be Asking as First Half of the Year Closes | AAPL | https://www.nasdaq.com/articles/3-questions-investors-should-be-asking-as-first-half-of-the-year-closes | nan | nan | B
arring a miracle today, which looks unlikely given that futures are indicating an opening lower than yesterday’s close, it looks as if the end of June is going to mark the end of the worst first half a year for stocks since 1970.
Even as traders are awaiting important figures, the major indices are indicating significantly lower openings, and it is hard to see how either the weekly jobless numbers or the Fed’s favored inflation indicator, Core Personal Consumption Expenditures (PCE), can turn that around. Anecdotally at least, companies are beginning to cut staff and prices are still rising so, unless our eyes and ears deceive us, this morning is unlikely to bring first-half saving news.
However, if they can detach themselves from the fear that a big, sustained drop in the market like we have seen over the last six months inevitably prompts, most investors will be all too aware that, at some point, this will be an opportunity to buy at a big discount.
Therefore, the three important questions that we should be asking are: Are we at that point yet? If not, how low can we go? And, when the time comes, what should we be buying?
I have already answered the first question. If, as expected, this morning brings news that either unequivocally is or can be interpreted as bad for the economy, today will be another big down day for stocks, reestablishing the downward momentum. Yesterday, I pointed to a bearish technical picture that indicated a drop back below the 3,639 low in S&P 500 futures of a couple of weeks ago, and if we close lower today, that is even more likely. That low may provide some support, but if and when it breaks, the next stopping point on the chart is somewhere around 3,500, which was a solid support level in November of 2020 on multiple occasions.
The good news there, though, is that if that low is broken and even if we go as low as 3,500, the fifth wave of the Elliott pattern that I identified in that piece will be complete, meaning there will then be a much better chance of a real, lasting bounce back. So, given the possibility of support around 3,640 and the fact that the ultimate low target is only 3.8% below that level, that would seem to be a good place for investors to start buying. The key word here, though, is “start.” This is definitely a time to dollar cost average into anything you buy, as further big swings, whether in an upward or downward direction, are almost guaranteed.
That brings us to the third question: What should investors buy? There are always two thoughts following a big market drop. You can buy the hardest hit stocks on the basis that when the recovery comes, they will bounce back further and faster, or buy those that have fared well on the way down on the basis that if they outperformed then, they will outperform now too. In this case, due to the nature of what has been sold, I prefer the former strategy.
The one-year, comparative chart for the S&P 500 and the Nasdaq Composite Index above clearly shows what most of us already know, that the Nasdaq has led the other major indices down. That is because it is heavily weighted towards the kind of techy, growth stocks that had outperformed so strongly since mid-2020 and hardest hit by both rising rates and slowing growth.
However, if you believe that the low is likely to be somewhere around 3,500 in the S&P, you have to believe that inflation will be under control fairly soon and that the Fed will not have to raise rates too far. In that case, those stocks will bounce back quickly, particularly companies like Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN) that are way too big and cash rich to face any existential threat from a downturn.
So, while I don’t think now is a good time to start buying, I do think that time will come fairly soon. And when it does, I will favor the tech and growth stocks that have been hit the hardest on the way down, but with a distinct preference for larger, established companies.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | In that case, those stocks will bounce back quickly, particularly companies like Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN) that are way too big and cash rich to face any existential threat from a downturn. If, as expected, this morning brings news that either unequivocally is or can be interpreted as bad for the economy, today will be another big down day for stocks, reestablishing the downward momentum. Yesterday, I pointed to a bearish technical picture that indicated a drop back below the 3,639 low in S&P 500 futures of a couple of weeks ago, and if we close lower today, that is even more likely. | In that case, those stocks will bounce back quickly, particularly companies like Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN) that are way too big and cash rich to face any existential threat from a downturn. arring a miracle today, which looks unlikely given that futures are indicating an opening lower than yesterday’s close, it looks as if the end of June is going to mark the end of the worst first half a year for stocks since 1970. Even as traders are awaiting important figures, the major indices are indicating significantly lower openings, and it is hard to see how either the weekly jobless numbers or the Fed’s favored inflation indicator, Core Personal Consumption Expenditures (PCE), can turn that around. | In that case, those stocks will bounce back quickly, particularly companies like Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN) that are way too big and cash rich to face any existential threat from a downturn. Even as traders are awaiting important figures, the major indices are indicating significantly lower openings, and it is hard to see how either the weekly jobless numbers or the Fed’s favored inflation indicator, Core Personal Consumption Expenditures (PCE), can turn that around. However, if they can detach themselves from the fear that a big, sustained drop in the market like we have seen over the last six months inevitably prompts, most investors will be all too aware that, at some point, this will be an opportunity to buy at a big discount. | In that case, those stocks will bounce back quickly, particularly companies like Apple (AAPL), Microsoft (MSFT), and Amazon (AMZN) that are way too big and cash rich to face any existential threat from a downturn. Even as traders are awaiting important figures, the major indices are indicating significantly lower openings, and it is hard to see how either the weekly jobless numbers or the Fed’s favored inflation indicator, Core Personal Consumption Expenditures (PCE), can turn that around. If not, how low can we go? |
20451.0 | 2022-06-30 00:00:00 UTC | BNPL firm Openpay pauses U.S. operations, to focus on Australia | AAPL | https://www.nasdaq.com/articles/bnpl-firm-openpay-pauses-u.s.-operations-to-focus-on-australia | nan | nan | Adds executive comment, background
July 1 (Reuters) - Australian buy-now-pay-later firm Openpay Group Ltd OPY.AX said on Friday it will "indefinitely" pause its United States operations and "materially" reduce its workforce, citing adverse macroeconomic and public market conditions.
The development comes eight months after the Melbourne-based company went live in the United States, with expectations of the country becoming one of its biggest markets. (https://bit.ly/3y7T0an)
BNPL stocks across the globe have been battered over the past few months due to rising interest rates and heightened regulatory scrutiny, with tech giant Apple Inc's AAPL.O entry into the market further hurting smaller players.
"This decision to shift our approach in the U.S. was not taken lightly but will now allow even greater focus on Openpay's Australian business," Openpay's Australia Chief Executive Dion Appel said. (https://bit.ly/3uh1D1b)
Australia accounted for 68% of Openpay's total transaction value of A$339 million ($233.81 million) in fiscal 2021. (https://bit.ly/3bBV6rw)
($1 = 1.4499 Australian dollars)
(Reporting by Sameer Manekar in Bengaluru; Editing by Shounak Dasgupta)
((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (https://bit.ly/3y7T0an) BNPL stocks across the globe have been battered over the past few months due to rising interest rates and heightened regulatory scrutiny, with tech giant Apple Inc's AAPL.O entry into the market further hurting smaller players. Adds executive comment, background July 1 (Reuters) - Australian buy-now-pay-later firm Openpay Group Ltd OPY.AX said on Friday it will "indefinitely" pause its United States operations and "materially" reduce its workforce, citing adverse macroeconomic and public market conditions. The development comes eight months after the Melbourne-based company went live in the United States, with expectations of the country becoming one of its biggest markets. | (https://bit.ly/3y7T0an) BNPL stocks across the globe have been battered over the past few months due to rising interest rates and heightened regulatory scrutiny, with tech giant Apple Inc's AAPL.O entry into the market further hurting smaller players. Adds executive comment, background July 1 (Reuters) - Australian buy-now-pay-later firm Openpay Group Ltd OPY.AX said on Friday it will "indefinitely" pause its United States operations and "materially" reduce its workforce, citing adverse macroeconomic and public market conditions. The development comes eight months after the Melbourne-based company went live in the United States, with expectations of the country becoming one of its biggest markets. | (https://bit.ly/3y7T0an) BNPL stocks across the globe have been battered over the past few months due to rising interest rates and heightened regulatory scrutiny, with tech giant Apple Inc's AAPL.O entry into the market further hurting smaller players. Adds executive comment, background July 1 (Reuters) - Australian buy-now-pay-later firm Openpay Group Ltd OPY.AX said on Friday it will "indefinitely" pause its United States operations and "materially" reduce its workforce, citing adverse macroeconomic and public market conditions. (https://bit.ly/3bBV6rw) ($1 = 1.4499 Australian dollars) (Reporting by Sameer Manekar in Bengaluru; Editing by Shounak Dasgupta) ((Sameer.Manekar@thomsonreuters.com; Twitter: https://twitter.com/sameer_manekar)) The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (https://bit.ly/3y7T0an) BNPL stocks across the globe have been battered over the past few months due to rising interest rates and heightened regulatory scrutiny, with tech giant Apple Inc's AAPL.O entry into the market further hurting smaller players. Adds executive comment, background July 1 (Reuters) - Australian buy-now-pay-later firm Openpay Group Ltd OPY.AX said on Friday it will "indefinitely" pause its United States operations and "materially" reduce its workforce, citing adverse macroeconomic and public market conditions. The development comes eight months after the Melbourne-based company went live in the United States, with expectations of the country becoming one of its biggest markets. |
20452.0 | 2022-06-30 00:00:00 UTC | Google to pay $90 mln to settle legal fight with app developers | AAPL | https://www.nasdaq.com/articles/google-to-pay-%2490-mln-to-settle-legal-fight-with-app-developers | nan | nan | Adds detail
WASHINGTON, June 30 (Reuters) - Alphabet Inc's GOOGL.O Google has agreed to pay $90 million to settle a legal fight with app developers over the money they earned creating apps for Android smartphones and for enticing users to make in-app purchases, according to a court filing.
The app developers, in a lawsuit filed in federal court in San Francisco, had accused Google of using agreements with smartphone makers, technical barriers and revenue sharing agreements to effectively close the app ecosystem and shunt most payments through its Google Play billing system with a default service fee of 30%.
As part of the proposed settlement, Google said in a blog post it would put $90 million in a fund to support app developers who made $2 million or less in annual revenue from 2016-2021.
"A vast majority of U.S. developers who earned revenue through Google Play will be eligible to receive money from this fund, if they choose," Google said in the blog post.
Google said it would also charge developers a 15% commission on their first million in revenue from the Google Play Store each year. It started doing this in 2021.
The court must approve the proposed settlement.
There were likely 48,000 app developers eligible to apply for the $90 million fund, and the minimum payout is $250, according to Hagens Berman Sobol Shapiro LLP, who represented the plaintiffs.
Apple Inc AAPL.O agreed last year to loosen App Store restrictions on small developers, striking a deal in a class action. It also agreed to pay $100 million.
In Washington, Congress is considering legislation that would require Google and Apple to allow sideloading, or the practice of downloading apps without using an app store. Google says it already allows sideloading. It would also bar them from requiring that app providers use Google and Apple's payment systems.
(Reporting by Diane Bartz in Washington Editing by Peter Henderson and Matthew Lewis)
((Diane.Bartz@thomsonreuters.com; 1 202 898 8313;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple Inc AAPL.O agreed last year to loosen App Store restrictions on small developers, striking a deal in a class action. The app developers, in a lawsuit filed in federal court in San Francisco, had accused Google of using agreements with smartphone makers, technical barriers and revenue sharing agreements to effectively close the app ecosystem and shunt most payments through its Google Play billing system with a default service fee of 30%. There were likely 48,000 app developers eligible to apply for the $90 million fund, and the minimum payout is $250, according to Hagens Berman Sobol Shapiro LLP, who represented the plaintiffs. | Apple Inc AAPL.O agreed last year to loosen App Store restrictions on small developers, striking a deal in a class action. As part of the proposed settlement, Google said in a blog post it would put $90 million in a fund to support app developers who made $2 million or less in annual revenue from 2016-2021. "A vast majority of U.S. developers who earned revenue through Google Play will be eligible to receive money from this fund, if they choose," Google said in the blog post. | Apple Inc AAPL.O agreed last year to loosen App Store restrictions on small developers, striking a deal in a class action. Adds detail WASHINGTON, June 30 (Reuters) - Alphabet Inc's GOOGL.O Google has agreed to pay $90 million to settle a legal fight with app developers over the money they earned creating apps for Android smartphones and for enticing users to make in-app purchases, according to a court filing. The app developers, in a lawsuit filed in federal court in San Francisco, had accused Google of using agreements with smartphone makers, technical barriers and revenue sharing agreements to effectively close the app ecosystem and shunt most payments through its Google Play billing system with a default service fee of 30%. | Apple Inc AAPL.O agreed last year to loosen App Store restrictions on small developers, striking a deal in a class action. As part of the proposed settlement, Google said in a blog post it would put $90 million in a fund to support app developers who made $2 million or less in annual revenue from 2016-2021. "A vast majority of U.S. developers who earned revenue through Google Play will be eligible to receive money from this fund, if they choose," Google said in the blog post. |
20453.0 | 2022-06-30 00:00:00 UTC | Recession vs. Depression: What Is the Difference? | AAPL | https://www.nasdaq.com/articles/recession-vs.-depression%3A-what-is-the-difference | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Since the start of the year, markets have been under pressure. Several factors have led to a global sell-off in stocks, bonds, and currencies. People are now debating about whether we are in for a recession or a slump. Recession vs. depression, therefore, is a key question on everyone’s minds these days. It is important to note the difference when you are doing your portfolio planning.
People are often afraid of recessions. However, they should not be because recessions are a natural part of the economy. It is a time when businesses have to make changes in their spending and investments to become more efficient.
Interest rates are increasing as a response to inflation. The Federal Reserve (Fed) is taking steps to combat inflation, but they are also worried about the risk of recession.
A recession is a period of negative economic growth. It is normal to worry about recessions, but it is important to prepare for them so you are not caught off guard.
Here at InvestorPlace, we’ve written different articles to help you navigate the inflationary environment to prepare for what might happen in the case of a recession.
However, this article will tell you about the difference between a recession and a slump. Although occasionally used interchangeably, these terms explain two different things. It’s important to understand this difference when deciding your investments.
Recession vs. Depression: What Is a Recession?
A recession is when the economy goes into a state of decline. It is characterized by declining production and rising unemployment.
7 Warren Buffett Stocks to Buy and Hold for the Next Decade
When the recession hits, we get an economic bubble that eventually bursts, leading to severe economic depression. This recession can be measured in gross domestic product (GDP), unemployment rates, and other significant statistics.
A recession is a period when the economy experiences negative growth. A slump is when the economy experiences negative growth and there are no signs of recovery.
Many factors can cause slumps, such as:
Economic downturns
Financial market crashes
Changes in global trade policy
What Is a Slump?
A slump is a period of economic decline. There are many causes, including a lack of demand for goods and services.
There are different types of slumps:
Business cycle: A downturn in the business cycle is when an economy’s output falls below its potential output for an extended period. This type of slump typically lasts longer than other types.
Economic contraction: An economic contraction is a decrease in production and demand that results from a recession or depression. A sharp decline in the prices of certain goods or assets, such as stocks, land, or houses, can also lead to an economic downturn.
Economic depression: An economic depression is generally defined as two consecutive years with negative GDP.
Difference Between a Recession and a Slump
A recession is a period when the economy is declining. A slump is a time when the economy is not doing well.
A recession can happen due to a drop in economic activity, such as an economic depression, or by an external shock, such as war or natural disaster. A recession may also result from increased unemployment due to excess supply and decreased demand for goods and services.
A slump can happen for various reasons. A change in government policy, such as increased taxes or subsidies or an increase in the cost of raw materials is also a vital reason for an economic slowdown. Decreased demand due to oversupply may also lead to a slump because goods and services become less attractive to consumers.
However, after the government takes the necessary steps, it can navigate out of these issues and begin a new era of economic growth.
What Is Needed to Promote Economic Growth?
The government can end a recession or slump by implementing policies that will stimulate the economy. Some of these policies include:
Increasing the money supply by printing more money to increase demand for goods and services.
Reducing taxes to encourage those who are unemployed to become employed.
Investing in public works projects, such as infrastructure improvements, will create jobs and stimulate the economy.
Recession vs. Depression: Do Not Panic
The economy is a complex system that is constantly changing. It’s not always easy to understand how the economy works, but we need to know.
The economy moves in cycles which include growth, recession, and slump. The cycle’s four phases are expansion, recession, recovery, and stagnation.
Expansion is when there is an increase in production and consumption. This phase usually lasts for a few years before entering into a recession. A recession happens when there is an economic decline because of reduced production or consumption. Recovery happens when the economy grows again after a recession or slump.
The Fed and the U.S. government are taking active steps to ensure we do not face a prolonged crisis. In the meantime, you can invest in bellwether stocks like Apple (NASDAQ:AAPL), Disney (NYSE:DIS), and Walmart (NYSE:WMT). These companies perform well regardless of the economic environment and are great defensive plays for any portfolio.
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.
The post Recession vs. Depression: What Is the Difference? 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. | In the meantime, you can invest in bellwether stocks like Apple (NASDAQ:AAPL), Disney (NYSE:DIS), and Walmart (NYSE:WMT). Here at InvestorPlace, we’ve written different articles to help you navigate the inflationary environment to prepare for what might happen in the case of a recession. A sharp decline in the prices of certain goods or assets, such as stocks, land, or houses, can also lead to an economic downturn. | In the meantime, you can invest in bellwether stocks like Apple (NASDAQ:AAPL), Disney (NYSE:DIS), and Walmart (NYSE:WMT). There are different types of slumps: Business cycle: A downturn in the business cycle is when an economy’s output falls below its potential output for an extended period. A recession may also result from increased unemployment due to excess supply and decreased demand for goods and services. | In the meantime, you can invest in bellwether stocks like Apple (NASDAQ:AAPL), Disney (NYSE:DIS), and Walmart (NYSE:WMT). Recession vs. Depression: What Is a Recession? Economic contraction: An economic contraction is a decrease in production and demand that results from a recession or depression. | In the meantime, you can invest in bellwether stocks like Apple (NASDAQ:AAPL), Disney (NYSE:DIS), and Walmart (NYSE:WMT). However, this article will tell you about the difference between a recession and a slump. Recession vs. Depression: What Is a Recession? |
20454.0 | 2022-06-30 00:00:00 UTC | Why Amazon, Apple, and Nvidia Are Falling Today | AAPL | https://www.nasdaq.com/articles/why-amazon-apple-and-nvidia-are-falling-today | nan | nan | What happened
Shares of Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), and Nvidia (NASDAQ: NVDA) were all falling this morning after the Commerce Department reported its latest inflation figures, which showed inflation remains persistently high.
The report said that the core personal consumption expenditures index rose 4.7% in May, only slightly less than expected and still a four-decade high.
Technology investors have been watching inflation figures very closely, and with today's report, Amazon plunged 3.5%, Apple fell 2.4%, and Nvidia dropped 2.2%.
So what
The core personal consumption expenditures index is one of the main measurements that the Federal Reserve uses to track inflation, and while it fell slightly in May compared to the previous quarter and was below the 4.8% that some experts were expecting, it still shows that inflation is stubbornly high.
Image source: Getty Images.
Technology stocks have fallen hard as a result of the Federal Reserve's hiking interest rates in order to tame inflation, and with today's news, it appears that Amazon, Apple, and Nvidia investors don't have an optimistic view of what's ahead.
The Fed is likely to continue to make aggressive rate hikes, including a potential 50- or 75-basis-point hike at the officials' next meeting in July.
Amazon, Apple, and Nvidia investors are looking at potential rate hikes and pulling back on these stocks, as they fear that fresh rate increases could slow the economy too much. If the economy slows too quickly, it could potentially hurt Amazon's e-commerce sales, cause Apple to sell fewer devices, and curb spending on Nvidia's semiconductors.
Investors in these companies are likely also pairing today's inflation data with recent comments made about the stocks by analysts.
Evercore ISI analyst Amit Daryananian said earlier this week that if there's a recession, Apple's revenue declines would likely be more severe than during the Great Recession, because that economic slowdown occurred during consumers' massive transition to smartphones.
Additionally, Bank of America analyst Vivek Arya said this week that he believes that the semiconductor industry could slow down in the second half of this year, though he's still generally bullish on the stock. And finally, Amazon received two stock price target cuts by analysts this week, on fears of a potential recession and the company facing rising costs.
Now what
There's no guarantee that a recession will come, of course, but that isn't stopping some investors from exiting technology stocks as they look for seemingly safer places to put their money.
Recession fears are likely to continue putting pressure on Amazon, Apple, and Nvidia's shares until the Fed is able to get inflation back down. But with investors unable to know when that could happen, shares of these stocks could remain volatile.
That doesn't mean they won't still make great long-term investments, but it does mean shareholders will have to stomach some additional share price swings.
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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. | What happened Shares of Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), and Nvidia (NASDAQ: NVDA) were all falling this morning after the Commerce Department reported its latest inflation figures, which showed inflation remains persistently high. Technology stocks have fallen hard as a result of the Federal Reserve's hiking interest rates in order to tame inflation, and with today's news, it appears that Amazon, Apple, and Nvidia investors don't have an optimistic view of what's ahead. If the economy slows too quickly, it could potentially hurt Amazon's e-commerce sales, cause Apple to sell fewer devices, and curb spending on Nvidia's semiconductors. | What happened Shares of Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), and Nvidia (NASDAQ: NVDA) were all falling this morning after the Commerce Department reported its latest inflation figures, which showed inflation remains persistently high. So what The core personal consumption expenditures index is one of the main measurements that the Federal Reserve uses to track inflation, and while it fell slightly in May compared to the previous quarter and was below the 4.8% that some experts were expecting, it still shows that inflation is stubbornly high. Amazon, Apple, and Nvidia investors are looking at potential rate hikes and pulling back on these stocks, as they fear that fresh rate increases could slow the economy too much. | What happened Shares of Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), and Nvidia (NASDAQ: NVDA) were all falling this morning after the Commerce Department reported its latest inflation figures, which showed inflation remains persistently high. Technology stocks have fallen hard as a result of the Federal Reserve's hiking interest rates in order to tame inflation, and with today's news, it appears that Amazon, Apple, and Nvidia investors don't have an optimistic view of what's ahead. Amazon, Apple, and Nvidia investors are looking at potential rate hikes and pulling back on these stocks, as they fear that fresh rate increases could slow the economy too much. | What happened Shares of Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), and Nvidia (NASDAQ: NVDA) were all falling this morning after the Commerce Department reported its latest inflation figures, which showed inflation remains persistently high. Technology stocks have fallen hard as a result of the Federal Reserve's hiking interest rates in order to tame inflation, and with today's news, it appears that Amazon, Apple, and Nvidia investors don't have an optimistic view of what's ahead. The Motley Fool has positions in and recommends Amazon, Apple, and Nvidia. |
20455.0 | 2022-06-30 00:00:00 UTC | When in Doubt, Zoom Out; Bear Markets Are a Goldmine | AAPL | https://www.nasdaq.com/articles/when-in-doubt-zoom-out-bear-markets-are-a-goldmine | nan | nan | It’s been a battlefield within the market landscape throughout 2022, with high-growth and tech stocks seemingly walking around with big targets on their backs. Buyers have entirely retreated, and bears have been pushing forward all year. It’s been exhausting, and bears keep reloading.
Day-traders and scalpers undoubtedly welcome the volatility, but the same can’t be said for long-term investors. Long-term investors don’t benefit from the significant intraday price swings that we’ve become familiar with; they desire considerable, consistent gains on a much larger time horizon.
Let the day-traders and scalpers have their fun. In the meantime, we’ve been presented with a fantastic opportunity to add to long-term positions at valuation levels that have not been seen in quite some time.
Let’s face it – it’s never fun to see some of your big-time winners give back gains. However, building up more significant positions in some of the best companies in the world is always exciting.
Below is a five-year chart of the S&P 500.
Image Source: Zacks Investment Research
As we can see, it sits at levels it hasn’t visited since 2021 Q1.
Furthermore, the S&P 500’s forward earnings multiple currently resides at 17.1X, the lowest we’ve seen since 2020 Q1. The value is also well below its five-year median of 19.9X.
Image Source: Zacks Investment Research
So, what does this tell us? A stretch of poor price action year-to-date has presented us with a rich buying opportunity not seen in years.
Alphabet
Alphabet GOOGL shares have tumbled in 2022, decreasing nearly 25% in value. The year-to-date chart below illustrates that.
Image Source: Zacks Investment Research
However, when you extend the time frame, we can see that GOOGL shares are trading at their lowest level since early 2021.
Image Source: Zacks Investment Research
Additionally, valuation levels have come down extensively. GOOGL's current forward earnings multiple of 20.2X is nowhere near 2020 highs of 39.1X and is well below its five-year median value of 27.1X.
Image Source: Zacks Investment Research
Nvidia
Nvidia NVDA shares have been sent down the drain in 2022, losing nearly 50% in value. The chart below illustrates the year-to-date price action of NVDA shares.
Image Source: Zacks Investment Research
However, upon zooming out, we can see that NVDA shares are currently trading at May 2021 levels, an area where the stock had faced previous resistance – perhaps the previous resistance level will turn into a support level.
Image Source: Zacks Investment Research
In addition, NVDA’s current forward earnings multiple resides at 34.2X, which appears a bit pricey. But, the current value is well below its five-year median of 49.8X and is nowhere near 2021 highs of 93.5X.
Image Source: Zacks Investment Research
Apple
Apple AAPL shares have struggled year-to-date, retracing nearly 23% in value. Below is a year-to-date chart of AAPL shares.
Image Source: Zacks Investment Research
Once again, upon zooming out, the rocky price action is less concerning – Apple shares are still up 300% over the past five years and are currently trading near July 2021 levels.
Image Source: Zacks Investment Research
Apple’s current forward earnings multiple resides at 22.8X, a fraction of its 2020 high of 41.5X and just above its five-year median value of 20.3X.
Image Source: Zacks Investment Research
Dollar Cost Averaging
Let’s face it – it’s impossible to time the market.
Of course, I’m sure you’ve heard the saying, “buy low, sell high.” If it was all that simple and investors could consistently and accurately forecast tops and bottoms, the market would be thrown out of balance entirely.
Then, there is the “buy the dip” approach, which is asking for trouble. Many people buy at the “dip,” yet it keeps dipping – that’s never fun. And, what exactly classifies as a “dip”?
One of the best and easiest ways to build a more prominent position for your long-term winners is the simple approach of dollar-cost averaging.
Dollar-cost averaging is a strategy in which investors split up their initial buys in periodic timeframes, reducing the impact of volatility on the overall purchase. It allows you the flexibility to “buy the dip” and add on to those winners whenever they come into uptrends.
It’s a stellar way to limit overall risk and protect investors against violent short-term price swings.
Bottom Line
It’s undoubtedly frustrating to watch your favorite stock give back all of its gains, but in the long-term picture, things don’t look nearly as bad as it seems. It’s vital to remain confident in your investment thesis through the ups and downs.
There was a reason behind that first initial buy, and if that reason hasn’t changed, there’s no need to panic. Instead, it’s highly beneficial for investors to dollar-cost-average into these positions, making the ride back up even sweeter.
When in doubt, just simply zoom out.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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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. | Image Source: Zacks Investment Research Apple Apple AAPL shares have struggled year-to-date, retracing nearly 23% in value. Below is a year-to-date chart of AAPL shares. Apple Inc. (AAPL): Free Stock Analysis Report | Image Source: Zacks Investment Research Apple Apple AAPL shares have struggled year-to-date, retracing nearly 23% in value. Below is a year-to-date chart of AAPL shares. Apple Inc. (AAPL): Free Stock Analysis Report | Image Source: Zacks Investment Research Apple Apple AAPL shares have struggled year-to-date, retracing nearly 23% in value. Below is a year-to-date chart of AAPL shares. Apple Inc. (AAPL): Free Stock Analysis Report | Image Source: Zacks Investment Research Apple Apple AAPL shares have struggled year-to-date, retracing nearly 23% in value. Below is a year-to-date chart of AAPL shares. Apple Inc. (AAPL): Free Stock Analysis Report |
20456.0 | 2022-06-30 00:00:00 UTC | Enjoy Technology, led by ex-Apple and JC Penney executive Johnson, files bankruptcy | AAPL | https://www.nasdaq.com/articles/enjoy-technology-led-by-ex-apple-and-jc-penney-executive-johnson-files-bankruptcy | nan | nan | By Jonathan Stempel
June 30 (Reuters) - Enjoy Technology Inc ENJY.O, a Silicon Valley retailer led by former Apple Inc AAPL.O and JC Penney Co executive Ron Johnson, filed for bankruptcy protection on Thursday, fewer than nine months after going public through a special-purpose acquisition company (SPAC).
The Palo Alto, California-based startup said it plans to sell its U.S. assets to Asurion LLC, a technology repair company.
Asurion agreed to provide $55 million of financing so Enjoy can operate while it reorganizes under Chapter 11 protection from creditors with the U.S. bankruptcy court in Delaware.
Founded by Johnson in 2014, Enjoy operates what it calls mobile retail stores that let customers buy smartphones and other technology that they can set up at home.
But in a court filing, a restructuring adviser said Enjoy has struggled with declining liquidity, in part because a large number of SPAC investors took back their money, as well as the "supply chain crisis" and an inability to retain staff.
Enjoy said it has just $523,000 of cash on hand. It also said its British unit is eliminating 411 jobs, or about 18% of the company's total workforce.
SPACs, or blank-check companies, are listed shell entities that let sponsors take private companies public faster than through traditional initial public offerings.
Many investors are pulling back from SPACs as the vehicles, which critics say are prone to conflicts of interest and shoddy due diligence, face tighter regulatory scrutiny.
Share prices of 291 companies that went public through SPAC mergers between 2019 and 2021 have fallen an average 58% since the mergers closed, according to University of Florida finance professor Jay Ritter, citing data from SPACResearch.com.
Johnson became a star executive overseeing the growth of Apple's retail stores.
He became JC Penney's chief executive in November 2011, but was ousted 17 months later after his turnaround plan, emphasizing fixed prices and eschewing coupons, alienated customers used to big discounts.
In late afternoon trading, Enjoy shares were down 27.8% at 21 cents. They peaked at $12.16 on Oct. 12.
(Reporting by Jonathan Stempel in New York; Editing by Richard Chang and Jonathan Oatis)
((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. | By Jonathan Stempel June 30 (Reuters) - Enjoy Technology Inc ENJY.O, a Silicon Valley retailer led by former Apple Inc AAPL.O and JC Penney Co executive Ron Johnson, filed for bankruptcy protection on Thursday, fewer than nine months after going public through a special-purpose acquisition company (SPAC). But in a court filing, a restructuring adviser said Enjoy has struggled with declining liquidity, in part because a large number of SPAC investors took back their money, as well as the "supply chain crisis" and an inability to retain staff. He became JC Penney's chief executive in November 2011, but was ousted 17 months later after his turnaround plan, emphasizing fixed prices and eschewing coupons, alienated customers used to big discounts. | By Jonathan Stempel June 30 (Reuters) - Enjoy Technology Inc ENJY.O, a Silicon Valley retailer led by former Apple Inc AAPL.O and JC Penney Co executive Ron Johnson, filed for bankruptcy protection on Thursday, fewer than nine months after going public through a special-purpose acquisition company (SPAC). Share prices of 291 companies that went public through SPAC mergers between 2019 and 2021 have fallen an average 58% since the mergers closed, according to University of Florida finance professor Jay Ritter, citing data from SPACResearch.com. Johnson became a star executive overseeing the growth of Apple's retail stores. | By Jonathan Stempel June 30 (Reuters) - Enjoy Technology Inc ENJY.O, a Silicon Valley retailer led by former Apple Inc AAPL.O and JC Penney Co executive Ron Johnson, filed for bankruptcy protection on Thursday, fewer than nine months after going public through a special-purpose acquisition company (SPAC). SPACs, or blank-check companies, are listed shell entities that let sponsors take private companies public faster than through traditional initial public offerings. Share prices of 291 companies that went public through SPAC mergers between 2019 and 2021 have fallen an average 58% since the mergers closed, according to University of Florida finance professor Jay Ritter, citing data from SPACResearch.com. | By Jonathan Stempel June 30 (Reuters) - Enjoy Technology Inc ENJY.O, a Silicon Valley retailer led by former Apple Inc AAPL.O and JC Penney Co executive Ron Johnson, filed for bankruptcy protection on Thursday, fewer than nine months after going public through a special-purpose acquisition company (SPAC). The Palo Alto, California-based startup said it plans to sell its U.S. assets to Asurion LLC, a technology repair company. But in a court filing, a restructuring adviser said Enjoy has struggled with declining liquidity, in part because a large number of SPAC investors took back their money, as well as the "supply chain crisis" and an inability to retain staff. |
20457.0 | 2022-06-30 00:00:00 UTC | US STOCKS-Wall St slides, Dow set for worst first-half since 1962 | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-st-slides-dow-set-for-worst-first-half-since-1962 | nan | nan | By Shreyashi Sanyal and Amruta Khandekar
June 30 (Reuters) - U.S. stocks slipped on Thursday, setting the Dow up for its worst first six months since 1962, on concerns that a dogged pursuit by central banks to tame inflation would hamper global economic growth.
Fears over slowing growth and surging prices have rippled through markets, with recession worries taking center stage as monetary policymakers across the world look to aggressively raise borrowing costs.
Federal Reserve Chair Jerome Powell on Wednesday vowed to not let the U.S. economy slip into a "higher inflation regime", even if it means raising interest rates to levels that put growth at risk.
The tech-heavy Nasdaq Composite .IXIC came off session lows but was still set for its largest declines ever for the first-half, while the benchmark S&P 500 .SPX tracked its biggest January-June percentage drop since 1970.
All the three main indexes are on course to post their second straight quarterly declines for the first time since 2015.
Fed policymakers in recent days have set expectations for a second 75-basis points interest rate hike in July even as economic data painted a dour picture of the American consumer.
"Until inflation meaningfully rolls over which at this point will take, I believe months, it's going to be hard for the market to really find a bottom and begin a rally," said Ross Mayfield, investment strategy analyst at Baird.
Meanwhile, consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose less than expected in May, indicating a tepid rebound in growth in the second quarter, while inflation maintained its upward trend. [nL1N2YH162]
"A lot of investors were expecting inflation data to really start to come down. But what we're finding is that it's a lot more challenging, and that the inflation data is remaining elevated for longer and probably has not peaked," said Sam Stovall, chief investment strategist at CFRA.
Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 0.5% and 2%, leading declines for the day.
At 12:01 p.m. ET the Dow Jones Industrial Average .DJI was down 224.38 points, or 0.72%, at 30,804.93, the S&P 500 .SPX was down 22.26 points, or 0.58%, at 3,796.57 and the Nasdaq Composite .IXIC was down 90.17 points, or 0.81%, at 11,087.72.
Heading into the second half of the year, bruised markets will continue to focus on inflation, unemployment and interest rate increases along with their impact on corporate earnings.
"There's a sense that the earnings picture is going to be the next shoe to drop and that downward revisions to earnings will catalyze another leg lower in the market," Baird's Mayfield said.
Walgreens Boots Alliance Inc WBA.O fell 4.5% as the drugstore chain maintained its full-year earnings forecast due to declining COVID vaccinations.
Declining issues outnumbered advancers for a 1.87-to-1 ratio on the NYSE and for a 1.79-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 42 new lows, while the Nasdaq recorded 11 new highs and 332 new lows.
S&P 500 set for worst June performance since 2008https://tmsnrt.rs/3RbYDNJ
(Reporting by Shreyashi Sanyal and Amruta Khandekar in Bengaluru; Additional reporting by Medha Singh; Editing by Arun Koyyur)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 0.5% and 2%, leading declines for the day. By Shreyashi Sanyal and Amruta Khandekar June 30 (Reuters) - U.S. stocks slipped on Thursday, setting the Dow up for its worst first six months since 1962, on concerns that a dogged pursuit by central banks to tame inflation would hamper global economic growth. Fears over slowing growth and surging prices have rippled through markets, with recession worries taking center stage as monetary policymakers across the world look to aggressively raise borrowing costs. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 0.5% and 2%, leading declines for the day. By Shreyashi Sanyal and Amruta Khandekar June 30 (Reuters) - U.S. stocks slipped on Thursday, setting the Dow up for its worst first six months since 1962, on concerns that a dogged pursuit by central banks to tame inflation would hamper global economic growth. Fed policymakers in recent days have set expectations for a second 75-basis points interest rate hike in July even as economic data painted a dour picture of the American consumer. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 0.5% and 2%, leading declines for the day. By Shreyashi Sanyal and Amruta Khandekar June 30 (Reuters) - U.S. stocks slipped on Thursday, setting the Dow up for its worst first six months since 1962, on concerns that a dogged pursuit by central banks to tame inflation would hamper global economic growth. Fed policymakers in recent days have set expectations for a second 75-basis points interest rate hike in July even as economic data painted a dour picture of the American consumer. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 0.5% and 2%, leading declines for the day. Fed policymakers in recent days have set expectations for a second 75-basis points interest rate hike in July even as economic data painted a dour picture of the American consumer. "Until inflation meaningfully rolls over which at this point will take, I believe months, it's going to be hard for the market to really find a bottom and begin a rally," said Ross Mayfield, investment strategy analyst at Baird. |
20458.0 | 2022-06-30 00:00:00 UTC | US STOCKS-Wall Street plunges, S&P 500 set for worst first-half since 1970 | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-plunges-sp-500-set-for-worst-first-half-since-1970 | nan | nan | By Shreyashi Sanyal and Amruta Khandekar
June 30 (Reuters) - U.S. stocks tumbled on Thursday, setting the S&P 500 for its worst first six months since 1970, on concerns that central banks determined to tame inflation will hamper global economic growth.
Fears over slowing growth and surging prices have rippled through markets, with recession worries taking center stage as monetary policymakers across the world look to aggressively raise borrowing costs.
Federal Reserve Chair Jerome Powell on Wednesday vowed to not let the U.S. economy slip into a "higher inflation regime", even if it means raising interest rates to levels that put growth at risk.
The tech-heavy Nasdaq Composite .IXIC was set for its largest declines ever during the first-half, while the Dow Jones Industrial Average .DJI was set for its biggest January-June percentage drop since the financial crisis.
All the three main indexes are bound to post their second straight quarterly declines for the first time since 2015.
Fed policymakers in recent days have set expectations for a second 75 basis points interest rate hike in July even as economic data painted a dour picture of the American consumer.
"People are raising cash going into earnings season," said Josh Wein, portfolio manager at Hennessy Funds.
"We've listened a lot to the Fed about what they're going to do. A lot of people are waiting to hear from companies as to what is actually happening and the state of the consumer, trying to get incremental info before they really commit to stocks."
Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 2.6% and 5.2%, leading declines for the day.
A Commerce Department report showed core personal consumption expenditure price index in May was slightly below expectations, although consumer spending rose less than expected.
"A lot of investors were expecting inflation data to really start to come down. But what we're finding is that it's a lot more challenging, and that the inflation data is remaining elevated for longer and probably has not peaked," said Sam Stovall, chief investment strategist at CFRA.
At 10:22 a.m. ET, the Dow Jones Industrial Average .DJI was down 527.89 points, or 1.70%, at 30,501.42, the S&P 500 .SPX was down 73.94 points, or 1.94%, at 3,744.89, and the Nasdaq Composite .IXIC was down 304.66 points, or 2.73%, at 10,873.23.
Heading into the second half of the year, bruised markets will continue to focus on inflation, unemployment and interest rate increases along with their impact on corporate earnings.
Drugstore chain Walgreens Boots Alliance Inc WBA.O shed 5% as its quarterly profit plunged 76%, hurt by its opioid settlement with Florida and a decrease in U.S. pharmacy sales on waning demand for COVID-19 vaccinations.
Declining issues outnumbered advancers for a 4.54-to-1 ratio on the NYSE and 4.43-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and 42 new lows, while the Nasdaq recorded nine new highs and 305 new lows.
