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20500.0 | 2022-06-28 00:00:00 UTC | Alphabet (GOOGL) Boosts YouTube Music With New Features | AAPL | https://www.nasdaq.com/articles/alphabet-googl-boosts-youtube-music-with-new-features | nan | nan | Alphabet’s GOOGL division Google is leaving no stone unturned to add features to its music-streaming service YouTube Music.
Reportedly, YouTube Music is gearing up to roll out the redesigned album UI on Android tablet.
The redesign version shows the artiste’s name, type of media and the release year on top. Options like download, add to library, play, share and an overflow menu are also included.
With this recent move, GOOGL aims to provide an enhanced music streaming experience to Android tablet users. This is likely to boost the adoption rate of YouTube Music.
Thus, the increasing uptake of YouTube Music is expected to benefit GOOGL’s financial performance in the near term, which will further help it win investor confidence.
Shares of GOOGL have been down 20%, outperforming the Zacks Computer and Technologysector’s decline of 27.1% in the year-to-date period.
Growing YouTube Music Efforts
Apart from the latest move, Alphabet recently redesigned YouTube Music playlists for Android mobiles.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
In addition, GOOGL introduced shortcut features and an album carousel to the YouTube Music’s Explore tab.
GOOGL added a capability whereby users can save queues as playlists. Alphabet also rolled out its Recent Played and Turntable widgets to Android users.
With these recent efforts, Google positioned itself well to rapidly penetrate the booming global music-streaming market.
The market has been witnessing significant growth for a while owing to an increase in mobile advertisement spending, use of mobile apps, rise in the number of subscription services and users’ accessibility to local content on the music streaming platforms.
Per an Allied Market Research report, the online music streaming industry is expected to reach $24.7 billion by 2027, witnessing a CAGR of 9.8% between 2021 and 2027.
Competitive Scenario
In this upbeat music streaming space, Alphabet which carries a Zacks Rank #4 (Sell) faces intense competitive pressure from other companies like Amazon AMZN, Apple AAPL and Spotify SPOT, which are making consistent efforts to capitalize on the above-mentioned prospects.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Amazon is gaining strong momentum in the music streaming market on the back of its expanding global footprint.AMZN offers its premium music subscription serviceAmazon Music Unlimited to customers. With Amazon Music Unlimited, music lovers can listen to any song anytime and anywhere on all types of devices, including smartphone, tablet, PC/Mac, Fire TV, and Alexa-enabled devices like Amazon Echo.
Apple’s music-streaming service Apple Music offers a subscription tier powered by Siri named Apple Music Voice Plan. Using Apple Music Voice Plan, subscribers can access millions of songs, playlists, personalized mixes, genre stations and Apple Music Radio. Music listeners can also download the Apple Music app on their Android tablet or Chromebook supporting Android apps.
Spotify providescommercial free music and ad-supported services to customers. Music lovers can enjoy ad-free music and offline playbacks with Spotify Premium service. SPOT users can enjoy the tablet version of Spotify on their iPad or Android tablets.
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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 In this upbeat music streaming space, Alphabet which carries a Zacks Rank #4 (Sell) faces intense competitive pressure from other companies like Amazon AMZN, Apple AAPL and Spotify SPOT, which are making consistent efforts to capitalize on the above-mentioned prospects. Apple Inc. (AAPL): Free Stock Analysis Report With this recent move, GOOGL aims to provide an enhanced music streaming experience to Android tablet users. | Apple Inc. (AAPL): Free Stock Analysis Report Competitive Scenario In this upbeat music streaming space, Alphabet which carries a Zacks Rank #4 (Sell) faces intense competitive pressure from other companies like Amazon AMZN, Apple AAPL and Spotify SPOT, which are making consistent efforts to capitalize on the above-mentioned prospects. Growing YouTube Music Efforts Apart from the latest move, Alphabet recently redesigned YouTube Music playlists for Android mobiles. | Competitive Scenario In this upbeat music streaming space, Alphabet which carries a Zacks Rank #4 (Sell) faces intense competitive pressure from other companies like Amazon AMZN, Apple AAPL and Spotify SPOT, which are making consistent efforts to capitalize on the above-mentioned prospects. Apple Inc. (AAPL): Free Stock Analysis Report Growing YouTube Music Efforts Apart from the latest move, Alphabet recently redesigned YouTube Music playlists for Android mobiles. | Apple Inc. (AAPL): Free Stock Analysis Report Competitive Scenario In this upbeat music streaming space, Alphabet which carries a Zacks Rank #4 (Sell) faces intense competitive pressure from other companies like Amazon AMZN, Apple AAPL and Spotify SPOT, which are making consistent efforts to capitalize on the above-mentioned prospects. Growing YouTube Music Efforts Apart from the latest move, Alphabet recently redesigned YouTube Music playlists for Android mobiles. |
20501.0 | 2022-06-28 00:00:00 UTC | Why Apple Was a Sour Stock on Tuesday | AAPL | https://www.nasdaq.com/articles/why-apple-was-a-sour-stock-on-tuesday | nan | nan | What happened
A victim of the Great Tech Stock Exodus of 2022, Apple (NASDAQ: AAPL) suffered another decline on Tuesday. The company's shares lost nearly 3% of their value, a worse showing than the 2% decline of the S&P 500 index. Investors were disheartened by one analyst's price target cut, and another's speculation about manufacturing difficulties.
So what
Of the two analyses, it was the one from TF International Securities that was the more concerning. That company's Ming-Chi Kuo wrote in a tweet that the results of a survey he conducted indicate that Apple's "own iPhone 5G modem chip development may have failed."
The company had been developing its own chips to alleviate its dependence on chip leader Qualcomm. Kuo speculated that Apple's struggles mean Qualcomm will remain the sole supplier of 5G chips for the tech giant's upcoming line of new iPhones, presumably making their production more expensive.
It's important to note that Apple has not released any updates recently about its 5G modem chip production.
Now what
Meanwhile, Evercore ISI analyst Amit Daryanani is growing more bearish on Apple's prospects for different reasons. Tuesday morning, he cut his price target on the stock to $180 per share from the previous $210.
Daryanani explained in a new research note that "Apple was in growth mode during the 2008/2009 as we were still at the beginning of the smartphone revolution, so revenue declines in a recession today would likely be more severe vs. the growth they managed in 2009."
Despite his concern and the price target reduction, Daryanani is maintaining his outperform (read: buy) recommendation on Apple stock.
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Eric Volkman has positions in Apple. 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.
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 A victim of the Great Tech Stock Exodus of 2022, Apple (NASDAQ: AAPL) suffered another decline on Tuesday. That company's Ming-Chi Kuo wrote in a tweet that the results of a survey he conducted indicate that Apple's "own iPhone 5G modem chip development may have failed." Kuo speculated that Apple's struggles mean Qualcomm will remain the sole supplier of 5G chips for the tech giant's upcoming line of new iPhones, presumably making their production more expensive. | What happened A victim of the Great Tech Stock Exodus of 2022, Apple (NASDAQ: AAPL) suffered another decline on Tuesday. That company's Ming-Chi Kuo wrote in a tweet that the results of a survey he conducted indicate that Apple's "own iPhone 5G modem chip development may have failed." After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. | What happened A victim of the Great Tech Stock Exodus of 2022, Apple (NASDAQ: AAPL) suffered another decline on Tuesday. 10 stocks we like better than Apple 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 Eric Volkman has positions in Apple. | What happened A victim of the Great Tech Stock Exodus of 2022, Apple (NASDAQ: AAPL) suffered another decline on Tuesday. Tuesday morning, he cut his price target on the stock to $180 per share from the previous $210. That's right -- they think these 10 stocks are even better buys. |
20502.0 | 2022-06-28 00:00:00 UTC | Dow Tumbles Nearly 500 Points as Nike Guidance Spooks Investors | AAPL | https://www.nasdaq.com/articles/dow-tumbles-nearly-500-points-as-nike-guidance-spooks-investors | nan | nan | The Dow Jones Industrial Average fell almost 500 points today as the bear market recovery stalled. Stocks enjoyed a nice week last week and some investors wondered if the market had bottomed and was finally turning the corner but it looks like there could still be selling pressure ahead.
After all, many experts now expect some kind of recession to occur later this year or early next year, as inflation has created a problem for the Federal Reserve, which has been raising interest rates rapidly to bring down consumer prices. Typically, when the Fed becomes very hawkish it can hurt the economy because higher interest rates raise the cost of debt and slow overall economic activity.
One stock today hurt the Dow more than any other, not only because of the broader market but also because of company-specific news.
Image source: Getty Images.
Flat margin guidance
Shares of Nike (NYSE: NKE) fell roughly 7% today after the large sports and footwear apparel brand reported earnings results late yesterday.
For its fiscal fourth quarter of 2022, which is the three months ending on May 31, Nike reported diluted earnings per share of $0.90 on total revenue of $12.2 billion. Both numbers beat analyst estimates for the quarter.
However, on theearnings call Nike's CFO Matt Friend said the company is "taking a cautious approach to Greater China given [the] uncertainty around additional COVID disruptions."
China, where Nike has many factories, has been difficult to gauge. As COVID-19 cases began to surge earlier this year, the Chinese government locked down or placed severe restrictions in major cities like Shanghai and Beijing. The government has now started to lift those restrictions and is trying to jump-start economic growth again, but it's hard to know if there will be more lockdowns if cases surge again.
Friend also noted that the company is experiencing headwinds from "elevated ocean freight costs, increased product costs, discrete supply chain investments and normalization of historically low markdown rates."
While Friend said the company expects revenue in the fiscal year 2023 to grow in the low double-digit percentage range, he also said to expect gross margins somewhere between flat or down half a percent versus the fiscal year 2022, a wider range than normal given the uncertainty.
Following the call, many analysts trimmed their 12-month price targets for Nike, although most still imply significant upside from Nike's current share price of just below $103 per share, which is down close to 37.5% this year.
Should you buy Nike?
For all of the selling today, Nike still beat earnings projections and should benefit as supply chain issues ease and COVID-19 hopefully become less prominent. Despite cutting their price targets, analysts are still quite bullish on Nike.
The company has a strong brand that should retain loyalty and enable the company to pass some of its higher costs onto its customers.
However, I also feel that it's more of a niche brand with largely specialty athletic equipment that consumers don't necessarily need in the same way they might need a smartphone. I think Nike is a buy at these levels, but it's not my favorite stock to fight a recession or inflation.
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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. | Flat margin guidance Shares of Nike (NYSE: NKE) fell roughly 7% today after the large sports and footwear apparel brand reported earnings results late yesterday. However, on theearnings call Nike's CFO Matt Friend said the company is "taking a cautious approach to Greater China given [the] uncertainty around additional COVID disruptions." As COVID-19 cases began to surge earlier this year, the Chinese government locked down or placed severe restrictions in major cities like Shanghai and Beijing. | Typically, when the Fed becomes very hawkish it can hurt the economy because higher interest rates raise the cost of debt and slow overall economic activity. While Friend said the company expects revenue in the fiscal year 2023 to grow in the low double-digit percentage range, he also said to expect gross margins somewhere between flat or down half a percent versus the fiscal year 2022, a wider range than normal given the uncertainty. For all of the selling today, Nike still beat earnings projections and should benefit as supply chain issues ease and COVID-19 hopefully become less prominent. | Following the call, many analysts trimmed their 12-month price targets for Nike, although most still imply significant upside from Nike's current share price of just below $103 per share, which is down close to 37.5% this year. 10 stocks we like better than Nike 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 Bram Berkowitz has no position in any of the stocks mentioned. | Friend also noted that the company is experiencing headwinds from "elevated ocean freight costs, increased product costs, discrete supply chain investments and normalization of historically low markdown rates." * They just revealed what they believe are the ten best stocks for investors to buy right now... and Nike wasn't one of them! That's right -- they think these 10 stocks are even better buys. |
20503.0 | 2022-06-28 00:00:00 UTC | Most Interesting New ETFs of 1H22 | AAPL | https://www.nasdaq.com/articles/most-interesting-new-etfs-of-1h22 | nan | nan | The ETF industry continues to grow at a record pace despite market turbulence. 190 new ETFs have launched this year so far, taking the total number of US listed products to over 2,950.
New ETFs are getting more niche, focusing on a very narrow corner of the market or a very specialized strategy. The main reason is that all easy ideas have already been taken.
We are highlighting five very interesting ETFs that made their debut in the first half of 2022.
ProShares, the firm behind the first and largest US listed bitcoin futures ETF BITO, launched an inverse bitcoin ETF last week. BITI allows investors to effectively short bitcoin using futures. Cryptocurrencies have suffered a brutal sell off lately, with bitcoin tumbling below $20,000 from an all-time high of over $67,800 in November.
The Dimensional US High Profitability ETF DUHP is an actively managed ETF that focuses on highly profitable companies like Apple AAPL and Microsoft MSFT.
The activist investment firm that had sent shock waves through Corporate America last year when it successfully placed three candidates on the board of Exxon Mobil XOM launched its second ETF. The Engine No. 1 Transform Climate ETF NETZ holds companies driving the transition to net zero.
The Invesco Electric Vehicle Metals Commodity Strategy No K-1 ETF EVMT is the first ETF that provides exposure to metals used in EV production, including cobalt, copper, nickel and aluminum.
The firm behind the SARK ETF that shorts the ARK Innovation ETF ARKK, Cathie Wood’s flagship fund, has now launched a fund that provides 2X exposure to ARKK . The AXS 2X Innovation ETF TARK may appeal to investors who believe the recent selloff in disruptive innovation stocks is overdone.
To learn more, please watch the short video above.
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Invesco Electric Vehicle Metals Commodity Strategy No K1 ETF (EVMT): ETF Research Reports
AXS 2X Innovation ETF (TARK): 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. | The Dimensional US High Profitability ETF DUHP is an actively managed ETF that focuses on highly profitable companies like Apple AAPL and Microsoft MSFT. Apple Inc. (AAPL): Free Stock Analysis Report The activist investment firm that had sent shock waves through Corporate America last year when it successfully placed three candidates on the board of Exxon Mobil XOM launched its second ETF. | The Dimensional US High Profitability ETF DUHP is an actively managed ETF that focuses on highly profitable companies like Apple AAPL and Microsoft MSFT. Apple Inc. (AAPL): Free Stock Analysis Report Exxon Mobil Corporation (XOM): Free Stock Analysis Report | The Dimensional US High Profitability ETF DUHP is an actively managed ETF that focuses on highly profitable companies like Apple AAPL and Microsoft MSFT. Apple Inc. (AAPL): Free Stock Analysis Report ARK Innovation ETF (ARKK): ETF Research Reports | The Dimensional US High Profitability ETF DUHP is an actively managed ETF that focuses on highly profitable companies like Apple AAPL and Microsoft MSFT. Apple Inc. (AAPL): Free Stock Analysis Report ProShares, the firm behind the first and largest US listed bitcoin futures ETF BITO, launched an inverse bitcoin ETF last week. |
20504.0 | 2022-06-28 00:00:00 UTC | US STOCKS-Wall Street stumbles as consumer pessimism stokes growth fears | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-stumbles-as-consumer-pessimism-stokes-growth-fears | nan | nan | By Stephen Culp
NEW YORK, June 28 (Reuters) - Wall Street closed sharply lower in a broad sell-off on Tuesday as dire consumer confidence data dampened investor optimism and fueled worries over recession and the looming earnings season.
The S&P and the Nasdaq fell about 2% and 3% respectively, with Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com AMZN.O weighing the heaviest. The blue-chip Dow shed about 1.6%.
"Markets were fine today until the consumer confidence number came out," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. "It was weak and markets immediately began selling off."
With the end of the month and the second quarter two days away, the benchmark S&P 500 is on track for its biggest first-half percentage drop since 1970.
All three indexes are on course to notch two straight quarterly declines for the first time since 2015.
"At some point this aggressive selling is going to dissipate but it doesn't seem like it's going to be anytime soon," said Tim Ghriskey, senior portfolio strategist Ingalls & Snyder in New York.
Data released on Tuesday morning showed the Conference Board's consumer confidence index dropping to the lowest it has been since February 2021, with near-term expectations reaching its most pessimistic level in nearly a decade.
The growing gap between the Conference Board's "current situation" and "expectations" components have widened to levels that often precede recession:
The Dow Jones Industrial Average .DJI fell 491.27 points, or 1.56%, to 30,946.99, the S&P 500 .SPX lost 78.56 points, or 2.01%, to 3,821.55 and the Nasdaq Composite .IXIC dropped 343.01 points, or 2.98%, to 11,181.54.
Ten of the 11 major sectors in the S&P 500 ended the session in negative territory, with consumer discretionary .SPLRCD suffering the largest percentage loss. Energy .SPNY was the sole gainer, benefiting from rising crude prices CLc1. O/R
With few market catalysts and market participants gearing up for the July Fourth holiday weekend, the day's sell-off cannot be blamed entirely on the Consumer Confidence report, said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis, Minnesota.
"It’s hard to attribute (market volatility) to one economic data point with so much noise around portfolio rebalancing at quarter-end," Hainlin said.
"There’s not a lot of new information out there and yet you see this volatile stock environment," he said, adding that there will not be much new information until companies start earnings.
With several weeks to go until second-quarter reporting commences, 130 S&P 500 companies 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.
Nike Inc NKE.N slid 7.0% following its lower than expected revenue forecast.
Shares of Occidental Petroleum Corp OXY.N advanced 4.8% after Warren Buffett's Berkshire Hathaway Inc BRKa.N raised its stake in the company.
Declining issues outnumbered advancing ones on the NYSE by a 2.28-to-1 ratio; on Nasdaq, a 2.70-to-1 ratio favored decliners.
The S&P 500 posted one new 52-week high and 29 new lows; the Nasdaq Composite recorded 29 new highs and 131 new lows.
Volume on U.S. exchanges was 11.54 billion shares, compared with the 12.99 billion average over the last 20 trading days.
Consumer confidencehttps://tmsnrt.rs/3HYP3Jx
(Reporting by Stephen Culp; Additional reporting by Sinead Carew and Caroline Valetkevitch in New York, Shreyashi Sanyal and Amruta Khandekar in Bengaluru; editing by Grant McCool)
((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. | The S&P and the Nasdaq fell about 2% and 3% respectively, with Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com AMZN.O weighing the heaviest. By Stephen Culp NEW YORK, June 28 (Reuters) - Wall Street closed sharply lower in a broad sell-off on Tuesday as dire consumer confidence data dampened investor optimism and fueled worries over recession and the looming earnings season. "Markets were fine today until the consumer confidence number came out," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. | The S&P and the Nasdaq fell about 2% and 3% respectively, with Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com AMZN.O weighing the heaviest. Data released on Tuesday morning showed the Conference Board's consumer confidence index dropping to the lowest it has been since February 2021, with near-term expectations reaching its most pessimistic level in nearly a decade. The growing gap between the Conference Board's "current situation" and "expectations" components have widened to levels that often precede recession: The Dow Jones Industrial Average .DJI fell 491.27 points, or 1.56%, to 30,946.99, the S&P 500 .SPX lost 78.56 points, or 2.01%, to 3,821.55 and the Nasdaq Composite .IXIC dropped 343.01 points, or 2.98%, to 11,181.54. | The S&P and the Nasdaq fell about 2% and 3% respectively, with Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com AMZN.O weighing the heaviest. The growing gap between the Conference Board's "current situation" and "expectations" components have widened to levels that often precede recession: The Dow Jones Industrial Average .DJI fell 491.27 points, or 1.56%, to 30,946.99, the S&P 500 .SPX lost 78.56 points, or 2.01%, to 3,821.55 and the Nasdaq Composite .IXIC dropped 343.01 points, or 2.98%, to 11,181.54. O/R With few market catalysts and market participants gearing up for the July Fourth holiday weekend, the day's sell-off cannot be blamed entirely on the Consumer Confidence report, said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis, Minnesota. | The S&P and the Nasdaq fell about 2% and 3% respectively, with Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com AMZN.O weighing the heaviest. O/R With few market catalysts and market participants gearing up for the July Fourth holiday weekend, the day's sell-off cannot be blamed entirely on the Consumer Confidence report, said Tom Hainlin, national investment strategist at U.S. Bank Wealth Management in Minneapolis, Minnesota. "It’s hard to attribute (market volatility) to one economic data point with so much noise around portfolio rebalancing at quarter-end," Hainlin said. |
20505.0 | 2022-06-28 00:00:00 UTC | Why Qualcomm Surged Today Even as the Nasdaq Plunged | AAPL | https://www.nasdaq.com/articles/why-qualcomm-surged-today-even-as-the-nasdaq-plunged | nan | nan | What happened
Shares of Qualcomm (NASDAQ: QCOM) had surged by 4.5% as of 3:17 p.m. ET Tuesday, a performance that was all the more remarkable since the tech-heavy Nasdaq Composite was at that point in the session down by 2.8%.
Obviously, there must have been some very positive company-specific news for Qualcomm to defy the sector-wide sell-off. That came from the declaration by a much-followed analyst that Apple's (NASDAQ: AAPL) efforts to develop its own 5G mobile modem "may have failed," and that Qualcomm will supply 100% of the mobile modems used in the iPhones to be manufactured in 2023.
So what
On Tuesday, Taiwanese analyst Ming-Chi Kuo at TF International Securities tweeted, "My latest survey indicates that Apple's own iPhone 5G modem chip development may have failed, so Qualcomm will remain exclusive supplier for 5G chips of 2H23 new iPhones, with a 100% supply share (vs. company's previous estimate of 20%)."
If true, this would certainly be fantastic news for Qualcomm, which has seen its valuation multiples contract over the past few years -- even as its results have remained strong -- due to investors' anticipation that it would eventually lose Apple as a major client. Back in 2019, Apple bought Intel's (NASDAQ: INTC) mobile modem business for $1 billion with the goal of eventually producing its own modems.
Apple has increasingly looked to develop its own chips in order to improve performance and further differentiate its hardware from Android phones and Windows-based PCs. It has already successfully developed the powerful "M" series processor for its Mac computers, displacing Intel's CPUs from them.
However, it appears mobile modems are a tougher nut to crack. Previously, Qualcomm had predicted it would only supply 20% of iPhones in 2023. And since Apple is falling behind on its modem ambitions, who knows how long Qualcomm will retain this business?
Apple has a relatively small share of the global smartphone market, with a percentage in the high teens to the low twenties. However, it controls an outsized share of the market for higher-priced premium phones. Therefore, the news is a big deal, especially since Qualcomm's low price-to-earnings ratio of around 13 indicates that investors are valuing it with the expectation that it will face growth struggles in the years ahead.
Now what
Investors will have to see if the conclusions Kuo drew from his survey turn out to be true. If he's right, that only bolsters an already-solid investment case for Qualcomm. Notably, management has been diversifying the company's revenue streams away from mobile devices, gaining ground in high-growth segments such as automotive chips, Internet of Things chips, and radio frequency chips for 5G radios. Last quarter, Qualcomm's automotive segment revenues were up 41% year over year, and its IoT division sales were up a whopping 61%.
Those newer segments accounted for one-third of revenue last quarter, and they should continue to deliver strong growth for the rest of this decade, which would offset any potential loss of business from Apple. Yet if the tech giant sticks with Qualcomm as a key supplier for a bit longer, the chipmaker should enjoy stronger and smoother growth than investors have expected. All in all, Qualcomm still looks like a great value stock, even after Tuesday's bump.
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*Stock Advisor returns as of June 2, 2022
Billy Duberstein has positions in Apple. The Motley Fool has positions in and recommends Apple, Intel, and Qualcomm. His clients may own shares of the companies mentioned. The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | That came from the declaration by a much-followed analyst that Apple's (NASDAQ: AAPL) efforts to develop its own 5G mobile modem "may have failed," and that Qualcomm will supply 100% of the mobile modems used in the iPhones to be manufactured in 2023. If true, this would certainly be fantastic news for Qualcomm, which has seen its valuation multiples contract over the past few years -- even as its results have remained strong -- due to investors' anticipation that it would eventually lose Apple as a major client. Those newer segments accounted for one-third of revenue last quarter, and they should continue to deliver strong growth for the rest of this decade, which would offset any potential loss of business from Apple. | That came from the declaration by a much-followed analyst that Apple's (NASDAQ: AAPL) efforts to develop its own 5G mobile modem "may have failed," and that Qualcomm will supply 100% of the mobile modems used in the iPhones to be manufactured in 2023. So what On Tuesday, Taiwanese analyst Ming-Chi Kuo at TF International Securities tweeted, "My latest survey indicates that Apple's own iPhone 5G modem chip development may have failed, so Qualcomm will remain exclusive supplier for 5G chips of 2H23 new iPhones, with a 100% supply share (vs. company's previous estimate of 20%)." The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, and short March 2023 $130 calls on Apple. | That came from the declaration by a much-followed analyst that Apple's (NASDAQ: AAPL) efforts to develop its own 5G mobile modem "may have failed," and that Qualcomm will supply 100% of the mobile modems used in the iPhones to be manufactured in 2023. So what On Tuesday, Taiwanese analyst Ming-Chi Kuo at TF International Securities tweeted, "My latest survey indicates that Apple's own iPhone 5G modem chip development may have failed, so Qualcomm will remain exclusive supplier for 5G chips of 2H23 new iPhones, with a 100% supply share (vs. company's previous estimate of 20%)." The Motley Fool recommends the following options: long January 2023 $57.50 calls on Intel, long March 2023 $120 calls on Apple, short January 2023 $57.50 puts on Intel, and short March 2023 $130 calls on Apple. | That came from the declaration by a much-followed analyst that Apple's (NASDAQ: AAPL) efforts to develop its own 5G mobile modem "may have failed," and that Qualcomm will supply 100% of the mobile modems used in the iPhones to be manufactured in 2023. So what On Tuesday, Taiwanese analyst Ming-Chi Kuo at TF International Securities tweeted, "My latest survey indicates that Apple's own iPhone 5G modem chip development may have failed, so Qualcomm will remain exclusive supplier for 5G chips of 2H23 new iPhones, with a 100% supply share (vs. company's previous estimate of 20%)." The Motley Fool has positions in and recommends Apple, Intel, and Qualcomm. |
20506.0 | 2022-06-28 00:00:00 UTC | 3 Stocks That Warren Buffett Can't Get Enough Of | AAPL | https://www.nasdaq.com/articles/3-stocks-that-warren-buffett-cant-get-enough-of | nan | nan | One of the most widely-followed individuals in the financial world is the mega-popular Warren Buffett. Recognized as one of the most successful investors of all time, it’s easy to see why eyes are constantly fixated on him and why investors are always waiting on his next move.
Warren Buffett is a philanthropist and businessman. He’s the CEO of Berkshire Hathaway, a diversified holding company whose subsidiaries engage in insurance, freight rail transportation, energy generation and distribution, manufacturing, and many others.
Throughout his life, he’s reaped stellar returns in the market. Simply put, he’s been excellent in choosing stocks, and that’s what we’re here to look at today.
On Monday, it was revealed in a regulatory filing that Berkshire Hathaway had acquired an additional 795,000 shares of Occidental Petroleum Corp. OXY, which increased the company’s stake to 16.4%.
Buffett has been on a buying spree in 2022, something we typically do not see. However, it does raise a valid question – what else has he bought in 2022? Let’s take a deeper dive into his OXY purchase and two other of his 2022 purchases.
Occidental Petroleum Corporation
Founded in 1920, Occidental Petroleum Corporation OXY is an integrated oil and gas company with significant exploration and production exposure. The company is also a producer of various basic chemicals, petrochemicals, polymers, and specialty chemicals. OXY operates through three segments: Oil and Gas, Chemical, and Midstream and Marketing.
OXY shares have been scorching hot year-to-date, as illustrated in the chart below.
Image Source: Zacks Investment Research
The company has reported strong quarterly results, exceeding EPS expectations consistently. Over its last four quarters, the company has beat bottom-line estimates on average by 7.6%, and in its latest quarterly release, OXY crushed EPS estimates by a sizable 26%.
Additionally, bottom-line growth rates are stellar across several timeframes. The $2.88 EPS estimate for the upcoming quarter reflects a jaw-dropping 800% growth in earnings from the year-ago quarter.
Perhaps even more impressive, FY22 earnings are forecasted to climb a massive triple-digit 306% year-over-year. Analysts have pushed their estimates higher across the board over the last 60 days.
Image Source: Zacks Investment Research
OXY is a Zacks Rank #3 with an overall VGM Score of an A.
Apple
We’re all familiar with Apple AAPL, the creator of the legendary iPhone, among many other widely-popular products. The company has completely shifted the mobile phone landscape over the last decade, and it’s been one of the best places for investors to park their cash.
AAPL shares have struggled year-to-date, declining approximately 21% in value and slightly underperforming the S&P 500.
Image Source: Zacks Investment Research
Numerous times, Buffett has stated that he’s attracted to Apple due to a simple fact – brand loyalty. Apple consumers have a strong tendency to trade in old Apple products for new ones, establishing a loyal customer base. Additionally, he believes that the company’s services and products are very beneficial and crucial to society.
AAPL has provided stellar quarterly results, exceeding bottom-line expectations in a whopping 19 out of its last 20 quarterly reports. The company has acquired a four-quarter trailing average EPS surprise of a double-digit 12%, and in its latest quarter, it exceeded EPS expectations by a robust 6.3% in the face of adverse business conditions.
Analysts have primarily dialed back their earnings estimates over the last 60 days, with the $1.14 per share estimate for the upcoming quarter reflecting a somewhat concerning 12% decrease in earnings from the year-ago quarter.
However, the $6.11 EPS estimate for FY22 displays a robust 9% growth in the bottom-line year-over-year.
Image Source: Zacks Investment Research
Apple is a Zacks Rank #3 (Hold) with an overall VGM Score of a C.
Chevron
Chevron CVX is one of the world's largest publicly traded oil and gas companies, with operations that span nearly all corners of the globe.
CVX shares have been hot year-to-date, increasing approximately 30% in value and extensively outperforming the S&P 500.
Image Source: Zacks Investment Research
Berkshire Hathaway significantly raised its stake in the oil giant, becoming one of the largest holds in the portfolio. Similar to OXY, it represents a massive bet on the oil industry, a primary focus of attention within the market throughout 2022.
CVX has had mixed quarterly results over its last four reports, missing EPS expectations twice and exceeding them twice. In its latest quarter, the company reported EPS of $3.36, which missed the Zacks Consensus Estimate of $3.44 per share by a slight 2.3%.
Analysts have dialed back their earnings estimates over the last 60 days, but bottom-line growth remains robust. For the upcoming quarter, the $4.69 per share estimate displays a substantial 175% growth in earnings from the year-ago quarter.
Furthermore, for the current fiscal year, the $17.50 EPS estimate reflects a massive triple-digit expansion of 115% within the bottom-line year-over-year.
Image Source: Zacks Investment Research
CVX is a Zacks Rank #3 (Hold) with an overall VGM Score of an A.
Bottom Line
Commonly referred to as the “Oracle of Omaha,” Warren Buffett has amassed a fortune within the stock market, making it easy to understand why investors anxiously await every move he makes.
He’s been on a buying spree year-to-date, which we generally don’t see. The Berkshire CEO undoubtedly recognizes all of the discounts that 2022 has brought us and has deployed an offensive approach.
All three stocks above are ones in which Buffett has increased his position size in throughout 2022, putting them in the spotlight. For investors seeking to invest like the Oracle of Omaha, all three companies above would provide that approach.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Apple Inc. (AAPL): Free Stock Analysis Report
Chevron Corporation (CVX): Free Stock Analysis Report
Occidental Petroleum Corporation (OXY): 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. | Image Source: Zacks Investment Research OXY is a Zacks Rank #3 with an overall VGM Score of an A. Apple We’re all familiar with Apple AAPL, the creator of the legendary iPhone, among many other widely-popular products. AAPL shares have struggled year-to-date, declining approximately 21% in value and slightly underperforming the S&P 500. AAPL has provided stellar quarterly results, exceeding bottom-line expectations in a whopping 19 out of its last 20 quarterly reports. | Image Source: Zacks Investment Research OXY is a Zacks Rank #3 with an overall VGM Score of an A. Apple We’re all familiar with Apple AAPL, the creator of the legendary iPhone, among many other widely-popular products. AAPL shares have struggled year-to-date, declining approximately 21% in value and slightly underperforming the S&P 500. AAPL has provided stellar quarterly results, exceeding bottom-line expectations in a whopping 19 out of its last 20 quarterly reports. | Image Source: Zacks Investment Research OXY is a Zacks Rank #3 with an overall VGM Score of an A. Apple We’re all familiar with Apple AAPL, the creator of the legendary iPhone, among many other widely-popular products. AAPL shares have struggled year-to-date, declining approximately 21% in value and slightly underperforming the S&P 500. AAPL has provided stellar quarterly results, exceeding bottom-line expectations in a whopping 19 out of its last 20 quarterly reports. | Apple Inc. (AAPL): Free Stock Analysis Report Image Source: Zacks Investment Research OXY is a Zacks Rank #3 with an overall VGM Score of an A. Apple We’re all familiar with Apple AAPL, the creator of the legendary iPhone, among many other widely-popular products. AAPL shares have struggled year-to-date, declining approximately 21% in value and slightly underperforming the S&P 500. |
20507.0 | 2022-06-28 00:00:00 UTC | US Supreme Court Rejects Apple Attempts To Restart Qualcomm Patent Dispute | AAPL | https://www.nasdaq.com/articles/us-supreme-court-rejects-apple-attempts-to-restart-qualcomm-patent-dispute | nan | nan | (RTTNews) - The US Supreme Court on Monday denied iPhone maker Apple Inc.'s (AAPL) request for a hearing to invalidate two Qualcomm (QCOM) patents, which had an important role in the attempts made by the chip maker in 2017 to ban Apple Watch, iPad and iPhone sales citing infringement of modem technology.
The Supreme Court did not give any reason as to why it rejected the request but a Justice Department amicus brief from May had said that there was no evidence to show that the Qualcomm patents were causing any harm to Apple's business.
It was in 2019 that the two companies settled their patent royalty dispute, thus putting an end to all the legal action, including those with Apple's manufacturing partners. Apple paid Qualcomm an unspecified amount, while both sides decided upon a six-year patent license deal as well as a "multi-year" wireless chipset supply deal.
While the six-year licensing deal was to settle the main issue, the agreement did not draw any conclusion on a US Patent and Trademark Office case involving the two patents. Apple lost an attempt to invalidate the patents with the USPTO's Patent Trial and Appeal Board, and again failed when a Federal Circuit court dismissed Apple's appeal request based on the settlement. When the iPhone maker went to the Supreme Court, the Justice Department filed its supporting brief opposing the request.
Apple, in its lawsuit, said that Qualcomm might use the patents to sue again once the licensing deal expires in 2025 or 2027, if extended. It's not certain what either company will do next. The landscape is expected to change drastically over the next few years and according to sources, Apple is leaving Qualcomm in favor of using its own 5G modems as soon as next year, and it's not yet clear as to how that move will affect the ongoing truce.
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 US Supreme Court on Monday denied iPhone maker Apple Inc.'s (AAPL) request for a hearing to invalidate two Qualcomm (QCOM) patents, which had an important role in the attempts made by the chip maker in 2017 to ban Apple Watch, iPad and iPhone sales citing infringement of modem technology. The Supreme Court did not give any reason as to why it rejected the request but a Justice Department amicus brief from May had said that there was no evidence to show that the Qualcomm patents were causing any harm to Apple's business. It was in 2019 that the two companies settled their patent royalty dispute, thus putting an end to all the legal action, including those with Apple's manufacturing partners. | (RTTNews) - The US Supreme Court on Monday denied iPhone maker Apple Inc.'s (AAPL) request for a hearing to invalidate two Qualcomm (QCOM) patents, which had an important role in the attempts made by the chip maker in 2017 to ban Apple Watch, iPad and iPhone sales citing infringement of modem technology. Apple paid Qualcomm an unspecified amount, while both sides decided upon a six-year patent license deal as well as a "multi-year" wireless chipset supply deal. When the iPhone maker went to the Supreme Court, the Justice Department filed its supporting brief opposing the request. | (RTTNews) - The US Supreme Court on Monday denied iPhone maker Apple Inc.'s (AAPL) request for a hearing to invalidate two Qualcomm (QCOM) patents, which had an important role in the attempts made by the chip maker in 2017 to ban Apple Watch, iPad and iPhone sales citing infringement of modem technology. The Supreme Court did not give any reason as to why it rejected the request but a Justice Department amicus brief from May had said that there was no evidence to show that the Qualcomm patents were causing any harm to Apple's business. Apple lost an attempt to invalidate the patents with the USPTO's Patent Trial and Appeal Board, and again failed when a Federal Circuit court dismissed Apple's appeal request based on the settlement. | (RTTNews) - The US Supreme Court on Monday denied iPhone maker Apple Inc.'s (AAPL) request for a hearing to invalidate two Qualcomm (QCOM) patents, which had an important role in the attempts made by the chip maker in 2017 to ban Apple Watch, iPad and iPhone sales citing infringement of modem technology. It was in 2019 that the two companies settled their patent royalty dispute, thus putting an end to all the legal action, including those with Apple's manufacturing partners. Apple paid Qualcomm an unspecified amount, while both sides decided upon a six-year patent license deal as well as a "multi-year" wireless chipset supply deal. |
20508.0 | 2022-06-28 00:00:00 UTC | US STOCKS-Wall Street tumbles as consumer data fuels recession worries | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-tumbles-as-consumer-data-fuels-recession-worries | nan | nan | By Stephen Culp
NEW YORK, June 28 (Reuters) - Wall Street slid on Tuesday with early gains reversing to a broad sell-off on the heels of dire consumer confidence data, which dampened investor optimism and stoked recession fears.
All three major U.S. stock indexes were sharply lower, with the tech-laden Nasdaq declining the most. Amazon.com AMZN.O, Microsoft Corp MSFT.O and Apple Inc AAPL.O were the heaviest drags.
With the end of the month and the second quarter a mere two days away, the benchmark S&P 500 is on track for its biggest first-half percentage drop since 1970.
All three indexes are on course to notch two straight quarterly declines for the first time since 2015.
"It has been a very bad start to the year, and 1970 is a pretty good analog to where we are now, with war and inflation," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
Data released on Tuesday morning showed the Conference Board's consumer confidence index dropping to the lowest it has been since February 2021, with near-term expectations reaching its most pessimistic level in nearly a decade.
The growing gap between the Conference Board's "current situation" and "expectations" components have widened to levels that often precede recession:
The Dow Jones Industrial Average .DJI fell 344.19 points, or 1.09%, to 31,094.07, the S&P 500 .SPX lost 60.5 points, or 1.55%, to 3,839.61 and the Nasdaq Composite .IXIC dropped 283.90 points, or 2.46%, to 11,240.66.
Of the 11 major sectors in the S&P 500, consumer discretionary .SPLRCD was suffering the largest percentage loss. Energy stocks .SPNY was the biggest gainer, benefiting from rising crude prices CLc1. O/R
With few market catalysts and market participants gearing up for the July Fourth holiday weekend, Tuz cautions against reading too much into daily index moves.
"One doesn't want to make much of this week - it's a pre-holiday week," Tuz added. "The real action is going to start in about 10 days, when companies start reporting earnings and providing guidance."
With several weeks to go until second-quarter reporting commences, 130 S&P 500 companies 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.
Nike Inc NKE.N slid 6.3% after forecasting lower than expected first-quarter revenue.
Shares of Occidental Petroleum Corp OXY.N advanced 3.1% after Warren Buffett's Berkshire Hathaway Inc BRKa.N raised its stake in the company.
Declining issues outnumbered advancing ones on the NYSE by a 1.56-to-1 ratio; on Nasdaq, a 2.23-to-1 ratio favored decliners.
The S&P 500 posted one new 52-week high and 29 new lows; the Nasdaq Composite recorded 25 new highs and 98 new lows.
Consumer confidencehttps://tmsnrt.rs/3HYP3Jx
(Reporting by Stephen Culp; Additional reporting by Shreyashi Sanyal and Amruta Khandekar in Bengaluru; editing by Grant McCool)
((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. | Amazon.com AMZN.O, Microsoft Corp MSFT.O and Apple Inc AAPL.O were the heaviest drags. By Stephen Culp NEW YORK, June 28 (Reuters) - Wall Street slid on Tuesday with early gains reversing to a broad sell-off on the heels of dire consumer confidence data, which dampened investor optimism and stoked recession fears. "It has been a very bad start to the year, and 1970 is a pretty good analog to where we are now, with war and inflation," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. | Amazon.com AMZN.O, Microsoft Corp MSFT.O and Apple Inc AAPL.O were the heaviest drags. All three major U.S. stock indexes were sharply lower, with the tech-laden Nasdaq declining the most. Data released on Tuesday morning showed the Conference Board's consumer confidence index dropping to the lowest it has been since February 2021, with near-term expectations reaching its most pessimistic level in nearly a decade. | Amazon.com AMZN.O, Microsoft Corp MSFT.O and Apple Inc AAPL.O were the heaviest drags. Data released on Tuesday morning showed the Conference Board's consumer confidence index dropping to the lowest it has been since February 2021, with near-term expectations reaching its most pessimistic level in nearly a decade. The growing gap between the Conference Board's "current situation" and "expectations" components have widened to levels that often precede recession: The Dow Jones Industrial Average .DJI fell 344.19 points, or 1.09%, to 31,094.07, the S&P 500 .SPX lost 60.5 points, or 1.55%, to 3,839.61 and the Nasdaq Composite .IXIC dropped 283.90 points, or 2.46%, to 11,240.66. | Amazon.com AMZN.O, Microsoft Corp MSFT.O and Apple Inc AAPL.O were the heaviest drags. All three major U.S. stock indexes were sharply lower, with the tech-laden Nasdaq declining the most. Data released on Tuesday morning showed the Conference Board's consumer confidence index dropping to the lowest it has been since February 2021, with near-term expectations reaching its most pessimistic level in nearly a decade. |
20509.0 | 2022-06-28 00:00:00 UTC | EXPLAINER-How a massive options trade by a JP Morgan fund can move markets | AAPL | https://www.nasdaq.com/articles/explainer-how-a-massive-options-trade-by-a-jp-morgan-fund-can-move-markets | nan | nan | By Saqib Iqbal Ahmed
NEW YORK, June 28 (Reuters) - A nearly $17 billion JP Morgan fund is expected to reset its options positions on Thursday, potentially adding to equity volatility at the end of a dismal first half for stocks.
Analysts say the JPMorgan Hedged Equity Fund’s reset roiled markets in the closing hours of the last quarter and has the potential to move markets again this time around.
Here is what you need to know:
WHAT IS THE JP MORGAN HEDGED EQUITY FUND?
The JPMorgan Hedged Equity Fund holds a basket of S&P 500 .SPX stocks along with options on the benchmark index and resets hedges once a quarter. The fund, which had about $16.71 billion in assets as of June 27, aims to let investors benefit from equity market gains while limiting their exposure to stock declines.
For the year, the fund was down 9.6% through June 27, compared with a 17.6% decline for the S&P 500 Total return Index .SPXTR.
Its assets have ballooned in recent years, as investors seek protection from the sort of wild swings that rocked markets in the wake of the COVID-19 outbreak in March 2020.
The fund's positions include some of the market's biggest names, such as shares of Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O.
HOW DOES THE FUND USE OPTIONS?
The fund uses an options overlay strategy that involves buying put options that make money if the S&P 500 drops about 5% or more from its level at the start of each quarter. To limit the cost of these put purchases, the fund also sells puts that would make money if the S&P 500 drops more than 20%.
In addition, the fund sells call options struck about 3.5%-5.5% above the market level, to help fund the cost of the hedge.
In all, the trade is structured so that investors are protected if the market falls -5% to -20%, and they are able to take advantage of any market gains in the average range of 3.5-5.5%.
In March, the refresh of these positions involved about 130,000 S&P 500 contracts in all, worth some $20 billion in notional terms.
HOW CAN THIS AFFECT THE BROADER MARKET?
Options dealers - typically big financial institutions who facilitate trading but seek to remain market-neutral - take the other side of the fund's options trades.
To minimize their own risk, they typically buy or sell stock futures, depending on the direction of the market's move. Such trading related to dealer hedging has the potential to influence the broader market, especially if done in size, as is the case for the JPM trade.
The S&P 500 Index .SPX fell 1.2% in the last hour of trading on March 31 amid a lack of any obvious news - a move some analysts pinned on options hedging flows.
Traders say the refresh could exacerbate market swings on Thursday, as the fund rolls over its options positions and dealers buy and sell futures to hedge their exposure.
Charlie McElligott, equities derivatives strategist at Nomura, believes that all else being equal, more volatility and stock weakness could follow after June 30, once the trade is out of the way.
The strategy's puts corresponding to the 3,620 level on the S&P 500, the lower leg of the trade, may have lent support to the market during its slide this month, he said.
Massive S&P options trade may have roiled U.S. stocks on Thursday
(Reporting by Saqib Iqbal Ahmed in New York Editing by Ira Iosebashvili and Matthew Lewis)
((saqib.ahmed@thomsonreuters.com; @SaqibReports; +1 646 223 6054; Reuters Messaging: saqib.ahmed.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. | The fund's positions include some of the market's biggest names, such as shares of Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Saqib Iqbal Ahmed NEW YORK, June 28 (Reuters) - A nearly $17 billion JP Morgan fund is expected to reset its options positions on Thursday, potentially adding to equity volatility at the end of a dismal first half for stocks. The S&P 500 Index .SPX fell 1.2% in the last hour of trading on March 31 amid a lack of any obvious news - a move some analysts pinned on options hedging flows. | The fund's positions include some of the market's biggest names, such as shares of Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Saqib Iqbal Ahmed NEW YORK, June 28 (Reuters) - A nearly $17 billion JP Morgan fund is expected to reset its options positions on Thursday, potentially adding to equity volatility at the end of a dismal first half for stocks. Analysts say the JPMorgan Hedged Equity Fund’s reset roiled markets in the closing hours of the last quarter and has the potential to move markets again this time around. | The fund's positions include some of the market's biggest names, such as shares of Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. Analysts say the JPMorgan Hedged Equity Fund’s reset roiled markets in the closing hours of the last quarter and has the potential to move markets again this time around. In addition, the fund sells call options struck about 3.5%-5.5% above the market level, to help fund the cost of the hedge. | The fund's positions include some of the market's biggest names, such as shares of Apple Inc AAPL.O, Microsoft Corp MSFT.O and Amazon.com Inc AMZN.O. By Saqib Iqbal Ahmed NEW YORK, June 28 (Reuters) - A nearly $17 billion JP Morgan fund is expected to reset its options positions on Thursday, potentially adding to equity volatility at the end of a dismal first half for stocks. The fund, which had about $16.71 billion in assets as of June 27, aims to let investors benefit from equity market gains while limiting their exposure to stock declines. |
20510.0 | 2022-06-28 00:00:00 UTC | Apple (AAPL) Boosts Content Portfolio With Animal Pictures Deal | AAPL | https://www.nasdaq.com/articles/apple-aapl-boosts-content-portfolio-with-animal-pictures-deal | nan | nan | Apple AAPL TV+ recently announced that the company has signed a new deal with Maya Rudolph's production company Animal Pictures for new shows.
The recent deal comes right after Apple TV+ debuted its new comedy series Loot, starring Maya Rudolph, last week.
The first-look deal gives Apple TV+ exclusive access to all TV series and digital films in production at the Animal Pictures studio first and the first right to refusal as well. Animal Pictures can shop its product to other potential buyers in the industry only following a refusal by Apple.
Apple has previously inked similar deals with other production companies as the company is investing heavily to build its content portfolio. Deals with other notable production houses include Scott Free Productions, Appian Way, Sikelia Productions and Green Door Pictures, to name a few.
Apple Inc. Price and Consensus
Apple Inc. price-consensus-chart | Apple Inc. Quote
Apple's Contract Strategy Driving Market Share
Apple's new deal with Rudolph's production house exhibits the company's strategy to beat the competition by winning market share in an already saturated market. The company is signing first-look deals with notable production houses, which is giving Apple access to content earlier than its competitors like Netflix NFLX and Disney DIS.
Every major streaming company is trying to win market share with original and new content. Apple being a more cash-rich company than its peers, is capitalizing on the advantage by blocking access to its peers, which is especially hurting companies like Netflix.
Netflix enjoys the leading position in the streaming industry. The company has been spending aggressively to build its original content portfolio. However, in its first-quarter 2022 earnings, NFLX reported that it has lost customers for the first time in a decade due to stiff competition.
Apple has been expanding its genre base to attract varied viewers, as evident from its foray into the live sports streaming space. Apple TV+ has won exclusive rights to broadcast Major League Soccer ("MLS") worldwide starting from 2023 for 10 years.
However, Apple is facing stiff competition from Disney and Amazon AMZN in the live sports streaming space.
Disney primarily dominates the live sports streaming space with its ESPN, which is home to several live sporting events like the F1 race, La Liga, Bundesliga, UEFA Champions League and the NBA.
Another major contender in the live sports streaming space is Amazon, which is well ahead of Apple in this race.
Amazon signed a long-term deal with the National Football League (NFL) that makes its streaming service — Prime Video — the exclusive broadcaster of Thursday Night Football, beginning with the 2022 season.
Apple's shares have been negatively impacted by the ongoing COVID-induced lockdowns in Shanghai, global supply chain disruptions, the Russia-Ukraine war, rising inflation and Fed's rate hikes. These macro-economic events have made the share market extremely unpredictable and volatile. This is quite evident from the performance of the Nasdaq Composite index, which is filled with tech stocks.
Apple's shares have fallen 20.7% in the year-to-date period compared with the Zacks Computer - Mini computers industry's decline of 19.7%.
However, Apple TV+'s lower price compared with its competitors in the United States and the first-look deal strategy that helps expand Apple TV+'s content portfolio are expected to attract viewers from its competitors. This is likely to drive Services revenues, which will impact shareholders' wealth positively in the long run.
Apple currently carries Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Netflix, Inc. (NFLX): Free Stock Analysis Report
The Walt Disney Company (DIS): Free Stock Analysis Report
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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. | Apple AAPL TV+ recently announced that the company has signed a new deal with Maya Rudolph's production company Animal Pictures for new shows. Apple Inc. (AAPL): Free Stock Analysis Report The first-look deal gives Apple TV+ exclusive access to all TV series and digital films in production at the Animal Pictures studio first and the first right to refusal as well. | Apple AAPL TV+ recently announced that the company has signed a new deal with Maya Rudolph's production company Animal Pictures for new shows. Apple Inc. (AAPL): Free Stock Analysis Report Apple Inc. Price and Consensus Apple Inc. price-consensus-chart | Apple Inc. Quote Apple's Contract Strategy Driving Market Share Apple's new deal with Rudolph's production house exhibits the company's strategy to beat the competition by winning market share in an already saturated market. | Apple AAPL TV+ recently announced that the company has signed a new deal with Maya Rudolph's production company Animal Pictures for new shows. Apple Inc. (AAPL): Free Stock Analysis Report Apple has previously inked similar deals with other production companies as the company is investing heavily to build its content portfolio. | Apple AAPL TV+ recently announced that the company has signed a new deal with Maya Rudolph's production company Animal Pictures for new shows. Apple Inc. (AAPL): Free Stock Analysis Report Apple has previously inked similar deals with other production companies as the company is investing heavily to build its content portfolio. |
20511.0 | 2022-06-28 00:00:00 UTC | Apple (AAPL) Likely to Launch New Macs With Four M2 Chip Variants | AAPL | https://www.nasdaq.com/articles/apple-aapl-likely-to-launch-new-macs-with-four-m2-chip-variants | nan | nan | Apple AAPL is likely to launch new Macs with four M2 chip variants — Pro, Ultra, Max, and Extreme — this year, per a latest newsletter by Bloomberg journalist, Mark Gurman, cited by 9TO5Mac.
Apart from new iPhones touted as iPhone 14 and 14 Pro, which are most likely to be launched in September, Gurman also expects the launches of a Mac Mini and Mac Mini Pro powered by the M2 chip.
Apple is also expected to launch Watch Series 8 and second-generation Watch SE later this year.
Moreover, Gurman expects a new HomePod to be released by Apple in 2023.
Apple Inc. Price and Consensus
Apple Inc. price-consensus-chart | Apple Inc. Quote
Apple’s Expanding Portfolio to Boost Growth
Apple has been struggling so far in 2022, primarily due to coronavirus-induced supply-chain disruptions, industry-wide silicon shortage, unfavorable forex and the ongoing Russia-Ukraine conflict.
Shares of the iPhone-maker have been down 20.2% year to date although it has managed to outperform the Zacks Computer & Technology sector’s decline of 27.7%.
The near-term outlook is not enthusiastic, given the headwinds. Apple did not provide revenue guidance for the third quarter of fiscal 2022. Apple expects COVID-induced supply chain disruptions and the industry-wide silicon shortage to hurt its top line by $4-$8 billion. Unfavorable forex is also expected to hurt revenues by 300 basis points (bps).
Moreover, the absence of revenues from Russia is expected to hurt the top line by 150 bps. Apple paused all sales in Russia during the fiscal second quarter (March quarter).
Nevertheless, the company’s expanding portfolio brightens its prospects. The new M2 chips are expected to boost demand for new MacBook Air and MacBook Pro, thereby improving Apple’s competitive position against the likes of Lenovo, Dell Technologies DELL and HP HPQ.
Per Gartner, worldwide PC shipments in the first quarter of 2022 witnessed a year-over-year decrease of 6.8%, reaching 77.9 million units. Both Lenovo and HP witnessed decline in market share while Dell and Apple’s shares gained.
Dell, Apple and ASUS were the only vendors that witnessed shipment growth in first-quarter 2022. Dell shipped 13.804 million units, witnessing 6.1% year-over-year growth in said time period, per the Gartner report.
Apple shipped 7.005 million units, witnessing 8.6% year-over-year growth. HP shipped 15.863 million units, down 17.8% year over year.
Moreover, the new watchOS9 updates (announced during Worldwide Developer Conference) will strengthen Apple Watch’s features, helping it steer off competition from the likes of Garmin GRMN, which has been constantly innovating in this domain.
Garmin recently unveiled a running smartwatch called the Forerunner 955 Solar with solar charging capability. The latest device expands Garmin’s portfolio of fitness offerings, adding strength to its fitness segment.
Meanwhile, the Services portfolio has emerged as Apple’s new cash cow. This Zacks Rank #3 (Hold) company had more than 825 million paid subscribers across its Services portfolio at the end of fiscal second quarter. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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Apple Inc. (AAPL): Free Stock Analysis Report
HP Inc. (HPQ): Free Stock Analysis Report
Garmin Ltd. (GRMN): Free Stock Analysis Report
Dell Technologies Inc. (DELL): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple AAPL is likely to launch new Macs with four M2 chip variants — Pro, Ultra, Max, and Extreme — this year, per a latest newsletter by Bloomberg journalist, Mark Gurman, cited by 9TO5Mac. Apple Inc. (AAPL): Free Stock Analysis Report Apple expects COVID-induced supply chain disruptions and the industry-wide silicon shortage to hurt its top line by $4-$8 billion. | Apple AAPL is likely to launch new Macs with four M2 chip variants — Pro, Ultra, Max, and Extreme — this year, per a latest newsletter by Bloomberg journalist, Mark Gurman, cited by 9TO5Mac. Apple Inc. (AAPL): Free Stock Analysis Report The new M2 chips are expected to boost demand for new MacBook Air and MacBook Pro, thereby improving Apple’s competitive position against the likes of Lenovo, Dell Technologies DELL and HP HPQ. | Apple Inc. (AAPL): Free Stock Analysis Report Apple AAPL is likely to launch new Macs with four M2 chip variants — Pro, Ultra, Max, and Extreme — this year, per a latest newsletter by Bloomberg journalist, Mark Gurman, cited by 9TO5Mac. Apple Inc. Price and Consensus Apple Inc. price-consensus-chart | Apple Inc. Quote Apple’s Expanding Portfolio to Boost Growth Apple has been struggling so far in 2022, primarily due to coronavirus-induced supply-chain disruptions, industry-wide silicon shortage, unfavorable forex and the ongoing Russia-Ukraine conflict. | Apple AAPL is likely to launch new Macs with four M2 chip variants — Pro, Ultra, Max, and Extreme — this year, per a latest newsletter by Bloomberg journalist, Mark Gurman, cited by 9TO5Mac. Apple Inc. (AAPL): Free Stock Analysis Report This Zacks Rank #3 (Hold) company had more than 825 million paid subscribers across its Services portfolio at the end of fiscal second quarter. |
20512.0 | 2022-06-28 00:00:00 UTC | 3 Stocks to Buy When Inflation Is High | AAPL | https://www.nasdaq.com/articles/3-stocks-to-buy-when-inflation-is-high | nan | nan | Consumer prices rose 8.6% in May, according to the Bureau of Labor Statistics, and there's no telling when the increase in prices will stop. Supply chain issues, increased money supply, and low interest rates have fueled inflation, and the worry is that it will be hard to stop.
As investors, one of the best ways to combat inflation is investing in companies that have the pricing power to pass additional costs on to customers, or that may even see inflation as a tailwind. I think Apple (NASDAQ: AAPL), MGM Resorts International (NYSE: MGM), and Verizon Communications (NYSE: VZ) all have a lot going for them in an inflationary environment.
Apple's pricing power
Companies are going to react to inflation pressure in different ways. Some will reduce spending to lower input costs (restaurants), others will need to eat the added cost because they're in a competitive market (hotels), and others will be able to pass additional costs on to the customers because they have pricing power.
Apple is certainly able to pass costs on to customers because it has a fairly affluent user base and a high price point already. It also has long-term supply contracts that could keep some inflation costs at bay.
The way I think about Apple, the biggest risk is that consumers put off purchases because of higher prices. But Apple has already seen refresh cycles get longer, and there's a limit to how long people will wait to get a new smartphone, especially in the company's affluent target market for new devices.
On top of pricing power, Apple has $192.7 billion in cash and investments on its balance sheet. High inflation has led to rising interest rates, which mean better returns on that cash.
Apple has the balance sheet to withstand the current turmoil and will be able to pass cost increases on to customers, and that's why it's a great stock to own in an inflationary environment.
MGM Resorts may love higher prices
MGM Resorts may be a hidden inflation play because of its high operating leverage. The company spent tens of billions of dollars building or acquiring the casinos it operates on the Las Vegas Strip and around the world, but then it sold most of the underlying real estate to Vici Properties (NYSE: VICI) when interest rates were much lower than they are today, reducing interest rate risk.
Today, the business doesn't have many expansion opportunities because gambling has become saturated in the places where it's legal, so the outlays are limited.
This combination of selling assets when rates were low and having few expansion plans is actually an advantage in an inflationary environment, because any price increases for hotel rooms, food, and gambling will be very high-margin.
Look at the image below to see that MGM's gross margin is relatively high at nearly 50%, but operating margins are lower (in the high single digits) because of relatively high operating expenses. This is because operating costs include items like rent and marketing costs. If the price of hotel rooms, food, and other items goes up, we could see margins rise because of this operating leverage.
MGM Gross Profit Margin (Quarterly) data by YCharts
The downside risk is that MGM will likely be more affected by a recession than Apple or Verizon because a trip to Las Vegas is a discretionary expense. So far, that reduction in revenue hasn't hit MGM hard, but it's a risk to the business that's worth acknowledging because it could offset some of the advantages MGM has in an inflationary environment.
Verizon has become a consumer staple
Verizon may have pricing power in the cellular market, but that's not why it's a great inflation stock. Its advantage is that the spending it did to buy spectrum and build a 5G network, not to mention the debt to fund those expansions, is in the past. And the company has just $13.1 billion in debt maturing in the next year and some debt extending all the way out to 2061.
VZ Total Long Term Debt (Quarterly) data by YCharts
So as inflation increases, the cash margin that Verizon generates should rise, assuming it raises prices even slightly. This could lead to a steady increase in the bottom line, and given rising interest rates, Verizon may even use some cash flow to pay down debt.
Telecommunications stocks aren't normally put in the consumer staples category, but given how reliant modern consumers are on smartphones, I think it's about as stable a business as there is today. Inflation may lead to higher prices for service, but that'll help Verizon's bottom line as well.
Inflation could be a tailwind for some companies
Inflation may not generally be helpful for business or the economy, but for Apple, MGM Resorts, and Verizon it isn't the headwind it will be for some. If the economy doesn't decline sharply, inflation may even be a tailwind for the bottom line. That's why these are companies I would recommend buying if you're worried about inflation getting even worse.
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Travis Hoium has positions in Apple, MGM Resorts International, and Verizon Communications. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends VICI Properties Inc. and Verizon Communications 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. | I think Apple (NASDAQ: AAPL), MGM Resorts International (NYSE: MGM), and Verizon Communications (NYSE: VZ) all have a lot going for them in an inflationary environment. Apple has the balance sheet to withstand the current turmoil and will be able to pass cost increases on to customers, and that's why it's a great stock to own in an inflationary environment. This combination of selling assets when rates were low and having few expansion plans is actually an advantage in an inflationary environment, because any price increases for hotel rooms, food, and gambling will be very high-margin. | I think Apple (NASDAQ: AAPL), MGM Resorts International (NYSE: MGM), and Verizon Communications (NYSE: VZ) all have a lot going for them in an inflationary environment. The company spent tens of billions of dollars building or acquiring the casinos it operates on the Las Vegas Strip and around the world, but then it sold most of the underlying real estate to Vici Properties (NYSE: VICI) when interest rates were much lower than they are today, reducing interest rate risk. The Motley Fool recommends VICI Properties Inc. and Verizon Communications and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | I think Apple (NASDAQ: AAPL), MGM Resorts International (NYSE: MGM), and Verizon Communications (NYSE: VZ) all have a lot going for them in an inflationary environment. As investors, one of the best ways to combat inflation is investing in companies that have the pricing power to pass additional costs on to customers, or that may even see inflation as a tailwind. Verizon has become a consumer staple Verizon may have pricing power in the cellular market, but that's not why it's a great inflation stock. | I think Apple (NASDAQ: AAPL), MGM Resorts International (NYSE: MGM), and Verizon Communications (NYSE: VZ) all have a lot going for them in an inflationary environment. As investors, one of the best ways to combat inflation is investing in companies that have the pricing power to pass additional costs on to customers, or that may even see inflation as a tailwind. MGM Resorts may love higher prices MGM Resorts may be a hidden inflation play because of its high operating leverage. |
20513.0 | 2022-06-28 00:00:00 UTC | 1 Unstoppable Metaverse Stock Down 55% That Could Soar, According to Wall Street | AAPL | https://www.nasdaq.com/articles/1-unstoppable-metaverse-stock-down-55-that-could-soar-according-to-wall-street | nan | nan | Meta Platforms (NASDAQ: META) has led the social media industry for over 10 years with its flagship platform, Facebook, in addition to its acquired assets Instagram and WhatsApp. Over 3.6 billion people engage with Meta's platforms every month, or nearly half the population of the entire planet.
That makes the company a prime candidate to lead the world into the next phase of social and professional networking: the metaverse. It's a collection of virtual worlds accessible by using wearable technology like a headset or glasses, and it's set to be a multitrillion-dollar opportunity over the next decade (and beyond).
Meta Platforms' stock is heavily beaten down due to the broader tech sell-off and some internal challenges. However, Wall Street thinks there's significant potential upside ahead.
Meta has been navigating tough times
Meta Platforms has had an incredible run since it listed as a public company in 2012 with a debut share price of $38. It reached a lofty $384 per share in September 2021, so the company's IPO backers were sitting pretty on a gain of more than 10 times their initial investment (assuming they'd held on).
Meta did a stellar job leading what was a brand-new social media industry, especially with the explosion of new technologies that would see most social media usage switch from computers to mobile devices. The sector's evolution has been swift, with notable contributions from the company's key competitors, but Meta has adapted and thrived each step of the way.
But the company does face growth challenges now that its user base has become so large. Plus, interventions by third parties like Apple (NASDAQ: AAPL) have unsettled Meta's business. Apple has changed its approach to privacy by empowering iPhone device customers to choose which apps they share their data with, so Meta is having a hard time tracking its social media users with the same accuracy as before.
Meta anticipates it will take a $10 billion hit to its revenue in 2022 because of this, as it can't target users to the same degree in order to sell advertising to its business customers. It's part of the reason Meta's stock has plunged 55% from its all-time high to $170 today.
But as the most well-resourced social media player in the game, finding a solution to this challenge is likely just a matter of time.
It's a long-term game for Meta
The technology sector is littered with high-growth companies, but the best of them make high-profit businesses out of their platforms. Meta has expanded its revenue from $5 billion in 2012 to $117 billion in 2021, and its earnings per share have been in positive territory every single year of that journey.
Meta's aforementioned challenges are likely to result in an earnings dip for the full 2022 year, according to analysts, but it's also partly due to the company's investments in the metaverse.
Meta's Reality Labs segment is responsible for developing the virtual world, and it burned $10 billion in 2021 doing so. It's on track to exceed that number in 2022 after losing $2.9 billion in the first quarter alone. This will continue to hit the company's bottom line, but there's already some tangible progress to show for it, including a brand new mixed-reality wearable headset called Project Cambria.
Cambria is designed to fuse the wearer's physical world with the virtual one by beaming digital enhancements into their vision, and it could change the way employees work in office jobs forever. It has the capability to replace laptop computers and even entire workstations, as the wearer can view and switch between multiple virtual screens with the single piece of hardware.
The opportunity for Meta could be staggering in size
It's tough to predict just how valuable the metaverse could be because it's such a broad opportunity in both hardware and software, but some pundits have given it a shot. The estimates vary widely, from $1.6 trillion annually by 2030 to $30 trillion over the next decade.
The economy inside the metaverse could be worth a fortune by itself. Meta CEO Mark Zuckerberg envisions a billion people in the metaverse spending hundreds of dollars each on digital goods and services to improve their personal avatars.
With the most active social media platforms in the world, Meta is perfectly positioned to lead the race. And by developing both the metaverse itself and the hardware, it's more likely to avoid disruptive changes from third parties like Apple in the future.
But even in the near term, Wall Street is very bullish on Meta Platforms' stock. Of the 53 analysts that cover it, just one recommends selling, with 34 analysts rating it a buy. The average price target is $283.54 over the next 12 to 18 months, which represents 66% upside from where Meta shares trade today.
But given the sheer size of the metaverse opportunity, investors might be better off buying the stock with a five- to 10-year time horizon for even stronger returns.
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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. Anthony Di Pizio 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. | Plus, interventions by third parties like Apple (NASDAQ: AAPL) have unsettled Meta's business. Apple has changed its approach to privacy by empowering iPhone device customers to choose which apps they share their data with, so Meta is having a hard time tracking its social media users with the same accuracy as before. Cambria is designed to fuse the wearer's physical world with the virtual one by beaming digital enhancements into their vision, and it could change the way employees work in office jobs forever. | Plus, interventions by third parties like Apple (NASDAQ: AAPL) have unsettled Meta's business. Meta Platforms (NASDAQ: META) has led the social media industry for over 10 years with its flagship platform, Facebook, in addition to its acquired assets Instagram and WhatsApp. Meta CEO Mark Zuckerberg envisions a billion people in the metaverse spending hundreds of dollars each on digital goods and services to improve their personal avatars. | Plus, interventions by third parties like Apple (NASDAQ: AAPL) have unsettled Meta's business. Meta Platforms (NASDAQ: META) has led the social media industry for over 10 years with its flagship platform, Facebook, in addition to its acquired assets Instagram and WhatsApp. Meta has been navigating tough times Meta Platforms has had an incredible run since it listed as a public company in 2012 with a debut share price of $38. | Plus, interventions by third parties like Apple (NASDAQ: AAPL) have unsettled Meta's business. Meta did a stellar job leading what was a brand-new social media industry, especially with the explosion of new technologies that would see most social media usage switch from computers to mobile devices. 10 stocks we like better than Meta Platforms, Inc. |
20514.0 | 2022-06-28 00:00:00 UTC | 7 Growth Stocks to Buy After the Market Crash | AAPL | https://www.nasdaq.com/articles/7-growth-stocks-to-buy-after-the-market-crash | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The 2022 bear market is in the middle-to-late phase. Consumer confidence is at an all-time-low level. March 2022’s stock market rebound tricked investors into thinking that buying the dip would work. Between April and May, markets tried to rally. Each time, sellers emerged in droves.
The selling throughout this year triggered a bear market with a loss of 20% from the high. This negative crowd might lead to a market crash next. The macroeconomic weakness is only intensifying. The Federal Reserve hiked interest rates by 75 basis points.
Markets haven’t received a shock of this size since 1994.
Source: StockRover
The central bank reacted to the consumer price index rising by 8.6% with urgency. It is so severely behind in raising rates that it needs to increase that amount.
Stock markets are still unprepared for this. Technology stocks, many of which are down 80% or more, are still overvalued. Retail investors are avoiding companies that do not earn a profit and sold off companies that traded at unsustainable valuations.
But there are still some gems. In the table above, Stock Rover issued strong quality scores for five of the seven stocks in this gallery.
7 Long-Term Stocks to Buy for a Secure Retirement
So here are seven growth stocks investors should buy after the market crash. Though since it’s is impossible to time a bottom in the stock market, investors should instead build a stock buying list and ease in at good prices.
AAPL Apple $141.66
INTC Intel $38.63
MA Mastercard $328.83
MO Altria $43.19
MSFT Microsoft $264.89
NEE NextEra Energy $77.90
SHOP Shopify $373.09
Apple (AAPL)
Source: WeDesing / Shutterstock.com
Apple (NASDAQ:AAPL) has a $2.3 trillion market capitalization title at the end of last week. It is also trading at 21.4 times forward earnings. Markets will struggle to justify Apple at its current price.
At lower levels, investors will find many reasons to own AAPL stock.
Apple is aggressively building its streaming content service. On June 14, 2022, it signed a deal with Major League Soccer. Fans may stream every soccer match on the Apple TV app. It’s also still in play for the NFL Sunday Ticker. This might give Apple a significant edge over other streaming services. Viewers will not have any local broadcast blackouts. Furthermore, they do not need to pay for a traditional pay-TV bundle.
Consumers will cut their spending as inflation rates soar. Many will tune out of traditional TV. Apple’s MLS deal is another reason for sports fans to sign up for the Apple TV app instead.
In the second quarter of 2023, Apple is expecting to release a mixed reality headset. Since sales of computers, tablets and smartphones are not slowing, the company may take its time developing an augmented reality peripheral.
Intel (INTC)
Source: Sundry Photography / Shutterstock.com
Intel (NASDAQ:INTC) failed to launch a graphics card at the start of 2022. Impatient investors dumped the stock in frustration. After much delay, the chip giant debuted its GPU in China.
Intel Arc A380 Photon is the first custom GPU based on an Intel Xe-HPG/DG2 architecture. To test consumer response, the company introduced the card in China. It has many technical advantages. It needs 92 watts of power. Furthermore, this model is overclocked and may run as fast as 2450 MHz. The card will have 15.5 Gbps of memory.
Intel chose to bundle the A380 Arc with pre-built systems first. This will shelter the product from GPU price fluctuations.
Why does that matter? This month, cryptocurrency prices crashed. Crypto miners will panic by selling GPUs on the secondary market. But this excess supply should not affect Intel’s GPU launch.
7 Bargain Income Stocks to Buy and Hold Forever
Intel needs to manage through the worsening market conditions. China is slowly emerging from its latest Covid-related lockdown. The PC market is weakening. Consumers already upgraded their systems during the pandemic. Still, as unit prices fall and manufacturers release budget-priced boards for Intel’s Alder Lake, demand will recover.
Mastercard (MA)
Source: David Cardinez / Shutterstock.com
Mastercard (NYSE:MA) is fairly well insulated from the crash in fintech stocks. Traditional credit card firms have a stronger, more secure infrastructure and better customer support. Instead of waiting weeks or months for an email reply from a fintech service, customers may get help on the phone.
On May 24, 2022, Mastercard strengthened its cybersecurity consulting practice. It will protect customers with its Cyber Front threat simulation platform. Mastercard’s Cyber Front continues to update its library of over 3,500 scenarios based on real-life threats. By protecting customers in real-time, fintech competitors cannot match this company’s level of security.
Admittedly, Mastercard’s openness to NFTs (non-fungible tokens) and Web 3.0 is a potential distraction. On June 9, 2022, it allowed people to use their Mastercard cards for NFTs purchases.
The crumbling value of NFT suggests that such marketplaces will realize lower sales from here. Still, NFT marketplaces enjoyed more than $25 billion in sales in 2021.
Altria Group (MO)
Source: viewimage / Shutterstock.com
Altria Group (NYSE:MO) stock fell hard recently after a report said President Joe Biden’s administration will pursue a plan that requires tobacco makers to cut nicotine levels in cigarettes.
For over a decade, Altria has joined other tobacco firms under government scrutiny. Every time MO stock fell, investors bought the dip and Altria stock recovered.
Income investors get $3.60 a share in dividends for taking political risks.
Investors also worried about tobacco consumption falling because of rising gas prices and poor consumer sentiment. This concern is misguided. Cigarettes are a non-deferrable purchase. They are low cost and are a necessity for many customers. Consumers have better ways to save money. They will cut spending on high-priced items or drive less to save on gas.
Furthermore, they may negotiate with employers to work more often at home, cutting travel costs.
7 REITs to Buy for a Profitable Summer
Smokers will give up other things before quitting cigarettes. Still, if they reduce smoking only slightly, it will not have a meaningful impact on Altria’s business.
Microsoft (MSFT)
Source: Peteri / Shutterstock.com
Software sales are weakening but Microsoft (NASDAQ:MSFT) has a broad portfolio to rely on.
In cloud computing, Microsoft’s Azure will keep growing. Corporations need to consolidate their software sources. For example, customers that use Microsoft Office, SQL Server, and Microsoft Teams may consider Azure, too. They would benefit from switching away from Amazon.com’s (NASDAQ:AMZN) AWS. By running on one Microsoft platform, customers will realize efficiencies while cutting down on complexity.
Investors tend to punish all stocks during a market crash, including selling MSFT stock. But then they’ll regret this mistake when market conditions improve.
In five years, shareholders should expect Microsoft to generate at least $400 billion in revenue and nearly $150 billion in earnings.
During the technology software bubble, companies that could not produce a profit got a lot of attention. After investors sold those stocks, they will look for long-term profitable ones. Microsoft will reward investors who have a five to 10 year time horizon.
NextEra Energy (NEE)
Source: madamF / Shutterstock.com
Earlier this month, NextEra Energy (NYSE:NEE) announced higher adjusted earnings per share expectations during its investor conference.
On June 14, the firm raised its expected adjusted earnings per share for the next four years to be in the range of $2.80 to $2.90; $2.98 to $3.13; $3.23 to $3.43; and $3.45 to $3.70, respectively. In 2025, its growth rate is between 6% and 8%. This positive trend will lead to regular dividend payment increases.
In the first quarter, NextEra Energy posted non-GAAP earnings per share of 74 cents. Shareholders briefly sold the stock in disappointment over its 22.5% year-over-year revenue decline, to $2.89 billion. Fortunately, the company will clear up uncertainties surrounding established tariffs with the Commerce Department.
7 Retirement Stocks to Buy in Unexpected Sectors
NextEra’s Florida Power and Light continue to perform well. In the next four years, the company has strong visibility in the unit’s performance after the settlement agreement. The company will benefit as it realizes over $400 million in run-rate savings in the next few years.
Shopify (SHOP)
Source: Burdun Iliya / Shutterstock.com
Shopify (NYSE:SHOP) led the decline as investors sold e-commerce firms. On June 14, 2022, producer price index figures fell slightly. This suggests peak inflation, which would benefit Shopify’s business.
Merchant sales volumes recover when inflation rates slow or decline. The Federal Reserve’s aggressive fight against inflation will benefit Shopify’s ecosystem in the end. While the company ignores the stock price dropping, it is investing in fulfillment logistics.
In May 2022, Shopify bought Deliverr for $2.1 billion in cash and stock. The acquisition will give Shopify’s independent business customers an edge. They will have a powerful logistics platform that increases the customers’ satisfaction. Shopify’s moat as the de-facto e-commerce platform strengthens after it combines Shopify Fulfillment Network (SNF) with Deliverr’s Shop Promise. Shop Promise gives customers two-day and next-day delivery. It also expands options for facilitating merchant storage, freight, inventory management, and product returns.
In 2019, Shopify acquired 6 River Systems. The purchase increased the speed and reliability of warehouse operations. The system facilitated inventory replenishment, picking, sorting and packing activities.
On the date of publication, Chris Lau 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 Growth Stocks to Buy After the Market Crash 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 $141.66 INTC Intel $38.63 MA Mastercard $328.83 MO Altria $43.19 MSFT Microsoft $264.89 NEE NextEra Energy $77.90 SHOP Shopify $373.09 Apple (AAPL) Source: WeDesing / Shutterstock.com Apple (NASDAQ:AAPL) has a $2.3 trillion market capitalization title at the end of last week. At lower levels, investors will find many reasons to own AAPL stock. Since sales of computers, tablets and smartphones are not slowing, the company may take its time developing an augmented reality peripheral. | AAPL Apple $141.66 INTC Intel $38.63 MA Mastercard $328.83 MO Altria $43.19 MSFT Microsoft $264.89 NEE NextEra Energy $77.90 SHOP Shopify $373.09 Apple (AAPL) Source: WeDesing / Shutterstock.com Apple (NASDAQ:AAPL) has a $2.3 trillion market capitalization title at the end of last week. At lower levels, investors will find many reasons to own AAPL stock. Altria Group (MO) Source: viewimage / Shutterstock.com Altria Group (NYSE:MO) stock fell hard recently after a report said President Joe Biden’s administration will pursue a plan that requires tobacco makers to cut nicotine levels in cigarettes. | AAPL Apple $141.66 INTC Intel $38.63 MA Mastercard $328.83 MO Altria $43.19 MSFT Microsoft $264.89 NEE NextEra Energy $77.90 SHOP Shopify $373.09 Apple (AAPL) Source: WeDesing / Shutterstock.com Apple (NASDAQ:AAPL) has a $2.3 trillion market capitalization title at the end of last week. At lower levels, investors will find many reasons to own AAPL stock. 7 Long-Term Stocks to Buy for a Secure Retirement So here are seven growth stocks investors should buy after the market crash. | AAPL Apple $141.66 INTC Intel $38.63 MA Mastercard $328.83 MO Altria $43.19 MSFT Microsoft $264.89 NEE NextEra Energy $77.90 SHOP Shopify $373.09 Apple (AAPL) Source: WeDesing / Shutterstock.com Apple (NASDAQ:AAPL) has a $2.3 trillion market capitalization title at the end of last week. At lower levels, investors will find many reasons to own AAPL stock. On June 9, 2022, it allowed people to use their Mastercard cards for NFTs purchases. |
20515.0 | 2022-06-28 00:00:00 UTC | Should iShares S&P 500 Growth ETF (IVW) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-ishares-sp-500-growth-etf-ivw-be-on-your-investing-radar-2 | nan | nan | Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the iShares S&P 500 Growth ETF (IVW) is a passively managed exchange traded fund launched on 05/22/2000.
The fund is sponsored by Blackrock. It has amassed assets over $29.05 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market.
Why Large Cap Growth
Large cap companies typically 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. Also, growth stocks are a type of equity that carries more risk compared to others. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.18%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 0.70%.
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 48.30% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 14.07% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN).
The top 10 holdings account for about 53.26% of total assets under management.
Performance and Risk
IVW seeks to match the performance of the S&P 500 Growth Index before fees and expenses. The S&P 500 Growth Index measures the performance of the large capitalization growth sector of the U.S. equity market.
The ETF has lost about -25.26% so far this year and is down about -12.05% in the last one year (as of 06/28/2022). In the past 52-week period, it has traded between $58.13 and $84.81.
The ETF has a beta of 1.04 and standard deviation of 26.25% for the trailing three-year period, making it a medium risk choice in the space. With about 243 holdings, it effectively diversifies company-specific risk.
Alternatives
IShares S&P 500 Growth ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, IVW is an excellent option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.
The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $69.40 billion in assets, Invesco QQQ has $160.57 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares S&P 500 Growth ETF (IVW): ETF Research Reports
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
Vanguard Growth ETF (VUG): ETF Research Reports
To read this article on Zacks.com click here.
The 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 14.07% 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 $29.05 billion, making it one of the largest ETFs attempting to match the Large Cap Growth segment of the US equity market. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 14.07% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the iShares S&P 500 Growth ETF (IVW) is a passively managed exchange traded fund launched on 05/22/2000. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 14.07% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Designed to provide broad exposure to the Large Cap Growth segment of the US equity market, the iShares S&P 500 Growth ETF (IVW) is a passively managed exchange traded fund launched on 05/22/2000. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 14.07% of total assets, followed by Microsoft Corp (MSFT) and Amazon Com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets. |
20516.0 | 2022-06-28 00:00:00 UTC | Should SPDR MSCI USA StrategicFactors ETF (QUS) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-spdr-msci-usa-strategicfactors-etf-qus-be-on-your-investing-radar-2 | nan | nan | Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the SPDR MSCI USA StrategicFactors ETF (QUS) is a passively managed exchange traded fund launched on 04/15/2015.
The fund is sponsored by State Street Global Advisors. It has amassed assets over $835.13 million, making it one of the larger ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies typically 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 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.52%.
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 26.80% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc. (AAPL) accounts for about 3.04% of total assets, followed by Microsoft Corporation (MSFT) and Johnson & Johnson (JNJ).
The top 10 holdings account for about 19.11% of total assets under management.
Performance and Risk
QUS seeks to match the performance of the MSCI USA Factor Mix A-Series Index before fees and expenses. The MSCI USA Factor Mix A-Series Index measures the equity market performance of large and mid-cap companies across the U.S. equity market. It aims to represent the performance of a combination of three factors: value, quality, and low volatility.
The ETF has lost about -14.62% so far this year and is down about -5.60% in the last one year (as of 06/28/2022). In the past 52-week period, it has traded between $103.89 and $131.16.
The ETF has a beta of 0.92 and standard deviation of 22.92% for the trailing three-year period, making it a medium risk choice in the space. With about 622 holdings, it effectively diversifies company-specific risk.
Alternatives
SPDR MSCI USA StrategicFactors 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, QUS 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 $287.81 billion in assets, SPDR S&P 500 ETF has $356.04 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.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
SPDR MSCI USA StrategicFactors ETF (QUS): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
Johnson & Johnson (JNJ): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
To read this article on Zacks.com click here.
The 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 3.04% of total assets, followed by Microsoft Corporation (MSFT) and Johnson & Johnson (JNJ). Apple Inc. (AAPL): Free Stock Analysis Report Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the SPDR MSCI USA StrategicFactors ETF (QUS) is a passively managed exchange traded fund launched on 04/15/2015. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 3.04% of total assets, followed by Microsoft Corporation (MSFT) and Johnson & Johnson (JNJ). Apple Inc. (AAPL): Free Stock Analysis Report Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the SPDR MSCI USA StrategicFactors ETF (QUS) is a passively managed exchange traded fund launched on 04/15/2015. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 3.04% of total assets, followed by Microsoft Corporation (MSFT) and Johnson & Johnson (JNJ). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives SPDR MSCI USA StrategicFactors ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. | Apple Inc. (AAPL): Free Stock Analysis Report Looking at individual holdings, Apple Inc. (AAPL) accounts for about 3.04% of total assets, followed by Microsoft Corporation (MSFT) and Johnson & Johnson (JNJ). Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the SPDR MSCI USA StrategicFactors ETF (QUS) is a passively managed exchange traded fund launched on 04/15/2015. |
20517.0 | 2022-06-28 00:00:00 UTC | Wall Street Continues to be Optimistic on Apple Stock: Here’s Why | AAPL | https://www.nasdaq.com/articles/wall-street-continues-to-be-optimistic-on-apple-stock%3A-heres-why | nan | nan | The threat of a recession, geopolitical tensions, and rising interest rates have significantly dragged down the tech sector this year. Tech giant Apple (NASDAQ: AAPL) has also been caught up in the broader market sell-off, with the stock down 20.2% year-to-date. Additionally, investors are also worried about the impact of supply chain disruptions and other macro headwinds on the company.
While Apple is known for its groundbreaking product innovations like the iPhone, the company has also been focusing on expanding its Services business.
Focus on Services
Apple generated $97.3 billion revenue in the fiscal second quarter (ended March 26, 2022), of which Products accounted for nearly 80% of the revenue while the remaining came from Services. Apple’s Services revenue includes sales from advertising, AppleCare, cloud services, digital content (including Apple Store, books, music, video and games), and payment services (like Apple Card, Apple Pay).
Apple’s Services business is growing rapidly. What’s more, it carries a higher gross margin than the Products business. Apple’s Services revenue grew 17.3% to $19.8 billion, while Product revenue was up 6.6% to $77.5 billion.
Apple’s Services business is expected to be one of the key growth drivers of its future revenue with the company experiencing increasing customer engagement. Apple now has more than 825 million paid subscriptions across the services it offers on its platform.
Apple continues to launch several offerings to boost its services revenue. The company recently announced that its iOS 16 operating system will have Apply Pay Later, a buy-now pay-later service that will initially be launched in the U.S this year.
Wall Street’s Take
Recently, Evercore ISI analyst Amit Daryanani reiterated a Buy rating on Apple stock as he believes that there is “plenty of runway” for most Apple Services, such as Apple Music, TV, and Arcade.
Meanwhile, J.P. Morgan analyst Samik Chatterjee notes that despite its "longevity and portfolio expansion," he estimates that Apple's Payments revenue has only reached $1 billion in recent years, and is on track to expand to $4 billion by FY26, accounting for only 5% of the company's total Services revenue.
That said, Chatterjee feels that gaining share in the Payments market is "a marathon, not a sprint," and an addressable market of $30 billion is "on the horizon.”
The analyst sees “many avenues of upside” as Apple continues to strengthen its portfolio and expand its installed base. Chatterjee opines that Apple's ecosystem is most comparable to that of PayPal (PYPL), with a total addressable market of $110 trillion.
Chatterjee reiterated a Buy rating on Apple stock with a price target of $200.
Overall, Apple scores a Strong Buy consensus rating based on 21 Buys and six Holds. The average Apple price target of $185.34 implies 30.83% upside potential from current levels.
Conclusion
Concerns about the impact of a challenging macro backdrop on consumer spending for premium products like Apple iPhone remain. That said, the majority of Wall Street analysts covering Apple continue to be optimistic on the company’s prospects based on its strength in the smartphone market, continued innovation, a rapidly growing Services business, and solid fundamentals.
Apple scores a “Perfect 10” on TipRanks’ Smart Score system, implying that it could likely outperform the broader market.
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. | Tech giant Apple (NASDAQ: AAPL) has also been caught up in the broader market sell-off, with the stock down 20.2% year-to-date. Apple’s Services business is expected to be one of the key growth drivers of its future revenue with the company experiencing increasing customer engagement. The company recently announced that its iOS 16 operating system will have Apply Pay Later, a buy-now pay-later service that will initially be launched in the U.S this year. | Tech giant Apple (NASDAQ: AAPL) has also been caught up in the broader market sell-off, with the stock down 20.2% year-to-date. Wall Street’s Take Recently, Evercore ISI analyst Amit Daryanani reiterated a Buy rating on Apple stock as he believes that there is “plenty of runway” for most Apple Services, such as Apple Music, TV, and Arcade. Chatterjee reiterated a Buy rating on Apple stock with a price target of $200. | Tech giant Apple (NASDAQ: AAPL) has also been caught up in the broader market sell-off, with the stock down 20.2% year-to-date. Apple’s Services revenue includes sales from advertising, AppleCare, cloud services, digital content (including Apple Store, books, music, video and games), and payment services (like Apple Card, Apple Pay). Wall Street’s Take Recently, Evercore ISI analyst Amit Daryanani reiterated a Buy rating on Apple stock as he believes that there is “plenty of runway” for most Apple Services, such as Apple Music, TV, and Arcade. | Tech giant Apple (NASDAQ: AAPL) has also been caught up in the broader market sell-off, with the stock down 20.2% year-to-date. While Apple is known for its groundbreaking product innovations like the iPhone, the company has also been focusing on expanding its Services business. Apple continues to launch several offerings to boost its services revenue. |
20518.0 | 2022-06-28 00:00:00 UTC | Arm launches new chip technology for smartphone games | AAPL | https://www.nasdaq.com/articles/arm-launches-new-chip-technology-for-smartphone-games | nan | nan | June 28 (Reuters) - Arm Ltd, the British chip technology firm owned by SoftBank Group Corp 9984.T, on Tuesday unveiled a set of new chip technologies aimed at making video games on smartphones look better while preserving battery life.
The latest products are designs for graphics processing units, or GPUs, most often used for video processing in gaming. Arm makes money by licensing its blueprints to chip companies like MediaTek Inc 2454.TW who in turn use them to design chips for Android-based smartphones.
Arm on Tuesday also upgraded plans for its CPUs, or central processing units, the main brains in a computer. In both cases, Arm is aiming to improve the performance of chips while using less electricity.
The latest push to improve mobile chips comes as Arm customers like Apple Inc AAPL.O and Qualcomm Inc QCOM.O are reducing their dependence on Arm.
While Apple and Qualcomm still pay Arm some licensing fees to ensure their chips work with software written for Arm-based chips, they now design many more critical parts of their chips themselves rather than using Arm-made designs.
"Our latest suite of compute solutions for consumer devices will continue to raise the threshold of what's possible in the mobile market," said Arm executive Paul Williamson in a blog announcing the new products.
"For developers, making these immersive real-time 3D experiences even more compelling and engaging requires more performance."
(Reporting By Jane Lanhee Lee and Stephen Nellis; editing by Richard Pullin)
((jane.lee@thomsonreuters.com; +1-415-344-3912; Reuters Messaging: jane.lee.thomsonreuters@reuters.net))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The latest push to improve mobile chips comes as Arm customers like Apple Inc AAPL.O and Qualcomm Inc QCOM.O are reducing their dependence on Arm. June 28 (Reuters) - Arm Ltd, the British chip technology firm owned by SoftBank Group Corp 9984.T, on Tuesday unveiled a set of new chip technologies aimed at making video games on smartphones look better while preserving battery life. Arm on Tuesday also upgraded plans for its CPUs, or central processing units, the main brains in a computer. | The latest push to improve mobile chips comes as Arm customers like Apple Inc AAPL.O and Qualcomm Inc QCOM.O are reducing their dependence on Arm. June 28 (Reuters) - Arm Ltd, the British chip technology firm owned by SoftBank Group Corp 9984.T, on Tuesday unveiled a set of new chip technologies aimed at making video games on smartphones look better while preserving battery life. The latest products are designs for graphics processing units, or GPUs, most often used for video processing in gaming. | The latest push to improve mobile chips comes as Arm customers like Apple Inc AAPL.O and Qualcomm Inc QCOM.O are reducing their dependence on Arm. June 28 (Reuters) - Arm Ltd, the British chip technology firm owned by SoftBank Group Corp 9984.T, on Tuesday unveiled a set of new chip technologies aimed at making video games on smartphones look better while preserving battery life. Arm makes money by licensing its blueprints to chip companies like MediaTek Inc 2454.TW who in turn use them to design chips for Android-based smartphones. | The latest push to improve mobile chips comes as Arm customers like Apple Inc AAPL.O and Qualcomm Inc QCOM.O are reducing their dependence on Arm. The latest products are designs for graphics processing units, or GPUs, most often used for video processing in gaming. Arm makes money by licensing its blueprints to chip companies like MediaTek Inc 2454.TW who in turn use them to design chips for Android-based smartphones. |
20519.0 | 2022-06-27 00:00:00 UTC | CEOs will look past abortion bans, too | AAPL | https://www.nasdaq.com/articles/ceos-will-look-past-abortion-bans-too | nan | nan | Reuters
Reuters
NEW YORK (Reuters Breakingviews) - The demolition of the constitutionally protected right to an abortion in the United States is historic. But for companies doing business in America, the cost-benefit analysis it provokes will feel familiar. Corporate bosses will end up viewing America’s illiberal states the way they do any emerging market.
Each state will be left to decide how and whether to regulate abortion after the Supreme Court on Friday decided that protections of “life, liberty, or property” don’t include ending a pregnancy as a right. At least eight states had already banned the procedure by Monday, and around half of the 50 are primed to outlaw it under statutes already in place.
Removing access to abortion could increase maternal deaths https://read.dukeupress.edu/demography/article/58/6/2019/265968/The-Pregnancy-Related-Mortality-Impact-of-a-Total by over one-fifth, according to Duke University, and Black maternal deaths by one-third. Recognizing the anxiety, companies have moved to reassure their staff: Facebook owner Meta Platforms and Goldman Sachs are among those offering to fund travel costs for employees who need to go out of state for healthcare and reproductive services.
But if the majority of Americans https://www.cbsnews.com/news/americans-react-to-roe-v-wade-overturn-opinion-poll-2022-06-26 who oppose the overturning of Roe vs. Wade hope their large, powerful employers will do more, they will be disappointed. Multinationals long ago made peace with setting up shop in locations where freedoms taken for granted in some countries are limited in the name of stability or ideology. Foreign direct investment into China surged by a third to $344 billion last year, according to Peterson Institute for International Economics. Net foreign investment in Saudi Arabia jumped more than threefold in 2021, according to state media.
China and states like Texas are in that way somewhat similar. The Lone Star state offers low taxes, good universities, rich natural resources, and scale. Accepting bans on abortion is simply the cost of doing business for companies like Goldman Sachs and Apple. So is turning a blind eye to the governing Texas Republican Party’s recent declaration that “homosexuality” is “an abnormal lifestyle choice https://texasgop.org/wp-content/uploads/2022/06/6-Permanent-Platform-Committee-FINAL-REPORT-6-16-2022.pdf,” an awkward reality for companies that trumpet their commitment to diversity.
Emerging-market attitudes don’t always create economic success for nations – or states. Mississippi, for example, has no Fortune 500 companies headquartered within its borders. It’s also the state with the least well-functioning healthcare system https://www.commonwealthfund.org/publications/scorecard/2022/jun/2022-scorecard-state-health-system-performance in the country, according to the Commonwealth Fund. Even then, there’s a price at which growth looks attractive. JPMorgan opened its first branch in the Magnolia State last year.
When asked how they feel about draconian governments in profitable places, company bosses often say that they follow the laws wherever they operate, and it’s not their job to challenge what those laws are. Investors mostly acquiesce. America is now another place for them to practice that line.
Follow @johnsfoley https://twitter.com/johnsfoley on Twitter
CONTEXT NEWS
Several U.S. states had moved to ban abortion within days of the Supreme Court overturning a landmark ruling that had affirmed abortion as a constitutionally protected right.
Thirteen of the 50 states already had so-called trigger laws designed to be enacted as soon as the Roe vs. Wade decision of 1973 had been struck down. Some ban abortions completely, while others outlaw them after a certain number of weeks.
Nine states, including Texas, Missouri, South Dakota and Oklahoma, were classed by the Guttmacher Institute as having “most restrictive” policies in effect as of June 27. Eleven, including New York, California, Oregon and Illinois, were labeled “protective” or “most protective.”
(Editing by Lauren Silva Laughin and Amanda Gomez)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Recognizing the anxiety, companies have moved to reassure their staff: Facebook owner Meta Platforms and Goldman Sachs are among those offering to fund travel costs for employees who need to go out of state for healthcare and reproductive services. Multinationals long ago made peace with setting up shop in locations where freedoms taken for granted in some countries are limited in the name of stability or ideology. So is turning a blind eye to the governing Texas Republican Party’s recent declaration that “homosexuality” is “an abnormal lifestyle choice https://texasgop.org/wp-content/uploads/2022/06/6-Permanent-Platform-Committee-FINAL-REPORT-6-16-2022.pdf,” an awkward reality for companies that trumpet their commitment to diversity. | Accepting bans on abortion is simply the cost of doing business for companies like Goldman Sachs and Apple. Several U.S. states had moved to ban abortion within days of the Supreme Court overturning a landmark ruling that had affirmed abortion as a constitutionally protected right. Nine states, including Texas, Missouri, South Dakota and Oklahoma, were classed by the Guttmacher Institute as having “most restrictive” policies in effect as of June 27. | Each state will be left to decide how and whether to regulate abortion after the Supreme Court on Friday decided that protections of “life, liberty, or property” don’t include ending a pregnancy as a right. Recognizing the anxiety, companies have moved to reassure their staff: Facebook owner Meta Platforms and Goldman Sachs are among those offering to fund travel costs for employees who need to go out of state for healthcare and reproductive services. Several U.S. states had moved to ban abortion within days of the Supreme Court overturning a landmark ruling that had affirmed abortion as a constitutionally protected right. | Foreign direct investment into China surged by a third to $344 billion last year, according to Peterson Institute for International Economics. When asked how they feel about draconian governments in profitable places, company bosses often say that they follow the laws wherever they operate, and it’s not their job to challenge what those laws are. Several U.S. states had moved to ban abortion within days of the Supreme Court overturning a landmark ruling that had affirmed abortion as a constitutionally protected right. |
20520.0 | 2022-06-27 00:00:00 UTC | 2 Stocks to Watch From the Challenging Computer Industry | AAPL | https://www.nasdaq.com/articles/2-stocks-to-watch-from-the-challenging-computer-industry | nan | nan | The Zacks Computer – Mini Computers industry is suffering from massive supply chain and logistical issues, along with several pandemic-related and geopolitical challenges, including the ongoing Russia-Ukraine war. However, the coronavirus outbreak has been beneficial for industry participants like Apple AAPL and HP HPQ. Despite massive supply chain disruption, the ongoing work-from-home and online-learning waves have been beneficial for them. Strong demand for high-end laptops and smartphones, particularly the availability of 5G-supported iPhones, has been a key catalyst. Further, the launch of foldable as well as AI and ML-infused smartphones, tablets, wearables and hearables is a major growth driver for the industry participants.
Industry Description
The Zacks Computer – Mini Computers industry comprises companies that offer smartphones, desktops, laptops, printers, wearables and 3-D printers. Such devices are based either on iOS, MacOS, iPadOS, WatchOS, Microsoft Windows, or on Google Chrome and Android operating systems. They predominantly use processors from Apple, Intel, AMD, Qualcomm, NVIDIA and Samsung. Expanding screen size, better display and enhanced storage capabilities have been key catalysts driving the rapid proliferation of smartphones. This has been well-supported by faster mobile processors. Laptops, both consumer and commercial, benefit from faster processors, sleek designs and expanded storage facilities. The addition of healthcare features has been driving demand for wearables.
3 Mini Computer Industry Trends to Watch Out For
Bring Your Own Device (BYOD) Aids Momentum: The industry is benefiting from the rapid adoption of BYOD in workplaces. Enterprises practicing BYOD allow employees to use their personal devices, including mobiles, laptops and tablets, for work purposes. BYOD helps in bridging communication gaps between remote workers and desk-bound employees, thereby improving process management and workflow. Moreover, BYOD has proved more productive as it lowers training time. Moreover, the coronavirus-induced remote working and online learning model bode well for industry participants as demand is expected to increase for desktops and laptops.
Impressive Formfactor Drives Demand: Expanding screen size, better display and enhanced storage capabilities have been key catalysts driving the rapid proliferation of smartphones and tablets. This has been well-supported by faster mobile processors from the likes of Qualcomm (Snapdragon-branded), NVIDIA (Tegra X1), Apple (A14 Bionic) and Samsung (Exynos 9609). Moreover, improved Internet penetration and speed along with the evolution of mobile apps have made smartphones indispensable for consumers. Further, the improved graphics quality is making smartphones suitable for playing games like PUBG and Fortnite. This is expected to boost demand for high-end smartphones and open up significant opportunities for device makers.
PCs Face Extinction Risk: Personal computers (desktops and laptops), be it Windows or Apple’s MacOS-based, have been facing the risk of extinction due to the rapid proliferation of smartphones and tablets. Stiff competition from smartphones has compelled global PC makers to not only upgrade hardware frequently but also add apps and cloud-based services to attract consumers. Nevertheless, the emergence of 5G, AI, machine learning and foldable computers is likely to be the key catalyst in expanding the total addressable market (TAM) of the PCs.
Zacks Industry Rank Indicates Dim Prospects
The Zacks Computer – Mini Computers industry is housed within the broader Zacks Computer and Technology sector. It carries a Zacks Industry Rank #224, which places it in the bottom 10% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all member stocks, indicates bearish near-term prospects. Our research shows that the top 50% of Zacks-ranked industries outperforms the bottom 50% by a factor of more than two to one.
The industry’s position in the bottom 50% of the Zacks-ranked industries is a result of negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic on this group’s earnings growth potential. Since Jul 31, 2021, the Zacks Consensus Estimate for this industry’s 2022 earnings has moved down 3.7%.
Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.
Industry Outperforms Sector and S&P 500
The Zacks Computer – Mini Computers industry has outperformed the broader Zacks Computer And Technology sector as well as the S&P 500 index over the past year.
The industry has returned 5.7% over this period against the S&P 500’s decline of 9.4% and the broader sector’s fall of 24.7%.
One-Year Price Performance
Industry's Current Valuation
On the basis of forward 12-month P/E, which is a commonly used multiple for valuing computer stocks, we see that the industry is currently trading at 21.32X compared with the S&P 500’s 16.77X and the sector’s 20.14X.
Over the last five years, the industry has traded as high as 28.99X, as low as 21.32X and at the median of 24.98X, as the chart below shows.
Forward 12-Month Price-to-Earnings (P/E) Ratio
2 Computer Stocks to Watch Right Now
Apple: This Zacks Rank #3 (Hold) company is benefiting from continued momentum in the Services segment, driven by App Store, Cloud Services, Music, advertising and AppleCare. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Apple’s near-term prospects are driven by the availability of the new Mac Studio and iPad Air. Apple TV+ is gaining recognition due to its award-winning shows. This bodes well for the Services segment. Services revenue growth is expected to be in strong double digits for the June quarter.
Apple currently has more than 825 million paid subscribers across its Services portfolio. The App Store continues to draw the attention of prominent developers worldwide, helping the company offer appealing new apps that drive App Store traffic. Further, a growing number of AI-infused apps will attract more subscribers to App Store.
The Zacks Consensus Estimate for fiscal 2022 earnings has been steady at $6.11 per share over the past 30 days. The stock has lost 20.2% year to date.
Price and Consensus: AAPL
HP: This Zacks Rank #3 company is benefiting from solid demand for PCs amid the pandemic-led remote-working and online-learning waves.
Furthermore, stringent cost-control measures are expected to drive margin over the long run. HP’s expectation of returning at least $4 billion to shareholders in fiscal 2022 is encouraging.
The Zacks Consensus Estimate for fiscal 2022 earnings has risen 1.4% to $4.31 per share over the past 30 days. The stock has lost 6.4% year to date.
Price and Consensus: HPQ
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HP Inc. (HPQ): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Price and Consensus: AAPL HP: This Zacks Rank #3 company is benefiting from solid demand for PCs amid the pandemic-led remote-working and online-learning waves. However, the coronavirus outbreak has been beneficial for industry participants like Apple AAPL and HP HPQ. Apple Inc. (AAPL): Free Stock Analysis Report | However, the coronavirus outbreak has been beneficial for industry participants like Apple AAPL and HP HPQ. Price and Consensus: AAPL HP: This Zacks Rank #3 company is benefiting from solid demand for PCs amid the pandemic-led remote-working and online-learning waves. Apple Inc. (AAPL): Free Stock Analysis Report | However, the coronavirus outbreak has been beneficial for industry participants like Apple AAPL and HP HPQ. Price and Consensus: AAPL HP: This Zacks Rank #3 company is benefiting from solid demand for PCs amid the pandemic-led remote-working and online-learning waves. Apple Inc. (AAPL): Free Stock Analysis Report | However, the coronavirus outbreak has been beneficial for industry participants like Apple AAPL and HP HPQ. Price and Consensus: AAPL HP: This Zacks Rank #3 company is benefiting from solid demand for PCs amid the pandemic-led remote-working and online-learning waves. Apple Inc. (AAPL): Free Stock Analysis Report |
20521.0 | 2022-06-27 00:00:00 UTC | Legal clashes await U.S. companies covering workers' abortion costs | AAPL | https://www.nasdaq.com/articles/legal-clashes-await-u.s.-companies-covering-workers-abortion-costs-1 | nan | nan | By Daniel Wiessner
June 27 (Reuters) - A growing number of large U.S. companies have said they will cover travel costs for employees who must leave their home states to get abortions, but these new policies could expose businesses to lawsuits and even potential criminal liability, legal experts said.
Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide.
Within an hour of the decision being released, Conde Nast Chief Executive Roger Lynch sent a memo to staff announcing a travel reimbursement policy and calling the court's ruling "a crushing blow to reproductive rights." Walt Disney Co DIS.N unveiled a similar policy on Friday, telling employees that it recognizes the impact of the abortion ruling but remains committed to providing comprehensive access to quality healthcare, according to a spokesman.
Health insurer Cigna Corp CI.N, Paypal Holdings Inc PYPL.O, Alaska Airlines Inc <ALK.N> and Dick's Sporting Goods Inc DKS.N also announced reimbursement policies on Friday.
Abortion restrictions that were already on the books in 13 states went into effect as a result of Friday's ruling and at least a dozen other Republican-led states are expected to ban abortion.