S&P 500 set for worst June performance since 2008https://tmsnrt.rs/3RbYDNJ
(Reporting by Shreyashi Sanyal and Amruta Khandekar in Bengaluru; Additional reporting by Medha Singh; Editing by Arun Koyyur)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 2.6% and 5.2%, leading declines for the day. By Shreyashi Sanyal and Amruta Khandekar June 30 (Reuters) - U.S. stocks tumbled on Thursday, setting the S&P 500 for its worst first six months since 1970, on concerns that central banks determined to tame inflation will hamper global economic growth. Fears over slowing growth and surging prices have rippled through markets, with recession worries taking center stage as monetary policymakers across the world look to aggressively raise borrowing costs. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 2.6% and 5.2%, leading declines for the day. By Shreyashi Sanyal and Amruta Khandekar June 30 (Reuters) - U.S. stocks tumbled on Thursday, setting the S&P 500 for its worst first six months since 1970, on concerns that central banks determined to tame inflation will hamper global economic growth. The tech-heavy Nasdaq Composite .IXIC was set for its largest declines ever during the first-half, while the Dow Jones Industrial Average .DJI was set for its biggest January-June percentage drop since the financial crisis. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 2.6% and 5.2%, leading declines for the day. By Shreyashi Sanyal and Amruta Khandekar June 30 (Reuters) - U.S. stocks tumbled on Thursday, setting the S&P 500 for its worst first six months since 1970, on concerns that central banks determined to tame inflation will hamper global economic growth. Fed policymakers in recent days have set expectations for a second 75 basis points interest rate hike in July even as economic data painted a dour picture of the American consumer. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 2.6% and 5.2%, leading declines for the day. Fed policymakers in recent days have set expectations for a second 75 basis points interest rate hike in July even as economic data painted a dour picture of the American consumer. "A lot of investors were expecting inflation data to really start to come down. |
20459.0 | 2022-06-30 00:00:00 UTC | The College Investor: Road Maps To Flipping Debt Into Wealth Plans | AAPL | https://www.nasdaq.com/articles/the-college-investor%3A-road-maps-to-flipping-debt-into-wealth-plans | nan | nan | (1:30) - Robert Farrington: The Millennial Money Expert
(5:10) - Learning To Invest at a Young Age: Where Should You Start?
(9:45) - How Much Do You Need To Save Per Year To Reach a Million Dollars?
(14:20) - Never Too Late To Start Investing: Balancing Now and Your Future
(19:30) - Creating a Plan That Works For You: Understanding Needs, Wants, Goals
Podcast@Zacks.com
Welcome back to Mind Over Money. I'm Kevin Cook, your field guide and storyteller for the fascinating arena of behavioral economics.
In a recent episode, I featured a gentleman who has designed what I believe is the ultimate personal finance software. It's better than anything I've ever seen.
That episode which came out on May 12 was titled Get Your Money Game In Top Shape With Mark Harvey, The MoneyPlan Coach.
What I loved about Mark Harvey's approach was the comprehensive nature of the platform for all areas of your financial life. And all the calculations were well connected so you could create scenarios for anything you wanted to see.
Mark is also big on getting the message to people when they are young and impressionable -- but also flexible in their habits -- with financial education and tools like this.
Be sure to catch that episode if you haven't yet because it's packed with good perspective from a guy who was cutting his teeth in the mortgage market over 30 years ago and he's now an RIA and has the highest fiduciary role with the IRS to serve his clients, that of the Enrolled Agent.
Meet the College Investor
As I was helping Mark look for other podcasts to visit and spread the word, I came across another gem of a teacher, Robert Farrington of The College Investor. The website is a dynamic hub of information, resources, methodologies, and platform, institution, and technology reviews for new investors. Here's the quick overview...
The College Investor is on a mission to help you escape student loan debt so that you can start building real wealth for the future.
They help you navigate your personal finance decisions - so you can escape debt, earn more money, learn how to start investing, and more.
The College Investor has been providing expert guides, reviews, tutorials, and more for their readers since September 2009. What started out as a personal finance blog by founder Robert Farrington has evolved into a financial media brand reaching millions of readers per month - across their website, podcast, and video channels.
In the podcast, I talk with the very enthusiastic founder Robert Farrington, America’s Millennial Money Expert® and America's Student Loan Debt Expert.™
After talking a little about Robert's early experiences with money, debt, and investing, I dive right into asking him about three benchmark articles for his wide audience, including the up-and-coming Gen Z...
How To Get Started Investing In College
How To Get Started Investing In Your 20s
How To Get Started Investing In Your 30s
What impresses me about Robert's approach to early investing education is that it basically "flips the script" for a college grad from "saddled with debt" to a mentality of "proactively crushing debt and building lifetime wealth."
That headstart at 20 vs 30 is powerful!
And what I also love about getting to high school and college kids is that if you can teach them to budget for saving and investing, you've taught them one of the most powerful skill-habits that will serve them tremendously in their prime earning and spending years.
One question I forgot to ask Robert was this: I've started to see a mini-revolt online (YouTube influencers) toward the 401k as if it is some type of giant scam. If you as a reader or listener have a view here, please share in the comments, or when you share the podcast and article on social media.
The $100 Billion Cult Doubles
In 2018, I talked about "The $100 Billion Cult: Video Gaming and Youth Culture" and now that market is going to cross $200 billion this year. Microsoft thinks it's such a big part of what I call the "ET Squared Economy" (Exponential Technology X Experience + Transformation) that they were willing to bet $68.7 billion to swallow up Activision Blizzard.
Millennials and Gen Z are working, earning, creating, and spending in this new ET Squared Economy that allows them to individually build wealth as they partake in massive global wealth generation.
Last week, my guest was Zechariah Schaefer of the Advice-Only firm Ascent Personal Finance where he focuses on helping Gen Z and Millennial investors with financial planning. Catch that episode for more insight on what drives the youth fascination for games, tech, crypto, and the new rules of a new economy.
And if I had to recommend five stocks for those 45 and under right now, I'd go with NVIDIA NVDA, Apple, Shopify SHOP, Block, and CrowdStrike CRWD. Maybe I'd throw in MongoDB too as a robust and innovative database technology platform that offers a new ecosystem outside Google and AWS for developers.
Why NVIDIA? The #1 provider of advanced technology for machine learning/AI, gaming/creating, medical diagnostics, and automation/robotics capabilities.
Why Apple AAPL? The juggernaut will continue to dominate in devices and software, even for what comes next in augmented reality (AR) after the iPhone.
Why Shopify? As Robert Farrington recommends, all young investors should be building multiple streams of income, and Shopify will be a magnet for learning the ropes of e-commerce.
Why Block SQ? The premier ecosystem for small business is dedicated to serving all kinds of independent creators and staying in tune with the Blockchain economy.
Why CrowdStrike? A top cybersecurity platform specializing in endpoint threats at the edge of the cloud. This is vital in a world of IoT, 100 billiion connected devices, and remote work.
College Investor Audio Show
Finally, I want to highlight the genius of Robert Farrington with his alternative podcast mode. Instead of long, rambling interviews (I feel seen), he publishes short episodes of the College Investor Audio Show every week that highlight new research, reviews, or recap an existing article.
Sounds like I could learn a few things from Robert and his team.
Be sure to listen to our "shorter" chat and get the goods from a mission-driven investor who's been working over a decade to help Millennials (and now their kids) sketch their roadmap and get the vehicles for a life of wealth building.
Disclosure: I own shares of all the stocks mentioned in this article.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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Apple Inc. (AAPL): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
Shopify Inc. (SHOP): Free Stock Analysis Report
Block, Inc. (SQ): Free Stock Analysis Report
CrowdStrike (CRWD): 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. | Why Apple AAPL? Apple Inc. (AAPL): Free Stock Analysis Report Be sure to catch that episode if you haven't yet because it's packed with good perspective from a guy who was cutting his teeth in the mortgage market over 30 years ago and he's now an RIA and has the highest fiduciary role with the IRS to serve his clients, that of the Enrolled Agent. | Apple Inc. (AAPL): Free Stock Analysis Report Why Apple AAPL? In the podcast, I talk with the very enthusiastic founder Robert Farrington, America’s Millennial Money Expert® and America's Student Loan Debt Expert.™ | Why Apple AAPL? Apple Inc. (AAPL): Free Stock Analysis Report (1:30) - Robert Farrington: The Millennial Money Expert (5:10) - Learning To Invest at a Young Age: Where Should You Start? | Why Apple AAPL? Apple Inc. (AAPL): Free Stock Analysis Report The College Investor has been providing expert guides, reviews, tutorials, and more for their readers since September 2009. |
20460.0 | 2022-06-30 00:00:00 UTC | Should Vanguard Russell 1000 ETF (VONE) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-vanguard-russell-1000-etf-vone-be-on-your-investing-radar-2 | nan | nan | If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the Vanguard Russell 1000 ETF (VONE), a passively managed exchange traded fund launched on 09/22/2010.
The fund is sponsored by Vanguard. It has amassed assets over $2.52 billion, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies 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
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.56%.
Sector Exposure and Top Holdings
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 29.30% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc. (AAPL) accounts for about 6.35% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN).
Performance and Risk
VONE seeks to match the performance of the Russell 1000 Index before fees and expenses. The Russell 1000 Index measures the performance of large-capitalization stocks in the United States.
The ETF has lost about -20.68% so far this year and is down about -11.87% in the last one year (as of 06/30/2022). In the past 52-week period, it has traded between $166.82 and $219.99.
The ETF has a beta of 1.02 and standard deviation of 24.55% for the trailing three-year period, making it a medium risk choice in the space. With about 1029 holdings, it effectively diversifies company-specific risk.
Alternatives
Vanguard Russell 1000 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, VONE is a good 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 $280.64 billion in assets, SPDR S&P 500 ETF has $348.37 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
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Vanguard Russell 1000 ETF (VONE): ETF Research Reports
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
To read this article on Zacks.com click here.
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. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 6.35% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the Vanguard Russell 1000 ETF (VONE), a passively managed exchange traded fund launched on 09/22/2010. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 6.35% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the Vanguard Russell 1000 ETF (VONE), a passively managed exchange traded fund launched on 09/22/2010. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 6.35% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives Vanguard Russell 1000 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 6.35% of total assets, followed by Microsoft Corp. (MSFT) and Amazon.com Inc. (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Annual operating expenses for this ETF are 0.08%, making it one of the least expensive products in the space. |
20461.0 | 2022-06-30 00:00:00 UTC | This FAANG Stock Is Too Cheap to Ignore | AAPL | https://www.nasdaq.com/articles/this-faang-stock-is-too-cheap-to-ignore | nan | nan | Social media specialist Meta Platforms (NASDAQ: META) has had a rough 2022: Shares of the company have declined 50% since January, a rare fall for a FAANG stock.
The cause? Privacy changes for iPhone users have made tracking users more difficult, while CEO Mark Zuckerberg's ambitious spending (and resulting losses) on the metaverse has Wall Street questioning his plans.
While these concerns have merit, investors risk getting distracted by headlines and not looking deep enough at the numbers. So, I'm going to do this and illustrate why Meta Platforms is a buy today.
Acknowledging the challenges
Meta Platforms gets most of its revenue from advertising to the people using its social media platforms like Facebook and Instagram. Last year Apple implemented changes to its iPhone software that allowed users to block apps like Facebook from tracking user activity across their devices.
It's much harder to effectively serve advertisements if you can't follow users and see their activities and interests. These headwinds caused Meta's price per ad, which indicates how profitable the ad is for Meta, to decrease 8% year over year in the first quarter of 2022.
Meanwhile, the company is investing heavily in its metaverse and VR business it calls Reality Labs. The segment's operating losses were a staggering $10.2 billion, and Zuckerberg emphasized on the company's Q1 2022earnings callthat these investments are laying the groundwork for years into the future, something that might bother an often short-sighted Wall Street.
Meta is still insanely profitable
It's important to acknowledge these short-term challenges because they are real. However, don't let them distract you from how powerful Meta's business model still is. You can see below how the company has still generated nearly $40 billion in free cash flow over the past four quarters, despite the Reality Labs investments and iOS headwinds.
META Free Cash Flow data by YCharts.
Based on the company's $120 billion in revenue, that's a conversion rate of 33%, higher than most businesses you'll come across. Furthermore, Meta Platforms is sitting on almost $44 billion cash on its balance sheet against zero debt.
Plus, Meta is pumping billions of cash back into the business with share repurchases, reducing the number of outstanding shares by 4% over the past year.
Is the stock a buy?
Naturally, nobody likes seeing a low share price. However, shareholders should appreciate the low prices at which management is buying back its stock. The stock has a price-to-earnings (P/E) ratio of just under 13.
The S&P 500 trades at a P/E of just under 20. The S&P 500's historical average growth rate is 10%, while analysts believe Meta Platforms will increase earnings per share (EPS) by an average of 11% per year over the next three to five years. In other words, Meta is expected to outgrow the market, but its stock is comparatively less expensive.
META PE Ratio data by YCharts.
Meta Platforms is an exciting opportunity for investors: The company's struggles create a situation where the stock has become arguably the cheapest it's ever been, despite still generating immense cash profits.
If the company finds a way to overcome the iOS privacy headaches, or Reality Labs begins showing a return on investment, great! That is essentially icing on the cake. But as it stands today, both of those things could never work out, and Meta is still a bargain worth considering today.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends 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. | The segment's operating losses were a staggering $10.2 billion, and Zuckerberg emphasized on the company's Q1 2022earnings callthat these investments are laying the groundwork for years into the future, something that might bother an often short-sighted Wall Street. You can see below how the company has still generated nearly $40 billion in free cash flow over the past four quarters, despite the Reality Labs investments and iOS headwinds. Meta Platforms is an exciting opportunity for investors: The company's struggles create a situation where the stock has become arguably the cheapest it's ever been, despite still generating immense cash profits. | Social media specialist Meta Platforms (NASDAQ: META) has had a rough 2022: Shares of the company have declined 50% since January, a rare fall for a FAANG stock. You can see below how the company has still generated nearly $40 billion in free cash flow over the past four quarters, despite the Reality Labs investments and iOS headwinds. META Free Cash Flow data by YCharts. | Social media specialist Meta Platforms (NASDAQ: META) has had a rough 2022: Shares of the company have declined 50% since January, a rare fall for a FAANG stock. Meta Platforms is an exciting opportunity for investors: The company's struggles create a situation where the stock has become arguably the cheapest it's ever been, despite still generating immense cash profits. See the 10 stocks *Stock Advisor returns as of June 2, 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. | You can see below how the company has still generated nearly $40 billion in free cash flow over the past four quarters, despite the Reality Labs investments and iOS headwinds. 10 stocks we like better than Meta Platforms, Inc. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Meta Platforms, Inc. wasn't one of them! |
20462.0 | 2022-06-30 00:00:00 UTC | 3 Reasons Why Apple Stock Is a Buy | AAPL | https://www.nasdaq.com/articles/3-reasons-why-apple-stock-is-a-buy | nan | nan | Among the tech sector's luminaries stands Apple (NASDAQ: AAPL), a well-regarded stock among many investors, including Warren Buffett. His Berkshire Hathaway owns a sizable chunk of Apple stock (over 900 million shares), but that strong endorsement alone doesn't justify an investment.
The potential to buy the stock at a discount does hold some sway. Apple's stock price hit a 52-week high of $182.94 on Jan. 4, but it has fallen since then along with the broader market due to macroeconomic fears such as inflation. The price is down almost 26% from that high. The current financial environment creates uncertainty, but now may actually be a great time for investors with an eye toward the long term to pick up shares.
But there are at least three other solid reasons why this business can weather the present economic storm and continue to be a solid investment over the long run.
1. Apple keeps people coming back for its products
It's no surprise the company that became famous for ushering in the personal computer era and the iconic iPhone would generate the bulk of its income from these products. In its fiscal 2022 second quarter (ended March 26), Mac and iPhone products comprised over $60 billion of the company's $97.3 billion in sales.
The iPhone, in particular, is Apple's bread and butter. iPhone sales in the company's fiscal Q2 represented more than half of all revenue at $50.6 billion. This has been the case for years, and Apple's iPhone development efforts have what it takes to continue this growth.
Consumers are in the midst of transitioning to mobile phones that support new, more powerful 5G wireless networks. Apple released 5G-compatible iPhones in the fall of 2020, which helped propel fiscal 2021 iPhone sales to a 39% year-over-year increase after falling 3% in the prior fiscal year. The company is also releasing scaled-back, lower-priced models to go after segments of the market it had previously ignored.
Given rising inflation and threats of a recession, I wouldn't be surprised if iPhone purchases slowed in the short term when compared to fiscal 2021's blistering sales. But as consumer 5G adoption increases from 8% last year to an estimated 25% by 2025, so will iPhone purchases, ensuring Apple's bread and butter remains intact over the long run.
2. Apple is not just a hardware company
It's understandable to assume Apple will be hurt by inflation. Rising prices might force some consumers to hold off buying Apple's latest devices. But Apple isn't just a hardware company. For years, it quietly built a slew of software-as-a-service (SaaS) offerings that generate recurring revenue through subscriptions.
Apple's services segment encompasses its AppleCare warranty and repair program, digital payments, cloud storage, advertising products, and digital content, which includes music, movie, TV, and video game subscriptions. This division has seen steadily rising revenue over the years, going from $46.3 billion in fiscal 2019 to $68.4 billion in fiscal 2021.
The segment got a boost from advertising revenue when Apple changed its ad policies last year to bolster consumer privacy. Customers can now block third-party apps from targeting them with ads. Consequently, companies reliant on advertising, such as Facebook parent Meta Platforms, saw revenue from their iPhone apps dramatically decline. Meanwhile, Apple benefited as advertisers shifted budgets to its ad products.
Cloud subscriptions are another key contributor to services' sales growth. With our ever-increasing reliance on digital content, such as photos taken with mobile phones, consumers need a place to store that content. Apple's cloud provides a solution. Since we're unlikely to remove the hundreds, even thousands (in my case), of photos and other content uploaded to Apple's cloud, the company has a revenue stream resilient to macroeconomic challenges.
3. Apple has built a self-sustaining ecosystem
The third reason to invest in Apple is the ecosystem it built through a symbiosis of its products and services. A consumer buying the latest iPhone can leverage the convenience of Apple's cloud to automatically back up the phone's content or stream movies on a television connected to an Apple TV device.
This interplay between Apple's products and services increases a consumer's reliance on both, bolstering Apple's revenue through subscriptions between product purchases. This ecosystem will continue to expand, both through acquisitions -- for which Apple has purchased around 100 companies over the past few years -- and in-house research and development (R&D) efforts.
The company's relentless quest to strengthen its technology is one reason why Apple invests heavily in R&D, which represented about half of the company's operating expenses in fiscal Q2, and keeps so much cash on hand. The company exited fiscal Q2 with $28.1 billion in cash and equivalents.
Despite its strengths, Apple isn't immune to macroeconomic factors. Investors should expect some pain in the short term. Apple's fiscal third quarter could show a revenue hit due to the strong U.S. dollar since more than half its net sales come from outside the Americas.
But investors with an eye on the long term can wait for these macroeconomic storms to pass and, while waiting, can collect dividends from Apple stock. The dividend yield is a modest 0.65% at the time of this writing, but many tech stocks offer no dividends.
So while inflation, supply chain woes, and other macroeconomic factors may create a daunting picture in the near term, investors holding shares for the long run will be glad they picked up Apple stock.
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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Robert Izquierdo has positions in Apple and Meta Platforms, Inc. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway (B shares), 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. | Among the tech sector's luminaries stands Apple (NASDAQ: AAPL), a well-regarded stock among many investors, including Warren Buffett. But as consumer 5G adoption increases from 8% last year to an estimated 25% by 2025, so will iPhone purchases, ensuring Apple's bread and butter remains intact over the long run. Since we're unlikely to remove the hundreds, even thousands (in my case), of photos and other content uploaded to Apple's cloud, the company has a revenue stream resilient to macroeconomic challenges. | Among the tech sector's luminaries stands Apple (NASDAQ: AAPL), a well-regarded stock among many investors, including Warren Buffett. This interplay between Apple's products and services increases a consumer's reliance on both, bolstering Apple's revenue through subscriptions between product purchases. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway (B shares), and Meta Platforms, Inc. | Among the tech sector's luminaries stands Apple (NASDAQ: AAPL), a well-regarded stock among many investors, including Warren Buffett. A consumer buying the latest iPhone can leverage the convenience of Apple's cloud to automatically back up the phone's content or stream movies on a television connected to an Apple TV device. This interplay between Apple's products and services increases a consumer's reliance on both, bolstering Apple's revenue through subscriptions between product purchases. | Among the tech sector's luminaries stands Apple (NASDAQ: AAPL), a well-regarded stock among many investors, including Warren Buffett. But Apple isn't just a hardware company. This interplay between Apple's products and services increases a consumer's reliance on both, bolstering Apple's revenue through subscriptions between product purchases. |
20463.0 | 2022-06-30 00:00:00 UTC | Upstart Holdings CEO Dave Girouard Talks About the Company's Balance Sheet and More | AAPL | https://www.nasdaq.com/articles/upstart-holdings-ceo-dave-girouard-talks-about-the-companys-balance-sheet-and-more | nan | nan | Upstart Holdings (NASDAQ: UPST) is a lending platform, powered by artificial intelligence. Its shares are down more than 70% year to date. It's down, but not out.
In this podcast, Upstart CEO Dave Girouard joined Motley Fool CEO Tom Gardner to discuss:
How Upstart is using its balance sheet now.
Growth opportunities in auto lending.
One stock idea (that's not his own company).
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 June 19, 2022.
Dave Girouard: Also, even whatever is on our balance sheet, it's a fraction of what a lot of other fintechs have, we're not a balance sheet company, do not intend to become one. Maybe we just need to be a little more disciplined and have technology that's a little better at price discovery. I think that's what we're getting toward.
Chris Hill: I'm Chris Hill and that's Dave Girouard, the CEO of Upstart Holdings, a lending platform that uses AI to determine creditworthiness instead of the traditional credit score. The company ran into hot water when some investors were less than pleased to find loans on its balance sheet; year to date shares of Upstart are down more than 70%. Girouard joined Motley Fool CEO Tom Gardner to break down how Upstart is using its balance sheet, growth opportunities moving forward, and one stock idea outside of his own company.
Tom Gardner: Now I want to talk specifically about Upstart, the business, and then really get to today's environment in the latter part of the conversation. But right now, as you look at your company, what do you see at the top few competitive advantages?
Dave Girouard: We're going after a very hard problem that I think very few others are even concerned about or attempting to deal with and that is access to credit. The simplest way I can describe it is, in our view, 80-90% of Americans are fundamentally creditworthy, given the right product at a reasonable price, they will pay back that loan, whatever form that is. But really, only about half of Americans are recognized as such. There's just an enormous difference between the reality of the risk in the world in how these very archaic systems we have to measure it work. People might just say, yes, that's the world and that's how it is. Some people got good credit scores and some don't. But there is a better reality out there. I am a technology optimist. I've grown up in the technology world. I've seen the way it can transform industries and worlds in just unimaginable ways.
Yet somehow are we supposed to believe that this notion of having more accurate credit and making credit more readily available to more people at better prices is impossible to solve? That's the heart of what we're focused on in that building the application of artificial intelligence to credit, to us is an obvious join. AI is clearly a technology that has amazing potential in so many dimensions. Credit is a risk-based problem that is vast in scope. If you can be the company that really leads the charge in terms of applying AI to this enormous giant industry, the potential there is awesome. It does come down to execution. There are a lot of pieces and parts of the problems to solve. But the addressable market or the chance you have to do it is so vast. Honestly, we're not like Uber and Lyft elbowing each other or we don't have others that are really in our face, if you want to say, trying to do the same thing. Most are just happy to build a digital bank or some other type of payment company. All great businesses, other businesses, but there are really very few looking to innovate on this very specific problem of how you make credit work better and more efficiently and through the application of very sophisticated models. That's a place we feel, particularly in the U.S. market, really, in a class by ourselves.
Tom Gardner: Perhaps you just answered this, but what would you say to somebody who said, "Upstart has created something that would be a useful application inside of a larger bank, but I don't see it as a stand-alone company"?
Dave Girouard: Yeah. I think that's probably an inside-out way to look at it. Any particular bank solves a problem for a particular set of customers and a certain set of products. The technology that we're developing here is utility far beyond any single bank and what they would want to do. There's a good reason to be a bank. Some fintechs are deciding to become banks. You have your own balance sheet, you have deposits and you lend against them and it's a known thing.
If you're a new age 2022 digital bank, you have some advantages. That's all good, but in our view the most impactful thing you could do is to insert this technology into as the highest fraction of credit originations of all flavors going on in the United States and eventually the world. You can never do that as a bank. You could be a great bank, but the impact in the scale that you can build at, if you are a tool that every bank, every credit union, every lender can use, I believe there's a much more scalable, much more impactful model. One that is, as a guy that came from [Alphabet's] Google, a bunch of folks came from Google and companies like that, that's the appealing opportunity we're excited about.
Tom Gardner: What did you just learn in deciding not to take loans on the balance sheet as a market clearing mechanism. I guess, in a way, I was wondering or thinking that maybe it was almost like putting your personal lending business back in R&D because the environment changed so substantially that the model needed to catch up to the new reality. But you'll see and I'm sure you have seen or your investor relations team has seen littered around the internet, comments saying, well, they said they were a tech company, but they're a bank, they're a subprime lender now. They're taking a lending risk and it's just beginning because if this environment worsens then do that even more and obviously now you've changed course on that. You talk about the importance or significance of Upstart not becoming a bank. There are people who believe that you just took a step in that direction. Correct that thinking or explain your rationale today.
Dave Girouard: Yeah. We've always grown up as a balance sheet company not intending to build loans on our balance sheet to generate net interest income, which is again, a perfectly good business, but not our business. As we've said before, our business is in effect a marketplace. If you wanted to say that technology is one thing, the business model's a different thing. The business model is largely a marketplace with consumers on one side, banks and lenders and investors on the other side. What we have said and continue to say is we will take things on our balance sheet to test and try out new things. It's really a form of R&D. But ultimately beyond that, we want to be a market-maker. Now, like in any market, you can have surpluses on the supplier-demand side, the pendulum swings back and forth in any kind of marketplace business.
The truth is on the funding side, it's just more brittle and it's not as getting price discovery, making supply meet demand, which is, of course, the objective of any marketplace. It's not as fluid as we would like. Some of the things we can fix and some of them may just be endemic to the nature of banks and lending and capital markets investors, they react emotionally sometimes more than just to numbers. But in any case, the bottom line is, we move, I would say 85-ish percent of the time we've been in this business, we have been borrower constrained, meaning unlimited sources of lenders and funding and always just borrower constrained in terms of where we can economically bring borrowers onto the platform. For the other 15% we found a place where there's overwhelming consumer demand, there's not enough lending capacity out there, which is where we've been.
In March, we made that switch happen pretty quickly for a whole bunch of reasons that are largely about unfortunately war and inflation and things of that nature. But in any case, we were caught on the loss side. We weren't as good and aren't yet as good at getting price discovery happening, meaning prices move up until supply meets demand. That's maybe the economics 101 thing that needs to happen. That's our intention going forward. Also, even whatever is on our balance sheet, it's a fraction of what a lot of other fintechs are. We're not a balance sheet company, and do not intend to become one. Maybe we just need to be a little more disciplined and have technology that's a little better at price discovery. I think that's what we're getting toward.
Tom Gardner: Just to understand the thinking that went behind that, was that to fill in a gap in the marketplace for defensive reasons or for revenue-generating reasons? What ticked you toward making that decision?
Dave Girouard: It's just continuity. The pipes are running, the borrowers are applying, they are being matched to lenders, and the lenders are selling some of the loans, keeping some of the loans. So, I mean, it's just sometimes like in March 2020 to go back a couple of years, there was just an insane upset of the applecart in the course of a few weeks. This wasn't quite like that, but you just have that when the economy changes really quickly. We have to make decisions really fast on such things, and generally speaking, like I said, that's not our goal. Interest income is not of interest to us.
We really aim to be the marketplace and the partner to these banks and credit unions. I think we're going to get closer and closer there. The important thing I'd say is we have mechanisms to make sure supply meets demand. For every loan that is approved on our platform, it is known what bank is originating it, and if that bank is not going to hold themselves then what investor will have it after the fact. So there's never a case where there's a loan sitting around and, "We're left with them." But it was a decision really to keep the pipeline moving and not to defer it, and we have a lot of tools to make sure supply meets demand. We're going to get better at that to make sure we're good with that in the future.
Tom Gardner: You talked about growing a company over long periods of time as a risk mitigation exercise. Which do you feel is the bigger risk to Upstart if you can compare these two? Would you say the bigger risk is that your data advantage of 10 years is not as great as you had hoped because other people came along, leapfrogged, and there were different sources of data? It wasn't as big a lead as you thought you had in the last 10 years. That's one or two, that the 10 years of data you have is in a low rate interest rate environment and the models, your fear about the adaptability of the model when conditions worsen when credit markets stall. If you compare those two, which one do you think is a greater long-term risk?
Dave Girouard: Honestly, I don't fear either of them because I don't think there's any evidence of either. We don't see others building models similar to ours. The best thing we can do is try to observe how other models work, and they all, in terms of consumer lending, all tend to be so highly correlated to a credit score that it's really hard to see anything beyond that going on. Maybe around the edges, but we just don't see it. It's hard for me to worry that suddenly our advantage out there is lessening. I don't see that. On the second thing, I mean, conceptually you could worry that your model, the environment is going to change such that your model suddenly becomes useless if you want. For us, it's almost implausible to imagine that because again, it's how it's doing relative to a traditional credit score, and that's not a tough fight for us just to be frank, like the amount of risk separation, if you just look. We've put actually a slide about this on our investor deck.
If you just split all of our loans by credit score and then you split all over the same loans by the Upstart, essentially risk tier, what you see is a dramatic separation and the risk tiers. A very smooth from tier 1 up to tier 8 like a very smooth increase in loss rates as you would like across these risk tiers. The tiers are working incredibly well. Whereas FICO it's only lightly correlated. It's useful a little bit, but it's actually not that well correlated. But anyway, I don't want to sound like we don't have things to worry about, Tom. Every business does and we do. I feel like if I can just nominate a No. 3 three, we have to execute. There are a lot of things that can go wrong in any particular business, and certainly in ours. For us it's execution to grab the opportunity to prove this isn't about unsecured personal lending, it's also about auto lending, it's also about small-business lending and mortgage lending. So to prove them more to categories to win over more lenders to the platform. Those are the things I worry about is really, how do we take those next steps to really prove this is going to be the business that we believe it's going to be in a few years.
Tom Gardner: Let's go to the other categories. Let's move to auto-lending now and enlighten us, teach us all the differences between personal lending and auto lending. The size of the market, the competitive dynamics in those markets, the potential margins, and the amount of market share that you think is available to Upstart in the two different categories. Those two to start.
Dave Girouard: Personal lending, depending on how you measure it, it's maybe a $100, $150 billion a year in originations. We believe our platform is a potential market share leader in the U.S. in that category and has become so over the last few years. But it's not a mainstream credit product, meaning most banks don't really offer personal loans at scale. It's historically an esoteric product just because it wasn't very economic for banks to like make a $10,000 loan. They just weren't going to make enough interest on that to make it worth the effort of dealing. Fintechs have really almost created that category in the last decade. We've really built a very strong position there and continue to build on that. Auto is very different of course, it's a very well-established category. It is probably scale-wise, maybe seven, eight times larger. Maybe it's a $700 billion a year in origin, maybe $800 billion a year in origination, so much larger, much more mainstream to the financial services world, to the banking world. This is a secured loan, so it's a fundamentally different product, whereas unsecured personal is really like you're betting on the person, you are underwriting the person. In an auto loan, much like a mortgage, there's a person, but there's also an asset behind it, and that means it's a collateralized loan. There's something you can recover.
Generally speaking, it makes the loan notionally less risky because you can recover a higher fraction if the person chooses not to pay. Getting that right and how that works. Also, the payment waterfall is different. Generally speaking, somebody is more likely to not pay a personal loan where the quid pro quo is they mind their credit score might get hit or a car loan their car might get repossessed, and so generally speaking, it's always believed that a car loan is higher up the payment waterfall for the consumer. That's how they differ.
From our point of view, there is still very sophisticated modeling in both. There are a lot of processes involved in a car loan that are not involved in a personal loan. If it's a refinance, which is the first product we got in, you have to deal with paying off the prior lender, establishing the new creditor on the lien, on the title for the car, so there's some logistical stuff that can make it what I would call a historically 0 billion-dollar market. Meaning, if it took 10 minutes, who wouldn't want to refinance the car loan to save a couple $100 a month? But if I had to go through trudging to the DMV and God-knows-what and notarization and all that, maybe I just won't bother. I think that's where the industry has been to date. So we've been building a process that feels more like unsecured personal products.
It's all automated, it can be done really quickly. I think even the bigger opportunity for us in auto is at the car dealership itself when people are buying cars. Historically, one of the, let's just say, worst experiences ever invented in the United States of America is what most people experience when they go to buy a car. It's just a circumstantial thing that's built over time, but we bought a company a year or so ago now, Prodigy, that is really the software going into car dealerships to help them create a more pleasing process for all, a more efficient car buying process. We're just now testing Upstart loans in that process. That's an enormous opportunity because that's where the bulk of auto-lending happens, the vast majority. It's really efficient, both in terms of process and in terms of pricing. It pulls on both of the ropes that make our business go, and we're seeing extremely promising early results. Our view generally is if we were betting on this, in a few years, you'd see auto surpass our personal loan business just by the potential of the inefficiency, and what we think is a very good position. We have, we feel pretty confidently, the fastest-growing auto retail software that's in the industry. There's a whole bunch of providers of trying to make software that helps car dealers sell more efficiently. But ours is clearly growing faster than others.
Tom Gardner: What do you expect the margins still look like in auto-lending versus personal lending?
Dave Girouard: Margins to us, we think won't be very different, very similar. Generally speaking, more of the revenue will likely happen over the term of the loan as opposed to upfront, so you can view that either as a good or bad thing. But we think the margins and the take and all that won't be all that different. I think the level of inefficiency and opportunity, are pretty similar. But I do think the nature of that product isn't a large upfront fee or anything like that, so it will tend to be a bit more recognized over the term of the loan, which for the point of just stability if you will, is not necessarily a bad thing.
Tom Gardner: We're going to take a step back for everyone to just get their footing about AI and to have you explain taking the auto loan on your balance sheet as an R&D maneuver to train the AI, so as to make sure the system works so that now lenders can come into the platform and feel confident that the data you're presenting is valid. So could you just explain that process and how somebody just coming into it for the first time might say, what? Wait, all these loans are on their balance sheet. This isn't a risk-less organization, they're having to shoulder all of these loans and it's in the hundreds of millions of dollars. Walk us through the process of how that works.
Dave Girouard: So just to give you an example. So we have a small business loan product coming out later this year. We've talked about it a bit, it's on the near-term horizon. For the rest of this year, we'll probably hope to really get this thing tested and out there and try it. Maybe a couple of tens of millions of dollars of loans, which in the grand scheme of lending is not a lot. Now we can't go to one of our bank partners and say, hey, we've got this thing, it's ready to go, you want to get the first small business loan in Upstart? Because that just doesn't make sense for them. They have a lot of responsibility in their vetting on something. We just never allow for that. So when we're bringing a new product to market or maybe something very different in an existing product, we want to have the capacity to test it ourselves and get through the first version, the second version, maybe the third version of the model. Usually, the curves are such that you can iterate quite quickly if you have enough volume. That's what we've been doing in auto, is really funding most of it and testing it.
Now for the refi product which has been in the market for a while, we're now transitioning that, where banks and credit unions are becoming the lenders for that, and we're getting it off our balance sheet. That's how it's supposed to work. We do it for, it depends on the product, it might be for six months or nine months or something like that, maybe a year. Then at that point, lenders have enough confidence in the product that they can step in and take it and be happy with it and it can pass all their tests if you will. Then small business now. We're going to start that process for that product soon enough, and we'll go through the same thing, six, nine months, who knows exactly? That capital on our balance sheet, it's an incredibly valuable use of it because it is R&D. I don't know how you would build an AI model where the bank assumes all the risks of the learning of getting this thing right in figuring it out. That's not a reasonable position for a bank to take and it's not a reasonable ask for us to make so we don't do that. We said look, we're going to build the first version of this ourselves going to test the pipes we're going to refine the model, and when you're comfortable, you come on board and then we'll be ready for you.
Tom Gardner: I'm sorry to go back to this, I promise this will be the last time I ask about taking the personal lending business back on the balance sheet. But is it fair to say that that was happening because essentially you needed to put it back in R&D to show the banks that this model does work in the new regime?
Dave Girouard: I think that would be a decorative description of it. In reality, I think it was just a mismatch of supply and demand that happened in a very short period of time. We just opted not to turn off some of the pipes as quickly as we could have, which would've been a different choice. Really it was just sometimes you don't know if something is momentary and it's going to clear itself up in a few days or whether there's something deeper going on in the economy or whatever. I would like to say, I can't say that was a form of R&D, and we would pretty transparent that that's what happened is suddenly the markets did turn and our price discovery process isn't fast enough to get prices where supply meets demand, and when we had that disequilibrium, if you will, we took some of them onto our balance sheet, and we do not intend to do that, it's not our business, and we're going to get better at the tools to have price discovery happen faster.
One of the very encouraging things we're seeing is we have a lot of pricing power. We haven't moved prices up a lot, I said this earlier, because core interest rates moved up, Fed rates moved up, probably the two-year treasury is really the mark that matters the most to us, and the two-year treasuries up a couple hundred basis points since the fall, as well as the risks and the environment that also pushes rates up. Yet still, consumer demand is super strong and that just shows we have, I think, real pricing power, which is good. But it means we're not as good as we want to be at getting price discovery happening.
Tom Gardner: We live interesting times. Certainly, a comparable would be to go back around 20 years and see what happened to the valuation of a lot of technology and growth companies. In hindsight, say their prices got well ahead of their value, but then the best among them delivered some of the greatest returns in American market history after that because the actual revolution was real, it was tangible even though there were a bunch of joke companies should never have even existed, let alone come public.
There were actually some, obviously an amazing companies and every company we'd like to compare itself to Amazon and the public markets, of course. But in that, I think 2001 shareholder letter, Jeff Bezos I think the word "ouch" was right there in the beginning. Our stock is down 90% and Bezos in talking about at some interviews I've seen it after the fact said it was funny because internally a lot of things we're going exactly the direction that we wanted them to go. But maybe a collection of valuation, reset, big new changes in the environment and trouble communicating what we were achieving and going for all all hit us at once. But when I was looking at the internal numbers, I was actually very pleased by what was happening, but our stock was down 90 percent at the time. Without putting you in a position where you have to compare yourself to Amazon, given that, compare and contrast the feeling that you have right now inside of Upstart, what you're seeing develop at the company versus the absolute invalidation of any prior valuation to a $150 a share all in the six-month periods slamming you. The external validation is getting knocked down and the internal experience, how different is that for you?
Dave Girouard: It's not as stark it might feel to the outsiders as you might think we're just like demotivated or just crushed by this. I don't think there's a lot of that. I wouldn't say nobody looks at the stock price. That would be silly. But honestly, we're pretty focused on the mission on what we're accomplishing internally. I think a good lesson for one of your members if they really want to understand us, forget all the noise, forget the stock price at any point in time. Go to the beginning, at least as our public journey, read the S1, read how we describe what we do, why we do it, how we do it, because we put a lot of energy in our S1, going way back then to describe how this AI works, it's not just noise there, there's some deep science there and we actually got super disclosive of it in the S1.
Then go read our first earnings report, our second earnings report, our third, and just take all the market noise out of that and judge for yourself is this real? Are these people legitimate, do they do what said they're going to do. If you do that at whatever conclusion you come to you can come to. But I think in some sense you have to ignore the fact that the stock, which started with $20 by the way, when we went public, ran up to close to $400, came all the way back to wherever it's sitting today, $45 bucks. [laughs] But again, that's the market, that's the noise. Read the details of what we've done and who we are, and I think you have a better chance to get to the truth than just reading speculative ideas about what we're good at, and not good at we said this, and we're not perfect, we'll make mistakes.
Any decent company trying to be transformative and trying to do really hard things is going to make mistakes, and we're in that list, but we're also in a very strong place, a very strong position to launch these new products from a really well capitalizing. We're company I just by the way, Tom, as a private company, we raised a total of a $160 million, frankly, a fraction of most fintechs. When we went public, I think we had in the range of $90 million of that still on our balance sheet. We've just been that company since day one, that's never changed. I think if you want to be a long-term investor, you got to get to the heart of a company, who they are, who the people are, how they do what they do, and then place your bets.
Tom Gardner: This is probably my least favorite question to ask. One of those rash statements that floats around it maybe not floats around, that spirals around, and I want to give you an opportunity to explain how the process works on executive selling of shares. Because these stories, your stock that has about a 30% short interest, and therefore, I don't want to be conspiratorial in my thinking, but therefore there are group of people because shorting is a short-term transaction that have a short-term incentive to swirl some rumor out there in the marketplace. Could you talk about your ownership stake, shares that you've sold in the last year, how that works and what it says about your commitment or a lack of commitment to Upstart.
Dave Girouard: Let me give proper context to it. We're eight years as a private company and now 8.5, as a private and 1.5 as a public. The 8.5 years as a private, nobody, no insider sold a single share. In fact, there's at least a couple of junctures where nobody wanted to fund our business, honestly, and a couple of times or I put what amounted to pretty significant parts of my personal worth, my family's worth into the business to get it to the next step and nobody sold anything, not me, not our board, not any of the executives. The only selling that's gone on since we became public from executives has been through 10b5-1 plans, structured selling plans where there's setup in advance and you have no choice. My plan was set up over a year-ago, May 2021, to sell what amounts to a single-digit fraction of what I own based on price triggers, etc, those things always are, and that's it. I have no ability to change that. Can you legally stop them or not? I don't know, but they were set based on what the world looked like and what Upstart looked like in May 2021, and that's it. That's the long and the short of it. I own the vast majority of shares I've ever had in Upstart, and I expect to have them for a very long time.
Tom Gardner: Last question, which is probably a one you wouldn't expect me to ask to close, but if you could, in a very generalized way, provideinvestment adviceto investors in high-growth technology enterprising companies, given what you've seen previously at Google, watching what happened in 2000. 2001, 2002, 2008, 2010, and a different sudden drops, but this is obviously substantial one when you have the Nasdaq falling more than 25 percent, that's maybe a once out of every 10-year outcome or experienced for the Nasdaq. What advice do you have for us as investors in companies like yours, not specifically Upstart? But just if you're investing in companies that are spending on R&D and trying to explore the future, and their stocks have gotten rocked 30%, 50%, 70% or more, what advice would you have for anyone who's thinking about their portfolio now and seeing a lot of red?
Dave Girouard: Obviously you don't want to act in fear, I'm one who has not historically done a lot of singular stock picking. I do it occasionally, but I usually will not do a lot of that myself. But occasionally I just have conviction and I have conviction through experience in seeing a product, and I will just give you an example. I put a big chunk of money recently, the first time I bought a singular stock in a long into Zoom. I was I know that business, we're trying to build products like that at Google. I know how hard it is. That company executed incredibly well when suddenly their business just went through the roof in early 2020, and I had just so much respect for what they've done, and I know how hard the problem is to solve. How many times has like doing video like this has been just a nightmare in the past despite the fact that Microsoft's coming after them, Google's coming after them whoever else.
To me it is you can do index investing or whatever you want, but you want to have some conviction somewhere. I don't know if I got Zoom at its lowest or whatever and timing the market is just not a useful exercise, I think. But find an area where you have conviction. You've seen what a team can do, you have enough personal experience to know it, such as something somebody mentioned to you and that's how I think about it. Honestly, I invested in Apple [laughs] in 2001 because I thought the iPod was a pretty damn awesome concept. I thought, wow, Steve Jobs can create a No. 1 position. I had left Apple a few years before that, and I fairly disgusted with the company when I left it. I said, if you can do that with an iPod, what else is he going to do over the time, and that one worked out pretty well.
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. The market is closed on Monday for the Juneteenth holiday, so we will see you on Tuesday.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. 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 Alphabet (A shares), Alphabet (C shares), Amazon, and Apple. Tom Gardner has positions in Upstart Holdings, Inc. and Zoom Video Communications. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Upstart Holdings, Inc., and Zoom Video Communications. The Motley Fool recommends Uber Technologies 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. | Girouard joined Motley Fool CEO Tom Gardner to break down how Upstart is using its balance sheet, growth opportunities moving forward, and one stock idea outside of his own company. In hindsight, say their prices got well ahead of their value, but then the best among them delivered some of the greatest returns in American market history after that because the actual revolution was real, it was tangible even though there were a bunch of joke companies should never have even existed, let alone come public. Tom Gardner: Last question, which is probably a one you wouldn't expect me to ask to close, but if you could, in a very generalized way, provideinvestment adviceto investors in high-growth technology enterprising companies, given what you've seen previously at Google, watching what happened in 2000. | In this podcast, Upstart CEO Dave Girouard joined Motley Fool CEO Tom Gardner to discuss: How Upstart is using its balance sheet now. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Upstart Holdings, Inc., and Zoom Video Communications. The Motley Fool recommends Uber Technologies and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | Girouard joined Motley Fool CEO Tom Gardner to break down how Upstart is using its balance sheet, growth opportunities moving forward, and one stock idea outside of his own company. We've always grown up as a balance sheet company not intending to build loans on our balance sheet to generate net interest income, which is again, a perfectly good business, but not our business. I would like to say, I can't say that was a form of R&D, and we would pretty transparent that that's what happened is suddenly the markets did turn and our price discovery process isn't fast enough to get prices where supply meets demand, and when we had that disequilibrium, if you will, we took some of them onto our balance sheet, and we do not intend to do that, it's not our business, and we're going to get better at the tools to have price discovery happen faster. | I don't see that. I don't think there's a lot of that. I wouldn't say nobody looks at the stock price. |
20464.0 | 2022-06-30 00:00:00 UTC | 1 Metric All Investors Should Consider Before Buying a New Stock | AAPL | https://www.nasdaq.com/articles/1-metric-all-investors-should-consider-before-buying-a-new-stock | nan | nan | In 1999, Barron's published an article titled "Amazon.bomb," which predicted the e-commerce company's impending demise. The author of the piece repeatedly cited Amazon's lack of profitability as an indication that the business was poorly run and highly overvalued.
Hindsight being 20/20, it's obvious Barron's got it wrong on the quality of Amazon's management team. And yet, 23 years later, we find ourselves in a similar environment, with skeptics making familiar claims about less profitable growth companies.
To be fair to the critics, stocks did become highly overvalued in the last couple of years. But history has shown us that you cannot rely on a single valuation metric like the price-to-earnings (P/E) ratio, to judge the quality of a company.
One less-utilized metric that gives investors a contextual view into the efficiency of a company's management team is known as return on invested capital (ROIC).
Image source: Getty Images.
What is ROIC?
ROIC is a measurement of how effectively the leadership team of a business generates a return on the capital it deploys. And it's one of the most important valuation tools for investors to understand.
As an early investor, I heard statements like "buy quality companies and let them compound" countless times. While that sounds simple, the definition of quality is broad and subjective, depending on who you're talking to.
That's why I like ROIC. It's not subjective; it's a quantitative measurement of how well a company is allocating its cash.
Calculating ROIC
Calculating ROIC is a little more involved than other metrics like the P/E ratio. But bear with me -- it's not that scary.
The formula for ROIC is:
Net operating income after taxes (NOPAT)/ invested capital (IC)
Before you can calculate ROIC, you'll first need to generate values for the numerator and the denominator.
NOPAT represents the earnings a company would make if it had zero debt. To calculate this, simply multiply the company's operating profit by 1 minus the tax rate.
The operating profit can be found on the income statement, and the tax rate can be easily derived by dividing the income before tax by the tax expense (both of which can also be found on the income statement). Here's the formula for NOPAT:
NOPAT = operating profit (1-tax rate)
From there, you will need to calculate the numerator in our ROIC formula – invested capital. To get this number, head over to the liabilities section of the balance sheet and add up the long-term (or noncurrent) and short-term (current) debt, which is known as total debt. Subtract the cash and cash equivalents from the total debt to arrive at net debt.
The last step in calculating invested capital is to add the total equity from the balance sheet to the net debt you just produced. And now you have your ROIC denominator. Here's the formula:
Invested capital = net debt + total equity
Now that you have both your numerator and denominator, simply divide NOPAT by invested capital and you'll arrive at the company's ROIC. ROIC varies by industry so its important to compare a company's return on capital to competitors in the same space. But generally speaking a ROIC that is above 20% is high, and rising ROIC indicates a business that's improving over time.
Real world example of ROIC
Here's an example using Apple's 2021 financials :
The NOPAT is calculated by multiplying the operating income, $109 billion, by 1 less the tax rate. Apple's tax rate is 13% or .13 so to calculate Apple's NOPAT we simply multiply $109 billion by 0.87 which equals $95 billion.
Next we need Apple's invested capital which is its net debt, $84 billion, + its total equity, $63 billion, which equals $147 billion.
Finally, to produce the current ROIC, simply divide Apple's NOPAT by its invested capital:
$95 billion (NOPAT) / $147 billion (invested capital) = 64% (ROIC)
That number by itself gives us insight into how incredibly efficient Apple was in 2021 at earning a return on the cash it invested into its business.
But if we extend the calculation several years back, we get further insight into how the company's ROIC has changed over time:
YEAR
ROIC
2017
21%
2018
32%
2019
37%
2020
42%
2021
64%
Data source: Apple 10K.
Here we see that not only is Apple generating a very high ROIC as of 2021, but it's also been steadily growing its ROIC over the last five years.
There are various other methods for calculating ROIC that might produce slightly different percentages, but what's most important is to look at the trend of ROIC over time. You should be looking for companies that are becoming more efficient with their capital (i.e., increasing their ROIC year-over-year), not less.
An important tool to add to your repertoire
ROIC certainly doesn't replace other metrics and analysis, but it's a highly effective tool at determining the quality of the management team and the overall trajectory toward higher profitability.
Earnings growth alone tells investors nothing about how much capital the business had to sink into the company to achieve that growth rate. By looking at ROIC, we can see if a business is getting an increasingly better rate of return on its investments or if it's slowly burning more capital to maintain a high growth rate. The latter should be a big red flag for investors.
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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. Mark Blank has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The author of the piece repeatedly cited Amazon's lack of profitability as an indication that the business was poorly run and highly overvalued. One less-utilized metric that gives investors a contextual view into the efficiency of a company's management team is known as return on invested capital (ROIC). Real world example of ROIC Here's an example using Apple's 2021 financials : The NOPAT is calculated by multiplying the operating income, $109 billion, by 1 less the tax rate. | Here's the formula: Invested capital = net debt + total equity Now that you have both your numerator and denominator, simply divide NOPAT by invested capital and you'll arrive at the company's ROIC. Next we need Apple's invested capital which is its net debt, $84 billion, + its total equity, $63 billion, which equals $147 billion. Finally, to produce the current ROIC, simply divide Apple's NOPAT by its invested capital: $95 billion (NOPAT) / $147 billion (invested capital) = 64% (ROIC) That number by itself gives us insight into how incredibly efficient Apple was in 2021 at earning a return on the cash it invested into its business. | The formula for ROIC is: Net operating income after taxes (NOPAT)/ invested capital (IC) Before you can calculate ROIC, you'll first need to generate values for the numerator and the denominator. Here's the formula: Invested capital = net debt + total equity Now that you have both your numerator and denominator, simply divide NOPAT by invested capital and you'll arrive at the company's ROIC. Finally, to produce the current ROIC, simply divide Apple's NOPAT by its invested capital: $95 billion (NOPAT) / $147 billion (invested capital) = 64% (ROIC) That number by itself gives us insight into how incredibly efficient Apple was in 2021 at earning a return on the cash it invested into its business. | One less-utilized metric that gives investors a contextual view into the efficiency of a company's management team is known as return on invested capital (ROIC). Finally, to produce the current ROIC, simply divide Apple's NOPAT by its invested capital: $95 billion (NOPAT) / $147 billion (invested capital) = 64% (ROIC) That number by itself gives us insight into how incredibly efficient Apple was in 2021 at earning a return on the cash it invested into its business. That's right -- they think these 10 stocks are even better buys. |
20465.0 | 2022-06-30 00:00:00 UTC | 3 Stocks That Turned $1,000 Into Half a Million Dollars | AAPL | https://www.nasdaq.com/articles/3-stocks-that-turned-%241000-into-half-a-million-dollars | nan | nan | The Nasdaq Composite Index is down 26% year to date as of this writing. Top stocks like Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL) have corrected 30% and 20%, respectively, so far in this year. Obviously, investors are concerned about their investments.
Yet if you look at a longer time horizon, you'll realize that your portfolio should do well, irrespective of steep corrections on the way. Let's look at three stocks that have turned $1,000 into half a million dollars, even after correcting steeply in this year. Although past performance is no indication of how these companies may fare in the future, it does give some important lessons on long-term investing strategies.
1. Amazon
Amazon went public in May 1997. Its IPO (initial public offering) price was $18, but adjusting for the four stock splits the stock has undergone so far, the IPO price comes to $0.075. If you had invested $1,000 in Amazon at the time of its IPO, your investment would have risen to half a million dollars (rising 500 times) in 2017 -- that's roughly 20 years.
AMZN data by YCharts
What's more, by now, that amount would have more than doubled again. In other words, your $1,000 investment would have risen to nearly $1.2 million, even after the recent correction.
AMZN data by YCharts
Considering the many areas in which Amazon is expanding, like cloud computing, there still seems to be lots of growth ahead for this online retail pioneer.
2. Apple
Apple, which went public in December 1980, has split its stock five times since its IPO. An amount of $1,000 invested in Apple stock in June 1998 -- 24 years ago -- would have turned into roughly $550,000 today.
By comparison, if invested at the time of Apple's IPO, the amount of $1,000 would have been $1.1 million today.
AAPL data by YCharts
Nearly $102 billion in net income in the trailing 12 months, a strong brand name for quality products, several new growth avenues, a strong cash position, reasonable valuation -- the list of reasons to like Apple stock is long.
3. Home Depot
Home Depot (NYSE: HD) stock would have turned $1,000 invested in 1988 to more than $500,000 today -- in roughly 34 years. By comparison, if you had invested the same amount at the time of its IPO in 1981, you would have $22.5 million, including dividends, today.
HD Total Return Price data by YCharts
Not only has Home Depot fared well over decades, but it also reported strong results in the latest quarter. Although investors are concerned about the impact of rising inflation on the company's performance, management looks confident of being able to navigate it successfully. With a dividend yield of 2.5%, the stock offers an attractive combination of income and 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. Rekha Khandelwal has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Apple, and Home Depot. 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. | Top stocks like Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL) have corrected 30% and 20%, respectively, so far in this year. AAPL data by YCharts Nearly $102 billion in net income in the trailing 12 months, a strong brand name for quality products, several new growth avenues, a strong cash position, reasonable valuation -- the list of reasons to like Apple stock is long. AMZN data by YCharts Considering the many areas in which Amazon is expanding, like cloud computing, there still seems to be lots of growth ahead for this online retail pioneer. | Top stocks like Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL) have corrected 30% and 20%, respectively, so far in this year. AAPL data by YCharts Nearly $102 billion in net income in the trailing 12 months, a strong brand name for quality products, several new growth avenues, a strong cash position, reasonable valuation -- the list of reasons to like Apple stock is long. If you had invested $1,000 in Amazon at the time of its IPO, your investment would have risen to half a million dollars (rising 500 times) in 2017 -- that's roughly 20 years. | Top stocks like Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL) have corrected 30% and 20%, respectively, so far in this year. AAPL data by YCharts Nearly $102 billion in net income in the trailing 12 months, a strong brand name for quality products, several new growth avenues, a strong cash position, reasonable valuation -- the list of reasons to like Apple stock is long. If you had invested $1,000 in Amazon at the time of its IPO, your investment would have risen to half a million dollars (rising 500 times) in 2017 -- that's roughly 20 years. | Top stocks like Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL) have corrected 30% and 20%, respectively, so far in this year. AAPL data by YCharts Nearly $102 billion in net income in the trailing 12 months, a strong brand name for quality products, several new growth avenues, a strong cash position, reasonable valuation -- the list of reasons to like Apple stock is long. If you had invested $1,000 in Amazon at the time of its IPO, your investment would have risen to half a million dollars (rising 500 times) in 2017 -- that's roughly 20 years. |
20466.0 | 2022-06-30 00:00:00 UTC | Technology Sector Update for 06/30/2022: BRAG, TGAN, AAPL, XLK, SOXX | AAPL | https://www.nasdaq.com/articles/technology-sector-update-for-06-30-2022%3A-brag-tgan-aapl-xlk-soxx | nan | nan | Technology stocks were declining premarket Thursday. The Technology Select Sector SPDR ETF (XLK) and the Semiconductor Sector Index Fund (SOXX) were down more than 1% recently.
Bragg Gaming Group (BRAG) stock was climbing near 5% after saying it extended a content distribution agreement in North American markets with Kalamba Games.
Transphorm (TGAN) shares were nearly 5% higher after it filed a shelf registration statement for the potential resale of up to about 3.9 million shares of its common stock by selling stockholders.
Apple (AAPL) is working to introduce a new CarPlay feature that will allow users to buy gas directly from the car dashboard, Reuters reported. Apple was recently slipping past 1%.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (AAPL) is working to introduce a new CarPlay feature that will allow users to buy gas directly from the car dashboard, Reuters reported. Bragg Gaming Group (BRAG) stock was climbing near 5% after saying it extended a content distribution agreement in North American markets with Kalamba Games. Transphorm (TGAN) shares were nearly 5% higher after it filed a shelf registration statement for the potential resale of up to about 3.9 million shares of its common stock by selling stockholders. | Apple (AAPL) is working to introduce a new CarPlay feature that will allow users to buy gas directly from the car dashboard, Reuters reported. Technology stocks were declining premarket Thursday. The Technology Select Sector SPDR ETF (XLK) and the Semiconductor Sector Index Fund (SOXX) were down more than 1% recently. | Apple (AAPL) is working to introduce a new CarPlay feature that will allow users to buy gas directly from the car dashboard, Reuters reported. The Technology Select Sector SPDR ETF (XLK) and the Semiconductor Sector Index Fund (SOXX) were down more than 1% recently. Transphorm (TGAN) shares were nearly 5% higher after it filed a shelf registration statement for the potential resale of up to about 3.9 million shares of its common stock by selling stockholders. | Apple (AAPL) is working to introduce a new CarPlay feature that will allow users to buy gas directly from the car dashboard, Reuters reported. Technology stocks were declining premarket Thursday. The Technology Select Sector SPDR ETF (XLK) and the Semiconductor Sector Index Fund (SOXX) were down more than 1% recently. |
20467.0 | 2022-06-30 00:00:00 UTC | Disney's Streaming Strategy Is a Home Run -- Here's Why | AAPL | https://www.nasdaq.com/articles/disneys-streaming-strategy-is-a-home-run-heres-why | nan | nan | The streaming market is booming, and the introduction of new platforms has drastically changed the industry's landscape from what it was only two years ago. Disney (NYSE: DIS) has had major success with its streamer Disney+ but had previously entered the market with Hulu and ESPN+. Here's why Disney is right to host and offer a variety of streaming platforms rather than just one.
Tailored entertainment
Hulu launched in 2007 as one of the first ad-supported streaming platforms, with Disney taking control of the streaming service in 2019 due to its Fox acquisition. Disney launched ESPN+ in April 2018 and Disney+ in November 2019.
Each of Disney's streaming platforms offers widely different services. For example, Hulu gives subscribers access to premium TV series and movies, ESPN+ has a wide range of sports content, and Disney+ is home to an extensive library of nostalgic and new Disney titles from brands such as Pixar, Star Wars, Marvel, and more.
Additionally, a recent study showed that consumers are likelier to stay subscribed to a service with no easy substitute, such as Spotify, YouTube, and Crunchyroll. In Spotify's case, 75% of consumers view the music streamer as a must-have versus just nice to have. Anime streaming service Crunchyroll's niche content results in 67% of consumers seeing it as an invaluable subscription. Each of Disney's streaming platforms provides specific content that is difficult to find elsewhere, encouraging consumer retention.
AMC has seen success by offering a variety of streaming platforms with niche content. The company hosts AMC+, which offers several original titles from its own network, horror streamer Shudder, Sundance Now with a large library of indie titles, Acorn TV with British content, and more. In May, AMC's interim CEO Matt Blank said that the "differentiated strategy" has led to "strong consumer loyalty and low churn." As a result, the company reported a gain of 430,000 new paid subscribers in the first quarter of 2022.
Bundles encourage subscriber retention
Offering multiple services allows Disney to bundle its offering for one low price, creating more value and making consumers less likely to drop their subscriptions. In addition, companies such as Apple (NASDAQ: AAPL) have skillfully used bundles to promote their varying services and increase revenue.
A recent study showed that 33% of people plan to add a new TV subscription in the next six months, while 30% intend to drop one. Subscriber retention is crucial in the streaming market, making bundles increasingly attractive for consumers and companies.
Since the launch of Disney+, the company has offered the service as a part of a bundle in the U.S. alongside ESPN+ and ad-supported Hulu access for $13.99/month -- a 36% discount from using each platform separately. When comparing the bundle to a Netflix subscription, $15.49 gets consumers two simultaneous streams and 1080p picture quality, while the cheapest option is $9.99 for one stream and 480p resolution. Comparatively, the Disney bundle not only gives members access to multiple services but also up to four simultaneous streams and no limitations on resolution.
Meanwhile, Apple bundles its Apple TV+ streaming platform with options such as Apple Music, Arcade, iCloud, Fitness+, and News+. The cheapest tiered bundle provides access to TV+ (4K, six streams), Music (90 million+ songs), Arcade, and 50GB of iCloud storage for $14.95 -- also cheaper and more valuable than Netflix. Services have become a significant part of Apple's business, making up 18% of its business in 2021 and its second-biggest sector after the iPhone.
While combining all of Disney's content under one platform would arguably be easier for the consumer, splitting up services based on interest creates more value for subscribers who can appreciate the low bundled price for three platforms rather than one. It also saves consumers from seeing content that they're either uninterested in or might not be age-appropriate. ESPN+ allows sports enthusiasts to locate the content they want easily, while Disney+ allows parents to be worry-free when their children browse the platform.
What's next for Disney?
Disney+ expanded to 42 additional countries this year, making the total just over 100. However, ESPN+ and Hulu continue to be only available in the U.S. for the most part. If the company can expand those platforms to other markets such as Europe and Asia, Disney will be able to attract more subscribers and offer value through bundling opportunities.
Disney+ already offers a lot of its Hulu content under a section called Star in Europe and Hotstar in other regions. However, live sports is an incredibly lucrative industry in most parts of the world and the introduction of ESPN+ could bring in a flood of subscribers on its own. The sports streamer gained 62% more subscriptions from 2020 to 2021 without being in many countries, proving the power of its content.
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The Motley Fool has positions in and recommends Apple 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. | In addition, companies such as Apple (NASDAQ: AAPL) have skillfully used bundles to promote their varying services and increase revenue. For example, Hulu gives subscribers access to premium TV series and movies, ESPN+ has a wide range of sports content, and Disney+ is home to an extensive library of nostalgic and new Disney titles from brands such as Pixar, Star Wars, Marvel, and more. Additionally, a recent study showed that consumers are likelier to stay subscribed to a service with no easy substitute, such as Spotify, YouTube, and Crunchyroll. | In addition, companies such as Apple (NASDAQ: AAPL) have skillfully used bundles to promote their varying services and increase revenue. Bundles encourage subscriber retention Offering multiple services allows Disney to bundle its offering for one low price, creating more value and making consumers less likely to drop their subscriptions. Meanwhile, Apple bundles its Apple TV+ streaming platform with options such as Apple Music, Arcade, iCloud, Fitness+, and News+. | In addition, companies such as Apple (NASDAQ: AAPL) have skillfully used bundles to promote their varying services and increase revenue. Bundles encourage subscriber retention Offering multiple services allows Disney to bundle its offering for one low price, creating more value and making consumers less likely to drop their subscriptions. While combining all of Disney's content under one platform would arguably be easier for the consumer, splitting up services based on interest creates more value for subscribers who can appreciate the low bundled price for three platforms rather than one. | In addition, companies such as Apple (NASDAQ: AAPL) have skillfully used bundles to promote their varying services and increase revenue. Each of Disney's streaming platforms offers widely different services. Bundles encourage subscriber retention Offering multiple services allows Disney to bundle its offering for one low price, creating more value and making consumers less likely to drop their subscriptions. |
20468.0 | 2022-06-30 00:00:00 UTC | The Stocks Are Losing, but That Doesn't Make Them Losers | AAPL | https://www.nasdaq.com/articles/the-stocks-are-losing-but-that-doesnt-make-them-losers | nan | nan | In this podcast, we look back at some stock picks.
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 June 15, 2022.
David Gardner: For 30 podcasts done over more than six years, I pick five-stock samplers right here for you for free. Every year thereafter, the first year after the picks were made, and then the second year and then the third, three years after the picks were made, we reviewed them, check their numbers. I had some of the Motley Fool's best analysts on to review their stories, review. We got to calling these Reviewapaloozas. Yes, Reviewapaloozas used to be among my favorite of Rule Breaker Investing podcast, hasn't been very fun to review the performance of any stocks really this year, any stocks at all. I don't enjoy spending time during the week with you going over poor performance, sifting through losers, sharing losing numbers. But that is what 2022 has been all about. As I've said a few times before on this podcast, if you enjoy slow-motion train wrecks, if you're the type who Gooseneck interstate accident cleanups as you drive by, slowing up traffic for the rest of us, if Schadenfreude is your middle name, even in Germany, is that anyone's middle name? Probably not. Well, then this week's podcast is for you. One thing we always enjoy doing is talking stocks and having some of the Motley Fool's best analysts on to discuss them. Fifteen stocks are in play this week, and while the vast majority of them are market losers, most of these remain compelling businesses to me anyway. So I'm thinking you might be rewarded going forward for joining in this week only on Rule Breaker Investing.
Welcome back to Rule Breaker Investing. It's a big month for stocks, not necessarily for the stock market itself, but at least for this podcast. Any time we spend time going through 15 or so different stocks, you know we're stock-centric. Next week we will remain stock-centric. It's the Market Cap Game Show. I'll be having back our two most recent champions going head-to-head. Calling out the market caps with you, our dear listeners you getting to play along at home are four times a year tradition, the Market Cap Game Show. Stocks are in the air, and it's not that fun to talk about the stock market right now. But I think it might be fun years from now, to listen back to this week's podcast or next week's podcast, and remember the prices that some of us were getting to buy stock set when the whole market was on sale. Well, on this Reviewapalooza episode, we have once again, three five-stock samplers, and let me name them right now, going backward from here. One year ago, it was five stocks pursued by a bear. Little did I know how that name might come back [laughs] to bite me. Those stocks have done very poorly, but the good news, I guess, is that these games are played for three years. This five-stock samplers, the vast majority, are three-year games. As hard as it's going to be to look at the numbers from one-year ago, my final five-stock sampler, we're not even quite a third of the way through that ballgame.
Two years ago, I picked five stocks for America. I had America in mind at the time in particular because our nation was hurting so badly, right in the face of COVID, I thought about what were our core values. I tagged the stock to each. We'll see how those are doing. Then we do have one five-stock sampler, five stocks that passed the snap test, picked three years ago this month that we will be sending forever to Foolhalla. Technically, that sampler ended on June 5th of this year. So we'll be reviewing the numbers from June 5th for that final five-stock sampler. It's quite remarkable to me to see that just in between June 5th and where I am speaking to you today, the S&P 500 has dropped almost another 10%. We're talking about an extremely weak market. Spoiler alert ahead of Asit Sharma, our first analyst, joining me to talk about five stocks pursued by a bear. By the way, we will then have Nick Sciple joining me for five stocks for America, and Alicia Alfiere later in the episode five stocks that passed the snap test.
Asit, Nick, and Alicia joining in this week, that's going to be fun, but let me give the spoiler upfront. All three of these samplers are losing or have lost to the market. No surprise there. It's been so disappointing to watch green numbers. Sometimes wildly positive, bolded green numbers turn to red. Initially disappointing flattish pink numbers, and then more to red numbers, bolded red numbers in some cases. Spoiler alert for a second consecutive Reviewapalooza episode we had another some weeks ago. It's not going to be pretty. But I do want to say two things on the other side of the ledger. The first is, this is about the worst time in the market cycle that I think we could be talking about stocks and reviewing past five-stock samplers and sending one indeed to Foolhalla. Our Reviewapalooza tradition, when we send the oldest still active five-stock sampler up to the halls of meat and celebration, even sometimes just drinking a way our [laughs] sorrows in Foolhalla. But this is about the worst time in the market cycle. I just think it's worth mentioning that and putting it out there. I think a lot of us our mindsets are all over the place with the market, but I hope you're close to me anyway, in that you, your mindset is expectant of better things to come. You know, that the market always comes back overtime, never bet against America, Warren Buffett has said. Anybody who looks at any long-term graph of stock market performance knows it goes lower left to upper right. You just need to give the market time.
We have a family stock contest that I write a little missive about each month of the year. I'm just going to share a little bit of what I shared, especially with some of the younger members of our family. This week when I had the pleasure or mis-pleasure of updating the numbers in the family stock contents, most of us have picked stocks that have gotten more than cut in half in less than six months, just since the start of this year. I wrote, and I will just share with you, this hasn't felt fun at all, but especially for those family members younger than the age of 30, the market year of 2022 is really educational and ultimately a good experience to see the volatility of the market, to know it doesn't only ever go up, and to experience directly or secondhand the psychology of what it takes to be a lifelong investor. I continued, you know, full well, these times will come. In my experience, about once a decade, and that's what we're living through right now. This is definitely the worst market year since 2008-'9 and before that, 2001–'2.
The Motley Fool has been in business for just about 30 years, and this is the third such time, we're watching stocks get beaten, bloody and yet just as happened in the face of 2002 and 2009, so to will the market come back in the years to come, particularly the winning companies doing valuable and important work in this world, it happens every time. It never feels good until you can look back and see where it came from.
Well, speaking of where things came from, we've done 35 stock samplers in Rule Breaker Investing history, and as painful as these numbers are to review, as disappointing as it is for me to see five stocks that passed the snap test, which was once such a winning sampler retreat to Foolhalla permanently with a little bit of red on its shoulder as of this afternoon, nevertheless, the 30 five-stock samplers who picked the 150 stocks picked on Rule Breaker Investing over years and years, average and individual stock gain of about 67 percent. That's against the markets, the S&P 500's 33 percent. Across 150 stocks, even at the worst time, I think just about in the market cycle, still happy to know that 150 stocks have generated more than 5,000 points of Alpha. I think it's going up from here, we shall see. A little bit of encouragement, not just for you, but I'm often on this podcast talking to me as well. But enough talking to me. I say we get this started with Reviewapalooza five-stock sampler, number 1, it's five stocks pursued by a bear. I pick these stocks one-year ago this month, and at the time mentioned, this will be my final five-stock sampler. Well, how have they done in the year since? I'd like to welcome back to the show, my friend Asit Sharma. Asit, great to have you back to Rule Breaker Investing.
Asit Sharma: Great to be here. Thanks very much, David.
David Gardner: How has the last year been for you? Forget about these stocks for a sec Asit, I think one question that I want to ask each of my friends joining with me today is I don't enjoy watching stocks as much when they are dropping. That's something I've talked a lot about. So I try to do some other things in life that I would've otherwise spent gawking at the market. Can you describe either a new habit or intention or experience you've had as a consequence of being in a bear market?
Asit Sharma: I think David, being in a bear market, has given me the courage to do something I've been trying to for a long time, which is to pick up another language. Why? Because it's harder to look at the market than it is to go to my grammar exercises. [laughs] I'm trying to pick up the Turkish language, which is famously difficult because it's called an agglutinative language. One word gets tacked onto another. But it's a fun language, and I've thrown all caution to the wind. I'm at the age where they say it's really difficult to pick up languages. But I prefer to do this than worry about stock prices.
David Gardner: I love that you're doing that. I have never even try. I don't know a single, how do you say hello in Turkish?
Asit Sharma: Really simple, [FOREIGN] .
David Gardner: [FOREIGN] , wow. Well that's very kind of you. Thank you. Now I know my first term in Turkish. When you talk about agglutinative, I always think of German nouns. Is that another example? You'll see these incredibly long nouns in German that are single words of compound concepts. Is that also agglutinative?
Asit Sharma: I think. Now I have two sons that are pretty proficient in German, so I hope they're not going to [laughs] listen to this later and say dad you should have said no it's actually x or yes. Certainly David that's the same principle.
David Gardner: To the Sharma family I probably got that wrong and if it was gotten wrong, it was on me. Well, I'm delighted to know that you have that extra pursuit enabled perhaps by some extra time. Well, let's take a look now at five stocks pursued by a bear. What I like to do usually is talk, first of all about how the stock market has done Asit. The stock market is down 11.8 percent, the S&P 500 since June 16th, 2021, so we're not quite into a full year right now, the market is down 12 percent. Now it's felt like it's done a lot more than that to me and I think to a lot of Rule Breakers style investors, and I think the performance of this five-stock samplers so far is eloquent testimony. Let me first mention the companies in alphabetical order. Axon Enterprise, Peloton Interactive, The Trade Desk, Unity Software, and Zillow Group. Those were five stocks I had in mind. I think they'd already declined somewhat. I think that was part of the theme of this particular five stock samplers. They were already down some they were pursued by a bear. But man, if the bare didn't show up, it's a little bit ironic to me Asit that I think we have officially entered bear market territory this week as the S&P 500 declined below a 20 percent loss since the start of the year. It is ironic that the very week, you and I do this Reviewapalooza for this five-stock sampler, the one-year anniversary, we're now Asit in a bear market.
Asit Sharma: Well, I wish the bear would go back into hibernation. My prediction is that many of these, if not all, these companies are going to be just fine over a longer time period.
David Gardner: Well, the one that's done the worst, which is the way I like to start it the ticker symbol is PTON, and this is Peloton Interactive. The stock was at $105 a share this month, last year, right now it's just down below $10 a share Asit down 90.9 percent up about the worst stock pick somebody can make to lose 91 percent of your value one year later across the market down 12. We start with a minus 79 in the Alpha hole, what has happened to Peloton?
Asit Sharma: The story with Peloton should be familiar with anyone who follows the connected fitness market. This is a company I think that almost got too much to soon or had too much of a good experience too soon. Sometimes you can get spoiled. Peloton was at the beginning of a longer journey to figure out its business model, where they manufacture, where they in essence, a subscription-based company that was going to enjoy really great margins from a software-type subscription business that was connected to those bikes and treadmills. What happened was as the effects of the pandemic faded away, people start to go back into the real-world. The demand for the bikes dropped off. They got such a big pull-forward during COVID that I think it masked for management the need to figure out at the end of the day how they were going to structure their profit and loss statement, how they're going to make their margin. Was it through profit in the manufacturer bikes? Was it through the subscriptions? How does that whole puzzle come together? Now they have a new CEO, and this is veteran CEO his name Barry McCarthy. I like the way that he is working on slashing the inventory where he can, trying to fix cash flow, doing all the things you would in a turnaround. I think now they get a chance to rethink life and figure it out. I wouldn't say that this is the company that's going to lead the basket into glory, but it's got a decent chance to make a comeback. [laughs]
David Gardner: Market cap has gone from $30 billion to just north of $3 billion so a much smaller company in at least the market capitalization terms, I would say it's brand hasn't declined nearly that much. Its public awareness clearly, the company is losing money and this has been a horrifically bad transition from in-COVID to somewhat anyway out of COVID at this point and Peloton has been badly hurt, I would say probably badly managed. The only real bad here is me for putting this into our five stocks pursued by a bear. Let's go from the worst stock to the best performer. I regret to say the best performer here is itself down 22 percent, which means even The Trade Desk ticker symbol TTD is down itself to the market by 10 percentage points. I never like to talk about being down 22 percent as a good thing, but relative to the other four stocks in the sampler, something's going really right for The Trade Desk. Do you agree?
Asit Sharma: I agree with this. I think what's going right for Trade Desk is that it knows exactly what its identity is. There's never been any confusion about the business model versus Peloton. This is a company that works in the programmatic advertising market. They make it easy for advertisers to place digital ads and they've just become better and better at what they do. The example I wanted to touch on here is the coming change in the way companies track us around the internet. Google Chrome is going to drop its cookies by late next year, and The Trade Desk is leading the charge to find a different way to track us one that's a little fair in terms of privacy, but still helps advertisers to reach us, gives us the ability to comfortably opt into some advertising. I think this is going to be great for their business model. It's a company that is still growing in the strong double-digits. Jeff Green is a really seasoned CEO, wonderful leader, and I think we see a ton of innovation going on in this company as well. They've announced some really cool integrations that offer real-time data to big companies like Adobe, so it's a company that understands what it needs to do in the marketplace. They are passionate about it. I can understand why they are only down 22 percent odd versus some other tech companies which are down a lot more.
David Gardner: Well, since we're talking market caps, and of course next week is our market cap, game show, Trade desk right now capped at about twenty-three-and-half billion, which ends up being 6-7 times the size of Peloton Interactive, which I think is a lot better known than the Trade Desk. Also I'm assuming if you were forced to buy one of these stocks, not that we're going to force you to do so, but I'm guessing you'd probably by the Trade Desk right now.
Asit Sharma: Actually, I might choose another one in the basket. The accountant in me doesn't like the cash flows that are associated with Unity Software, they're still losing money. I think they could do a better job in generating cash flow, but I love the way this company invests in the future. They offer a creative platform for gamers to develop games. They offer another one that can be used by architects. It can be used by filmmakers. This is a company that is working on the tools for creativity in the next decade. There's a long path to greatness for Unity it's not going to be an easy path for them. But I love the ambition of this company, and at this point in a bear market it's sometimes good to kick the tires on companies that you like. Maybe they're not as profitable, so they've been pushed down even further. If you believe in the concept and management, I mean, this is an interesting company. I think investors should keep their eye on it. It's one of the worst performers, David, but it could be one of the most resilient as conditions improve.
David Gardner: Stock is down from $200 in December to just right around $33 as we speak today. Again, just cataclysmic drops $200 down to $33. The market cap, well about half of The Trade Desk's at 11.5 billion. But so of the five asset you favor Unity the most. I like Unity a lot too of course, that's why it's in the sampler. I don't like the performance of any of these Unity down 65 percent for the sampler so far again, against the market's 12, that's minus a 53. But thank you for the positive words there. Would you like to add anything about another single letter, ticker symbol company Unity Software owns the letter U. That's it's ticker symbol Zillow Group is Z. It's also ZG by another share class. But any thoughts about actually let's close it out with A-Z. Axon Enterprise, as I mentioned earlier in this sampler down 43 percent, Zillow Group down 72 percent. I'll give the final accounting in a minute, but I will say, give us just a little bit of thinking on Axon Enterprise and Zillow Group.
Asit Sharma: Both are trying to play important roles in the economy. Axon offers body cameras. They have a software-as-a-service platform that is aimed at companies that buy its products. They have a product called the Axon Fleet 3, which is AI-enabled license plate recognition. It's a company you can see for a long time just playing a greater role in our economy. It does a lot of good out in the world, its main purpose as stated, is to try to help reduce crime through its product. This is an important company for people who believe in the potential of technology to make the world a safer place. Zillow, I think, is a little challenge just now because the real estate industry is at a crossroads. There's a lot of pent-up demand for housing and yet we have mortgage rates that are flying through the roof. This is one, the thesis isn't broken for Zillow, but it's maybe one of the more exposed to near-term macro stuff in the economy. Again, as we go out over a longer time period, you were mentioning the power of brand earlier as we talked. Zillow's got such a great brand in the real estate space, I think in residential, housing, they're going to be an important player. I wouldn't count that out either, but I would lean Axon, I'd lean the beginning of the alphabet between these two choices versus the end.
David Gardner: You like Unity Software the most all five of these I liked one year ago, I like them a little bit less right now because I just don't like things that lose this badly and yet, I think often the strength of balance sheets helps us think through what's going to come back and of course, the strength of opportunity, is the company doing something important that's good for this world that always counts for so much for me? How could I not also reference brand? Because I think brand accounts for a lot. Well, take it all-in-all Asit. This is on me, not on you. I thank you though. I'm not going to shoot the messenger. You're the messenger of some good thoughts about these companies. But take it all-in-all, the stock market down 12 percent over the last year, these stocks averaged a loss of 59 percent. That is 47 percentage points under the market averages. If there's any good news and this is about all I can come up with right now. We're only through just about the first year of three. This will be fascinating to watch. How these companies do, how the economy rebounds, which ones of these rebound? Can we get anything, any green back on this red scorecard for the 30th and final five-stock sampler. Asit, do you have your fingers crossed for us?
Asit Sharma: I don't even have my fingers crossed, David, I look forward to the performance of these companies and I'm already impressed by the performance of this basket in advance.
David Gardner: [LAUGHTER] Well, thank you so much Asit for visiting and let's revisit this together a year from now, shall we? It'll be interesting to see where we are. Asit Sharma, thank you so much for joining me this week on Rule Breaker Investing.
Asit Sharma: Thanks so much for having me, David.
David Gardner: All right, well thus much for now, for five stocks pursued by a bear, it's time to go. Let's strap ourselves into the way back machine and we need to go back through time, Rick Engdahl.