The court's decision, driven by its conservative majority, upheld a Mississippi law that bans abortion after 15 weeks. Meanwhile, some Democratic-led states are moving to bolster access to abortion.
Companies will have to navigate that patchwork of state laws and are likely to draw the ire of anti-abortion groups and Republican-led states if they adopt policies supportive of employees having abortions.
State lawmakers in Texas have already threatened Citigroup Inc C.N and Lyft, which had earlier announced travel reimbursement policies, with legal repercussions. A group of Republican lawmakers in a letter last month to Lyft Chief Executive Logan Green said Texas "will take swift and decisive action" if the ride-hailing company implements the policy.
The legislators also outlined a series of abortion-related proposals, including a bill that would bar companies from doing business in Texas if they pay for residents of the state to receive abortions elsewhere.
LAWSUITS LOOMING
It is likely only a matter of time before companies face lawsuits from states or anti-abortion campaigners claiming that abortion-related payments violate state bans on facilitating or aiding and abetting abortions, according to Robin Fretwell Wilson, a law professor at the University of Illinois and expert on healthcare law.
"If you can sue me as a person for carrying your daughter across state lines, you can sue Amazon for paying for it," Wilson said.
Amazon, Citigroup and other companies that have announced reimbursement policies did not respond to requests for comment. A Lyft spokesperson said: “We believe access to healthcare is essential and transportation should never be a barrier to that access."
For many large companies that fund their own health plans, the federal law regulating employee benefits will provide crucial cover in civil lawsuits over their reimbursement policies, several lawyers and other legal experts said.
The Employee Retirement Income Security Act of 1974 (ERISA) prohibits states from adopting requirements that "relate to" employer-sponsored health plans. Courts have for decades interpreted that language to bar state laws that dictate what health plans can and cannot cover.
ERISA regulates benefit plans that are funded directly by employers, known as self-insured plans. In 2021, 64% of U.S. workers with employer-sponsored health insurance were covered by self-insured plans, according to the Kaiser Family Foundation.
Any company sued over an abortion travel reimbursement requirement will likely cite ERISA as a defense, according to Katy Johnson, senior counsel for health policy at the American Benefits Council trade group. And that will be a strong argument, she said, particularly for businesses with general reimbursement policies for necessary medical-related travel rather than those that single out abortion.
Johnson said reimbursements for other kinds of medical-related travel, such as visits to hospitals designated "centers of excellence," are already common even though policies related to abortion are still relatively rare.
"While this may seem new, it's not in the general sense and the law already tells us how to handle it," Johnson said.
LIMITS
The argument has its limits. Fully-insured health plans, in which employers purchase coverage through a commercial insurer, cover about one-third of workers with insurance and are regulated by state law and not ERISA.
Most small and medium-sized U.S. businesses have fully-insured plans and could not argue that ERISA prevents states from limiting abortion coverage.
And, ERISA cannot prevent states from enforcing criminal laws, such as those in several states that make it a crime to aid and abet abortion. So employers who adopt reimbursement policies are vulnerable to criminal charges from state and local prosecutors.
But since most criminal abortion laws have not been enforced in decades, since Roe was decided, it is unclear whether officials would attempt to prosecute companies, according to Danita Merlau, a Chicago-based lawyer who advises companies on benefits issues.
GRAPHIC-Abortion access in a post-Roe Americahttps://graphics.reuters.com/USA-ABORTION/GRAPHIC/zgpomdbeopd/index.html
FACTBOX-Companies offering abortion travel benefits to U.S. workers
(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi, Grant McCool and Bill Berkrot)
((daniel.wiessner@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. | Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide. By Daniel Wiessner June 27 (Reuters) - A growing number of large U.S. companies have said they will cover travel costs for employees who must leave their home states to get abortions, but these new policies could expose businesses to lawsuits and even potential criminal liability, legal experts said. Within an hour of the decision being released, Conde Nast Chief Executive Roger Lynch sent a memo to staff announcing a travel reimbursement policy and calling the court's ruling "a crushing blow to reproductive rights." | Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide. For many large companies that fund their own health plans, the federal law regulating employee benefits will provide crucial cover in civil lawsuits over their reimbursement policies, several lawyers and other legal experts said. Fully-insured health plans, in which employers purchase coverage through a commercial insurer, cover about one-third of workers with insurance and are regulated by state law and not ERISA. | Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide. Companies will have to navigate that patchwork of state laws and are likely to draw the ire of anti-abortion groups and Republican-led states if they adopt policies supportive of employees having abortions. It is likely only a matter of time before companies face lawsuits from states or anti-abortion campaigners claiming that abortion-related payments violate state bans on facilitating or aiding and abetting abortions, according to Robin Fretwell Wilson, a law professor at the University of Illinois and expert on healthcare law. | Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide. For many large companies that fund their own health plans, the federal law regulating employee benefits will provide crucial cover in civil lawsuits over their reimbursement policies, several lawyers and other legal experts said. And that will be a strong argument, she said, particularly for businesses with general reimbursement policies for necessary medical-related travel rather than those that single out abortion. |
20522.0 | 2022-06-27 00:00:00 UTC | Notable Monday Option Activity: TSLA, AAPL, CRM | AAPL | https://www.nasdaq.com/articles/notable-monday-option-activity%3A-tsla-aapl-crm | nan | nan | Looking at options trading activity among components of the S&P 500 index, there is noteworthy activity today in Tesla Inc (Symbol: TSLA), where a total volume of 617,427 contracts has been traded thus far today, a contract volume which is representative of approximately 61.7 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 189.9% of TSLA's average daily trading volume over the past month, of 32.5 million shares. Particularly high volume was seen for the $800 strike call option expiring July 01, 2022, with 51,667 contracts trading so far today, representing approximately 5.2 million underlying shares of TSLA. Below is a chart showing TSLA's trailing twelve month trading history, with the $800 strike highlighted in orange:
Apple Inc (Symbol: AAPL) options are showing a volume of 587,085 contracts thus far today. That number of contracts represents approximately 58.7 million underlying shares, working out to a sizeable 67.8% of AAPL's average daily trading volume over the past month, of 86.6 million shares. Particularly high volume was seen for the $145 strike call option expiring July 01, 2022, with 51,801 contracts trading so far today, representing approximately 5.2 million underlying shares of AAPL. Below is a chart showing AAPL's trailing twelve month trading history, with the $145 strike highlighted in orange:
And Salesforce Inc (Symbol: CRM) saw options trading volume of 58,810 contracts, representing approximately 5.9 million underlying shares or approximately 55.2% of CRM's average daily trading volume over the past month, of 10.7 million shares. Particularly high volume was seen for the $195 strike call option expiring July 08, 2022, with 20,232 contracts trading so far today, representing approximately 2.0 million underlying shares of CRM. Below is a chart showing CRM's trailing twelve month trading history, with the $195 strike highlighted in orange:
For the various different available expirations for TSLA options, AAPL options, or CRM options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Particularly high volume was seen for the $145 strike call option expiring July 01, 2022, with 51,801 contracts trading so far today, representing approximately 5.2 million underlying shares of AAPL. Below is a chart showing TSLA's trailing twelve month trading history, with the $800 strike highlighted in orange: Apple Inc (Symbol: AAPL) options are showing a volume of 587,085 contracts thus far today. That number of contracts represents approximately 58.7 million underlying shares, working out to a sizeable 67.8% of AAPL's average daily trading volume over the past month, of 86.6 million shares. | Below is a chart showing TSLA's trailing twelve month trading history, with the $800 strike highlighted in orange: Apple Inc (Symbol: AAPL) options are showing a volume of 587,085 contracts thus far today. Below is a chart showing AAPL's trailing twelve month trading history, with the $145 strike highlighted in orange: And Salesforce Inc (Symbol: CRM) saw options trading volume of 58,810 contracts, representing approximately 5.9 million underlying shares or approximately 55.2% of CRM's average daily trading volume over the past month, of 10.7 million shares. That number of contracts represents approximately 58.7 million underlying shares, working out to a sizeable 67.8% of AAPL's average daily trading volume over the past month, of 86.6 million shares. | Below is a chart showing AAPL's trailing twelve month trading history, with the $145 strike highlighted in orange: And Salesforce Inc (Symbol: CRM) saw options trading volume of 58,810 contracts, representing approximately 5.9 million underlying shares or approximately 55.2% of CRM's average daily trading volume over the past month, of 10.7 million shares. Below is a chart showing TSLA's trailing twelve month trading history, with the $800 strike highlighted in orange: Apple Inc (Symbol: AAPL) options are showing a volume of 587,085 contracts thus far today. That number of contracts represents approximately 58.7 million underlying shares, working out to a sizeable 67.8% of AAPL's average daily trading volume over the past month, of 86.6 million shares. | Below is a chart showing AAPL's trailing twelve month trading history, with the $145 strike highlighted in orange: And Salesforce Inc (Symbol: CRM) saw options trading volume of 58,810 contracts, representing approximately 5.9 million underlying shares or approximately 55.2% of CRM's average daily trading volume over the past month, of 10.7 million shares. Below is a chart showing TSLA's trailing twelve month trading history, with the $800 strike highlighted in orange: Apple Inc (Symbol: AAPL) options are showing a volume of 587,085 contracts thus far today. That number of contracts represents approximately 58.7 million underlying shares, working out to a sizeable 67.8% of AAPL's average daily trading volume over the past month, of 86.6 million shares. |
20523.0 | 2022-06-27 00:00:00 UTC | Legal clashes await U.S. companies covering workers' abortion costs | AAPL | https://www.nasdaq.com/articles/legal-clashes-await-u.s.-companies-covering-workers-abortion-costs-0 | nan | nan | By Daniel Wiessner
June 26 (Reuters) - A growing number of large U.S. companies have said they will cover travel costs for employees who must leave their home states to get abortions, but these new policies could expose businesses to lawsuits and even potential criminal liability, legal experts said.
Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide.
Within an hour of the decision being released, Conde Nast chief executive Roger Lynch sent a memo to staff announcing a travel reimbursement policy and calling the court's ruling "a crushing blow to reproductive rights." Walt Disney Co DIS.N unveiled a similar policy on Friday, telling employees that it recognizes the impact of the abortion ruling but remains committed to providing comprehensive access to quality healthcare, according to a spokesman.
Companies including health insurer Cigna Corp CI.N, Paypal Holdings Inc PYPL.O, Alaska Airlines Inc [RIC:RIC:ALKAIR.UL] and Dick's Sporting Goods Inc DKS.N also announced reimbursement policies on Friday.
Abortion restrictions that were already on the books in 13 states went into effect as a result of Friday's ruling and at least a dozen other Republican-led states are expected to ban abortion.
The court's decision, driven by its conservative majority, upheld a Mississippi law that bans abortion after 15 weeks. Meanwhile, some Democratic-led states are moving to bolster access to abortion.
Companies will have to navigate that patchwork of state laws and are likely to draw the ire of anti-abortion groups and Republican-led states if they adopt policies supportive of employees having abortions.
State lawmakers in Texas have already threatened Citigroup Inc C.N and Lyft, which had earlier announced travel reimbursement policies, with legal repercussions. A group of Republican lawmakers in a letter last month to Lyft chief executive Logan Green said Texas "will take swift and decisive action" if the ride-hailing company implements the policy.
The legislators also outlined a series of abortion-related proposals, including a bill that would bar companies from doing business in Texas if they pay for residents of the state to receive abortions elsewhere.
LAWSUITS LOOMING
It is likely only a matter of time before companies face lawsuits from states or anti-abortion campaigners claiming that abortion-related payments violate state bans on facilitating or aiding and abetting abortions, according to Robin Fretwell Wilson, a law professor at the University of Illinois and expert on healthcare law.
"If you can sue me as a person for carrying your daughter across state lines, you can sue Amazon for paying for it," Wilson said.
Amazon, Citigroup, Lyft, Conde Nast and several other companies that have announced reimbursement policies did not respond to requests for comment.
For many large companies that fund their own health plans, the federal law regulating employee benefits will provide crucial cover in civil lawsuits over their reimbursement policies, several lawyers and other legal experts said.
The Employee Retirement Income Security Act of 1974 (ERISA) prohibits states from adopting requirements that "relate to" employer-sponsored health plans. Courts have for decades interpreted that language to bar state laws that dictate what health plans can and cannot cover.
ERISA regulates benefit plans that are funded directly by employers, known as self-insured plans. In 2021, 64% of U.S. workers with employer-sponsored health insurance were covered by self-insured plans, according to the Kaiser Family Foundation.
Any company sued over an abortion travel reimbursement requirement will likely cite ERISA as a defense, according to Katy Johnson, senior counsel for health policy at the American Benefits Council, a trade group. And that will be a strong argument, she said, particularly for businesses with general reimbursement policies for necessary medical-related travel rather than those that single out abortion.
Johnson said reimbursements for other kinds of medical-related travel, such as visits to hospitals designated "centers of excellence," are already common even though policies related to abortion are still relatively rare.
"While this may seem new, it's not in the general sense and the law already tells us how to handle it," Johnson said.
LIMITS
The argument has its limits. Fully-insured health plans, in which employers purchase coverage through a commercial insurer, cover about one-third of workers with insurance and are regulated by state law and not ERISA.
Most small and medium-sized U.S. businesses have fully-insured plans and could not argue that ERISA prevents states from limiting abortion coverage.
And, ERISA cannot prevent states from enforcing criminal laws, such as those in several states that make it a crime to aid and abet abortion, so employers who adopt reimbursement policies are vulnerable to criminal charges from state and local prosecutors.
But since most criminal abortion laws have not been enforced in decades, since Roe was decided, it is unclear whether officials would attempt to prosecute companies, according to Danita Merlau, a Chicago-based lawyer who advises companies on benefits issues.
GRAPHIC-Abortion access in a post-Roe Americahttps://graphics.reuters.com/USA-ABORTION/GRAPHIC/zgpomdbeopd/index.html
(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and Grant McCool)
((daniel.wiessner@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. | Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide. By Daniel Wiessner June 26 (Reuters) - A growing number of large U.S. companies have said they will cover travel costs for employees who must leave their home states to get abortions, but these new policies could expose businesses to lawsuits and even potential criminal liability, legal experts said. Within an hour of the decision being released, Conde Nast chief executive Roger Lynch sent a memo to staff announcing a travel reimbursement policy and calling the court's ruling "a crushing blow to reproductive rights." | Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide. For many large companies that fund their own health plans, the federal law regulating employee benefits will provide crucial cover in civil lawsuits over their reimbursement policies, several lawyers and other legal experts said. Fully-insured health plans, in which employers purchase coverage through a commercial insurer, cover about one-third of workers with insurance and are regulated by state law and not ERISA. | Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide. Companies will have to navigate that patchwork of state laws and are likely to draw the ire of anti-abortion groups and Republican-led states if they adopt policies supportive of employees having abortions. It is likely only a matter of time before companies face lawsuits from states or anti-abortion campaigners claiming that abortion-related payments violate state bans on facilitating or aiding and abetting abortions, according to Robin Fretwell Wilson, a law professor at the University of Illinois and expert on healthcare law. | Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide. For many large companies that fund their own health plans, the federal law regulating employee benefits will provide crucial cover in civil lawsuits over their reimbursement policies, several lawyers and other legal experts said. And that will be a strong argument, she said, particularly for businesses with general reimbursement policies for necessary medical-related travel rather than those that single out abortion. |
20524.0 | 2022-06-27 00:00:00 UTC | After Hours Most Active for Jun 27, 2022 : SWN, PINS, ZI, TAL, INTC, AAPL, KZR, QQQ, BZ, MDT, INFY, TFC | AAPL | https://www.nasdaq.com/articles/after-hours-most-active-for-jun-27-2022-%3A-swn-pins-zi-tal-intc-aapl-kzr-qqq-bz-mdt-infy | nan | nan | The NASDAQ 100 After Hours Indicator is up 15.86 to 12,024.1. The total After hours volume is currently 115,911,241 shares traded.
The following are the most active stocks for the after hours session:
Southwestern Energy Company (SWN) is -0.01 at $7.19, with 11,251,065 shares traded. Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Jun 2022. The consensus EPS forecast is $0.35. SWN's current last sale is 79.89% of the target price of $9.
Pinterest, Inc. (PINS) is unchanged at $20.73, with 10,282,875 shares traded. PINS's current last sale is 74.04% of the target price of $28.
ZoomInfo Technologies Inc. (ZI) is unchanged at $36.45, with 5,346,805 shares traded. As reported by Zacks, the current mean recommendation for ZI is in the "buy range".
TAL Education Group (TAL) is -0.03 at $4.86, with 5,021,580 shares traded. TAL's current last sale is 90% of the target price of $5.4.
Intel Corporation (INTC) is +0.02 at $38.65, with 3,795,783 shares traded. INTC's current last sale is 77.3% of the target price of $50.
Apple Inc. (AAPL) is +0.3801 at $142.04, with 3,737,839 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Kezar Life Sciences, Inc. (KZR) is +4.52 at $10.30, with 3,529,979 shares traded. As reported by Zacks, the current mean recommendation for KZR is in the "strong buy range".
Invesco QQQ Trust, Series 1 (QQQ) is +0.77 at $293.22, with 2,951,227 shares traded. This represents a 8.89% increase from its 52 Week Low.
KANZHUN LIMITED (BZ) is +0.0274 at $27.39, with 2,922,479 shares traded. As reported by Zacks, the current mean recommendation for BZ is in the "buy range".
Medtronic plc (MDT) is unchanged at $90.47, with 2,860,609 shares traded. Over the last four weeks they have had 5 up revisions for the earnings forecast, for the fiscal quarter ending Jan 2023. The consensus EPS forecast is $1.44. MDT's current last sale is 77.32% of the target price of $117.
Infosys Limited (INFY) is unchanged at $18.76, with 2,844,751 shares traded. As reported by Zacks, the current mean recommendation for INFY is in the "buy range".
Truist Financial Corporation (TFC) is unchanged at $48.57, with 2,841,955 shares traded. TFC's current last sale is 79.95% of the target price of $60.75.
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 +0.3801 at $142.04, with 3,737,839 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Jun 2022. | Apple Inc. (AAPL) is +0.3801 at $142.04, with 3,737,839 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Jun 2022. | Apple Inc. (AAPL) is +0.3801 at $142.04, with 3,737,839 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The total After hours volume is currently 115,911,241 shares traded. | Apple Inc. (AAPL) is +0.3801 at $142.04, with 3,737,839 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The NASDAQ 100 After Hours Indicator is up 15.86 to 12,024.1. |
20525.0 | 2022-06-27 00:00:00 UTC | As Customers Spend Less, Companies' Balance Sheets Become More Important | AAPL | https://www.nasdaq.com/articles/as-customers-spend-less-companies-balance-sheets-become-more-important | nan | nan | In this podcast, Motley Fool senior analyst Jason Moser discusses:
The strength of a company's balance sheet becoming more important.
Increasing data that customers are starting to spend less.
"Shrinkflation" as a tool that some (but not all) companies can employ.
Net expansion as a key metric to watch.
Motley Fool analyst Sanmeet Deo joins Jason to talk about potential applications for virtual reality (VR) in the healthcare industry and a mid-cap company that may have advantages over the tech giants in the space.
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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Chris Hill: Lately we've been asking about pricing power. Today, it looks like we may need to start asking a new question. Motley Fool Money starts now. I'm Chris Hill and joining me today for the second time this week, Motley Fool Senior Analyst Jason Moser. Thanks for being here!
Jason Moser: Hey, thanks for having me!
Chris Hill: Well, yesterday was fun while it lasted [laughs] and today the market continues its grim slide. I wanted to get your thoughts on what appears to be a trend or if it's not a trend it's certainly a growing amount of data and it has to do with consumer prices. I think consumer prices may even be on the business side as well, but this morning we got two bits of consumer data. One was that for the first time this year airfare prices have dropped, so for anyone still looking to book some air travel that's welcome news. More specifically, Kroger came out and said that their customers are starting to drop more expensive name brand products in favor of lower-priced generics, and you and I have talked plenty of times in the past about pricing power; what businesses have it? What are the limits that they can push it? Earlier this year you and I talked specifically with regards to Chipotle and their ability to raise prices, and you had made that point of like, they're doing a pretty good job right now. I don't know how much more they can push it. I'm wondering if we're now moving into a new phase where the question for businesses is not do they have pricing power, but instead the question is how strong is their balance sheet? Can they withstand individual customers or other businesses spending less?
Jason Moser: I think that's a good question. We've hit that phase of this cycle where consumers are starting to trade down. Clearly inflation is hitting us from all sides. You look at some of the data out there in regard to the store brands versus national brands, in the first quarter of this year sales of store-owned brands rose six-and-a-half percent, that compares with 5.2 percent increase in national brands sales. We have seen that move already really from all the way back to the beginning of the year where folks have started to trade down, so to speak a little bit, and that makes sense. Another interesting concept and it's a funny word that always makes me chuckle when I see it but shrinkflation.
Chris Hill: I'm sorry. What? [laughs] I've never heard that.
Jason Moser: Shrinkflation, it's a word. Companies are very clever. These national brands, they're very clever in how they exercise pricing power. It doesn't necessarily always come in the form of higher prices. It can come in the form of shrinking the actual product size in maintaining the same price, so that box of cereal is 14 ounces, maybe now it's 12. Customers are on the lookout for that stuff, it does matter. Pricing power is a very strong quality to have. We love to see it, but it's always worth remembering. It doesn't go to the moon. There is a cap, there is a ceiling where you have to stop, but it's really sensitive on the food side right now. I think within food products you see the prices up 11.9 percent for food stuff that we're eating at home versus stuff that we're eating at restaurants; eating away from home, those prices rising just 7.4 percent. It's hitting consumers in the house, and so when you see the way these businesses start trying to cope with this, absolutely looking at balance sheets I think is a wonderful way to get a grip on, on a company's financial stability because if you think about it in this rising interest rate environment, in this inflationary environment, of course we as consumers are getting hit by it. It makes perfect sense that businesses would get hit by it too, but it's not every business. For businesses that generate free cash flow, for businesses that are profitable, for businesses that have excellent balance sheets, they're able to more or less self-fund. They're not going to be necessarily beholden to the same inflationary pressures that consumers might be feeling. It's a very good reminder though, to always pay attention to a company's fiscal fitness so to speak because they all are not equal.
Chris Hill: I've experienced shrinkflation, I just didn't know there was a word for it. [laughs] The example I always think of in this case was years ago talking with our colleague Charly Travers, and he made a comment about ice cream in the grocery store packages of ice cream. He was referring to this happening, I said, what are you talking about? He said do you ever buy ice cream at the grocery store? I can, of course I do. [laughs] He said what size do you buy? I said I buy the two quart size. He said no, it's no longer two quarts. It's now [laugh] one-and-a-half quarts. They adjusted the packaging, and that's how they manage it. You can do that with a package of ice cream, but if you're in the business of say software, that seems like a tough thing to pull off. The two stories I mentioned, those are consumer-facing prices that we're talking about here. Do you think we're going to start seeing this on the business side as well?
Jason Moser: I think we will to an extent, I think the message is clear. We're seeing businesses, more and more headlines coming out of related businesses are focused on maintaining a strong hold on the expense line, the hiring. I think Uber said for example that they will treat hiring as a privilege. I think now more than ever businesses are looking at the costs of doing business and looking at ways that they can simplify, become more efficient. Software like you, you think about the way that the workforce has changed over the last few years, and there are certain things that companies now are more dependent on than before. You look at your Zooms and your Slacks of the world and how pivotal they are to just our every day work. Most people are using some form of those platforms in order to be able to get work done. It all speaks to well, if a company really is reliant on it then they don't necessarily have that freedom to be able to say, you know what? We're going to cut this cost, we're going to cut that like that. They're not going to say what we're just going to get rid of Slack for example because then what's the alternative? Now, interestingly, there is an alternative. Microsoft, I think, stands out as a shining example here, but you look at Zoom and Slack both provide services that a lot of businesses are using. Well, Microsoft obviously provides services that most businesses use. Furthermore, now having developed the Teams platform, which could certainly be seen as a substitute for Zoom and Slack, and Microsoft having that fortress balance sheet, having that size, having the financial resources, they can package that differently, they could price that more effectively, and so it does seem like this would be a stretch where Microsoft could get out there and say, "Hey, we're going to help businesses save a little bit on those expenses by offering something like Microsoft Teams as a competitor to what you're doing on Slack and Zoom today." Some companies maybe will make the shift and some won't, it just really, I think, ultimately depends on what leadership of the company's want and reenrolling what the employees prefer to use. But I do think it does speak to the value and having something where substitutes are rare. I think when you're looking at the software that companies are using, there are probably a million payment providers, there are a million payroll software providers, and I feel like that might be a little bit different than something like a communication tool. It does matter exactly the purpose that the software serves.
Chris Hill: It's one more question we can ask ourselves as investors when we're looking at any business. It's, of course, related to the pricing power question. It's basically, how big are the switching costs for this business? It's pretty easy for anyone going into a grocery store to just switch to a lower-priced product when faced with that choice, and as more people are tightening their fiscal belts, I think we're going to see more of that. It's a little bit harder when the switching costs for what is the communications platform that our company uses, and the bigger the company, arguably the higher the switching cost because it's as you indicated, you've got to get your employees on board with it.
Jason Moser: I think that's really the key is, ultimately employees need to be on board with it. It's never just that cut and dry. The longer that you use these particular platforms, the more that you get used to using them and the more functionality they build in. There's things that you do probably without even thinking twice with these platforms now, and then to switch over, you really do have to weigh that. It is going to be a short-term versus a long-term perspective there. Is it worth the financial savings for something that could potentially be an inferior product or maybe it's a superior one? I look at Microsoft Teams as an interesting example because having used Microsoft Teams before, I found it really good. Zoom and Slack are helpful too. For me, I don't know, I really guess I would be more or less indifferent. But others would probably feel very strongly one way or the other. Yeah, you have to figure that out, it's a balancing act for sure, the bigger the company, the more employees. There's just more opinions that you have to take into consideration. [laughs]
Chris Hill: It's really going to be interesting, the next six months, what we see out of these types of businesses because, again, the switching costs are higher. But if some businesses, and you spoke to this, that it's not really an option to not have them. So many more businesses look at things like Zoom and Slack and whether they are a hybrid setup or fully remote, like whatever it is, you got to have some version of Zoom or Slack to exist as a business. Then the question becomes, all right, well, do we want to switch? It's going to be really interesting to see over the next couple of earnings seasons if we start seeing some of these businesses lose customers as a result, or if they are less in the driver's seat and they have to basically make some concessions so that they can keep their customers. This is something you and other analysts bring up when we're talking about software companies, a business like Okta, that sort of thing where it's, hey, they've got their customer base and then they've got their, essentially the customers who spend over $1,000, or over $100,000, or over a million dollars per year. It's going to be interesting to see what those numbers continue to look like.
Jason Moser: It does seem like an opportunity for some of those providers to really earn a little goodwill from their customers. In a trying time such as this, you can either be the provider that is going to try to capitalize on that and raise prices, or you could be a provider that say, "Hey, listen, we're all in the same boat here dealing with the difficult economic environment." I think you're probably looking these Q2 numbers coming out and they will indicate that we're in a recession now, it certainly feels like one, it feels like the longer-term opportunity is for a company to hold back on pushing that pricing up. Listen, we're not going to try to put the screws to you right now because we know everybody is dealing with it from all angles, that goodwill certainly can breathe longer-lasting relationships where you ultimately grow the relationship with that provider, you go back to those net expansion numbers, you're looking for those how are they growing the relationship? That's always a good metric to pay attention to. It'll be interesting to see how companies approach this because there are a couple of different perspectives there.
Chris Hill: I appreciate the time, Jason. Thanks.
Jason Moser: Thank you.
Chris Hill: When we think about the applications for virtual reality, we often go to gaming as an example. But one of the more promising used cases for VR is in healthcare. Among other things, virtual worlds can make something like physical therapy a lot more engaging. Sanmeet Deo joins Jason Moser to talk about the possibilities for VR in healthcare, and one midcap company that has an important leg up over the tech giants in this space.
Jason Moser: Hey, Sanmeet. It's great to catch up with you again. This week we're talking about immersive technology, and immersive technology, it's all around us. But you and I are actually both really excited about one particular market where it has significant potential, and that is in the health and wellness space. This week we're going to talk a little bit about some of the companies in this space, what they are doing. When we talk about immersive technology, it's the broad term, it includes things like augmented reality and virtual reality, and now you hear a lot of talk about mixed reality. Real quickly just for our listeners, let's remind our listeners the differences between the two in augmented reality and virtual reality. What is augmented reality and how is that different from virtual reality?
Sanmeet Deo: Jason, and thanks for having me, I'm excited to talk about this. Just to lay the groundwork here, augmented realities enhances your surroundings by adding digital elements to a live view or a real-world setting, and it's usually done through your camera on your smartphone or augmented reality device. Think Iron Man's glasses, how he put those glasses on and then he sees the real world, but then he sees digital, either images or information laid on top of the real-world setting, gets information that he needs. Virtual reality is a completely immersive experience, so basically replaces the real-life environment with a simulated or virtual one. Think of the Holodeck on Star Trek when they walk onto the Holodeck, and you can simulate a whole different environment from what you're in already. That's how I think of the difference between augmented and virtual reality.
Jason Moser: I think that's spot on there. I think for our discussion today, we're really talking a bit more about virtual reality and the impact that it's having in the health and wellness space. There are some obvious suspects that are doing a lot of work in this space, and then there are some smaller companies that may be folks might not be as familiar with. Let's just start from the top here and talk about some of those companies that are making waves in this market, the companies that people are probably more familiar with, and there are, I think, four in particular that you've kept your eye on.
Sanmeet Deo: Yeah. One of the biggest ones that you think of is Meta. Meta has their Oculus Quest, where now I believe it's called the Meta Quest 2. It's the big goggles that you put on, and then they have a whole bunch of apps related to gaming and health and fitness, and all those things. The Meta Quest 2 is like your virtual reality platform where you put on the glasses and some of the apps that they have that are great, especially for fitness are things like the FitXR, which is entitled the most intense workout among VR apps. There's an app called Supernatural, which won the best VR workout app overall, so you have workouts like boxing, meditation, hit, stretching. It can gamify fitness with leaderboards and creating goals for yourself and interacting with coaches. It's a great device, I've never used it myself, I have definitely been wanting to use that. Meta has that, which is their main device, which is a big consumer device that we think of primarily. Microsoft has the HoloLens, which is what they call a mixed reality headset, which can work augmented and virtual reality to like what we talked about earlier. Allows the person to put on these glasses, work hands-free, collaborate with remote colleagues in real-time.
Some of the use cases for those are of course, healthcare, seeing a patient, like as you're working with the patient, you could see their patient records, they're charged their data, like in an image right next to you as you're working with the patients, so it makes it a lot easier than fumbling around with a chart or data or pulling up any information you need as you're working with the patients. That's an exciting device. Even Intuitive Surgical is a company that has a sim now simulation system where it guides surgeons through realistic exercises and master complex procedures. Think of medical training and education for doctors and nurses and medical professionals being able to perform procedures and surgeries and all the work that they do on a virtual body versus a physical body so that way they don't mess it up on someone [laughs] in real life which I for one would be totally for. They also received an FDA approval for their IRIS augmented reality system which displays 3D renderings of patient's anatomy for physicians on their iPads and iPhones, they can view, manipulate the 3D model as part of their pre-op surgical planning and referencing and doing operations. In the healthcare space, a lot of the use cases are digital pointing, which is simulating the patient for the doctor to observe and practice on or work on, telemedicine where you're remotely treating patients through an ARV or your headset or your smartphone and medical training education like we talked about a little bit with training the doctors and nurses on a virtual patient versus actual patients so when they get to the actual patient, they can actually perform very well.
Jason Moser: Yeah, it feels to me like one of the things that technology is doing in the healthcare space. In a particular immersive technology, virtual reality, things like that, it's helping scale healthcare. It's giving us the ability to get more healthcare out there to the folks that need it most. It feels we're in this environment where we have a growing number of patients, the population continues to grow, and yet if you look at the actual data, we have a shrinking number of physicians. The actual professionals, the providers in the healthcare space, the barriers to entry there are high. It's a lot of money, a lot of education, and you really need to be committed and passionate about doing that. It is a limited supply of providers and a growing base of real demand there. In virtual reality immersive technology in general, is helping us scale healthcare, which I think is one of the bigger challenges that we've been trying to solve for, so it's really encouraging to see this happening. It is slowly but surely, but you really see a lot of these companies making a lot of investments, they're making great strides in doing this. Now, we talk about the big companies like your Googles, and Metas, and Microsofts of the world that are doing all neat things when it comes to immersive technology, but they're not limited to healthcare space. They're doing all things, gaming, healthcare, entertainment, all of that needs stuff. There are some smaller companies out there, perhaps a little bit lesser known to some investors, but they're making great strides and focus specifically on healthcare. Penumbra is a company that stands out to me and you and I have talked about Penumbra a little bit. I know that you recently had an interview with Penumbra leadership. Let's talk a little bit about Penumbra, what the company does and how Penumbra is using virtual reality to advance the healthcare space.
Sanmeet Deo: Penumbra actually bought a company that they were able to incorporate and create what they're calling the real Immersive System, which is an advanced rehab technology that uses virtual reality for therapeutic activities, developed with input from rehab experts. It's basically they have a device similar to Meta, where is big goggles and it's actually received initial FDA clearance in 2019 so using the device along with a physical therapist or physical therapist professionals or doctors, they can help patients recover from things such as chronic back-and-neck pain or stroke rehab or Parkinson's. They can support the rehab of the upper body with focus on strengthening range of motion and postural control. It can even do things like addressing cognitive functions like visual spatial awareness and command response. Basically, I find this interesting my wife is a physical medicine rehab doctor and she works with physical therapist and patients who are experiencing a lot of these things, mostly like we can worry, so fitness-related stuff, but being able to use a virtual reality device and to enhance the rehab process, especially for things like stroke rehab or patients that really can't feel or use their arms or legs or whatever they're facing their challenges in, using a virtual reality device, actually, it's almost like tricking the mind to be able to do what they thought they couldn't do. It actually enhances the process of rehab, and so it's a very exciting field. The interview I did with the CEO was great, I definitely recommend listeners to check that out. But it's very young, it's very new, but it's a lot of practical, great use case that I feel could really help these patients get to another level on the rehab quicker because of virtual reality so that's definitely an exciting company doing some exciting things.
Jason Moser: Penumbra's small-cap by I think virtually every definition. How important do you feel like it is for a company like Penumbra going up against the behemoths in tech, like Apple, Google, Microsoft. Those are formidable companies with vast virtual limitless resources. How important do you think FDA clearance is for something like that? Having that FDA clearance, is that something that really separates them from the comp?
Sanmeet Deo: Oh, absolutely. Because while the device may look like a regular consumer device, there's becoming a divide between the consumer devices and the more medical oriented devices where you need a medical professional to help you use that device to achieve the goals that you're trying to achieve when it comes to your rehab or your health or medical goals. While somebody looking to help themselves with crank back-and-neck pain can pick up the device and just start doing stuff, you may not necessarily know how to use it in the proper way to get the gains and the goals that you have. I think it's a real competitive advantage and something they can use to their benefit.
Jason Moser: All right. We'll leave it there. Sanmeet, it's been great catching up with you. Thanks so much for taking the time to come on the show today.
Sanmeet Deo: Thank you, Jason.
Chris Hill: As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Chris Hill, thanks for listening. We'll see you tomorrow.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Chris Hill has positions in Alphabet (A shares), Alphabet (C shares), Apple, Chipotle Mexican Grill, Microsoft, and Okta. Jason Moser has positions in Alphabet (C shares), Apple, and Chipotle Mexican Grill. Sanmeet Deo has positions in Alphabet (A shares), Chipotle Mexican Grill, and Zoom Video Communications. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, Chipotle Mexican Grill, Intuitive Surgical, Meta Platforms, Inc., Microsoft, Okta, 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. | Motley Fool analyst Sanmeet Deo joins Jason to talk about potential applications for virtual reality (VR) in the healthcare industry and a mid-cap company that may have advantages over the tech giants in the space. More specifically, Kroger came out and said that their customers are starting to drop more expensive name brand products in favor of lower-priced generics, and you and I have talked plenty of times in the past about pricing power; what businesses have it? They also received an FDA approval for their IRIS augmented reality system which displays 3D renderings of patient's anatomy for physicians on their iPads and iPhones, they can view, manipulate the 3D model as part of their pre-op surgical planning and referencing and doing operations. | Motley Fool analyst Sanmeet Deo joins Jason to talk about potential applications for virtual reality (VR) in the healthcare industry and a mid-cap company that may have advantages over the tech giants in the space. Chris Hill has positions in Alphabet (A shares), Alphabet (C shares), Apple, Chipotle Mexican Grill, Microsoft, and Okta. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, Chipotle Mexican Grill, Intuitive Surgical, Meta Platforms, Inc., Microsoft, Okta, and Zoom Video Communications. | Motley Fool analyst Sanmeet Deo joins Jason to talk about potential applications for virtual reality (VR) in the healthcare industry and a mid-cap company that may have advantages over the tech giants in the space. In the healthcare space, a lot of the use cases are digital pointing, which is simulating the patient for the doctor to observe and practice on or work on, telemedicine where you're remotely treating patients through an ARV or your headset or your smartphone and medical training education like we talked about a little bit with training the doctors and nurses on a virtual patient versus actual patients so when they get to the actual patient, they can actually perform very well. Basically, I find this interesting my wife is a physical medicine rehab doctor and she works with physical therapist and patients who are experiencing a lot of these things, mostly like we can worry, so fitness-related stuff, but being able to use a virtual reality device and to enhance the rehab process, especially for things like stroke rehab or patients that really can't feel or use their arms or legs or whatever they're facing their challenges in, using a virtual reality device, actually, it's almost like tricking the mind to be able to do what they thought they couldn't do. | Jason Moser: Yeah, it feels to me like one of the things that technology is doing in the healthcare space. Now, we talk about the big companies like your Googles, and Metas, and Microsofts of the world that are doing all neat things when it comes to immersive technology, but they're not limited to healthcare space. Basically, I find this interesting my wife is a physical medicine rehab doctor and she works with physical therapist and patients who are experiencing a lot of these things, mostly like we can worry, so fitness-related stuff, but being able to use a virtual reality device and to enhance the rehab process, especially for things like stroke rehab or patients that really can't feel or use their arms or legs or whatever they're facing their challenges in, using a virtual reality device, actually, it's almost like tricking the mind to be able to do what they thought they couldn't do. |
20526.0 | 2022-06-27 00:00:00 UTC | Apple (AAPL) Flat As Market Sinks: What You Should Know | AAPL | https://www.nasdaq.com/articles/apple-aapl-flat-as-market-sinks%3A-what-you-should-know | nan | nan | Apple (AAPL) closed the most recent trading day at $141.66, making no change from the previous trading session. This change was narrower than the S&P 500's daily loss of 0.3%. At the same time, the Dow lost 0.2%, and the tech-heavy Nasdaq lost 0.1%.
Coming into today, shares of the maker of iPhones, iPads and other products had lost 5.33% in the past month. In that same time, the Computer and Technology sector gained 3.24%, while the S&P 500 lost 0.62%.
Investors will be hoping for strength from Apple as it approaches its next earnings release. In that report, analysts expect Apple to post earnings of $1.14 per share. This would mark a year-over-year decline of 12.31%. Our most recent consensus estimate is calling for quarterly revenue of $82.36 billion, up 1.13% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $6.11 per share and revenue of $394.45 billion. These totals would mark changes of +8.91% and +7.83%, respectively, from last year.
Investors should also note any recent changes to analyst estimates for Apple. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.1% lower. Apple is currently a Zacks Rank #3 (Hold).
Looking at its valuation, Apple is holding a Forward P/E ratio of 23.2. Its industry sports an average Forward P/E of 8.17, so we one might conclude that Apple is trading at a premium comparatively.
Meanwhile, AAPL's PEG ratio is currently 1.86. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. AAPL's industry had an average PEG ratio of 1.95 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 224, putting it in the bottom 12% of all 250+ industries.
The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow AAPL in the coming trading sessions, be sure to utilize Zacks.com.
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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) closed the most recent trading day at $141.66, making no change from the previous trading session. Meanwhile, AAPL's PEG ratio is currently 1.86. AAPL's industry had an average PEG ratio of 1.95 as of yesterday's close. | Apple (AAPL) closed the most recent trading day at $141.66, making no change from the previous trading session. Meanwhile, AAPL's PEG ratio is currently 1.86. AAPL's industry had an average PEG ratio of 1.95 as of yesterday's close. | Apple (AAPL) closed the most recent trading day at $141.66, making no change from the previous trading session. Meanwhile, AAPL's PEG ratio is currently 1.86. AAPL's industry had an average PEG ratio of 1.95 as of yesterday's close. | Apple (AAPL) closed the most recent trading day at $141.66, making no change from the previous trading session. Apple Inc. (AAPL): Free Stock Analysis Report Meanwhile, AAPL's PEG ratio is currently 1.86. |
20527.0 | 2022-06-27 00:00:00 UTC | Taiwan's GlobalWafers to invest $5 bln in new silicon wafer plant in Texas | AAPL | https://www.nasdaq.com/articles/taiwans-globalwafers-to-invest-%245-bln-in-new-silicon-wafer-plant-in-texas-0 | nan | nan | Adds details, share price performance
TAIPEI, June 28 (Reuters) - Taiwan's GlobalWafers Co Ltd 6488.TWO will spend $5 billion on a new plant in Texas to make silicon wafers used in semiconductors, switching to the United States after a failed European investment.
The company said late on Monday the new plant, manufacturing 300-milimetre silicon wafers, would start being built later this year and generate as many as 1,500 jobs in Sherman, Texas.
"With the global chips shortage and ongoing geopolitical concerns, GlobalWafers is taking this opportunity to address the United States semiconductor supply chain resiliency issue by building an advanced node, state-of-the-art, 300-millimeter silicon wafer factory," Chairwoman and CEO Doris Hsu said.
"Instead of importing wafers from Asia, GlobalWafers USA (GWA) will produce and supply wafers locally."
The company added that the investment would be done "phase by phase" based on confirming actual customer demand.
The United States has been encouraging foreign tech firms to manufacture in the country, and the government welcomed the move, with U.S. Secretary of Commerce Gina Raimondo saying it would strengthen economic and national security.
Raimondo on Monday stepped up pressure on Congress to approve $52 billion in funding for chipmakers to expand operations, warning that firms would abandon American expansion plans without the legislation.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC) 2330.TW, a major Apple Inc AAPL.O supplier and the world's largest contract chipmaker, started construction last year in Arizona where it plans to spend $12 billion to build a semiconductor factory.
While the United States has been successful at attracting Taiwanese tech firms, Europe has not, despite unveiling plans this year to encourage chip firms to invest there.
GlobalWafers said in February it expected its total capital expenditure to reach T$100 billion ($3.4 billion) between 2022 and 2024, redirecting funds for a now-ended 4.35-billion-euro ($4.60 billion) takeover of Germany's Siltronic WAFGn.DE.
The failed acquisition came as a global shortage of semiconductors has laid bare Europe's dependence on Asian suppliers, which has triggered recent efforts to boost production across the continent.
Germany's Economy Ministry said it was not possible to complete all the steps of the investment review, in particular a review of an antitrust approval granted by China only in January.
The GlobalWafers deal would have created the second-largest maker of 300-millimetre wafers, behind Japan's Shin-Etsu 4063.T, as the semiconductor industry consolidates.
Germany has become wary of changes to its high-tech supply network after carmakers, one of its major sectors, were hit by the global chip shortage.
GlobalWafers secured a majority stake in Siltronic last year and initially hoped to have the transaction wrapped up in late 2021.
GlobalWafers' Taipei-listed shares were down around 5% on Tuesday morning.
($1 = 29.6040 Taiwan dollars)
($1 = 0.9452 euros)
(Reporting by Ben Blanchard; Editing by Rashmi Aich and Jacqueline Wong)
((ben.blanchard@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Taiwan Semiconductor Manufacturing Co Ltd (TSMC) 2330.TW, a major Apple Inc AAPL.O supplier and the world's largest contract chipmaker, started construction last year in Arizona where it plans to spend $12 billion to build a semiconductor factory. Adds details, share price performance TAIPEI, June 28 (Reuters) - Taiwan's GlobalWafers Co Ltd 6488.TWO will spend $5 billion on a new plant in Texas to make silicon wafers used in semiconductors, switching to the United States after a failed European investment. "With the global chips shortage and ongoing geopolitical concerns, GlobalWafers is taking this opportunity to address the United States semiconductor supply chain resiliency issue by building an advanced node, state-of-the-art, 300-millimeter silicon wafer factory," Chairwoman and CEO Doris Hsu said. | Taiwan Semiconductor Manufacturing Co Ltd (TSMC) 2330.TW, a major Apple Inc AAPL.O supplier and the world's largest contract chipmaker, started construction last year in Arizona where it plans to spend $12 billion to build a semiconductor factory. Adds details, share price performance TAIPEI, June 28 (Reuters) - Taiwan's GlobalWafers Co Ltd 6488.TWO will spend $5 billion on a new plant in Texas to make silicon wafers used in semiconductors, switching to the United States after a failed European investment. The company said late on Monday the new plant, manufacturing 300-milimetre silicon wafers, would start being built later this year and generate as many as 1,500 jobs in Sherman, Texas. | Taiwan Semiconductor Manufacturing Co Ltd (TSMC) 2330.TW, a major Apple Inc AAPL.O supplier and the world's largest contract chipmaker, started construction last year in Arizona where it plans to spend $12 billion to build a semiconductor factory. Adds details, share price performance TAIPEI, June 28 (Reuters) - Taiwan's GlobalWafers Co Ltd 6488.TWO will spend $5 billion on a new plant in Texas to make silicon wafers used in semiconductors, switching to the United States after a failed European investment. "With the global chips shortage and ongoing geopolitical concerns, GlobalWafers is taking this opportunity to address the United States semiconductor supply chain resiliency issue by building an advanced node, state-of-the-art, 300-millimeter silicon wafer factory," Chairwoman and CEO Doris Hsu said. | Taiwan Semiconductor Manufacturing Co Ltd (TSMC) 2330.TW, a major Apple Inc AAPL.O supplier and the world's largest contract chipmaker, started construction last year in Arizona where it plans to spend $12 billion to build a semiconductor factory. Adds details, share price performance TAIPEI, June 28 (Reuters) - Taiwan's GlobalWafers Co Ltd 6488.TWO will spend $5 billion on a new plant in Texas to make silicon wafers used in semiconductors, switching to the United States after a failed European investment. Raimondo on Monday stepped up pressure on Congress to approve $52 billion in funding for chipmakers to expand operations, warning that firms would abandon American expansion plans without the legislation. |
20528.0 | 2022-06-27 00:00:00 UTC | Meta Platforms (META) Develops 3 New AI Models for Metaverse | AAPL | https://www.nasdaq.com/articles/meta-platforms-meta-develops-3-new-ai-models-for-metaverse | nan | nan | Meta Platforms META recently announced that the company’s AI researchers and audio specialists from the Reality labs team built three new AI models — Visual-Acoustic Matching, Visually-Informed Dereverberation and VisualVoice.
Meta’s research team built these new models, which will specifically focus on audio-visual perception, in collaboration with researchers from the University of Texas at Austin.
The newly designed AI models, currently available for developers, will help Meta build the Metaverse as a more refined immersive reality space by making the sound more realistic in mixed and virtual reality experiences.
The AI models create a unique experience for the users in the Metaverse. For instance, the visual acoustic matchmaking model called AViTAR is self-supervised and matches audio to match the space of a target image. One of the future utilities of this model is quite distinctive, like reliving past memories.
When one puts on a pair of AR glasses and sees an object, they will have the option of replaying the memory associated with that object. The newly launched AI models are capable of achieving such audacious feats.
AI is at the heart of the fourth industrial revolution, and Meta is investing heavily to build its AI, which can support the growth of both of its business segments — Family of Apps and the building of Metaverse.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
Meta Investing In AI to Drive Long-Term Top Line
Meta’s revenue growth was driven exponentially by the e-commerce boom during the pandemic. However, that was momentum growth and is finally slowing down. Meta’s share price has been significantly impacted by the Russia-Ukraine war, which can be described as a black swan event.
While war has historically impacted businesses and the economy globally before but the sanctions imposed by the United States, the G7 and the EU upon Russia have been unprecedented in scale and scope.
The sheer number of sanctions triggered by this situation makes the global geopolitical situation extremely complicated and makes it difficult to predict how this will impact businesses globally.
Meta, whose services have been banned in Russia, is losing a significant portion of its ad revenues from that region. This kind of negative global geopolitical situation and inflation, which the war has aggravated, has hurt the company's stock price.
Shares of Meta have tumbled 49.8% in the year-to-date period compared with the Zacks Internet – Software industry decline of 48.6%.
The situation is not expected to get better in the near term as negative sentiments are clearly reflected by traders shorting shares of every major tech stock in the NASDAQ composite, including Meta’s social media peer Twitter TWTR and tech giants Alphabet GOOGL and Apple AAPL.
Twitter shares have fallen 8.4% compared with the Zacks Internet Software industry’s decline of 48.6%.
Alphabet shares have lost 19% in the year-to-date period compared with the Zacks Internet – Services industry’s decline of 21.6%.
Apple’s shares have fallen 20% in the year-to-date period compared with the Zacks Computer - Mini computers industry’s decline of 19.7%.
Although Meta’s short-term revenue growth looks bleak, the company is confident about its long-term growth. Meta is investing heavily in developing AI, which will drive revenue growth across ad business and the Metaverse.
Reels are the newest trend right now, and the feeds are increasingly being recommended by AI. This will enable Meta to evolve its ad systems to do more with less data, thus minimizing its privacy policy issues substantially.
Further, as Meta is banking its future on building the Metaverse, investment in AI is expected to bring lofty ROI for the company and separate its services from competitors. This will impact shareholders' growth positively and makes it a lucrative stock to retain in your portfolio.
Meta currently carries Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The situation is not expected to get better in the near term as negative sentiments are clearly reflected by traders shorting shares of every major tech stock in the NASDAQ composite, including Meta’s social media peer Twitter TWTR and tech giants Alphabet GOOGL and Apple AAPL. Apple Inc. (AAPL): Free Stock Analysis Report While war has historically impacted businesses and the economy globally before but the sanctions imposed by the United States, the G7 and the EU upon Russia have been unprecedented in scale and scope. | The situation is not expected to get better in the near term as negative sentiments are clearly reflected by traders shorting shares of every major tech stock in the NASDAQ composite, including Meta’s social media peer Twitter TWTR and tech giants Alphabet GOOGL 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 Investing In AI to Drive Long-Term Top Line Meta’s revenue growth was driven exponentially by the e-commerce boom during the pandemic. | The situation is not expected to get better in the near term as negative sentiments are clearly reflected by traders shorting shares of every major tech stock in the NASDAQ composite, including Meta’s social media peer Twitter TWTR and tech giants Alphabet GOOGL and Apple AAPL. Apple Inc. (AAPL): Free Stock Analysis Report Meta Platforms META recently announced that the company’s AI researchers and audio specialists from the Reality labs team built three new AI models — Visual-Acoustic Matching, Visually-Informed Dereverberation and VisualVoice. | The situation is not expected to get better in the near term as negative sentiments are clearly reflected by traders shorting shares of every major tech stock in the NASDAQ composite, including Meta’s social media peer Twitter TWTR and tech giants Alphabet GOOGL and Apple AAPL. Apple Inc. (AAPL): Free Stock Analysis Report Meta is investing heavily in developing AI, which will drive revenue growth across ad business and the Metaverse. |
20529.0 | 2022-06-27 00:00:00 UTC | 2 Monster Warren Buffett Stock-Split Stocks to Buy Right Now | AAPL | https://www.nasdaq.com/articles/2-monster-warren-buffett-stock-split-stocks-to-buy-right-now-0 | nan | nan | Warren Buffett may not be a fan of stock splits when it comes to some stock classes of his own company, Berkshire Hathaway, but several notable names have been going down this route recently.
A split reduces the dollar value of a company's stock and leads to an increase in the number of outstanding shares -- a purely cosmetic move as it doesn't do anything to boost the intrinsic value of a company. However, companies sometimes turn to stock splits to make the shares more attractive to a larger pool of retail investors. It is believed that the increased accessibility following a split can boost the retail demand for a company's shares, and thereby lead to an increase in the stock price.
Warren Buffett's top holding, Apple (NASDAQ: AAPL), executed a stock split in August 2020. Amazon (NASDAQ: AMZN) is another Warren Buffett holding whose stock split went into effect on June 6. Investors can still buy these stock-split plays from Warren Buffett's portfolio at attractive valuations right now. Let's see why that could turn out to be a smart long-term move.
1. Apple
Apple's 4-for-1 stock split was executed on Aug. 28, 2020. Shares of the tech giant have gained only 12% since then, barely outperforming the S&P 500.
AAPL data by YCharts
Apple's weak returns can be attributed to the broader stock market sell-off this year. However, this also means that investors who missed buying the stock after its split can still buy it at an attractive valuation following its pullback. Apple currently sports a price-to-earnings (P/E) ratio of 22.4. For comparison, it was trading at over 40 times trailing earnings at the end of 2020.
Buying Apple at this valuation looks like a no-brainer, as the company has multiple catalysts that could send the stock higher in the long run. These growth drivers include the iPhone, the services business, and Apple's potential entry into emerging technologies such as headsets and self-driving cars.
The iPhone, for instance, is dominating the fast-growing 5G smartphone market. Strategy Analytics estimates that Apple cornered a 31% share of the 5G smartphone market last year. More importantly, Apple is also enjoying robust pricing power thanks to the adoption of 5G smartphones. That's evident from the 14% increase in the average selling price (ASP) of the iPhone last year to $825. This was well ahead of the global smartphone ASP of $322. What's more, Apple managed to boost its iPhone ASP despite increasing its share in price-sensitive emerging markets such as India, Brazil, Vietnam, and Thailand.
According to a third-party estimate, the global 5G smartphone market could clock annual growth of 123% through 2027. So it wouldn't be surprising to see the iPhone drive impressive growth for Apple in the long run thanks to a mix of higher volumes and healthy pricing driven by the rapid growth of the 5G smartphone market.
Additionally, Apple's rumored entry into potentially lucrative markets such as autonomous cars could substantially boost the company's revenue and stock price. So investors who haven't bought Apple following its split still have an opportunity to do so -- it is cheap right now and is sitting on solid catalysts that could supercharge this tech stock in the long run.
2. Amazon
Amazon stock has headed south since splitting earlier this month. It is now trading at 54 times trailing earnings, which, though expensive, is lower than its five-year average multiple of 121.
Amazon stock's decline following the split is a blessing in disguise for investors looking to buy a growth stock. After all, the company is expected to clock annual earnings growth of 40% for the next five years, which isn't surprising given the opportunities in the e-commerce and cloud computing markets.
Amazon is expected to generate $525 billion in revenue this year, which would be a 12% jump over 2021. The company's growth rate is expected to pick up the pace in 2023, with revenue expected to jump an estimated 17% to $613 billion and adjusted earnings anticipated to more than triple to $2.71 per share. Even better, Amazon is expected to sustain its growth trajectory in 2024 as well, as evident from the chart below.
AMZN Revenue Estimates for 2 Fiscal Years Ahead data by YCharts
Amazon could sustain its impressive growth for a much longer time. E-commerce, which is Amazon's biggest business with 84% of its top line, is set for secular long-term growth. According to a third-party estimate, global e-commerce sales could more than quadruple by 2030 to $17.5 trillion, compared to $4.2 trillion in 2020.
Amazon is a key player in several e-commerce hotspots around the globe, so the company is in a nice position to capitalize on this market's expansion. Meanwhile, Amazon built a solid position for itself in the cloud computing market, pulling well ahead of competitors with a market share of 33%. This points toward yet another enticing opportunity for Amazon to clock incremental revenue growth, as the global cloud computing market is expected to more than double in revenue by 2026 compared to last year's levels according to third-party estimates.
So even though Amazon's stock may not have taken off following its split, investors shouldn't miss the bigger picture, as its two big growth drivers could lead to healthy upside in the long run.
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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. | Warren Buffett's top holding, Apple (NASDAQ: AAPL), executed a stock split in August 2020. AAPL data by YCharts Apple's weak returns can be attributed to the broader stock market sell-off this year. Additionally, Apple's rumored entry into potentially lucrative markets such as autonomous cars could substantially boost the company's revenue and stock price. | Warren Buffett's top holding, Apple (NASDAQ: AAPL), executed a stock split in August 2020. AAPL data by YCharts Apple's weak returns can be attributed to the broader stock market sell-off this year. AMZN Revenue Estimates for 2 Fiscal Years Ahead data by YCharts Amazon could sustain its impressive growth for a much longer time. | Warren Buffett's top holding, Apple (NASDAQ: AAPL), executed a stock split in August 2020. AAPL data by YCharts Apple's weak returns can be attributed to the broader stock market sell-off this year. Amazon stock's decline following the split is a blessing in disguise for investors looking to buy a growth stock. | Warren Buffett's top holding, Apple (NASDAQ: AAPL), executed a stock split in August 2020. AAPL data by YCharts Apple's weak returns can be attributed to the broader stock market sell-off this year. This was well ahead of the global smartphone ASP of $322. |
20530.0 | 2022-06-27 00:00:00 UTC | Stock Market News for Jun 27, 2022 | AAPL | https://www.nasdaq.com/articles/stock-market-news-for-jun-27-2022 | nan | nan | U.S. stocks ended sharply higher on Friday to record their first weekly advance since May as investors deliberated if markets have hit their lows and reassessed Fed’s aggressive rate hike plans. The rebound rally was led by tech stocks. All the major indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) jumped 2.7% or 823.32 points to finish at 31,500.68 points.
The S&P 500 rose 3.1% or 116.01 points to close at 3,911.74 points. Consumer discretionary, materials, communication services and tech stocks were the best performers.
The Materials Select Sector SPDR (XLB) gained 4%, while the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) added 3.8% each. The Technology Select Sector SPDR (XLK) gained 3.6%. All the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq climbed 3.3% or 375.43.16 points to end at 11,607.62 points.
The fear-gauge CBOE Volatility Index (VIX) was down 6.27% to 27.42. Advancers outnumbered decliners on the NYSE by a 4.66-to-1 ratio. On Nasdaq, a 2.15-to-1 ratio favored advancing issues. A total of 19 billion shares were traded on Friday, higher than the last 20-session average of 12.9 billion.
Positive Sentiments Send Stocks on a Rally
Investors have been worrying about slowing economic growth as the Fed has continued to hike interest rates aggressively in its battle to check soaring inflation. This has been taking a toll on stocks. However, investors’ sentiments finally seem to have got a lift over the past few sessions, which saw all the three major indexes record weekly gains for the first time after three weeks.
The bear market rally continued for the third consecutive session on Friday. Commodity prices have finally started falling and going by the Fed’s fund futures, investors are now expecting lower rate hikes over the course of time in the Fed’s benchmark interest-rate target.
Investors now expect rate hikes to hit a high of something between 3.25% to 3.5% by December, which is lower than the 3.5% to 3.75%, which was being expected until a week ago, according to CME’s FedWatch tool.
Also, investor sentiment got a boost after a reading of the consumer sentiment, which is followed closely by the Fed, showed that people now expect inflation to ease slightly. This has been giving a boost to investor confidence lately.
Tech, Financial Stocks Drive Rally
The upbeat mood has been helping markets over the past three days. Friday wasn’t any different. Friday’s rally was led by the beaten-down tech stocks. Shares of Meta Platforms, Inc. META soared 7.2%, while Apple Inc. AAPL gained 2.5%. Apple has a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Other notable gainers from Friday’s rally were financial, materials and consumer discretionary stocks. Shares of The Goldman Sachs Group, Inc. GS jumped 5.8%, while Wells Fargo & Company WFC rallied 7.6%.
The gains in S&P 500 were led by cruise line stocks. Shares of Royal Caribbean Cruises Ltd. RCL surged 15.8%. Carnival Corporation & plc’s CCL shares gained 12.4%.
Economic Data
In economic data released on Friday, the University of Michigan’s final reading of consumer sentiment reflected a massive decline. Consumer sentiment hit a record low of 50 in June. Although the reading isn’t impressive, a reading in the detailed report showed that consumers’ 12-month inflation expectations eased to 5.3%, which is being seen as a positive.
In other economic data, the Census Bureau said that new home sales in the United States increased 10.7% in May to 696,000 units from April’s decline of 12%.
Weekly Roundup
All the three major indexes finally managed to snap a three-week losing streak in the holiday-shortened week. The Dow finished 5.4% higher for the week.
The S&P 500 ended 6.5% up for the week. The index had entered a bear market last week after recording its worst week since March 2020. The Nasdaq was the best performer for the week, finishing 7.5% up.
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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. | Shares of Meta Platforms, Inc. META soared 7.2%, while Apple Inc. AAPL gained 2.5%. Apple Inc. (AAPL): Free Stock Analysis Report U.S. stocks ended sharply higher on Friday to record their first weekly advance since May as investors deliberated if markets have hit their lows and reassessed Fed’s aggressive rate hike plans. | Shares of Meta Platforms, Inc. META soared 7.2%, while Apple Inc. AAPL gained 2.5%. Apple Inc. (AAPL): Free Stock Analysis Report The Materials Select Sector SPDR (XLB) gained 4%, while the Consumer Discretionary Select Sector SPDR (XLY) and the Communication Services Select Sector SPDR (XLC) added 3.8% each. | Shares of Meta Platforms, Inc. META soared 7.2%, while Apple Inc. AAPL gained 2.5%. Apple Inc. (AAPL): Free Stock Analysis Report U.S. stocks ended sharply higher on Friday to record their first weekly advance since May as investors deliberated if markets have hit their lows and reassessed Fed’s aggressive rate hike plans. | Shares of Meta Platforms, Inc. META soared 7.2%, while Apple Inc. AAPL gained 2.5%. Apple Inc. (AAPL): Free Stock Analysis Report All the 11 sectors of the benchmark index ended in positive territory. |
20531.0 | 2022-06-27 00:00:00 UTC | Should Schwab Fundamental U.S. Large Company Index ETF (FNDX) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-schwab-fundamental-u.s.-large-company-index-etf-fndx-be-on-your-investing-radar-3 | nan | nan | Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Schwab Fundamental U.S. Large Company Index ETF (FNDX) is a passively managed exchange traded fund launched on 08/13/2013.
The fund is sponsored by Charles Schwab. It has amassed assets over $9.17 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Large cap companies usually 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.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 2.04%.
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 16% of the portfolio. Healthcare and Financials round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 4.36% of total assets, followed by Exxon Mobil Corp (XOM) and Chevron Corp (CVX).
The top 10 holdings account for about 20.52% of total assets under management.
Performance and Risk
FNDX seeks to match the performance of the Russell RAFI US Large Co. Index before fees and expenses. The Russell RAFI US Large Company Index measures the performance of the large company size segment by fundamental overall company scores.
The ETF has lost about -10.92% so far this year and is down about -2.56% in the last one year (as of 06/27/2022). In the past 52-week period, it has traded between $49.93 and $59.90.
The ETF has a beta of 1 and standard deviation of 24.43% for the trailing three-year period, making it a medium risk choice in the space. With about 721 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Large Company Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, FNDX is an excellent option for investors seeking exposure to the Style Box - Large Cap Value segment of the market. There are other additional ETFs in the space that investors could consider as well.
The iShares Russell 1000 Value ETF (IWD) and the Vanguard Value ETF (VTV) track a similar index. While iShares Russell 1000 Value ETF has $52.17 billion in assets, Vanguard Value ETF has $94.85 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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iShares Russell 1000 Value ETF (IWD): 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. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 4.36% of total assets, followed by Exxon Mobil Corp (XOM) and Chevron Corp (CVX). Apple Inc. (AAPL): Free Stock Analysis Report It has amassed assets over $9.17 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 4.36% of total assets, followed by Exxon Mobil Corp (XOM) and Chevron Corp (CVX). Apple Inc. (AAPL): Free Stock Analysis Report Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Schwab Fundamental U.S. Large Company Index ETF (FNDX) is a passively managed exchange traded fund launched on 08/13/2013. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 4.36% of total assets, followed by Exxon Mobil Corp (XOM) and Chevron Corp (CVX). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives Schwab Fundamental U.S. Large Company Index ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 4.36% of total assets, followed by Exxon Mobil Corp (XOM) and Chevron Corp (CVX). Apple Inc. (AAPL): Free Stock Analysis Report Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Schwab Fundamental U.S. Large Company Index ETF (FNDX) is a passively managed exchange traded fund launched on 08/13/2013. |
20532.0 | 2022-06-27 00:00:00 UTC | Should Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC) Be on Your Investing Radar? | AAPL | https://www.nasdaq.com/articles/should-goldman-sachs-activebeta-u.s.-large-cap-equity-etf-gslc-be-on-your-investing-3 | nan | nan | Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC) is a passively managed exchange traded fund launched on 09/17/2015.
The fund is sponsored by Goldman Sachs Funds. It has amassed assets over $11.32 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market.
Why Large Cap Blend
Large cap companies usually have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Blend ETFs are aptly named, since they tend to hold a mix of growth and value stocks, as well as show characteristics of both kinds of equities.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.09%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 1.49%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Information Technology sector--about 29% of the portfolio. Healthcare and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.78% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN).
The top 10 holdings account for about 23.5% of total assets under management.
Performance and Risk
GSLC seeks to match the performance of the Goldman Sachs ActiveBeta U.S. Large Cap Equity Index before fees and expenses. The Goldman Sachs ActiveBeta U.S. Large Cap Equity Index is designed to deliver exposure to equity securities of large-capitalization U.S. issuers.
The ETF has lost about -18.62% so far this year and is down about -7.94% in the last one year (as of 06/27/2022). In the past 52-week period, it has traded between $72.75 and $95.62.
The ETF has a beta of 0.98 and standard deviation of 23.58% for the trailing three-year period, making it a medium risk choice in the space. With about 448 holdings, it effectively diversifies company-specific risk.
Alternatives
Goldman Sachs ActiveBeta U.S. Large Cap 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, GSLC is a reasonable option for those seeking exposure to the Style Box - Large Cap Blend area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Core S&P 500 ETF (IVV) and the SPDR S&P 500 ETF (SPY) track a similar index. While iShares Core S&P 500 ETF has $288.77 billion in assets, SPDR S&P 500 ETF has $356.32 billion. IVV has an expense ratio of 0.03% and SPY charges 0.09%.
Bottom-Line
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
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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Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC): ETF Research Reports
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
SPDR S&P 500 ETF (SPY): ETF Research Reports
iShares Core S&P 500 ETF (IVV): ETF Research Reports
To read this article on Zacks.com click here.
The 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 5.78% 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 $11.32 billion, making it one of the largest ETFs attempting to match the Large Cap Blend segment of the US equity market. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.78% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC) is a passively managed exchange traded fund launched on 09/17/2015. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.78% of total assets, followed by Microsoft Corp (MSFT) and Amazon.com Inc (AMZN). Apple Inc. (AAPL): Free Stock Analysis Report Designed to provide broad exposure to the Large Cap Blend segment of the US equity market, the Goldman Sachs ActiveBeta U.S. Large Cap Equity ETF (GSLC) is a passively managed exchange traded fund launched on 09/17/2015. | Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.78% 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 0.09%, making it one of the least expensive products in the space. |
20533.0 | 2022-06-27 00:00:00 UTC | Should You Invest in the Technology Select Sector SPDR ETF (XLK)? | AAPL | https://www.nasdaq.com/articles/should-you-invest-in-the-technology-select-sector-spdr-etf-xlk-2 | nan | nan | If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the Technology Select Sector SPDR ETF (XLK), a passively managed exchange traded fund launched on 12/16/1998.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Investor-friendly, sector ETFs provide many options to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 8, placing it in top 50%.
Index Details
The fund is sponsored by State Street Global Advisors. It has amassed assets over $40 billion, making it the largest ETF attempting to match the performance of the Technology - Broad segment of the equity market. XLK seeks to match the performance of the Technology Select Sector Index before fees and expenses.
The Technology Select Sector Index includes companies from the following industries: computers & peripherals; software; diversified telecommunication services; communications equipment; semiconductor & semiconductor equipment; internet software & services; IT services; wireless telecommunication services; electronic equipment & instruments; and office electronics.
Costs
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for this ETF are 0.10%, making it one of the least expensive products in the space.
It has a 12-month trailing dividend yield of 0.90%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector--about 100% of the portfolio.
Looking at individual holdings, Apple Inc. (AAPL) accounts for about 25.09% of total assets, followed by Microsoft Corporation (MSFT) and Nvidia Corporation (NVDA).
The top 10 holdings account for about 66.13% of total assets under management.
Performance and Risk
The ETF has lost about -23.62% so far this year and is down about -7.39% in the last one year (as of 06/27/2022). In that past 52-week period, it has traded between $123.49 and $176.65.
The ETF has a beta of 1.08 and standard deviation of 29.97% for the trailing three-year period, making it a medium risk choice in the space. With about 78 holdings, it effectively diversifies company-specific risk.
Alternatives
Technology Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, XLK is a great option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that investors could consider as well.
ARK Innovation ETF (ARKK) tracks N/A and the Vanguard Information Technology ETF (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. ARK Innovation ETF has $9.27 billion in assets, Vanguard Information Technology ETF has $42.17 billion. ARKK has an expense ratio of 0.75% and VGT charges 0.10%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Technology Select Sector SPDR ETF (XLK): ETF Research Reports
Apple Inc. (AAPL): Free Stock Analysis Report
Microsoft Corporation (MSFT): Free Stock Analysis Report
NVIDIA Corporation (NVDA): Free Stock Analysis Report
ARK Innovation ETF (ARKK): ETF Research Reports
Vanguard Information Technology ETF (VGT): ETF Research Reports
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. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 25.09% of total assets, followed by Microsoft Corporation (MSFT) and Nvidia Corporation (NVDA). Apple Inc. (AAPL): Free Stock Analysis Report It has amassed assets over $40 billion, making it the largest ETF attempting to match the performance of the Technology - Broad segment of the equity market. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 25.09% of total assets, followed by Microsoft Corporation (MSFT) and Nvidia Corporation (NVDA). Apple Inc. (AAPL): Free Stock Analysis Report The Technology Select Sector Index includes companies from the following industries: computers & peripherals; software; diversified telecommunication services; communications equipment; semiconductor & semiconductor equipment; internet software & services; IT services; wireless telecommunication services; electronic equipment & instruments; and office electronics. | Looking at individual holdings, Apple Inc. (AAPL) accounts for about 25.09% of total assets, followed by Microsoft Corporation (MSFT) and Nvidia Corporation (NVDA). Apple Inc. (AAPL): Free Stock Analysis Report Alternatives Technology Select Sector SPDR ETF holds a Zacks ETF Rank of 1 (Strong Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. | Apple Inc. (AAPL): Free Stock Analysis Report Looking at individual holdings, Apple Inc. (AAPL) accounts for about 25.09% of total assets, followed by Microsoft Corporation (MSFT) and Nvidia Corporation (NVDA). If you're interested in broad exposure to the Technology - Broad segment of the equity market, look no further than the Technology Select Sector SPDR ETF (XLK), a passively managed exchange traded fund launched on 12/16/1998. |
20534.0 | 2022-06-27 00:00:00 UTC | U.S. Supreme Court won't hear Apple's bid to revive Qualcomm patent challenges | AAPL | https://www.nasdaq.com/articles/u.s.-supreme-court-wont-hear-apples-bid-to-revive-qualcomm-patent-challenges | nan | nan | By Blake Brittain
WASHINGTON, June 27 (Reuters) - The U.S. Supreme Court on Monday declined to hear Apple Inc's AAPL.O bid to revive an effort to cancel two Qualcomm Inc QCOM.O smartphone patents despite the global settlement of the underlying dispute between the two tech giants.
The justices turned away Apple's appeal of a lower court's ruling that the Cupertino, California-based company lacked standing to pursue the matter because of the settlement. Apple had argued that it should be allowed to appeal because San Diego-based Qualcomm could sue again after the settlement ends.
Qualcomm sued Apple in San Diego federal court in 2017, arguing that its iPhones, iPads and Apple Watches infringed a variety of Qualcomm mobile-technology patents. That case was one element of a broader dispute between the rivals.
Apple challenged the validity of the two patents at issue at the Patent and Trademark Office's Patent Trial and Appeal Board.
The parties settled their litigation in 2019, signing an agreement worth billions of dollars that allowed Apple to continue using Qualcomm chips in iPhones. The settlement also featured a license to tens of thousands of Qualcomm patents, including the two at issue, but allowed the patent board case to continue.
The board ruled in favor of Qualcomm. The U.S. Court of Appeals for the Federal Circuit, which specializes in patent law, dismissed Apple's appeal last year based on the settlement. The Federal Circuit rejected Apple's contention that its royalty payments and risk of being sued again justified hearing the case on the merits.
Apple told the Supreme Court that it still faced the risk of litigation after the agreement expires in 2025, or in 2027 if the settlement term is extended. Qualcomm already sued once, has "not disclaimed its intention to do so again," and has a "history of aggressively enforcing its patents," Apple said.
Qualcomm asked the justices to reject the appeal, arguing Apple had not shown any concrete injury that would give it proper legal standing.
President Joe Biden's administration urged the Supreme Court to reject the appeal in a brief in May.
(Reporting by Blake Brittain in Washington; Editing by Will Dunham)
((blake.brittain@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. | By Blake Brittain WASHINGTON, June 27 (Reuters) - The U.S. Supreme Court on Monday declined to hear Apple Inc's AAPL.O bid to revive an effort to cancel two Qualcomm Inc QCOM.O smartphone patents despite the global settlement of the underlying dispute between the two tech giants. The justices turned away Apple's appeal of a lower court's ruling that the Cupertino, California-based company lacked standing to pursue the matter because of the settlement. The parties settled their litigation in 2019, signing an agreement worth billions of dollars that allowed Apple to continue using Qualcomm chips in iPhones. | By Blake Brittain WASHINGTON, June 27 (Reuters) - The U.S. Supreme Court on Monday declined to hear Apple Inc's AAPL.O bid to revive an effort to cancel two Qualcomm Inc QCOM.O smartphone patents despite the global settlement of the underlying dispute between the two tech giants. Qualcomm sued Apple in San Diego federal court in 2017, arguing that its iPhones, iPads and Apple Watches infringed a variety of Qualcomm mobile-technology patents. The settlement also featured a license to tens of thousands of Qualcomm patents, including the two at issue, but allowed the patent board case to continue. | By Blake Brittain WASHINGTON, June 27 (Reuters) - The U.S. Supreme Court on Monday declined to hear Apple Inc's AAPL.O bid to revive an effort to cancel two Qualcomm Inc QCOM.O smartphone patents despite the global settlement of the underlying dispute between the two tech giants. Qualcomm sued Apple in San Diego federal court in 2017, arguing that its iPhones, iPads and Apple Watches infringed a variety of Qualcomm mobile-technology patents. The U.S. Court of Appeals for the Federal Circuit, which specializes in patent law, dismissed Apple's appeal last year based on the settlement. | By Blake Brittain WASHINGTON, June 27 (Reuters) - The U.S. Supreme Court on Monday declined to hear Apple Inc's AAPL.O bid to revive an effort to cancel two Qualcomm Inc QCOM.O smartphone patents despite the global settlement of the underlying dispute between the two tech giants. Apple had argued that it should be allowed to appeal because San Diego-based Qualcomm could sue again after the settlement ends. Qualcomm sued Apple in San Diego federal court in 2017, arguing that its iPhones, iPads and Apple Watches infringed a variety of Qualcomm mobile-technology patents. |
20535.0 | 2022-06-27 00:00:00 UTC | US STOCKS-Wall St set to extend bounce as inflation fears ease | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-st-set-to-extend-bounce-as-inflation-fears-ease | nan | nan | By Shreyashi Sanyal
June 27 (Reuters) - U.S. stock index futures edged higher on Monday, setting up Wall Street to extend gains from the previous week after a slide in commodity prices eased worries of prolonged inflation.
All three key indexes posted solid gains last week, with the Nasdaq Composite .IXIC rising 7.5% as investors bet the retreat in oil prices from the three-month highs hit this month could ease inflationary pressures and push the Federal Reserve to moderate its aggressive policy tightening.
The U.S. central bank has rapidly raised interest rates to rein in 40-year-high inflation, stoking fears its actions could tip the world's largest economy into a recession.
After the benchmark S&P 500 .SPX index earlier this month recorded a 20% drop from its January closing peak to confirm a bear market, investors this week will try to gauge when the market might hit its bottom.
"The rebound in markets is a reminder of the merits of staying invested in line with a long-term plan. But volatility is likely to remain elevated until we see strong evidence that inflation is moderating, recession risks are receding, and geopolitical threats are declining," Mark Haefele, chief investment officer at UBS Global Wealth Management wrote in a client note.
Haefele added that the main driver of the markets in the second half of 2022 will be investor perceptions of whether we are headed for stagflation, reflation, a soft-landing, or a slump.
Shares across the board gained in premarket trading on Monday, with tech-focused growth stocks including Tesla Inc TSLA.O, Netflix Inc NFLX.O, Alphabet Inc GOOGL.O and Apple Inc AAPL.O up between 0.6% and 1.4%.
At 6:48 a.m. ET, Dow e-minis 1YMcv1 were up 58 points, or 0.18%, S&P 500 e-minis EScv1 were up 10.75 points, or 0.27%, and Nasdaq 100 e-minis NQcv1 were up 47.5 points, or 0.39%.
Shares of Robinhood Markets HOOD.O rose 3.5% after media reports said Goldman Sachs upgraded the retail broker's stock to "neutral" from "sell".
Goldman Sachs, however, cut rating on Coinbase Global Inc COIN.O to "sell" from "buy", according to media reports, sending shares of the cryptocurrency exchange lower by 4.8%.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Vinay Dwivedi)
((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. | Shares across the board gained in premarket trading on Monday, with tech-focused growth stocks including Tesla Inc TSLA.O, Netflix Inc NFLX.O, Alphabet Inc GOOGL.O and Apple Inc AAPL.O up between 0.6% and 1.4%. By Shreyashi Sanyal June 27 (Reuters) - U.S. stock index futures edged higher on Monday, setting up Wall Street to extend gains from the previous week after a slide in commodity prices eased worries of prolonged inflation. All three key indexes posted solid gains last week, with the Nasdaq Composite .IXIC rising 7.5% as investors bet the retreat in oil prices from the three-month highs hit this month could ease inflationary pressures and push the Federal Reserve to moderate its aggressive policy tightening. | Shares across the board gained in premarket trading on Monday, with tech-focused growth stocks including Tesla Inc TSLA.O, Netflix Inc NFLX.O, Alphabet Inc GOOGL.O and Apple Inc AAPL.O up between 0.6% and 1.4%. By Shreyashi Sanyal June 27 (Reuters) - U.S. stock index futures edged higher on Monday, setting up Wall Street to extend gains from the previous week after a slide in commodity prices eased worries of prolonged inflation. ET, Dow e-minis 1YMcv1 were up 58 points, or 0.18%, S&P 500 e-minis EScv1 were up 10.75 points, or 0.27%, and Nasdaq 100 e-minis NQcv1 were up 47.5 points, or 0.39%. | Shares across the board gained in premarket trading on Monday, with tech-focused growth stocks including Tesla Inc TSLA.O, Netflix Inc NFLX.O, Alphabet Inc GOOGL.O and Apple Inc AAPL.O up between 0.6% and 1.4%. By Shreyashi Sanyal June 27 (Reuters) - U.S. stock index futures edged higher on Monday, setting up Wall Street to extend gains from the previous week after a slide in commodity prices eased worries of prolonged inflation. All three key indexes posted solid gains last week, with the Nasdaq Composite .IXIC rising 7.5% as investors bet the retreat in oil prices from the three-month highs hit this month could ease inflationary pressures and push the Federal Reserve to moderate its aggressive policy tightening. | Shares across the board gained in premarket trading on Monday, with tech-focused growth stocks including Tesla Inc TSLA.O, Netflix Inc NFLX.O, Alphabet Inc GOOGL.O and Apple Inc AAPL.O up between 0.6% and 1.4%. All three key indexes posted solid gains last week, with the Nasdaq Composite .IXIC rising 7.5% as investors bet the retreat in oil prices from the three-month highs hit this month could ease inflationary pressures and push the Federal Reserve to moderate its aggressive policy tightening. The U.S. central bank has rapidly raised interest rates to rein in 40-year-high inflation, stoking fears its actions could tip the world's largest economy into a recession. |
20536.0 | 2022-06-27 00:00:00 UTC | US STOCKS-Wall St set to extend bounce as inflation fears ease | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-st-set-to-extend-bounce-as-inflation-fears-ease-0 | nan | nan | By Shreyashi Sanyal
June 27 (Reuters) - Wall Street's main indexes were set to open higher on Monday and extend gains from the previous week after a slide in commodity prices allayed concerns about an overly aggressive Federal Reserve that is seeking to tame inflation.
All three key indexes posted solid gains last week, with the tech-heavy Nasdaq Composite .IXIC rising 7.5% as investors bet the retreat in oil prices from the three-month highs hit in June could ease inflationary pressures and push the Federal Reserve to moderate its aggressive policy tightening.
"I think there is an overwhelming feeling that inflation may be coming down and the Fed may not have to be as aggressive as anticipated moving forward," said Thomas Hayes, managing member at Great Hill Capital LLC in New York.
"As early as a week ago, unequivocally, everyone did feel that 75 basis points was guaranteed. I think now those probabilities have come down a little bit and it's kind of an open story."
The U.S. central bank has rapidly raised interest rates to rein in 40-year-high inflation, stoking fears its actions could tip the world's largest economy into a recession.
After the benchmark S&P 500 .SPX index earlier this month recorded a 20% drop from its January closing peak to confirm a bear market, investors have been trying to gauge when the market might hit its bottom.
"The rebound in markets is a reminder of the merits of staying invested in line with a long-term plan. But volatility is likely to remain elevated until we see strong evidence that inflation is moderating, recession risks are receding, and geopolitical threats are declining," Mark Haefele, chief investment officer at UBS Global Wealth Management wrote in a client note.
Haefele added that the main driver of the markets in the second half of 2022 will be investor perceptions of whether we are headed for stagflation, reflation, a soft-landing, or a slump.
Shares across the board gained in premarket trading on Monday, with tech-focused growth stocks including Tesla Inc TSLA.O, Netflix Inc NFLX.O, Alphabet Inc GOOGL.O and Apple Inc AAPL.O up between 0.5% and 1.5%.
At 08:25 a.m. ET, Dow e-minis 1YMcv1 were up 79 points, or 0.25%, S&P 500 e-minis EScv1 were up 14.5 points, or 0.37%, and Nasdaq 100 e-minis NQcv1 were up 58.25 points, or 0.48%.
Shares of Robinhood Markets HOOD.O rose 2.4% after media reports said Goldman Sachs upgraded the retail broker's stock to "neutral" from "sell".
Goldman Sachs, however, cut rating on Coinbase Global Inc COIN.O to "sell" from "buy", according to media reports, sending shares of the cryptocurrency exchange lower by 5.7%.
(Reporting by Shreyashi Sanyal and Amruta Khandekar in Bengaluru; Editing by Vinay Dwivedi)
((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. | Shares across the board gained in premarket trading on Monday, with tech-focused growth stocks including Tesla Inc TSLA.O, Netflix Inc NFLX.O, Alphabet Inc GOOGL.O and Apple Inc AAPL.O up between 0.5% and 1.5%. By Shreyashi Sanyal June 27 (Reuters) - Wall Street's main indexes were set to open higher on Monday and extend gains from the previous week after a slide in commodity prices allayed concerns about an overly aggressive Federal Reserve that is seeking to tame inflation. All three key indexes posted solid gains last week, with the tech-heavy Nasdaq Composite .IXIC rising 7.5% as investors bet the retreat in oil prices from the three-month highs hit in June could ease inflationary pressures and push the Federal Reserve to moderate its aggressive policy tightening. | Shares across the board gained in premarket trading on Monday, with tech-focused growth stocks including Tesla Inc TSLA.O, Netflix Inc NFLX.O, Alphabet Inc GOOGL.O and Apple Inc AAPL.O up between 0.5% and 1.5%. By Shreyashi Sanyal June 27 (Reuters) - Wall Street's main indexes were set to open higher on Monday and extend gains from the previous week after a slide in commodity prices allayed concerns about an overly aggressive Federal Reserve that is seeking to tame inflation. ET, Dow e-minis 1YMcv1 were up 79 points, or 0.25%, S&P 500 e-minis EScv1 were up 14.5 points, or 0.37%, and Nasdaq 100 e-minis NQcv1 were up 58.25 points, or 0.48%. | Shares across the board gained in premarket trading on Monday, with tech-focused growth stocks including Tesla Inc TSLA.O, Netflix Inc NFLX.O, Alphabet Inc GOOGL.O and Apple Inc AAPL.O up between 0.5% and 1.5%. By Shreyashi Sanyal June 27 (Reuters) - Wall Street's main indexes were set to open higher on Monday and extend gains from the previous week after a slide in commodity prices allayed concerns about an overly aggressive Federal Reserve that is seeking to tame inflation. All three key indexes posted solid gains last week, with the tech-heavy Nasdaq Composite .IXIC rising 7.5% as investors bet the retreat in oil prices from the three-month highs hit in June could ease inflationary pressures and push the Federal Reserve to moderate its aggressive policy tightening. | Shares across the board gained in premarket trading on Monday, with tech-focused growth stocks including Tesla Inc TSLA.O, Netflix Inc NFLX.O, Alphabet Inc GOOGL.O and Apple Inc AAPL.O up between 0.5% and 1.5%. By Shreyashi Sanyal June 27 (Reuters) - Wall Street's main indexes were set to open higher on Monday and extend gains from the previous week after a slide in commodity prices allayed concerns about an overly aggressive Federal Reserve that is seeking to tame inflation. All three key indexes posted solid gains last week, with the tech-heavy Nasdaq Composite .IXIC rising 7.5% as investors bet the retreat in oil prices from the three-month highs hit in June could ease inflationary pressures and push the Federal Reserve to moderate its aggressive policy tightening. |
20537.0 | 2022-06-27 00:00:00 UTC | Will Nvidia Be a Trillion-Dollar Stock by 2025? | AAPL | https://www.nasdaq.com/articles/will-nvidia-be-a-trillion-dollar-stock-by-2025-1 | nan | nan | Mega-cap public companies have gotten unbelievably large in the past few years. Some of the technology giants like Apple and Microsoft have gotten so large that their market capitalizations -- the total value of their publicly traded shares -- are now north of $1 trillion. Only six publicly traded companies in the United States have ever joined the exclusive $1 trillion market cap club. But what company will be the next to join? I think a good candidate is Nvidia (NASDAQ: NVDA), the maker of computer chips for gamers, cryptocurrencies, data centers, and many other technologies.
Nvidia's market cap is currently around $400 billion. Can it join the ranks of companies valued at $1 trillion, or more than double its current price, by 2025? Let's investigate.
Image source: Getty Images.
Recent growth has been fantastic
To take a look at Nvidia's prospects to reach the $1 trillion club, we first need to look at its financials and growth. In its latest quarter, revenue hit $8.29 billion, up 46% year-over-year, and free cash flow hit $1.37 billion. Nvidia is currently seeing super-strong growth for its data center business, which grew revenue by 83% year-over-year to $3.75 billion. Gaming revenue, Nvidia's other large operating segment, is seeing solid growth as well, with revenue hitting $3.62 billion in the quarter, up 31% year-over-year.
And there's reason to be optimistic about both segments continuing to grow over the long term. Video games and associated technologies are growing steadily each and every year, and data center build-outs continue to happen in order for companies to build out cloud computing infrastructure. There should also be continued growth in machine learning and artificial intelligence (AI) research. Nvidia's various computing products are the market leaders for these industries.
Watch out for short-term headwinds
There's one thing Nvidia investors should be concerned with, at least in the short run, and that is cryptocurrencies. Long story short, cryptocurrency companies and miners use Nvidia's computing products to run their businesses. With the crypto markets crashing, these companies are starting to sell their Nvidia products, sometimes for prices well below retail. This increase in the supply of used products has the chance to decrease demand for new Nvidia products coming down the manufacturing line, which would hurt Nvidia's top-line revenue growth.
Regardless of whether or not Nvidia gets hit by cryptocurrency demands, the long-term growth drivers for the business remain intact. People are playing more video games, businesses are building out more data centers, and researchers are building out more and more AI technologies. All bode well for the demand for Nvidia's products in the future.
So will it join the $1 trillion club?
In order to reach a market cap of $1 trillion, Nvidia will need to significantly increase its annual free cash flow generation. Based on a price-to-free cash flow multiple (P/FCF) of 25, which is above the market average right now, a stock worth $1 trillion needs to generate $40 billion in annual free cash flow ($1 trillion divided by 25). For reference, of the four U.S. companies valued at over $1 trillion (Apple, Alphabet, Microsoft, and Amazon), all except Amazon have generated over $60 billion in free cash flow in the last 12 months. Amazon's free cash flow is negative due to a lot of heavy investments it has made since the start of the pandemic, but should recover to above $40 billion in the next couple of years.
NVDA Free Cash Flow data by YCharts
As you can see in the above chart, Nvidia generated just under $8 billion in free cash flow over the last 12 months. In order to hit $40 billion by the end of 2025, the company needs to grow its free cash flow by 50% a year for four straight years. While certainly possible, it doesn't seem probable for a company of this magnitude to grow that fast. Of course, the stock could hit $1 trillion with pure multiple expansion, but investors shouldn't be banking on that happening, especially as we enter a bear market.
Given the tailwinds around computing, AI, and data centers, Nvidia is on a path to eventually join the $1 trillion market cap club. But to do so by the end of 2025 seems unlikely.
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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. Brett Schafer 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, Microsoft, 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. | Some of the technology giants like Apple and Microsoft have gotten so large that their market capitalizations -- the total value of their publicly traded shares -- are now north of $1 trillion. Video games and associated technologies are growing steadily each and every year, and data center build-outs continue to happen in order for companies to build out cloud computing infrastructure. Amazon's free cash flow is negative due to a lot of heavy investments it has made since the start of the pandemic, but should recover to above $40 billion in the next couple of years. | In its latest quarter, revenue hit $8.29 billion, up 46% year-over-year, and free cash flow hit $1.37 billion. For reference, of the four U.S. companies valued at over $1 trillion (Apple, Alphabet, Microsoft, and Amazon), all except Amazon have generated over $60 billion in free cash flow in the last 12 months. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Microsoft, and Nvidia. | Based on a price-to-free cash flow multiple (P/FCF) of 25, which is above the market average right now, a stock worth $1 trillion needs to generate $40 billion in annual free cash flow ($1 trillion divided by 25). For reference, of the four U.S. companies valued at over $1 trillion (Apple, Alphabet, Microsoft, and Amazon), all except Amazon have generated over $60 billion in free cash flow in the last 12 months. NVDA Free Cash Flow data by YCharts As you can see in the above chart, Nvidia generated just under $8 billion in free cash flow over the last 12 months. | Long story short, cryptocurrency companies and miners use Nvidia's computing products to run their businesses. In order to hit $40 billion by the end of 2025, the company needs to grow its free cash flow by 50% a year for four straight years. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Microsoft, and Nvidia. |
20538.0 | 2022-06-27 00:00:00 UTC | Have $3,000? These Top Tech Stocks Are a Buy Now | AAPL | https://www.nasdaq.com/articles/have-%243000-these-top-tech-stocks-are-a-buy-now | nan | nan | It's been a rough year for the stock market as a whole, but it's been especially rough for tech stocks. The Nasdaq Composite Index -- which tracks the tech-heavy Nasdaq -- is down close to 30% YTD as of June 23.
Regardless of the performance of the broader market, there are some must-have stocks for your portfolio that you can grab during the current tech stock sell-off.
1. Apple
You'd be hard-pressed to find someone who doesn't think Apple (NASDAQ: AAPL) is a good company. Apple products may not be everyone's preference, but the company's current and historical impact on technology and society is undeniable. Even as the most valuable company in the U.S., the company isn't showing any signs of slowing down and still finds ways to continue its admirable growth.
Apple's financial success has largely depended on the iPhone, which accounts for over half of its net sales. The iPhone will continue to be Apple's bread and butter, but I believe one of its biggest growth opportunities, even with its current size, is its slow-but-sure entrance into the financial services space.
Apple crept into the financial space by releasing Apple Pay in 2014 and took it a step further when it released its Apple Card in 2019. But, its recent move -- Apple Pay Later, which gets the company into the growing buy now, pay later space -- is the sign it's ready to make a bigger move.
The company is also seeking a larger piece of the streaming pie, inking a deal with Major League Soccer (MLS) to exclusively stream every single MLS match on the Apple TV app beginning in 2023. In addition to the matches, the app will provide fans with original programming and content they won't receive anywhere else.
Apple still trails behind other popular streaming platforms like Netflix, HBO Max (part of Warner Bros. Discovery), and Disney+, but as the industry continues to transform, there's room for Apple to continue its growth in the space.
2. Amazon
Amazon (NASDAQ: AMZN) continues to dominate the e-commerce industry. The company's flagship subscription service, Amazon Prime, has over 200 million subscribers worldwide. However, I believe Amazon's growth ability won't rely on its e-commerce business, but on Amazon Web Services (AWS).
AWS is the world's largest cloud computing provider, and some of the biggest brands in the world rely on it for their operations. Operating at such a large scale requires sophisticated data centers, and those data centers require expensive chips, with customers inevitably incurring some costs. Other tech giants like Intel and Nvidia have dominated the chip market, but Amazon has begun developing its own chips, which it says are faster and 40% cheaper.
More products are increasingly reliant on semiconductors to not only function well, but to function at all. The number of semiconductors in cars is expected to approximately double from 2013 to 2030, and the semiconductor industry is expected to grow globally by 10% in 2022 to over $600 billion. As Amazon continues to invest in faster, cheaper chips, it will be in a position to use its size and reach to take advantage of an industry that is becoming a necessity and growing rapidly.
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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. Stefon Walters has positions in Apple. The Motley Fool has positions in and recommends Amazon, Apple, Intel, Netflix, Nvidia, and Walt Disney. The Motley Fool recommends Warner Bros. Discovery, Inc. 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. | Apple You'd be hard-pressed to find someone who doesn't think Apple (NASDAQ: AAPL) is a good company. The iPhone will continue to be Apple's bread and butter, but I believe one of its biggest growth opportunities, even with its current size, is its slow-but-sure entrance into the financial services space. In addition to the matches, the app will provide fans with original programming and content they won't receive anywhere else. | Apple You'd be hard-pressed to find someone who doesn't think Apple (NASDAQ: AAPL) is a good company. However, I believe Amazon's growth ability won't rely on its e-commerce business, but on Amazon Web Services (AWS). The Motley Fool has positions in and recommends Amazon, Apple, Intel, Netflix, Nvidia, and Walt Disney. | Apple You'd be hard-pressed to find someone who doesn't think Apple (NASDAQ: AAPL) is a good company. Apple crept into the financial space by releasing Apple Pay in 2014 and took it a step further when it released its Apple Card in 2019. Discovery, Inc. 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. | Apple You'd be hard-pressed to find someone who doesn't think Apple (NASDAQ: AAPL) is a good company. The iPhone will continue to be Apple's bread and butter, but I believe one of its biggest growth opportunities, even with its current size, is its slow-but-sure entrance into the financial services space. However, I believe Amazon's growth ability won't rely on its e-commerce business, but on Amazon Web Services (AWS). |
20539.0 | 2022-06-27 00:00:00 UTC | Still Think Tesla Is Expensive? This Stat Will Change Your Mind | AAPL | https://www.nasdaq.com/articles/still-think-tesla-is-expensive-this-stat-will-change-your-mind | nan | nan | Tesla (NASDAQ: TSLA) has probably been the biggest success story on the stock market in the last few years. Even after a pullback this year, the stock is up 1,500% over the past three years, rewarding investors who held through a volatile period with 16x gains.
Tesla's status as one of the biggest battleground stocks is also no secret. CEO Elon Musk may be as well known for making controversial remarks as he is for being a visionary leader, and critics have long cheered for the company's demise. They've argued at one point or another that Tesla is bound for bankruptcy, its results are only propped up by government credits, or that competition will come along and wipe out its premium valuation.
Bears love to argue that the company is massively overvalued, saying it's driven mostly by hype, and in some ways that charge makes sense. At recent prices, Tesla has a market cap over $750 billion, while larger automakers like Ford and General Motors are valued at just $48 billion and $51 billion.
However, apples-to-apples comparisons are difficult with these stocks since Tesla is a fast-growing electric vehicle maker with high profit margins, while Ford and GM are slow-growth, low-margin incumbents. Though both Ford and GM are transitioning to produce electric vehicles, their sales of EVs are only likely to cannibalize sales of their traditional combustion vehicles. It's a classic innovator's dilemma. Tesla, on the other hand, has a clear edge with a decade-long head start in EV technology as well as advantages like its supercharger network, well-loved brand, and it doesn't face the kind of conflicts that legacy automakers will, including dealer networks that are resistant to EV's since they require less maintenance. It also offers firmware-over-the-air updates, which most of its legacy competitors have been unable to match.
Not only that, but the numbers themselves don't indicate that Tesla is overvalued, at least not compared to the broader market.
The PEG ratio
There's no perfect way to value a stock. Many investors like to use the price-to-earnings ratio, which offers a good snapshot for how a company's price compares to its current earnings.
The flaw with the P/E ratio though is that it ignores a company's future growth, which is often the most important factor in determining its value. Tesla, for example, currently has a P/E ratio around 96, but it's expected to grow revenue by 59% this year, and earnings per share is forecast to jump 79% to $12.11, giving it a more reasonable forward P/E of almost 60.
The best way to measure both price-to-earnings and growth is with the PEG ratio, a favorite metric of famed hedge fund manager Peter Lynch. The PEG ratio divides the price-to-earnings ratio by the expected earnings growth rate, generally the compound average over the next five years. Since high P/E companies tend to have high growth rates, the PEG is a good way to compare valuations of both high- and low-growth stocks.
Lynch, who ran Fidelity's Magellan Fund in the '80s, theorized that an accurately valued stock would trade at a PEG of 1, while a PEG over 1 would indicate the stock was overvalued, and a PEG under 1 would mean that it's undervalued. However, back then, stock valuations were much lower, due in part to sky-high interest rates. The P/E of the S&P 500 was below 15 for nearly all of the time Lynch ran his fund. By comparison, since 2000, the P/E of the S&P 500 has almost never been below 15, in part because of the emergence of the fast-growing tech sector. As P/E ratios have inflated, so has the PEG, and a PEG of 1 no longer seems like an accurate benchmark.
At recent prices, Tesla trades at a moderate PEG of 1.66. That ratio actually makes the stock cheaper than the average stock on the Dow Jones Industrial Average, which has a PEG of 2.41. And that doesn't include the four stocks on the index that have negative PEG values due to expected declining earnings.
You can see the list below.
DOW COMPONENT PEG RATIO
American Express 1.22
Amgen 1.42
Apple 2.36
Boeing 6.53
Caterpillar 1.56
Cisco 2.21
Chevron 3.85
Home Depot 2.31
Honeywell 1.85
IBM 1.53
Intel 2.10
Johnson & Johnson 3.39
Coca-Cola 3.36
McDonald's 3.69
3M 1.81
Merck 1.11
Microsoft 1.71
Nike 1.69
Procter & Gamble 4.05
Travelers 1.68
UnitedHealth 1.74
Salesforce 1.76
Verizon Communications 4.67
Visa 1.32
Walmart 3.19
Walt Disney 0.55
Average PEG ratio 2.41
Data source: S&P Global Market Intelligence
Not only does the average Dow stock trade at a significantly higher PEG ratio than Tesla, but 19 of the 26 companies above are also more expensive than Tesla based on the PEG ratio. In other words, when you factor in growth, Tesla is cheaper than your typical blue-chip stock.
The PEG ratio isn't perfect, of course, and divining Tesla's growth rate, especially five years from now, may be a fool's errand. But it's a mistake to discount the company's growth rate, especially since Tesla has a solid track record of beating analyst estimates in recent years, topping them in 10 of the last 11 quarters.
Tesla is the clear leader in EVs, penetrating a massive addressable market that will take shape over the next 10 or 20 years. A lot can change during that time, and competition is likely to rise, but given Tesla's early leadership and brand strength, it's the clear favorite in the industry.
Bears will surely continue to knock the stock. But at this point, if you're arguing that it's overvalued, the numbers simply don't back that up.
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American Express is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Jeremy Bowman has positions in Nike and Walt Disney. The Motley Fool has positions in and recommends Apple, Cisco Systems, Goldman Sachs, Home Depot, Intel, Microsoft, Nike, Salesforce, Inc., Tesla, Visa, and Walt Disney. The Motley Fool recommends 3M, Amgen, Johnson & Johnson, UnitedHealth Group, and Verizon Communications and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2024 $145 calls on Walt Disney, long January 2024 $47.50 calls on Coca-Cola, 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. | However, apples-to-apples comparisons are difficult with these stocks since Tesla is a fast-growing electric vehicle maker with high profit margins, while Ford and GM are slow-growth, low-margin incumbents. But it's a mistake to discount the company's growth rate, especially since Tesla has a solid track record of beating analyst estimates in recent years, topping them in 10 of the last 11 quarters. The Motley Fool has positions in and recommends Apple, Cisco Systems, Goldman Sachs, Home Depot, Intel, Microsoft, Nike, Salesforce, Inc., Tesla, Visa, and Walt Disney. | Merck 1.11 Microsoft 1.71 Nike 1.69 Procter & Gamble 4.05 Travelers 1.68 UnitedHealth 1.74 Salesforce 1.76 Verizon Communications 4.67 Visa 1.32 Walmart 3.19 Walt Disney 0.55 Average PEG ratio 2.41 Data source: S&P Global Market Intelligence Not only does the average Dow stock trade at a significantly higher PEG ratio than Tesla, but 19 of the 26 companies above are also more expensive than Tesla based on the PEG ratio. The Motley Fool has positions in and recommends Apple, Cisco Systems, Goldman Sachs, Home Depot, Intel, Microsoft, Nike, Salesforce, Inc., Tesla, Visa, and Walt Disney. The Motley Fool recommends 3M, Amgen, Johnson & Johnson, UnitedHealth Group, and Verizon Communications and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2024 $145 calls on Walt Disney, long January 2024 $47.50 calls on Coca-Cola, 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. | Lynch, who ran Fidelity's Magellan Fund in the '80s, theorized that an accurately valued stock would trade at a PEG of 1, while a PEG over 1 would indicate the stock was overvalued, and a PEG under 1 would mean that it's undervalued. Merck 1.11 Microsoft 1.71 Nike 1.69 Procter & Gamble 4.05 Travelers 1.68 UnitedHealth 1.74 Salesforce 1.76 Verizon Communications 4.67 Visa 1.32 Walmart 3.19 Walt Disney 0.55 Average PEG ratio 2.41 Data source: S&P Global Market Intelligence Not only does the average Dow stock trade at a significantly higher PEG ratio than Tesla, but 19 of the 26 companies above are also more expensive than Tesla based on the PEG ratio. The Motley Fool recommends 3M, Amgen, Johnson & Johnson, UnitedHealth Group, and Verizon Communications and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2024 $145 calls on Walt Disney, long January 2024 $47.50 calls on Coca-Cola, 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. | Tesla (NASDAQ: TSLA) has probably been the biggest success story on the stock market in the last few years. The PEG ratio divides the price-to-earnings ratio by the expected earnings growth rate, generally the compound average over the next five years. The Motley Fool has positions in and recommends Apple, Cisco Systems, Goldman Sachs, Home Depot, Intel, Microsoft, Nike, Salesforce, Inc., Tesla, Visa, and Walt Disney. |
20540.0 | 2022-06-26 00:00:00 UTC | Warren Buffett's 10 Top Dividend Stocks to Buy Now | AAPL | https://www.nasdaq.com/articles/warren-buffetts-10-top-dividend-stocks-to-buy-now | nan | nan | There are more than 50 stocks in Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) stock portfolio, many of which were hand-selected by Warren Buffett himself. And since Buffett is a fan of reliable, passive income, it shouldn't come as much of a surprise that many of Berkshire's stocks are dividend payers.
While rock-solid dividend stocks have generally fared better than growth stocks, they haven't exactly been immune to the recent market downturn. As a result, some of Berkshire's top dividend stocks look like excellent opportunities for income-seeking investors.
In no particular order, here are 10 dividend stocks from Berkshire's portfolio that look like especially strong buying opportunities right now.
Coca-Cola (Yield: 2.8%)
It's tough to call Coca-Cola (NYSE: KO) a "bargain" stock right now, as it is only about 6% below its high and is handily outperforming the S&P 500 in the current downturn. However, it's tough to find a more stable and predictable dividend stock to create a steadily growing income stream in your portfolio. In fact, Coca-Cola recently announced its 60th consecutive annual dividend increase.