We have alighted upon June of 2020, things were not pretty in the world at large. The economy was shutting down. There were a lot of Americans hurting for lots of different reasons and so I was inspired that week to think about what would be five stocks for America. These are companies that are, of course all American companies. But each of them I tag to one of the core values as I've thought about America. Things like Liberty in enterprise and justice. We're not going to revisit each of those, but that was the uniting theme behind this five-stock sampler, five stocks for America and to review this five-stock sampler with me, my pal Nick Sciple. Nick, great to have you on Rule Breaker Investing.
Nick Sciple: Great to be here with you, David. First-time, what I guess visitor or whatever you want to call this long-time listener [LAUGHTER] happy to be here with you.
David Gardner: Absolutely. Anybody who's a Motley Fool member has I think got to know Nick and Asit and Alicia, all three of my guests really well, because Motley Fool Live, the equivalent of the TV show on our website that's there for our members. Every weekday, Nick, you are regularly featured and I've always drove so much of your morning show and other commentary on Motley Fool Live. Thanks a lot for that and this time we get to do a little bit of a dive into stocks. I know sometimes you've been talking especially macro recently. The joke being you're not a macro thinker necessarily or we're not a macro show, but Nick, you can't not talk about macro a little bit these days.
Nick Sciple: No. That's the top of the headlines. You can't turn on CNBC without hearing about interest rates and inflation and all of these, I guess second year macroeconomics, business, I'm more of a microeconomics thinker, but the headlines these days are those macroeconomic topics for better or worse. I am looking forward to the days when we get past some of that and we talk about what real businesses are doing in the real world, but that's just me.
David Gardner: Well, let's do that together for about 10 or 15 minutes or so, looking at these five companies now first, let me mention how the stock market has done at the bogey, of course. Then I'm always looking to beat and I'm sorry to say spoiler alert ahead of time none of the five companies in this sampler is beating the market averages, which looked tough to beat over two years. Is this true? The market's up 16.3 percent from where it was two years ago. Again, so many stocks so far down, including some of these, but it is nice to know Nick that the market, the S&P 500, those in the index fund anyway, have enjoyed a 16 percent return in these two years.
Nick Sciple: The market has continued to march up, although some of these companies haven't performed quite as well. Although I won't say the market hasn't been marching quite as well the past six months of the year, 2022 as they had been the past couple of years before that. But in any event, these companies are not keeping up with where they've been in the past couple of years.
David Gardner: That's right in five stocks for America, I used to open up the sampler spreadsheet with joy and see green. Now what we see is red. But let's talk about the companies, each of which is a really interesting company that I still certainly believe in going forward. Let's start with, as tradition would happen, with the worst performer again, the market up 16 percent, which makes the drop for Boston Beer company. Ticker symbol SAM, from 524 two years ago to just below 300 right now, a drop of 44 percentage points. That is well down to the markets gain of 16. We're going to call that minus 61 in the loss column for alpha, for SAM, so far. Nick, are you a beer drinker?
Nick Sciple: I like to have a beer every now and again. I'm much more of a beer drinker than a liquor drinker. I like a craft beer. Miller Lite, is my main line beer of choice?
David Gardner: Yeah. What about Hard Seltzer?
Nick Sciple: Haven't gotten into the Hard Seltzer game as much. We might talk about this a little bit later. I'm a little bit more into these ready-to-drink cocktails that have emerged in the past couple of years. High Noon is one that I'm a fan of it, but yeah, I've had a future release in my day.
David Gardner: Very nice. Well, let's transition then into looking at this company. Nick just taken a big picture of you here. Stocks almost just about been cut in half over these last two years. What's happening to the Boston Beer Company?
Nick Sciple: Sure. The Boston Beer Company, when folks hear about this company, probably think of Sam Adams, there their [inaudible 00:27:51] beer, lots of commercials. They were the first mover in this craft beer. But today, much less of a beer company, more of a malted beverage company and the big drivers are brands like Truly Hard Seltzer, Angry Orchard, Hard Cider, Twisted Tea products. Those products have really been driving the business in recent years are actually a majority of the business today. A slowdown in that part of the business is really what's driving this underperformance of SAM in the past year. In particular, Hard Seltzer, where they're one of the leaders in the market with their Truly product. We're really seeing incredible growth in Hard Seltzer over the past couple of years. In 2020 Hard Seltzer grew a 158 percent year-over-year and deliveries. Big slowdown in 2021, however, with only 13 percent growth in the category. That left the Boston Beer Company in a situation where they had rushed to increase supply to keep up with the demand they saw coming down the pike. We even saw CEO Jim Koch say that the company had to toss, "Millions of cases of Truly back in October."
David Gardner: Oh my gosh.
Nick Sciple: Part of that is, we've seen this huge growth in Hard Seltzer. Perhaps you see a fad slowing down. These things can't grow to the moon. We're not going to be exclusively drinking Hard Seltzer to the detriment of other categories. But another potential competitive threat that I think we're seeing rise up, are these ready-to-drink Cocktail. We just saw this week actually Coke make a deal with Jack Daniel's. You're going to able to buy Jack and Coke in the store and that's indicative of this big growth we've seen in ready-to-drink products. I gave you those numbers in growth of Hard Seltzer in 2021, only 13 percent growth in 2021 after a 100 percent plus growth in 2020. But if you look at those ready-to-drink cocktails in 2021 grew over 118 percent year-over-year. To a certain extent, the loss in these Hard Seltzer markets, the winners have been these ready-to-drink cocktails and that's a potential threat. We actually saw Jim Koch write a letter to a large brewers organization in 2021, where he said, speaking about concerns about these ready-to-drink cocktails. Historically, liquor based drinks have been taxed at a higher rate than multi-base drinks like beer and Ciders, and things like that. He wrote in his letter, "If they succeed in changing state regulations for these other purveyors of ready-to-drink cocktails, the beer industry, brewers and wholesalers alike would face virtually permanent declines in volume, revenue, and profits while liquor volume and profits would sour." I think a couple of things going on, increased competition from these ready-to-drink cocktails and then also, again, you can't grow at a 100 percent growth rate to infinity with these Hard Seltzer. Those are the things that are driving down Boston Beer stock.
David Gardner: It is ironic to think that the company made a smart forward-thinking bet with Hard Seltzer with the rest of the industry and yet in the face of huge growth, we see the stock price with significant decline. Stock down by the way 700 last summer. Now when you're quoting SAM these days, seeing it just below 300, well again, it feels like so many other stocks, especially Rule Breaker Style stocks on the market today. Well, let's go Nick, from the worst performer in this sampler to the best performer and all four of the other companies, Nick, all of them are down. Again, the market up 17 percent, all of them are down somewhere between eight and 15 percent. They're all about 25 percentage points to 30 percentage points behind the market averages. The one that's technically ahead of the rest is Take-Two Interactive, down 8.4 percent from a year ago. Now Nick, you and I know in some long time discerning listeners may remember, I never did pick Take-Two Interactive as part of this five-stock sampler, picked Zynga, and Zynga the mobile software games company ended up getting bought out by Take-Two Interactive not too long ago, and shareholders were paid out some cash, but also Take-Two Interactive stocks. I'd simply converted over what your dollar for dollar investment would've been in Zynga two years ago, to what it looks like in Take-Two Interactive today. A little bit of technicality there. Yeah, sometimes these stocks get bought out in bad times, sometimes and in good. Take-Two Interactive. Nick, any thoughts around this best performer in this sampler?
Nick Sciple: Sure. I think Zynga was an interesting company. The acquisition by Take-Two in 2021, they put up their best annual revenue and bookings ever, and put up their best first quarter ever as well here in 2022. However, when Take-Two announced their deal to acquire Zynga stock for $3.50 in cash and about 0.0406 shares of Take-Two, doctor [inaudible 00:32:37] per Zynga, stock was down over 30 percent, and there's some drivers of that. Number 1, as the pandemic was coming to an end, a little bit of a slowdown in mobile games into the category where Zynga is a leader. However, another factor that was driving Zynga's stock down is if you think about how mobile games or monetize mobile games have been monetized historically through advertising. If you think about the way folks interact with a mobile games, spending a few minutes on the platform, you aren't spending $60 upfront and the way you do for traditional game sales. In that business, dependence on advertising means Zynga was impacted by Apple's iOS changes in 2021 and the ability to be able to target ads in the same way that you could prior to those ad changes, and that was a contributor to the sell-off in Zynga stock. However, I think Zynga combined with Take-Two is in an interesting spot. Zynga being one of the largest providers of mobile games in the world. They have a lot of first party data on the types of users they are engaging on their platforms. They also acquired a company called Chartboost in, I believe it was August of 2021.
That was a leading mobile ad platform to be able to essentially take all this first-party data we have marry it together with an advertising platform and improve our advertising business performance. There had their highest ever advertising revenue in Q1 of 2022. I would suggest that some of that business is taking hold. Combined with Take-Two. I think there's a lot of opportunity there as well. Take-two historically has been a laggard in the mobile game market relative to some of these other Tier-1 game developers. Although Take-Two had been making some significant investments in mobile games, combined together with Zynga, they'll have an even bigger platform of first-party mobile games data that they can plug into that Chartboost system and really move significantly into the advertising side of things. Another thing that is interesting, as well as Zynga was getting ready to launch their Star Wars Hunters franchise, which is going to be Zynga's first cross-platform game offering. That's again another area that Take-Two has lagged behind some other players in the market. If you think long term, where gaming is going, cross-platform, ad-supported games appear to be where business models are increasingly moving in the future. You can tell a story about how the combination between Zynga and Take-Two is value creative. The management thinks that too. If you looked at the Take-Twoearnings callback in May, the CEO of Take-Two, Strauss Zelnick, said he thought the stock was deep value at a $158 a share when they were buying back stock in Q2 of last year. Well, today we're in a 120 this year. Again, this is with Zynga combined, this event, again, this additive acquisitions. I think the stock is very attractive here. I own it and I think it's an interesting one for listeners to look at too.
David Gardner: Well thank you Nick. Taking the longer view, which sometimes we forget to do in the face of one or two or three-year sampler reviews, Take-two Interactive has been a good performer. It's been an outstanding performer really for Motley Fool Rule Breakers over the years. But just looking at the last five years, a market beater, not spectacular, up 75 percent and the market's up 50 percent. It has beaten the market, so a lot of up and down for Take-Two Interactive. Well, I mean, if the worst performer, Boston Beer is down about 44 percent, and the best performer Take-Two Interactive down about eight percent. That means this sampler is presently losing to the market. Again, good news. It's got another year for a comeback. These stocks had been doing well until about 6-9 months ago. But Nick, let's take quick looks at the other three. Down 8.7 percent. Just behind Take-Two Interactive, down less than 10 percent which I almost think it's important to say these days, is Starbucks.
Nick Sciple: Yeah, Starbucks continues to be America's coffee shop in the same way you think about McDonald's as America's hamburger stand. Starbucks continue to put up some pretty reasonable numbers. Most recent quarter comp sales growth up 12 percent even at significant scale, continuing to grow its sales [OVERLAPPING]
David Gardner: Reopening.
Nick Sciple: Reopening exactly. We talked earlier about how Boston Beer isn't necessarily a beer company with all this focus on Truly Hard Seltzer. I think if you look at Starbucks, I'd argue it's not necessarily a coffee company either. About 80 percent of their sales are now from cold beverages. I think you could say at the milkshake company and more so been a coffee company, but why is Starbucks stock struggling? Well, part of it is some lockdowns in China, a significant portion of the business coming out of China and most recent quarter comp sales in China down 23 percent. Also, some headwinds from labor costs. There's been unionization efforts across the company, which is of course, hitting the business. There's a quote from now returning CEO, Founder Howard Schultz back at the [OVERLAPPING] business once again saying that we've done our best to build up our benefits over the past several years, but still not good enough for the Gen Z employees. There's been some headwinds on labor costs, those things. I think Starbucks, again still America's coffee shop, but some of these macro headwinds, whether it's labor unrest or issues actually doing business in China that's slowing down the company.
David Gardner: Well, the two others are Etsy and Axon Enterprise. Let's talk a minute or two about both of them. Of course, Axon did show up in the earlier sampler, the five stocks pursued by a bear. But let's shift to Etsy briefly, what's happening in Etsyville, Nick Sciple?
Nick Sciple: Sure. Etsy continues to be the dominant platform for these online handmade gifts, things of that sort. However again, like Starbucks coming out of the pandemic, some headwinds as folks move away from e-commerce sales. In addition, Etsy has seen some pushback from its sellers in the face of an increase in it's transactions fee by 30 percent. They increase it from five percent to 6.5 percent. Good for Etsy in the sense that they are able to capture more capital moving forward, but a little bit of a pushback from consumers. But the big thing pulling the stock down, I think, is just this lack of enthusiasm among investors related to e-commerce stories that we saw past couple of years ago and some of the tailwinds that have been behind them are coming to an end.
David Gardner: Well, Etsy, two-years ago this month, about $80 a share, it's at $72 now that's down 10 percent again, the market up 17. The last one is Axon Enterprise. I did cover it briefly. I think listeners will be familiar with this one. This one, I picked in a number of samplers and a lot of Motley Fool members I think probably owned or at least are aware of Axon Enterprise. Taking those slightly longer view, the two-year view, the stock is down 16 percent, again, the market up 17 percent. It's also like its brethren and sister in here, down about 30 percentage points to the market these past two years. But Nick again, the good news there is another year left for five stocks for America. What would you like to see going forward from Axon?
Nick Sciple: Well, hopefully more of the same of what the company has delivered in the past. If you look at the past five years, they've grown revenue at 26 percent compound annual growth rate. If you drill into that a little bit more hardware sales, so things like body cams and the taser devices up 3X in that period of time Cloud, which is the evidence.com where you store all that data you collect from body cameras up 47 percent on a compound annual growth rate over the past five-years. If you look in the first-quarter of 2022, overall revenue up 32 percent, the Cloud revenue up 47 percent. Growing faster or in line with that historical five-year growth rate. I think the big thing that's brought down Axon stock is the valuation. It peaks back toward the end of 2021 at somewhere around 15 times sales evaluation number. Now we're down in the six times or seven times sales range thereabouts. The performance of the business is very strong. There's not a lot I would be upset about as far as continuing earnings growth. However, the valuation has compressed. One thing I will point out, however, there has been some headlines in recent weeks following that the tragic school shooting the past couple of weeks, Axon came out saying that we're going to deploy drones, that we'll have taser enabled devices on them. That statement was made without consulting the AI ethics board that our axon had put in place earlier this year and it's led to a number of ethicist on that board resigning. On one hand are very happy to see Axon trying to continue to push technology forward and keep society safe. That's the core part of their mission. Their mission is obsolete, the bullet by the end of the decade. Certainly this will be part of that. But in an industry that again, you're deploying force on human beings as something that is very concerning to the average citizen you would like to see the way the company goes about deploying that technology. Be a little bit more step-by-step rather than making willy nilly statements. I think maybe what we've seen these past couple of weeks can be corrected going forward or they can learn from this incident this month due to do better moving forward.
David Gardner: Well, we certainly have to comment on that because it does seem important and recent. But also taking the longer view, I do really appreciate what this company does. I much prefer a non-lethal world when we talked about weaponry, and that's really what Axon's about. Stock up from 25 to 85 these last five years, despite the drop as Nick alluded to from 200 last year to just down below 100 right now. But still a market whopper and a company, I think we like a lot going forward. Market cap by the way, below seven billion, so 6.5 billion or so today for Axon Enterprise. Well Nick, thank you very much for an info-rich look at this five-stock sampler, five stocks for America. I really wish my numbers were as good as your analysis, but the facts are these, stock market up about 17 percentage points over the last two years. These stocks in aggregate down 17 percentage points these last two years. What used to be a winning sampler is now 34 percentage points in the whole. As I think I've hasten to add a number of times there's still more time left for five stocks for America. We'll check in a year from now summer and send this one-off to Foolhalla, I hope, with some better numbers. But Nick Sciple, thank you so much for excellent analysis and you're good foolishness, sir.
Nick Sciple: Great to be here with you, David. If you had told me five years ago I was going to be on this podcast with you, I would have been very excited. [LAUGHTER] So you've made my dream come true.
David Gardner: [LAUGHTER] That's so kind. Thank you, Nick. Before I let you go, I want to make sure I ask you the same question I asked Asit that I also asked myself, which is, if you're like me, when the market declines, you don't spend quite as much time looking at the numbers. It's just not as fun. Maybe you take some of that time we were spending, I would even say somewhat voyeuristically and you supplement it. You converted into something more positive. Asit learning a new language. Nick, what have you been doing the last year or so that's different from before?
Nick Sciple: Well, sure. I'm coming up on my one-year wedding anniversary. I got married last July 17, 2021.
David Gardner: That's a great answer.
Nick Sciple: So I've been busy traveling in the world, going on honeymoons and doing all those things. There have been a happy year married so far and looking forward to many more.
David Gardner: Well, that's probably the best answer I can imagine that question. Congratulations again, Nick Sciple and congratulations ahead of time in your first year anniversary, I think it's July. Come back and join me sometime. Thanks, Nick.
Nick Sciple: Anytime.
David Gardner: Well, two out of three ain't bad. But you know what is bad? Three out of three. All three of these are market losers. I guess it gets a little bit better though. I'm delighted to be joined by Alicia Alfiere to talk through five stocks that passed the snap test Alicia, from June 2019.
Alicia Alfiere: Yeah, so glad to be here with you.
David Gardner: Thank you. Let's put on our seatbelts because we're about to get in the way back machine together, the way-back music, and let's go back to June 5th of 2019.
On that fair day, I hope it was a fair day, it was June, I picked five stocks that passed the snap tests. Now, we didn't talk about this offline and I never expect my analysts who have listened to the original podcast, Alicia, but do you know what I mean when I say the snap test?
Alicia Alfiere: I do and I did listen. I have my own explanation. I am a Marvel fan and a bit of a nerd, so my explanation is this is, if Thanos snapped test fingers and these companies disappeared, you and the rest of us would notice and you would feel it and care.
David Gardner: Beautifully recounted. I first wrote about the snap test in the Rule Breakers Rule Makers book of 1998. I couldn't have known at the time probably about Infinity Wars or really what would have become of Marvel, which at the time was really just a comic book company, wouldn't make the shift to the big silver screen until the early 2000s. Anyway, Alicia, thank you for rebranding in some sense the snap test with a Thanos test, and yeah, these five companies, and I'm going to read them out now alphabetically. Oh my golly, Axon Enterprise, I picked it three Junes in a row. Axon Enterprise, Fair Isaac, Live Nation, Nintendo, and Twitter. What I was contending three years ago this month, as you have ably recounted, is that I think that if any of these companies disappeared, a lot of us would notice and the world would care. The reason that the Thanos test or snap test, I think leads to better investing for those who follow it is that it has you focused on companies of real consequence, you're going to be avoiding a lot of penny stocks or fly by-nighter, or hope in a dream stocks because you're really focused on companies doing big important things like these five that we'll talk about now. Let's first share how the market has done Alicia, and the market over the last three years is up 45 percent from where it was the S&P 500 three years ago. Is it that interesting? It doesn't feel that way at all, right now, emotionally, psychologically, Alicia I see you, nodding your head from your new venue in Colorado, which we'll be talking about it a little bit. But isn't it interesting to think that the market has actually really outperformed the norm over the last three years? Because, of course, you and I know the market typically rises 9-10 percent over three years, that would be 30-ish percent. Alicia, stock market up 45.1 percent from three years ago.
Alicia Alfiere: Yes and I think the important thing to remember here is that this is a really good example of zooming out an increasing year timeline.
David Gardner: I agree. That's something that is sometimes hard to do, especially in the face of such poor performance for the market. But if there's one thing I hope this podcast helps our listeners do from one week to the next, it's zoom out a little bit. Thank you for that reminder. Speaking of zooming out, before we dive into these stocks together, Alicia I have been asking each of my guests this week if they are converting some of their past time they might have spent gawking at their stocks going up into something more positive. Could you describe a change in your life circumstances or habits over the last year or so?
Alicia Alfiere: Sure. As we mentioned, I recently moved to Colorado, so what I've been doing instead of checking my portfolio every day is I've been taking walks and exploring the area and the sky in Colorado is amazing.
David Gardner: It's sky state.
Alicia Alfiere: It's really help speed to put things in perspective, I think
David Gardner: I also love the sky. Talking about really geeky stuff like video games, which we talked about earlier, or Marvel these days, whenever you have like elemental choices that you make with your role-playing character, I always select air, not fire or water or earth, I am an air person. I love big skies, clouds, birds, planes. The sky in Colorado is just so much bigger than I think it is here in the Washington DC area.
Alicia Alfiere: It certainly feels that way and it's beautiful. I can't tell you how many times I've just marveled at the sky.
David Gardner: Well, I'm marveling that you're even on the podcast this week, Alicia, because you mentioned to me in a humble, I would almost say sheepish manner that before this podcast throughout the day this morning, you were being moved in or movers were [laughs] in your house. As I recall, it is one of the five most stressful things in life for a lot of people. Thank you again for making some time with us on Rule Breaker Investing this week.
Alicia Alfiere: Of course, I am coming to you among boxes. [laughs] It's better than being in an empty house, I would say that.
David Gardner: You and I can agree on that. Good. Well, let's agree on some other things. One thing we can agree on is that the worst performer of these five companies, and this is ironic, perhaps in the face of so many headlines, although maybe not ironic is Twitter. Twitter, of course, I'm not going to say in infatuation of Elon Musk because I hope that's still mostly Tesla, but certainly, Elon making lots of headlines saying he's going to buy Twitter out. Twitter been a volatile stock. Three years ago, the stock was at 36 dollars a share and it closed out June 3rd, which is when this sampler ended, this three-year game ended on June 3rd earlier this month at about 40. Twitter was up 10 1/2 percent, but the bad news Alicia markets up 45 percent, so severely underperforming.
Alicia Alfiere: Yes, and what I would say here first is that Twitter definitely passes the snap test because if it were gone, a lot of us would miss it because of news, interacting with people, and certainly Elon Musk would no doubt miss them if it were lost in a snap. Though there are question marks around the acquisition and that certainly isn't helping the stock. When we look at what happened, so first, there's been drama with Elon Musk potentially buying the company. But apparently, there has been some drama with the number of bots on Twitter, the company's willingness to provide raw data to him. It's essentially like a long-running TV series; we're left asking the question of will they or won't they. But unlike TV viewers, investors don't like the uncertainty. There's also been a fair amount of cost to fuel Twitter's growth. Last summer, Twitter was looking like a really interesting opportunity. They had a renewed focus to grow the platforms relevance, they had positive momentum with advertising revenues growing even faster than their user base, suggesting that they were doing a good job monetizing their product. To be fair, from 2019-2021, revenues increased 47 percent, monetizable daily active users, which are people, organizations, and other accounts logging to Twitter.
David Gardner: Only investment analyst say monetizable daily, what did you say again? Asset?
Alicia Alfiere: Monetizable daily active users, it's a mouthful. [laughs]
David Gardner: Active users
Alicia Alfiere: But those users increased almost 43 percent. But that growth, as I said, came at a cost. Twitter's R&D expenses, or research and development expenses, increased 83 percent in that same time period. A lot of those product launches that looks really promising, like the ability to tip other users and Twitter subscription service that let you undo a tweet, they haven't quite paid off yet. Add to this the fact that Jack Dorsey left to focus solely on Block also known as Square, which was a bit of a mixed bag. It meant losing a co-founder, but it also meant that Twitter would gain a new CEO, longtime Twitter employee, Parag Agarwal, and that would mean that they would have a leader that was focused solely on Twitter. But it often takes time for a new leader to really get their footing to pivot and implement their own strategies on a business. It's really trying to turn a massive ship in the ocean. That means that changes in direction or strategy just can't happen immediately. But then that turning ship got hit with a force of nature that is Elon Musk. We'll have to wait and see what happens if the acquisition happens, what new leaders will take the helm, and what their strategies will be for the future.
David Gardner: Yeah, it's funny looking at Twitter stock, it was right around 37 before the Elon announcement and all of the [inaudible 00:53:22]. Right now as we speak, it's back down to right around 37, so there's been a temporary blip and we're left on the horns of a dilemma not quite knowing where the stock is going to go from here. Since this five-stock sampler closed out a couple of weeks ago, the numbers are fixed where we are, but the story continues and Twitter touched over 70. It was flirting with 80 points last year, so to see it again down below 40, more than cut in half from its 2021 highs, I've continued to find the company interesting and favorite. I do think it still passes the snap test to your point. Thank you for that, Alicia. Well, from the worst performer, we go to the best performer and Live Nation out of this group of five stocks, remarkable, I think because, for two of the three years of the sampler, many concert venues were closed for business altogether. Live Nation, which, of course, sells tickets on some of the venues, partners with a lot of the acts, a lot of rock music fans like their Live Nation. Actually, a lot of people don't like Live Nation that much in my experience because they feel like the ticket that they buy from the platform it usually has some tack-on additional service fee seems high, but at least from a business standpoint, Live Nation, well finished strong. The stock up 54 percent over these three years. Again, the market up 45. Alicia, two of these five companies, Live Nation and Axon Enterprise, which we probably don't need to talk too much about, we'll speak about it for a minute in a sec, but Live Nation, the number 1 performer, how did this company ticker symbol LYV somehow go up more than 50 percent through a pandemic?
Alicia Alfiere: You know what? When we were talking earlier, I told you I was really glad that they were the winner in this sampler just because their journey over the last three years has been incredible and difficult. The biggest challenge that Live Nation faced over this period was COVID, of course, and the impact it had on our ability to see friends and family let alone go to a crowded concert venue. It was almost like someone snapped their fingers and most concert disappeared, and I think we all noticed. In 2020, Live Nation saw revenues fall 84 percent and full-year revenues were under two billion, which is pretty close to just one quarter's worth of revenues in a normal year. Live Nation restarted their concert business about halfway through 2021, and there was a lot of pent-up demand. As a result, the fourth quarter in 2021 saw the largest number of tickets sold in a single quarter, the highest gross ticket value, excluding refunds, and their resale business also hit record highs. Here's a great statistic. In the last five months of the year, Live Nation had more than 15 Million fans attend their outdoor events in the US and the UK, which was higher than the same period in 2019. As the world continues to reopen, people are still looking to spend on experiences as opposed to things like we did at the height of the pandemic. So far this year, Live Nation is looking pretty promising. They delivered their best first-quarter efforts despite some markets taking longer to reopen in the pretty positive about the road ahead. Over 70 million tickets now sold for shows in 2022, which is up 36 percent from 2019 and early reads on consumer spending, obviously a concern since a lot of people are concerned about inflation. Early reads on consumer spending shows that fans are spending a fair bit when they go to shows too. With average revenue per fan up 30 percent compared to 2019. Since we started talking about COVID, COVID is having less of an impact on their concert schedules and by March in the US, they canceled only one percent of their planned concerts. Potentially good news for the rest of the year.
David Gardner: Just a really a remarkable story and I'm guilty as charged when I ask myself before the show, who's the CEO of Live Nation, I couldn't answer my own question. I'm not going to put you on the spot because I think most of us, Alicia, don't know who the CEO of Live Nation has been, but he's been there since Clear Channel's spun off Live Nation into its own company in 2005. Michael Rapino, a Canadian American business executive, has been for 17 years and counting the CEO of Live Nation, you can only imagine what he was saying to his employees through this period of time, somebody should make the Michael Rapino story so we can see at least the Hollywood version of the inspirational speech he must have been giving to the employees. Especially as things open back up, a rocky like ending and at least for this five-stock sampler which has now ended, and we're about to send to Foolhalla. This five-stock sampler was carried by the best performer that you just mentioned, Live Nation ticker symbol L-Y-V. Now, it's worth pointing out that Axon Enterprise, which also made it into this five-stock sampler. Axon beat the market. Talk about taking the long view. Axon up 52 percent over these three years, the market up 45 percent. The longer you've held Axon, the happier you are with it. I trust that's going to be true going forward. But Alicia, is there anything you would like to say that Asit and/or Nick didn't already say about Axon Enterprise.
Alicia Alfiere: Well, I would only add that the company isn't just resting on their laurels and leading growth define them. They're also working to expand the ecosystem of solutions in order to continue their growth. They have an expanded virtual reality simulator, which is a training solution. They also have Attorney Premier, which was launched just last year and aims to help prosecutors and defense attorneys manage digital evidence, so they're continuing to expand.
David Gardner: Well, it's rare that we talked about the same stock in three samplers, all in the same Reviewapalooza. But I guess without even realizing and I had Axon the brain around this month, every year, [laughs] the past several years, looking over the other two in conclusion, one of them, Fair Isaac, a company largely unknown by, I think many people, although if they knew the ticker symbol FICO and then they start thinking, what is FICO stand for? They'd realize this is the company behind FICO credit scoring, Fair Isaac up from 300 to 420 over these three years. Unfortunately, that 39 percent gain a handful of points behind the market. But let's look at a much better known company which was among the worst performers here. Nintendo. Alicia, Nintendo up 18 percent, not bad over the last three years, except again, the market up 45 percentage points. Would you like to add anything about one of the more consumer friendly global brands I can think of, Nintendo.
Alicia Alfiere: Absolutely. When I think of Nintendo, I think of content and I think if intellectual property, they've been called the Disney of the East with big franchises like Super Mario and Pokémon. Unlike a lot of video game companies, they did well at the beginning of the pandemic, with revenues increasing about 34 percent year-over-year for the fiscal year ending in March 2021. But that meant tougher year-over-year comparisons for the most recent year and revenues actually fell 3.6 percent year-over-year. But it also didn't help that they didn't release any blockbuster games plus we can't forget the Nintendo awesome mix consoles and the switch, which lets you go from at-home gaming to handheld games on the go and it's been around since 2017. But the big question is, where is their next console and when is it coming out? After all, new hardware generally meets people going out and buying new games and we certainly don't want a do-over from the Wii U console. But I would say it's not doom and gloom, Nintendo seems to be embracing the idea of being Disney-like and is building Super Nintendo World theme parks. That'll be something to keep your eye on going forward.
David Gardner: I did look that up and look into that a little bit. Super Nintendo World, which is a Universal Studios Hollywood theme park coming in 2023, the first of its kind in the United States, not in the world, but yes, Super Nintendo World about to become a thing in the year ahead. This is one of those companies that I think you can buy and hold for a long period of time and probably beat the market. It is an amazing company and with lots of beloved characters and brands, Disney like in its own way, as we've said many times before, a last, that wasn't enough to cause the stock to beat the market, even with the Nintendo Switch here over the last three years. Again, Nintendo up 18 percent of market loser. Well, since the clear light motif, it just kept recurring throughout this week's podcast, Alicia is losing, I'm sorry to say that these five stocks in aggregate from June 5th of 2019 through June 3rd of 2022, rose 34.7 percent, the market up 45.1 percent. This five-stock sampler, which was for the record, the 20th in Rule Breaker Investing history, goes up to Foolhalla with a negative number, 10.4 percentage points behind the market, but Alicia, it is somewhat refreshing to know you actually made money like your stocks went up 35 percent over these three years with this snap test, passing sampler.
Alicia Alfiere: Agreed, and that just drives home the point to have your timeline longer than three years.
David Gardner: I'm glad you're reminding us of the importance of the timelines. While Foolhalla is forever and five stocks that passed the snap tests have gone and left us. The sampler is over, but investing is not, each of us has an opportunity to continue to hold these stocks. Two interesting notes as we close your first of all, with this sampler closing on June 3rd. Wow, the S&P 500 dropping about 10 more percentage points in the last 10 days, which is truly remarkable and unfortunate. But this group of stocks has actually improved their alpha versus the market by one percentage point. Not a big deal, but the point is, staying in good companies usually we carry you pass the averages if you just stay in the game. Again, Alicia, thank you for staying in the game with me and rejoining me for another Reviewapalooza and a lovely look at five really compelling companies that whether Thanos's real or not, you can't make them disappear. That's part of the reason I like these kinds of investments.
Alicia Alfiere: Thank you, it's been a pleasure.
David Gardner: Fool on now I can say Alicia in Colorado, which by the way, you know this, our offices in Colorado, we've always called Foolorado. You've put some fool in Foolorado.
Alicia Alfiere: I'm so glad to.
David Gardner: Well, from five-stock samplers this week we're headed to the Market Cap Game Show next week. I hope you've got your market cap hat on and you're ready to play the game. You can win this game. This is a game you can win in good markets and bad. I'm really looking forward to being joined by our two most recent champions, Brian Stoffel and Yasser El-Shimy and you next week on this show, the Market Cap Game Show in the meantime, just keep swimming.
Alicia Alfiere has positions in Adobe Inc., Apple, Peloton Interactive, and Walt Disney. Asit Sharma has positions in Etsy and Walt Disney. David Gardner has positions in Apple, Starbucks, Walt Disney, Zillow Group (A shares), and Zillow Group (C shares). Nick Sciple has positions in Apple, Axon Enterprise, Take-Two Interactive, and Unity Software Inc. The Motley Fool has positions in and recommends Adobe Inc., Apple, Axon Enterprise, Etsy, Peloton Interactive, Starbucks, Take-Two Interactive, The Trade Desk, Twitter, Unity Software Inc., Walt Disney, Zillow Group (A shares), and Zillow Group (C shares). The Motley Fool recommends Boston Beer, Fair Isaac, Live Nation Entertainment, and Nintendo and recommends the following options: long January 2023 $115 calls on Take-Two Interactive, long January 2024 $145 calls on Walt Disney, long January 2024 $420 calls on Adobe Inc., long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, short January 2024 $430 calls on Adobe Inc., short July 2022 $85 calls on Starbucks, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | But man, if the bare didn't show up, it's a little bit ironic to me Asit that I think we have officially entered bear market territory this week as the S&P 500 declined below a 20 percent loss since the start of the year. David Gardner: It is ironic to think that the company made a smart forward-thinking bet with Hard Seltzer with the rest of the industry and yet in the face of huge growth, we see the stock price with significant decline. But the big thing pulling the stock down, I think, is just this lack of enthusiasm among investors related to e-commerce stories that we saw past couple of years ago and some of the tailwinds that have been behind them are coming to an end. | Now Nick, you and I know in some long time discerning listeners may remember, I never did pick Take-Two Interactive as part of this five-stock sampler, picked Zynga, and Zynga the mobile software games company ended up getting bought out by Take-Two Interactive not too long ago, and shareholders were paid out some cash, but also Take-Two Interactive stocks. The Motley Fool has positions in and recommends Adobe Inc., Apple, Axon Enterprise, Etsy, Peloton Interactive, Starbucks, Take-Two Interactive, The Trade Desk, Twitter, Unity Software Inc., Walt Disney, Zillow Group (A shares), and Zillow Group (C shares). The Motley Fool recommends Boston Beer, Fair Isaac, Live Nation Entertainment, and Nintendo and recommends the following options: long January 2023 $115 calls on Take-Two Interactive, long January 2024 $145 calls on Walt Disney, long January 2024 $420 calls on Adobe Inc., long March 2023 $120 calls on Apple, short January 2024 $155 calls on Walt Disney, short January 2024 $430 calls on Adobe Inc., short July 2022 $85 calls on Starbucks, and short March 2023 $130 calls on Apple. | The Motley Fool has been in business for just about 30 years, and this is the third such time, we're watching stocks get beaten, bloody and yet just as happened in the face of 2002 and 2009, so to will the market come back in the years to come, particularly the winning companies doing valuable and important work in this world, it happens every time. Well, speaking of where things came from, we've done 35 stock samplers in Rule Breaker Investing history, and as painful as these numbers are to review, as disappointing as it is for me to see five stocks that passed the snap test, which was once such a winning sampler retreat to Foolhalla permanently with a little bit of red on its shoulder as of this afternoon, nevertheless, the 30 five-stock samplers who picked the 150 stocks picked on Rule Breaker Investing over years and years, average and individual stock gain of about 67 percent. The stock was at $105 a share this month, last year, right now it's just down below $10 a share Asit down 90.9 percent up about the worst stock pick somebody can make to lose 91 percent of your value one year later across the market down 12. | That's against the markets, the S&P 500's 33 percent. But let's talk about the companies, each of which is a really interesting company that I still certainly believe in going forward. The stock up 54 percent over these three years. |
20469.0 | 2022-06-30 00:00:00 UTC | Pre-Market Most Active for Jun 30, 2022 : TQQQ, ASPN, SQQQ, DNAY, QQQ, NIO, CCL, ACI, LI, XPEV, AAPL, COP | AAPL | https://www.nasdaq.com/articles/pre-market-most-active-for-jun-30-2022-%3A-tqqq-aspn-sqqq-dnay-qqq-nio-ccl-aci-li-xpev-aapl | nan | nan | The NASDAQ 100 Pre-Market Indicator is down -126.09 to 11,532.17. The total Pre-Market volume is currently 41,037,256 shares traded.
The following are the most active stocks for the pre-market session:
ProShares UltraPro QQQ (TQQQ) is -1.08 at $23.80, with 4,479,275 shares traded. This represents a 11.63% increase from its 52 Week Low.
Aspen Aerogels, Inc. (ASPN) is +3.32 at $11.75, with 4,089,563 shares traded., following a 52-week high recorded in prior regular session.
ProShares UltraPro Short QQQ (SQQQ) is +2.47 at $59.12, with 3,344,537 shares traded. This represents a 110.02% increase from its 52 Week Low.
Codex DNA, Inc. (DNAY) is +0.29 at $2.21, with 2,069,018 shares traded. As reported by Zacks, the current mean recommendation for DNAY is in the "strong buy range".
Invesco QQQ Trust, Series 1 (QQQ) is -4.07 at $279.73, with 1,297,783 shares traded. This represents a 3.88% increase from its 52 Week Low.
NIO Inc. (NIO) is -0.4 at $21.46, with 1,090,347 shares traded. As reported by Zacks, the current mean recommendation for NIO is in the "buy range".
Carnival Corporation (CCL) is -0.31 at $8.56, with 809,013 shares traded. CCL's current last sale is 61.14% of the target price of $14.
Albertsons Companies, Inc. (ACI) is -1.35 at $26.80, with 672,754 shares traded. ACI's current last sale is 72.43% of the target price of $37.
Li Auto Inc. (LI) is +0.63 at $38.71, with 624,567 shares traded. As reported by Zacks, the current mean recommendation for LI is in the "strong buy range".
XPeng Inc. (XPEV) is -0.34 at $31.76, with 617,649 shares traded. As reported by Zacks, the current mean recommendation for XPEV is in the "buy range".
Apple Inc. (AAPL) is -2.18 at $137.05, with 598,783 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
ConocoPhillips (COP) is -2.01 at $89.45, with 345,713 shares traded. As reported by Zacks, the current mean recommendation for COP 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. | Apple Inc. (AAPL) is -2.18 at $137.05, with 598,783 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Aspen Aerogels, Inc. (ASPN) is +3.32 at $11.75, with 4,089,563 shares traded., following a 52-week high recorded in prior regular session. | Apple Inc. (AAPL) is -2.18 at $137.05, with 598,783 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 DNAY is in the "strong buy range". | Apple Inc. (AAPL) is -2.18 at $137.05, with 598,783 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The total Pre-Market volume is currently 41,037,256 shares traded. | Apple Inc. (AAPL) is -2.18 at $137.05, with 598,783 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 DNAY is in the "strong buy range". |
20470.0 | 2022-06-30 00:00:00 UTC | US STOCKS-Wall St set to fall on last day of bleak first-half on growth fears | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-st-set-to-fall-on-last-day-of-bleak-first-half-on-growth-fears | nan | nan | By Shreyashi Sanyal
June 30 (Reuters) - U.S. stock index futures slid on Thursday on the last day of a dismal first-half of the year on worries that central banks determined to tame inflation will hamper global economic growth.
Fears over slowing growth and surging prices have rippled through markets, with central bank chiefs across the world prioritizing on steps to lower a well-entrenched inflation at all costs.
Federal Reserve Chair Jerome Powell has vowed to not let the U.S. economy slip into a "higher inflation regime", even if it means raising interest rates to levels that put growth at risk.
The S&P 500 index .SPX was on track to end the first half of the year with the biggest percentage drop since 1970, while the Nasdaq Composite .IXIC was set for its largest declines ever during the same period.
The Dow Jones Industrial Average .DJI was set for its biggest January-June percentage drop since the financial crisis, and all the three main indexes are bound to post their second straight quarterly declines, for the first time since 2015.
Fed policymakers in recent days have set expectations for their second consecutive 75 basis point interest rate hike in July even as economic data painted a dour picture of the American consumer.
"It does seem like the pessimism has reached some kind of peak and it certainly is understandable given readings on inflation and slowdown in consumer spending and the economy," said Josh Wein, portfolio manager at Hennessy Funds.
Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 1.3% and 1.7% in premarket trading, leading declines for the day.
A Commerce Department report showed core personal consumption expenditure price index in May was slightly below expectations, although consumer spending rose less than expected.
At 8:40 a.m. ET, Dow e-minis 1YMcv1 were down 330 points, or 1.06%, S&P 500 e-minis EScv1 were down 44.75 points, or 1.17%, and Nasdaq 100 e-minis NQcv1 were down 145.75 points, or 1.25%.
Heading into the second half of the year, bruised markets will continue to focus on inflation, unemployment and interest rate increases along with their impact on corporate earnings.
"Earnings growth has certainly shown us that there's been margin pressure which makes sense in an inflationary environment such that we're in," Wein said.
Drugstore chain Walgreens Boots Alliance Inc WBA.O shed 2.4% as its quarterly profit plunged 76%, hurt by its opioid settlement with Florida and a decrease in U.S. pharmacy sales on waning demand for COVID-19 vaccinations.
Spirit Airlines Inc SAVE.N rose 1.1% after the budget carrier deferred a shareholder vote on Frontier Group Holdings Inc's ULCC.O merger offer until next week.
S&P 500 set for worst June performance since 2008https://tmsnrt.rs/3RbYDNJ
(Reporting by Shreyashi Sanyal and Amruta Khandekar in Bengaluru; Additional reporting by Medha Singh; Editing by Arun Koyyur)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 1.3% and 1.7% in premarket trading, leading declines for the day. By Shreyashi Sanyal June 30 (Reuters) - U.S. stock index futures slid on Thursday on the last day of a dismal first-half of the year on worries that central banks determined to tame inflation will hamper global economic growth. Federal Reserve Chair Jerome Powell has vowed to not let the U.S. economy slip into a "higher inflation regime", even if it means raising interest rates to levels that put growth at risk. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 1.3% and 1.7% in premarket trading, leading declines for the day. By Shreyashi Sanyal June 30 (Reuters) - U.S. stock index futures slid on Thursday on the last day of a dismal first-half of the year on worries that central banks determined to tame inflation will hamper global economic growth. The S&P 500 index .SPX was on track to end the first half of the year with the biggest percentage drop since 1970, while the Nasdaq Composite .IXIC was set for its largest declines ever during the same period. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 1.3% and 1.7% in premarket trading, leading declines for the day. By Shreyashi Sanyal June 30 (Reuters) - U.S. stock index futures slid on Thursday on the last day of a dismal first-half of the year on worries that central banks determined to tame inflation will hamper global economic growth. Fed policymakers in recent days have set expectations for their second consecutive 75 basis point interest rate hike in July even as economic data painted a dour picture of the American consumer. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 1.3% and 1.7% in premarket trading, leading declines for the day. By Shreyashi Sanyal June 30 (Reuters) - U.S. stock index futures slid on Thursday on the last day of a dismal first-half of the year on worries that central banks determined to tame inflation will hamper global economic growth. The S&P 500 index .SPX was on track to end the first half of the year with the biggest percentage drop since 1970, while the Nasdaq Composite .IXIC was set for its largest declines ever during the same period. |
20471.0 | 2022-06-30 00:00:00 UTC | Should Invesco NASDAQ 100 ETF (QQQM) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-invesco-nasdaq-100-etf-qqqm-be-on-your-investing-radar-1 | nan | nan | Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the Invesco NASDAQ 100 ETF (QQQM), a passively managed exchange traded fund launched on 10/13/2020.
The fund is sponsored by Invesco. It has amassed assets over $4.02 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
While growth stocks do boast higher than average sales and earnings growth rates, and they are expected to grow faster than the wider market, investors should note these kinds of stocks have higher valuations. Additionally, growth stocks have a greater level of risk associated with them. When you consider growth versus value, growth stocks are usually the clear winner in strong bull markets but tend to fall flat in nearly all other environments.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.61%.
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.
This ETF has heaviest allocation to the Information Technology sector--about 55.50% of the portfolio. Telecom and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.56% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN).
The top 10 holdings account for about 52.2% of total assets under management.
Performance and Risk
QQQM seeks to match the performance of the NASDAQ-100 INDEX before fees and expenses. The NASDAQ-100 Index includes securities of 100 of the largest domestic and international nonfinancial companies listed on Nasdaq.
The ETF has lost about -29.09% so far this year and is down about -19.44% in the last one year (as of 06/30/2022). In the past 52-week period, it has traded between $111.72 and $166.07.
The ETF has a beta of 1.19 and standard deviation of 24.24% for the trailing three-year period. With about 104 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco NASDAQ 100 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, QQQM 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 $67.31 billion in assets, Invesco QQQ has $155.22 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.56% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report It has amassed assets over $4.02 billion, making it one of the larger ETFs attempting to match the Large Cap Growth segment of the US equity market. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.56% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report You should consider the Invesco NASDAQ 100 ETF (QQQM), a passively managed exchange traded fund launched on 10/13/2020. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.56% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives Invesco NASDAQ 100 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 12.56% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Annual operating expenses for this ETF are 0.15%, making it one of the least expensive products in the space. |
20472.0 | 2022-06-30 00:00:00 UTC | FOCUS-Apple eyes fuel purchases from dashboard as it revs up car software | AAPL | https://www.nasdaq.com/articles/focus-apple-eyes-fuel-purchases-from-dashboard-as-it-revs-up-car-software | nan | nan | By Stephen Nellis
June 30 (Reuters) - Apple Inc AAPL.O wants you to start buying gas directly from your car dashboard as early as this fall, when the newest version of its CarPlay software rolls out, accelerating the company's push to turn your vehicle into a store for goods and services.
A new feature quietly unveiled at Apple's developer conference this month will allow CarPlay users to tap an app to navigate to a pump and buy gas straight from a screen in the car, skipping the usual process of inserting or tapping a credit card. Details of Apple's demo for developers have not previously been reported.
But Dallas-based HF Sinclair DINO.N, which markets its gasoline at 1,600 stations in the United States, told Reuters that it plans to use the new CarPlay technology and will announce details in coming months.
"We are excited by the idea that consumers could navigate to a Sinclair station and purchase fuel from their vehicle navigation screen," said Jack Barger, the company's senior vice president of marketing.
Fuel apps are just the latest in a sustained push by Apple to make it possible to tap to buy from the navigation screen. It has already opened up CarPlay to apps for parking, electric vehicle charging and ordering food, and it also is adding driving task apps such as logging mileage on business trips.
Fuel is a major expense for car owners. The U.S. Energy Information Administration estimated in April that the average U.S. household will spend about $2,945 on gasoline in 2022, or about $455 more than last year.
Apple currently does not charge automakers, developers or users for CarPlay; the business interest is putting Apple at the forefront as cars transform into rolling computers, said Horace Dediu, an analyst with Asymco and founder of Micromobility Industries. The new feature will hit hundreds of car models already compatible with CarPlay when Apple releases software updates this fall.
"Forget about Apple Car - Apple CarPlay is a bigger deal," Dediu said. "It's very likely to scale to millions and millions of cars, if not hundreds of millions."
To use the new CarPlay feature this fall, iPhone users will need to download a fuel company's app to their phone and enter payment credentials to set up the app. After the app is set up, users will be able to tap on their navigation screen to activate a pump and pay.
"It's a massive marketplace, and consumers really want to take friction out of payments," said Donald Frieden, chief executive officer of Houston-based P97 Networks, which makes the digital plumbing that many fuel companies will use to connect their apps to cars.
Frieden said he has fielded calls from oil companies that are interested to make their apps work with CarPlay. BP BP.L, Shell SHEL.L and Chevron Corp CVX.N did not respond to requests for comment about whether they plan to make their iPhone apps work with CarPlay.
FAILED ATTEMPTS
Apple's latest move is likely to increase tensions with automakers that have their own ambitions for commerce in the car.
For example, vehicle makers have tried - and failed - to popularize gasoline purchasing from the car before. General Motors Co GM.N rolled out a system for doing so in 2017, but shuttered it earlier this year "due to a supplier exiting the business," GM told Reuters in a statement.
Beyond apps for fuel and other purchases, Apple is also seeking to expand CarPlay further into the car's driving systems by accessing speed and fuel gauge data.
But automakers are not likely to hand over that data to Apple without making demands of their own in talks that analysts believe are likely already under way.
Speaking at the Reuters Automotive Europe conference in Munich on Wednesday, Mercedes Benz CEO Ola Kaellenius said the company's goal "is to have a complete, holistic, Mercedes experience."
Kallenius said Mercedes would not seek to reinvent every category of app, but that "when interacting with companies that are in this digital domain ... anything and everything that crosses into product liability relevance, we would be very cautious."
ANALYSIS-Apple's next frontier is your car's dashboard
(Reporting by Stephen Nellis in San Francisco Editing by Peter Henderson, Kenneth Li and Matthew Lewis)
((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. | By Stephen Nellis June 30 (Reuters) - Apple Inc AAPL.O wants you to start buying gas directly from your car dashboard as early as this fall, when the newest version of its CarPlay software rolls out, accelerating the company's push to turn your vehicle into a store for goods and services. But Dallas-based HF Sinclair DINO.N, which markets its gasoline at 1,600 stations in the United States, told Reuters that it plans to use the new CarPlay technology and will announce details in coming months. "It's a massive marketplace, and consumers really want to take friction out of payments," said Donald Frieden, chief executive officer of Houston-based P97 Networks, which makes the digital plumbing that many fuel companies will use to connect their apps to cars. | By Stephen Nellis June 30 (Reuters) - Apple Inc AAPL.O wants you to start buying gas directly from your car dashboard as early as this fall, when the newest version of its CarPlay software rolls out, accelerating the company's push to turn your vehicle into a store for goods and services. A new feature quietly unveiled at Apple's developer conference this month will allow CarPlay users to tap an app to navigate to a pump and buy gas straight from a screen in the car, skipping the usual process of inserting or tapping a credit card. "We are excited by the idea that consumers could navigate to a Sinclair station and purchase fuel from their vehicle navigation screen," said Jack Barger, the company's senior vice president of marketing. | By Stephen Nellis June 30 (Reuters) - Apple Inc AAPL.O wants you to start buying gas directly from your car dashboard as early as this fall, when the newest version of its CarPlay software rolls out, accelerating the company's push to turn your vehicle into a store for goods and services. A new feature quietly unveiled at Apple's developer conference this month will allow CarPlay users to tap an app to navigate to a pump and buy gas straight from a screen in the car, skipping the usual process of inserting or tapping a credit card. Apple currently does not charge automakers, developers or users for CarPlay; the business interest is putting Apple at the forefront as cars transform into rolling computers, said Horace Dediu, an analyst with Asymco and founder of Micromobility Industries. | By Stephen Nellis June 30 (Reuters) - Apple Inc AAPL.O wants you to start buying gas directly from your car dashboard as early as this fall, when the newest version of its CarPlay software rolls out, accelerating the company's push to turn your vehicle into a store for goods and services. "We are excited by the idea that consumers could navigate to a Sinclair station and purchase fuel from their vehicle navigation screen," said Jack Barger, the company's senior vice president of marketing. Fuel apps are just the latest in a sustained push by Apple to make it possible to tap to buy from the navigation screen. |
20473.0 | 2022-06-30 00:00:00 UTC | US STOCKS-Futures tumble on last day of a torrid first-half on growth fears | AAPL | https://www.nasdaq.com/articles/us-stocks-futures-tumble-on-last-day-of-a-torrid-first-half-on-growth-fears | nan | nan | By Shreyashi Sanyal
June 30 (Reuters) - U.S. stock index futures slid on Thursday on the last day of a dismal first-half of the year on worries that central banks determined to tame inflation will hamper global economic growth.
Investors are also awaiting a reading on the Federal Reserve's preferred inflation measure due at 8.30 a.m. ET to see if the surge in prices have peaked.
A Commerce Department report is expected to show core personal consumption expenditure price index, excluding the volatile food and energy components, likely rose 0.4% in May, compared to a 0.3% rise in the previous month.
Markets have been torn between growth and inflation worries, with central bank chiefs across the world prioritizing on steps to lower a well-entrenched inflation at all costs.
Federal Reserve chair Jerome Powell has vowed to not let the U.S. economy slip into a "higher inflation regime", even if it means raising interest rates to levels that put growth at risk.
The S&P 500 index .SPX was on track to end the first half of the year with the biggest percentage drop since 1970, while the Nasdaq Composite .IXIC was set for its largest declines ever during the same period.
The Dow Jones Industrial Average .DJI was set for its biggest January-June percentage drop since the financial crisis, and all the three main indexes are bound to post their second consecutive quarterly declines, for the first time since 2015.
Fed policymakers in recent days have set expectations for their second consecutive 75 basis point interest rate hike in July even as economic data painted a dour picture of the American consumer.
Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 1.7% and 2.4% in premarket trading, leading declines on the day.
At 6:08 a.m. ET, Dow e-minis 1YMcv1 were down 317 points, or 1.02%, S&P 500 e-minis EScv1 were down 49.75 points, or 1.3%, and Nasdaq 100 e-minis NQcv1 were down 195.25 points, or 1.67%.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur)
((Shreyashi.Sanyal@thomsonreuters.com; +1 646 223 8780; +91 961 144 3740; Twitter: https://twitter.com/s_shreyashi;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 1.7% and 2.4% in premarket trading, leading declines on the day. By Shreyashi Sanyal June 30 (Reuters) - U.S. stock index futures slid on Thursday on the last day of a dismal first-half of the year on worries that central banks determined to tame inflation will hamper global economic growth. A Commerce Department report is expected to show core personal consumption expenditure price index, excluding the volatile food and energy components, likely rose 0.4% in May, compared to a 0.3% rise in the previous month. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 1.7% and 2.4% in premarket trading, leading declines on the day. Markets have been torn between growth and inflation worries, with central bank chiefs across the world prioritizing on steps to lower a well-entrenched inflation at all costs. Fed policymakers in recent days have set expectations for their second consecutive 75 basis point interest rate hike in July even as economic data painted a dour picture of the American consumer. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 1.7% and 2.4% in premarket trading, leading declines on the day. By Shreyashi Sanyal June 30 (Reuters) - U.S. stock index futures slid on Thursday on the last day of a dismal first-half of the year on worries that central banks determined to tame inflation will hamper global economic growth. A Commerce Department report is expected to show core personal consumption expenditure price index, excluding the volatile food and energy components, likely rose 0.4% in May, compared to a 0.3% rise in the previous month. | Large-cap growth stocks including Microsoft Corp MSFT.O, Apple Inc AAPL.O, Amazon.com Inc AMZN.O and Tesla Inc TSLA.O fell between 1.7% and 2.4% in premarket trading, leading declines on the day. By Shreyashi Sanyal June 30 (Reuters) - U.S. stock index futures slid on Thursday on the last day of a dismal first-half of the year on worries that central banks determined to tame inflation will hamper global economic growth. Investors are also awaiting a reading on the Federal Reserve's preferred inflation measure due at 8.30 a.m. |
20474.0 | 2022-06-30 00:00:00 UTC | Meta Stock Bears the Weight of a Risky Venture | AAPL | https://www.nasdaq.com/articles/meta-stock-bears-the-weight-of-a-risky-venture | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
With the value of Meta Platforms (NASDAQ:META) recently cut in half from when it was called Facebook, CEO Mark Zuckerberg is hyping the metaverse, and analysts are buying it.
The virtual reality platform in which people could live and work intimately from wherever they are, will have a billion people spending hundreds of dollar each, he predicted.
The entry point is the Quest 2 headset, currently on sale at Amazon (NASDAQ:AMZN) for $300. Current applications are mostly games but that will change as the software develops.
The focus on the metaverse, which Zuckerberg admits is losing money, lets the company ignore slowing growth and controversies at its Facebook and Instagram. The question for investors is whether it will work.
Ticker Comapny Price
META Meta Platforms $162.14
META Stock and Facebook Reality
There’s no doubt that Meta’s growth stalled. March quarter revenues of $27.9 billion were well below the previous quarter’s $33.7 billion. Net income of $7.5 billion was down 27% from the December quarter. Operating cash flow was down 22% at $14 billion.
7 Growth Stocks to Buy for a Rich Retirement
Meta still had $44 billion of cash and securities on March 31, and the company doesn’t pay a dividend. There is no doubt that Zuckerberg can fund this effort for years.
But it’s taking a toll on shareholders, and on Zuckerberg’s personal fortune. He has fallen out of the top 20 in the Forbes 400 and is now worth $57.2 billion, about $3 billion more than Michael Dell of Dell Technologies (NASDAQ:DELL).
The dog-and-pony show did seem to put a floor under Meta’s value. You can now buy it for less than 12 times last year’s earnings and just 3.6 times sales. That’s dirt cheap considering it still brought almost 27% of revenue to the net income line in what a “down” quarter, after growing 37% at scale during 2021.
Meta Promise
Investors don’t buy yesterdays. They’re deeply skeptical about Meta’s tomorrow.
The company’s payment system has been rebranded as Meta Pay, offering what it calls “proof of digital ownership” in the new metaverse. Too bad digital coins and NFTs have all crashed. The company has also joined a standards group from which Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) are notably absent. The Meta future is built around its headset, a technology the company paid $2 billion for back in 2014.
Critics charge the whole thing is an effort by Zuckerberg to build an operating system under his control, absent the privacy issues that have hurt recent advertising efforts. Others, who can accept the entertainment possibilities, don’t get the business application. Still others note that this changes the subject away from Facebook’s use in politics.
Meta’s current business is built on its 15 cloud data centers, most of them in the U.S., and free services delivered largely to the developing world. In theory, the metaverse would let a Nigerian programmer appear as the equal of one in Cupertino, but Facebook and Instagram already do this. The headset, and the broadband driving it, would also be unaffordable for much of the current audience.
The Bottom Line
Zuckerberg claims he’s creating something as big as the iPhone. But a demonstration, no matter how impressive, is just a demonstration.
Meta should bring in $28 billion to $30 billion during the current quarter, equal to last year’s second quarter, when it next reports July 27. Analysts expect $2.57/share of earnings. Average monthly users should be flat, owing to its exit from Russia.
That would be impressive, except as a shareholder you don’t get to decide what happens to all that money. Mark Zuckerberg does, and he’s sinking it into a risky venture with no guarantee of success.
If he’s right, this is the most exciting investment opportunity in years. If he’s wrong, there is still the base business and its data centers. This is a speculation for young investors that we oldsters should avoid.
On the date of publication, Dana Blankenhorn held a long position in GOOGL, AAPL and AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com, tweet him at @danablankenhorn, or subscribe to his Substack.
The post Meta Stock Bears the Weight of a Risky Venture 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. | The company has also joined a standards group from which Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) are notably absent. On the date of publication, Dana Blankenhorn held a long position in GOOGL, AAPL and AMZN. The focus on the metaverse, which Zuckerberg admits is losing money, lets the company ignore slowing growth and controversies at its Facebook and Instagram. | The company has also joined a standards group from which Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) are notably absent. On the date of publication, Dana Blankenhorn held a long position in GOOGL, AAPL and AMZN. InvestorPlace - Stock Market News, Stock Advice & Trading Tips With the value of Meta Platforms (NASDAQ:META) recently cut in half from when it was called Facebook, CEO Mark Zuckerberg is hyping the metaverse, and analysts are buying it. | The company has also joined a standards group from which Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) are notably absent. On the date of publication, Dana Blankenhorn held a long position in GOOGL, AAPL and AMZN. InvestorPlace - Stock Market News, Stock Advice & Trading Tips With the value of Meta Platforms (NASDAQ:META) recently cut in half from when it was called Facebook, CEO Mark Zuckerberg is hyping the metaverse, and analysts are buying it. | The company has also joined a standards group from which Alphabet (NASDAQ:GOOGL) and Apple (NASDAQ:AAPL) are notably absent. On the date of publication, Dana Blankenhorn held a long position in GOOGL, AAPL and AMZN. Ticker Comapny Price META Meta Platforms $162.14 META Stock and Facebook Reality There’s no doubt that Meta’s growth stalled. |
20475.0 | 2022-06-30 00:00:00 UTC | Global smartphone, PC shipments to decline in 2022 on China slowdown - Gartner | AAPL | https://www.nasdaq.com/articles/global-smartphone-pc-shipments-to-decline-in-2022-on-china-slowdown-gartner | nan | nan | June 30 (Reuters) - China's slowing economy and an inflation-driven drop in consumer spending are expected to drag down global shipments of computers and smartphones this year, according to research firm Gartner.
Shipments to China - the world's biggest smartphone market - are expected to shrink by 18% as demand takes a beating from strict COVID-19 curbs that halted activity in key economic hubs including Shanghai, Gartner said in a report on Thursday.
The research firm expects a 7% drop in worldwide smartphone shipments, also reflecting the expected toll of supply chain snarls and the Russia-Ukraine conflict on demand.
"A perfect storm of geopolitics upheaval, high inflation, currency fluctuations and supply chain disruptions have lowered business and consumer demand for devices across the world, and is set to impact the PC market the hardest in 2022," said Ranjit Atwal, senior director analyst at Gartner.
Gartner expects global computer shipments to drop 9.5% this year.
The forecast mirrors commentary from industry players, with chipmaker Advanced Micro Devices Inc AMD.O saying earlier this month that the PC market was set for a slowdown after two "very strong" years.
The soft demand for PCs and smartphones is likely to weigh on companies from chipmakers such as Nvidia Corp NVDA.O to mega-cap tech firms including Apple Inc AAPL.O and Microsoft Corp MSFT.O. Those companies are set to report second-quarter earnings starting next month.
(Reporting by Yuvraj Malik in Bengaluru; Editing by Aditya Soni)
((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. | The soft demand for PCs and smartphones is likely to weigh on companies from chipmakers such as Nvidia Corp NVDA.O to mega-cap tech firms including Apple Inc AAPL.O and Microsoft Corp MSFT.O. June 30 (Reuters) - China's slowing economy and an inflation-driven drop in consumer spending are expected to drag down global shipments of computers and smartphones this year, according to research firm Gartner. Shipments to China - the world's biggest smartphone market - are expected to shrink by 18% as demand takes a beating from strict COVID-19 curbs that halted activity in key economic hubs including Shanghai, Gartner said in a report on Thursday. | The soft demand for PCs and smartphones is likely to weigh on companies from chipmakers such as Nvidia Corp NVDA.O to mega-cap tech firms including Apple Inc AAPL.O and Microsoft Corp MSFT.O. June 30 (Reuters) - China's slowing economy and an inflation-driven drop in consumer spending are expected to drag down global shipments of computers and smartphones this year, according to research firm Gartner. The research firm expects a 7% drop in worldwide smartphone shipments, also reflecting the expected toll of supply chain snarls and the Russia-Ukraine conflict on demand. | The soft demand for PCs and smartphones is likely to weigh on companies from chipmakers such as Nvidia Corp NVDA.O to mega-cap tech firms including Apple Inc AAPL.O and Microsoft Corp MSFT.O. June 30 (Reuters) - China's slowing economy and an inflation-driven drop in consumer spending are expected to drag down global shipments of computers and smartphones this year, according to research firm Gartner. Shipments to China - the world's biggest smartphone market - are expected to shrink by 18% as demand takes a beating from strict COVID-19 curbs that halted activity in key economic hubs including Shanghai, Gartner said in a report on Thursday. | The soft demand for PCs and smartphones is likely to weigh on companies from chipmakers such as Nvidia Corp NVDA.O to mega-cap tech firms including Apple Inc AAPL.O and Microsoft Corp MSFT.O. June 30 (Reuters) - China's slowing economy and an inflation-driven drop in consumer spending are expected to drag down global shipments of computers and smartphones this year, according to research firm Gartner. Shipments to China - the world's biggest smartphone market - are expected to shrink by 18% as demand takes a beating from strict COVID-19 curbs that halted activity in key economic hubs including Shanghai, Gartner said in a report on Thursday. |
20476.0 | 2022-06-30 00:00:00 UTC | Down 20% in 6 Months, Is Now the Time to Buy Apple Stock? | AAPL | https://www.nasdaq.com/articles/down-20-in-6-months-is-now-the-time-to-buy-apple-stock | nan | nan | Tech giant Apple (NASDAQ: AAPL) has proven resilient, holding up better than the Nasdaq Composite over the past year. However, even Apple stock has slipped over the past six months, down more than 20% since the beginning of 2022.
Apple is an obvious winner and one of the largest companies in the world today. Is the recent decline a buying opportunity or a sign of prolonged danger on the horizon?
Here is why investors should pause before rushing to buy that dip in the stock price.
Apple's shares aren't cheap yet
Investors have enjoyed a solid stretch from Apple over the past three years; the stock has been up more than 170%. However, the stock has outrun the company's growth, and you can see below how the stock's price-to-earnings (P/E) ratio has exploded since the pandemic began in early 2020.
AAPL P/E Ratio data by YCharts.
You can also see how the recent dip has begun pulling that valuation back to earth. However, it's still hard to say that Apple has become cheap. The current P/E ratio of 22 is still higher than the stock's decade median of 16.
Whenever a stock trades above or below its historical valuations, investors must ask themselves whether the fundamentals have changed to justify it or if the stock is more likely to revert to its historical trends.
In Apple's case, the bear market could squeeze more juice from the valuation. Here's why.
Trying to clear a high bar
Apple's revenue can be cyclical, with periods of peaks and valleys because major iPhone updates can cause many consumers to upgrade their devices. For example, Apple's first iPhone with 5G compatibility was announced at the end of 2020 (iPhone 12). That and the iPhone 13 caused a significant growth spurt that pushed revenue growth to its highest in a decade.
AAPL Revenue (Quarterly YOY Growth) data by YCharts.
The higher growth helped drive the stock's valuation as high as it went, but now the company is coming down on the other side of that spurt. With most iPhone financing plans spanning one to two years, many consumers have already upgraded to new devices, and you can see the revenue growth plummeting in the above chart as the cycle turns over.
Wall Street analysts project Apple to grow revenue at a mid-single-digit rate over the next several years. This trickles down to the bottom line; analysts believe earnings-per-share (EPS) will grow at an estimated annual growth rate of 12% over the next three to five years.
Apple has grown EPS by an average of 15% per year over the past decade, so it's hard to justify a higher P/E ratio for the stock with growth potentially slowing.
A luxury versus a necessity
Tightening consumer spending could potentially pour more cold water on near-term demand for iPhones. It's no secret that inflation is rampant, and consumer sentiment is currently its lowest on record, going back to 1980 for a comparable measurement.
US Index of Consumer Sentiment data by YCharts.
I'm an iPhone user, and while I love it, I see my smartphone as a luxury more than a necessity. I don't think it's a stretch to say that a new iPhone isn't high on the priority list for many households when times are tough, though Apple has introduced an entry-level device to combat this.
This isn't to say that Apple isn't a fantastic business; it remains a powerhouse with a robust ecosystem of devices and software that's highly lucrative. But it seems more is going against Apple now than for it.
Apple's stock has begun to slide, and the fact that it accounts for 12% of the Nasdaq-100 makes its resiliency over the past year much more impressive. But don't rush to buy the dip because there's a good chance shares could still head lower. Instead, consider a dollar-cost average strategy to build a position slowly, so you don't catch a proverbial falling knife.
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Justin Pope 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. | Tech giant Apple (NASDAQ: AAPL) has proven resilient, holding up better than the Nasdaq Composite over the past year. AAPL P/E Ratio data by YCharts. AAPL Revenue (Quarterly YOY Growth) data by YCharts. | Tech giant Apple (NASDAQ: AAPL) has proven resilient, holding up better than the Nasdaq Composite over the past year. AAPL P/E Ratio data by YCharts. AAPL Revenue (Quarterly YOY Growth) data by YCharts. | Tech giant Apple (NASDAQ: AAPL) has proven resilient, holding up better than the Nasdaq Composite over the past year. AAPL P/E Ratio data by YCharts. AAPL Revenue (Quarterly YOY Growth) data by YCharts. | Tech giant Apple (NASDAQ: AAPL) has proven resilient, holding up better than the Nasdaq Composite over the past year. AAPL P/E Ratio data by YCharts. AAPL Revenue (Quarterly YOY Growth) data by YCharts. |
20477.0 | 2022-06-29 00:00:00 UTC | Samsung Elec starts 3-nanometre chip production to lure new foundry customers | AAPL | https://www.nasdaq.com/articles/samsung-elec-starts-3-nanometre-chip-production-to-lure-new-foundry-customers | nan | nan | By Joyce Lee
SEOUL, June 30 (Reuters) - Samsung Electronics Co Ltd 005930.KS said on Thursday it has begun mass producing chips with advanced 3-nanometre technology, the first to do so globally, as it seeks new clients to catch far bigger rival TSMC 2330.TW in contract chip manufacturing.
Compared with conventional 5-nanometre chips, the newly developed first-gen 3-nanometre process can reduce power consumption by up to 45%, improve performance by 23%, and reduce area by 16%, Samsung said in a statement.
The South Korean firm did not name clients for its latest foundry technology, which supplies made-to-order chips like mobile processors and high-performance computing chips, and analysts said Samsung itself and Chinese companies are expected to be among the initial customers.
Taiwan Semiconductor Manufacturing Co (TSMC) is the world's most advanced foundry chipmaker and controls about 54% of theglobal marketfor contract production of chips, used by firms such as Apple AAPL.O and Qualcomm QCOM.O which don't have their own semiconductor facilities.
Samsung, a distant second with a 16.3% market share, according to data provider TrendForce, announced a 171 trillion won ($132 billion) investment plan last year to overtake TSMC as the world's top logic chipmaker by 2030.
"We will continue active innovation in competitive technology development," said Siyoung Choi, Head of Foundry Business at Samsung.
Samsung Co-CEO Kyung Kye-hyun said earlier this year its foundry business would look for new clients in China, where it expects high market growth, as companies from automakers to appliance goods manufacturers rush to secure capacity to address persistent global chip shortages.
While Samsung is the first to production with 3-nanometre chip production, TSMC is planning 2-nanometre volume production in 2025.
Samsung is the market leader in memory chips, but it had been outspent by frontrunner TSMC in the more diverse foundry business, making it difficult to compete, analysts said.
"Non-memory is different, there's too much variety," said Kim Yang-jae, analyst at Daol Investment & Securities.
"There are only two kinds of memory chips - DRAM and NAND Flash. You can concentrate on one thing, raise efficiency and make a lot of it, but you can't do that with a thousand different non-memory chips."
Samsung's compound annual growth rate (CAGR) of capital spending between 2017 and 2023, which measures how quickly a company is increasing its investment, is estimated at 7.9%, versus TSMC's estimated 30.4%, according to Mirae Asset Securities.
Samsung's efforts to compete with the industry leader have also been hampered by less-than-expected yields of older chips during the past year or so, analysts said. The company said in March that its operations have shown a gradual improvement.
($1 = 1,292.8900 won)
(Reporting by Joyce Lee; Editing by Miyoung Kim and Richard Pullin)
((joyce.lee@tr.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Taiwan Semiconductor Manufacturing Co (TSMC) is the world's most advanced foundry chipmaker and controls about 54% of theglobal marketfor contract production of chips, used by firms such as Apple AAPL.O and Qualcomm QCOM.O which don't have their own semiconductor facilities. Samsung, a distant second with a 16.3% market share, according to data provider TrendForce, announced a 171 trillion won ($132 billion) investment plan last year to overtake TSMC as the world's top logic chipmaker by 2030. Samsung Co-CEO Kyung Kye-hyun said earlier this year its foundry business would look for new clients in China, where it expects high market growth, as companies from automakers to appliance goods manufacturers rush to secure capacity to address persistent global chip shortages. | Taiwan Semiconductor Manufacturing Co (TSMC) is the world's most advanced foundry chipmaker and controls about 54% of theglobal marketfor contract production of chips, used by firms such as Apple AAPL.O and Qualcomm QCOM.O which don't have their own semiconductor facilities. Samsung, a distant second with a 16.3% market share, according to data provider TrendForce, announced a 171 trillion won ($132 billion) investment plan last year to overtake TSMC as the world's top logic chipmaker by 2030. While Samsung is the first to production with 3-nanometre chip production, TSMC is planning 2-nanometre volume production in 2025. | Taiwan Semiconductor Manufacturing Co (TSMC) is the world's most advanced foundry chipmaker and controls about 54% of theglobal marketfor contract production of chips, used by firms such as Apple AAPL.O and Qualcomm QCOM.O which don't have their own semiconductor facilities. By Joyce Lee SEOUL, June 30 (Reuters) - Samsung Electronics Co Ltd 005930.KS said on Thursday it has begun mass producing chips with advanced 3-nanometre technology, the first to do so globally, as it seeks new clients to catch far bigger rival TSMC 2330.TW in contract chip manufacturing. The South Korean firm did not name clients for its latest foundry technology, which supplies made-to-order chips like mobile processors and high-performance computing chips, and analysts said Samsung itself and Chinese companies are expected to be among the initial customers. | Taiwan Semiconductor Manufacturing Co (TSMC) is the world's most advanced foundry chipmaker and controls about 54% of theglobal marketfor contract production of chips, used by firms such as Apple AAPL.O and Qualcomm QCOM.O which don't have their own semiconductor facilities. Compared with conventional 5-nanometre chips, the newly developed first-gen 3-nanometre process can reduce power consumption by up to 45%, improve performance by 23%, and reduce area by 16%, Samsung said in a statement. Samsung is the market leader in memory chips, but it had been outspent by frontrunner TSMC in the more diverse foundry business, making it difficult to compete, analysts said. |
20478.0 | 2022-06-29 00:00:00 UTC | FCC Commissioner Asks Apple And Google To Remove TikTok From App Stores | AAPL | https://www.nasdaq.com/articles/fcc-commissioner-asks-apple-and-google-to-remove-tiktok-from-app-stores | nan | nan | (RTTNews) - The U.S. Federal Communications Commission's Brendan Carr said he has asked tech giants Apple and Google to remove TikTok from their app stores due to China-related data security concerns.
The popular short video app is owned by Chinese company ByteDance. The company had faced severe scrutiny in the country under President Donald Trump.
"TikTok is not just another video app. That's the sheep's clothing. It harvests swaths of sensitive data that new reports show are being accessed in Beijing. I've called on @Apple & @Google to remove TikTok from their app stores for its pattern of surreptitious data practices," Carr, one of the FCC's commissioners, tweeted. He also shared the letter sent to Apple and Google.
Carr's letter, dated June 24 on FCC letterhead, said if the Apple and Alphabet do not remove TikTok from their app stores, they should provide statements to him by July 8.
"It is clear that TikTok poses an unacceptable national security risk due to its extensive data harvesting being combined with Beijing's apparently unchecked access to that sensitive data. But it is also clear that that TikTok's pattern of conduct and misrepresentations regarding the unfettered access that persons in Beijing have to sensitive U.S. user data puts it out of compliance with the policies that both of your companies require every app to adhere to as a condition of remaining available on your app stores. Therefore, I am requesting that you apply the plain text of your app store policies to TikTok and remove it from your app stores for failure to abide by those terms," Carr's letter reads.
Carr also described ByteDance as "beholden" to the Chinese government and "required by law to comply with [Chinese government] surveillance demands."
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (RTTNews) - The U.S. Federal Communications Commission's Brendan Carr said he has asked tech giants Apple and Google to remove TikTok from their app stores due to China-related data security concerns. I've called on @Apple & @Google to remove TikTok from their app stores for its pattern of surreptitious data practices," Carr, one of the FCC's commissioners, tweeted. Carr's letter, dated June 24 on FCC letterhead, said if the Apple and Alphabet do not remove TikTok from their app stores, they should provide statements to him by July 8. | (RTTNews) - The U.S. Federal Communications Commission's Brendan Carr said he has asked tech giants Apple and Google to remove TikTok from their app stores due to China-related data security concerns. I've called on @Apple & @Google to remove TikTok from their app stores for its pattern of surreptitious data practices," Carr, one of the FCC's commissioners, tweeted. Therefore, I am requesting that you apply the plain text of your app store policies to TikTok and remove it from your app stores for failure to abide by those terms," Carr's letter reads. | (RTTNews) - The U.S. Federal Communications Commission's Brendan Carr said he has asked tech giants Apple and Google to remove TikTok from their app stores due to China-related data security concerns. But it is also clear that that TikTok's pattern of conduct and misrepresentations regarding the unfettered access that persons in Beijing have to sensitive U.S. user data puts it out of compliance with the policies that both of your companies require every app to adhere to as a condition of remaining available on your app stores. Therefore, I am requesting that you apply the plain text of your app store policies to TikTok and remove it from your app stores for failure to abide by those terms," Carr's letter reads. | The popular short video app is owned by Chinese company ByteDance. I've called on @Apple & @Google to remove TikTok from their app stores for its pattern of surreptitious data practices," Carr, one of the FCC's commissioners, tweeted. But it is also clear that that TikTok's pattern of conduct and misrepresentations regarding the unfettered access that persons in Beijing have to sensitive U.S. user data puts it out of compliance with the policies that both of your companies require every app to adhere to as a condition of remaining available on your app stores. |
20479.0 | 2022-06-29 00:00:00 UTC | Is Qualcomm Stock a Buy Right Now? | AAPL | https://www.nasdaq.com/articles/is-qualcomm-stock-a-buy-right-now | nan | nan | In this video, I will talk about Qualcomm (NASDAQ: QCOM), the reason the stock popped yesterday when the overall market was red, and how its business is expanding and evolving. A TF International Securities analyst reported that Qualcomm will remain the main supplier of 5G chips for Apple (NASDAQ: AAPL) iPhones and will supply 100% of the mobile modems manufactured in 2023.
For the full insights, do watch the video, consider subscribing, and click the special offer link below.
*Stock prices used were the closing prices of June 28, 2022. The video was published on June 29, 2022.
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Neil Rozenbaum has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Qualcomm. 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. Neil is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | A TF International Securities analyst reported that Qualcomm will remain the main supplier of 5G chips for Apple (NASDAQ: AAPL) iPhones and will supply 100% of the mobile modems manufactured in 2023. In this video, I will talk about Qualcomm (NASDAQ: QCOM), the reason the stock popped yesterday when the overall market was red, and how its business is expanding and evolving. For the full insights, do watch the video, consider subscribing, and click the special offer link below. | A TF International Securities analyst reported that Qualcomm will remain the main supplier of 5G chips for Apple (NASDAQ: AAPL) iPhones and will supply 100% of the mobile modems manufactured in 2023. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. The Motley Fool has positions in and recommends Apple and Qualcomm. | A TF International Securities analyst reported that Qualcomm will remain the main supplier of 5G chips for Apple (NASDAQ: AAPL) iPhones and will supply 100% of the mobile modems manufactured in 2023. 10 stocks we like better than Qualcomm 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. | A TF International Securities analyst reported that Qualcomm will remain the main supplier of 5G chips for Apple (NASDAQ: AAPL) iPhones and will supply 100% of the mobile modems manufactured in 2023. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Neil Rozenbaum has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Qualcomm. |
20480.0 | 2022-06-29 00:00:00 UTC | 3 Reasons Why Microsoft Is a Stellar Long-Term Hold | AAPL | https://www.nasdaq.com/articles/3-reasons-why-microsoft-is-a-stellar-long-term-hold | nan | nan | It’s been a battlefield within the market year-to-date. Bears have seemingly pushed forward all year, forcing bulls to retreat. At every corner, they keep up their assault.
It’s been exhausting, to say the least. In a quick turn of events from previous years, tech stocks have tumbled, undoubtedly causing investors to feel the pain.
Supply chain and geopolitical issues have added fuel to the fire sale, but the spark was created earlier in the year whenever inflation had been reported to be at its highest levels in decades. Needing to act swiftly, the Fed opted to raise interest rates by levels not seen in years.
With the market pricing in the impact of the Fed’s actions, many once-beloved stocks have seen their valuations slashed by double-digit percentages throughout 2022. The chart below illustrates the performance of three heavy hitters in the tech space – Microsoft MSFT, Apple AAPL, and Alphabet GOOGL – while blending in the S&P 500 as a benchmark.
Image Source: Zacks Investment Research
As we can see, it’s been quite the rough stretch for all three companies. One company, in particular, Microsoft, still has plenty of room to grow. Let’s look at three reasons MSFT investors can sleep soundly at night.
Cloud Computing
Cloud computing is rapidly becoming a major highlight of modern technology, and nearly all companies want a piece of the pie. Fortunately, Microsoft has established itself in this realm with Azure, the company’s cloud computing services.
Azure is the only consistent hybrid cloud, delivering unparalleled developer productivity and comprehensive, multilayered security. Microsoft believes that cloud technology will be a critical growth driver of the world’s economic output and will extensively aid its top-line results in the future.