Store Capital (Yield: 5.7%)
The only real estate investment trust, or REIT, in Berkshire's portfolio, Store Capital (NYSE: STOR) owns a portfolio of single-tenant commercial properties occupied by tenants in the service, retail, or manufacturing industries. Store's tenants are generally well-positioned to weather recessions and e-commerce disruption, and the company is not only one of the highest-yielding stocks in Berkshire's portfolio, but it has given investors a raise every year since its IPO.
Bank of America (Yield: 2.7%)
Bank of America (NYSE: BAC) is one of Berkshire's largest investments, and it has been beaten down significantly in the recent market decline, down 36% from the highs. However, the bank is well-capitalized and should weather any economic conditions just fine. In fact, as one of the more interest rate-sensitive banks, Bank of America could be a major beneficiary of rising interest rates in 2022 and 2023.
Chevron (Yield: 3.8%)
A more recent investment for Berkshire, Chevron (NYSE: CVX) has quickly become one of the portfolio's largest positions. While Chevron is one of the portfolio's best performers, up 35% over the past year, it has pulled back quite a bit from the recent highs and could continue to outperform if oil prices stay elevated.
Mastercard (Yield: 0.6%)
Mastercard (NYSE: MA) isn't exactly a high-yield dividend stock, but it's a powerhouse business. There's essentially a duopoly in the payment network space (the other one is coming later in the list), and with many areas of the world still in the earlier stages of the cashless payment revolution and an estimated $185 trillion global payment opportunity, Mastercard still has plenty of room to grow.
U.S. Bancorp (Yield: 3.9%)
U.S. Bancorp (NYSE: USB) is down by 26% from its recent highs, but it is still one of the more expensive big bank stocks on a price-to-book basis. Even so, you get what you pay for with this one. U.S. Bancorp has a fantastic track record of profitability and responsible lending -- in fact, it was one of the few banks to stay profitable throughout the 2008-09 financial crisis.
Vanguard S&P 500 ETF (Yield: 1.6%)
Technically, this isn't a stock, but an exchange-traded fund, or ETF. However, Buffett has said several times that the best investment most people can make is a low-cost S&P 500 index fund like this, so it's worth including on the list. The Vanguard S&P 500 ETF (NYSEMKT: VOO) invests in all 500 companies in the S&P 500 and is essentially a bet on American business as a whole.
Visa (Yield: 0.7%)
Berkshire owns both Mastercard and Visa (NYSE: V) in its portfolio, and both are great stocks to own, especially with both about 20% off the highs. With a massive global payments opportunity, this industry leader could still have plenty of room to grow, and since it makes its money by taking a percentage of each transaction on its network, it could actually end up being a net beneficiary of inflation.
Apple (Yield: 0.6%)
Apple (NASDAQ: AAPL) is the largest investment in Berkshire's stock portfolio, and it isn't even close. Buffett isn't the most tech-savvy investor, but he knows a great business when he sees one. Apple has an incredibly loyal customer base, tremendous pricing power, and a great history of innovation. With shares 22% below the highs, now could be a smart time to take a closer look at this unstoppable business.
American Express (Yield: 1.3%)
American Express (NYSE: AXP) has declined by 27% from its highs, but this is a best-in-breed business that is worth a closer look. Unlike Visa and Mastercard, Amex is a lender and a payment processor and benefits from both fee and interest income. Not only should its interest income rise with overall interest rates, but inflation could end up driving transaction volume higher over the coming years.
A collection of rock-solid businesses that should deliver strong returns over time
It's hard to make a solid case against any of these businesses as long-term investments, so the best choice(s) for you depends on your particular income needs and investment goals. Buffett has absolutely no idea what any of them will do over the next few weeks or months (and neither do I), but these are rock-solid businesses that should deliver excellent performance for investors focused on the long run.
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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. Matthew Frankel, CFP® has positions in American Express, Bank of America, Berkshire Hathaway (B shares), and STORE Capital. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway (B shares), Mastercard, STORE Capital, Vanguard S&P 500 ETF, and Visa. The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long January 2024 $47.50 calls on Coca-Cola, long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Apple (Yield: 0.6%) Apple (NASDAQ: AAPL) is the largest investment in Berkshire's stock portfolio, and it isn't even close. Store's tenants are generally well-positioned to weather recessions and e-commerce disruption, and the company is not only one of the highest-yielding stocks in Berkshire's portfolio, but it has given investors a raise every year since its IPO. While Chevron is one of the portfolio's best performers, up 35% over the past year, it has pulled back quite a bit from the recent highs and could continue to outperform if oil prices stay elevated. | Apple (Yield: 0.6%) Apple (NASDAQ: AAPL) is the largest investment in Berkshire's stock portfolio, and it isn't even close. Matthew Frankel, CFP® has positions in American Express, Bank of America, Berkshire Hathaway (B shares), and STORE Capital. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway (B shares), Mastercard, STORE Capital, Vanguard S&P 500 ETF, and Visa. | Apple (Yield: 0.6%) Apple (NASDAQ: AAPL) is the largest investment in Berkshire's stock portfolio, and it isn't even close. There are more than 50 stocks in Berkshire Hathaway's (NYSE: BRK.A)(NYSE: BRK.B) stock portfolio, many of which were hand-selected by Warren Buffett himself. Visa (Yield: 0.7%) Berkshire owns both Mastercard and Visa (NYSE: V) in its portfolio, and both are great stocks to own, especially with both about 20% off the highs. | Apple (Yield: 0.6%) Apple (NASDAQ: AAPL) is the largest investment in Berkshire's stock portfolio, and it isn't even close. In no particular order, here are 10 dividend stocks from Berkshire's portfolio that look like especially strong buying opportunities right now. Visa (Yield: 0.7%) Berkshire owns both Mastercard and Visa (NYSE: V) in its portfolio, and both are great stocks to own, especially with both about 20% off the highs. |
20541.0 | 2022-06-26 00:00:00 UTC | Market Plunge 2022: 3 Absolute Bargains Begging to Be Bought | AAPL | https://www.nasdaq.com/articles/market-plunge-2022%3A-3-absolute-bargains-begging-to-be-bought | nan | nan | The stock market has gotten crushed in 2022. The tech-heavy Nasdaq Composite index has plunged 28% year to date, even after the largely positive week of trading on July 20-24.
This drop has brought shares of a few companies down to extremely appealing levels. Apple (NASDAQ: AAPL), Coupang (NYSE: CPNG), and Airbnb (NASDAQ: ABNB) have all fallen to the point where shares are begging to be bought, and with these three stocks, investors should consider doing just that.
1. Apple
Apple might not excite many investors because of its $2.25 trillion market cap, especially considering its saturation in the smartphone space. Some estimates put Apple's Q1 2022 smartphone market share in North America at a staggering 51%, which leaves little room for growth.
However, Apple's potential isn't tapped out. Its wearables division has the opportunity to increase the value of its watches for consumers, which could dramatically boost demand and revenue. One way Apple is doing this is by integrating health features into the Watch. The tech titan already has heart rate, blood oxygen, and fall-detection monitors on its current Watches, but it could offer non-invasive blood glucose and sleep tracking features in the future.
Considering Apple's wearables division represented only 9% of total revenue in its second fiscal quarter, which ended March 26, 2022, there's a lot of room to grow this segment if these features can improve the value and demand for its wearables.
That alone could be appealing, but you're also buying one of the strongest businesses in history. The company generated $102 billion in net income and $106 billion in free cash flow over the trailing 12 months. This jaw-dropping profitability has fueled continued leadership in the smartphone and computer industries while funding its growth opportunities, and there's even enough left over for a dividend and stock repurchases.
At 22.5 times earnings, Apple is trading at its lowest valuation since early 2020. At this price, you might regret not buying this dominant behemoth.
2. Coupang
Coupang is the top dog in the South Korean e-commerce space, and with over 18.1 million active customers in Q1, roughly 35% of the South Korean population uses Coupang. This has led to great success for the e-commerce business: It generated over $5.1 billion in revenue in Q1.
However, shares have tumbled almost 75% since Coupang's IPO in early 2021, bringing its price-to-sales ratio down to a bargain 1.1. This stunning drop is likely because the company struggles with profitability and cash flow. In Q1, for example, Coupang posted a loss of $209.3 million and free cash flow burn of $294 million. This is caused partially by the low-margin business of first-party e-commerce sales. In Q1, the company's gross margin was a measly 20%, but it is improving steadily.
However, this selling might have been overdone. Coupang has almost $3.7 billion in cash on the balance sheet to fund these losses, and the e-commerce space in South Korea is still a large pond to fish in. Expectations put total e-commerce spending in the country in 2025 at $291 billion, leaving room for Coupang to flourish. At this multiple, the company could be an amazing investment if it can maintain its dominance as the space expands.
3. Airbnb
Like Coupang, Airbnb is trading at an intriguing multiple of just 22 times free cash flow. Traditional hospitality stocks like Marriott International and Hilton Worldwide comparatively trade above 32 times free cash flow.
One might expect Airbnb to be floundering given this cheap valuation, but its financial performance is near all-time highs. In Q1 2022, Airbnb reported a record 102 million nights and experiences booked, which soared 59% year over year. This bolstered the company's cash flows: In the same period, Airbnb generated $1.2 billion in free cash flow and lost only $19 million.
A potential culprit for shares falling more than 42% year to date is the fear of inflation and a possible recession impacting travel in the back half of 2022. According to a report from the U.S. Travel Association, 59% of Americans said that gas prices would impact their vacation plans, yet travel spending surpassed 2019 levels for the first time since the start of the pandemic. Therefore, while demand might drop slightly if gas prices continue to rise, travel spending will likely remain very high this summer.
As one of the leading platforms to book unique stays for your vacation, Airbnb is likely to capitalize on this. It also has more than 6 million active listings, so the chances that Airbnb will run low on supply are slim, too. With the stock trading so low today and the company having such a large opportunity ahead -- both over the short and long term -- it is worth buying shares for the long haul.
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Jamie Louko has positions in Airbnb, Inc. and Apple. The Motley Fool has positions in and recommends Airbnb, Inc., Apple, and Coupang, Inc. The Motley Fool recommends Marriott International and recommends the following options: long January 2023 $115 calls on Marriott International, 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 (NASDAQ: AAPL), Coupang (NYSE: CPNG), and Airbnb (NASDAQ: ABNB) have all fallen to the point where shares are begging to be bought, and with these three stocks, investors should consider doing just that. This jaw-dropping profitability has fueled continued leadership in the smartphone and computer industries while funding its growth opportunities, and there's even enough left over for a dividend and stock repurchases. Coupang has almost $3.7 billion in cash on the balance sheet to fund these losses, and the e-commerce space in South Korea is still a large pond to fish in. | Apple (NASDAQ: AAPL), Coupang (NYSE: CPNG), and Airbnb (NASDAQ: ABNB) have all fallen to the point where shares are begging to be bought, and with these three stocks, investors should consider doing just that. Some estimates put Apple's Q1 2022 smartphone market share in North America at a staggering 51%, which leaves little room for growth. Airbnb Like Coupang, Airbnb is trading at an intriguing multiple of just 22 times free cash flow. | Apple (NASDAQ: AAPL), Coupang (NYSE: CPNG), and Airbnb (NASDAQ: ABNB) have all fallen to the point where shares are begging to be bought, and with these three stocks, investors should consider doing just that. This bolstered the company's cash flows: In the same period, Airbnb generated $1.2 billion in free cash flow and lost only $19 million. The Motley Fool recommends Marriott International and recommends the following options: long January 2023 $115 calls on Marriott International, long March 2023 $120 calls on Apple, and short March 2023 $130 calls on Apple. | Apple (NASDAQ: AAPL), Coupang (NYSE: CPNG), and Airbnb (NASDAQ: ABNB) have all fallen to the point where shares are begging to be bought, and with these three stocks, investors should consider doing just that. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys. |
20542.0 | 2022-06-26 00:00:00 UTC | Better Buy: Dividend Aristocrats vs. Beaten-Down Tech Stocks | AAPL | https://www.nasdaq.com/articles/better-buy%3A-dividend-aristocrats-vs.-beaten-down-tech-stocks | nan | nan | The broader market decline over the past five months has left the S&P 500 at a year-to-date loss of 23% and has no doubt left many investors questioning the solidity of their portfolios. If you're considering making changes to your investments, or happen to be on the sidelines holding a bucket of cash (good for you), you might find yourself asking what to do next and how to best put your hard-earned dollars to use.
The answers to those questions all boil down to an investment strategy. Some of you may prefer the comfort of dividends, while others opt for riskier, beaten-down tech stocks that boast massive growth potential and are currently trading at bargain prices. Which route is the better buy for you?
Image source: Getty Images.
The case for Dividend Aristocrats
Dividend Aristocrats have the distinction of having increased annual dividends for 25 consecutive years. These companies also belong to the S&P 500, an index that has produced average annual returns of 10.7% dating back to 1957. So, focusing on this group can have the potential to produce a significant level of capital appreciation along with the comfort that annual dividends are likely to increase over time. As dividend payouts grow, investors that choose to reinvest dividends can benefit from additional compounded earnings.
But how much passive income can dividends really generate? One easy way to know how much you can receive in annual dividends is to view the company's dividend yield. For every $100 of investment you make in a company's stock, your annual dividend will be equal to the yield number.
The table below shows what that looks like for a sample of Dividend Aristocrat stocks -- IBM (NYSE: IBM), ExxonMobil (NYSE: XOM), General Dynamics (NYSE: GD), and Walgreens Boots Alliance (NASDAQ: WBA) -- representing various sectors.
COMPANY SHARE PRICE PER-SHARE ANNUAL DIVIDEND DIVIDEND YIELD ANNUAL DIVIDEND WITH A $100 INVESTMENT ANNUAL DIVIDEND WITH A $10,000 INVESTMENT
IBM $135 $6.60 4.85% $4.89 $489
Exxon $ 86 $3.52 4.09% $4.09 $409
General Dynamics $210 $5.04 2.40% $2.40 $240
Walgreens $39 $1.91 4.86% $4.90
$490
Data Source: Yahoo!Finance as of June 20, 2022.
During times of broader market volatility and downward pressure, various sectors may perform better than others in annualized returns. For example, research conducted at George Mason University shows that during periods of high inflation and rising interest rates, Energy and Materials stocks outperform other sectors, offering annualized returns of 18% and 16%, respectively. This may impact your strategy about how to invest in dividend stocks.
Savvy investors who trust their own portfolio-management skills may opt to make adjustments that align with market trends in order to optimize capital appreciation and dividends. But for many long-term investors who would be satisfied with a 10.7% average annual return from the S&P 500, choosing Dividend Aristocrats with the highest annual dividend and the longest streak of consecutive annual increases may be the way to go.
The case for beaten-down tech
In looking at the current list of Dividend Aristocrats, you might notice that one sector appears to be largely unrepresented: technology. In fact, only two of the 65 companies listed -- Automatic Data Processing and IBM -- are in technology. This isn't terribly surprising, though, because such companies often choose to invest money back into themselves for future innovation and growth.
The technology sector as a whole is down 12.7% over the past year and down 28% year to date. Companies like Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN), whose stocks have respectively dropped 25% and 42% over the past year, are arguably top dogs in the tech space, but neither offers much in the way of dividends. Apple's current annual dividend is only $0.92 per share, while Amazon doesn't pay a dividend at all.
There are, of course, pros and cons to forgoing dividends entirely or only producing minimal ones. On the one hand, no- and low-dividend companies have more to reinvest in innovation and future growth. On the other hand, dividends can keep investors engaged enough so that stock drops are relatively minimized. Without shelling out a dividend incentive to investors, companies stock prices may be exposed to more drastic dips.
But where these beaten-down tech stocks offer investors excitement is in the tremendous growth potential in revenue and earnings, which can lead to huge capital appreciation through share-price growth. The 10-year average annualized return for the S&P 500 information technology sector is 16.9%, which outpaces that of the broader index's 14% average annualized return over that same time period and far outpaces the 10.7% lifetime average of the S&P 500.
But if you look at leading tech companies like Apple or Amazon, the share-price growth over that same 10-year period is an astonishing 487% and 881%, respectively. That level of return, which comes along with the risk of huge drops along the way (as evidenced by the past year), can certainly make up for lack of dividends.
The last time Apple and Amazon stocks dropped by as much as 25% was in 2018. After that, both went on a three-year climb resulting in over 100% gains before the current bear market. And since 1950, the S&P 500 has rebounded with an average 24% growth a year after entering bear market territory -- which we're in now.
Which is right for you?
Determining which is the better buy depends on your investment strategy. Dividend Aristocrats and beaten-down tech stocks can all provide returns to help meet investors' goals. If you're more risk-averse, or at a point in life where generating income is important, then perhaps going with Dividend Aristocrats would better suit your needs. But if you're willing to take the risks of volatility for the potential reward that comes from growth generated by advancements in innovation, the beaten-down technology sector can provide buy-low opportunities that can increase gains over the long term. Some investors may opt for a mix of both.
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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. Jeff Little has positions in Amazon and Apple. 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. | Companies like Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN), whose stocks have respectively dropped 25% and 42% over the past year, are arguably top dogs in the tech space, but neither offers much in the way of dividends. For example, research conducted at George Mason University shows that during periods of high inflation and rising interest rates, Energy and Materials stocks outperform other sectors, offering annualized returns of 18% and 16%, respectively. But if you're willing to take the risks of volatility for the potential reward that comes from growth generated by advancements in innovation, the beaten-down technology sector can provide buy-low opportunities that can increase gains over the long term. | Companies like Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN), whose stocks have respectively dropped 25% and 42% over the past year, are arguably top dogs in the tech space, but neither offers much in the way of dividends. The table below shows what that looks like for a sample of Dividend Aristocrat stocks -- IBM (NYSE: IBM), ExxonMobil (NYSE: XOM), General Dynamics (NYSE: GD), and Walgreens Boots Alliance (NASDAQ: WBA) -- representing various sectors. The 10-year average annualized return for the S&P 500 information technology sector is 16.9%, which outpaces that of the broader index's 14% average annualized return over that same time period and far outpaces the 10.7% lifetime average of the S&P 500. | Companies like Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN), whose stocks have respectively dropped 25% and 42% over the past year, are arguably top dogs in the tech space, but neither offers much in the way of dividends. The case for Dividend Aristocrats Dividend Aristocrats have the distinction of having increased annual dividends for 25 consecutive years. But for many long-term investors who would be satisfied with a 10.7% average annual return from the S&P 500, choosing Dividend Aristocrats with the highest annual dividend and the longest streak of consecutive annual increases may be the way to go. | Companies like Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN), whose stocks have respectively dropped 25% and 42% over the past year, are arguably top dogs in the tech space, but neither offers much in the way of dividends. Some of you may prefer the comfort of dividends, while others opt for riskier, beaten-down tech stocks that boast massive growth potential and are currently trading at bargain prices. Apple's current annual dividend is only $0.92 per share, while Amazon doesn't pay a dividend at all. |
20543.0 | 2022-06-26 00:00:00 UTC | Have $3,000? These 2 Stocks Could Be Bargain Buys for 2022 And Beyond | AAPL | https://www.nasdaq.com/articles/have-%243000-these-2-stocks-could-be-bargain-buys-for-2022-and-beyond-0 | nan | nan | Investors are getting scared about the possibility of a recession. They have good cause to feel that way: Inflation is rampant and at 40-year highs, gas prices are at an all-time record north of $5 per gallon, and the Federal Reserve just implemented a 75 basis-point interest rate increase, the largest hike in over two decades.
Last week, global investors withdrew over $30 billion from equity funds, the largest wave of selling since 2020 during the depths of the pandemic. The tech sector alone saw a near-half billion outflow of funds. Bond funds saw an equal amount taken out, and money market accounts were brought down by over $40 billion.
Image source: Getty Images.
Investors are moving to cash in a big way, leading the tech-laden Nasdaq 100 to tumble 32% so far this year. While understandable, smart investors should have been keeping some powder dry anyway to take advantage of this situation. A recession means stocks that were overvalued because of the extended bull market have suddenly now become affordable.
The following two companies could be the bargain buys of the year -- and beyond.
1. Apple
Apple (NASDAQ: AAPL) is down about 25% from the all-time high of $182.01 that it hit late last year. Much of this can be chalked up to concerns about ebbing demand for the iPhone. Smartphone demand is seen declining as the upgrade supercycle is getting long in the tooth -- but there's still plenty of reason to bet on Apple being able to run far ahead of the field.
First, the iPhone 14 is arriving later this year. Suppliers for the device are bullish ahead of its release and confident that the product will be unaffected by shipment delays and the broader market slowdown. Apple also just released the latest MacBook Pro, and is refreshing the entry-level iPad with a USB-C port.
Macs enjoyed yet another quarter of record growth last quarter, with sales rising 15% to $10.4 billion, and in fact, each of the past seven quarters has been a record for the line. And though sales of iPads actually fell 2% last quarter, that was solely due to continued supply chain constraints. Demand for the device remains high and Apple's installed base of iPads reached a new all-time high during the quarter.
Morgan Stanley analyst Katy Huberty told investors in a research note that Apple's Worldwide Developers Conference earlier this month displayed the company's "innovation engine at full throttle." While there is the potential for even the high-end consumer to ease back in the current environment, Apple has other levers to pull.
For one thing, services will continue to grow in importance, and segment revenue in the most recent quarter hit $19.8 billion, now accounting for over 20% of the total. According to JPMorgan, Apple Pay has a chance to rake in $4 billion by 2026, and that figure could get a further boost thanks to the company's new Apple Pay Later service. What's more, Apple's Arcade could generate as much as $1.2 billion in the growing mobile gaming market.With the potential future release of augmented and virtual reality glasses, and maybe even the much-rumored Apple Car, there are plenty of opportunities left for this tech giant.
2. Verizon
The rollout of 5G networks over the coming years is a major catalyst for Verizon (NYSE: VZ) as consumers spend more on enhanced video, AR and VR, and digital gaming over 5G networks (Apple is likely to benefit, too).
Still, don't expect Verizon to appreciate in value like other tech stocks -- it's a mature company in a mature industry. But you will find it to be a steady performer. Its stock is down only 6% this year, reflecting the stability of its business.
Revenue continues to expand at rates above those from just a few years ago, rising over 4% last year to $133.6 billion compared to a 2.7% drop in 2020 and a less than 1% increase in 2019. Profitability is also markedly improving, jumping 24% in 2021 to $22 billion versus a near 8% drop in 2020.
Verizon remains the largest carrier, ending 2021 with 91.4 million postpaid phone connections and 23.8 million prepaid connections. AT&T had 81.5 million postpaid and 19 million prepaid subscribers, while T-Mobile had 70.3 million and 21 million, respectively.
Verizon has lost customers, dropping a net 36,000 in the first quarter, but that was significantly better than the 178,000 it lost a year ago. Its business segment, on the other hand, added 256,000 net postpaid subscribers.
Still, AT&T and T-Mobile are adding customers, over half a million each. But Verizon has finally begun to see traction after launching its home broadband access through a 5G network. In the first quarter, Verizon saw a 35% sequential increase in millimeter wave traffic, which is considered to be the industry's futrue and where Verizon is already the leader.
The company also just launched its Verizon Home Internet promotion, which gives 5G mobile customers the chance to get 5G internet service in their homes for $25 a month, whether it's the LTE Home, 5G Home, or Fios service. The price is guaranteed for up to four years, which could prove attractive in these inflationary times.Customers are more willing these days to switch carriers for the best price and keeping them tethered to the service not only maintains its customer base, but helps in limiting churn and new acquisition costs.
The telecom giant is also a reliable and safe dividend stock, which is currently yielding 5.2% annually. It began making its payout after going public in 2000 and has increased it every year since 2006. Verizon is easily a stock for 2022 and beyond.
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JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends Verizon Communications 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 down about 25% from the all-time high of $182.01 that it hit late last year. They have good cause to feel that way: Inflation is rampant and at 40-year highs, gas prices are at an all-time record north of $5 per gallon, and the Federal Reserve just implemented a 75 basis-point interest rate increase, the largest hike in over two decades. Smartphone demand is seen declining as the upgrade supercycle is getting long in the tooth -- but there's still plenty of reason to bet on Apple being able to run far ahead of the field. | Apple Apple (NASDAQ: AAPL) is down about 25% from the all-time high of $182.01 that it hit late last year. Verizon remains the largest carrier, ending 2021 with 91.4 million postpaid phone connections and 23.8 million prepaid connections. The company also just launched its Verizon Home Internet promotion, which gives 5G mobile customers the chance to get 5G internet service in their homes for $25 a month, whether it's the LTE Home, 5G Home, or Fios service. | Apple Apple (NASDAQ: AAPL) is down about 25% from the all-time high of $182.01 that it hit late last year. According to JPMorgan, Apple Pay has a chance to rake in $4 billion by 2026, and that figure could get a further boost thanks to the company's new Apple Pay Later service. The Motley Fool recommends Verizon Communications and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | Apple Apple (NASDAQ: AAPL) is down about 25% from the all-time high of $182.01 that it hit late last year. Revenue continues to expand at rates above those from just a few years ago, rising over 4% last year to $133.6 billion compared to a 2.7% drop in 2020 and a less than 1% increase in 2019. The Motley Fool has positions in and recommends Apple. |
20544.0 | 2022-06-26 00:00:00 UTC | Missed Out on Apple Stock? 2 Growth Stocks to Buy and Hold Forever. | AAPL | https://www.nasdaq.com/articles/missed-out-on-apple-stock-2-growth-stocks-to-buy-and-hold-forever. | nan | nan | Apple has the kind of brand authority most companies will never achieve, and it has used that competitive advantage to build a very sticky business. Specifically, by pairing first-party hardware with software and services, Apple benefits from recurring revenue and high switching costs. That has made it a cash-flow machine, and shareholders have seen a 560% return over the past decade as a result.
Block (NYSE: SQ) and Axon Enterprise (NASDAQ: AXON) aren't quite the same as Apple, but both have earned brand recognition in their industries while blending hardware, software, and services to create a sticky business model. With that in mind, I think Block and Axon could also soar 600% (or more) over the next decade.
Here's what you should know.
1. Block
Block makes financial services easy and accessible. Its Square ecosystem is a robust suite of hardware, software, and financial services that helps sellers run an omnichannel business. That includes everything from point-of-sale systems and card readers to payment processing and banking services.
On the other side of the business, the Cash App allows consumers to deposit, spend, and invest money from a single platform, and Block's lack of physical infrastructure means it can acquire customers much more efficiently than traditional banks.
More broadly, the breadth of the Square and Cash App ecosystems differentiates Block from many of its rivals, and that has led to impressive growth. Gross profit soared 50% to $4.8 billion in the past year, driven by increased engagement across both ecosystems. In particular, more mid-market sellers (i.e. those making over $500,000 per year) are turning to Square, and those merchants tend to use more software, which means the relationship is stickier and more profitable for Block. On the bottom line, the company generated $965 million of trailing-12-month free cash flow, up from a loss of $344 million in the prior-year period.
Block is integrating its buy now, pay later (BNPL) platform, Afterpay, into Square and Cash App too. Sellers should benefit from increased transaction volumes as BNPL tends to increase conversion rates and cart sizes. And sellers can leverage consumer shopping data to deliver targeted product recommendations through the Cash App. That could unlock natural synergy between the ecosystems.
Collectively, Block values its U.S. addressable market at $190 billion in gross profit, comprising $70 billion from the Cash App and $120 billion from Square. That means Block has captured less than 3% of its domestic market opportunity, and the company has a growing presence in Europe, giving this stock plenty of runway to outpace Apple's performance over the last 10 years.
2. Axon Enterprise
Axon specializes in public safety technology. The company is best known for conducted energy devices (CEDs), which are sold under the brand name Taser. In fact, it was formerly known as Taser International but rebranded to Axon in 2017 to reflect its growing software and sensors business. In that segment, Axon offers body cameras (and other sensors) that stream geo-location and video data to Axon Cloud, a suite of software for digital evidence management, reporting, and real-time operations.
Collectively, those products help public-safety officials (think police officers, first responders, and federal agents) work more efficiently and productively, while also bringing transparency to law enforcement. Building on its early success with Tasers, Axon has established itself as a leader in body cameras and digital evidence-management software, too. That has led to steady and consistent growth.
Revenue rose 27% to $925 million over the past year, and the company generated $51 million in free cash flow, up from $5 million in the prior year. But Axon has hardly scratched the surface of its addressable market, especially where software and sensors are concerned.
In the last quarter, management said 25 agencies are now live on Axon Records, software that accelerates incident reporting by replacing written words with video evidence, and by automating tasks like transcription with artificial intelligence. For context, Axon has a customer relationship with 17,000 out of the 18,000 U.S. law enforcement agencies, meaning there is a tremendous opportunity to upsell existing clients.
In total, Axon estimates its market opportunity is worth $52 billion, approximately 80% of which comes from Tasers (for civilians and law enforcement officers), body cameras, and digital evidence-management software. As the leader in all three categories, Axon is well positioned to create wealth for shareholders, and that's why this growth stock is worth buying today.
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Trevor Jennewine has positions in Axon Enterprise and Block, Inc. The Motley Fool has positions in and recommends Apple, Axon Enterprise, and Block, 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. | On the other side of the business, the Cash App allows consumers to deposit, spend, and invest money from a single platform, and Block's lack of physical infrastructure means it can acquire customers much more efficiently than traditional banks. That means Block has captured less than 3% of its domestic market opportunity, and the company has a growing presence in Europe, giving this stock plenty of runway to outpace Apple's performance over the last 10 years. In the last quarter, management said 25 agencies are now live on Axon Records, software that accelerates incident reporting by replacing written words with video evidence, and by automating tasks like transcription with artificial intelligence. | Collectively, Block values its U.S. addressable market at $190 billion in gross profit, comprising $70 billion from the Cash App and $120 billion from Square. Revenue rose 27% to $925 million over the past year, and the company generated $51 million in free cash flow, up from $5 million in the prior year. In total, Axon estimates its market opportunity is worth $52 billion, approximately 80% of which comes from Tasers (for civilians and law enforcement officers), body cameras, and digital evidence-management software. | Block (NYSE: SQ) and Axon Enterprise (NASDAQ: AXON) aren't quite the same as Apple, but both have earned brand recognition in their industries while blending hardware, software, and services to create a sticky business model. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Trevor Jennewine has positions in Axon Enterprise and Block, Inc. The Motley Fool has positions in and recommends Apple, Axon Enterprise, and Block, Inc. | Gross profit soared 50% to $4.8 billion in the past year, driven by increased engagement across both ecosystems. 10 stocks we like better than Block, Inc. The Motley Fool has positions in and recommends Apple, Axon Enterprise, and Block, Inc. |
20545.0 | 2022-06-26 00:00:00 UTC | 3 Best Dow Stocks to Buy and Hold Forever | AAPL | https://www.nasdaq.com/articles/3-best-dow-stocks-to-buy-and-hold-forever | nan | nan | "Buy and hold" is great investing advice but with a few caveats. For starters, aim to buy and hold, for decades, but keep up with your holdings, lest one or more of them deteriorate without your noticing. And also, don't just buy and hold anything; seek out high-quality, healthy and growing companies.
Here are three to consider, all of which hold a berth on the Dow Jones Industrial Average index, which only features 30 companies.
1. Apple
It's probably easy to see why buying and holding shares of Apple (NASDAQ: AAPL) would be a good idea. Once nearly left for dead, with a small share of the personal computer market, Apple has grown into an electronic juggernaut. Its market value was recently $2.1 trillion -- and that was after the stock had fallen some 29% from its 52-week high.
Apple's business model is compelling. It has built a very sticky electronic ecosystem, so that someone with an iPhone who wants a smart watch will likely be pulled toward the Apple Watch as it will sync with other Apple offerings. The ecosystem features not only smartphones, smart watches, desktop computers, laptops, and tablets, but also a music streaming service, an app store, a TV streaming service, digital payment systems, and much more. Apple has inked a streaming deal for Major League Baseball, and if it signs up other sports, it could start dominating in that area, as well.
Another advantage for Apple is its very solid brand, recently valued at $947 billion and top-ranked in the 2022 Kantar BrandZ Most Valuable Global Brands list. That strong brand means that if Apple debuts a new kind of product or service, it will likely be checked out by many people and assumed to be of good quality. With a massive multibillion-dollar cash hoard, Apple has the wherewithal to develop and introduce many new offerings.
Apple's future seems quite promising, and it pays a dividend, too, recently yielding 0.7%. In its second quarter, revenue grew 9% year over year to a record $97 billion, demonstrating that this giant can grow even bigger.
2. Nike
Nike (NYSE: NKE) is also a dominant force in its field, specializing in athletic footwear and apparel. In the 2020 brand-value ranking noted above, Nike held the top ranking for apparel businesses, with a brand value estimated at $110 billion, up a hefty 31% from the year before. Note, too, that Nike not only has its own flagship brand name, but it's now also home to the Converse and Jordan names.
Nike's strong brand power confers some pricing power: When a company has a strong brand, it's more able to raise prices, because many consumers favor its offerings over others. Raising prices, meanwhile, can help a company fight inflation. In its third quarter, Nike reported revenue growth of 5% year over year, to nearly $11 billion. On a currency-neutral basis, that growth would be 8%. The company is having particular success with its direct sales, which rose 15% (17% on a currency-neutral basis), while digital sales surged 19% (22% on a currency-neutral basis).
Clearly, this company with a recent market value near $170 billion is likely to keep growing. Its shares were recently down 40% from their 52-week high, with a forward-looking price-to-earnings (P/E) ratio recently near 24 -- well below the five-year average of 33. That decline pushed its dividend yield up to a recent 1.1%. Nike is a Dow stock well worth considering for any long-term portfolio.
3. UnitedHealth Group
UnitedHealth Group (NYSE: UNH) is another Dow component worth considering for your long-term portfolio, with its shares recently down 18% from their 52-week high. It's not quite in screaming-bargain territory, though, as its forward-looking P/E ratio was recently 21, above the five-year average of 19.
UnitedHealth is a massive company, with a recent market value of $424 billion, some 350,000 employees, and close to $300 billion in annual revenue. (Fully 85,000 members of its workforce is made up of doctors and nurses.) It serves around 100 million people and counting. Its first quarter featured revenue up 14% year over year, to $80 billion.
UnitedHealth also pays a dividend. Recently yielding 1.5%, it may not look tempting, but the payout has been increased by nearly 800% over the past decade. Healthy and growing dividend payers tend to increase their payouts over time.
These are just three of many attractive companies in the Dow Jones Industrial Average. Most, if not all, of the 30 companies should be of interest, as the index only includes companies that have performed very well to become large and dominant businesses in their field.
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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 It's probably easy to see why buying and holding shares of Apple (NASDAQ: AAPL) would be a good idea. Apple has inked a streaming deal for Major League Baseball, and if it signs up other sports, it could start dominating in that area, as well. That strong brand means that if Apple debuts a new kind of product or service, it will likely be checked out by many people and assumed to be of good quality. | Apple It's probably easy to see why buying and holding shares of Apple (NASDAQ: AAPL) would be a good idea. Here are three to consider, all of which hold a berth on the Dow Jones Industrial Average index, which only features 30 companies. Nike's strong brand power confers some pricing power: When a company has a strong brand, it's more able to raise prices, because many consumers favor its offerings over others. | Apple It's probably easy to see why buying and holding shares of Apple (NASDAQ: AAPL) would be a good idea. Another advantage for Apple is its very solid brand, recently valued at $947 billion and top-ranked in the 2022 Kantar BrandZ Most Valuable Global Brands list. The Motley Fool recommends UnitedHealth Group and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | Apple It's probably easy to see why buying and holding shares of Apple (NASDAQ: AAPL) would be a good idea. In the 2020 brand-value ranking noted above, Nike held the top ranking for apparel businesses, with a brand value estimated at $110 billion, up a hefty 31% from the year before. Clearly, this company with a recent market value near $170 billion is likely to keep growing. |
20546.0 | 2022-06-26 00:00:00 UTC | Legal clashes await U.S. companies covering workers' abortion costs | AAPL | https://www.nasdaq.com/articles/legal-clashes-await-u.s.-companies-covering-workers-abortion-costs | nan | nan | By Daniel Wiessner
June 26 (Reuters) - A growing number of large U.S. companies have said they will cover travel costs for employees who must leave their home states to get abortions, but these new policies could expose businesses to lawsuits and even potential criminal liability, legal experts said.
Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide.
Within an hour of the decision being released, Conde Nast chief executive Roger Lynch sent a memo to staff announcing a travel reimbursement policy and calling the court's ruling "a crushing blow to reproductive rights." Walt Disney Co DIS.N unveiled a similar policy on Friday, telling employees that it recognizes the impact of the abortion ruling but remains committed to providing comprehensive access to quality healthcare, according to a spokesman.
Companies including health insurer Cigna Corp CI.N, Paypal Holdings Inc PYPL.O, Alaska Airlines Inc [RIC:RIC:ALKAIR.UL] and Dick's Sporting Goods Inc DKS.N also announced reimbursement policies on Friday.
Abortion restrictions that were already on the books in 13 states went into effect as a result of Friday's ruling and at least a dozen other Republican-led states are expected to ban abortion.
The court's decision, driven by its conservative majority, upheld a Mississippi law that bans abortion after 15 weeks. Meanwhile, some Democratic-led states are moving to bolster access to abortion.
Companies will have to navigate that patchwork of state laws and are likely to draw the ire of anti-abortion groups and Republican-led states if they adopt policies supportive of employees having abortions.
State lawmakers in Texas have already threatened Citigroup Inc C.N and Lyft, which had earlier announced travel reimbursement policies, with legal repercussions. A group of Republican lawmakers in a letter last month to Lyft chief executive Logan Green said Texas "will take swift and decisive action" if the ride-hailing company implements the policy.
The legislators also outlined a series of abortion-related proposals, including a bill that would bar companies from doing business in Texas if they pay for residents of the state to receive abortions elsewhere.
LAWSUITS LOOMING
It is likely only a matter of time before companies face lawsuits from states or anti-abortion campaigners claiming that abortion-related payments violate state bans on facilitating or aiding and abetting abortions, according to Robin Fretwell Wilson, a law professor at the University of Illinois and expert on healthcare law.
"If you can sue me as a person for carrying your daughter across state lines, you can sue Amazon for paying for it," Wilson said.
Amazon, Citigroup, Lyft, Conde Nast and several other companies that have announced reimbursement policies did not respond to requests for comment.
For many large companies that fund their own health plans, the federal law regulating employee benefits will provide crucial cover in civil lawsuits over their reimbursement policies, several lawyers and other legal experts said.
The Employee Retirement Income Security Act of 1974 (ERISA) prohibits states from adopting requirements that "relate to" employer-sponsored health plans. Courts have for decades interpreted that language to bar state laws that dictate what health plans can and cannot cover.
ERISA regulates benefit plans that are funded directly by employers, known as self-insured plans. In 2021, 64% of U.S. workers with employer-sponsored health insurance were covered by self-insured plans, according to the Kaiser Family Foundation.
Any company sued over an abortion travel reimbursement requirement will likely cite ERISA as a defense, according to Katy Johnson, senior counsel for health policy at the American Benefits Council, a trade group. And that will be a strong argument, she said, particularly for businesses with general reimbursement policies for necessary medical-related travel rather than those that single out abortion.
Johnson said reimbursements for other kinds of medical-related travel, such as visits to hospitals designated "centers of excellence," are already common even though policies related to abortion are still relatively rare.
"While this may seem new, it's not in the general sense and the law already tells us how to handle it," Johnson said.
LIMITS
The argument has its limits. Fully-insured health plans, in which employers purchase coverage through a commercial insurer, cover about one-third of workers with insurance and are regulated by state law and not ERISA.
Most small and medium-sized U.S. businesses have fully-insured plans and could not argue that ERISA prevents states from limiting abortion coverage.
And, ERISA cannot prevent states from enforcing criminal laws, such as those in several states that make it a crime to aid and abet abortion, so employers who adopt reimbursement policies are vulnerable to criminal charges from state and local prosecutors.
But since most criminal abortion laws have not been enforced in decades, since Roe was decided, it is unclear whether officials would attempt to prosecute companies, according to Danita Merlau, a Chicago-based lawyer who advises companies on benefits issues.
GRAPHIC-Abortion access in a post-Roe Americahttps://graphics.reuters.com/USA-ABORTION/GRAPHIC/zgpomdbeopd/index.html
(Reporting by Daniel Wiessner in Albany, New York, Editing by Alexia Garamfalvi and Grant McCool)
((daniel.wiessner@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. | Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide. By Daniel Wiessner June 26 (Reuters) - A growing number of large U.S. companies have said they will cover travel costs for employees who must leave their home states to get abortions, but these new policies could expose businesses to lawsuits and even potential criminal liability, legal experts said. Within an hour of the decision being released, Conde Nast chief executive Roger Lynch sent a memo to staff announcing a travel reimbursement policy and calling the court's ruling "a crushing blow to reproductive rights." | Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide. For many large companies that fund their own health plans, the federal law regulating employee benefits will provide crucial cover in civil lawsuits over their reimbursement policies, several lawyers and other legal experts said. Fully-insured health plans, in which employers purchase coverage through a commercial insurer, cover about one-third of workers with insurance and are regulated by state law and not ERISA. | Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide. Companies will have to navigate that patchwork of state laws and are likely to draw the ire of anti-abortion groups and Republican-led states if they adopt policies supportive of employees having abortions. It is likely only a matter of time before companies face lawsuits from states or anti-abortion campaigners claiming that abortion-related payments violate state bans on facilitating or aiding and abetting abortions, according to Robin Fretwell Wilson, a law professor at the University of Illinois and expert on healthcare law. | Amazon.com Inc AMZN.O, Apple Inc AAPL.O, Lyft Inc LYFT.O, Microsoft Corp MSFT.O and JPMorgan Chase & Co JPM.N were among companies that announced plans to provide those benefits through their health insurance plans in anticipation of Friday's U.S. Supreme Court decision overturning the landmark 1973 Roe v. Wade ruling that had legalized abortion nationwide. For many large companies that fund their own health plans, the federal law regulating employee benefits will provide crucial cover in civil lawsuits over their reimbursement policies, several lawyers and other legal experts said. And that will be a strong argument, she said, particularly for businesses with general reimbursement policies for necessary medical-related travel rather than those that single out abortion. |
20547.0 | 2022-06-25 00:00:00 UTC | Warren Buffett's 4 Rules for Investing in a Bear Market | AAPL | https://www.nasdaq.com/articles/warren-buffetts-4-rules-for-investing-in-a-bear-market | nan | nan | Warren Buffett began his investing career in a bear market. He bought his first stock in the early 1940s at age 11 as the S&P 500 was on its way to a 35% dip that bottomed in 1942. Since then, he's managed through 12 more bear markets not including this one.
Despite those downturns, Buffett has managed to create billions in value for himself and the shareholders of the company he runs, Berkshire Hathaway. If any investor is qualified to share wisdom on investing in bear markets, it's Buffett.
So it makes sense to lean on his expertise to get through this tough climate with your wealth intact, right? To get you started, here are four of Buffett's famous rules for investing in a bear market.
Image source: Getty Images.
1. Buy quality merchandise on sale
"Whether we're talking about socks or stocks, I like buying quality merchandise when it is marked down."
Buffett invests in high-quality businesses -- companies with a proven ability to create shareholder value through all economic climates. In his view, bear markets provide opportunities to buy these quality stocks at lower prices.
As an example, Buffett's response earlier this year to the tech stock sell-off was to buy more of his favorite technology company, Apple. Although Apple already comprised more than 40% of Berkshire Hathaway's portfolio, Buffett bought another 3.78 million shares.
You can mimic his strategy by identifying stocks you love for their long-term prospects. If your budget allows, increase your investing activity and pad your share counts while prices remain low.
2. Hold forever
"Our favorite holding period is forever."
When you buy stocks you'd like to hold forever, bear markets become far less stressful. Since your plan is to hold for the long run, you don't have to do anything when the market goes sideways. No reshuffling your portfolio and no guessing when share prices will bottom out. Your only job is to wait.
3. Stay calm
"The most important quality for an investor is temperament, not intellect."
It's normal and useful to second-guess your "hold forever" plan when circumstances change. Certainly, there will be times when you should drop a stock you thought was a keeper.
The distinction you must make is whether circumstances have changed permanently or temporarily. And that's easier to do when you can analyze what's happening calmly and rationally. If you let your emotions take over, they can convince you to scrap your plan, cut your losses, or take some other dramatic action that's sure to dampen your long-term returns.
4. Keep your distance
Buffett said this when asked what advice he had for investors in tough markets: "I would tell them: Don't watch the market too closely."
Let's say you're confident that your "hold forever" stocks can withstand a temporary bear market. And for that reason, you're not going to react to falling share prices. In that scenario, what's the benefit of tracking every bump along the way? There isn't one.
It's OK to keep some distance from financial headlines when the market is going crazy. Consider it a survival strategy that helps you stay calm and stick to your investing plan.
Buy or do nothing
When a bear market sets in, you'll see Buffett mostly buy or hold. If you're questioning whether those are the right moves for your portfolio, remember this: Buffett is worth about $95 billion, and he has invested through more bear markets than almost anyone. His tactics can help you emerge from this bear market stronger and wealthier than ever.
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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. | Buffett invests in high-quality businesses -- companies with a proven ability to create shareholder value through all economic climates. As an example, Buffett's response earlier this year to the tech stock sell-off was to buy more of his favorite technology company, Apple. If you let your emotions take over, they can convince you to scrap your plan, cut your losses, or take some other dramatic action that's sure to dampen your long-term returns. | Although Apple already comprised more than 40% of Berkshire Hathaway's portfolio, Buffett bought another 3.78 million shares. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway (B shares). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. | When you buy stocks you'd like to hold forever, bear markets become far less stressful. Buy or do nothing When a bear market sets in, you'll see Buffett mostly buy or hold. 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. | When you buy stocks you'd like to hold forever, bear markets become far less stressful. Buy or do nothing When a bear market sets in, you'll see Buffett mostly buy or hold. That's right -- they think these 10 stocks are even better buys. |
20548.0 | 2022-06-25 00:00:00 UTC | My Favorite Investing Lesson from Warren Buffett | AAPL | https://www.nasdaq.com/articles/my-favorite-investing-lesson-from-warren-buffett | nan | nan | Warren Buffett -- at age 91, still the CEO of Berkshire Hathaway -- is one of the greatest investors of our time. Shares of the conglomerate have produced a compound annual return of more than 20% between 1965 and 2021, compared to just 10.5% for the S&P 500 over the same period. A large part of that outperformance was driven by its huge equities portfolio, which has also generated outstanding returns over the years.
As a result, investors from all over study Buffett's investing methods, and try to learn to think like he does. Over the decades, he has shared plenty of advice on how to do that, but one of those lessons is a particular favorite of mine.
Image source: Getty Images.
Diversification? Who needs it?
A common investing theme you have probably heard before is the need for diversification in your portfolio. To use an idiom even older than the stock market, don't put all of your eggs in one basket.
The idea is that if you buy stocks across a range of sectors, you will be hedged against various economic environments and scenarios. For instance, while growth and tech stocks performed extremely well in 2021, they have gotten crushed this year. If you also held oil and natural gas stocks, though, you'd have winners this year to help you offset the hit you are taking in tech. In addition, diversification allows you to better stomach the blow if one company in your portfolio really struggles.
But Buffett has long been a critic of too much diversification. "Diversification is protection against ignorance," he once said. "It makes little sense if you know what you're doing."
He clearly is still following his mantra. After all, nearly 65% of Berkshire's now roughly $314 billion equities portfolio is invested in just four stocks, and roughly 39% of it is invested in just one: the nation's largest public company, Apple.
Buffett's thesis is that if you do enough good research, you can make smart calculated risks and buy stocks at attractive valuations that will reward patient, long-term investors. He also believes that once you've done the necessary work, if you see a great opportunity, you should go in big, not small.
Think about what's in your portfolio today. Do you feel better about the stocks you invested in after doing minimal research or the ones you spent days and weeks investigating?
When it comes to the stocks you did more research on, you probably know every facet of their business, and you likely also considered how they might perform in a negative scenario or a broad-based recession. I'd bet that you're a lot less concerned about how the stocks you researched thoroughly are currently performing, and are more confident that they will rebound and eventually generate strong returns.
Should you abandon diversification?
Now, I don't believe Buffett was telling the common investor to totally abandon diversification, and I don't think you should either if you like the strategy. The reality is that few of us have anywhere close to Buffett's experience as an investor, nor do most of us spend much of our workdays researching stocks. And Buffett invests hundreds of billions of dollars on behalf of a huge conglomerate, and has opportunities the rest of us lack. He also has many stakeholders he must answer to. You, as a small retail investor, need to manage your portfolio in the way that's best for you. Diversification is a proven concept that can still produce great returns over a long-term horizon.
But I love Buffett's take on diversification because I believe the more thoroughly you research your stocks before buying them, the better those you choose will perform. You will also feel a lot more confident about those stocks, which will allow you to sleep a lot better at night, especially during tough market conditions like the ones we're experiencing this year.
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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway (B shares). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Buffett's thesis is that if you do enough good research, you can make smart calculated risks and buy stocks at attractive valuations that will reward patient, long-term investors. I'd bet that you're a lot less concerned about how the stocks you researched thoroughly are currently performing, and are more confident that they will rebound and eventually generate strong returns. And Buffett invests hundreds of billions of dollars on behalf of a huge conglomerate, and has opportunities the rest of us lack. | After all, nearly 65% of Berkshire's now roughly $314 billion equities portfolio is invested in just four stocks, and roughly 39% of it is invested in just one: the nation's largest public company, Apple. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway (B shares). The Motley Fool recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. | 10 stocks we like better than Berkshire Hathaway (A shares) 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 Bram Berkowitz has no position in any of the stocks mentioned. 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. | After all, nearly 65% of Berkshire's now roughly $314 billion equities portfolio is invested in just four stocks, and roughly 39% of it is invested in just one: the nation's largest public company, Apple. But I love Buffett's take on diversification because I believe the more thoroughly you research your stocks before buying them, the better those you choose will perform. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway (B shares). |
20549.0 | 2022-06-25 00:00:00 UTC | Nvidia Stock Is Down, But Still Expensive | AAPL | https://www.nasdaq.com/articles/nvidia-stock-is-down-but-still-expensive | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Nvidia (NASDAQ:NVDA) stock, the darling of 2021’s market, has lost 44% of its value in 2022.
But it’s still not a cheap stock. At its June 23 price of $165/share, Nvidia’s market cap was $407 billion, on fiscal 2022 revenue of $27 billion. The price to earnings ratio was nearly 44. The dividend yields just .1%.
With a lot of good stocks like Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) selling for a fraction of that, on a relative basis, it can be hard to see why analysts keep giving Nvidia love. But they do. None of the 31 following it at Tipranks want you to sell it, and all but four still have it on their buy lists.
Business is great, people are wonderful, but this stock stinks.
Ticker Company Price
NVDA Nvidia $159.79
NVDA Stock: Relative Value Is Excessive
NVDA stock isn’t down because the business is broken. But it’s no longer able to dictate prices as it once did. For the first fiscal quarter pf 2023, reported on May 25, revenue of $8.3 billion was up 46% from a year earlier. But net income was down 15%, to $1.6 billion. Compared with the previous quarter it was down 46%.
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Supply is starting to catch up with demand. People no longer want to mine Bitcoin, once a big market for Nvidia graphics processors. Prices for used Nvidia gaming cards are finally becoming affordable. The data center business, which is the center of Nvidia’s current success, is notoriously price sensitive.
Nvidia is looking for a new growth catalyst, and analysts expect the metaverse to deliver it. Nvidia has joined a Metaverse Standards Forum, alongside Microsoft and Meta Platforms (NASDAQ:META). Notably, Apple and Alphabet (NASDAQ:GOOGL) remain absent.
The whole idea of the metaverse remains controversial. The idea of working in a virtual environment is jarring. Sales of headsets, the essential client devices in this new environment, are slowing.
Given these headwinds, and the possibility of China overrunning Taiwan, where Nvidia CEO Jensen Huang was born and where Taiwan Semiconductor (NYSE:TSM) makes Nvidia chips, the relative value of Nvidia looks excessive.
The Machine Internet
It may surprise you, then, to know that I have only sold one-quarter of my own NVDA stock holdings.
Like the analysts, I’m trying to see across the chasm.
Clouds are still gearing up to provide machine learning and artificial intelligence. The cloud market is also continuing to grow. Public cloud revenue jumped 26% in the first quarter, led by basic infrastructure and platforms, where revenues were up nearly 40%. There are now over 300 cloud data centers in the development pipeline and older centers are going to need upgrades with new chips.
This is the Machine Internet. It’s not just about self-driving cars, although they’re part of it. It’s about industrial machines that schedule their own maintenance, lawn sprinklers that waste less water while keeping plants healthy, and devices that can keep your next heart attack from killing you.
All sorts of industrial, civic and personal infrastructure will be upgraded for this, as prices fall, software improves and data centers scale. Anything with an on-off switch can become intelligent, and Nvidia is at the center of this market.
The Bottom Line on NVDA Stock
Nvidia will never be a cheap stock. It may go nowhere for the rest of 2022.
But if you’re a young investor, in your 30s or 40s, this is a stock that needs to be in your portfolio. If you’re over 70 and need income, give it a pass.
Nvidia chips will design your future. They are going to change the way we live and work because the Machine Internet will deliver productivity at low cost.
Forget the metaverse. Forget Web3. It’s machine learning that will define the future, cutting costs and improving performance in everything it touches.
On the date of publication, Dana Blankenhorn held long positions in NVDA, AAPL, MSFT, GOOGL, and TSM. 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.
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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. | On the date of publication, Dana Blankenhorn held long positions in NVDA, AAPL, MSFT, GOOGL, and TSM. With a lot of good stocks like Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) selling for a fraction of that, on a relative basis, it can be hard to see why analysts keep giving Nvidia love. All sorts of industrial, civic and personal infrastructure will be upgraded for this, as prices fall, software improves and data centers scale. | With a lot of good stocks like Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) selling for a fraction of that, on a relative basis, it can be hard to see why analysts keep giving Nvidia love. On the date of publication, Dana Blankenhorn held long positions in NVDA, AAPL, MSFT, GOOGL, and TSM. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Nvidia (NASDAQ:NVDA) stock, the darling of 2021’s market, has lost 44% of its value in 2022. | With a lot of good stocks like Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) selling for a fraction of that, on a relative basis, it can be hard to see why analysts keep giving Nvidia love. On the date of publication, Dana Blankenhorn held long positions in NVDA, AAPL, MSFT, GOOGL, and TSM. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Nvidia (NASDAQ:NVDA) stock, the darling of 2021’s market, has lost 44% of its value in 2022. | With a lot of good stocks like Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) selling for a fraction of that, on a relative basis, it can be hard to see why analysts keep giving Nvidia love. On the date of publication, Dana Blankenhorn held long positions in NVDA, AAPL, MSFT, GOOGL, and TSM. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Nvidia (NASDAQ:NVDA) stock, the darling of 2021’s market, has lost 44% of its value in 2022. |
20550.0 | 2022-06-25 00:00:00 UTC | Shopify Stock-Split: 3 E-Commerce Companies to Buy Now | AAPL | https://www.nasdaq.com/articles/shopify-stock-split%3A-3-e-commerce-companies-to-buy-now | nan | nan | From Jan. 1, 2019, till mid-November 2021, Shopify (NYSE: SHOP) stock took the market by storm with an 11-fold return thanks to its booming e-commerce business, rapid revenue growth, and massive total addressable market. But like many once red-hot tech stocks, Shopify is down a staggering 80% from its all-time high.
The company's 10-for-1 stock split, which should execute on June 28, will make it easier to own the stock. However, it doesn't change the investment thesis for Shopify as a company, which remains a compelling -- albeit high-risk, high-reward -- opportunity even after its sell-off.
Although many leading e-commerce stocks are down big over the last 18 months, some investors may be more interested in picks-and-shovels names with stable business models that can outlast a prolonged downturn. United Parcel Service (NYSE: UPS), Global-e Online (NASDAQ: GLBE), and Zebra Technologies (NASDAQ: ZBRA) stand out as three long-term winners. Here's why.
Image source: Getty Images.
UPS is a layup in the e-commerce space
Daniel Foelber (UPS): Companies like Shopify and Etsy are exciting and could very well outperform the broader e-commerce industry over time. But for many investors, UPS may be a better buy.
The company underpins the domestic and global shipping industry. Amazon may dominate e-commerce. But there's been increasing investment by retailers like Walmart and Target over the years, which are taking more of their business online and using carriers like UPS. Similarly, consumer electronic companies like Apple are doing many more online orders.
Aside from existing companies doing more online sales, there's also the growing shift of small businesses taking their sales online. UPS is "merchant agnostic," so to speak. It benefits from the general trend of higher business-to-consumer and business-to-business shipping needs -- making it a catch-all way to invest in the e-commerce industry.
Best of all, UPS has a 3.6% dividend yield and a price to earnings ratio of 14.3 -- which provides a good source of passive income at a great value. With an impeccable management team and an incredibly efficient business model, UPS stock appeals to income and value investors alike.
For retailers, this solutions company offers a world of difference
Scott Levine (Global-e Online): With fears of a global recession rattling many people's nerves, many investors may not feel like now's the best time to go shopping for an e-commerce stock. But keeping one's feelings in check is one of the best strategies for successful investing. In fact, one of Warren Buffett's most familiar bits of wisdom is to be greedy when others are fearful, and if it's good enough for the Oracle of Omaha, it's good enough for me. That's why Global-e Online seems particularly appealing at the moment.
Unlike companies with a regional e-commerce focus like Coupang and MercadoLibre, Global-e is less concerned about international borders. On its website, for example, it characterizes itself as helping to make "selling internationally as simple as selling domestically." With its industry-leading platform, Global-e helps more than 650 retailers connect to customers in the United States, Europe, and Asia.
Making a $100 million investment in further solidifying its prowess, Global-e announced this week that it has reached an agreement with Pitney Bowes to acquire Borderfree, an e-commerce solutions business that helps retailers gain a foothold in new markets by assisting with compliance and regulations processing in more than 200 countries and territories.
Thanks to the concerns of a global economic downturn reducing customers' e-commerce demand, Global-e's stocks have taken a hit in 2022. Shares have fallen more than 69% year to date. But to completely forsake an investment in Global-e because of near-term challenges seems unwise at best. The growth of e-commerce is hardly a flash in the pan, and Global-e is well-positioned to benefit as customers increasingly embrace online shopping.
Down more than 50% in 2022, it's time to take a look at Zebra Technologies
Lee Samaha (Zebra Technologies): It hasn't been an easy year for this automatic identification and data capture company. While management maintained its full-year sales (adjusted net sales to rise 3% to 7%) on its first-quarterearnings callin April, it cut its full-year profit margin guidance due to "increased premium freight and supply chain costs from global pressures."
Unfortunately, there's little the company can do about rising freight costs and component supplies (notably from Asia). That said, the issues may prove temporary. So instead, investors should focus on the future drivers of the company's growth potential, one of which is driven by e-commerce.
Zebra makes data capture equipment, such as barcode scanners, mobile computers, and RFID readers. Its two largest end markets are retail and e-commerce, and transportation and logistics. The trend toward omnichannel retail is an obvious driver of end demand, as is the growing need for warehousing and logistic solutions for e-commerce fulfillment.
Simply put, there's never been a greater need to monitor and manage inventory and deliveries accurately than there is now. These trends will persist long after the supply chain issues pressuring Zebra's earnings in 2022 have disappeared. There's little doubt that Zebra will face cost pressures in the second quarter too, but with the stock being aggressively sold off, it's time to start looking at the longer-term perspective here.
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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. Daniel Foelber has positions in Walmart Inc. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has positions in Coupang, Inc. The Motley Fool has positions in and recommends Amazon, Apple, Coupang, Inc., Etsy, Global-e Online Ltd., MercadoLibre, Shopify, Target, and Zebra Technologies. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify, long March 2023 $120 calls on Apple, short January 2023 $1,160 calls on Shopify, and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Although many leading e-commerce stocks are down big over the last 18 months, some investors may be more interested in picks-and-shovels names with stable business models that can outlast a prolonged downturn. For retailers, this solutions company offers a world of difference Scott Levine (Global-e Online): With fears of a global recession rattling many people's nerves, many investors may not feel like now's the best time to go shopping for an e-commerce stock. Making a $100 million investment in further solidifying its prowess, Global-e announced this week that it has reached an agreement with Pitney Bowes to acquire Borderfree, an e-commerce solutions business that helps retailers gain a foothold in new markets by assisting with compliance and regulations processing in more than 200 countries and territories. | United Parcel Service (NYSE: UPS), Global-e Online (NASDAQ: GLBE), and Zebra Technologies (NASDAQ: ZBRA) stand out as three long-term winners. The Motley Fool has positions in and recommends Amazon, Apple, Coupang, Inc., Etsy, Global-e Online Ltd., MercadoLibre, Shopify, Target, and Zebra Technologies. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify, long March 2023 $120 calls on Apple, short January 2023 $1,160 calls on Shopify, and short March 2023 $130 calls on Apple. | UPS is a layup in the e-commerce space Daniel Foelber (UPS): Companies like Shopify and Etsy are exciting and could very well outperform the broader e-commerce industry over time. For retailers, this solutions company offers a world of difference Scott Levine (Global-e Online): With fears of a global recession rattling many people's nerves, many investors may not feel like now's the best time to go shopping for an e-commerce stock. The Motley Fool has positions in and recommends Amazon, Apple, Coupang, Inc., Etsy, Global-e Online Ltd., MercadoLibre, Shopify, Target, and Zebra Technologies. | But for many investors, UPS may be a better buy. The growth of e-commerce is hardly a flash in the pan, and Global-e is well-positioned to benefit as customers increasingly embrace online shopping. The Motley Fool has positions in and recommends Amazon, Apple, Coupang, Inc., Etsy, Global-e Online Ltd., MercadoLibre, Shopify, Target, and Zebra Technologies. |
20551.0 | 2022-06-24 00:00:00 UTC | 7 Top Stocks to Buy Now (High Growth) | AAPL | https://www.nasdaq.com/articles/7-top-stocks-to-buy-now-high-growth | nan | nan | This video breaks down top stocks to buy now. These high-growth stocks are worth accumulating at these levels and lower for long-term investors with 2030 time horizons and beyond. Growth investors focus on secular growth trends and disruptive technologies such as:
Data centers
Cloud computing
Cybersecurity
Space exploration
Video gaming
Online gambling
Augmented reality (AR)
Virtual reality (VR)
Mixed reality (MR)
Autonomous driving
Electric vehicles
Genomics
Esports
5G/6G
Internet of Things (IoT)
E-commerce
Cryptocurrency
Artificial intelligence (AI)
The metaverse
Big Data
What do all these growth trends have in common? They all require semiconductors. I call semiconductors the new oil, and Advanced Micro Devices (NASDAQ: AMD) is one of the top picks on the list. But what about the other growth trends and stock picks?
Please watch the below video covering an overview of current macroeconomic conditions, portfolio management methodologies, and individual stock picks.
*Stock prices used in the below video were during the trading day of June 22, 2022. The video was published on June 23, 2022.
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Eric Cuka has positions in ARK Innovation ETF, Advanced Micro Devices, Apple, Bitcoin, Blend Labs, Inc., Cloudflare, Inc., Costco Wholesale, CrowdStrike Holdings, Inc., DLocal Limited, Datadog, Digital Turbine, Home Depot, Invesco QQQ Trust, MercadoLibre, Microsoft, SentinelOne, Inc., ServiceNow, Inc., Snowflake Inc., Tesla, UnitedHealth Group, Upstart Holdings, Inc., Vanguard S&P 500 ETF, and Zscaler. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Bitcoin, Cloudflare, Inc., Costco Wholesale, CrowdStrike Holdings, Inc., Datadog, Home Depot, MercadoLibre, Microsoft, ServiceNow, Inc., Snowflake Inc., Tesla, Upstart Holdings, Inc., Vanguard S&P 500 ETF, and Zscaler. The Motley Fool recommends UnitedHealth Group and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy. Eric 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. | Internet of Things (IoT) E-commerce Cryptocurrency Artificial intelligence (AI) The metaverse Big Data What do all these growth trends have in common? Please watch the below video covering an overview of current macroeconomic conditions, portfolio management methodologies, and individual stock picks. See the 10 stocks *Stock Advisor returns as of June 2, 2022 Eric Cuka has positions in ARK Innovation ETF, Advanced Micro Devices, Apple, Bitcoin, Blend Labs, Inc., Cloudflare, Inc., Costco Wholesale, CrowdStrike Holdings, Inc., DLocal Limited, Datadog, Digital Turbine, Home Depot, Invesco QQQ Trust, MercadoLibre, Microsoft, SentinelOne, Inc., ServiceNow, Inc., Snowflake Inc., Tesla, UnitedHealth Group, Upstart Holdings, Inc., Vanguard S&P 500 ETF, and Zscaler. | See the 10 stocks *Stock Advisor returns as of June 2, 2022 Eric Cuka has positions in ARK Innovation ETF, Advanced Micro Devices, Apple, Bitcoin, Blend Labs, Inc., Cloudflare, Inc., Costco Wholesale, CrowdStrike Holdings, Inc., DLocal Limited, Datadog, Digital Turbine, Home Depot, Invesco QQQ Trust, MercadoLibre, Microsoft, SentinelOne, Inc., ServiceNow, Inc., Snowflake Inc., Tesla, UnitedHealth Group, Upstart Holdings, Inc., Vanguard S&P 500 ETF, and Zscaler. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Bitcoin, Cloudflare, Inc., Costco Wholesale, CrowdStrike Holdings, Inc., Datadog, Home Depot, MercadoLibre, Microsoft, ServiceNow, Inc., Snowflake Inc., Tesla, Upstart Holdings, Inc., Vanguard S&P 500 ETF, and Zscaler. The Motley Fool recommends UnitedHealth Group and recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | 10 stocks we like better than Advanced Micro Devices 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 Eric Cuka has positions in ARK Innovation ETF, Advanced Micro Devices, Apple, Bitcoin, Blend Labs, Inc., Cloudflare, Inc., Costco Wholesale, CrowdStrike Holdings, Inc., DLocal Limited, Datadog, Digital Turbine, Home Depot, Invesco QQQ Trust, MercadoLibre, Microsoft, SentinelOne, Inc., ServiceNow, Inc., Snowflake Inc., Tesla, UnitedHealth Group, Upstart Holdings, Inc., Vanguard S&P 500 ETF, and Zscaler. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Bitcoin, Cloudflare, Inc., Costco Wholesale, CrowdStrike Holdings, Inc., Datadog, Home Depot, MercadoLibre, Microsoft, ServiceNow, Inc., Snowflake Inc., Tesla, Upstart Holdings, Inc., Vanguard S&P 500 ETF, and Zscaler. | This video breaks down top stocks to buy now. I call semiconductors the new oil, and Advanced Micro Devices (NASDAQ: AMD) is one of the top picks on the list. His opinions remain his own and are unaffected by The Motley Fool. |
20552.0 | 2022-06-24 00:00:00 UTC | US STOCKS-Wall St rallies as traders dial back rate-hike bets | AAPL | https://www.nasdaq.com/articles/wall-st-rallies-as-traders-dial-back-rate-hike-bets | nan | nan | By Sruthi Shankar and Anisha Sircar
June 24 (Reuters) - Wall Street's main indexes rose over 1% on Friday as signs of slowing economic growth and falling commodity prices tempered expectations over how high the Federal Reserve will raise interest rates to rein in inflation.
Global financial markets have been roiled this month on worries that rapid rate hikes by major central banks could cause a recession, with the benchmark S&P 500 .SPX confirming a bear market last week as it recorded a 20% drop from its January closing peak.
The three main indexes on Friday looked set to notch their first weekly gain in four, boosted by megacap growth stocks and defensive sectors such as healthcare and utilities seen as safer bets during times of economic uncertainty.
"Conversations about the U.S. economy likely slowing which could lessen the hawkishness of the Fed, combined with lower commodity prices and bond yields - these are reasons investors are mentioning to justify why we could experience a near-term bounce," said Sam Stovall, chief investment strategist at CFRA Research in New York.
"Yet, I do not think that it's the final bottom."
Data on Thursday showed U.S. business activity slowed considerably in June, driving investors to scale back bets on where interest rates may peak and even bring forward expectations of a rate cut.
The University of Michigan's survey on Friday showed U.S. consumer sentiment hit a record low in June.
Sliding commodity prices this week also quelled worries about red-hot inflation, with copper prices heading for their biggest weekly fall in a year and crude oil set for a second weekly decline.
The Fed's commitment to fight high inflation is "unconditional," Chair Jerome Powell told lawmakers on Thursday, a day after saying it was not trying to provoke a recession but that was "certainly a possibility."
All the major 11 S&P 500 sectors gained on Friday, led by gains in technology stocks .SPLRCT and communication services .SPLRCD with a 2% jump.
Heavyweights Apple Inc AAPL.O and Tesla TSLA.O rose 1.9% and 3.1%, respectively, as U.S. Treasury yields hovered near two-week lows hit on Thursday. US/
Rising interest rates tend to hurt shares of megacap growth companies as their valuations rely more heavily on future earnings.
At 09:43 a.m. ET, the Dow Jones Industrial Average .DJI was up 323.04 points, or 1.05%, at 31,000.40, the S&P 500 .SPX was up 51.38 points, or 1.35%, at 3,847.11, and the Nasdaq Composite .IXIC was up 208.26 points, or 1.85%, at 11,440.45.
FedEx Corp FDX.N jumped 7.2% after the parcel delivery company issued a stronger-than-expected full-year profit forecast despite softening global demand for shipping.
Bank stocks were mixed after the Federal Reserve's annual "stress test" exercise showed that the lenders have enough capital to weather a severe economic downturn.
Citigroup Inc C.N slipped 1.5% and Bank of America Corp BAC.N fell 1.7% lower, while Morgan Stanley MS.N gained 3.1%.
Zendesk Inc ZEN.N soared 29.0% after the software company said it would be acquired by a group of private equity firms led by Hellman & Friedman LLC and Permira for $10.2 billion.
Advancing issues outnumbered decliners by a 5.26-to-1 ratio on the NYSE and a 3.87-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and 29 new lows, while the Nasdaq recorded 18 new highs and 18 new lows.
(Reporting by Sruthi Shankar and Anisha Sircar in Bengaluru; Editing by Sriraj Kalluvila)
((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Heavyweights Apple Inc AAPL.O and Tesla TSLA.O rose 1.9% and 3.1%, respectively, as U.S. Treasury yields hovered near two-week lows hit on Thursday. By Sruthi Shankar and Anisha Sircar June 24 (Reuters) - Wall Street's main indexes rose over 1% on Friday as signs of slowing economic growth and falling commodity prices tempered expectations over how high the Federal Reserve will raise interest rates to rein in inflation. The three main indexes on Friday looked set to notch their first weekly gain in four, boosted by megacap growth stocks and defensive sectors such as healthcare and utilities seen as safer bets during times of economic uncertainty. | Heavyweights Apple Inc AAPL.O and Tesla TSLA.O rose 1.9% and 3.1%, respectively, as U.S. Treasury yields hovered near two-week lows hit on Thursday. By Sruthi Shankar and Anisha Sircar June 24 (Reuters) - Wall Street's main indexes rose over 1% on Friday as signs of slowing economic growth and falling commodity prices tempered expectations over how high the Federal Reserve will raise interest rates to rein in inflation. Data on Thursday showed U.S. business activity slowed considerably in June, driving investors to scale back bets on where interest rates may peak and even bring forward expectations of a rate cut. | Heavyweights Apple Inc AAPL.O and Tesla TSLA.O rose 1.9% and 3.1%, respectively, as U.S. Treasury yields hovered near two-week lows hit on Thursday. By Sruthi Shankar and Anisha Sircar June 24 (Reuters) - Wall Street's main indexes rose over 1% on Friday as signs of slowing economic growth and falling commodity prices tempered expectations over how high the Federal Reserve will raise interest rates to rein in inflation. The three main indexes on Friday looked set to notch their first weekly gain in four, boosted by megacap growth stocks and defensive sectors such as healthcare and utilities seen as safer bets during times of economic uncertainty. | Heavyweights Apple Inc AAPL.O and Tesla TSLA.O rose 1.9% and 3.1%, respectively, as U.S. Treasury yields hovered near two-week lows hit on Thursday. By Sruthi Shankar and Anisha Sircar June 24 (Reuters) - Wall Street's main indexes rose over 1% on Friday as signs of slowing economic growth and falling commodity prices tempered expectations over how high the Federal Reserve will raise interest rates to rein in inflation. Sliding commodity prices this week also quelled worries about red-hot inflation, with copper prices heading for their biggest weekly fall in a year and crude oil set for a second weekly decline. |
20553.0 | 2022-06-24 00:00:00 UTC | Why Apple and Alphabet Stocks Popped on Friday | AAPL | https://www.nasdaq.com/articles/why-apple-and-alphabet-stocks-popped-on-friday | nan | nan | What happened
Is the tech-stock trouncing over?
It surely felt that way to many investors on Friday, as they witnessed strong gains with some of the sector's major titles. Two bucking the recent downward trend of their grouping gained nicely on the day. Apple (NASDAQ: AAPL) finished Friday nearly 2.5% higher, while both publicly-traded share classes of Google parent Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) enjoyed a more than 5% rise.
So what
Savvy investors know that a bear market is an ideal time to buy quality companies. Since stocks within a sector can frequently more or less move in concert, a great number of once high-flying techies have come down considerably in price.
Despite the devotion they've inspired among investors (and, in Apple's case, users), both Apple and Alphabet have hewed to this rule, and are not exceptions. Both companies' stocks are down by roughly 20% this year. That, by the way, is worse than the just-under-18% slide of the bellwether S&P 500 index.
Yet even a superficial analysis of Alphabet's and Apple's businesses shows that the two tech industry mainstays are powerhouses in their respective segments, with excellent growth considering how long they've been on the scene. It feels inevitable, then, that bargain-seekers would pounce on both once their respective share prices dipped low enough.
Now what
That level of tolerance seems to have been reached, but we should be cautious here. There is still much to be concerned about with the wider global economy. And while fears of a deep recession seem a bit exaggerated, the world has to navigate a stack of challenges in the near to midterm future.
That said, even with a tighter economy, advertisers are unlikely to sharply cut their spending on Google ads, while consumers should continue to find a way to pay for Apple's enduringly popular phones, tablets, and premium apps.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Eric Volkman has positions in Apple. 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. | Apple (NASDAQ: AAPL) finished Friday nearly 2.5% higher, while both publicly-traded share classes of Google parent Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) enjoyed a more than 5% rise. Since stocks within a sector can frequently more or less move in concert, a great number of once high-flying techies have come down considerably in price. Yet even a superficial analysis of Alphabet's and Apple's businesses shows that the two tech industry mainstays are powerhouses in their respective segments, with excellent growth considering how long they've been on the scene. | Apple (NASDAQ: AAPL) finished Friday nearly 2.5% higher, while both publicly-traded share classes of Google parent Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) enjoyed a more than 5% rise. 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. | Apple (NASDAQ: AAPL) finished Friday nearly 2.5% higher, while both publicly-traded share classes of Google parent Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) enjoyed a more than 5% rise. 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. | Apple (NASDAQ: AAPL) finished Friday nearly 2.5% higher, while both publicly-traded share classes of Google parent Alphabet (NASDAQ: GOOG)(NASDAQ: GOOGL) enjoyed a more than 5% rise. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Apple wasn't one of them! That's right -- they think these 10 stocks are even better buys. |
20554.0 | 2022-06-24 00:00:00 UTC | Apple will not challenge Maryland store unionization vote | AAPL | https://www.nasdaq.com/articles/apple-will-not-challenge-maryland-store-unionization-vote | nan | nan | By Stephen Nellis
June 24 (Reuters) - Apple Inc AAPL.O will not challenge the results of a vote by workers at its Towson, Maryland, store to unionize and intends to participate in the bargaining process in good faith, a person familiar with the company's plans told Reuters on Friday.
Nearly two-thirds of the employees at the store voted to join a union last week, making it the first Apple store in the United States to vote to organize.
The employees voted to join the International Association of Machinists and Aerospace Workers (IAM). The IAM did not immediately respond to a request for comment.
Apple is one of several major American companies whose workforces have moved to unionize, with workers at some Starbucks Corp SBUX.Oand Amazon Inc AMZN.Olocations also voting to unionize in recent months.
Apple employees at a store in Georgia earlier this year had plans to vote on unionization but canceled the vote, with union officers later filing a complaint alleging that Apple intimidated its employees. Employees at two other Apple stores in New York are also considering unionization.
(Reporting by Stephen Nellis in San Francisco; editing by Jonathan Oatis and Deepa Babington)
((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 24 (Reuters) - Apple Inc AAPL.O will not challenge the results of a vote by workers at its Towson, Maryland, store to unionize and intends to participate in the bargaining process in good faith, a person familiar with the company's plans told Reuters on Friday. The employees voted to join the International Association of Machinists and Aerospace Workers (IAM). Apple employees at a store in Georgia earlier this year had plans to vote on unionization but canceled the vote, with union officers later filing a complaint alleging that Apple intimidated its employees. | By Stephen Nellis June 24 (Reuters) - Apple Inc AAPL.O will not challenge the results of a vote by workers at its Towson, Maryland, store to unionize and intends to participate in the bargaining process in good faith, a person familiar with the company's plans told Reuters on Friday. Nearly two-thirds of the employees at the store voted to join a union last week, making it the first Apple store in the United States to vote to organize. Apple employees at a store in Georgia earlier this year had plans to vote on unionization but canceled the vote, with union officers later filing a complaint alleging that Apple intimidated its employees. | By Stephen Nellis June 24 (Reuters) - Apple Inc AAPL.O will not challenge the results of a vote by workers at its Towson, Maryland, store to unionize and intends to participate in the bargaining process in good faith, a person familiar with the company's plans told Reuters on Friday. Nearly two-thirds of the employees at the store voted to join a union last week, making it the first Apple store in the United States to vote to organize. Apple employees at a store in Georgia earlier this year had plans to vote on unionization but canceled the vote, with union officers later filing a complaint alleging that Apple intimidated its employees. | By Stephen Nellis June 24 (Reuters) - Apple Inc AAPL.O will not challenge the results of a vote by workers at its Towson, Maryland, store to unionize and intends to participate in the bargaining process in good faith, a person familiar with the company's plans told Reuters on Friday. The employees voted to join the International Association of Machinists and Aerospace Workers (IAM). Employees at two other Apple stores in New York are also considering unionization. |
20555.0 | 2022-06-24 00:00:00 UTC | Disney, other U.S. companies offer abortion travel benefit after Roe decision | AAPL | https://www.nasdaq.com/articles/disney-other-u.s.-companies-offer-abortion-travel-benefit-after-roe-decision | nan | nan | By David Shepardson and Dawn Chmielewski
NEW YORK, June 24 (Reuters) - U.S. companies including Walt Disney Co DIS.N and Facebook parent Meta Platforms Inc META.O said on Friday they will cover employees' expenses if they have to travel for abortion services after the U.S. Supreme Court overturned Roe v Wade.
The U.S. Supreme Court on Friday overturned the landmark 1973 ruling that recognized a woman's constitutional right to an abortion, handing a momentous victory to Republicans and religious conservatives who want to limit or ban and, in some states criminalize, the procedure.
Many states are expected to further restrict or ban abortions following the ruling, making it difficult for female employees to terminate pregnancies unless they travel to states where the procedure is allowed.
For example, in Oklahoma a bill due to take effect in August bans abortion except in medical emergencies and penalizes providers who violate the law with up to $100,000 in fines and 10 years in prison. States offering abortion protections include New York and Maryland.
Disney told employees on Friday that it remains committed to providing comprehensive access to quality healthcare, including for abortions, according to a Disney spokesperson.
The company's benefits will cover the cost of employees who need to travel to another location to access care, including to obtain an abortion, it said.
Meta will reimburse travel expenses for employees seeking out-of-state reproductive care, but the company was also "assessing how best to do so given the legal complexities involved," according to a spokesperson.
Dick's Sporting Goods DKS.N Chief Executive Lauren Hobart said on LinkedIn that the company would pay up to $4,000 in travel for employees or their family members and a support person if abortion was not available nearby.
Companies that offer reimbursements for abortion-related travel could be vulnerable to lawsuits by anti-abortion groups and Republican-led states, and even potential criminal penalties.
Lawyers and other experts said employers could face claims that their policies violate state laws banning, facilitating or aiding and abetting abortions.
Ride hailing company Lyft LYFT.O said it would legally shield drivers in abortion cases, saying it would expand a recent policy as new state laws were passed. "No driver should have to ask a rider where they are going and why," a spokesperson said.
A draft of the Supreme Court ruling on abortion was leaked in May. At that time, many other companies, including online review site Yelp YELP.N, Microsoft Corp MSFT.O, and Tesla TSLA.O, said they would help cover the cost of travel for employees seeking reproductive services. Apple AAPL.O repeated that it supported employees making their own decisions on reproductive health and that its healthcare covered travel for services unavailable nearby.
Yelp co-founder and Chief Executive Jeremy Stoppelman on Friday said the ruling "puts women's health in jeopardy, denies them their human rights, and threatens to dismantle the progress we've made toward gender equality in the workplace since Roe."
Alaska Air Group ALK.N, parent of Alaska Airlines, said on Friday it is "reimbursing travel for certain medical procedures and treatments if they are not available where you live. Today's Supreme Court decision does not change that."
Other companies offering the benefit include Johnson & Johnson JNJ.N, online dating sites OkCupid and Bumble Inc BMBL.O, Netflix Inc NFLX.O and JPMorgan Chase & Co JPM.N, the nation's largest bank.
OkCupid sent in-app messages to customers in 26 states likely to ban abortions, gearing up for a political fight. "Act now by calling your representatives and demanding freedom and choice," said a copy of the message tweeted by OkCupid Chief Marketing Officer Melissa Hobley.
JPMorgan to cover U.S. staff travel costs for out-of-state abortions -memo
U.S. Supreme Court overturns Roe v. Wade abortion landmark
Abortion access in a post-Roe Americahttps://graphics.reuters.com/USA-ABORTION/GRAPHIC/zgpomdbeopd/index.html
(Reporting by Nivedita Balu and Tiyashi Datta in Bengaluru, Dawn Chmielewski in Los Angeles, Doyinsola Oladipo and Daniel Wiessner in New York and David Shepardson in Washingon; Writing by Anna Driver; Editing by Bill Berkrot and Rosalba O'Brien)
((anna.driver@thomsonreuters.com; 646-223-4342; Reuters Messaging: anna.driver@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. | Apple AAPL.O repeated that it supported employees making their own decisions on reproductive health and that its healthcare covered travel for services unavailable nearby. By David Shepardson and Dawn Chmielewski NEW YORK, June 24 (Reuters) - U.S. companies including Walt Disney Co DIS.N and Facebook parent Meta Platforms Inc META.O said on Friday they will cover employees' expenses if they have to travel for abortion services after the U.S. Supreme Court overturned Roe v Wade. The U.S. Supreme Court on Friday overturned the landmark 1973 ruling that recognized a woman's constitutional right to an abortion, handing a momentous victory to Republicans and religious conservatives who want to limit or ban and, in some states criminalize, the procedure. | Apple AAPL.O repeated that it supported employees making their own decisions on reproductive health and that its healthcare covered travel for services unavailable nearby. Meta will reimburse travel expenses for employees seeking out-of-state reproductive care, but the company was also "assessing how best to do so given the legal complexities involved," according to a spokesperson. Other companies offering the benefit include Johnson & Johnson JNJ.N, online dating sites OkCupid and Bumble Inc BMBL.O, Netflix Inc NFLX.O and JPMorgan Chase & Co JPM.N, the nation's largest bank. | Apple AAPL.O repeated that it supported employees making their own decisions on reproductive health and that its healthcare covered travel for services unavailable nearby. By David Shepardson and Dawn Chmielewski NEW YORK, June 24 (Reuters) - U.S. companies including Walt Disney Co DIS.N and Facebook parent Meta Platforms Inc META.O said on Friday they will cover employees' expenses if they have to travel for abortion services after the U.S. Supreme Court overturned Roe v Wade. Many states are expected to further restrict or ban abortions following the ruling, making it difficult for female employees to terminate pregnancies unless they travel to states where the procedure is allowed. | Apple AAPL.O repeated that it supported employees making their own decisions on reproductive health and that its healthcare covered travel for services unavailable nearby. By David Shepardson and Dawn Chmielewski NEW YORK, June 24 (Reuters) - U.S. companies including Walt Disney Co DIS.N and Facebook parent Meta Platforms Inc META.O said on Friday they will cover employees' expenses if they have to travel for abortion services after the U.S. Supreme Court overturned Roe v Wade. Lawyers and other experts said employers could face claims that their policies violate state laws banning, facilitating or aiding and abetting abortions. |
20556.0 | 2022-06-24 00:00:00 UTC | Meta Platforms (META) Testing Methods to Verify Insta Users' Age | AAPL | https://www.nasdaq.com/articles/meta-platforms-meta-testing-methods-to-verify-insta-users-age | nan | nan | Meta Platforms META recently announced that is testing new ways for Instagram users to verify their age starting with people in the United States. Apart from uploading their ID (driver’s license or ID card), users can use video selfie and social vouching to verify their age.
Instagram requires people to be at least 13 years old to sign up. In some countries, the minimum age requirement is higher.
Meta is also partnering with Yoti, a company that specializes in online age verification, to help ensure people’s privacy. The social-networking giant is using artificial technology (AI) to understand whether a user is a teen or an adult.
Meta already uses AI to prevent teens from accessing Facebook Dating, adults from messaging teens and helps teens from receiving restricted ad content.
The verification requirements will help Instagram provide age-appropriate experiences, thus preventing unwanted contact from adults whom teenage users don’t know and limiting the options advertisers have to reach them with ads.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
New Features to Boost Privacy for Instagram Users
Instagram’s growing popularity in international markets, particularly in Asia, has helped Meta expand its user base. Instagram is particularly popular among Gen-Z.
However, Meta has been facing flak regarding child protection issues on the social networking platform.
Meta has been undertaking several initiatives to save children and teenagers from unwanted activities. In order to protect the Gen Z online, Adam Mosseri, head of Instagram, stated in March that the company is introducing Family Center for parents. This new feature will provide parents access to supervision tools and resources from leading industry experts.
Meta recently rolled out a new feature called Amber Alerts on Instagram for the first time, which will help people find missing children. The Amber Alert Program uses photos to search for missing children, especially in the first few hours of the lookout. With this new feature, law enforcement agencies can activate the Amber Alert in case a child goes missing, which will alert all the Instagram users in that area regarding the same.
Amber Alert has been rolled out on Instagram from Jun 1 in 25 countries such as Argentina, Australia, Belgium, Bulgaria, Canada, Ecuador, Greece, and the United States, to name a few. The company is working on expanding its services globally.
Meta Peers Facing Child Safety Issues
Meta peers like Snap SNAP have been facing flak over child safety issues.
Snap’s Snapchat platform announced new parental controls in January this year to limit friend suggestions for teen users and to protect them from unwanted attention.
Snapchat’s initiatives come following allegations that the company has been failing to prevent drug-related content from proliferating on its chatting platforms, specifically among its users aged below 18.
Snapchat has been the most preferred social network among Gen Z compared with its rival Meta’s Facebook or Instagram, and Twitter.
Meta has been facing significant competition from Snap as the latter is benefiting from improving user engagement, particularly in the 13-34-year-old demography, which is expanding its advertiser base.
What Awaits Meta Stock in 2022?
Meta is having a terrible 2022, primarily attributable to engagement-related headwinds as well as changes made by Apple AAPL in its iOS that have made ad targeting difficult. Intensifying competition for ad dollars and user engagement from the likes of Snap, Twitter TWTR and TikTok have been other headwinds.
Shares of this social-networking giant are down 52.8% year to date, underperforming the Zacks Computer & Technology sector, which has dropped 29.9% over the same time frame. Snap shares are down 70.4% while Twitter’s has declined 10.5%.
The ongoing Russia-Ukraine war has hurt advertisers’ budgets. Rising inflation, along with slowing economy, is expected to trigger budget cuts.
Meta expects engagement headwinds and ad-targeting difficulty due to Apple’s iOS changes to hurt advertising revenue growth throughout 2022. This Zacks Rank #3 (Hold) company’s second-quarter guidance also reflects macroeconomic and forex concerns. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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.
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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. | Meta is having a terrible 2022, primarily attributable to engagement-related headwinds as well as changes made by Apple AAPL in its iOS that have made ad targeting difficult. Apple Inc. (AAPL): Free Stock Analysis Report The verification requirements will help Instagram provide age-appropriate experiences, thus preventing unwanted contact from adults whom teenage users don’t know and limiting the options advertisers have to reach them with ads. | Meta is having a terrible 2022, primarily attributable to engagement-related headwinds as well as changes made by Apple AAPL in its iOS that have made ad targeting difficult. Apple Inc. (AAPL): Free Stock Analysis Report Meta already uses AI to prevent teens from accessing Facebook Dating, adults from messaging teens and helps teens from receiving restricted ad content. | Meta is having a terrible 2022, primarily attributable to engagement-related headwinds as well as changes made by Apple AAPL in its iOS that have made ad targeting difficult. Apple Inc. (AAPL): Free Stock Analysis Report Meta Platforms META recently announced that is testing new ways for Instagram users to verify their age starting with people in the United States. | Meta is having a terrible 2022, primarily attributable to engagement-related headwinds as well as changes made by Apple AAPL in its iOS that have made ad targeting difficult. Apple Inc. (AAPL): Free Stock Analysis Report Meta Platforms META recently announced that is testing new ways for Instagram users to verify their age starting with people in the United States. |
20557.0 | 2022-06-24 00:00:00 UTC | Lessons From the Great Depression | AAPL | https://www.nasdaq.com/articles/lessons-from-the-great-depression | nan | nan | In this podcast, Motley Fool senior analyst Bill Mann discusses:
What he's watching in the market.
Where he's been putting his money to work and which stocks he's been buying.
His relative disinterest in IPOs as an event.
Author Morgan Housel joins Motley Fool host Alison Southwick and Motley Fool retirement expert Robert Brokamp to talk about the speculative boom that caused the Great Depression, and how those lessons apply to investors today.
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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Chris Hill: Today we've got Morgan Housel doing what he does best: looking at financial history and drawing lessons for today. Motley Fool Money starts now. I'm Chris Hill and I am joined by Motley Fool senior analyst Bill Mann. Thanks for being here.
Bill Mann: Hey, Chris, how're you?
Hill: I'd be doing better if the market was going higher. But in that sense, I have a lot of company, don't I? We would all be doing a little bit better [laughs] if the market was going higher.
Mann: Yes, exactly. I guess the good news is that you're not necessarily wondering what you have done wrong.
Hill: No, that is true, so that is some solace. I wanted to get your thoughts on just stepping back. I mean, sure, we could talk about Oracle's earnings if you really want to. But I'm more interested in Bill Mann's big-picture view of where things are right now. Because something Jason and I had talked about yesterday was the level of pessimism in the market right now. I don't want to say it's unfounded because when you have smart people like Jamie Dimon coming out and saying, I think there is an economic hurricane coming and the only question is how bad it's going to be, and by the way, we're going to be doing X, Y, and Z with our balance sheet. We are going to be more conservative. If there's a lot of pessimism out there, at least it's grounded in something. Let's stick with pessimism for just one second. Do you look at the commentary? Do you look at the reaction and some of the comments from maybe not Jamie Dimon, but noted investors? Do you think it's in line with your thinking? Because there are some people out there saying, hey, look, this is bad and I think it's going to get a lot worse.
Mann: It's amazing to me that you bring up Jamie Dimon in his comments right out of the gate because Jamie Dimon joined a CEO roundtable. He's told the story a number of times in his early teens. One of the first things that he did was, the CEO roundtable, they all got together and talked about "What's this next year going to look like?" Jamie Dimon went through the process and you would think that CEOs know more than anybody else. He just had some researchers go back and say, OK, they have done this for every single year. Let's go back and see how accurate they were in their prognostications.
Chris, you would not be surprised to hear that they were not very accurate. They were not very good at prognosticating, the people who you would think, and they're in a semi-private room. They're not talking to the public; they're talking to each other. They're not very good about prognosticating. Now I look at what's happening now and yes, Jamie Dimon came out and he said "I see a hurricane coming." He is at a structurally important bang-up financial institution. So yes, he sees the sheet music that's being handed to him. But if we were better at prognosticating, do you think that the S&P 500 would have only been allocated 2% to energy companies in 2021 if we were good at seeing what was coming? We're not. We're not good at seeing what's coming.
Hill: Sorry to get personal, but are you doing anything with your cash right now? Something Jason and I talked about yesterday was putting money to work slowly. I'll just say in my own financial life earlier this year when the market dropped, what I thought was a [laughs] decent amount, I looked at some of the really stable, sustainably profitable businesses that their shares looked like they were on sale to me, and in some cases, they were -- companies like Microsoft and Johnson & Johnson, and Apple and that sort of thing. I thought, OK, I'm going to buy some more shares of those. To a company, they've basically fallen further. I don't know. I'm one of those people who's like, I think I'm holding on to my cash for right now. What are you doing with your money?
Mann: I actually have been investing. One thing that's really important to recognize is that the price you pay is a form of risk. The higher the price of any company. If you can buy it at $10 a share versus $20 a share, it is essentially the same company. If you buy something at a higher price, you are essentially even if it doesn't feel like it at the moment, taking on more risk. The inverse of that is now, that you have companies that are down 60%, 70%, 80%. Some of them are dramatically the same companies. Some of these companies should have never been priced as high as they were and will probably never come back. But what's happening right now? Somebody who lives in an emerging market would be very comfortable with what's happening right now, because everything's getting sold.
Every asset class, bonds are being sold, sovereigns are being sold, commodities are being sold, and stocks are being sold. That is something that people in developing markets are very happy about, but they're comfortable with -- that type of indiscriminate selling suggests to me that we should in fact be looking at the other side of the risk equation and buy. I think it's really easy for people to say, well, the stock's down 90%, so therefore it must be cheap. Some of these companies are never coming back, but I have a hard time believing that Berkshire Hathaway, which I had bought some a few weeks ago, is really that deeply impacted, or Mastercard, or Google, or Domino's Pizza. These are companies that are incredible at making money over the cycle, and news flash, we have not cured the economic cycle. Over the cycle, these companies will continue to make a lot of money. The last I checked, that's the point of investing.
Hill: It's Tuesday morning as you and I are having this conversation. I think it's reasonable to say that if not all eyes are on the Federal Reserve, most eyes are on the Federal Reserve, the meeting, and the likelihood of a rate hike coming later this week. Are you watching that, and if not, what are you watching to give you a better sense of where the economy is going in the near term?
Mann: I mean, I think it's interesting what's happening, and what we're going through right now is fairly unprecedented. In some ways right now goes over the last decade. But also what's happening right now is, the last four days or the last six months, our economy is obviously struggling, but we're also seeing inflation. Usually, when you have an economy that's struggling in the way that ours is now, both United States and globally, the Federal Reserve or central banks are going to step in and add liquidity. But because we've got an inflationary environment and it is dangerous, they are having to continue to raise rates, which does not bode well for asset pricing. But asset pricing ultimately at the end of the day is not the horse that leads the economic cart. I mean, it is actually the opposite. So for me, what we're seeing right now is the backslide, not just of two years of an incredible amount of liquidity being put into the market but almost 15 years, going back to 2008.
I mean, we've gone through a decade in which sovereign debt around the world in 2020, $17 trillion of it traded at a negative rate, which meant that if you held the debt, you paid for the privilege. This is prior to 2015. That was a unicorn sighting. So we are coming out of what has been one of the strongest economic periods in world history, not just our lifetimes. I'm talking a thousand years of actual centralized financial systems. It just bears remembering that when you come out of something that's weird, those weird things are going to happen on the backside. I've been buying stocks.
I'm not particularly convicted about it. If you were to tell me that the market was going to go down another 40%, I'd say, nah. People are out there still spending six figures on a weird picture of a monkey that's got some code behind it, so who really knows? But I do know right now that the Fed is fighting something that was a natural outcome of some real financial stress, and at the end of it, we will hit an equilibrium.
Hill: Last thing, and then I'll let you go. You had mentioned that some of these companies are not coming back. You and I have talked before on this show about the SPACs that just littered the markets last year and the year before. Certainly, now we look at some of them as public companies and think now, OK, yeah, you probably shouldn't have.
Mann: You were a money grab.
Hill: This was money-grabbing, and you probably have no business being in the public markets. I forget who said it, but I heard someone say recently that asked the question, the rhetorical question, who in God's name would go public in this environment right now? Are IPOs something that you look at as a positive sign somewhere, whether it's later this year or into 2023, because it really does seem like we went through a long stretch of time where we didn't really collectively ask the question about any company going public. Why are they going public? We just thought, oh, OK, here's a company going public. It seems like, Bill, we're in an environment right now where if a company were going public, that would be the first thing we would ask. Like, really, you're going public now, in this?
Mann: The crazy thing is, I don't really care that much about IPOs just because I like them so much. I think I like so much understanding how a management team is going to interact and behave as a publicly traded entity. I don't care what people say; it is an entirely different experience to have the public-facing you on a quarter-by-quarter basis from when you were a private company. The thing is, Chris, there are hundreds of SPACs that have been stood up as buckets of money that they have an egg timer, they have to continue to bring companies public. You're going to see additional companies come public. I actually think that it is a little bit more of a target-rich environment.
Now you may see companies that are coming public through SPACs because there is a mutually agreed but not expressed desperation between the two. [laughs] Like we need the money, you have the money. Let's do a thing and we'll deal with the consequences later. You're going to see more companies come public. I tend to think of times like the SPAC bubble, so many companies coming public. You have to remember that they're not doing that for the benefit of investors. They're doing it at a point in time in which it is good for them. The fact that it is a much more difficult time to go public may actually mean that it is a better time to be on our side of the ledger and be buyers of stocks.
Hill: I'm sorry, but your SPAC analogy just immediately brought to mind bartenders as last call, and two people just look at each other and, all right, [laughs] why don't we go home together?
Mann: [laughs] I'm sorry. We haven't been stupid enough yet, but there's just enough time.
Hill: Bill Mann. Always great talking to you. Thanks for being here.
Mann: Thanks, Chris.
Hill: In the wake of stocks falling this year, we decided to look back at other market crashes from history. A few years back, Morgan Housel joined Alison Southwick and Robert Brokamp to talk about the speculative boom that caused the Great Depression and how those lessons apply for investors today.
Alison Southwick: Let me set this stage for you. It's the roaring '20s. In the wake of World War I, the nation's wealth more than doubled. This means that a lot of people had enough money to become full-blown consumers. They could buy newfangled things like electric refrigerators and radios and, lest we forget, the Model T. In this prosperous America you could have anything, except alcohol, of course. But the party didn't stop. [laughs] Suddenly. So today, Morgan, joining us for our series this month looking at market crashes in the U.S., and why not start with the big one, that great crash, Black Tuesday. But before we get into the actual crash, what was life like, leading up to the Great Depression?
Morgan Housel: Whenever people talked about what caused the Great Depression, what caused the crash of 1929, it's always easy to point to one thing, but then what caused that one thing that you can always keep going back in time and say what really caused all this to happen. If we are talking about the Great Depression, I'd like to start with World War I. Something really important happened in World War I. Frederick Lewis Allen is a great historian who wrote history in the 1920s and 1930s. He made this point that during World War I, to finance the war, they sold liberty bonds to average everyday Americans, not just wealthy people, but everyday Americans were buying liberty bonds to finance the war. It was the first time that most Americans had any experience with stockbrokers.
Because stockbrokers up until that point only dealt with wealthy people and aristocrats, and now it was every day trained conductors and farmers going in and talking to a stock broker to buy these liberty bonds because there's such a push of patriotism to buy these bonds. Because of that, not only did people get their first taste of what it was like to work at a stockbroker. But stockbrokers had to learn all kinds of new skills to sell to these average everyday people and high-pressure sales tactics had like a needle there in security and get them to buy something that they really didn't need.
But the salesmen's job was to convince them that you needed this. It was set up in the late nineteen-teens, this early dynamic of Main Street's affiliation with Wall Street that had no relationship before that. That's where I think the seeds of the Great Depression were ultimately planted getting everyday people who didn't have a lot of money and had no sophistication, no training or education, getting them involved with Wall Street.
Southwick: But then they had no place to get educated either.
Housel: Yeah.
Southwick: You're just going to have to trust this stockbroker guy.
Housel: That's the first seeds that were planted, and then after World War I, all the troops came home. Devastating period for the war, and the economy instantly falls into a really deep recession, really bad, high deflation, really high unemployment in the early 1920s. Frederick Lewis makes this really interesting point I think that between the war and then the recession when people came home, the people just got tired of being tired after like seven years of everything going wrong. There was a period in the early and mid-1920s when people just said, I'm ready to have fun again. We've been dealing with a decade of everything going wrong between war and the recession, I'm ready to let loose and have fun again. It was almost like the spark that he wrote about that in the early 1920s, people were just ready to have fun and just let loose and a few other things happened at the same time.
That's really important leading up to the Great Depression. Just continue on with the stories of really awful things happening. 1921, there was a really awful famine in Russia, and the United States wanted to do something about it. The U.S. government set an artificially high price for the price of wheat and told farmers as much wheat as they can grow, we will buy it from you at this inflated price. The price of wheat at the time was, I think $0.40 a bushel and the government said, we will buy as much as you can grow at a $1 a bushel so that they can send it to Russia to help break the famine. You had all these farmers that overnight basically were minting money and planting as much wheat and corn as they could and making a fortune doing it by selling it the government. It was so lucrative to be a farmer back then during this time because of these inflated prices that they had, what were called suitcase farmers, which were people from Chicago and Minneapolis who were, maybe they were lawyers or insurance salesmen that would take the train into Iowa and buy a small farm and grow wheat.
They come in with their suitcase. [laughs] Maybe farmers on the weekend go home because you can make so much money doing it. Farming was such a big part of the economy back then that in the early 1920s when that started, it was just a huge stimulus to the overall economy. This big farming surplus was going on. At the same time that you had people that were just ready to get back into having fun and helping grow the economy again and so it was like almost overnight in the early 1920s, the US economy just took off like a rocket ship. Part of that was coming out of this recession in the early 1920s and then you combine that with this big farming stimulus and it was just boom off to the races. Because of the psychology at the time, Frederick Lewis Allen writes a lot about this at the time. That these people were so ready to have fun again that you mix that excitement with that much extra money that was flowing around it was just a boom time in the 1920s and you mix optimism with a lot of money and people start making really bad decisions. [laughs]
Robert Brokamp: [laughs] Then if you also add in debt, because a lot of people didn't have necessarily all the money to buy these new consumer goods or these investments, but there were people who were willing to lend on money to do that. Back then, the margin requirement to borrow money to buy investments was only 10 percent, so if you want to buy a thousand dollars worth of stock, you only need to put down a hundred bucks. All that thing had to do is drop 10 percent and then you've lost all the equity in that investment.
Housel: Also during this period in 1920s, two of I think the most important inventions of the 20th century, the car and the radio, were coming online for average everyday people and that just added to the sense of optimism of what we could do as a country, what our potential was. That completely changed American life in the span of a few years, the car and the radio. Then you add all that together, you have people who for the first time ever have connections to stockbrokers. You have this big economic boom from farming.
Then you have all this optimism coming from the airplane and the 1920s making a lot of people know the booming twenties or roaring twenties. It was a great time for a lot of people that just led to a lot of excitement and over-optimism and so led to in the late 1920s, probably the biggest stock bubble that we've ever seen. That really took place in just like a year or two, is really like 1928 and early 1929 that the market just went straight up, just went parabolic and day after day after day stock prices for all companies were just going straight up and increased by several multiples just in the late 1920s to create a bubble that, it's hard to measure it because earnings and whatnot weren't measured back then, but probably much bigger than the 1999 stock bubble, just completely detached from reality by 1929.
Southwick: Let's get to the actual bursting of the bubble.
Housel: What's interesting too is that it didn't happen in one day. We talk about the crash of 1929, but that played out over a week and is basically three days in October of 1929 when the market fell about 12% each day consecutively. I think putting that together, rather than all happening at once, having it spread out a little bit, gave investors at the time, I don't think it was asked traumatic as we would expect it to be today because it happened slower than say, the crash of 1987. It just played out slowly and people were so accustomed to prosperity and rising stock prices that the 30 percent decline that happened in October. Was it a big deal? Of course.
Did stockbrokers jump out the window? Literally, yes, there were accounts of that happening. But I think people were so shocked and a 30% decline in the grand scheme of things, isn't that huge? In three days, it's big, but it's not that big a deal, stock prices fell 20 percent in the US in 2011. There was still a pretty big sense of optimism at the time and Herbert Hoover who was President and Andrew Mellon, who was Secretary of Treasury at the time, made a big push in the media and newspapers to say, business is sound, the fundamentals are strong, this is a temporary break, as they called it back then, but we're going to pull through this, everything is OK and I think people bought it at the time. As the month kept playing out into November and December of 1929, things stabilized and recovered a little bit and the big idea was, that was it, that was tough, but things are going to move on and things are going to keep going. There's a little bit of a rally after that, but people really had no idea what was still to come.