In its latest quarterly report, Microsoft Azure was a significant highlight. It reported better-than-expected commercial booking growth of 28%, and Azure Cloud revenue was $23.4 billion, up 32% year-over-year.
Currently, MSFT faces tough opposition from Amazon’s AMZN AWS cloud platform – the largest in the world. However, Azure is now available globally in more than 60 regions, strengthening its foothold in the space.
Activision Blizzard Acquisition
The world was shut down during the early and mid-phases of the pandemic. We had to work, study, and communicate, all within a digital landscape. Being trapped inside, video games rapidly became a popular way to pass the time, spurring innovation and growth in the space – and companies soon took notice.
Back in January, Microsoft made a major splash, acquiring Activision Blizzard ATVI for a whopping $68.7 billion. It was a massive deal that caught extensive attention – it ranks as the largest acquisition in the video game industry’s history.
Activision Blizzard is a leader in video game development and an interactive entertainment content publisher, most well-known for Call of Duty. MSFT already owns two massive video game titles, Halo – the company’s flagship video game, and Minecraft – the best-selling game of all time.
The company plans to publish all of ATVI’s video game titles onto its Xbox Game Pass, a unique gaming service that allows gamers unlimited access to a library of games for a flat rate of $9.99 per month.
The Xbox Game Pass subscriber count exceeded 25 million in January of this year, and ATVI titles currently have around 400 million monthly active players. Providing affordable access to the most iconic gaming franchises will undoubtedly fuel Microsoft’s gaming segment growth and propel its top line.
Growth Estimates
Of course, any investor wants to see a company consistently increasing its top and bottom line, and that is precisely what Microsoft is forecasted to do. It’s one of the reasons that Microsoft has become a staple in many portfolios.
MSFT is forecasted to rake in a mighty $52.4 billion for the upcoming quarter, registering a double-digit quarterly revenue increase of 13.5% compared to the year-ago quarter. Looking ahead, the FY22 sales estimate of $198.5 billion reflects a substantial 18% expansion within the top line year-over-year.
Image Source: Zacks Investment Research
The bottom line is forecasted to expand substantially as well. The $2.30 per share estimate for the upcoming quarter displays a notable 6% growth in earnings from the year-ago quarter, and the FY22 EPS estimate of $9.28 reflects a beautiful 18% expansion within the bottom line year-over-year.
Over the next three to five years, the bottom line is forecasted to expand by a notable 12%.
Image Source: Zacks Investment Research
Bottom Line
As we can see, Microsoft still has plenty of room for growth. A robust cloud computing service, a beefed-up gaming segment, and strong future growth prospects bode well for the company in the long term.
Of course, the price action throughout tech in 2022 is more than disheartening. However, it’s allowed us to buy shares at levels not seen in some time. Its current forward earnings multiple of 27.6X is nowhere near 2021 highs of 37.5X and is just below its five-year median value of 28.4X.
Image Source: Zacks Investment Research
All in all, the future looks bright for Microsoft and its shareholders.
Zacks Names "Single Best Pick to Double"
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Amazon.com, Inc. (AMZN): Free Stock Analysis Report
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To read this article on Zacks.com click here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The chart below illustrates the performance of three heavy hitters in the tech space – Microsoft MSFT, Apple AAPL, and Alphabet GOOGL – while blending in the S&P 500 as a benchmark. Apple Inc. (AAPL): Free Stock Analysis Report Supply chain and geopolitical issues have added fuel to the fire sale, but the spark was created earlier in the year whenever inflation had been reported to be at its highest levels in decades. | The chart below illustrates the performance of three heavy hitters in the tech space – Microsoft MSFT, Apple AAPL, and Alphabet GOOGL – while blending in the S&P 500 as a benchmark. Apple Inc. (AAPL): Free Stock Analysis Report Image Source: Zacks Investment Research The bottom line is forecasted to expand substantially as well. | The chart below illustrates the performance of three heavy hitters in the tech space – Microsoft MSFT, Apple AAPL, and Alphabet GOOGL – while blending in the S&P 500 as a benchmark. Apple Inc. (AAPL): Free Stock Analysis Report MSFT already owns two massive video game titles, Halo – the company’s flagship video game, and Minecraft – the best-selling game of all time. | The chart below illustrates the performance of three heavy hitters in the tech space – Microsoft MSFT, Apple AAPL, and Alphabet GOOGL – while blending in the S&P 500 as a benchmark. Apple Inc. (AAPL): Free Stock Analysis Report The company plans to publish all of ATVI’s video game titles onto its Xbox Game Pass, a unique gaming service that allows gamers unlimited access to a library of games for a flat rate of $9.99 per month. |
20481.0 | 2022-06-29 00:00:00 UTC | Investor Insight: "This Isn't Like 2008." | AAPL | https://www.nasdaq.com/articles/investor-insight%3A-this-isnt-like-2008. | nan | nan | In this podcast, Motley Fool senior analysts Matt Argersinger and Jason Moser discuss:
The lack of clarity (at the moment) facing investors.
PayPal, Netflix (NASDAQ: NFLX), and Meta Platforms are being added to the Russell 1000 Value Index.
What the latest results from homebuilder KB Home reveal about housing.
The latest from DocuSign (NASDAQ: DOCU), Darden Restaurants, and Kellogg.
Jason and Matt answer a listener's question about Activision Blizzard and share two stocks on their radar: Qualcomm and eBay (NASDAQ: EBAY). Motley Fool senior analyst Jim Mueller analyzes the companies competing for Netflix's ad business, opportunities in the metaverse, and big tech's pursuit of streaming live sports.
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 June 24, 2022.
Chris Hill: It's Motley Fool Money radio show. I'm Chris Hill and I'm joined by Motley Fool senior analysts Jason Moser and Matt Argersinger. And it's good to see you both.
Jason Moser: Hey.
Matt Argersinger: Hey.
Chris Hill: We've got the latest headlines from Wall Street we'll get an update on the entertainment media landscape, and as always, we've got a couple of stocks on our radar. But we begin with the big puzzle. On the one hand, data out Friday indicates that both gas prices and mortgage rates are starting to drop. On the other hand, some major companies are either freezing, hiring or laying people off. Matt, let me start with you. Everyone is looking for clues to where the economy and the stock market are going. But it seems like clarity is weeks, if not months away.
Matt Argersinger: Absolutely. Chris, I'm trying to figure it out myself. But I think what I can say confidently is, that this isn't like 2008. There's not a systemic crisis that is going to bring everything down. Jobs, the economy, asset prices, energy prices, credit markets, and the whole world basically crashed back in 2008. I think we all agree on that. I think what we have today is just really a big jumbled mixed bag. It's the best way I can describe it. Because I think on one hand you've got industries. You've got the homebuilders, you've got manufacturers, you've got technology companies seeing a pretty sharp slowdown. But on the other hand, you've got the energy industry, which is having its best moment in more than a decade. You have hotels and resorts that are charging rates that are higher than before the pandemic, to travel, it feels pretty strong. Retail is doing fine for the most part. It just feels really unsettled. I think you can make good arguments for the economy to go in either direction. I think that's being reflected in the stock market right now, investors have a sense that there are opportunities and there always are opportunities. But they're hesitant because you just don't know what kind of shape the economy is going to be in several months from now, and what higher interest rates are going to mean for a lot of businesses. I think a holding pattern is where the investors and the stock market are right now.
Chris Hill: Jason, I want to key in on one word Matt said at the end there and it hasn't, because I think that as much as anything, that sums up the mood for a lot of individual investors and also for the fund managers and institutional folks on Wall Street, there is a hesitancy to jump into this market with both feet.
Jason Moser: It reminds me of that Larry David GIF or GIF, whatever side of the argument you fall on there. But he is like uncertain. He is like maybe so maybe not. I don't really, we're doing that right now, it does feel that way. I like your use of the word puzzle because it feels like we're trying to just put these pieces together and it's just right now that picture just isn't there. I mean, there's so many signs pointing in so many different directions and consumer sentiment at a record low, personal savings rate is around 4.4 percent now and falling, there's not going to be more stimulus really to help prop up the consumer spending in that regard, credit card balances going up, starting to see some pressure in the jobs market.
Then you look at the way the market has been performing. I'm glad many brought up 2008 because that's an important time to remember. We all lived through that as investors have felt like the prevailing attitude at the time was the world was coming to an end. It felt like it was because there were some fundamentally structural issues at play there that don't exist today. If you look at the way the market performed in 2008, it wasn't good Chris, meaning it was down 36 and a half percent and that's right about in line with the average bear market since 1929. The S and P Blues is on average about 36 percent. We're not even close to that right now. I mean, there is every reasonably we could see the market go lower, but it doesn't necessarily mean it will. Then you add to that this dynamic in play that over the last 20 years, half of the S and P strongest days occurred during a bear market and certainly we're all seeing that play. I mean, there's just some very big moves to the upside on certain days when the headlines look a little bit better than others and so it makes it for a very confusing time I think. Honestly, it really does point back to why we invest the way we do here because it is very difficult sometimes to try to ascertain exactly what's going on on a daily basis.
Chris Hill: Adding to the confusion is the fact that at the close of trading on Friday, the Russell 1,000 Value Index will do some rebalancing. Among the stocks being added to the value index our Netflix, PayPal, and Meta platforms, the parent company of Facebook. Jason those are three of the biggest growth stocks of the past executive. What are they doing in a Value Index?
Jason Moser: Well, other than the obligatory rebalancing that comes from stocks headed to different benchmarks, I think it's interesting to think about why these businesses are where they are today. You look at the performance year-to-date, Meta down 50 percent, PayPal down 59 percent, Netflix down 68 percent. There are reasons why that's happening though. The bigger question investors need to ask themselves as opposed to why are these value stocks? Why are these companies where they are today? I think these are all businesses they're all market leaders in their own right. There is uncertainty about at all three as well. What is that uncertainty and what are the chances that they can turn this conversation around? You look at something like metaphors to me, Meta stands out as the one with the most uncertainty because it seems like it's placing all of its chips on the metaverse. Which right now is just a big fat question mark for a lot of us. We don't know what that's going to look like. We don't know how many people are going to choose to participate. We don't know how really that's going to monetize video streaming and digital and mobile payments. I think the uncertainty is very much just been last. There's just less uncertainty in regard to those long-term tailwinds there. It's going to be interesting to watch how these businesses recover from this value territory. But it's also worth remembering that as businesses get bigger this just becomes more and more of the part of the conversation. We had a point that we're talking about Apple in this light. As it became a dividend-paying stock, wow Chris, that worked out pretty well for investors. I would encourage you to see the glass half full in this case.
Chris Hill: From value stocks to bellwethers shares of FedEx of nearly 10 percent on Friday, fourth-quarter results were mixed, but FedEx escape strong guidance for the new fiscal year. I'm done, shareholder Matt, but this is one of those companies that I root for because of its role in the broader economy.
Matt Argersinger: I'm not a shareholder either Chris, but after these results, I'm thinking about it because, go back to our earlier discussion on the economy. If you want to feel pretty good about things, look at FedEx's earnings. In the quarter just ended in May, revenue was up eight percent year-over-year, get adjusted operating profits up 13 percent, and pretty much better profit margins across the board. This was a quarter by the way, where we had significantly higher fuel prices. That's a huge line item for FedEx, yet they managed through a pretty darn well, and yet the guidance was where the strength was really. You had forecast earnings-per-share growth around 14 percent in the current fiscal year, which just started. Now some of that growth is coming from buybacks. So FedEx, which really hasn't been a big repurchase serve its stock. They bought back more than two billion dollars worth of stock over the last fiscal year. That's really helping the earnings-per-share. They also recently raised our dividend by 53 percent. You step back and you have this bellwether business. There stock is trading for roughly 11, 12 times forward earnings and now the dividend is yielding two percent, and you got double-digit earnings growth potentially this year. Like I said, I don't own shares of FedEx, but I think if you're a shareholder today, you've got to feel pretty good about it, and it tells you a pretty good story about the economy.
Chris Hill: On Tuesday DocuSign announced that CEO, Dan Springer was leaving effective immediately. Board chair Maggie Wilderotter takes over as Interim CEO, as DocuSign looks for a permanent replacement. Jason we've talked before about how a rising stock price provides a halo effect for CEOs were in a bear market. Shares of DocuSign are down more than 50 percent year-to-date. They are not alone, as we have discussed before. I'm wondering if you expect to see more changes in more corner offices.
Jason Moser: I absolutely think it's a possibility. A business that stands out to me as being a part of this conversation is PayPal. It wouldn't shock me at all to see CEO Dan Schulman, at least feeling like the spotlight could be turning his way. You look at what's going on with DocuSign, these companies have found themselves on the tricky spot. I mean, this is a business that's fundamentally far better than it was even just a couple of years ago. If you've look at first quarter of 2019 revenue for DocuSign, 214 million dollars, you fast-forward today, first-quarter of 2022, those revenue of 588 million dollars. I mean, it's, it's the working its way toward profitability, but it is cash flow positive. I mean, this is a business is fundamentally a better shape, but there were some unforced errors along the way that we're committed in regard to forecasting, there's employee attrition.
Dan Springer, to be fair, took his lumps here recently talking about how they did such a great job of fulfilling demand during a tough time. That demand more or less just showed up on their doorstep though. They didn't do as great a job. They took their eyes off the ball in creating demand. I think that could be where the concern for this business is today. Perhaps there's another shoe to drop. It's hard to say. But I do know when you look at the recent language in PayPal's call, there was a tone of humility on the part of Dan Schulman and Singleton, "We need to rethink our philosophy and methodology around forecasting. We need to get back to where we were before the pandemic, and making sure we give the ball to our teammates and let them develop and run and grow this business as well." I said it before. It felt like maybe PayPal became a little bit of a Dan Schulman-centric story. It felt like maybe DocuSign became a little bit of a Dan Springer-centric story. That's a sword that can cut both ways. Unfortunately, in this case, it resulted in Mr. Springer having to step down.
Chris Hill: I don't mean to indicate that the sole report card for any CEO should be the stock price. It just seems though that because of the environment we are in, you used the word rethinking, I can see more boards of directors, and in some cases maybe CEOs themselves, evaluating where they are, where their business is, and saying, "You know what, it might be time for a change."
Jason Moser: Yeah. It's just no two ways about it. Leadership can make or break a business in certain cases. You can never take these types of situations for granted. A good business is a good business, but you'd still have to have someone leading the way.
[MUSIC]
Chris Hill: Up next, we've got the latest in housing, restaurants, and more, so stay right here. You're listening to Motley Fool Money.
[MUSIC]
Chris Hill: Welcome back to Motley Fool Money. Chris Hill here with Matt Argersinger and Jason Moser. Shares of Darden Restaurants up nearly five percent this week. The parent company of Olive Garden raised their dividend 10 percent and posted higher-than-expected profits in revenue for the fourth quarter. Jason, we talked about this earlier in the week, Olive Garden drives the bus for Darden [LAUGHTER] but they've got a fine-dining segment that's doing much better although management is being cautious with their guidance.
Jason Moser: They are. Darden has always been very good about using its size to its advantage and keeping prices low, maximizing efficiencies, and reaching every level of consumer from the lower-end to the higher. It certainly feels like they've been able to keep that ball rolling here over the last couple of years, which have been a tough time for really all restaurant businesses. But to your point there on the numbers, total sales up 14.2 percent. That was driven by a same-store restaurant sales of 11.7 percent. Now, like you said, Olive Garden drives the bus. That's the biggest contributor to the business, and those comps were up 6 and 1/5 percent. But the fine dining to your point, 34 and 1/5 percent, Chris, people wanted to treat themselves this quarter it sounds like.
That's all very encouraging. I think the 10 percent boost to the dividend from a quarter ago is a sign of strength as well. Interestingly, what Darden does, and you heard the on the call a lot, they continue to under-price inflation and their competition. Inflation has really been a key theme for a lot of these calls. They continue to focus on under-pricing inflation in their compensation to present a value proposition and bring people in. It certainly worked out very well for them on Mother's Day. It was the highest sales day ever for Olive Garden and the second highest guest count day in history. Interestingly also, on staffing, right now they have more managers per restaurant than pre-COVID times. So at the manager level they are doing great. They're back to basically pre-COVID levels on the team member side as well. Though they did note there's some pockets of restaurants where there's some staffing issues. But generally speaking, in a world where staffing in the service industry has been very difficult, it feels like Darden has managed their way pretty well and that is playing out on the business.
Chris Hill: Am I the only who thinks that when earnings season hits up in July and August we're going to hear the phrase staffing issues for more than a couple of retailers and restaurants out there?
Jason Moser: I feel like we will and it feels like Darden's put themselves in a pretty good spot where this is concerned.
Chris Hill: KB Home's second-quarter profits and revenue came in higher-than-expected and shares up nearly 15 percent this week. Matty, you watch real estate and housing more than anyone I know. What, if anything, does a home-builder like KB Home tell us about the housing market?
Matt Argersinger: Well, it tells us a pretty good story, I think. I was looking at KB Home's results and to me they told us exactly what I think most of us think is going on with the housing market, which is housing market is not crashing. It's not falling off a cliff by any stretch. People are still buying homes, especially in strong markets like the Southeast, Southwest, and even California, where KB Home does a lot of its building. There has been some moderation though, as we've seen, interest rates, mortgage rates surge higher really historically over the past few months. If you look at KB's result, even though revenue and margins were higher, that's really mostly reflective of higher home prices. Deliveries, on the other hand, were flat. Orders have actually come down and cancellations have picked up a little bit. To me, KB Home going up as much as it did recently is really just a relief rally because home-builders have just been hit really hard. You got the higher revenue, higher margins, but lower growth. I think that's the same story a lot of home-builders are telling right now.
The one disagreement that I have with KB is their guidance. It has been a little worried. They're guiding that the average selling price is going to keep moving higher to about $500,000. Right now it's around $490,000. That strikes me as pretty optimistic. I expect we're going to see a moderation in prices. We're going to see those orders continue to come down. I feel home-builders are probably going to protect margin more than anything else. They're already facing a lot of pressure on the supply side and the cost side. I'm a little concerned, but I do think the home-builders, are just being beaten down so hard, including KB Home that any decent continues. In other words, housing market is not crashing, good news, is going to send their stocks probably higher.
Chris Hill: Should we be looking for similar guidance from other home-builders as well and essentially compare what they think is going to happen to home prices going forward to what KB Home is saying?
Matt Argersinger: I think that'd be smart to do. We're going to see this coming quarter when the home-builders report what they say about the average selling prices. I expect a lot of the other home-builders, like NVR, and D Horton, are going to come out and say, "Now we actually think prices are going to stay roughly flat, maybe even slightly lower over the next fiscal year, so we'll have to see."
Chris Hill: This week, Kellogg announced plans to split into three separate public companies, one for breakfast cereal, one for snacks, and one for plant-based foods. CEO Steve Callahan is planning to run the snack business. Jason, I'm already a consumer [LAUGHTER] of both Cheez-It and Pringles so I might have to invest my money where my mouth is.
Jason Moser: Well, I feel like you're probably right there. The snacks company, to my mind, seems like the more attractive of the three opportunities. When you look at the overall business, Kellogg has been relatively stagnant here over the last five years. Compound annual growth rate on the revenue side of 2.1 percent which is just nothing really to write home about. Although I will say, it's had a very good year to-date, stock is actually up and outperforming the market handily. That's nice. Chris, I just had very strong feelings on the tickers here, OK, in two ways, the cereal company's ticker better be pops, P-O-P-S [LAUGHTER], if not missed opportunity. For the love of God, I'm with you on Cheez-Its, [MUSIC] I'm going extra toasty, and it feels like it's a perfect opportunity for that snacks division ticker to be C-H-Z-T. If it's not Cheez-It, color me disappointed.
Chris Hill: Jason Moser, Matt Argersinger, guys, we'll see you later in the show. Up next we will get the latest on the metaverse and the entertainment industry with Senior Analyst Jim Mueller. Stay right here. This is Motley Fool Money.
[MUSIC]
Chris Hill: Welcome back to Motley Fool Money. I'm Chris Hill. Earlier this week, The Wall Street Journal reported that Comcast and Alphabet have emerged as the top contenders to work with Netflix on the ad-supported tier of their service. Joining me to discuss in that and other parts of the entertainment media landscape is Motley Fool Senior Analyst Jim Mueller. Jim, thanks for being here.
Jim Mueller: My pleasure, Chris. How are you done?
Chris Hill: Doing well. I want to get your thoughts on Netflix apart from this, but let's start with this story. Is this a lucrative opportunity for whoever wins the right to work with Netflix on advertising?
Jim Mueller: Not right off, certainly not this year, probably not next year, it's going to take a little bit because Netflix and whoever wins, Google, Comcast, whoever, need to figure out how to serve the ads, who gets to see the ads, etc. It could be, but if Netflix shareholders are thinking this is going to be the savior of their company, it's going to take a few years for this to really get going.
Chris Hill: What do you think is a reasonable success metric? What should people be looking for? Because it seems as though Netflix is very focused on launching this in this calendar year.
Jim Mueller: Look for revenue growth as our management said at the end of the call, last quarter, I think the first quarter call, but for quite a while, Netflix's revenue growth is going to be still subscriber counts. How many subscribers do you have? Because remember anyone who goes to ad-based here and is willing to be served those ads, Netflix is losing money on, because they're going to lower the price. They have to make that up plus whatever extra they can get per person for that. If you're thinking of billions and billions of dollars of revenue from advertising, they're going to have to overcome even more billions of lost revenue because of the drop in the pricing tier.
Chris Hill: Why do you think Netflix is going the route of partnering with someone? Certainly, Google is as experienced at advertising digitally as any business out there. Is it just so that they can launch this sooner? Because I'm sure there are people within Netflix who are making the argument saying, no, we should build this thing ourselves.
Jim Mueller: You answered your own question. Yes, this is to get it out there quicker. Get someone who knows the advertising business because Hastings and Sarandos and those guys, they do not know advertising at all. They know content, they know subscription, they diddly on advertising. Get somebody who is experienced on that, learn from them, and in comments made today in another Wall Street Journal article, Co-CEO Ted Sarandos is quoted as saying that basically they want to end up building their own and iterating and making it their own thing, which means that this partnership is going to be a few years, maybe a decade at most, I think, just from what they were saying. They definitely want to do it themselves, but I think they recognize that in order to start generating more revenue, they need to get in this faster than the two year timeline they mentioned at the end of the first quarter.
Chris Hill: What do you think the current state of Netflix is? Is this a stock that looks, certainly, it's lower priced than it was, say, a year or so ago and it's always fascinating to me when there is a business that is the clear leader. Let's be clear about this, all other subscribing services would love to have the number of subscribers that Netflix has. They're the clear leader in that category, but the stock is really beaten down right now.
Jim Mueller: You're asking is it a value play? No, I think it's a value trap at the moment. They're in trouble. They lost two million subscribers this last quarter. They came in two million subscribers light against what they had guided to Wall Street, and when they issued that guidance in January, it was half of what Wall Street was expecting. They got pounded about that and they couldn't even make it because of a near one percent churn. For the current quarter, Q2, which they report in middle of July, they're guiding to a two million subscriber drop. That's the first time they've ever guided in 16 years. I've been tracking this for 16 years. That's the first time they've ever guided to a subscriber drop, and if they miss on that and the drop is three or four million, you don't want to be buying shares at today's price. That means the virtuous cycle of more subscribers means more revenue, means more spending on great content, which brings in more subscribers. That's been the driver for the company so far, but now if their subscriber count is actually beginning to go down, you're going to start running that backwards and that is death to the company. They need to get revenue, that's why they've finally caved on the advertising campaign, that's why they're starting to focus on very carefully so they don't push people away on the sharing issue of passwords and so on. I think they are reacting to things and in trouble and before investing in it again, I would like to see them start to solve these problems. Full disclosure, I do not longer own any shares of the company.
Chris Hill: Earlier this month, there were reports that Netflix might be buying Roku. Certainly, the more recent reports about Comcast and Alphabet probably put all of that to rest. If you're a Roku shareholder, are you disappointed or are you relieved?
Jim Mueller: As Sarandos confirmed that in the same article, we don't need it, as a quote, declining to comment on reports that Netflix could be interested in buying the streaming of Roku. I was quoting from the Wall Street Journal article, we don't need it. Frankly, anyone who actually thought about it said they've got six billion dollars of cash on the books, how much are they going to spend to buy Roku and what is it going to give them and how else might they use that money? Remember, they are spending a lot of money on that content. I don't think the Roku thing was anything more than a rumor and not even much of one. As a shareholder of Roku, probably relieved. Roku has pretty solid business by itself. They've just hit a little bit of rough patch and I think shareholders give that management team time to get through it, they should be all right.
Chris Hill: Let's move away from streaming video and into the metaverse. Meta Platforms CEO, Mark Zuckerberg said this week, his goal is to have one billion people in the metaverse, each spending hundreds of dollars a year. Let's put aside whether or not you or I think it's going to get to a billion people and how long that will take. I am curious though about the commerce part in all of this. When you think about the metaverse, do you think there are public companies that are among the likely candidates to either enabled e-commerce in the metaverse or provide the entertainment or services or whatever that people are going to actually spend money on?
Jim Mueller: Sure, advertising. That's what Facebook, I'm sorry, I can't say Meta Platforms [laughs] without cracking up. That's obviously where Zuckerberg is going with that, but there's so many ways to play the metaverse. You've got advertising, you've got companies like the Trade Desk that do a good job of placing ads where they do the most good and they'll learn from the patterns of what people do inside, whatever platform they're on about which ads would serve those people well. You've got Google, Alphabet, of course, and their expertise of advertising. Then you've got the platforms. The way a lot of people are talking about it is as if the metaverse is a single thing, it's not. It's scattered all over the place. You've got Facebook's version, you've got Roblox's version, and within that you've got a whole hundreds, if not thousands, of different little worlds to go explore. You've got live baseball that has metaverse. You see what they call stat cast, the arc of the ball, the speed of the pitch, the placement. All of that is using data from the real world and adding a layer of computer-generated imagery and information on top, which is what's called augmented reality, if I've got my terminology right. You could play into, Major League Baseball is not public, but there are companies that collect that data and provide it. Sportradar is probably the biggest player there. Lots of different ways to play it. If I were going to be investing in this long-term trend, I'd want to be willing to sit for at least a decade as it slowly builds out. It took a long time for the Internet to really get going, and this I think is bigger and requires more of a commitment by people to have some hardware permanently on, if they're going to be in it all the time. That is going to take longer for this to come into reality for most people.
Chris Hill: You mentioned live baseball and that's actually where I want to wrap up because I know you're a big baseball fan. Apple and Peacock are each paying Major League Baseball $100 million for the rights to stream games. Amazon Prime is doing New York Yankee games on Friday nights. As someone who is a subscriber of ApplePlus, they are pushing the baseball on a regular basis. I'm curious if these are services that you think are going to lure people in because the larger trend, obviously, is something that I think we all talked about for a while and it took a while to get going, but it was this idea that big tech companies like Apple and Amazon would actually start bidding on live sports. There are people back in 2008, '09, and 2010 saying this is coming. It actually took a little bit longer. But do you think Apple and Peacock dipping their toe into major league baseball as waters. Do you think this is a prelude to larger things?
Jim Mueller: Oh, definitely. Apple in addition to that baseball stuff, they are the likely winner of the NFL Sunday ticket. Just hasn't been announced yet but that's the speculation, which means they will have a bunch of American football games on every weekend starting probably next year. I think directed to you. DirecTV has the contract through the end of this year. So not not only baseball but sports in general. I mean, I ran across a story while thinking about this. Sinclair, the television network company there, they just launched, in fact, that went live this past week their regional sports and network valley sports as a independent streaming service to play baseball games for the five baseball teams in their regional sports network and regional sportsmen networks like yes, Yankees. I don't know what the ES stands for but it's the Yankee 1. Any SM covers the Boston Red Sox, all these regional sports networks, they're starting to launch their own little subscription services to this. Major League Baseball, of course has the whole thing, except for your regional teams for 150 a year finally, pulling it up. [laughs] [MUSIC] Just to watch them on my Mariner games. This is definitely happening and this is definitely a thing and you can expect more and more of it to come going forward.
Chris Hill: Jim Mueller, good luck to your Mariner. Thanks for being here.
Jim Mueller: Thanks.
Chris Hill: Up next, Jason Moser and Matt Argersinger return. I got a couple of stocks on their radar, so stay right here. You're listening to Motley Fool Money.
[MUSIC]
Chris Hill: As always, people on the program may have interest in the stocks they talked 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. Welcome back to Motley Fool Money. Chris Hill here once again with Jason Moser and Matt Argersinger. Our email address is podcasts@fool.com. Got a question from Levi in South Dakota who writes, any updates on the activision blizzard buyout? We're saving to build the house and I'm wondering if this is too risky to put some of our house savings into for an arbitrage play. Warren Buffett likes it. So does that indicate safety? Let me just thank you for the question Levi. Let me just review for folks who haven't been following this closely as we have back in January, Microsoft announced it would buy Activision Blizzard for $95 a share. The deal is expected to close next year. At the moment, Activision shares are around $77. At the end of April, Warren Buffett said at the Berkshire Hathaway Annual Meeting that Berkshire owns 9.5 percent of Activision Blizzard, and it's because he said, sometimes I will see an arbitrage jail and I'll do it and I'm coding here, it looks like the odds are in our favor, but absolutely we can lose money on this company, fairly large sums of money depending on what happens if the deal blows up. So map, we can't give specific personalized guidance for Levi, but I don't know. I think the fact that Buffet himself is signaling like, yeah, we like our odds, but there's no guarantee. I feel like that in and of itself provides even more guidance.
Jason Moser: That's the guidance. These can be a dangerous effort through said at first, but it's the metaphor of picking up pennies in front of a steam roller. In this case, it's a little different though the spread is so wide and you've got buffered behind it. I have to say this is one of those arbitrage plays. Just speaking from my own personal perspective, I own shares of Activision Blizzard, not because of the arbitrage play. I've owned the shares for years, but it's one of those situations where I do think there's probably not as much downside because of you said the stock's at 77, well, that is just slightly above where Activision's been trading the last five years. I feel like even if the deal falls through regulatory concerns or what have you, I don't feel like it's a situation where the stock is actually going to plummet. It will fall, but maybe the downside isn't as sharp as it might be, say, for another arbitrage play. So maybe one of small bet for the average investor, I don't know.
Matt Argersinger: Jason, I feel like this is one of those situations. If you're interested, maybe make it a small percentage of your investing dollars.
Jason Moser: Yeah, I think that's fair. The old saw goes if something bookstore seems too good to be true usually is. It feels like in this case I'm with Matt, it does feel like this deal likely happens, and even if it doesn't, I mean, Activision Blizzard around zone is still a good business, so the downside is relatively limited, but you go back to the funds. I mean, it's funds are for building a house. So this is a big deal. You don't want to put that stuff at risk. I think it all goes back to just these are the types of situations. Maybe you have a small portion of your portfolio that's dedicated to special situations investing, which is what this would qualify as. Also remember, there are going to be short-term capital gains taxes here replay depending on the type of account that you use. But I tend to agree with Matt, it feels like the downside in this case is probably somewhat limited.
Chris Hill: Let's get to the stocks on our radar. Our man behind-the-glass, Dan Boyd is going to hit you with a question. Matt, you are up first. What are you looking at this week?
Matt Argersinger: Chris, I am looking at eBay and the tickers, E-B-A-Y, simple as the comps, everyone knows eBay and it's still an e-commerce powerhouse. I mean, they did 10 billion in annual revenue last year. Still have 147 million active buyers, 17 million active sellers, so it's a huge platform, huge marketplace. It's just a huge big-time cash-generator. Nearly 1.8 billion in free cash flow over the last 12 months. They've used a lot of that cash flow to reduce share count by buybacks. They bought back over 50 percent of the stock over the last nine years. Trades at a 4P multiple 11, they start paying a dividend 2019. They've raised that a few times already. I hate disagreeing with the market, but I think eBay is way too cheap right now.
Chris Hill: Dan, question about eBay.
Dan Boyd: You know, it's not too cheap, Chris. All the stuff that I want to buy on eBay [laughs] I got to tell you boys, I do like eBay as-a-service. It is a wonderful way to get things that are out of print or special or signed or anything that is commemorative, remember Bill or whatever. I love the service. I think that as the stock if it's super cheap right now, might be a good opportunity because I don't think eBay it's going anywhere.
Matt Argersinger: There you go, Dan.
Chris Hill: Jason Moser, what's on your radar?
Jason Moser: Keeping an eye on Qualcomm ticker, Q-C-O-M, I'm going to have a good fortune next week to interview CFO Akash Palkhiwala. We'll be talking hopefully about a wide range of topics, things like how they're handling the ongoing supply chain issues, Apple's moves to becoming more vertical. They have an ongoing partnership with Microsoft and of course, their ongoing efforts in building out 5G. But hey, it's also worth noting dairy founding affiliate of 6G and UT, a program at University of Texas that is working on the inevitable rollout of 6G and all of its applications. So it should be very fun and educational interview, and folks probably know I've recommended Qualcomm and both of my services here at the fools. [MUSIC] So I'm especially excited.
Chris Hill: Dan, question about Qualcomm.
Dan Boyd: Now, Qualcomm seems like one of those stocks from the '90s that has just stuck around for whatever reason, I'm sure that they have been very important in developing technology and stuff in the past. But all I can figure when they think of Qualcomm is like a landfill lines.
Jason Moser: Well, Dan, that's not really a question, but I'm going to put it into question forum and added to the interview next week. So thanks for the help. [laughs]
Chris Hill: A love the reference to landlines, Dan, of those two, do you have one you want to add to your watch list?
Dan Boyd: You know what Chris? As much as I like the old rotary phone, I think I'm going to have [laughs] to go with eBay on this one again it's service that I love. I think it's a great site.
Chris Hill: Matt Argersinger, Jason Moser guys, thanks so much for being here.
Matt Argersinger: Thank you.
Jason Moser: Thanks, Chris.
Chris Hill: That's going to do it for this week's Motley Fool Money radio show. Show is mixed by Dan Boyd. I'm Chris Hill, thanks for listening. We'll see you next time.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Chris Hill has positions in Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, DocuSign, Microsoft, PayPal Holdings, Roblox Corporation, and eBay. Dan Boyd has positions in Activision Blizzard, Amazon, and Berkshire Hathaway (B shares). Jason Moser has positions in Alphabet (C shares), Amazon, Apple, DocuSign, and PayPal Holdings. Jim Mueller, CFA has positions in Alphabet (A shares), Alphabet (C shares), Amazon, Microsoft, PayPal Holdings, and eBay and has the following options: long January 2023 $115 calls on Apple, long January 2023 $210 calls on Microsoft, long January 2024 $2,650 calls on Alphabet (C shares), long January 2024 $80 calls on Activision Blizzard, short January 2023 $125 calls on Apple, short January 2023 $220 calls on Microsoft, short January 2024 $2,700 calls on Alphabet (C shares), short January 2024 $82.50 puts on Activision Blizzard, short July 2022 $92.50 puts on PayPal Holdings, and short September 2022 $50 calls on eBay. Matthew Argersinger has positions in Activision Blizzard, Alphabet (C shares), Amazon, DocuSign, NVR, Netflix, PayPal Holdings, Roku, and eBay and has the following options: short July 2022 $2,000 puts on Alphabet (A shares) and short June 2022 $195 puts on Meta Platforms, Inc. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), DocuSign, FedEx, Meta Platforms, Inc., Microsoft, NVR, Netflix, PayPal Holdings, Qualcomm, Roblox Corporation, and Roku. The Motley Fool recommends Comcast, KB Home, and eBay and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $60 calls on DocuSign, 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 July 2022 $57.50 calls on eBay, 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. | Motley Fool senior analyst Jim Mueller analyzes the companies competing for Netflix's ad business, opportunities in the metaverse, and big tech's pursuit of streaming live sports. Chris Hill: Jason, I want to key in on one word Matt said at the end there and it hasn't, because I think that as much as anything, that sums up the mood for a lot of individual investors and also for the fund managers and institutional folks on Wall Street, there is a hesitancy to jump into this market with both feet. I expect a lot of the other home-builders, like NVR, and D Horton, are going to come out and say, "Now we actually think prices are going to stay roughly flat, maybe even slightly lower over the next fiscal year, so we'll have to see." | Jim Mueller, CFA has positions in Alphabet (A shares), Alphabet (C shares), Amazon, Microsoft, PayPal Holdings, and eBay and has the following options: long January 2023 $115 calls on Apple, long January 2023 $210 calls on Microsoft, long January 2024 $2,650 calls on Alphabet (C shares), long January 2024 $80 calls on Activision Blizzard, short January 2023 $125 calls on Apple, short January 2023 $220 calls on Microsoft, short January 2024 $2,700 calls on Alphabet (C shares), short January 2024 $82.50 puts on Activision Blizzard, short July 2022 $92.50 puts on PayPal Holdings, and short September 2022 $50 calls on eBay. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), DocuSign, FedEx, Meta Platforms, Inc., Microsoft, NVR, Netflix, PayPal Holdings, Qualcomm, Roblox Corporation, and Roku. The Motley Fool recommends Comcast, KB Home, and eBay and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $60 calls on DocuSign, 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 July 2022 $57.50 calls on eBay, and short March 2023 $130 calls on Apple. | Jim Mueller, CFA has positions in Alphabet (A shares), Alphabet (C shares), Amazon, Microsoft, PayPal Holdings, and eBay and has the following options: long January 2023 $115 calls on Apple, long January 2023 $210 calls on Microsoft, long January 2024 $2,650 calls on Alphabet (C shares), long January 2024 $80 calls on Activision Blizzard, short January 2023 $125 calls on Apple, short January 2023 $220 calls on Microsoft, short January 2024 $2,700 calls on Alphabet (C shares), short January 2024 $82.50 puts on Activision Blizzard, short July 2022 $92.50 puts on PayPal Holdings, and short September 2022 $50 calls on eBay. The Motley Fool has positions in and recommends Activision Blizzard, Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), DocuSign, FedEx, Meta Platforms, Inc., Microsoft, NVR, Netflix, PayPal Holdings, Qualcomm, Roblox Corporation, and Roku. The Motley Fool recommends Comcast, KB Home, and eBay and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $60 calls on DocuSign, 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 July 2022 $57.50 calls on eBay, and short March 2023 $130 calls on Apple. | In this podcast, Motley Fool senior analysts Matt Argersinger and Jason Moser discuss: The lack of clarity (at the moment) facing investors. Jim Mueller: Not right off, certainly not this year, probably not next year, it's going to take a little bit because Netflix and whoever wins, Google, Comcast, whoever, need to figure out how to serve the ads, who gets to see the ads, etc. Jim Mueller: Look for revenue growth as our management said at the end of the call, last quarter, I think the first quarter call, but for quite a while, Netflix's revenue growth is going to be still subscriber counts. |
20482.0 | 2022-06-29 00:00:00 UTC | Why Apple Stock Climbed on Wednesday | AAPL | https://www.nasdaq.com/articles/why-apple-stock-climbed-on-wednesday | nan | nan | What happened
Shares of Apple (NASDAQ: AAPL) climbed higher on Wednesday, adding as much as 2.4%. As of 12:42 p.m. ET today, the stock was up 1.3%.
The catalyst that sent the stock higher on a mixed market day was news that iPhone demand may be holding up better than investors expected, which could spell additional upside for the stock.
So what
After initiating supply chain checks in China, Wedbush analyst Daniel Ives concluded there have been "steady with slight improvements, despite the zero-COVID-driven demand issues." The Chinese government has acted swiftly, initiating lockdowns for some of the country's largest cities to curb the spread of the pandemic, which has caused intermittent delays in the manufacturing sector.
Apple has not been immune as the iPhone factories were temporarily shuttered earlier this year.
However, Ives' checks suggest iPhone sales could surprise to the upside. "We believe iPhone demand is holding up slightly better than expected," the analyst wrote, "despite the various supply issues that have plagued Apple and the rest of the tech sector." Furthermore, Ives believes that worry over the iPhone supply chain and production issues should peak in the June quarter, giving way to optimism regarding the coming launch of the iPhone 14, which is expected this fall.
Now what
It's important to note that any protracted economic downturn would weigh on the tech giant's stock, at least in the short term. With an average iPhone selling price of roughly $825, consumers would likely put off upgrading to the latest device, which in turn would pressure Apple's revenue.
The iPhone is by far the biggest contributor to Apple's revenue. In the March quarter, iPhone sales topped $50.5 billion, up 5.4% year over year, accounting for roughly 52% of the company's total revenue. In the event of a recession, sales could temporarily stall, which would spook investors.
That said, Apple dominates the global smartphone market, taking home roughly 44% of worldwide smartphone revenue last year. Additionally, with more than $192 billion in cash and marketable securities on its balance sheet, the company has the resources to weather any economic storm, and should be viewed as a safe haven for investors with a long-term outlook.
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Danny Vena has positions in Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | What happened Shares of Apple (NASDAQ: AAPL) climbed higher on Wednesday, adding as much as 2.4%. So what After initiating supply chain checks in China, Wedbush analyst Daniel Ives concluded there have been "steady with slight improvements, despite the zero-COVID-driven demand issues." The Chinese government has acted swiftly, initiating lockdowns for some of the country's largest cities to curb the spread of the pandemic, which has caused intermittent delays in the manufacturing sector. | What happened Shares of Apple (NASDAQ: AAPL) climbed higher on Wednesday, adding as much as 2.4%. So what After initiating supply chain checks in China, Wedbush analyst Daniel Ives concluded there have been "steady with slight improvements, despite the zero-COVID-driven demand issues." In the March quarter, iPhone sales topped $50.5 billion, up 5.4% year over year, accounting for roughly 52% of the company's total revenue. | What happened Shares of Apple (NASDAQ: AAPL) climbed higher on Wednesday, adding as much as 2.4%. The catalyst that sent the stock higher on a mixed market day was news that iPhone demand may be holding up better than investors expected, which could spell additional upside for the stock. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Danny Vena has positions in Apple. | What happened Shares of Apple (NASDAQ: AAPL) climbed higher on Wednesday, adding as much as 2.4%. The catalyst that sent the stock higher on a mixed market day was news that iPhone demand may be holding up better than investors expected, which could spell additional upside for the stock. In the March quarter, iPhone sales topped $50.5 billion, up 5.4% year over year, accounting for roughly 52% of the company's total revenue. |
20483.0 | 2022-06-29 00:00:00 UTC | A U.S. FCC commissioner urges Apple, Google to boot TikTok from app stores | AAPL | https://www.nasdaq.com/articles/a-u.s.-fcc-commissioner-urges-apple-google-to-boot-tiktok-from-app-stores | nan | nan | By Diane Bartz and Echo Wang
WASHINGTON/NEW YORK, June 29 (Reuters) - A Republican member of the Federal Communications Commission has urged the chief executives of Apple Inc AAPL.O and Alphabet Inc's GOOGL.O Google to kick Chinese-owned TikTok out of its app stores.
Brendan Carr, the FCC commissioner, said in a letter to the CEOs, dated June 24 and sent on FCC letterhead, that video-sharing app TikTok has collected vast troves of sensitive data about U.S. users that could be accessed by ByteDance staff in Beijing. ByteDance is TikTok's Chinese parent.
Carr tweeted details of the letter on Tuesday.
"TikTok is not just another video app. That's the sheep's clothing," Carr said on Twitter. "It harvests swaths of sensitive data that new reports show are being accessed in Beijing."
Carr asked the companies to either remove TikTok from their app stores by July 8 or explain to him why they did not plan to do so.
Carr's request is unusual given that the FCC does not have clear jurisdiction over the content of app stores. The FCC regulates the national security space usually through its authority to grant certain communications licenses to companies.
A TikTok spokeswoman said the company's engineers in locations outside of the United States, including China, can be granted access to U.S. user data "on an as-needed basis" and under "strict controls."
Google declined comment on Carr's letter, while Apple did not immediately respond to a request for comment.
TikTok has been under U.S. regulatory scrutiny over its collection of U.S. personal data. The Committee on Foreign Investment in the United States (CFIUS), which reviews deals by foreign acquirers for potential national security risks, ordered ByteDance in 2020 to divest TikTok because of fears that U.S. user data could be passed on to China's communist government.
To address these concerns, TikTok said earlier this month that it migrated the information of its U.S. users to servers at Oracle Corp ORCL.N.
A spokesperson for the U.S. Department of the Treasury, which chairs CFIUS, did not immediately respond to a request for comment.
"What we're seeing here from Commissioner Carr is a suggestion that at least some parts of the U.S. government don't think that this is enough," Richard Sofield, a national security partner at law firm Vinson & Elkins LLP, said about TikTok's partnership with Oracle.
(Reporting by Diane Bartz in Washington, D.C., and Echo Wang in New York; Editing by Leslie Adler)
((Diane.Bartz@thomsonreuters.com; 1 202 898 8313;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | By Diane Bartz and Echo Wang WASHINGTON/NEW YORK, June 29 (Reuters) - A Republican member of the Federal Communications Commission has urged the chief executives of Apple Inc AAPL.O and Alphabet Inc's GOOGL.O Google to kick Chinese-owned TikTok out of its app stores. A TikTok spokeswoman said the company's engineers in locations outside of the United States, including China, can be granted access to U.S. user data "on an as-needed basis" and under "strict controls." "What we're seeing here from Commissioner Carr is a suggestion that at least some parts of the U.S. government don't think that this is enough," Richard Sofield, a national security partner at law firm Vinson & Elkins LLP, said about TikTok's partnership with Oracle. | By Diane Bartz and Echo Wang WASHINGTON/NEW YORK, June 29 (Reuters) - A Republican member of the Federal Communications Commission has urged the chief executives of Apple Inc AAPL.O and Alphabet Inc's GOOGL.O Google to kick Chinese-owned TikTok out of its app stores. A TikTok spokeswoman said the company's engineers in locations outside of the United States, including China, can be granted access to U.S. user data "on an as-needed basis" and under "strict controls." Google declined comment on Carr's letter, while Apple did not immediately respond to a request for comment. | By Diane Bartz and Echo Wang WASHINGTON/NEW YORK, June 29 (Reuters) - A Republican member of the Federal Communications Commission has urged the chief executives of Apple Inc AAPL.O and Alphabet Inc's GOOGL.O Google to kick Chinese-owned TikTok out of its app stores. Brendan Carr, the FCC commissioner, said in a letter to the CEOs, dated June 24 and sent on FCC letterhead, that video-sharing app TikTok has collected vast troves of sensitive data about U.S. users that could be accessed by ByteDance staff in Beijing. The Committee on Foreign Investment in the United States (CFIUS), which reviews deals by foreign acquirers for potential national security risks, ordered ByteDance in 2020 to divest TikTok because of fears that U.S. user data could be passed on to China's communist government. | By Diane Bartz and Echo Wang WASHINGTON/NEW YORK, June 29 (Reuters) - A Republican member of the Federal Communications Commission has urged the chief executives of Apple Inc AAPL.O and Alphabet Inc's GOOGL.O Google to kick Chinese-owned TikTok out of its app stores. Brendan Carr, the FCC commissioner, said in a letter to the CEOs, dated June 24 and sent on FCC letterhead, that video-sharing app TikTok has collected vast troves of sensitive data about U.S. users that could be accessed by ByteDance staff in Beijing. A TikTok spokeswoman said the company's engineers in locations outside of the United States, including China, can be granted access to U.S. user data "on an as-needed basis" and under "strict controls." |
20484.0 | 2022-06-29 00:00:00 UTC | S&P 500 staggers to slightly lower close as quarter-end looms | AAPL | https://www.nasdaq.com/articles/sp-500-staggers-to-slightly-lower-close-as-quarter-end-looms | nan | nan | By Stephen Culp
NEW YORK, June 29 (Reuters) - The S&P 500 ended a seesaw session slightly down on Wednesday as investors limped toward the finish line of a downbeat month, a dismal quarter, and the worst first-half for the S&P 500 since President Richard Nixon's first term.
The three major U.S. stock indexes spent much of the session wavering between red and green.
"The market’s struggling to find direction," said Megan Horneman, chief investment officer at Verdence Capital Advisors in Hunt Valley, Maryland. "We had disappointing data, and the markets are waiting for earnings season, when we'll get more clarity" with respect to future earnings and an economic slowdown.
Market leaders Apple AAPL.O, Amazon.com AMZN.O and Microsoft MSFT.O provided the upside muscle, while economically sensitive chips .SOX small caps .RUT and transports .DJT were underperforming the broader market.
With the end of the month and the second quarter a day away, the benchmark S&P 500 has set a course for its biggest first-half percentage drop since 1970.
As for the Nasdaq, it was on its way to its worst-ever first-half performance, while the Dow appeared on track for its biggest January-June percentage drop since the financial crisis.
All three indexes were bound to post their second straight quarterly declines. That last time that happened was in 2015.
"We have a central bank that has had to pivot from a decades-old easy money policy to a tightening cycle," Horneman added. "This is new for a lot of investors."
"We’re seeing a repricing for what we expect to be a very different interest rate environment going forward."
According to preliminary data, the S&P 500 .SPX lost 3.13 points, or 0.08%, to end at 3,817.90 points, while the Nasdaq Composite .IXIC lost 4.62 points, or 0.04%, to 11,176.92. The Dow Jones Industrial Average .DJI rose 73.06 points, or 0.24%, to 31,020.05.
Benchmark Treasury yields have risen by over 1.606 percentage points so far in 2022, their biggest first-half jump since 1984. That explains why interest rate sensitive growth stocks .IGX have plunged over 26% year-to-date.
Federal Reserve officials in recent days have reiterated their determination to rein in inflation, setting expectations for their second consecutive 75 basis point interest rate hike in July, while expressing confidence that monetary tightening will not tip the economy into recession.
In economic news, U.S. Commerce Department data showed GDP contracted slightly more than previously stated in the first three months of the year, with consumer spending, which accounts for about 70% of the economy, contributing substantially less than originally reported.
This follows Tuesday's dire consumer confidence report, which showed consumer expectations sinking to their lowest level since March 2013.
Second-quarter reporting season remains several weeks away, and 130 of the companies in the S&P 500 have pre-announced. Of those, 45 have been positive and 77 have been negative, resulting in a negative/positive ratio of 1.7 stronger than the first quarter but weaker than a year ago, according to Refinitiv data.
What will investors be listening for in those earnings calls?
"Margin pressures, that’s the big concern, pricing pressures, scaling back plans for capex because of the slowdown, and if they see any improvement in the supply chain," Horneman said.
Packaged food company General Mills Inc GIS.N jumped after its sales beat estimates.
Bed Bath & Beyond Inc BBBY.O tumbled following the retailer's announcement that it had replaced chief executive officer Mark Tritton, hoping to reverse a slump.
(Reporting by Stephen Culp; additional reporting by Amruta Khandekar and Shreyashi Sanyal in Bangalore; Editing by David Gregorio)
((stephen.culp@thomsonreuters.com; 646-223-6076;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Market leaders Apple AAPL.O, Amazon.com AMZN.O and Microsoft MSFT.O provided the upside muscle, while economically sensitive chips .SOX small caps .RUT and transports .DJT were underperforming the broader market. By Stephen Culp NEW YORK, June 29 (Reuters) - The S&P 500 ended a seesaw session slightly down on Wednesday as investors limped toward the finish line of a downbeat month, a dismal quarter, and the worst first-half for the S&P 500 since President Richard Nixon's first term. Federal Reserve officials in recent days have reiterated their determination to rein in inflation, setting expectations for their second consecutive 75 basis point interest rate hike in July, while expressing confidence that monetary tightening will not tip the economy into recession. | Market leaders Apple AAPL.O, Amazon.com AMZN.O and Microsoft MSFT.O provided the upside muscle, while economically sensitive chips .SOX small caps .RUT and transports .DJT were underperforming the broader market. With the end of the month and the second quarter a day away, the benchmark S&P 500 has set a course for its biggest first-half percentage drop since 1970. According to preliminary data, the S&P 500 .SPX lost 3.13 points, or 0.08%, to end at 3,817.90 points, while the Nasdaq Composite .IXIC lost 4.62 points, or 0.04%, to 11,176.92. | Market leaders Apple AAPL.O, Amazon.com AMZN.O and Microsoft MSFT.O provided the upside muscle, while economically sensitive chips .SOX small caps .RUT and transports .DJT were underperforming the broader market. By Stephen Culp NEW YORK, June 29 (Reuters) - The S&P 500 ended a seesaw session slightly down on Wednesday as investors limped toward the finish line of a downbeat month, a dismal quarter, and the worst first-half for the S&P 500 since President Richard Nixon's first term. According to preliminary data, the S&P 500 .SPX lost 3.13 points, or 0.08%, to end at 3,817.90 points, while the Nasdaq Composite .IXIC lost 4.62 points, or 0.04%, to 11,176.92. | Market leaders Apple AAPL.O, Amazon.com AMZN.O and Microsoft MSFT.O provided the upside muscle, while economically sensitive chips .SOX small caps .RUT and transports .DJT were underperforming the broader market. The three major U.S. stock indexes spent much of the session wavering between red and green. "We had disappointing data, and the markets are waiting for earnings season, when we'll get more clarity" with respect to future earnings and an economic slowdown. |
20485.0 | 2022-06-29 00:00:00 UTC | Noteworthy ETF Inflows: QQQ, AAPL, MSFT, PEP | AAPL | https://www.nasdaq.com/articles/noteworthy-etf-inflows%3A-qqq-aapl-msft-pep | nan | nan | Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco QQQ (Symbol: QQQ) where we have detected an approximate $779.7 million dollar inflow -- that's a 0.5% increase week over week in outstanding units (from 546,300,000 to 549,050,000). Among the largest underlying components of QQQ, in trading today Apple Inc (Symbol: AAPL) is up about 1.7%, Microsoft Corporation (Symbol: MSFT) is up about 1.6%, and PepsiCo Inc (Symbol: PEP) is up by about 1.5%. For a complete list of holdings, visit the QQQ Holdings page » The chart below shows the one year price performance of QQQ, versus its 200 day moving average:
Looking at the chart above, QQQ's low point in its 52 week range is $269.28 per share, with $408.71 as the 52 week high point — that compares with a last trade of $283.93. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Among the largest underlying components of QQQ, in trading today Apple Inc (Symbol: AAPL) is up about 1.7%, Microsoft Corporation (Symbol: MSFT) is up about 1.6%, and PepsiCo Inc (Symbol: PEP) is up by about 1.5%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco QQQ (Symbol: QQQ) where we have detected an approximate $779.7 million dollar inflow -- that's a 0.5% increase week over week in outstanding units (from 546,300,000 to 549,050,000). These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. | Among the largest underlying components of QQQ, in trading today Apple Inc (Symbol: AAPL) is up about 1.7%, Microsoft Corporation (Symbol: MSFT) is up about 1.6%, and PepsiCo Inc (Symbol: PEP) is up by about 1.5%. For a complete list of holdings, visit the QQQ Holdings page » The chart below shows the one year price performance of QQQ, versus its 200 day moving average: Looking at the chart above, QQQ's low point in its 52 week range is $269.28 per share, with $408.71 as the 52 week high point — that compares with a last trade of $283.93. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ». | Among the largest underlying components of QQQ, in trading today Apple Inc (Symbol: AAPL) is up about 1.7%, Microsoft Corporation (Symbol: MSFT) is up about 1.6%, and PepsiCo Inc (Symbol: PEP) is up by about 1.5%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco QQQ (Symbol: QQQ) where we have detected an approximate $779.7 million dollar inflow -- that's a 0.5% increase week over week in outstanding units (from 546,300,000 to 549,050,000). For a complete list of holdings, visit the QQQ Holdings page » The chart below shows the one year price performance of QQQ, versus its 200 day moving average: Looking at the chart above, QQQ's low point in its 52 week range is $269.28 per share, with $408.71 as the 52 week high point — that compares with a last trade of $283.93. | Among the largest underlying components of QQQ, in trading today Apple Inc (Symbol: AAPL) is up about 1.7%, Microsoft Corporation (Symbol: MSFT) is up about 1.6%, and PepsiCo Inc (Symbol: PEP) is up by about 1.5%. Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco QQQ (Symbol: QQQ) where we have detected an approximate $779.7 million dollar inflow -- that's a 0.5% increase week over week in outstanding units (from 546,300,000 to 549,050,000). For a complete list of holdings, visit the QQQ Holdings page » The chart below shows the one year price performance of QQQ, versus its 200 day moving average: Looking at the chart above, QQQ's low point in its 52 week range is $269.28 per share, with $408.71 as the 52 week high point — that compares with a last trade of $283.93. |
20486.0 | 2022-06-29 00:00:00 UTC | Is Schwab Fundamental U.S. Broad Market Index ETF (FNDB) a Strong ETF Right Now? | AAPL | https://www.nasdaq.com/articles/is-schwab-fundamental-u.s.-broad-market-index-etf-fndb-a-strong-etf-right-now-2 | nan | nan | The Schwab Fundamental U.S. Broad Market Index ETF (FNDB) was launched on 08/13/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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 Charles Schwab. FNDB has been able to amass assets over $422.47 million, making it one of the larger ETFs in the Style Box - All Cap Value. FNDB, before fees and expenses, seeks to match the performance of the Russell RAFI US Index.
The Russell RAFI US Index measures the performance of the constituent companies by fundamental overall company scores.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 2.01%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 15.80% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
Taking into account individual holdings, Apple Inc (AAPL) accounts for about 4.04% of the fund's total assets, followed by Exxon Mobil Corp (XOM) and Chevron Corp (CVX).
The top 10 holdings account for about 18.99% of total assets under management.
Performance and Risk
The ETF has lost about -12.08% so far this year and is down about -4.29% in the last one year (as of 06/29/2022). In the past 52-week period, it has traded between $49.26 and $59.23.
The fund has a beta of 1.02 and standard deviation of 24.42% for the trailing three-year period, which makes FNDB a medium risk choice in this particular space. With about 1627 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Broad Market Index ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
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 $6.33 billion in assets, iShares Core S&P U.S. Value ETF has $11.06 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.
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Schwab Fundamental U.S. Broad Market Index ETF (FNDB): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
Chevron Corporation (CVX): Free Stock Analysis Report
Exxon Mobil Corporation (XOM): 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
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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. | Taking into account individual holdings, Apple Inc (AAPL) accounts for about 4.04% of the fund's total assets, followed by Exxon Mobil Corp (XOM) and Chevron Corp (CVX). 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. | Taking into account individual holdings, Apple Inc (AAPL) accounts for about 4.04% of the fund's total assets, followed by Exxon Mobil Corp (XOM) and Chevron Corp (CVX). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives Schwab Fundamental U.S. Broad Market Index ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. | Taking into account individual holdings, Apple Inc (AAPL) accounts for about 4.04% of the fund's total assets, followed by Exxon Mobil Corp (XOM) and Chevron Corp (CVX). Apple Inc. (AAPL): Free Stock Analysis Report The Schwab Fundamental U.S. Broad Market Index ETF (FNDB) was launched on 08/13/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Value category of the market. | Taking into account individual holdings, Apple Inc (AAPL) accounts for about 4.04% of the fund's total assets, followed by Exxon Mobil Corp (XOM) and Chevron Corp (CVX). Apple Inc. (AAPL): Free Stock Analysis Report The Schwab Fundamental U.S. Broad Market Index ETF (FNDB) was launched on 08/13/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Value category of the market. |
20487.0 | 2022-06-29 00:00:00 UTC | ITOT, FDIG: Big ETF Inflows | AAPL | https://www.nasdaq.com/articles/itot-fdig%3A-big-etf-inflows | nan | nan | Comparing units outstanding versus one week ago at the coverage universe of ETFs at ETF Channel, the biggest inflow was seen in the iShares Core S&P Total U.S. Stock Market ETF, which added 21,600,000 units, or a 4.8% increase week over week. Among the largest underlying components of ITOT, in morning trading today Apple is up about 1.6%, and Microsoft is up by about 1.6%.
And on a percentage change basis, the ETF with the biggest increase in inflows was the FDIG ETF, which added 250,000 units, for a 35.7% increase in outstanding units.
VIDEO: ITOT, FDIG: Big ETF Inflows
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Comparing units outstanding versus one week ago at the coverage universe of ETFs at ETF Channel, the biggest inflow was seen in the iShares Core S&P Total U.S. Stock Market ETF, which added 21,600,000 units, or a 4.8% increase week over week. Among the largest underlying components of ITOT, in morning trading today Apple is up about 1.6%, and Microsoft is up by about 1.6%. VIDEO: ITOT, FDIG: Big ETF Inflows The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Comparing units outstanding versus one week ago at the coverage universe of ETFs at ETF Channel, the biggest inflow was seen in the iShares Core S&P Total U.S. Stock Market ETF, which added 21,600,000 units, or a 4.8% increase week over week. And on a percentage change basis, the ETF with the biggest increase in inflows was the FDIG ETF, which added 250,000 units, for a 35.7% increase in outstanding units. VIDEO: ITOT, FDIG: Big ETF Inflows The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Comparing units outstanding versus one week ago at the coverage universe of ETFs at ETF Channel, the biggest inflow was seen in the iShares Core S&P Total U.S. Stock Market ETF, which added 21,600,000 units, or a 4.8% increase week over week. And on a percentage change basis, the ETF with the biggest increase in inflows was the FDIG ETF, which added 250,000 units, for a 35.7% increase in outstanding units. VIDEO: ITOT, FDIG: Big ETF Inflows The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Comparing units outstanding versus one week ago at the coverage universe of ETFs at ETF Channel, the biggest inflow was seen in the iShares Core S&P Total U.S. Stock Market ETF, which added 21,600,000 units, or a 4.8% increase week over week. Among the largest underlying components of ITOT, in morning trading today Apple is up about 1.6%, and Microsoft is up by about 1.6%. And on a percentage change basis, the ETF with the biggest increase in inflows was the FDIG ETF, which added 250,000 units, for a 35.7% increase in outstanding units. |
20488.0 | 2022-06-29 00:00:00 UTC | US STOCKS-S&P 500 limps to slightly lower close as quarter-end looms | AAPL | https://www.nasdaq.com/articles/us-stocks-sp-500-limps-to-slightly-lower-close-as-quarter-end-looms | nan | nan | By Stephen Culp
NEW YORK, June 29 (Reuters) - The S&P 500 ended a seesaw session slightly down on Wednesday as investors staggered toward the finish line of a downbeat month, a dismal quarter, and the worst first-half for Wall Street's benchmark index since President Richard Nixon's first term.
The three major U.S. stock indexes spent much of the session wavering between red and green. The Nasdaq joined the S&P 500, closing nominally lower, while the blue-chip Dow posted a modest gain.
"The market’s struggling to find direction," said Megan Horneman, chief investment officer at Verdence Capital Advisors in Hunt Valley, Maryland. "We had disappointing data, and the markets are waiting for earnings season, when we'll get more clarity" with respect to future earnings and an economic slowdown.
Market leaders Apple AAPL.O, Microsoft MSFT.O and Amazon.com AMZN.O provided the upside muscle, while economically sensitive chips .SOX small caps .RUT and transports .DJT were underperforming the broader market.
With the end of the month and the second quarter a day away, the S&P 500 has set a course for its biggest first-half percentage drop since 1970.
The Nasdaq was on its way to its worst-ever first-half performance, while the Dow appeared on track for its biggest January-June percentage drop since the financial crisis.
All three indexes were bound to post their second straight quarterly declines. That last time that happened was in 2015.
"We have a central bank that has had to pivot from a decades-old easy money policy to a tightening cycle," Horneman added. "This is new for a lot of investors."
"We’re seeing a repricing for what we expect to be a very different interest rate environment going forward."
The Dow Jones Industrial Average .DJIrose 82.32 points, or 0.27%, to 31,029.31, the S&P 500 .SPXlost 2.72 points, or 0.07%, to 3,818.83 and the Nasdaq Composite .IXICdropped 3.65 points, or 0.03%, to 11,177.89.
Of the 11 major sectors of the S&P 500, five lost ground on the day, with energy stocks .SPNY suffering the largest percentage drop. Healthcare .SPXHC led the gainers.
Benchmark Treasury yields have risen by over 1.606 percentage points so far in 2022, their biggest first-half jump since 1984. That explains why interest rate sensitive growth stocks .IGX have plunged over 26% year-to-date.
Federal Reserve officials in recent days have reiterated their determination to rein in inflation, setting expectations for their second consecutive 75 basis point interest rate hike in July, while expressing confidence that monetary tightening will not tip the economy into recession.
In economic news, U.S. Commerce Department data showed GDP contracted slightly more than previously stated in the first three months of the year. Consumer spending, which accounts for about 70% of the economy, contributed substantially less than originally reported.
A day earlier, a dire consumer confidence report showed consumer expectations sinking to their lowest level since March 2013.
Second-quarter reporting season remains several weeks away, and 130 of the companies in the S&P 500 have pre-announced. Of those, 45 have been positive and 77 have been negative, resulting in a negative/positive ratio of 1.7 stronger than the first quarter but weaker than a year ago, according to Refinitiv data.
What will investors be listening for in those earnings calls?
"Margin pressures, that’s the big concern, pricing pressures, scaling back plans for capex because of the slowdown, and if they see any improvement in the supply chain," Horneman said.
Packaged food company General Mills Inc GIS.N jumped 6.3% after its sales beat estimates.
Bed Bath & Beyond Inc BBBY.O tumbled 23.6% following the retailer's announcement that it had replaced chief executive officer Mark Tritton, hoping to reverse a slump.
Package deliverer Fedex Corp FDX.N dropped 2.6% in the wake of its disappointing margin forecast for its ground unit.
Declining issues outnumbered advancing ones on the NYSE by a 1.96-to-1 ratio; on Nasdaq, a 1.79-to-1 ratio favored decliners.
The S&P 500 posted 1 new 52-week highs and 36 new lows; the Nasdaq Composite recorded 14 new highs and 284 new lows.
Volume on U.S. exchanges was 11.55 billion shares, compared with the 12.79 billion average over the last 20 trading days.
(Reporting by Stephen Culp; additional reporting by Amruta Khandekar and Shreyashi Sanyal in Bangalore; Editing by David Gregorio)
((stephen.culp@thomsonreuters.com; 646-223-6076;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Market leaders Apple AAPL.O, Microsoft MSFT.O and Amazon.com AMZN.O provided the upside muscle, while economically sensitive chips .SOX small caps .RUT and transports .DJT were underperforming the broader market. By Stephen Culp NEW YORK, June 29 (Reuters) - The S&P 500 ended a seesaw session slightly down on Wednesday as investors staggered toward the finish line of a downbeat month, a dismal quarter, and the worst first-half for Wall Street's benchmark index since President Richard Nixon's first term. "The market’s struggling to find direction," said Megan Horneman, chief investment officer at Verdence Capital Advisors in Hunt Valley, Maryland. | Market leaders Apple AAPL.O, Microsoft MSFT.O and Amazon.com AMZN.O provided the upside muscle, while economically sensitive chips .SOX small caps .RUT and transports .DJT were underperforming the broader market. With the end of the month and the second quarter a day away, the S&P 500 has set a course for its biggest first-half percentage drop since 1970. A day earlier, a dire consumer confidence report showed consumer expectations sinking to their lowest level since March 2013. | Market leaders Apple AAPL.O, Microsoft MSFT.O and Amazon.com AMZN.O provided the upside muscle, while economically sensitive chips .SOX small caps .RUT and transports .DJT were underperforming the broader market. By Stephen Culp NEW YORK, June 29 (Reuters) - The S&P 500 ended a seesaw session slightly down on Wednesday as investors staggered toward the finish line of a downbeat month, a dismal quarter, and the worst first-half for Wall Street's benchmark index since President Richard Nixon's first term. Federal Reserve officials in recent days have reiterated their determination to rein in inflation, setting expectations for their second consecutive 75 basis point interest rate hike in July, while expressing confidence that monetary tightening will not tip the economy into recession. | Market leaders Apple AAPL.O, Microsoft MSFT.O and Amazon.com AMZN.O provided the upside muscle, while economically sensitive chips .SOX small caps .RUT and transports .DJT were underperforming the broader market. "We had disappointing data, and the markets are waiting for earnings season, when we'll get more clarity" with respect to future earnings and an economic slowdown. Of the 11 major sectors of the S&P 500, five lost ground on the day, with energy stocks .SPNY suffering the largest percentage drop. |
20489.0 | 2022-06-29 00:00:00 UTC | US STOCKS-Wall St set for subdued open as Fed hawks push for faster rate hikes | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-st-set-for-subdued-open-as-fed-hawks-push-for-faster-rate-hikes | nan | nan | By Amruta Khandekar
June 29 (Reuters) - U.S. stock index futures struggled for direction on Wednesday after several Federal Reserve policymakers made a case for faster interest rate hikes to tamp down inflation as a string of recent data continued to paint a dour picture for the economy.
The latest data highlighted the contraction of the U.S. economy in the first quarter amid a record trade deficit and followed a Tuesday report that showed U.S. consumer confidence hitting a 16-month low.
Market participants, who are fretting about the impact of hefty rate increases on the U.S. economy, focused on a speech by Fed Chair Jerome Powell at a European Central Bank forum. His comments will be parsed for any change in the Fed's hawkish stance on tackling inflation.
Investors also digested a report that said Cleveland Federal Reserve Bank President Loretta Mester advocated for another 75 basis points (bps) interest rate hike in the U.S. central bank's July meeting, if economic conditions remain the same.
San Francisco Fed President Mary Daly and New York Fed President John Williams on Tuesday backed further rapid interest rate hikes and pushed back against fears that sharply higher borrowing costs will trigger a steep downturn.
"They're (markets) not taking it in stride, that's for sure. Right now when you have these sort of negative confluences, all coming together at one time, that keeps people on the sidelines, unwilling to step up and become buyers," said Robert Pavlik, senior portfolio manager at Dakota Wealth Management.
The benchmark S&P 500 .SPX was on track for its biggest drop in the first half of a year since 1970, and along with the Dow and the Nasdaq was headed toward a second straight quarterly decline for the first time since 2015.
At 8:48 a.m. ET, Dow e-minis 1YMcv1 were up 42 points, or 0.14%, S&P 500 e-minis EScv1 remained unchanged, and Nasdaq 100 e-minis NQcv1 were down 15.5 points, or 0.13%.
Traders pointed to quarter-end rebalancing of portfolios also feeding into higher volatility.
Shares of Tesla TSLA.O led declines among growth stocks, including Apple Inc AAPL.O, Netflix Inc NFLX.O and Amazon.com Inc AMZN.O, which fell between 0.1% and 1% in premarket trading.
General Mills Inc GIS.N gained 2.9% after the Cheerios maker's sales surpassed estimates despite higher prices.
Pinterest Inc PINS.N gained 4.1% after the social media platform said former Alphabet Inc GOOGL.O executive, Bill Ready, would replace its long-time chief executive officer who is stepping down.
Bed Bath & Beyond Inc BBBY.O tumbled 12.7% after the home goods retailer reported a drop in quarterly comparable sales and said its CEO, Mark Tritton, had stepped down
(Reporting by Amruta Khandekar and Shreyashi Sanyal; Editing by Vinay Dwivedi and Anil D'Silva)
((Amruta.Khandekar@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. | Shares of Tesla TSLA.O led declines among growth stocks, including Apple Inc AAPL.O, Netflix Inc NFLX.O and Amazon.com Inc AMZN.O, which fell between 0.1% and 1% in premarket trading. By Amruta Khandekar June 29 (Reuters) - U.S. stock index futures struggled for direction on Wednesday after several Federal Reserve policymakers made a case for faster interest rate hikes to tamp down inflation as a string of recent data continued to paint a dour picture for the economy. The latest data highlighted the contraction of the U.S. economy in the first quarter amid a record trade deficit and followed a Tuesday report that showed U.S. consumer confidence hitting a 16-month low. | Shares of Tesla TSLA.O led declines among growth stocks, including Apple Inc AAPL.O, Netflix Inc NFLX.O and Amazon.com Inc AMZN.O, which fell between 0.1% and 1% in premarket trading. Investors also digested a report that said Cleveland Federal Reserve Bank President Loretta Mester advocated for another 75 basis points (bps) interest rate hike in the U.S. central bank's July meeting, if economic conditions remain the same. San Francisco Fed President Mary Daly and New York Fed President John Williams on Tuesday backed further rapid interest rate hikes and pushed back against fears that sharply higher borrowing costs will trigger a steep downturn. | Shares of Tesla TSLA.O led declines among growth stocks, including Apple Inc AAPL.O, Netflix Inc NFLX.O and Amazon.com Inc AMZN.O, which fell between 0.1% and 1% in premarket trading. Investors also digested a report that said Cleveland Federal Reserve Bank President Loretta Mester advocated for another 75 basis points (bps) interest rate hike in the U.S. central bank's July meeting, if economic conditions remain the same. San Francisco Fed President Mary Daly and New York Fed President John Williams on Tuesday backed further rapid interest rate hikes and pushed back against fears that sharply higher borrowing costs will trigger a steep downturn. | Shares of Tesla TSLA.O led declines among growth stocks, including Apple Inc AAPL.O, Netflix Inc NFLX.O and Amazon.com Inc AMZN.O, which fell between 0.1% and 1% in premarket trading. The latest data highlighted the contraction of the U.S. economy in the first quarter amid a record trade deficit and followed a Tuesday report that showed U.S. consumer confidence hitting a 16-month low. Market participants, who are fretting about the impact of hefty rate increases on the U.S. economy, focused on a speech by Fed Chair Jerome Powell at a European Central Bank forum. |
20490.0 | 2022-06-29 00:00:00 UTC | Three Value Stocks to Consider For Your Bargain Hunting in 2022 | AAPL | https://www.nasdaq.com/articles/three-value-stocks-to-consider-for-your-bargain-hunting-in-2022 | nan | nan | As the age-old saying goes, “everybody is a genius in a bull market,” but what motto is most suitable for such unprecedented, trying times? With inflation at a 40-year high, the Federal Reserve remaining steadfast in increasing interest rates to combat it, and 6 in every 10 Americans forecasting a looming recession, according to a recent survey conducted by the Gallup poll, the street is eerily silent. And the recent string of job cuts and hiring slowdowns already makes one wonder if this is 2008 all over again.
Fortunately, if an investor has time on her side, the gloom and doom can and should be greeted with optimism. Any young opportunist will want to take full advantage of what could be a once-in-a-lifetime, generational opportunity to score high-quality, value stocks at steep discounts. Better yet, such investments won’t even require much of your attention.
To some, such an approach may seem boring, but the goal is not about having fun – it is about building wealth and securing a financially stress-free future.
So, where exactly are these stock market gems? Like most opportunities, they are right in front of us, and we just need to act at the right time!
Technology
The first sector to dive into, which may be the most exciting among them all, is the technology sector. Without having to look too far, Apple (AAPL) and Microsoft (MSFT) present themselves well.
Apple, the world’s most valuable company by market capitalization, is currently down from its 52-week high of $182.27 trading for $141.66 a share which equates to a change in the share price of 22.3% whereas Microsoft plummeted from its 52-week high of $349.67 to $267.70 equating to an even greater change rate of 23.4%.
Of course, share prices alone should never be the determinant to executing an investment so it is noteworthy that Apple’s P/E ratio is sitting at 23 while Microsoft’s P/E ratio is nominally higher at 27.9 – multiples that are in the ballpark of Cola-Cola (KO) and Proctor & Gamble (PG) which is crazy considering the fact that these two technology leaders continue to create our digital futures.
Moreover, the sheer combination of continued superior financial performance and focus on growth by both these names continue to warrant investor attention.
Apple’s recent Worldwide Developer Conference 2022 showcased iOS16, watchOS 9, and the new iPadOS16. Apple confirmed two new laptops and the M2 processor that can handle 24GB. The company’s buy-now-pay-later is arguably one of the biggest moves in the financial domain this season. Further, its moves into the AR/VR space along with Apple glass could open new lucrative markets.
Apple’s top line has grown from $274.5 billion in 2020 to $365.8 billion in 2021. The figure is further expected to balloon to nearly $415 billion in 2023. At the same time, its EPS is expected to expand at a faster clip from $3.28 in 2020 to $6.5 in 2023. This implies a strong moat and a firm grip over margins. Wall Street is already seeing a 34.7% potential upside in the stock with a Strong Buy consensus rating and an average price target of $185.13.
Further, Apple has a return on total assets of 29% and a return on total capital of 38%, whereas the industry median does not score above 5% on either of these metrics. The third important point where the company actually scores high is its net income per employee of almost $650,000, which shows that despite its global presence, Apple is highly efficient in utilizing its manpower.
Microsoft, too, has had a dominant position in its market for decades now and is probably making bigger moves than its peers.
At first glance, the name Microsoft only brings WindowsOS and spreadsheets to one’s mind. But there’s more under the surface.
Its recent Activision Blizzard acquisition makes it the third biggest name in gaming, Azure puts it far ahead in the Cloud space and LinkedIn makes it a major name in social networks, and GitHub, too, is owned by Microsoft. This level of omnipresence is more than hard to replicate.
Microsoft’s top line has expanded from $143 billion in 2020 to $168 billion in 2022 and is expected to reach ~$227 billion in 2023. Concurrently, EPS is expected to jump to $10.7 in 2023 from $5.88 in 2020. Analysts have a Strong Buy consensus rating on the stock alongside a price target of $352.77 which implies a 37.54% potential upside.
Microsoft, too, scores high on return on total capital and return on total assets at 22% and 21%, respectively. Further, its net income per employee at the $400,000 level is far ahead of the industry median of ~8,000 and highlights its scale of efficiency even after decades of ruling its market.
Financials
However, if technology investments aren’t quite your thing, the financial sector has been on sale for quite some time, and until interest rates rise, it may remain at attractive valuations.
An obvious pick that has become the largest bank in the United States and the world’s largest bank by market capitalization is JPMorgan Chase (JPM). As interest rates were knocked to zero at the onset of the COVID-19 pandemic in 2020, JPMorgan’s share price began its descent as one of its key revenue streams from interest-bearing loans was suddenly placed on pause.
Currently, JPMorgan’s current share price is $117.32, which is down from a 52-week high of $172.96, making for a 32.2% change with a P/E ratio at a low of just 8.7.
Looking ahead, as the Federal Reserve begins to steadily raise rates, banks across the board will be one of the main beneficiaries; they will experience stronger margins, resulting in more revenue on the balance sheet, which will likely rally shareholders for JPMorgan’s share price comeback.
Moreover, JPMorgan, which was founded in 1799 has weathered both the 1929 and 2008 crashes. Top-line of this financial behemoth increased from ~$102.5 billion in 2020 to ~$131 billion in 2021. The figure is expected to further rise to $136.2 billion in 2023. Simultaneously, EPS is expected to reach $12.8 in 2023 from ~$8.5 in 2020.
Additionally, the 28.4% share price slide in 2022 so far means the stock now offers a dividend yield of 3.32%. The Street has a Moderate Buy consensus rating on JPMorgan alongside a price target of $155.11 which implies a potential upside of 33.92%.
JPMorgan's return on equity at 16% is almost 33% higher than the financial industry median and its net income per employee at $150,000 levels is nearly 50% higher than the financial industry's median. Moreover, the financial giant has a price-to-sales ratio of 2.66 and a price-to-free cash flow ratio of 5.10. This implies, that investors are paying nearly 2.5 times for each sales dollar the company generates.
Closing Note
Earlier this year, Mr. Buffett bemoaned a lack of buying opportunities. The steep decline over the past few months has already made these three names attractive bargains, and if the Fed’s stance continues, more names might be coming up for seekers of value.
Read full Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Without having to look too far, Apple (AAPL) and Microsoft (MSFT) present themselves well. With inflation at a 40-year high, the Federal Reserve remaining steadfast in increasing interest rates to combat it, and 6 in every 10 Americans forecasting a looming recession, according to a recent survey conducted by the Gallup poll, the street is eerily silent. As interest rates were knocked to zero at the onset of the COVID-19 pandemic in 2020, JPMorgan’s share price began its descent as one of its key revenue streams from interest-bearing loans was suddenly placed on pause. | Without having to look too far, Apple (AAPL) and Microsoft (MSFT) present themselves well. Analysts have a Strong Buy consensus rating on the stock alongside a price target of $352.77 which implies a 37.54% potential upside. The Street has a Moderate Buy consensus rating on JPMorgan alongside a price target of $155.11 which implies a potential upside of 33.92%. | Without having to look too far, Apple (AAPL) and Microsoft (MSFT) present themselves well. Apple, the world’s most valuable company by market capitalization, is currently down from its 52-week high of $182.27 trading for $141.66 a share which equates to a change in the share price of 22.3% whereas Microsoft plummeted from its 52-week high of $349.67 to $267.70 equating to an even greater change rate of 23.4%. Of course, share prices alone should never be the determinant to executing an investment so it is noteworthy that Apple’s P/E ratio is sitting at 23 while Microsoft’s P/E ratio is nominally higher at 27.9 – multiples that are in the ballpark of Cola-Cola (KO) and Proctor & Gamble (PG) which is crazy considering the fact that these two technology leaders continue to create our digital futures. | Without having to look too far, Apple (AAPL) and Microsoft (MSFT) present themselves well. Further, its net income per employee at the $400,000 level is far ahead of the industry median of ~8,000 and highlights its scale of efficiency even after decades of ruling its market. Financials However, if technology investments aren’t quite your thing, the financial sector has been on sale for quite some time, and until interest rates rise, it may remain at attractive valuations. |
20491.0 | 2022-06-29 00:00:00 UTC | Netflix (NFLX) Pledges to Localize Payment Methods in APAC | AAPL | https://www.nasdaq.com/articles/netflix-nflx-pledges-to-localize-payment-methods-in-apac | nan | nan | Netflix NFLX is looking to localize payment methods in the Asia Pacific region to make subscriptions easier for streamers.