Southwick: Apparently yes, so what was still to come and how are we going to suffer here?
Housel: Even by mid-1930, most economists thought by looking around and what was happening, that we were in a pretty bad recession, but nothing more than that. A pretty severe recession but nothing of historic terms. It was the summer of 1930 and as we moved into 1931 that the banking system started cracking, which was caused a lot by two things. One, all these investors with margin debt who were buying from banks, were now defaulting on the debt that they were borrowing. But also, wheat prices and corn prices started plunging, so then farmers who had been a big driver of the economic boom of the 1920s and had leveraged up with all debt to buy farm equipment whatnot were defaulting at record rates too. Back then, the Federal Reserve worked in a different way.
They didn't bail out banks like they do today and more importantly, the big thing was there was no FDIC insurance, so if your local bank was going down, your life savings was going with it. That began the bank runs of the early 1930s, which is where things really started getting out of hand. It peaked in 1932 and there was starting a wave of bank failures in 1932 and the big one actually was a bank in Austria called Creditanstalt in Vienna, that was a huge bank in Austria and it failed overnight and no one really saw it it coming. There have been some economists who've mapped this, how it happened. After Creditanstalt failed in Vienna, then it spread to Paris and then spread to London and then eventually spread to New York. There was a bank called the Knickerbocker Trust in the United States that failed in New York and after that, the curtain just came down.
Southwick: Knickerbocker, that's like the most perfect name for a failing bank in 1920s [laughs].You couldn't write that.
Housel: After the banks started failing, that's where things started getting really ugly in the United States. Now we're into 1932, so we're three years after the crash of 1929, which I think, to me that's probably the biggest misconception of the Great Depression, is that there was a crash in 1929 and then boom, welcome to The Great Depression and it wasn't. The first couple of years played out slowly over a period of many years. If you think about the 2008 financial crisis, the worst of that was really contained in literally a 90-day period. In late 2008, September, October, and November and then it was pretty much over. The Great Depression played out over three years and what I think did the opposite of what the 1920s did, is that people just got accustomed to pessimism. Their hope vanished, after you've just been beaten up consistently for three years, people just lose all their optimism and all their faith. That feeds on itself, because if businesses and employees, and investors don't have any optimism, and don't have any confidence, then it's really hard to get them.
Southwick: Nothing goes up.
Housel: The stock market bottomed in mid-1932. Unemployment in the economy bottomed in 1933, four years after the crash.
Southwick: How do we recover? How do we get out of this?
Housel: This is where things could get political and a lot of people still disagree with this 90 years later, but Franklin Roosevelt is elected in 1932 and started with the new deal. There's that element of it, of economic stimulus from the new deal, just changing tactics and whatnot. There's also a thing with all recessions that if prices get low enough, stock prices, housing prices, labor prices, if things get low enough, then it's attractive to get back in business. Every investment, every business opportunity is attractive at some price and prices got ridiculous low and 1930s everywhere, the price of labor, the price of food. By 1932, stock prices were down 89% from their 1929 peak, so just completely obliterated. But there are still a lot of good companies out there.
Southwick: You talked about the FDIC. Did that come out of this? What other legislation or regulation came out following the depression to keep this from happening again? Because it's obviously never going to have an again.
Housel: [laughs] Not going to let it.
Southwick: No, it's only going to happen over the next three episodes of this podcast. Not this bad, of course.
Housel: The few big ones besides FDIC Insurance, one was the SEC and a lot of the reason that the market grew so high in the 1920s, is because fraud and bad behavior in the stock market was rapid. One of the big actors during the 1920s who made a fortune ripping people off in the stock market was Joseph Kennedy, JFK's father. He made a fortune in the 1920s, bringing together groups of investors and then they would corner a stock and put out false information and since they had a corner, they could drive up the price and then once a rise in prices got other people excited, then they would dump their shares back on them. There was all this misbehavior in the stock market. That was perfectly legal back then, even though they were really taking advantage of vulnerable people. With that came the SEC and the punch line of the story is, you know who the first chairman of the SEC was? Joseph Kennedy.
Southwick: Same guy. [laughs]
Brokamp: What was FDR's quote about that?
Housel: I forget.
Brokamp: Something along the lines, if you want to catch a bank robber, you got to put him in charge, [laughs] something along those lines.
Housel: That was the other big thing besides the FDIC, was the SEC.
Southwick: As we're winding down here, what is your takeaway for investors? What's one good lesson from The Great Depression that our listener should takeaway?
Housel: There is a lawyer during The Great Depression named Benjamin Roth, who kept a really incredible diary. He was a lawyer, but he was an amateur investor too and an amateur economist, a really smart guy. His son published the biography, I think five years ago. It's called The Great Depression. A Diary. It's really fascinating just to see a layman's perception of what happened during the depression. He constantly writes about 1932, and 1933 he uses the same phrasing over and over again. He says, "Everyone knows stocks are cheap but nobody has any cash to buy them." He just talked about it all over the place. He says not just stocks, he's talking about buildings and real estate and his neighbourhood. There's a warehouse down the street that's selling for nothing, but nobody has any cash to buy it.
He writes about the sense of, all this opportunity that's lost and if anyone had any cash during that period, they can mint a fortune. There was just an opportunity laying right in front of them, but no one had any cash saved up. To me, I used to write a blog right about this quite a bit, when I was here at The Motley Fool. People really discount cash as an asset, when things are going well. Cash doesn't earn a good return. Why would you want to earn cash? Put your money to work, it's not doing anything for you. The value of cash is what it can do for you when things turn down and things eventually will, that's what you earn your return on cash and so I've always held more cash than I think any financial advisor would say is necessary, but that's why I do it and I think I'm earning a good return on my cash, I'm just not going to realize that return until things get hairy again.
Hill: As always, people on the program may have an interest in the stocks they talk about that The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. I'm Chris Hill. Thanks for listening. We'll see you tomorrow!
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Alison Southwick has positions in Apple. Bill Mann has positions in Alphabet (C shares), Berkshire Hathaway (A shares), Berkshire Hathaway (B shares), and Domino's Pizza. Chris Hill has positions in Alphabet (A shares), Alphabet (C shares), Apple, Johnson & Johnson, and Microsoft. Robert Brokamp, CFP(R) has positions in Johnson & Johnson. The Motley Fool has positions in and recommends Alphabet (A shares), Alphabet (C shares), Apple, Berkshire Hathaway (B shares), Domino's Pizza, and Microsoft. 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. | Some of these companies are never coming back, but I have a hard time believing that Berkshire Hathaway, which I had bought some a few weeks ago, is really that deeply impacted, or Mastercard, or Google, or Domino's Pizza. A few years back, Morgan Housel joined Alison Southwick and Robert Brokamp to talk about the speculative boom that caused the Great Depression and how those lessons apply for investors today. Housel: Also during this period in 1920s, two of I think the most important inventions of the 20th century, the car and the radio, were coming online for average everyday people and that just added to the sense of optimism of what we could do as a country, what our potential was. | Author Morgan Housel joins Motley Fool host Alison Southwick and Motley Fool retirement expert Robert Brokamp to talk about the speculative boom that caused the Great Depression, and how those lessons apply to investors today. He made this point that during World War I, to finance the war, they sold liberty bonds to average everyday Americans, not just wealthy people, but everyday Americans were buying liberty bonds to finance the war. 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. | Morgan Housel: Whenever people talked about what caused the Great Depression, what caused the crash of 1929, it's always easy to point to one thing, but then what caused that one thing that you can always keep going back in time and say what really caused all this to happen. [laughs] Robert Brokamp: [laughs] Then if you also add in debt, because a lot of people didn't have necessarily all the money to buy these new consumer goods or these investments, but there were people who were willing to lend on money to do that. That really took place in just like a year or two, is really like 1928 and early 1929 that the market just went straight up, just went parabolic and day after day after day stock prices for all companies were just going straight up and increased by several multiples just in the late 1920s to create a bubble that, it's hard to measure it because earnings and whatnot weren't measured back then, but probably much bigger than the 1999 stock bubble, just completely detached from reality by 1929. | Some of these companies should have never been priced as high as they were and will probably never come back. Hill: Last thing, and then I'll let you go. [laughs] Robert Brokamp: [laughs] Then if you also add in debt, because a lot of people didn't have necessarily all the money to buy these new consumer goods or these investments, but there were people who were willing to lend on money to do that. |
20558.0 | 2022-06-24 00:00:00 UTC | US STOCKS-Wall St set for gains as traders scale back rate hike expectations | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-st-set-for-gains-as-traders-scale-back-rate-hike-expectations | nan | nan | By Sruthi Shankar and Anisha Sircar
June 24 (Reuters) - Wall Street's main indexes were set to open higher on Friday as signs of slowing economic growth and falling commodity prices eased expectations over how aggressively the Federal Reserve will raise interest rates to rein in inflation.
Global financial markets have been roiled this month on worries that rapid rate hikes by major central banks could cause a sharp economic downturn, with the benchmark S&P 500 .SPX confirming a bear market last week as it recorded a 20% drop from its January closing peak.
Data on Thursday showed U.S. business activity slowed considerably in June, driving investors to scale back bets on where interest rates may peak.
Sliding commodity prices also quelled worries about red-hot inflation, with copper prices heading for their biggest weekly fall in a year and crude oil set for a second weekly decline.
"Conversations about the U.S economy likely slowing which could lessen the hawkishness of the Fed, combined with lower commodity prices and bond yields - these are reasons investors are mentioning to justify why we could experience a near-term bounce," said Sam Stovall, chief investment strategist at CFRA Research in New York.
"Yet, I do not think that it's the final bottom."
The Fed's commitment to fight high inflation is "unconditional," Chair Jerome Powell told lawmakers on Thursday, a day after saying it was not trying to provoke a recession but that was "certainly a possibility."
The main stock indexes looked set to notch their first weekly gain in four, with healthcare, real estate and utilities - among sectors considered as safer bets during times of economic uncertainty - outperforming so far in the week.
Market heavyweights such as Apple Inc AAPL.O and Tesla TSLA.O rose 0.9% and 0.5% in premarket trading. Rising interest rates have hurt shares of the mega-cap growth companies as their valuations rely more heavily on future earnings.
At 08:45 a.m. ET, Dow e-minis 1YMcv1 were up 208 points, or 0.68%, S&P 500 e-minis EScv1 were up 27.5 points, or 0.72%, and Nasdaq 100 e-minis NQcv1 were up 90.25 points, or 0.77%.
The University of Michigan's survey on U.S. consumer sentiment in June and new home sales data will be published later in the day.
FedEx Corp FDX.N rose 3.4% after the parcel delivery company issued a stronger-than-expected full-year profit forecast despite softening global demand for shipping.
Bank stocks were mixed after the Federal Reserve's annual "stress test" exercise showed that the lenders have enough capital to weather a severe economic downturn.
Citigroup Inc C.N slipped 0.9% and Bank of America Corp BAC.N edged lower, while Morgan Stanley MS.N gained 1%.
Zendesk Inc ZEN.N soared 28.1% after the software company said it would be acquired by a group of buyout firms led by Hellman & Friedman LLC and Permira in a deal valued at $10.2 billion.
(Reporting by Sruthi Shankar and Anisha Sircar in Bengaluru; Editing by Sriraj Kalluvila)
((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Market heavyweights such as Apple Inc AAPL.O and Tesla TSLA.O rose 0.9% and 0.5% in premarket trading. By Sruthi Shankar and Anisha Sircar June 24 (Reuters) - Wall Street's main indexes were set to open higher on Friday as signs of slowing economic growth and falling commodity prices eased expectations over how aggressively the Federal Reserve will raise interest rates to rein in inflation. Data on Thursday showed U.S. business activity slowed considerably in June, driving investors to scale back bets on where interest rates may peak. | Market heavyweights such as Apple Inc AAPL.O and Tesla TSLA.O rose 0.9% and 0.5% in premarket trading. By Sruthi Shankar and Anisha Sircar June 24 (Reuters) - Wall Street's main indexes were set to open higher on Friday as signs of slowing economic growth and falling commodity prices eased expectations over how aggressively the Federal Reserve will raise interest rates to rein in inflation. Data on Thursday showed U.S. business activity slowed considerably in June, driving investors to scale back bets on where interest rates may peak. | Market heavyweights such as Apple Inc AAPL.O and Tesla TSLA.O rose 0.9% and 0.5% in premarket trading. By Sruthi Shankar and Anisha Sircar June 24 (Reuters) - Wall Street's main indexes were set to open higher on Friday as signs of slowing economic growth and falling commodity prices eased expectations over how aggressively the Federal Reserve will raise interest rates to rein in inflation. Global financial markets have been roiled this month on worries that rapid rate hikes by major central banks could cause a sharp economic downturn, with the benchmark S&P 500 .SPX confirming a bear market last week as it recorded a 20% drop from its January closing peak. | Market heavyweights such as Apple Inc AAPL.O and Tesla TSLA.O rose 0.9% and 0.5% in premarket trading. By Sruthi Shankar and Anisha Sircar June 24 (Reuters) - Wall Street's main indexes were set to open higher on Friday as signs of slowing economic growth and falling commodity prices eased expectations over how aggressively the Federal Reserve will raise interest rates to rein in inflation. Global financial markets have been roiled this month on worries that rapid rate hikes by major central banks could cause a sharp economic downturn, with the benchmark S&P 500 .SPX confirming a bear market last week as it recorded a 20% drop from its January closing peak. |
20559.0 | 2022-06-24 00:00:00 UTC | 3 Tech Stocks at the Top of Our Watchlists | AAPL | https://www.nasdaq.com/articles/3-tech-stocks-at-the-top-of-our-watchlists | nan | nan | The S&P 500 is in a bear market -- down 22% from its all-time high. But the sell-off has been far worse for the tech, consumer discretionary, and communications sectors, as well as the Nasdaq Composite, which is down 31% from its all-time high.
Many individual tech stocks are down far worse from their all-time highs. The averages have been buoyed by larger companies like Apple, Alphabet, and Microsoft, which, all things considered, are down relatively little.
Investors looking for well-rounded tech stocks have come to the right place. Adobe (NASDAQ: ADBE), Cognex (NASDAQ: CGNX), and Amyris (NASDAQ: AMRS) stand out as good buys now. Here's why.
Image source: Getty Images.
This is how you want a business to slow down
Daniel Foelber (Adobe): The tech sector has been one of the hardest hit by the Nasdaq bear market. Many individual names from Shopify to Netflix are down 75% or more from their all-time highs.
While some risk-tolerant investors may be interested in picking up hyper-growth names on sale, a simpler approach is to pick up shares of industry-leading companies that have the business models needed to endure a prolonged downturn -- companies like Adobe.
Adobe stock is down nearly 50% from its all-time high. The latest leg of the sell-off is due to its recently released full-year revised fiscal 2022 guidance, which calls for year-over-year revenue growth of just 11.8% and diluted earnings per share (EPS) growth of 8.1%. If Adobe hits its $17.65 billion revenue target and non-GAAP EPS guidance of $13.50, it will have achieved all-time high results for both metrics during what has been a challenging economic climate.
However, Adobe's market-beating performance over the last few years is largely due to a unique combination of recurring revenue from its subscription model, high gross margins, and strong top- and bottom-line growth. Simply put, Adobe used to have it all. And now, the growth story is gone.
But what Adobe has going for it now (that it hasn't had for years) is a reasonable valuation. Adobe is shifting from a growth story to a well-rounded investment similar to other established mega-cap tech stocks. It has a price-to-earnings (P/E) ratio of 35.4, which is deservingly below its 10-year median P/E ratio of 54.4. However, Adobe's forward P/E ratio is now just 26.9. What's more, Adobe is still putting up record results, generating a boatload of free cash flow, and has one of the highest gross profit margins in the software as a service (SaaS) industry at 88% and an operating margin of 35%.
When interest rates are rising, inflation is at a 40-year high, and consumer spending is falling, it's hard to expect companies to grow at a breakneck pace. In an environment where many growth stocks are losing money, free cash flow negative, taking on debt, and/or have weak balance sheets, Adobe is a breath of fresh air.
Adobe's guidance illustrates how you want a business to slow down in a recession. It involves the business doing OK -- not great, but still putting up incredible results, booking sizable profits, and generating positive free cash flow so it doesn't have to take on debt. Add it all up, and Adobe offers an impeccable risk/reward in the tech sector.
Cognex's stock valuation is now at multi-year lows
Lee Samaha (Cognex Corporation): This leading machine vision company has been hit harder than most by the tumultuous events of 2022. Going into the year, the expectation of Cognex's management, and many others, was that global supply chain issues would ease, leading to a gradual resumption of deliveries of critical components like semiconductors.
Unfortunately, that positive outlook hasn't been realized. Instead, ongoing lockdowns in China, a war in Ukraine, labor shortages, surging raw material inflation, and other ongoing supply chain issues have, at the very least, delayed that recovery. That's terrible news for a company like Cognex, particularly as these issues significantly affect two of its three key end markets (automotive and consumer electronics). Cognex CEO Rob Willett's warning (delivered on the first-quarterearnings callin May) that "automation projects are taking longer to deploy, and some are being delayed because of supply chain challenges and staffing shortages" is a sign of the times.
It's going to be a challenging year for Cognex. However, some valuation context is needed here. Despite the near-term disappointment, Wall Street analysts still expect $1.1 billion in revenue in 2022 (some $415 million higher than in 2019) and double-digit revenue growth in 2023. You rarely get to buy a growth stock like Cognex on such a valuation, and if you can close your eyes and ears to some potentially bad news coming up in the second quarter, the stock looks very attractive for long-term buyers.
Data by YCharts.
Time to take a real look at this synthetic biology stock
Scott Levine (Amyris): After falling 62% since the start of 2022, Amyris is one stock that is at the top of my watchlist these days. As a leader in synthetic biology, or "synbio," Amyris engineers molecules that are subsequently used as ingredients in various products, ranging from healthcare to food and beverage to cosmetics. The ingredients that Amyris has developed through its synbio process can be found in more than 20,000 products.
Now's a particularly interesting time for Amyris, because it recently reached a significant milestone: Fermentation has begun at its new plant in Barra Bonita, Brazil. Like so many businesses, Amyris has been plagued by supply chain headwinds that have hampered the company's growth. The development of the new fermentation plant in Brazil, however, is an important step in its attempt to overcome supply chain challenges and improve its resilience.
Addressing the company's feat of beginning fermentation at the plant, COO Eduardo Alvarez commented: "The plant will allow Amyris to more efficiently meet demand from its ingredient customers after several years of operating under third-party capacity supply constraints." According to management, plant capacity at Barra Bonita is already committed through 2023, illustrating how valuable an asset the facility is to the company meeting customer demand.
While the company's news is encouraging, it doesn't mean that investors should rush to click the buy button. Management foresees plenty of growth in the company's future as cosmetics companies, as well as those in other industries, embrace synbio ingredients. So waiting a little longer before picking up shares seems reasonable -- maybe until management confirms its projection that three of its new manufacturing facilities will achieve full-scale commercial production by the end of 2022.
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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Daniel Foelber has no position in any of the stocks mentioned. Lee Samaha has no position in any of the stocks mentioned. Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe Inc., Alphabet (A shares), Alphabet (C shares), Apple, Cognex, Microsoft, Netflix, and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify, long January 2024 $420 calls on Adobe Inc., long March 2023 $120 calls on Apple, short January 2023 $1,160 calls on Shopify, short January 2024 $430 calls on Adobe Inc., and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | However, Adobe's market-beating performance over the last few years is largely due to a unique combination of recurring revenue from its subscription model, high gross margins, and strong top- and bottom-line growth. In an environment where many growth stocks are losing money, free cash flow negative, taking on debt, and/or have weak balance sheets, Adobe is a breath of fresh air. Cognex CEO Rob Willett's warning (delivered on the first-quarterearnings callin May) that "automation projects are taking longer to deploy, and some are being delayed because of supply chain challenges and staffing shortages" is a sign of the times. | Time to take a real look at this synthetic biology stock Scott Levine (Amyris): After falling 62% since the start of 2022, Amyris is one stock that is at the top of my watchlist these days. The Motley Fool has positions in and recommends Adobe Inc., Alphabet (A shares), Alphabet (C shares), Apple, Cognex, Microsoft, Netflix, and Shopify. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify, long January 2024 $420 calls on Adobe Inc., long March 2023 $120 calls on Apple, short January 2023 $1,160 calls on Shopify, short January 2024 $430 calls on Adobe Inc., and short March 2023 $130 calls on Apple. | Adobe stock is down nearly 50% from its all-time high. You rarely get to buy a growth stock like Cognex on such a valuation, and if you can close your eyes and ears to some potentially bad news coming up in the second quarter, the stock looks very attractive for long-term buyers. The Motley Fool recommends the following options: long January 2023 $1,140 calls on Shopify, long January 2024 $420 calls on Adobe Inc., long March 2023 $120 calls on Apple, short January 2023 $1,160 calls on Shopify, short January 2024 $430 calls on Adobe Inc., and short March 2023 $130 calls on Apple. | But the sell-off has been far worse for the tech, consumer discretionary, and communications sectors, as well as the Nasdaq Composite, which is down 31% from its all-time high. 10 stocks we like better than Adobe Inc. The Motley Fool has positions in and recommends Adobe Inc., Alphabet (A shares), Alphabet (C shares), Apple, Cognex, Microsoft, Netflix, and Shopify. |
20560.0 | 2022-06-24 00:00:00 UTC | Pre-Market Most Active for Jun 24, 2022 : TQQQ, SQQQ, ZEN, NIO, REV, QQQ, BABA, LI, ET, PSNY, AAPL, CCL | AAPL | https://www.nasdaq.com/articles/pre-market-most-active-for-jun-24-2022-%3A-tqqq-sqqq-zen-nio-rev-qqq-baba-li-et-psny-aapl | nan | nan | The NASDAQ 100 Pre-Market Indicator is up 94.83 to 11,792.51. The total Pre-Market volume is currently 37,654,586 shares traded.
The following are the most active stocks for the pre-market session:
ProShares UltraPro QQQ (TQQQ) is +0.63 at $25.96, with 4,038,274 shares traded. This represents a 21.76% increase from its 52 Week Low.
ProShares UltraPro Short QQQ (SQQQ) is -1.43 at $55.42, with 2,334,360 shares traded. This represents a 96.87% increase from its 52 Week Low.
Zendesk, Inc. (ZEN) is +28.75 at $86.70, with 1,885,524 shares traded. ZEN's current last sale is 72.25% of the target price of $120.
NIO Inc. (NIO) is +0.44 at $23.49, with 1,311,055 shares traded. As reported by Zacks, the current mean recommendation for NIO is in the "buy range".
Revlon, Inc. (REV) is -0.43 at $6.77, with 1,178,992 shares traded. REV's current last sale is 79.65% of the target price of $8.5.
Invesco QQQ Trust, Series 1 (QQQ) is +2.21 at $287.06, with 1,018,280 shares traded. This represents a 6.6% increase from its 52 Week Low.
Alibaba Group Holding Limited (BABA) is +3.11 at $115.22, with 931,693 shares traded. As reported by Zacks, the current mean recommendation for BABA is in the "buy range".
Li Auto Inc. (LI) is +1.62 at $40.86, with 817,400 shares traded., following a 52-week high recorded in prior regular session.
Energy Transfer L.P. (ET) is +0.14 at $9.93, with 764,831 shares traded. As reported by Zacks, the current mean recommendation for ET is in the "buy range".
Polestar Automotive Holding UK Limited (PSNY) is unchanged at $11.95, with 656,997 shares traded.
Apple Inc. (AAPL) is +1.13 at $139.40, with 508,873 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Carnival Corporation (CCL) is +0.23 at $9.88, with 457,106 shares traded. CCL's current last sale is 53.41% of the target price of $18.5.
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 +1.13 at $139.40, with 508,873 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". ProShares UltraPro Short QQQ (SQQQ) is -1.43 at $55.42, with 2,334,360 shares traded. | As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Apple Inc. (AAPL) is +1.13 at $139.40, with 508,873 shares traded. As reported by Zacks, the current mean recommendation for NIO is in the "buy range". | Apple Inc. (AAPL) is +1.13 at $139.40, with 508,873 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The total Pre-Market volume is currently 37,654,586 shares traded. | As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Apple Inc. (AAPL) is +1.13 at $139.40, with 508,873 shares traded. The NASDAQ 100 Pre-Market Indicator is up 94.83 to 11,792.51. |
20561.0 | 2022-06-24 00:00:00 UTC | Stock Market News for Jun 24, 2022 | AAPL | https://www.nasdaq.com/articles/stock-market-news-for-jun-24-2022 | nan | nan | Wall Street closed higher on Thursday, led by defensive and tech stocks. Investors continued to weigh in the possibility of an economic downturn, and markets were driven by defensive sectors like utilities and health care, which will be relatively unaffected if the economy enters into recession. The yield on the 10-year treasury note hit its lowest level in roughly two weeks. All three major stock indexes ended in the green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.6% or 194.23 points to close at 30,677.36. Twenty components of the 30-stock index ended in the green, one remained unchanged, while nine ended in the red.
The tech-heavy Nasdaq Composite finished at 11,232.19, adding 1.6% or 179.11 points.
The S&P 500 gained 1% or 35.84 points to close at 3,795.73. Seven of the 11 broad sectors of the benchmark index closed in the green. The Utilities Select Sector SPDR (XLU), the Health Care Select Sector SPDR (XLV) and the Real Estate Select Sector SPDR (XLRE) rose 2.4%, 2.2% and 2%, respectively, while the Energy Select Sector SPDR (XLE) declined 3.7%.
The fear-gauge CBOE Volatility Index (VIX) went up 0.4% to 29.05. A total of 12.4 billion shares were traded Thursday, lower than the last 20-session average of 12.5 billion. Advancers outnumbered decliners on the NYSE by a 1.41-to-1 ratio. On the Nasdaq, a 1.67-to-1 ratio favored the advancing issues.
Investors Rush To The Safety Of Defensive Stocks
Fears of an impending recession have been ruling investor sentiment for the past few weeks due to various policy tightening measures, primarily interest rate hikes, taken up by the Fed to tackle inflation. Markets remained volatile as investors guessed and second-guessed the impact of these policies on the U.S. economy in the coming months. Weekly losses were, however, interspersed with days when markets finished in the green. Thursday was one such day when investors saw sectors like utilities and health care as reasonable fallback options that will be relatively unaffected in the event of a recession.
Oil Prices Remain A Drag On The Energy Sector
Oil prices fell on Thursday on concerns that rate hikes by the Fed could push the U.S. economy into recession, reducing fuel demand. Brent crude fell $1.69 to settle at $110.05/barrel, while WTI crude fell $1.92 to settle at $104.27/barrel. The Energy sector fell 3.8%, dragged down primarily by oil prices and continued its recent slump after outperforming other sectors throughout 2022, erasing further gains it had made earlier in the week. Energy was the single biggest drag on the S&P 500 on Thursday.
Tech Sector Boosted By Falling Yields In The Bond Market
Yields fell in the U.S. bond market on a belief that yields may have peaked in the near term even if inflation stayed high. Yields have dropped from their highest levels in over a decade reached before last week’s Fed meeting, when the 75-basis-point-rate hike, the biggest increase since 1994, was announced. The benchmark U.S. 10-year treasury note yield fell to 3.005% in the session, before finishing at 3.070%. The yield has dropped from 3.498% on Jun 14, the worst fall since April 2011.
Bond yields move inversely to prices, and growth stocks, such as from the mega-cap tech space, look lucrative in the event of yields going down as they do not look overvalued in the near term. Nasdaq was the biggest mover on the day, riding on tech stocks.
Consequently, shares of Apple Inc. AAPL and Microsoft Corporation MSFT gained 2.2% and 2.3%, respectively. Apple currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The Labor Department said on Thursday that initial jobless claims fell by 2,000 to 229,000, for the week ending Jun 18. The previous week's level was revised up by 2,000 from 229,000 to 231,000. The four-week moving average came in at 223,500, marking an increase of 4,500 from the previous week’s revised average of 219,000.
However, continuing claims came in at 1,315,000, increasing 5,000 from the previous week’s revised level. The previous week's numbers were revised down by 2,000 from 1,312,000 to 1,310,000. The 4-week moving average came in at 1,310,000, a decrease of 7,000 from the previous week's revised average. This is the lowest level for this average since Jan 3, 1970, when it was 1,280,250.
American Petroleum Institute reported that U.S. crude inventories had risen by 5.61 million barrels against a consensus of decline of 1.43 million barrels. This is the first build of more than 5 million barrels since mid-February.
Stocks That Have Made Headline
FedEx Q4 Earnings Miss, Stock Up on Upbeat FY23 View
FedEx Corporation’s FDX fourth-quarter fiscal 2022 (ended May 31, 2022) earnings (excluding $4.74 from non-recurring items) of $6.87 per share missed the Zacks Consensus Estimate of $6.91. (Read More)
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.
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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. | Consequently, shares of Apple Inc. AAPL and Microsoft Corporation MSFT gained 2.2% and 2.3%, respectively. Apple Inc. (AAPL): Free Stock Analysis Report Investors continued to weigh in the possibility of an economic downturn, and markets were driven by defensive sectors like utilities and health care, which will be relatively unaffected if the economy enters into recession. | Consequently, shares of Apple Inc. AAPL and Microsoft Corporation MSFT gained 2.2% and 2.3%, respectively. Apple Inc. (AAPL): Free Stock Analysis Report The Utilities Select Sector SPDR (XLU), the Health Care Select Sector SPDR (XLV) and the Real Estate Select Sector SPDR (XLRE) rose 2.4%, 2.2% and 2%, respectively, while the Energy Select Sector SPDR (XLE) declined 3.7%. | Consequently, shares of Apple Inc. AAPL and Microsoft Corporation MSFT gained 2.2% and 2.3%, respectively. Apple Inc. (AAPL): Free Stock Analysis Report The Utilities Select Sector SPDR (XLU), the Health Care Select Sector SPDR (XLV) and the Real Estate Select Sector SPDR (XLRE) rose 2.4%, 2.2% and 2%, respectively, while the Energy Select Sector SPDR (XLE) declined 3.7%. | Consequently, shares of Apple Inc. AAPL and Microsoft Corporation MSFT gained 2.2% and 2.3%, respectively. Apple Inc. (AAPL): Free Stock Analysis Report Seven of the 11 broad sectors of the benchmark index closed in the green. |
20562.0 | 2022-06-24 00:00:00 UTC | 3 Cathie Wood Stocks to Buy and Hold for the Long Haul | AAPL | https://www.nasdaq.com/articles/3-cathie-wood-stocks-to-buy-and-hold-for-the-long-haul | nan | nan | Ark Investment Management CEO Cathie Wood is often regarded as Wall Street's most bullish technology investor. She manages a group of nine exchange-traded funds (ETFs) focused on various areas of innovation, from financial technology to space exploration.
Those funds have been clobbered amid the broader market sell-off. The flagship Ark Innovation ETF (NYSEMKT: ARKK) has tumbled 75% from its all-time high, but many of the individual stocks it holds still have remarkable long-term potential. Three Motley Fool contributors have identified Unity Software (NYSE: U), Roku (NASDAQ: ROKU), and Nvidia (NASDAQ: NVDA) as some of the best Cathie Wood picks of the bunch to buy now and hold. Here's why.
The present and future of gaming
Anthony Di Pizio (Unity Software): Video games are now among the most popular forms of entertainment globally -- the industry was worth over $180 billion in 2021. And mobile gaming now accounts for more than half of that value thanks to today's powerful smartphones, which allow players to access their favorite titles from almost anywhere. New titles are published constantly as developers reach for a piece of that massive pie. But when everyone's digging for gold, the most lucrative business opportunities often lie in selling shovels, and Unity Software does just that -- providing the world's leading suite of development tools for game creators.
Unity Pro -- its flagship platform -- provides a low-code way for creators to bring their games to life, but the company also supports those projects once they are live and on the market. It offers analytics tools to help diagnose potential issues and collect user feedback to improve the overall experience, and developers can also leverage Unity's advertising platform and its in-app purchases plugin to generate revenue more.
In 2021, 72% of the top 1,000 mobile games were created with Unity, and in fact, more than 50% of all games across all platforms were made with the company's tools. But Unity serves more than just game developers. Its powerful 3D rendering tools are used by film creators, and even in industrial applications for the design of new products. Overall, it's estimated that 3.9 billion people consumed content made with Unity every single month last year.
Unity generated $320 million in revenue during Q1 2022, a 36% year-over-year jump. But that result wasn't as strong as investors expected. The company, like many others, is grappling with challenges stemming from Apple's (NASDAQ: AAPL) move last year to enhance user privacy for owners of iOS-powered devices. Those changes made it harder for Unity's clients to use highly targeted ads to attract customers.
Still, with Unity stock down 83% from its all-time high, this might be an opportunity to build a long-term position ahead of an eventual broader market recovery. The endorsement of Cathie Wood, one of the world's top technology investors, is just a bonus.
Everybody wants to own Roku
Jamie Louko (Roku): Occupying prominent positions in two of Ark Invest's ETFs, Roku is the third-largest holding in the firm's combined portfolios, signaling how optimistic Wood is about its future. That view is understandable considering that Roku is the top streaming platform in the U.S., Canada, and Mexico, with almost 21 billion hours streamed globally in the first quarter.
The company is looking to leverage its leadership to capitalize on the growth in ad spending on streaming video. Roku cited Nielsen reports that in the U.S., audiences spend 46% of their TV time streaming,, while eMarketer reports that advertisers put just 18% of their TV ad budgets toward streaming. That percentage will likely grow as advertisers adjust to the fact that Americans are spending more time watching streaming services, and Roku could be a major beneficiary.
The company has already benefited from the shift to streaming in the U.S. with revenue of almost $734 million in Q1. Roku also generated $87 million in Q1 free cash flow, which could be invested to further its dominance.
Roku isn't just attracting the attention of Wood -- Netflix (NASDAQ: NFLX) also appears to have its eye on it. Rumors came out recently that Netflix was looking to buy Roku, and I can't say I'd blame it. It wouldn't be bad for it to control a leading streaming platform with more than 61 million active accounts that it could use to push more consumers toward Netflix. While these are just rumors, it makes sense that Netflix would be interested in making a bid.
That said, Roku CEO and founder Anthony Wood would likely be against such a deal. As of April 14, he owned over 17.7 million shares. Considering he believes Roku has a significant opportunity ahead, the chances are slim that he would be looking to cash out now.
Trading at just 3.8 times sales, Roku looks like a bargain, especially given its scale and the opportunities ahead of it. Advertisers could flock to it as an increasing share of ad budgets moves to streaming, and those rising revenues could propel the stock higher. I would follow in Wood's footsteps and pick up a few shares at these prices.
A semiconductor company that specializes in artificial intelligence
Trevor Jennewine (Nvidia): Gamers and creators of 3D imagery have long recognized Nvidia graphics cards as the gold standard for rendering cutting-edge visual effects. In fact, Nvidia currently holds a 78% market share in discrete graphics processing units (GPUs) and an over 90% market share in workstation graphics. But its GPUs have also become the computational accelerators of choice in data centers, particularly where artificial intelligence (AI) workloads are concerned. In fact, it currently holds a 90% market share in the supercomputer accelerator market, and its technology helps power every major cloud platform.
Nvidia's competitive edge is built on its best-in-class hardware, but the company has reinforced its strong market position by growing its portfolio of supporting software. For instance, Nvidia AI Enterprise is a suite of software that accelerates the development and simplifies the deployment of AI applications. Nvidia also provides frameworks for specific use cases, including Clara for AI healthcare applications, Riva for conversational AI applications, and Isaac for AI robotics applications.
Financially, Nvidia is growing at a blistering pace. Its revenue soared 53% to $29.5 billion over the past year, and free cash flow climbed 44% to $7.9 billion. Also noteworthy, gross profit margin jumped 280 basis points to 65.3%, and Nvidia CFO Colette Kress says that trend is set to continue as the portion of revenue provided by software grows. In other words, Nvidia should become even more profitable over time.
On that note, shareholders have good reason to be optimistic about Nvidia's future. The company puts its total market opportunity at a whopping $1 trillion, and it has demonstrated its capacity for innovation on countless occasions. For instance, it is preparing to launch its first central processing unit (CPU). According to management, the Grace CPU will be available in early 2023, and will offer 10 times the performance of the fastest server chip on the market today.
That type of innovation should keep Nvidia at the forefront of the semiconductor industry, yet its shares are trading at just 13.6 times sales -- well below their five-year average of 17 times sales. With that in mind, now looks like a great time to buy this growth stock.
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Anthony Di Pizio has no position in any of the stocks mentioned. Jamie Louko has positions in Apple, Nvidia, Roku, and Unity Software Inc. Trevor Jennewine has positions in Nvidia and Roku. The Motley Fool has positions in and recommends Apple, Netflix, Nvidia, Roku, and Unity Software 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 company, like many others, is grappling with challenges stemming from Apple's (NASDAQ: AAPL) move last year to enhance user privacy for owners of iOS-powered devices. But when everyone's digging for gold, the most lucrative business opportunities often lie in selling shovels, and Unity Software does just that -- providing the world's leading suite of development tools for game creators. It offers analytics tools to help diagnose potential issues and collect user feedback to improve the overall experience, and developers can also leverage Unity's advertising platform and its in-app purchases plugin to generate revenue more. | The company, like many others, is grappling with challenges stemming from Apple's (NASDAQ: AAPL) move last year to enhance user privacy for owners of iOS-powered devices. The present and future of gaming Anthony Di Pizio (Unity Software): Video games are now among the most popular forms of entertainment globally -- the industry was worth over $180 billion in 2021. Jamie Louko has positions in Apple, Nvidia, Roku, and Unity Software Inc. Trevor Jennewine has positions in Nvidia and Roku. | The company, like many others, is grappling with challenges stemming from Apple's (NASDAQ: AAPL) move last year to enhance user privacy for owners of iOS-powered devices. Three Motley Fool contributors have identified Unity Software (NYSE: U), Roku (NASDAQ: ROKU), and Nvidia (NASDAQ: NVDA) as some of the best Cathie Wood picks of the bunch to buy now and hold. Jamie Louko has positions in Apple, Nvidia, Roku, and Unity Software Inc. Trevor Jennewine has positions in Nvidia and Roku. | The company, like many others, is grappling with challenges stemming from Apple's (NASDAQ: AAPL) move last year to enhance user privacy for owners of iOS-powered devices. Three Motley Fool contributors have identified Unity Software (NYSE: U), Roku (NASDAQ: ROKU), and Nvidia (NASDAQ: NVDA) as some of the best Cathie Wood picks of the bunch to buy now and hold. In 2021, 72% of the top 1,000 mobile games were created with Unity, and in fact, more than 50% of all games across all platforms were made with the company's tools. |
20563.0 | 2022-06-24 00:00:00 UTC | Should You Buy Apple Stock Right Now? | AAPL | https://www.nasdaq.com/articles/should-you-buy-apple-stock-right-now-0 | nan | nan | Apple (NASDAQ: AAPL) has been a fantastic long-term investment, but year to date the stock has fallen nearly 23%. The drop has come as investors worry about sky-high inflation and the Federal Reserve's aggressive approach to bringing it back down by hiking the federal funds rate.
Apple's share price drop, mixed with the general pessimism in the market right now, has left some investors wondering if Apple's stock is still a buy. I think there's a strong case for adding more shares (or starting a position) in the tech giant right now. Here's why.
Image source: Getty Images.
Tons of cash to weather any storm
Some investors are exiting technology stocks right now in part because many of them aren't profitable and won't be for years to come. Apple doesn't have this problem.
At the end of the most recent quarter, the company had $193 billion in cash on hand. Even when you account for the company's debt, Apple still had $73 billion left over.
At a time when investors are hunting for profitable companies that could weather a potential economic slowdown, Apple looks like a no-brainer.
Service revenue continues to grow
Apple has built a very successful services business that some investors may still not fully appreciate. Consider that in the company's second quarter, Apple's services revenue increased 17% year over year to an impressive $19.8 billion.
Apple's services revenue accounted for more than 20% of the company's total sales, and the tech giant now has 825 million services subscribers, a 25% gain in the past 12 months.
Apple already has enviable gross margins of nearly 44%, but its services gross margins are even better, at nearly 73%. Investors should also consider that Apple still has more opportunities in the services space, including a potential subscription plan for its iPhone and other devices.
Plenty of potential for new products
Bloomberg reported back in May that Apple had shown its board of directors an augmented reality (AR) and virtual reality (VR) headset. Apple has focused a lot of attention on AR over the past several years with iPhone apps, but an AR device could be a big step into a new category.
Showing its board such a device could indicate that the company is close to releasing it, perhaps as early as next year. Noted Apple analyst Katy Huberty estimates that an AR/VR device could bring Apple $29 billion in revenue by 2026.
While these are just estimates based on a potential Apple device, the company does appear to be closer to such a product. Apple CEO Tim Cook said this month that people should "stay tuned and you'll see what we have to offer" in the AR space.
While Apple hasn't confirmed an AR device yet, Cook's comments continue to hint that Apple has bigger plans for this space than just AR apps.
Apple continues to create shareholder value
And finally, Apple has boosted shareholder value by using its cash hoard for share buybacks and dividend payments.
Apple's CFO, Luca Maestri, said on the company's most recent quarterly earnings call, "Our strong operating performance generated over $28 billion in operating cash flow and allowed us to return nearly $27 billion to our shareholders during the quarter."
That figure came from a 5% increase in Apple's dividend and ongoing share repurchases -- with more to come. Apple's board approved a $90 billion increase to the company's current share repurchase program, which will continue to add value to existing shareholders by reducing the number of shares on the market.
With all of the above in mind, Apple's stock looks like a great deal, especially at a time when investors are wisely focused on finding profitable companies that still have room to grow.
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Chris Neiger 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. | Apple (NASDAQ: AAPL) has been a fantastic long-term investment, but year to date the stock has fallen nearly 23%. Apple CEO Tim Cook said this month that people should "stay tuned and you'll see what we have to offer" in the AR space. With all of the above in mind, Apple's stock looks like a great deal, especially at a time when investors are wisely focused on finding profitable companies that still have room to grow. | Apple (NASDAQ: AAPL) has been a fantastic long-term investment, but year to date the stock has fallen nearly 23%. Consider that in the company's second quarter, Apple's services revenue increased 17% year over year to an impressive $19.8 billion. While Apple hasn't confirmed an AR device yet, Cook's comments continue to hint that Apple has bigger plans for this space than just AR apps. | Apple (NASDAQ: AAPL) has been a fantastic long-term investment, but year to date the stock has fallen nearly 23%. Apple's share price drop, mixed with the general pessimism in the market right now, has left some investors wondering if Apple's stock is still a buy. Noted Apple analyst Katy Huberty estimates that an AR/VR device could bring Apple $29 billion in revenue by 2026. | Apple (NASDAQ: AAPL) has been a fantastic long-term investment, but year to date the stock has fallen nearly 23%. Consider that in the company's second quarter, Apple's services revenue increased 17% year over year to an impressive $19.8 billion. While these are just estimates based on a potential Apple device, the company does appear to be closer to such a product. |
20564.0 | 2022-06-24 00:00:00 UTC | Should You Buy Stocks Now or Wait? Here's Buffett's Advice. | AAPL | https://www.nasdaq.com/articles/should-you-buy-stocks-now-or-wait-heres-buffetts-advice. | nan | nan | It's official. The S&P 500 has now entered bear-market territory. After peaking at the very start of 2022, the broad index has lost just over 20% of its value as of this writing.
A perfect storm of factors is to blame. Soaring inflation that's at a 40-year high, geopolitical turmoil, ongoing supply chain challenges, and a Federal Reserve that is aggressively raising interest rates have all scared investors from being optimistic to expecting a full-on recession in the near term. And the question of what to do from an investing standpoint is a pressing one.
In times like these, it's worthwhile to try and understand what an investing legend like Warren Buffett thinks we should do. Let's take a closer look.
Image source: The Motley Fool.
Stocks are on sale
Imagine that the things you buy in your daily life suddenly became cheaper. It might be hard to think about this now, but if the prices of gas, a car, rent, food, or even an Apple iPhone all dropped by a significant amount, how would you react? Consumers would be ecstatic because they'd be able to purchase more of the things they want and need at far lower prices. It's important to note that in this thought exercise, the consumer understands full well the value of those important things that he or she is buying.
Why is it, then, that when stock prices go down, everyone panics? If one looks at buying stocks like owning pieces of real businesses, which is what real investing is and what Buffett emphasizes, then shouldn't we all get excited in a time like this?
There are a couple things to consider in this situation, though. If you have a time horizon that is 10 years or more into the future, then buying stocks at cheaper prices is an advantageous thing for you. But if you're someone who is currently in or near retirement, then no doubt seeing the value of your portfolio plummet can be painful.
For most younger investors, however, now is an excellent time to buy stocks. The S&P 500 has always bounced back from a low to continue reaching new highs over time. Those who were aggressive in times of major uncertainty gained the most. "Be greedy when others are fearful," as Buffett says. There's definitely a lot of fear out there right now.
Don't time the market
Now that we've discussed whether it's a good idea to buy stocks when prices are down, let's look at the decision of buying now versus waiting. The Motley Fool recommends that investors consistently buy stocks, let's say every month, regardless of what is happening with the economy or the stock market. This is called dollar-cost averaging.
The advantage here is that you are simply not trying to time the stock market, which studies have shown is a loser's game. No one knows with any real level of certainty if the market is going to go up or down in the near future. But by focusing on what you can control, investing on a regular basis, and buying high-quality, blue-chip businesses, you can ensure that over time you will benefit from the market's gains.
It's impossible to call the stock market's bottom. What's worse is that you risk losing out on any possible gains by being on the sidelines and waiting.
This is undoubtedly one of the most difficult times to be an investor. But if you remain committed to your investment strategy and adopt a long-term mindset, the current environment will prove to be a fantastic buying opportunity.
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Neil Patel 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. | Soaring inflation that's at a 40-year high, geopolitical turmoil, ongoing supply chain challenges, and a Federal Reserve that is aggressively raising interest rates have all scared investors from being optimistic to expecting a full-on recession in the near term. It might be hard to think about this now, but if the prices of gas, a car, rent, food, or even an Apple iPhone all dropped by a significant amount, how would you react? But by focusing on what you can control, investing on a regular basis, and buying high-quality, blue-chip businesses, you can ensure that over time you will benefit from the market's gains. | If you have a time horizon that is 10 years or more into the future, then buying stocks at cheaper prices is an advantageous thing for you. The Motley Fool recommends that investors consistently buy stocks, let's say every month, regardless of what is happening with the economy or the stock market. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. | If one looks at buying stocks like owning pieces of real businesses, which is what real investing is and what Buffett emphasizes, then shouldn't we all get excited in a time like this? Don't time the market Now that we've discussed whether it's a good idea to buy stocks when prices are down, let's look at the decision of buying now versus waiting. The Motley Fool recommends that investors consistently buy stocks, let's say every month, regardless of what is happening with the economy or the stock market. | If one looks at buying stocks like owning pieces of real businesses, which is what real investing is and what Buffett emphasizes, then shouldn't we all get excited in a time like this? If you have a time horizon that is 10 years or more into the future, then buying stocks at cheaper prices is an advantageous thing for you. That's right -- they think these 10 stocks are even better buys. |
20565.0 | 2022-06-24 00:00:00 UTC | ANALYSIS -Swiss policy pivot signals exit for big stock and bond investor | AAPL | https://www.nasdaq.com/articles/analysis-swiss-policy-pivot-signals-exit-for-big-stock-and-bond-investor | nan | nan | By Yoruk Bahceli, Saikat Chatterjee and Tommy Wilkes
LONDON, June 24 (Reuters) - From Silicon Valley shares to U.S. and European government bonds, securities that are already under heavy pressure stand to lose a major buyer as Switzerland ends its long-standing policy of recycling euros and dollars into foreign markets.
The Swiss National Bank recently delivered a surprise half-point interest rate hike and for the first time in years omitted references in its statement to the franc being highly valued.
The shift is a momentous one, suggesting the SNB will no longer prioritise weakening the currency by purchasing foreign exchange - a policy that enabled it to build a reserve pile of nearly $1 trillion.
Unlike most central banks, it recycled these proceeds of intervention into world markets rather than holding them at home, making it a huge stock and bond investor. In recent years it ranked among the top shareholders in the likes of Apple, Amazon and Microsoft.
Any reduction in its purchases, or an eventual move towards selling - a possibility after the bank said it is also ready to check a weakening of the franc - risks heightening volatility on already shaky markets.
"The SNB's departure from its previous approach to keep the franc weak means they will unwind their large U.S. stock holdings, particularly in FAANGS, which should increase selling pressure on these mega-cap names," said Kaspar Hense, senior portfolio manager at Bluebay Asset Management, referring to the tech quintet of Facebook (Meta), Apple, Amazon, Netflix and Google.
The SNB had already cut back forex buying in recent weeks, as evidenced by a drop in "total sight deposits" at Swiss banks that are seen as a proxy for intervention. These deposits declined by 1.3 billion Swiss francs in the week ending June 17, versus a rise of 756 million francs a month earlier and an increase of nearly 6 billion francs in early April.
The SNB said it would seek to minimise the market impact whether it were to let existing bonds expire or actively sell assets, with the focus remaining on the overall liquidity of the portfolio.
With inflation above the SNB's target, the franc has been allowed to rise to seven-year highs against the euro EURCHF=EBS, briefly pushing beyond one franc per euro in March. It has performed less well against the dollar CHF=EBS, which has soared on expectations of aggressive policy tightening by the U.S. Federal Reserve.
FAANGs
The SNB's recent policy shift is not quite on a par with its shock decision in 2015 to ditch the franc's euro exchange rate peg. But tighter policy and its potential step back from markets coincides with a deepening market selloff that has sent global stocks to a 21% loss this year.
Bond yields have also surged as inflation hits multi-decade highs, prompting steep rate hikes.
"In isolation, the impact (of potential asset sales) would have been limited but it comes in the middle of a sharp re-pricing and lower market liquidity so the effect will likely be magnified," said ING senior rates strategist Antoine Bouvet.
It is difficult to gauge accurately the impact of any investment pullback, as the SNB does not provide a breakdown of exactly which assets it holds in each currency.
SNB data does show that a quarter of its FX reserves were in equities as of end-March.
At that time, U.S. regulatory filings show the SNB's U.S. equity portfolio was worth $177 billion, including $12.4 billion in Apple shares, $9.5 billion in Microsoft and $6.4 billion in Amazon. Other holdings included $1.5 billion in Exxon Mobil and $1.1 billion in Coca Cola.
The SNB also holds 600 billion francs in foreign government bonds, making up 64% of FX reserves, according to Reuters calculations from SNB data.
Assuming bonds make up the same share of holdings in each currency as they do across its entire FX portfolio, Reuters calculations show that might include some $248 billion of U.S. Treasuries and 221 billion euros of euro zone government debt - most of it likely to be in top-rated bonds like Germany's.
"Their activities have been quite large over the last few years, and we did see in general increased euro holdings by central banks, and the SNB is one of them," BofA strategist Sphia Salim said. She predicted pressure on short-dated German bonds.
Unsurprisingly, last week's policy pivot sent euro zone and U.S. bond yields surging.
If the SNB were to wind down bond holdings, it would first stop reinvesting the proceeds of maturing bonds, Lyn Graham-Taylor, senior rates strategist at Rabobank said. That could see the SNB drop nearly 5 billion euros of German government debt by year-end, he estimates.
In 2023, "you'll get those concerns around the SNB potentially selling bonds, merged with higher issuance next year and the potential for ECB QT," BofA's Salim said - a reference to expectations the European Central Bank may eventually start reducing its own balance sheet, a process known as Quantitative Tightening.