Instead of mandating the usual credit or debit card for their subscription, streamers can use alternative payment methods, including Unified Payments Interface (UPI), digital wallet and direct carrier billing.
According to Netflix, the number of new subscribers signing up with an alternative payment method more than tripled between 2020 and 2021. At the same time, the company added 16 new payment methods. The company added that it adheres to the payment card industry’s standards of keeping customer card data secure, which includes not storing CVV numbers.
Per The Global Payments Report, digital wallets will make up 72% of e-commerce transactions in APAC by 2025. Currently, digital wallets, direct carrier billing and bank-based payments are some of the most popular payment methods among Netflix’s new signups.
In India, Netflix was the first merchant to launch UPI autopay. In Indonesia, the mobile wallet service, GoPay, was the first e-money payment option that Netflix offered. Netflix handles retail payments such as gift cards, in addition to traditional credit, debit and prepaid cards.
Even in more mature markets, like South Korea and Taiwan, where card payments are still the norm, there’s a strong demand for direct carrier billing, along with an increased growth in digital wallets.
Netflix, Inc. Price and Consensus
Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote
Netflix Eyes Asia to Address Subscriber Growth Woes
Netflix is setting its eyes on the Asian market to fuel its growth in the upcoming years after experiencing an unexpected retreat in the number of paid subscribers. In the first quarter of 2022, Netflix lost 640,000 subscribers in the United States and Canada, 350,000 subscribers in Latin America, and 300,000 subscribers in Europe, the Middle East, and Africa (“EMEA”). The Asia Pacific was the only region where paying subscribers grew by 1.1 million.
Asia-Pacific has been the engine of Netflix’s growth over the past year and is expected to be the biggest driver of further expansion. The Asia-Pacific region currently accounts for 15% of Netflix’s 221.6 million global subscribers.
However, the pace of revenue growth is the slowest since records began in 2017, after low-cost mobile plans were introduced in Asia and prices were slashed in India. The average revenue per membership fell 5% to $9.21 per month in the Asia Pacific, compared with a 5% increase to $14.91 in the United States and Canada.
Given the rising movie and original show production costs, these lower-priced plans might not be sustainable in the long term. Netflix has shown interest in bringing advertising to its platform. Although the plan will undoubtedly diversify revenue sources, Netflix might find it difficult to win market share, given the huge proliferation of ad-supported video streamers in these markets.
Moreover, this Zacks Rank #4 (Sell) company faces stiff competition in the region from competing streaming platforms, like Disney DIS owned Hotstar, and Viu, owned by Hong Kong-based PCCW Media. Netflix had 6.8 million subscribers in Southeast Asia, compared with Viu’s 7 million and Hotstar’s 7.2 million, at the end of 2021, according to data from Singapore-based media consultancy, Media Partners Asia.
Besides, the near-term outlook is not enthusiastic as Netflix expects to lose two million paid subscribers in second-quarter 2022, owing to significant competition from the likes of Apple’s AAPL Apple TV+ and Amazon’s AMZN Prime Video services in international markets.
Apple TV+ outbid Netflix to win the rights to Sugar. Apple TV+ is gaining a solid reputation, with Ted Lasso winning multiple Emmy Awards and CODA winning three Academy Awards.
Disney recently began offering its streaming service, Disney+, in 16 countries across the Middle East and North Africa. Given the breadth of content of Disney+, the streaming platform is expected to grab the second spot, with a subscriber base of 6.5 million in the region by 2027, trailing only Netflix, which is likely to have a viewer base of 11 million per Digital TV Research data. Amazon is expected to outperform Starzplay, with 4.8 million subscribers, to grab the third spot.
Nonetheless, Netflix is expected to add 5.29, 4.7 and 3.7 million subscribers in 2022, 2023 and 2024, respectively, in APAC.
The company has been leveraging the talent of local producers in Asia lately and some of its bets have turned into home runs such as Squid Game, The White Tiger and Crash Landing on You.
Netflix is bringing back its hit Korean urban fantasy action series, Sweet Home for two more seasons. Lee Eung-bok, who directed the first season of Sweet Home, is also set to helm the K-drama’s new seasons.
Recently, Netflix launched a remake of the popular Spanish series Money Heist for its Korean audiences. This production showcases the strong efforts made by the production team to test successful western titles become big hits in Asia as well.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Besides, the near-term outlook is not enthusiastic as Netflix expects to lose two million paid subscribers in second-quarter 2022, owing to significant competition from the likes of Apple’s AAPL Apple TV+ and Amazon’s AMZN Prime Video services in international markets. Apple Inc. (AAPL): Free Stock Analysis Report Even in more mature markets, like South Korea and Taiwan, where card payments are still the norm, there’s a strong demand for direct carrier billing, along with an increased growth in digital wallets. | Besides, the near-term outlook is not enthusiastic as Netflix expects to lose two million paid subscribers in second-quarter 2022, owing to significant competition from the likes of Apple’s AAPL Apple TV+ and Amazon’s AMZN Prime Video services in international markets. Apple Inc. (AAPL): Free Stock Analysis Report Instead of mandating the usual credit or debit card for their subscription, streamers can use alternative payment methods, including Unified Payments Interface (UPI), digital wallet and direct carrier billing. | Besides, the near-term outlook is not enthusiastic as Netflix expects to lose two million paid subscribers in second-quarter 2022, owing to significant competition from the likes of Apple’s AAPL Apple TV+ and Amazon’s AMZN Prime Video services in international markets. Apple Inc. (AAPL): Free Stock Analysis Report Netflix, Inc. Price and Consensus Netflix, Inc. price-consensus-chart | Netflix, Inc. Quote Netflix Eyes Asia to Address Subscriber Growth Woes Netflix is setting its eyes on the Asian market to fuel its growth in the upcoming years after experiencing an unexpected retreat in the number of paid subscribers. | Besides, the near-term outlook is not enthusiastic as Netflix expects to lose two million paid subscribers in second-quarter 2022, owing to significant competition from the likes of Apple’s AAPL Apple TV+ and Amazon’s AMZN Prime Video services in international markets. Apple Inc. (AAPL): Free Stock Analysis Report Netflix NFLX is looking to localize payment methods in the Asia Pacific region to make subscriptions easier for streamers. |
20492.0 | 2022-06-29 00:00:00 UTC | US STOCKS-Futures edge lower as Fed hawks push for faster rate hikes | AAPL | https://www.nasdaq.com/articles/us-stocks-futures-edge-lower-as-fed-hawks-push-for-faster-rate-hikes | nan | nan | By Amruta Khandekar
June 29 (Reuters) - U.S. stock index futures dipped on Wednesday after several Federal Reserve policymakers made the case for faster interest rate hikes to bring down high inflation.
Investors are now awaiting more data to determine whether the U.S. economy can withstand hefty rate hikes. Data on Tuesday showed U.S. consumer confidence dropped to a 16-month low in June on worries about high inflation and growing risks of a recession.
Fed Chair Jerome Powell is due to speak at a European Central Bank forum later in the day. His comments will be parsed for any change in the Fed's hawkish stance on tackling inflation.
Markets also digested a report that said Cleveland Federal Reserve Bank President Loretta Mester advocated for another 75 basis points (bps) interest rate hike in the U.S. central bank's July meeting, if economic conditions remain the same.
San Francisco Fed President Mary Daly and New York Fed President John Williams on Tuesday backed further rapid interest rate hikes and pushed back against fears that sharply higher borrowing costs will trigger a steep downturn.
The benchmark S&P 500 .SPX was on track for its biggest drop in the first half of a year since 1970, and along with the Dow and the Nasdaq was headed towards a second straight quarterly decline for the first time since 2015.
The Department of Commerce will release its final estimates for first-quarter gross domestic product (GDP) at 8:30 am ET, expected to show a 1.5% annualized fall in GDP.
At 7:00 a.m. ET, Dow e-minis 1YMcv1 were down 28 points, or 0.09%, S&P 500 e-minis EScv1 were down 8.25 points, or 0.22%, and Nasdaq 100 e-minis NQcv1 were down 34.5 points, or 0.3%.
Shares of Tesla TSLA.O led declines among growth stocks, including Apple Inc AAPL.O, Netflix Inc NFLX.O and Amazon.com Inc AMZN.O which fell between 0.5% and 1.5% in premarket trading.
Pinterest Inc PINS.N gained 3.2% after the social media platform said former Alphabet Inc GOOGL.O executive, Bill Ready would replace its long-time chief executive officer who is stepping down.
(Reporting by Amruta Khandekar; Editing by Vinay Dwivedi)
((Amruta.Khandekar@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. | Shares of Tesla TSLA.O led declines among growth stocks, including Apple Inc AAPL.O, Netflix Inc NFLX.O and Amazon.com Inc AMZN.O which fell between 0.5% and 1.5% in premarket trading. By Amruta Khandekar June 29 (Reuters) - U.S. stock index futures dipped on Wednesday after several Federal Reserve policymakers made the case for faster interest rate hikes to bring down high inflation. Data on Tuesday showed U.S. consumer confidence dropped to a 16-month low in June on worries about high inflation and growing risks of a recession. | Shares of Tesla TSLA.O led declines among growth stocks, including Apple Inc AAPL.O, Netflix Inc NFLX.O and Amazon.com Inc AMZN.O which fell between 0.5% and 1.5% in premarket trading. Markets also digested a report that said Cleveland Federal Reserve Bank President Loretta Mester advocated for another 75 basis points (bps) interest rate hike in the U.S. central bank's July meeting, if economic conditions remain the same. San Francisco Fed President Mary Daly and New York Fed President John Williams on Tuesday backed further rapid interest rate hikes and pushed back against fears that sharply higher borrowing costs will trigger a steep downturn. | Shares of Tesla TSLA.O led declines among growth stocks, including Apple Inc AAPL.O, Netflix Inc NFLX.O and Amazon.com Inc AMZN.O which fell between 0.5% and 1.5% in premarket trading. By Amruta Khandekar June 29 (Reuters) - U.S. stock index futures dipped on Wednesday after several Federal Reserve policymakers made the case for faster interest rate hikes to bring down high inflation. Markets also digested a report that said Cleveland Federal Reserve Bank President Loretta Mester advocated for another 75 basis points (bps) interest rate hike in the U.S. central bank's July meeting, if economic conditions remain the same. | Shares of Tesla TSLA.O led declines among growth stocks, including Apple Inc AAPL.O, Netflix Inc NFLX.O and Amazon.com Inc AMZN.O which fell between 0.5% and 1.5% in premarket trading. By Amruta Khandekar June 29 (Reuters) - U.S. stock index futures dipped on Wednesday after several Federal Reserve policymakers made the case for faster interest rate hikes to bring down high inflation. Investors are now awaiting more data to determine whether the U.S. economy can withstand hefty rate hikes. |
20493.0 | 2022-06-29 00:00:00 UTC | Apple Stock Remains Solid Despite Mounting Inflation Concerns | AAPL | https://www.nasdaq.com/articles/apple-stock-remains-solid-despite-mounting-inflation-concerns | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Apple (NASDAQ:AAPL) stock hasn’t had a great 2022 but it isn’t alone.
It’s no secret that the tech sector has been pummeled. Apple stock has fallen more than 24% year to date.
That isn’t much better than the S&P 500 IT Index which has fallen more than 27% YTD.
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Still, there are several reasons to believe that Apple will outperform in whatever environment the economy heads into next. Yes, there are risks, but among tech stocks, Apple is the cream of the crop.
AAPL Apple $137.44
A Closer Look at AAPL Stock
Much of the reason that the tech sector has been pummeled so badly is its inherent instability. When quantitative policy is eased, which coincides with good times, tech performs well generally.
Tech companies can grow their revenues in such times because there’s a lot of money sloshing around in the economy. That’s true of most tech companies whether they’re profitable, like Apple, or not, as are many tech companies.
Now that quantitative policy is quickly tightening, tech is plummeting. But that’s why Apple should be a tech stock that investors purchase: It is massively profitable and inherently stable.
The company’s balance sheet ensures that is the case. However you slice it, Apple’s balance sheet looks very healthy. The company has $350.7 billion in total assets balanced by $283.3 billion in total liabilities.
Equally important, Apple counted $51.5 billion in cash and securities in its most recent earnings report.
Apple can maneuver much better than its competitors because its fundamental strengths are so substantial. It is a tech company in name, but fundamentally it bears few of the negative hallmarks of tech.
A Strong Dividend
Investors are increasingly interested in dividend-bearing stocks for their stability and income as inflation continues to run rampant.
Apple’s dividend yield is a low 0.67% but the good news is that Apple has been growing that dividend at a rate of 9.5% over the past five years.
Long story short, Apple exhibits many factors that suggest it will remain strong in the toughest times. That said, investors should be aware of the bearish sentiment around AAPL stock currently.
The Bottom Line
Pundits expect Apple’s Q2 revenues to be flat owing to the lockdown in China. However, they expect that growth will return after that for the remainder of 2022 and throughout 2023. That is, of course, a strong testament to the firm and its stock.
But there is other news to be aware of also. Morgan Stanley (NYSE:MS) released a survey stating that 55% of high-income respondents expect to reduce spending on electronics in the coming six months because of inflation. That kind of slowdown certainly could hurt APPL stock.
Nonetheless, Apple remains the best of the best in tech and it isn’t a stretch to call it the best stock period. As long as it remains the number one stock in Warren Buffett’s portfolio I see no reason to avoid it now.
On the date of publication, Alex Sirois 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.
The post Apple Stock Remains Solid Despite Mounting Inflation Concerns 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. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Apple (NASDAQ:AAPL) stock hasn’t had a great 2022 but it isn’t alone. AAPL Apple $137.44 A Closer Look at AAPL Stock Much of the reason that the tech sector has been pummeled so badly is its inherent instability. That said, investors should be aware of the bearish sentiment around AAPL stock currently. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Apple (NASDAQ:AAPL) stock hasn’t had a great 2022 but it isn’t alone. AAPL Apple $137.44 A Closer Look at AAPL Stock Much of the reason that the tech sector has been pummeled so badly is its inherent instability. That said, investors should be aware of the bearish sentiment around AAPL stock currently. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Apple (NASDAQ:AAPL) stock hasn’t had a great 2022 but it isn’t alone. AAPL Apple $137.44 A Closer Look at AAPL Stock Much of the reason that the tech sector has been pummeled so badly is its inherent instability. That said, investors should be aware of the bearish sentiment around AAPL stock currently. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Apple (NASDAQ:AAPL) stock hasn’t had a great 2022 but it isn’t alone. AAPL Apple $137.44 A Closer Look at AAPL Stock Much of the reason that the tech sector has been pummeled so badly is its inherent instability. That said, investors should be aware of the bearish sentiment around AAPL stock currently. |
20494.0 | 2022-06-29 00:00:00 UTC | What Is a Stock Split and How Does It Work? | AAPL | https://www.nasdaq.com/articles/what-is-a-stock-split-and-how-does-it-work | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Stock splits are just simple arithmetic, altering the share count to influence the stock price.
Amazon (AMZN) recently split its stock; Alphabet (GOOG, GOOGL) and Shopify (SHOP) will do the same soon.
A company can go through a stock split or a reverse stock split.
In the summer of 2020, a number of big-name companies began announcing stock splits. (Yes, I’m talking about Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA)). Despite the current bear market, a number of other companies are also announcing stock splits, leading many newer investors to ask the simple question: What is a stock split?
A stock split really is simple arithmetic. If company ABC has 1 million shares trading for $10, the company is worth $10 million.
If company ABC wants to do a 2-for-1 stock split, it will double the number of shares from 1 million to 2 million, but then divide the stock price by a factor of two, so $10 becomes $5. How much is ABC worth now? 2 million shares multiplied by $5 gets us to a valuation of $10 million.
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See? It’s just arithmetic. However, that inevitably leads us to a few other complexities. With that in mind, let’s take a closer look at what a stock split is and how it works.
What Is a Stock Split Good For?
Moving past our understanding of what a stock split is, you might now wonder what a stock split is good for. A stock split is good for drumming up demand. Not only do stock traders tend to front-run an event like this — meaning they buy the stock ahead of the event — but it seems to create sustainable demand beyond the split date.
According to one study by Bank of America, S&P 500 companies that split their stocks tend to enjoy strong gains versus the rest of the index. Specifically: “Based on data since 1980, S&P 500 … stocks that have announced stock splits have significantly outperformed the index in the three, six and 12 months after the initial announcement. Stocks that have split gained on average 25% over the next 12 months compared with a gain of 9% for the benchmark index.”
You can also see it in Amazon (NASDAQ:AMZN), which split its stock earlier this month. Other notable stock split surges include Apple and Tesla — both of which occurred in August 2020.
What Companies Are Splitting Their Stock?
As mentioned above, Amazon was the most recent notable company to split its stock. It underwent a 20-for-1 stock split on June 3, bringing its stock price back down to a more palatable level for investors.
While a company doesn’t have to split its stock, it’s a lot more encouraging for investors to buy 10 shares rather than 0.50 shares. It also gives greater liquidity to a stock, given the big moves we can see on a four-figure stock. A lower stock price also gives the impression of a cheaper stock, even though the valuation has nothing to do with the share price. Meaning, a $1,000 stock can be a lot more expensive than a $1 stock, valuation-wise.
For an idea of what it looks like for companies that don’t split their stocks, look no further than the A shares from Berkshire Hathaway (NYSE:BRK.A, NYSE:BRK.B). The stock has recently fallen $147,000 a share from its peak.
7 Top Stocks to Buy and Hold
As for other notable stock splits on the horizon, Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is set for a 20-for-1 stock split and Shopify (NYSE:SHOP) will soon undergo a 10-for-1 split. Tesla is expected to perform a 3-for-1 stock split, pending shareholder approval.
What Is a Reverse Stock Split?
Investors came here asking, “what is a stock split?” But there’s also a reverse stock split to consider as well. It’s simply the opposite of what I discussed above.
Instead of multiplying the share count and dividing the share price, reverse stock splits divide the share count and multiply the share price. A company might resort to this tactic in an effort to boost its share price.
One reason for that may be to keep it out of penny-stock status. Another reason would be to drum up interest among institutional investors. Lastly, it may be a requirement of the exchange to maintain a certain minimum share price.
For instance, if company XYZ has 10 million shares outstanding and the stock is trading for $1, the company — which is worth $10 million in this scenario — may elect for a 10-for-1 reverse stock split.
In doing so, there will be just 1 million shares outstanding (dividing the share count by 10), but they will trade for $10 immediately following the split (multiplying the stock price). Notice how the company is worth $10 million in both scenarios.
Recent companies to undergo a reverse stock split are General Electric (NYSE:GE) and Rite Aid (NYSE:RAD).
On the date of publication, Bret Kenwell 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.
The post What Is a Stock Split and How Does It Work? 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. | (Yes, I’m talking about Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA)). Amazon (AMZN) recently split its stock; Alphabet (GOOG, GOOGL) and Shopify (SHOP) will do the same soon. According to one study by Bank of America, S&P 500 companies that split their stocks tend to enjoy strong gains versus the rest of the index. | (Yes, I’m talking about Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA)). InvestorPlace - Stock Market News, Stock Advice & Trading Tips Stock splits are just simple arithmetic, altering the share count to influence the stock price. Amazon (AMZN) recently split its stock; Alphabet (GOOG, GOOGL) and Shopify (SHOP) will do the same soon. | (Yes, I’m talking about Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA)). InvestorPlace - Stock Market News, Stock Advice & Trading Tips Stock splits are just simple arithmetic, altering the share count to influence the stock price. A company can go through a stock split or a reverse stock split. | (Yes, I’m talking about Apple (NASDAQ:AAPL) and Tesla (NASDAQ:TSLA)). A company can go through a stock split or a reverse stock split. Despite the current bear market, a number of other companies are also announcing stock splits, leading many newer investors to ask the simple question: What is a stock split? |
20495.0 | 2022-06-29 00:00:00 UTC | Here is What to Know Beyond Why Apple Inc. (AAPL) is a Trending Stock | AAPL | https://www.nasdaq.com/articles/here-is-what-to-know-beyond-why-apple-inc.-aapl-is-a-trending-stock-0 | nan | nan | 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 -7.7% over the past month versus the Zacks S&P 500 composite's -8% change. The Zacks Computer - Mini computers industry, to which Apple belongs, has lost 8.2% 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.
Earnings Estimate Revisions
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.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Apple is expected to post earnings of $1.14 per share for the current quarter, representing a year-over-year change of -12.3%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.1%.
The consensus earnings estimate of $6.11 for the current fiscal year indicates a year-over-year change of +8.9%. This estimate has changed -0.1% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $6.63 indicates a change of +8.6% from what Apple is expected to report a year ago. Over the past month, the estimate has changed -0.3%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, 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
Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
In the case of Apple, the consensus sales estimate of $82.36 billion for the current quarter points to a year-over-year change of +1.1%. The $394.45 billion and $418.67 billion estimates for the current and next fiscal years indicate changes of +7.8% and +6.1%, respectively.
Last Reported Results and Surprise History
Apple reported revenues of $97.28 billion in the last reported quarter, representing a year-over-year change of +8.6%. EPS of $1.52 for the same period compares with $1.40 a year ago.
Compared to the Zacks Consensus Estimate of $94.54 billion, the reported revenues represent a surprise of +2.9%. The EPS surprise was +6.29%.
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.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
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.
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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. | Apple (AAPL) has recently been on Zacks.com's list of the most searched stocks. Apple Inc. (AAPL): Free Stock Analysis Report Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. | Apple (AAPL) has recently been on Zacks.com's list of the most searched stocks. Apple Inc. (AAPL): Free Stock Analysis Report The chart below shows the evolution of the company's forward 12-month consensus EPS estimate: 12 Month EPS Projected Revenue Growth Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. | 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. | 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 $6.63 indicates a change of +8.6% from what Apple is expected to report a year ago. |
20496.0 | 2022-06-29 00:00:00 UTC | Is Apple’s Push Into the Buy Now, Pay Later Space a Mistake? | AAPL | https://www.nasdaq.com/articles/is-apples-push-into-the-buy-now-pay-later-space-a-mistake | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Source: Vytautas Kielaitis / Shutterstock.com
While Apple (NASDAQ:AAPL) unveiled several new features, services and products at its annual Worldwide Developers Conference earlier this month, it was its plans to launch a buy now, pay later (BNPL) service that attracted the most attention. But Wall Street’s response has been muted, with AAPL stock down around 6% since the news broke.
Called Apple Pay Later, the new service will enable U.S. consumers to break the cost of a purchase into four equal payments over a six-week period without incurring any interest or fees.
Many analysts were quick to criticize the move as a bridge too far for the consumer electronics giant and a distraction from its core businesses. So, has Apple bitten off more than it can chew with its BNPL service?
AAPL Apple $139.23
Regulators Look to Crack Down on Predatory Lending
Buy now, pay later is not a new concept. Department stores used to offer “layaway,” which allowed customers to pay for items in installments over a set period of time.
These days, a growing number of companies are offering BNPL services as an alternative to traditional credit cards and other consumer loans, and they are primarily targeting younger consumers and minority groups who often use the service to pay for small ticket items such as clothes, shoes and, in some cases, even meals. Companies at the forefront of the BNPL industry include Affirm (NASDAQ:AFRM), PayPal (NASDAQ:PYPL), Block (NYSE:SQ) and privately held Klarna.
The industry has come under scrutiny for engaging in predatory lending practices that are ensnaring young adults and teenagers, as well as minority groups, in an endless cycle of debt and related fees and charges. A New York University marketing professor, Scott Galloway, recently published a scathing article about the BNPL industry in New York Magazine with the headline “Buy Now. Pay (and Pay, and Pay, and Pay) Later.”
This paragraph from the article sums up the growing problem with BNPL: “Consumer debt jumped $52 billion in March, the largest increase on record. In California, 91 percent of consumer loans made in 2020 were BNPL loans. More than 40 percent of Gen-Z consumers will have used BNPL by the end of the year, the highest penetration of any age group. And now those debts are going bad.”
The article goes on to detail how the business model behind BNPL is not panning out the way the companies involved had hoped. For instance, Galloway notes, “Klarna racked up $700 million in losses last year, and 65 percent of it was from credit defaults. Affirm lost almost the same over the past 12 months, while its marketing expenses tripled to $427 million. Any hope of profitability depends on overextended consumers somehow making their payments and continuing to mash the BUY button.”
The U.S. Consumer Financial Protection Bureau launched an inquiry into BNPL programs late last year based on concerns that they are leading people to accumulate excessive amounts of debt.
So far this year, the stocks of the publicly traded BNPL leaders have been eviscerated. AFRM is down 80% year to date, while PYPL has fallen 62% and SQ is down 60%.
Whether this is due to concerns about their business model, increasing regulatory scrutiny, the broader fintech sell-off, or all the above, it begs the question, why would Apple want to step into this mess?
Apple Continues Its Push Into Finance
Apple’s foray into the buy now, pay later space is part of the company’s growing push into the realm of finance. Its Apple Pay service allows consumers to use their iPhones to make quick payments. In 2019, Apple launched a credit card in partnership with investment bank Goldman Sachs (NYSE:GS).
With Apple Pay Later, which is set to launch in September, the tech giant has a few things working in its favor. First, because it can be integrated with Apple Pay and Apple Wallet, it won’t require a third party to facilitate transactions. Second, Apple is able to fund the BNPL loans using the $51.5 billion of cash that’s sitting on its balance sheet.
Understandably, Apple’s push into the BNPL space has other companies quaking in their boots. And clearly, Apple sees an opportunity in the space.
Theglobal marketfor BNPL exploded last year, more than tripling in size to reach $120 billion, according to market research firm GlobalData. And it is forecast to grow at a 26% compound annual rate moving forward.
Some analysts say the push into BNPL is Apple’s attempt to provide yet another service that will keep consumers in the company’s orbit for longer. Others say Apple will mine the BNPL loans for consumer data.
But is the potential for bad loans, indebted consumers and the negative publicity that comes with it going to be worth it for Apple?
The Bottom Line on AAPL Stock
Apple is clearly looking for ways to diversify its business and sees finance as a legitimate avenue to pursue. But the world of buy now, pay later is messy, and companies that have engaged in it have not fared well thus far.
Perhaps Apple, with its deep pockets and massive customer base, can make BNPL work. However, if it goes wrong, the BNPL business is likely to comprise a small enough part of Apple’s overall business that any losses will prove to be immaterial. As long as Apple remains focused on its core revenue-generating products like the iPhone, Apple Watch and Mac computer, the company and its shareholders should be fine.
On the date of publication, Joel Baglole held a long position in AAPL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The post Is Apple’s Push Into the Buy Now, Pay Later Space a Mistake? 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. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Source: Vytautas Kielaitis / Shutterstock.com While Apple (NASDAQ:AAPL) unveiled several new features, services and products at its annual Worldwide Developers Conference earlier this month, it was its plans to launch a buy now, pay later (BNPL) service that attracted the most attention. But Wall Street’s response has been muted, with AAPL stock down around 6% since the news broke. AAPL Apple $139.23 Regulators Look to Crack Down on Predatory Lending Buy now, pay later is not a new concept. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Source: Vytautas Kielaitis / Shutterstock.com While Apple (NASDAQ:AAPL) unveiled several new features, services and products at its annual Worldwide Developers Conference earlier this month, it was its plans to launch a buy now, pay later (BNPL) service that attracted the most attention. But Wall Street’s response has been muted, with AAPL stock down around 6% since the news broke. AAPL Apple $139.23 Regulators Look to Crack Down on Predatory Lending Buy now, pay later is not a new concept. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Source: Vytautas Kielaitis / Shutterstock.com While Apple (NASDAQ:AAPL) unveiled several new features, services and products at its annual Worldwide Developers Conference earlier this month, it was its plans to launch a buy now, pay later (BNPL) service that attracted the most attention. But Wall Street’s response has been muted, with AAPL stock down around 6% since the news broke. AAPL Apple $139.23 Regulators Look to Crack Down on Predatory Lending Buy now, pay later is not a new concept. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Source: Vytautas Kielaitis / Shutterstock.com While Apple (NASDAQ:AAPL) unveiled several new features, services and products at its annual Worldwide Developers Conference earlier this month, it was its plans to launch a buy now, pay later (BNPL) service that attracted the most attention. But Wall Street’s response has been muted, with AAPL stock down around 6% since the news broke. AAPL Apple $139.23 Regulators Look to Crack Down on Predatory Lending Buy now, pay later is not a new concept. |
20497.0 | 2022-06-29 00:00:00 UTC | Why Disney Is the Top Streaming Stock Today | AAPL | https://www.nasdaq.com/articles/why-disney-is-the-top-streaming-stock-today | nan | nan | The streaming battle seems to be in full swing, with Netflix (NASDAQ: NFLX) hitting some bumps in the road, competitors like Discovery and Time Warner forming Warner Bros. Discovery (NASDAQ: WBD), and even tech giants like Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) getting into the fray. But not everyone will survive in the streaming business long-term.
I think there are some structural advantages Disney (NYSE: DIS) has in streaming that competitors can't match. And we may see the fruit of the company's streaming investments sooner rather than later.
Franchises matter
If we've learned anything about streaming content libraries in the last year, it's that not all content is created equal. Netflix spent billions of dollars over the last five years to create content, but it's now finding that the content is owns has a festively short shelf life. Orange is the New Black, Squid Games, and House of Cards were hits, but are you likely to rewatch them again this year -- or in five or 10 years?
Disney has arguably the best content franchises in Marvel, Star Wars, Pixar, and Disney Animation, and more rewatchable content than any streaming provider. This matters when building out a streaming company because hits matter, but rewatchable filler content is what gets views on a day-to-day basis, and it has a much longer value lifespan.
Disney isn't the only game in town with franchise content at this point. Warner Bros. Discovery has put together a great catalog, with Harry Potter and HBO's entire library, but I think Disney still has the best franchise foundation in streaming.
Sports are the next shoe to drop
The streaming wars so far have been fought over periodic hits and the filler time in our lives. Appointment television in the age of streaming is almost exclusively owned by live sporting events on cable TV, and no brand is as big in sports as ESPN, the network 80% owned by Disney. ESPN+ is part of the Disney bundle, and in time it could be part of a larger bundle if rebundling of streaming services occurs.
Apple and Amazon are making a play for streaming sports, but if Disney decides to go all-in on streaming sports it has the balance sheet and infrastructure to be a major force. It has the national cable rights to the NBA, NHL, and key NFL games as a starting point. If these leagues move to streaming, I think it would make sense for them to leverage services with a big audience and global reach -- and in the next couple of years Disney may be the biggest streaming provider in the world.
Profits from streaming will come later
The stock market and media generally want instant gratification from Disney's streaming business, but it's a long game. The company is spending money now to build out the infrastructure and content that will generate value for decades, because franchise content has a long lifetime value.
On top of streaming, Disney has theme parks, cruise lines, merchandise, and other ways to monetize content that goes beyond the infrastructure of competitors. Streaming isn't a one trick pony for Disney.
Remember that it took decades for cable networks to become the profitable behemoths of the early 2010s until streaming started taking share. The streaming transition will be faster, and when we reach a more steady state it may be even more profitable given the ability to reach a global audience with a single service. I think Disney is better positioned as a streaming provider than its competitors when you consider its subscriber base, franchise content, and position in live sports with ESPN. Don't sell this stock before we see fruit from the investments being made today.
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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. Travis Hoium has positions in Apple and Walt Disney. The Motley Fool has positions in and recommends Amazon, Apple, Netflix, and Walt Disney. The Motley Fool recommends 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, 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. | Discovery (NASDAQ: WBD), and even tech giants like Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) getting into the fray. Discovery has put together a great catalog, with Harry Potter and HBO's entire library, but I think Disney still has the best franchise foundation in streaming. Sports are the next shoe to drop The streaming wars so far have been fought over periodic hits and the filler time in our lives. | Discovery (NASDAQ: WBD), and even tech giants like Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) getting into the fray. This matters when building out a streaming company because hits matter, but rewatchable filler content is what gets views on a day-to-day basis, and it has a much longer value lifespan. The Motley Fool has positions in and recommends Amazon, Apple, Netflix, and Walt Disney. | Discovery (NASDAQ: WBD), and even tech giants like Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) getting into the fray. Disney has arguably the best content franchises in Marvel, Star Wars, Pixar, and Disney Animation, and more rewatchable content than any streaming provider. Profits from streaming will come later The stock market and media generally want instant gratification from Disney's streaming business, but it's a long game. | Discovery (NASDAQ: WBD), and even tech giants like Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) getting into the fray. Franchises matter If we've learned anything about streaming content libraries in the last year, it's that not all content is created equal. This matters when building out a streaming company because hits matter, but rewatchable filler content is what gets views on a day-to-day basis, and it has a much longer value lifespan. |
20498.0 | 2022-06-29 00:00:00 UTC | Is iShares Core S&P U.S. Growth ETF (IUSG) a Strong ETF Right Now? | AAPL | https://www.nasdaq.com/articles/is-ishares-core-sp-u.s.-growth-etf-iusg-a-strong-etf-right-now-2 | nan | nan | The iShares Core S&P U.S. Growth ETF (IUSG) was launched on 07/24/2000, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Growth category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Blackrock. IUSG has been able to amass assets over $10.73 billion, making it one of the largest ETFs in the Style Box - All Cap Growth. IUSG, before fees and expenses, seeks to match the performance of the S&P 900 Growth Index.
The S&P 900 Growth Index measures the performance of the large and mid-capitalization growth sector of the U.S. equity market.
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.
Operating expenses on an annual basis are 0.04% for this ETF, which makes it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.88%.
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.
IUSG's heaviest allocation is in the Information Technology sector, which is about 46.30% of the portfolio. Its Healthcare and Consumer Discretionary round out the top three.
When you look at individual holdings, Apple Inc (AAPL) accounts for about 13.25% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 50.19% of total assets under management.
Performance and Risk
Year-to-date, the iShares Core S&P U.S. Growth ETF has lost about -27.14% so far, and is down about -15.37% over the last 12 months (as of 06/29/2022). IUSG has traded between $80.61 and $117.16 in this past 52-week period.
The fund has a beta of 1.05 and standard deviation of 26.06% for the trailing three-year period, which makes IUSG a medium risk choice in this particular space. With about 477 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares Core S&P U.S. Growth ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. There are other ETFs in the space which investors could consider as well.
First Trust US Equity Opportunities ETF (FPX) tracks IPOX-100 U.S. Index and the iShares Morningstar Growth ETF (ILCG) tracks MORNINGSTAR US LARGE-MID CP BRD GRWTH ID. First Trust US Equity Opportunities ETF has $1.04 billion in assets, iShares Morningstar Growth ETF has $1.54 billion. FPX has an expense ratio of 0.57% and ILCG 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 Growth.
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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iShares Core S&P U.S. Growth ETF (IUSG): ETF Research Reports
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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. | When you look at individual holdings, Apple Inc (AAPL) accounts for about 13.25% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). 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. | When you look at individual holdings, Apple Inc (AAPL) accounts for about 13.25% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report First Trust US Equity Opportunities ETF (FPX) tracks IPOX-100 U.S. Index and the iShares Morningstar Growth ETF (ILCG) tracks MORNINGSTAR US LARGE-MID CP BRD GRWTH ID. | When you look at individual holdings, Apple Inc (AAPL) accounts for about 13.25% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report The iShares Core S&P U.S. Growth ETF (IUSG) was launched on 07/24/2000, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Growth category of the market. | When you look at individual holdings, Apple Inc (AAPL) accounts for about 13.25% of the fund's total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report The iShares Core S&P U.S. Growth ETF (IUSG) was launched on 07/24/2000, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Growth category of the market. |
20499.0 | 2022-06-29 00:00:00 UTC | What's The Outlook Like For Apple Suppliers? | AAPL | https://www.nasdaq.com/articles/whats-the-outlook-like-for-apple-suppliers | nan | nan | Our theme of Apple Component Supplier Stocks – which includes a diverse set of companies that supply components for Apple’s iPhones and other devices, has declined by about 28% year-to-date in 2022, roughly in line with the broader Nasdaq-100 which is down 27%, although it has underperformed Apple stock (NASDAQ: AAPL), which is down about 22%. So what are some of the trends that are likely to impact the theme in the near-to-medium term?
While surging inflation has prompted the Federal Reserve to hike interest rates at a more aggressive pace, leading to a sell off in growth sectors such as technology, Apple suppliers have also been impacted to an extent by the semiconductor shortage, and Covid-19-related disruptions in China and Southeast Asia. Moreover, Apple’s demand growth is also likely to cool a bit compared to the pandemic period, as the remote working and learning trend eases a bit. Apple revenue is only likely to grow at single-digit levels over FY’22 and FY’23, per consensus estimates, down from 33% growth in FY’21, in spite of new high-end iPad and Macbook launches. These factors are likely to impact the growth rates for Apple’s suppliers, as well, in the near term.
That said, this could be a good time to look at the theme. The semiconductor supply crunch is likely to eventually ease and this could help companies in the theme to an extent. Moreover, the coming launch of Apple’s next-generation iPhone 14 could also help the theme. The new smartphone is expected to feature more substantial upgrades and possibly design changes versus the iPhone 13, boding well for suppliers from both a volume and component content per-device perspective. Moreover, the ongoing transition to 5G wireless networks is also likely to help Apple’s suppliers, who are largely focused on semiconductors, as mobile vendors have been looking to equip their mid-range and lower-end models with 5G chipsets.
With inflation rising and the Fed raising interest rates, Apple has fallen 22% this year. Can it drop more? See how low can Apple stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
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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. | Our theme of Apple Component Supplier Stocks – which includes a diverse set of companies that supply components for Apple’s iPhones and other devices, has declined by about 28% year-to-date in 2022, roughly in line with the broader Nasdaq-100 which is down 27%, although it has underperformed Apple stock (NASDAQ: AAPL), which is down about 22%. While surging inflation has prompted the Federal Reserve to hike interest rates at a more aggressive pace, leading to a sell off in growth sectors such as technology, Apple suppliers have also been impacted to an extent by the semiconductor shortage, and Covid-19-related disruptions in China and Southeast Asia. The new smartphone is expected to feature more substantial upgrades and possibly design changes versus the iPhone 13, boding well for suppliers from both a volume and component content per-device perspective. | Our theme of Apple Component Supplier Stocks – which includes a diverse set of companies that supply components for Apple’s iPhones and other devices, has declined by about 28% year-to-date in 2022, roughly in line with the broader Nasdaq-100 which is down 27%, although it has underperformed Apple stock (NASDAQ: AAPL), which is down about 22%. See how low can Apple stock go by comparing its decline in previous market crashes. Invest with Trefis Market Beating Portfolios See all Trefis Price Estimates The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Our theme of Apple Component Supplier Stocks – which includes a diverse set of companies that supply components for Apple’s iPhones and other devices, has declined by about 28% year-to-date in 2022, roughly in line with the broader Nasdaq-100 which is down 27%, although it has underperformed Apple stock (NASDAQ: AAPL), which is down about 22%. While surging inflation has prompted the Federal Reserve to hike interest rates at a more aggressive pace, leading to a sell off in growth sectors such as technology, Apple suppliers have also been impacted to an extent by the semiconductor shortage, and Covid-19-related disruptions in China and Southeast Asia. Invest with Trefis Market Beating Portfolios See all Trefis Price Estimates The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Our theme of Apple Component Supplier Stocks – which includes a diverse set of companies that supply components for Apple’s iPhones and other devices, has declined by about 28% year-to-date in 2022, roughly in line with the broader Nasdaq-100 which is down 27%, although it has underperformed Apple stock (NASDAQ: AAPL), which is down about 22%. While surging inflation has prompted the Federal Reserve to hike interest rates at a more aggressive pace, leading to a sell off in growth sectors such as technology, Apple suppliers have also been impacted to an extent by the semiconductor shortage, and Covid-19-related disruptions in China and Southeast Asia. Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016. |
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