(Additional reporting by John Revill in Zurich and Noel Randewich in New York Editing by Sujata Rao and Catherine Evans)
((saikat.chatterjee@thomsonreuters.com; +44-20-7542-1713; Reuters Messaging: saikat.chatterjee.reuters.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 Yoruk Bahceli, Saikat Chatterjee and Tommy Wilkes LONDON, June 24 (Reuters) - From Silicon Valley shares to U.S. and European government bonds, securities that are already under heavy pressure stand to lose a major buyer as Switzerland ends its long-standing policy of recycling euros and dollars into foreign markets. The Swiss National Bank recently delivered a surprise half-point interest rate hike and for the first time in years omitted references in its statement to the franc being highly valued. "In isolation, the impact (of potential asset sales) would have been limited but it comes in the middle of a sharp re-pricing and lower market liquidity so the effect will likely be magnified," said ING senior rates strategist Antoine Bouvet. | At that time, U.S. regulatory filings show the SNB's U.S. equity portfolio was worth $177 billion, including $12.4 billion in Apple shares, $9.5 billion in Microsoft and $6.4 billion in Amazon. The SNB also holds 600 billion francs in foreign government bonds, making up 64% of FX reserves, according to Reuters calculations from SNB data. Assuming bonds make up the same share of holdings in each currency as they do across its entire FX portfolio, Reuters calculations show that might include some $248 billion of U.S. Treasuries and 221 billion euros of euro zone government debt - most of it likely to be in top-rated bonds like Germany's. | At that time, U.S. regulatory filings show the SNB's U.S. equity portfolio was worth $177 billion, including $12.4 billion in Apple shares, $9.5 billion in Microsoft and $6.4 billion in Amazon. The SNB also holds 600 billion francs in foreign government bonds, making up 64% of FX reserves, according to Reuters calculations from SNB data. Assuming bonds make up the same share of holdings in each currency as they do across its entire FX portfolio, Reuters calculations show that might include some $248 billion of U.S. Treasuries and 221 billion euros of euro zone government debt - most of it likely to be in top-rated bonds like Germany's. | At that time, U.S. regulatory filings show the SNB's U.S. equity portfolio was worth $177 billion, including $12.4 billion in Apple shares, $9.5 billion in Microsoft and $6.4 billion in Amazon. The SNB also holds 600 billion francs in foreign government bonds, making up 64% of FX reserves, according to Reuters calculations from SNB data. Assuming bonds make up the same share of holdings in each currency as they do across its entire FX portfolio, Reuters calculations show that might include some $248 billion of U.S. Treasuries and 221 billion euros of euro zone government debt - most of it likely to be in top-rated bonds like Germany's. |
20566.0 | 2022-06-24 00:00:00 UTC | US STOCKS-Futures rise as investors scale back rate hike expectations | AAPL | https://www.nasdaq.com/articles/us-stocks-futures-rise-as-investors-scale-back-rate-hike-expectations | nan | nan | For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Futures up: Dow 0.61%, S&P 0.70%, Nasdaq 0.89%
June 24 (Reuters) - U.S. stock index futures rose on Friday as signs of slowing economic growth and falling commodity prices eased expectations over how high the Federal Reserve will raise interest rates to rein in inflation.
Fears that aggressive tightening by major central banks will cause a sharp economic downturn have roiled financial markets this month, pushing the benchmark S&P 500 .SPX to confirm a bear market or a 20% fall from its recent peak.
Data on Thursday showed U.S. business activity slowed considerably in June, driving investors to scale back bets on where interest rates may peak and bring forward their views on the timing of rate cuts.
Money markets see U.S. interest rates peaking at around 3.4% by next March, far below the just above 4% priced for June 2023 before last Wednesday's Fed meeting. FEDWATCH
Copper prices on Friday were set for their biggest weekly fall in a year and other industrial metals also tumbled, while crude oil was headed for a second straight weekly decline.
The Fed's commitment to reining in 40-year-high inflation is "unconditional," Chair Jerome Powell told lawmakers on Thursday, a day after saying it was not trying to provoke a recession but that was "certainly a possibility."
The main stock indexes looked set to notch their first weekly gain in four, with healthcare, real estate and utilities - among sectors considered as safer bets during times of economic uncertainty - outperforming so far in the week.
Megacap stocks such as Apple Inc AAPL.O and Tesla TSLA.O rose about 1% in premarket trading. Rising interest rates have hurt shares of the mega-cap growth companies as their valuations rely more heavily on future earnings.
At 06:58 a.m. ET, Dow e-minis 1YMcv1 were up 187 points, or 0.61%, S&P 500 e-minis EScv1 were up 26.75 points, or 0.7%, and Nasdaq 100 e-minis NQcv1 were up 104.5 points, or 0.89%.
FedEx Corp FDX.N rose 3.4% after the parcel delivery company issued a stronger-than-expected full-year profit forecast despite softening global demand for shipping.
Bank stocks were mixed after the Federal Reserve's annual "stress test" exercise showed that the lenders have enough capital to weather a severe economic downturn.
Citigroup Inc C.N slipped 0.3%, while Bank of America Corp BAC.N rose 0.3% and Morgan Stanley MS.N 0.7%.
Zendesk Inc ZEN.N soared 55.4% after reports said the software company was close to a deal with a group of buyout firms that includes Hellman & Friedman LLC and Permira.
The University of Michigan's survey on U.S. consumer sentiment in June and new home sales data will be published later in the day.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)
((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2787;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Megacap stocks such as Apple Inc AAPL.O and Tesla TSLA.O rose about 1% in premarket trading. The Fed's commitment to reining in 40-year-high inflation is "unconditional," Chair Jerome Powell told lawmakers on Thursday, a day after saying it was not trying to provoke a recession but that was "certainly a possibility." Bank stocks were mixed after the Federal Reserve's annual "stress test" exercise showed that the lenders have enough capital to weather a severe economic downturn. | Megacap stocks such as Apple Inc AAPL.O and Tesla TSLA.O rose about 1% in premarket trading. Futures up: Dow 0.61%, S&P 0.70%, Nasdaq 0.89% June 24 (Reuters) - U.S. stock index futures rose on Friday as signs of slowing economic growth and falling commodity prices eased expectations over how high the Federal Reserve will raise interest rates to rein in inflation. Money markets see U.S. interest rates peaking at around 3.4% by next March, far below the just above 4% priced for June 2023 before last Wednesday's Fed meeting. | Megacap stocks such as Apple Inc AAPL.O and Tesla TSLA.O rose about 1% in premarket trading. Futures up: Dow 0.61%, S&P 0.70%, Nasdaq 0.89% June 24 (Reuters) - U.S. stock index futures rose on Friday as signs of slowing economic growth and falling commodity prices eased expectations over how high the Federal Reserve will raise interest rates to rein in inflation. Fears that aggressive tightening by major central banks will cause a sharp economic downturn have roiled financial markets this month, pushing the benchmark S&P 500 .SPX to confirm a bear market or a 20% fall from its recent peak. | Megacap stocks such as Apple Inc AAPL.O and Tesla TSLA.O rose about 1% in premarket trading. For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window. Futures up: Dow 0.61%, S&P 0.70%, Nasdaq 0.89% June 24 (Reuters) - U.S. stock index futures rose on Friday as signs of slowing economic growth and falling commodity prices eased expectations over how high the Federal Reserve will raise interest rates to rein in inflation. |
20567.0 | 2022-06-23 00:00:00 UTC | US STOCKS-S&P 500 ends higher, boosted by defensives, tech | AAPL | https://www.nasdaq.com/articles/us-stocks-sp-500-ends-higher-boosted-by-defensives-tech | nan | nan | By Lewis Krauskopf, Devik Jain and Sruthi Shankar
June 23 (Reuters) - The S&P 500 ended higher on Thursday after a day of choppy trading, as gains in defensive and tech shares countered declines for economically sensitive groups as worries persisted about a potential recession.
The S&P 500 swung between positive and negative during the session, as investors weighed whether the Federal Reserve's aggressive rate hikes to control surging inflation would wound the economy.
Benchmark U.S. Treasury yields fell to two-week lows, supporting tech and other growth stocks.
Trading has remained volatile in the wake of the S&P 500 last week logging its biggest weekly percentage drop since March 2020. Investors are weighing how far stocks could fall after the index earlier this month fell over 20% from its January all-time high, confirming the common definition of a bear market.
“There is a tremendous amount of uncertainty about the outlook and so the market is confused,” said Walter Todd, chief investment officer at Greenwood Capital in South Carolina.
According to preliminary data, the S&P 500 .SPX gained 36.17 points, or 0.96%, to end at 3,796.06 points, while the Nasdaq Composite .IXIC gained 180.02 points, or 1.63%, to 11,233.10. The Dow Jones Industrial Average .DJI rose 200.60 points, or 0.66%, to 30,683.73.
In his second day of testifying before Congress, U.S. central bank chief Jerome Powell said the Fed's commitment to reining in 40-year-high inflation is "unconditional" but also comes with the risk of higher unemployment.
U.S. business activity slowed considerably in June as high inflation and declining consumer confidence dampened demand across the board, a survey on Thursday showed.
“The Fed wants to see things start to slow and the data is starting to reflect that,” said James Ragan, director of wealth management research at D.A. Davidson.
Citigroup analysts are forecasting a near 50% probability of a global recession.
“Economic growth is slowing. Is it going to slow enough to go into a recession, that’s the big question,” Ragan said.
Defensive groups considered safer bets in rocky economic times were among the top-performing S&P 500 sectors, including utilities .SPLRCU, consumer staples .SPLRCS and healthcare .SPXHC.
Gains in tech heavyweights Microsoft MSFT.O and Apple AAPL.O also helped support the S&P 500.
The energy sector .SPNY slumped, continuing its recent pullback after soundly outperforming the market for most of 2022. Declines in Exxon Mobil XOM.N and Chevron CVX.N were among the biggest individual drags on the S&P 500.
Other economically sensitive sectors also fell, including declines for materials .SPLRCM and financials .SPSY.
(Reporting by Lewis Krauskopf in New York, Devik Jain and Sruthi Shankar in Bengaluru and Boleslaw Lasocki in Gdansk; Editing by Arun Koyyur and Cynthia Osterman)
((lewis.krauskopf@thomsonreuters.com; 646-223-6082; Reuters Messaging: lewis.krauskopf.thomsonreuters.com@reuters.net, Twitter: @LKrauskopf))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Gains in tech heavyweights Microsoft MSFT.O and Apple AAPL.O also helped support the S&P 500. By Lewis Krauskopf, Devik Jain and Sruthi Shankar June 23 (Reuters) - The S&P 500 ended higher on Thursday after a day of choppy trading, as gains in defensive and tech shares countered declines for economically sensitive groups as worries persisted about a potential recession. In his second day of testifying before Congress, U.S. central bank chief Jerome Powell said the Fed's commitment to reining in 40-year-high inflation is "unconditional" but also comes with the risk of higher unemployment. | Gains in tech heavyweights Microsoft MSFT.O and Apple AAPL.O also helped support the S&P 500. By Lewis Krauskopf, Devik Jain and Sruthi Shankar June 23 (Reuters) - The S&P 500 ended higher on Thursday after a day of choppy trading, as gains in defensive and tech shares countered declines for economically sensitive groups as worries persisted about a potential recession. According to preliminary data, the S&P 500 .SPX gained 36.17 points, or 0.96%, to end at 3,796.06 points, while the Nasdaq Composite .IXIC gained 180.02 points, or 1.63%, to 11,233.10. | Gains in tech heavyweights Microsoft MSFT.O and Apple AAPL.O also helped support the S&P 500. By Lewis Krauskopf, Devik Jain and Sruthi Shankar June 23 (Reuters) - The S&P 500 ended higher on Thursday after a day of choppy trading, as gains in defensive and tech shares countered declines for economically sensitive groups as worries persisted about a potential recession. According to preliminary data, the S&P 500 .SPX gained 36.17 points, or 0.96%, to end at 3,796.06 points, while the Nasdaq Composite .IXIC gained 180.02 points, or 1.63%, to 11,233.10. | Gains in tech heavyweights Microsoft MSFT.O and Apple AAPL.O also helped support the S&P 500. By Lewis Krauskopf, Devik Jain and Sruthi Shankar June 23 (Reuters) - The S&P 500 ended higher on Thursday after a day of choppy trading, as gains in defensive and tech shares countered declines for economically sensitive groups as worries persisted about a potential recession. Benchmark U.S. Treasury yields fell to two-week lows, supporting tech and other growth stocks. |
20568.0 | 2022-06-23 00:00:00 UTC | Apple's 'Buy Now Pay Later' Could Be Major Fintech Disruptor | AAPL | https://www.nasdaq.com/articles/apples-buy-now-pay-later-could-be-major-fintech-disruptor | nan | nan | Apple's (NASDAQ: AAPL) recent foray into fintech is intriguing. In this video clip from "The Future of Fintech" on Motley Fool Live, recorded on June 9, Fool.com contributors Jason Hall and Lou Whiteman discuss how the tech giant, with all of its resources, could be a gamechanger in the fintech industry.
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Jason Hall: I think this is just signaling that Apple is willing to give it a try. I trust Tim Cook, I trust Luca Maestri, the CFO there. They will take risks with products. They will not take risks with the balance sheet. The amount of cash that consistently is on the balance sheet is evidence of that. I trust these guys.
I think the biggest threat to the rest of the buy now pay later industry continues to be their ability to manage risk. It's far bigger than Apple, and we're going to find that if these guys are any good over the next two or three years as the credit cycle plays out. That's kind of my thoughts on it. Lou?
Lou Whiteman: Just round it up but I don't think Jason, you hit on it. This isn't the tech show. I think the thing we've all known about Apple for a long time, and I think it was really highlighted this week was the phone updates were nothing burger. Phones are a mature technology and we keep waiting for the what's next, and whether it's Apple car or the Apple TV a few years ago or fintech.
Apple is fully aware that they need a second act. I think a lot more than we perceive they do, given how great the phones are and what people are willing to pay for the phones. That's mature business and they need a second act.
For me I'm looking at fintechs that I invest in, I think there's a lot more opportunity in Apple with fintech than there is with an Apple car or something like that, and I'm going to be watching really closely because I do think with their balance sheet, with their resources and with the networks they have, this is a real natural player that could be a real pain in the side for a lot of fintech companies that we talk about every week here.
Jason Hall has no position in any of the stocks mentioned. Lou Whiteman 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. | Apple's (NASDAQ: AAPL) recent foray into fintech is intriguing. Find out why Apple is one of the 10 best stocks to buy now Our award-winning analyst team has spent more than a decade beating the market. I think the biggest threat to the rest of the buy now pay later industry continues to be their ability to manage risk. | Apple's (NASDAQ: AAPL) recent foray into fintech is intriguing. In this video clip from "The Future of Fintech" on Motley Fool Live, recorded on June 9, Fool.com contributors Jason Hall and Lou Whiteman discuss how the tech giant, with all of its resources, could be a gamechanger in the fintech industry. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. | Apple's (NASDAQ: AAPL) recent foray into fintech is intriguing. In this video clip from "The Future of Fintech" on Motley Fool Live, recorded on June 9, Fool.com contributors Jason Hall and Lou Whiteman discuss how the tech giant, with all of its resources, could be a gamechanger in the fintech industry. For me I'm looking at fintechs that I invest in, I think there's a lot more opportunity in Apple with fintech than there is with an Apple car or something like that, and I'm going to be watching really closely because I do think with their balance sheet, with their resources and with the networks they have, this is a real natural player that could be a real pain in the side for a lot of fintech companies that we talk about every week here. | Apple's (NASDAQ: AAPL) recent foray into fintech is intriguing. In this video clip from "The Future of Fintech" on Motley Fool Live, recorded on June 9, Fool.com contributors Jason Hall and Lou Whiteman discuss how the tech giant, with all of its resources, could be a gamechanger in the fintech industry. They will not take risks with the balance sheet. |
20569.0 | 2022-06-23 00:00:00 UTC | What A Recession Would Mean For Apple Stock | AAPL | https://www.nasdaq.com/articles/what-a-recession-would-mean-for-apple-stock | nan | nan | Apple’s (NASDAQ:AAPL) financial performance has been strong over the last two years, driven by surging demand for computing devices as the remote working and learning trend accelerated through the pandemic. For perspective, in FY’21, Apple’s revenues were up by about 40% versus 2019 levels, driven by soaring iPhone, Mac, and services sales. Apple’s margins have also expanded considerably, with gross margins as of Q2 FY’22 standing at 43.7%, driven by a more favorable product mix, higher services sales, and rising volumes, up from around 38% in FY’19. However, investors are concerned about whether the momentum will hold up. The U.S. economy could be headed into a recession, as the Federal Reserve hikes interest rates at a more aggressive pace to tame surging inflation. The central bank just carried out a 0.75% hike last week, its highest since 1994, and more similar hikes are looking likely in the coming months. Consumer confidence is also on the decline, as surging energy, grocery, and housing prices eat into household budgets. Apple stock is already pricing in some of the economic pain, with the stock remaining down by about 28% year-to-date.
So how will a potential recession hurt Apple? Demand for consumer electronics companies is levered toward discretionary spending, which could decline if the economy takes a turn for the worse. Apple could see some pressure on its sales as people are likely to delay purchases of the company’s increasingly pricey products. Moreover, unlike the 2008 great recession which the company navigated with relative ease as the iPhone was just launched around then, Apple’s core smartphone market is increasingly saturated, with the company banking on price increases and its ecosystem effect to drive sales. That said, there are a couple of trends that could help Apple’s business perform better than its peers. Apple’s fast-growing services business is accounting for a greater mix of sales and profits and we expect this business to fare well even over a recession. Wireless carriers are also likely to support the sales of the iPhone, via discounts and promotions, as they look to bring more customers onto their 5G networks. Moreover, economic indicators do not point to a very deep recession this time around, with household savings rising post the pandemic and banks also remaining well-capitalized.
We think Apple stock remains a good value at its current market price of about $132 per share, trading at about 21x forward earnings. This is well below the 31x multiple seen in 2021 and 38x in 2020. Moreover, Apple’s solid balance sheet, with over $190 billion in cash, as well as its share repurchases, could enable to stock to hold up better than the broader Nasdaq index through a recession. We have a $179 per share valuation for Apple, which is almost 35% ahead of the current market price. See our analysis on Apple Valuation: Is AAPL Stock Expensive Or Cheap? for an overview of what’s driving our price estimate for Apple. Also, see our analysis of Apple revenue for more details on the company’s key revenue streams and how they have been trending.
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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’s (NASDAQ:AAPL) financial performance has been strong over the last two years, driven by surging demand for computing devices as the remote working and learning trend accelerated through the pandemic. See our analysis on Apple Valuation: Is AAPL Stock Expensive Or Cheap? Moreover, economic indicators do not point to a very deep recession this time around, with household savings rising post the pandemic and banks also remaining well-capitalized. | See our analysis on Apple Valuation: Is AAPL Stock Expensive Or Cheap? Apple’s (NASDAQ:AAPL) financial performance has been strong over the last two years, driven by surging demand for computing devices as the remote working and learning trend accelerated through the pandemic. Apple’s margins have also expanded considerably, with gross margins as of Q2 FY’22 standing at 43.7%, driven by a more favorable product mix, higher services sales, and rising volumes, up from around 38% in FY’19. | Apple’s (NASDAQ:AAPL) financial performance has been strong over the last two years, driven by surging demand for computing devices as the remote working and learning trend accelerated through the pandemic. See our analysis on Apple Valuation: Is AAPL Stock Expensive Or Cheap? Moreover, unlike the 2008 great recession which the company navigated with relative ease as the iPhone was just launched around then, Apple’s core smartphone market is increasingly saturated, with the company banking on price increases and its ecosystem effect to drive sales. | Apple’s (NASDAQ:AAPL) financial performance has been strong over the last two years, driven by surging demand for computing devices as the remote working and learning trend accelerated through the pandemic. See our analysis on Apple Valuation: Is AAPL Stock Expensive Or Cheap? Apple stock is already pricing in some of the economic pain, with the stock remaining down by about 28% year-to-date. |
20570.0 | 2022-06-23 00:00:00 UTC | After Hours Most Active for Jun 23, 2022 : KGC, CMCSA, SWN, JD, AAPL, TSM, ERIC, SYF, SNAP, MSFT, CSX, GM | AAPL | https://www.nasdaq.com/articles/after-hours-most-active-for-jun-23-2022-%3A-kgc-cmcsa-swn-jd-aapl-tsm-eric-syf-snap-msft-csx | nan | nan | The NASDAQ 100 After Hours Indicator is down -24.51 to 11,673.17. The total After hours volume is currently 73,711,464 shares traded.
The following are the most active stocks for the after hours session:
Kinross Gold Corporation (KGC) is +0.01 at $3.98, with 4,978,683 shares traded. KGC's current last sale is 52.37% of the target price of $7.6.
Comcast Corporation (CMCSA) is unchanged at $39.11, with 4,894,923 shares traded. As reported by Zacks, the current mean recommendation for CMCSA is in the "buy range".
Southwestern Energy Company (SWN) is unchanged at $6.53, with 4,808,089 shares traded. Over the last four weeks they have had 3 up revisions for the earnings forecast, for the fiscal quarter ending Mar 2023. The consensus EPS forecast is $0.7. SWN's current last sale is 72.56% of the target price of $9.
JD.com, Inc. (JD) is unchanged at $61.90, with 3,828,156 shares traded. As reported by Zacks, the current mean recommendation for JD is in the "buy range".
Apple Inc. (AAPL) is -0.08 at $138.19, with 3,146,957 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) is -0.02 at $84.10, with 2,783,093 shares traded. As reported by Zacks, the current mean recommendation for TSM is in the "buy range".
Ericsson (ERIC) is +0.02 at $7.62, with 2,547,255 shares traded. ERIC's current last sale is 55.42% of the target price of $13.75.
Synchrony Financial (SYF) is unchanged at $28.22, with 2,123,981 shares traded. As reported by Zacks, the current mean recommendation for SYF is in the "buy range".
Snap Inc. (SNAP) is -0.04 at $13.90, with 2,109,188 shares traded. As reported by Zacks, the current mean recommendation for SNAP is in the "buy range".
Microsoft Corporation (MSFT) is -0.35 at $258.51, with 2,108,194 shares traded. As reported by Zacks, the current mean recommendation for MSFT is in the "buy range".
CSX Corporation (CSX) is unchanged at $28.71, with 2,031,903 shares traded. CSX's current last sale is 71.78% of the target price of $40.
General Motors Company (GM) is -0.04 at $32.95, with 1,570,412 shares traded. As reported by Zacks, the current mean recommendation for GM 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 -0.08 at $138.19, with 3,146,957 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Southwestern Energy Company (SWN) is unchanged at $6.53, with 4,808,089 shares traded. | Apple Inc. (AAPL) is -0.08 at $138.19, with 3,146,957 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 CMCSA is in the "buy range". | As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Apple Inc. (AAPL) is -0.08 at $138.19, with 3,146,957 shares traded. As reported by Zacks, the current mean recommendation for SNAP is in the "buy range". | Apple Inc. (AAPL) is -0.08 at $138.19, with 3,146,957 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 -24.51 to 11,673.17. |
20571.0 | 2022-06-23 00:00:00 UTC | US STOCKS-Wall Street posts solid gains, as defensives, tech shine | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-posts-solid-gains-as-defensives-tech-shine | nan | nan | By Lewis Krauskopf, Devik Jain and Sruthi Shankar
June 23 (Reuters) - Wall Street's main indexes posted solid gains on Thursday, fueled by strong performance from defensive and tech shares that outweighed declines for economically sensitive groups as worries persisted about a potential recession.
The benchmark S&P 500 swung between positive and negative during the session, but stocks picked up steam heading into the market's close. Benchmark U.S. Treasury yields fell to two-week lows, supporting tech and other rate-sensitive growth stocks.
Trading has remained volatile in the wake of the S&P 500 last week logging its biggest weekly percentage drop since March 2020. Investors are weighing how far stocks could fall after the index earlier this month fell over 20% from its January all-time high, confirming the common definition of a bear market.
“There is a tremendous amount of uncertainty about the outlook and so the market is confused,” said Walter Todd, chief investment officer at Greenwood Capital in South Carolina.
The Dow Jones Industrial Average .DJI rose 194.23 points, or 0.64%, to 30,677.36, the S&P 500 .SPX gained 35.84 points, or 0.95%, to 3,795.73 and the Nasdaq Composite .IXIC added 179.11 points, or 1.62%, to 11,232.19.
In his second day of testifying before Congress, U.S. central bank chief Jerome Powell said the Fed's commitment to reining in 40-year-high inflation is "unconditional" but also comes with the risk of higher unemployment.
U.S. business activity slowed considerably in June as high inflation and declining consumer confidence dampened demand across the board, a survey on Thursday showed.
“The Fed wants to see things start to slow and the data is starting to reflect that,” said James Ragan, director of wealth management research at D.A. Davidson.
Citigroup analysts are forecasting a near 50% probability of a global recession.
“Economic growth is slowing. Is it going to slow enough to go into a recession, that’s the big question,” Ragan said.
Defensive groups considered safer bets in rocky economic times were the top-performing S&P 500 sectors. Among them, utilities .SPLRCU gained 2.4%, healthcare .SPXHC rose 2.2% and real estate .SPLRCR added 2%.
The heavyweight tech sector .SPLRCT rose 1.4%, with Microsoft MSFT.O gaining 2.3% and Apple AAPL.O up 2.2%.
The energy sector .SPNY slumped 3.8%, continuing its recent pullback after soundly outperforming the market for most of 2022. Declines in Exxon Mobil XOM.N and Chevron CVX.N were the biggest individual drags on the S&P 500, with Exxon dropping 3% and Chevron falling 3.7%.
Other economically sensitive sectors also fell. Materials .SPLRCM lost 1.4%, while industrials .SPLRCI and financials .SPSY dipped about 0.5% each.
Advancing issues outnumbered declining ones on the NYSE by a 1.41-to-1 ratio; on Nasdaq, a 1.67-to-1 ratio favored advancers.
The S&P 500 posted one new 52-week high and 40 new lows; the Nasdaq Composite recorded 32 new highs and 194 new lows.
About 12.4 billion shares changed hands in U.S. exchanges, compared with the 12.5 billion daily average over the last 20 sessions.
(Reporting by Lewis Krauskopf in New York, Devik Jain and Sruthi Shankar in Bengaluru and Boleslaw Lasocki in Gdansk; Editing by Arun Koyyur and Cynthia Osterman)
((lewis.krauskopf@thomsonreuters.com; 646-223-6082; Reuters Messaging: lewis.krauskopf.thomsonreuters.com@reuters.net, Twitter: @LKrauskopf))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The heavyweight tech sector .SPLRCT rose 1.4%, with Microsoft MSFT.O gaining 2.3% and Apple AAPL.O up 2.2%. By Lewis Krauskopf, Devik Jain and Sruthi Shankar June 23 (Reuters) - Wall Street's main indexes posted solid gains on Thursday, fueled by strong performance from defensive and tech shares that outweighed declines for economically sensitive groups as worries persisted about a potential recession. In his second day of testifying before Congress, U.S. central bank chief Jerome Powell said the Fed's commitment to reining in 40-year-high inflation is "unconditional" but also comes with the risk of higher unemployment. | The heavyweight tech sector .SPLRCT rose 1.4%, with Microsoft MSFT.O gaining 2.3% and Apple AAPL.O up 2.2%. By Lewis Krauskopf, Devik Jain and Sruthi Shankar June 23 (Reuters) - Wall Street's main indexes posted solid gains on Thursday, fueled by strong performance from defensive and tech shares that outweighed declines for economically sensitive groups as worries persisted about a potential recession. The Dow Jones Industrial Average .DJI rose 194.23 points, or 0.64%, to 30,677.36, the S&P 500 .SPX gained 35.84 points, or 0.95%, to 3,795.73 and the Nasdaq Composite .IXIC added 179.11 points, or 1.62%, to 11,232.19. | The heavyweight tech sector .SPLRCT rose 1.4%, with Microsoft MSFT.O gaining 2.3% and Apple AAPL.O up 2.2%. By Lewis Krauskopf, Devik Jain and Sruthi Shankar June 23 (Reuters) - Wall Street's main indexes posted solid gains on Thursday, fueled by strong performance from defensive and tech shares that outweighed declines for economically sensitive groups as worries persisted about a potential recession. The Dow Jones Industrial Average .DJI rose 194.23 points, or 0.64%, to 30,677.36, the S&P 500 .SPX gained 35.84 points, or 0.95%, to 3,795.73 and the Nasdaq Composite .IXIC added 179.11 points, or 1.62%, to 11,232.19. | The heavyweight tech sector .SPLRCT rose 1.4%, with Microsoft MSFT.O gaining 2.3% and Apple AAPL.O up 2.2%. By Lewis Krauskopf, Devik Jain and Sruthi Shankar June 23 (Reuters) - Wall Street's main indexes posted solid gains on Thursday, fueled by strong performance from defensive and tech shares that outweighed declines for economically sensitive groups as worries persisted about a potential recession. Is it going to slow enough to go into a recession, that’s the big question,” Ragan said. |
20572.0 | 2022-06-23 00:00:00 UTC | US STOCKS-Choppy Wall Street waffles as investors weigh recession fears | AAPL | https://www.nasdaq.com/articles/choppy-wall-street-waffles-as-investors-weigh-recession-fears | nan | nan | By Lewis Krauskopf, Devik Jain and Sruthi Shankar
June 23 (Reuters) - Wall Street's main indexes were mixed in choppy trading on Thursday, as gains in defensive shares countered declines for economically sensitive groups amid growing worries about a recession.
The benchmark S&P 500 edged lower as investors weighed whether the Federal Reserve's aggressive rate hikes to control surging inflation would wound the economy. Benchmark U.S. Treasury yields fell to two-week lows, supporting tech and other growth stocks and keeping the Nasdaq in positive territory.
Trading has remained volatile in the wake of the S&P 500 last week logging its biggest weekly percentage drop since March 2020. Investors are weighing how far stocks could fall after the index earlier this month fell over 20% from its January all-time high, confirming the common definition of a bear market.
“It’s just like we have seen over the last few months, anytime we get a little bit of a rally from the bottom, it doesn’t seem to last very long,” said James Ragan, director of wealth management research at D.A. Davidson.
The Dow Jones Industrial Average .DJI fell 108.55 points, or 0.36%, to 30,374.58, the S&P 500 .SPX lost 4.64 points, or 0.12%, to 3,755.25 and the Nasdaq Composite .IXIC added 31.14 points, or 0.28%, to 11,084.22.
In his second day of testifying before Congress, U.S. central bank chief Jerome Powell said the Fed's commitment to reining in 40-year-high inflation is "unconditional" but also comes with the risk of higher unemployment.
U.S. business activity slowed considerably in June as high inflation and declining consumer confidence dampened demand across the board, a survey on Thursday showed.
“The Fed wants to see things start to slow and the data is starting to reflect that,” Ragan said.
Meanwhile, Citigroup analysts are forecasting a near 50% probability of a global recession.
Among S&P 500 sectors, energy .SPNY slumped 4.5%, continuing its recent pullback after soundly outperforming the market for most of 2022. Declines in Exxon Mobil XOM.N and Chevron CVX.N were among the biggest individual weights on the S&P 500.
Other economically sensitive sectors also fell, with materials .SPLRCM down 2.2% and financials .SPSY and industrials .SPLRCI off 1.9% and 1.6%, respectively.
Defensive groups considered safer bets in rocky economic times were the top-performing sectors. Among those groups, utilities .SPLRCU, consumer staples .SPLRCS and healthcare .SPXHC all rose over 1%.
Gains of about 1% each in tech heavyweights Microsoft MSFT.O and Apple AAPL.O also helped support the S&P 500.
Declining issues outnumbered advancing ones on the NYSE by a 1.13-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favored advancers.
The S&P 500 posted one new 52-week high and 40 new lows; the Nasdaq Composite recorded 28 new highs and 166 new lows.
(Reporting by Lewis Krauskopf in New York, Devik Jain and Sruthi Shankar in Bengaluru and Boleslaw Lasocki in Gdansk; Editing by Arun Koyyur and Cynthia Osterman)
((lewis.krauskopf@thomsonreuters.com; 646-223-6082; Reuters Messaging: lewis.krauskopf.thomsonreuters.com@reuters.net, Twitter: @LKrauskopf))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Gains of about 1% each in tech heavyweights Microsoft MSFT.O and Apple AAPL.O also helped support the S&P 500. By Lewis Krauskopf, Devik Jain and Sruthi Shankar June 23 (Reuters) - Wall Street's main indexes were mixed in choppy trading on Thursday, as gains in defensive shares countered declines for economically sensitive groups amid growing worries about a recession. In his second day of testifying before Congress, U.S. central bank chief Jerome Powell said the Fed's commitment to reining in 40-year-high inflation is "unconditional" but also comes with the risk of higher unemployment. | Gains of about 1% each in tech heavyweights Microsoft MSFT.O and Apple AAPL.O also helped support the S&P 500. By Lewis Krauskopf, Devik Jain and Sruthi Shankar June 23 (Reuters) - Wall Street's main indexes were mixed in choppy trading on Thursday, as gains in defensive shares countered declines for economically sensitive groups amid growing worries about a recession. U.S. business activity slowed considerably in June as high inflation and declining consumer confidence dampened demand across the board, a survey on Thursday showed. | Gains of about 1% each in tech heavyweights Microsoft MSFT.O and Apple AAPL.O also helped support the S&P 500. By Lewis Krauskopf, Devik Jain and Sruthi Shankar June 23 (Reuters) - Wall Street's main indexes were mixed in choppy trading on Thursday, as gains in defensive shares countered declines for economically sensitive groups amid growing worries about a recession. U.S. business activity slowed considerably in June as high inflation and declining consumer confidence dampened demand across the board, a survey on Thursday showed. | Gains of about 1% each in tech heavyweights Microsoft MSFT.O and Apple AAPL.O also helped support the S&P 500. By Lewis Krauskopf, Devik Jain and Sruthi Shankar June 23 (Reuters) - Wall Street's main indexes were mixed in choppy trading on Thursday, as gains in defensive shares countered declines for economically sensitive groups amid growing worries about a recession. Benchmark U.S. Treasury yields fell to two-week lows, supporting tech and other growth stocks and keeping the Nasdaq in positive territory. |
20573.0 | 2022-06-23 00:00:00 UTC | GLOBAL MARKETS-U.S. stocks climb as yields fall to two-week low; copper tumbles | AAPL | https://www.nasdaq.com/articles/global-markets-u.s.-stocks-climb-as-yields-fall-to-two-week-low-copper-tumbles | nan | nan | By Caroline Valetkevitch
NEW YORK, June 23 (Reuters) - Stocks in global markets rose on Thursday as U.S. Treasury yields fell to two-week lows, while copper was at 16-month lows as investors worried about a possible global economic slowdown.
The Nasdaq led the way higher on Wall Street, rising more than 1.6%. Technology shares including Apple Inc AAPL.O and defensive shares gave the S&P 500 its biggest boost as investors continued to worry about a potential recession.
Investors have been weighing the risk of hefty interest rate rises tipping economies into recession.
Federal Reserve Chairman Jerome Powell testified before Congress for a second day, a day after saying the Fed is committed to cutting inflation at all costs, and acknowledged a recession was "certainly a possibility."
"What we're seeing here is a (stock) market trying to absorb the Fed's tightening and basically trying to put in a low in a bear market," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"We have yields that are coming down, and so that's helping stocks," he said. "For now, the market has probably discounted somewhat of a mild recession."
Gauges of factory activity released on Thursday in Japan, Britain, the euro zone and United States all softened in June, with U.S. producers reporting the first outright drop in new orders in two years.
Manufacturing growth is slowing worldwide partly because China's COVID-19 curbs and Russia's invasion of Ukraine have disrupted supply chains and added to inflation problems.
The Dow Jones Industrial Average .DJI rose 194.23 points, or 0.64%, to 30,677.36, the S&P 500 .SPX gained 35.84 points, or 0.95%, to 3,795.73 and the Nasdaq Composite .IXIC added 179.11 points, or 1.62%, to 11,232.19.
The pan-European STOXX 600 index .STOXX lost 0.82% and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 0.43%.
In the U.S. bond market, yields fell, partly on a growing belief that yields may have topped for the near term even if inflation stays high.
Yields have dropped from their highest level in more than a decade, reached before last week’s Fed meeting, when the U.S. central bank hiked rates by 75 basis points, the biggest increase since 1994.
Benchmark U.S. 10-year yields fell to 3.005%, before rebounding to 3.070%. They have dropped from 3.498% on June 14, the highest since April 2011. US10YT=RR
Copper prices slumped as rising interest rates and weak economic data fed worries about demand.
Copper CMCU3 on the London Metal Exchange (LME) hit its lowest level since February 2021.
In the foreign exchange market, the euro slid across the board following the weaker-than-expected German and French PMI data.
Against the dollar, the euro EUR=EBS declined 0.5% to $1.0509. It earlier declined below a key $1.05 level for the third time this week. The euro also declined 1.4% versus the Japanese currency to 141.85 yen. EURJPY=EBS
Oil prices ended lower as investors weighed the risk of a recession. Brent crude LCOc1 futures fell $1.69 to settle at $110.05 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 futures dropped $1.92 to settle at $104.27.
World FX rates YTDhttp://tmsnrt.rs/2egbfVh
Global asset performancehttp://tmsnrt.rs/2yaDPgn
Asian stock marketshttps://tmsnrt.rs/2zpUAr4
Copper/goldhttps://tmsnrt.rs/3n8qsIK
(Reporting by Caroline Valetkevitch in New York Additional reporting by Gertrude Chavez-Dreyfuss and Karen Brettell in New York, and Huw Jones in London Editing by David Gregorio and Matthew Lewis)
((caroline.valetkevitch@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. | Technology shares including Apple Inc AAPL.O and defensive shares gave the S&P 500 its biggest boost as investors continued to worry about a potential recession. Gauges of factory activity released on Thursday in Japan, Britain, the euro zone and United States all softened in June, with U.S. producers reporting the first outright drop in new orders in two years. Manufacturing growth is slowing worldwide partly because China's COVID-19 curbs and Russia's invasion of Ukraine have disrupted supply chains and added to inflation problems. | Technology shares including Apple Inc AAPL.O and defensive shares gave the S&P 500 its biggest boost as investors continued to worry about a potential recession. By Caroline Valetkevitch NEW YORK, June 23 (Reuters) - Stocks in global markets rose on Thursday as U.S. Treasury yields fell to two-week lows, while copper was at 16-month lows as investors worried about a possible global economic slowdown. In the U.S. bond market, yields fell, partly on a growing belief that yields may have topped for the near term even if inflation stays high. | Technology shares including Apple Inc AAPL.O and defensive shares gave the S&P 500 its biggest boost as investors continued to worry about a potential recession. By Caroline Valetkevitch NEW YORK, June 23 (Reuters) - Stocks in global markets rose on Thursday as U.S. Treasury yields fell to two-week lows, while copper was at 16-month lows as investors worried about a possible global economic slowdown. "What we're seeing here is a (stock) market trying to absorb the Fed's tightening and basically trying to put in a low in a bear market," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. | Technology shares including Apple Inc AAPL.O and defensive shares gave the S&P 500 its biggest boost as investors continued to worry about a potential recession. By Caroline Valetkevitch NEW YORK, June 23 (Reuters) - Stocks in global markets rose on Thursday as U.S. Treasury yields fell to two-week lows, while copper was at 16-month lows as investors worried about a possible global economic slowdown. Yields have dropped from their highest level in more than a decade, reached before last week’s Fed meeting, when the U.S. central bank hiked rates by 75 basis points, the biggest increase since 1994. |
20574.0 | 2022-06-23 00:00:00 UTC | Is the Show Over for Netflix? | AAPL | https://www.nasdaq.com/articles/is-the-show-over-for-netflix | nan | nan | One company that benefitted majorly from the stay-at-home orders and a world that had been shut down during the early phases of the pandemic was the all-mighty streaming giant Netflix NFLX.
Once widely hailed and an investors’ favorite in many portfolios, the tide has shifted significantly for the company throughout 2022.
The chart below shows the performance of Netflix shares over the last five years while blending in the S&P 500 for comparison.
Image Source: Zacks Investment Research
As seen, Netflix was once a stellar investment that was undoubtedly a staple in many portfolios. Beginning in late 2021, shares took on a steep downwards trajectory, plummeting and losing an immense amount of value.
Below is a year-to-date chart of Netflix shares.
Image Source: Zacks Investment Research
One word perfectly describes that chart – meltdown. So, what exactly caused this spiral? Is the company still worth your hard-earned cash? Let’s take a look.
Rising Competition
Online streaming services have popped up left and right over the last several years, undoubtedly a significant part of the “digital shift” we have undergone.
A few of these streaming services include Amazon AMZN Prime Video, Apple AAPL TV, Roku ROKU, and Disney+ DIS. All of these services have been pushing boundaries, making the industry much more competitive. Simply put, Netflix is no longer the go-to streaming service it used to be.
For example, Netflix used to stream several blockbuster Marvel movies, such as Infinity War and Thor: Ragnarok. Since Disney+ has hit the scene, NFLX has lost access to these beloved movies, undoubtedly causing a shift in sentiment. This is just one example of the company losing ground to its competitors.
Additionally, coming into Disney’s latest quarterly report, many believed that since NFLX lost subscribers throughout the quarter, Disney must also have.
This turned out to be a significant misconception, as Disney boasted strong net subscriber adds for the quarter, capturing 7.9 million subscribers vs. the 4.5 million expected. Additionally, Disney+ remains on track to achieve its guidance of 230 – 260 million paid subscribers by the end of FY24, which would overtake NFLX in total subscribers.
Subscriber Growth Slowdown
Of course, subscriber count is king for the streaming giant. The unfortunate news is that things have recently taken a turn for the worst in this area.
In 2021 Q4, the company provided disappointing guidance that it expected new subscriber adds of 2.5 million in 2022 Q1, well below the consensus of seven million expected.
Fast-forward to 2022 Q1, and the company reported that it had lost more than 200,000 subscribers in the quarter; NFLX then provided disheartening guidance again that it was expecting another drop of two million subscribers for the upcoming quarter.
The disappointing guidance threw fuel on the fire, with NFLX shares plummeting 35% following the 2022 Q1 earnings report. Simply put, the market priced in the growth slowdown, and the downwards trajectory that shares were on continued.
Current Valuation & Forecasts
Not all is negative, however. After the sell-off, Netflix now sports much more reasonable valuation levels – a major positive for potential investors. Its forward 12-month P/E ratio of 15.6X is an absolute fraction of 2018 highs of 161.8X and nowhere near its five-year median of 61.1X.
NFLX currently has a Value Style Score of a B.
Image Source: Zacks Investment Research
Analysts have dialed back their earnings estimates across the board over the last 60 days, with a 100% revision agreement percentage. The $2.95 EPS estimate for the upcoming quarter reflects a marginal 0.7% decrease in earnings from the year-ago quarter. Additionally, FY22 earnings are expected to slide nearly 3% but are forecasted to climb 10% in FY23.
Image Source: Zacks Investment Research
Top-line forecasts appear solid, with the $32.5 billion revenue estimate for FY22 displaying a notable 9% increase year-over-year. Furthermore, in FY23, revenue is expected to climb an additional 9.1% to $35.4 billion.
Netflix’s Solutions
The company has turned to a solution to turn things around – advertisements. As of now, NFLX doesn’t run any advertisements within its streaming services, and it’s one of the big reasons why the streaming giant has become so popular.
After all, nobody likes ads in the middle of their favorite shows and movies.
In a quick turn of events, Netflix has been open and has plans for an ad-based tier within its streaming service. It’s important to note that the ad-based tier will be cheaper and is something that felt inevitable from the start.
Consumers have been increasingly becoming frustrated with the constant price hikes NFLX has deployed, and this will no doubt alleviate that issue. Previously, NFLX primarily used its pricing power to increase revenue, something many would call a double-edged sword – Netflix makes more money off higher subscription costs but also runs the risk of losing subscribers who refuse to pay more.
Bottom Line
All in all, it’s been a very rough stretch for the once-beloved stock. Known for generating immense gains, that story has quickly turned south in 2022.
Currently, Netflix’s valuation levels are much more reasonable, and an ad-based tier will undoubtedly help propel the top line. In the near term, I think investors should keep their distance from this stock but also keep an eye out for quarterly results.
If subscribers start piling back in, it’s game on for Netflix. At the current moment, however, it seems to be a losing battle, further displayed by its Zacks Rank #4 (Sell).
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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. | A few of these streaming services include Amazon AMZN Prime Video, Apple AAPL TV, Roku ROKU, and Disney+ DIS. Apple Inc. (AAPL): Free Stock Analysis Report One company that benefitted majorly from the stay-at-home orders and a world that had been shut down during the early phases of the pandemic was the all-mighty streaming giant Netflix NFLX. | Apple Inc. (AAPL): Free Stock Analysis Report A few of these streaming services include Amazon AMZN Prime Video, Apple AAPL TV, Roku ROKU, and Disney+ DIS. Zacks' Top Picks to Cash in on Electric Vehicles Big money has already been made in the Electric Vehicle (EV) industry. | A few of these streaming services include Amazon AMZN Prime Video, Apple AAPL TV, Roku ROKU, and Disney+ DIS. Apple Inc. (AAPL): Free Stock Analysis Report Additionally, coming into Disney’s latest quarterly report, many believed that since NFLX lost subscribers throughout the quarter, Disney must also have. | A few of these streaming services include Amazon AMZN Prime Video, Apple AAPL TV, Roku ROKU, and Disney+ DIS. Apple Inc. (AAPL): Free Stock Analysis Report Fast-forward to 2022 Q1, and the company reported that it had lost more than 200,000 subscribers in the quarter; NFLX then provided disheartening guidance again that it was expecting another drop of two million subscribers for the upcoming quarter. |
20575.0 | 2022-06-23 00:00:00 UTC | Too bad Netflix isn’t on the block | AAPL | https://www.nasdaq.com/articles/too-bad-netflix-isnt-on-the-block | nan | nan | Reuters
Reuters
NEW YORK (Reuters Breakingviews) - Netflix is in a little jam. The streaming service behind “Stranger Things” may partner with rivals to manage advertising. Yet history shows that media alliances – including its own – can turn into a tangled mess. A better idea would be an outright Netflix sale, if only that would happen.
Co-Chief Executive Ted Sarandos fittingly confirmed the news on Thursday during the annual advertising confab in Cannes, France. Netflix is moving forward to introduce ads to the $80 billion company’s streaming subscription service in order to support a cheaper package.
The contours of the partnership could result in Netflix tapping ad technology and sales teams with a revenue sharing agreement with big name media firms. Comcast’s NBC Universal, which operates streaming competitor Peacock, and Google, which owns YouTube, may be the top contenders https://www.wsj.com/articles/comcasts-nbcuniversal-google-among-frontrunners-to-partner-with-netflix-to-help-create-ad-supported-tier-11655921297?mod=article_inline, according to the Wall Street Journal.
Such arrangements can quickly sour though, especially in the media business. Video service Hulu was launched around the same time that Netflix started to offer its streaming product. But its hydra headed ownership which includes Walt Disney and Comcast hamstrung growth efforts. Netflix itself initially formed content agreements with other media companies that were too eager to sell movies and TV series to boss Reed Hastings. Those fell apart when executives realized they were competing with themselves.
Instead Netflix could in theory be a tempting takeover target. Its market capitalization has fallen almost 70% from $265 billion at the start of this year. Netflix’s enterprise value is at around 15 times forward EBITDA according to Refinitiv, half its average and at a level not seen since a decade ago.
And while it is finally throwing off cash flow, plugging into a firm with deeper pockets and a studio could help fund its ambitious content machine. The $2.2 trillion, cash flush tech giant Apple or even the $172 billion Comcast, home to Universal studio, could be potential buyers if the regulatory environment wasn’t so tough. Too bad for them, Netflix isn’t for sale.
Follow @jennifersaba https://twitter.com/jennifersaba on Twitter
CONTEXT NEWS
- Netflix is in talks with several companies for advertising partnerships, co-Chief Executive Ted Sarandos said on Thursday at the Cannes Lions ad conference, Reuters reported. “We are talking to all of them now,” he said.
- Potential partners include Comcast and Alphabet’s Google, the Wall Street Journal reported on June 22, citing people familiar with the matter.
- Netflix said in April that it is open to offering a lower-priced subscription service with advertising. Currently, Netflix is ad-free and charges a monthly fee.
(Editing by Lauren Silva Laughlin and Sharon Lam)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Comcast’s NBC Universal, which operates streaming competitor Peacock, and Google, which owns YouTube, may be the top contenders https://www.wsj.com/articles/comcasts-nbcuniversal-google-among-frontrunners-to-partner-with-netflix-to-help-create-ad-supported-tier-11655921297?mod=article_inline, according to the Wall Street Journal. The $2.2 trillion, cash flush tech giant Apple or even the $172 billion Comcast, home to Universal studio, could be potential buyers if the regulatory environment wasn’t so tough. - Netflix is in talks with several companies for advertising partnerships, co-Chief Executive Ted Sarandos said on Thursday at the Cannes Lions ad conference, Reuters reported. | Netflix is moving forward to introduce ads to the $80 billion company’s streaming subscription service in order to support a cheaper package. - Netflix is in talks with several companies for advertising partnerships, co-Chief Executive Ted Sarandos said on Thursday at the Cannes Lions ad conference, Reuters reported. - Potential partners include Comcast and Alphabet’s Google, the Wall Street Journal reported on June 22, citing people familiar with the matter. | Netflix is moving forward to introduce ads to the $80 billion company’s streaming subscription service in order to support a cheaper package. The contours of the partnership could result in Netflix tapping ad technology and sales teams with a revenue sharing agreement with big name media firms. - Netflix is in talks with several companies for advertising partnerships, co-Chief Executive Ted Sarandos said on Thursday at the Cannes Lions ad conference, Reuters reported. | Comcast’s NBC Universal, which operates streaming competitor Peacock, and Google, which owns YouTube, may be the top contenders https://www.wsj.com/articles/comcasts-nbcuniversal-google-among-frontrunners-to-partner-with-netflix-to-help-create-ad-supported-tier-11655921297?mod=article_inline, according to the Wall Street Journal. Video service Hulu was launched around the same time that Netflix started to offer its streaming product. - Netflix is in talks with several companies for advertising partnerships, co-Chief Executive Ted Sarandos said on Thursday at the Cannes Lions ad conference, Reuters reported. |
20576.0 | 2022-06-23 00:00:00 UTC | US STOCKS-Wall Street struggles for direction on growing recession fears | AAPL | https://www.nasdaq.com/articles/us-stocks-wall-street-struggles-for-direction-on-growing-recession-fears | nan | nan | By Devik Jain and Sruthi Shankar
June 23 (Reuters) - U.S. stocks indexes were mixed on Thursday as gains in healthcare and megacap technology stocks offset losses in energy and other economically sensitive sectors amid growing recession fears.
Trading has remained volatile after a bruising selloff last week sparked by concerns that aggressive interest rate hikes to tame stubborn inflation could hurt economic growth and corporate profits.
As government bond yields fell to two-week lows, rate-sensitive growth and technology stocks gained, with Apple Inc AAPL.O adding 0.8% and Microsoft Corp MSFT.O 0.9%.
Sectors considered as safer bets in equities such as healthcare .SPXHC, consumer staples .SPLRCS, real estate .SPLRCR and utilities .SPLRCU gained more than 1%, while energy stocks .SPNY slid 4.7% as crude prices fell $1 a barrel. O/R
"You're in the bottoming process and you'll get these little bounces," said Aaron Clark, portfolio manager at GW&K Investment Management.
The benchmark S&P 500 has struggled to make a headway after it confirmed a bear market last week, marking a 20% decline from its record closing peak in January.
"What we really need is for earnings estimates to come down ... to establish a good bottom. Despite all the talks of recession, earnings revisions are still positive so far this year."
In his second day of testimony to Congress, Federal Reserve Chair Jerome Powell said the central bank's commitment to rein in 40-year-high inflation is "unconditional" but it comes with the risk of higher unemployment.
Big Wall Street banks Citigroup C.N and Goldman Sachs GS.N now see a bigger chance of a recession.
Rising inflation is also taking a toll on consumer confidence as latest data showed business activity slowed considerably in June.
At 12:49 p.m. ET, the Dow Jones Industrial Average .DJI was down 138.70 points, or 0.46%, at 30,344.43, the S&P 500 .SPX was down 6.39 points, or 0.17%, at 3,753.50, and the Nasdaq Composite .IXIC was up 40.19 points, or 0.36%, at 11,093.27.
Bank stocks dropped, with Bank of America BAC.N down 3.6% ahead of the Fed's 2022 stress test results, which will assess how much capital banks would need to withstand a severe economic downturn.
Snowflake Inc SNOW.N climbed 8.9% after J.P. Morgan upgraded the cloud software company's stock to "overweight" from "neutral".
Meanwhile, U.S. corporations with big oversees operations have started to flag risks from dollar, which hit a 20-year high earlier this month.
Accenture Plc ACN.N fell 1.1% after IT services company tempered its earnings expectations for the year due to rising inflation and a stronger dollar.
Advancing issues outnumbered decliners by a 1.00-to-1 ratio on the NYSE and by a 1.25-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week highs and 38 new lows, while the Nasdaq recorded 26 new highs and 133 new lows.
(Reporting by Devik Jain and Sruthi Shankar in Bengaluru and Boleslaw Lasocki in Gdansk; Editing by Arun Koyyur)
((Devik.Jain@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. | As government bond yields fell to two-week lows, rate-sensitive growth and technology stocks gained, with Apple Inc AAPL.O adding 0.8% and Microsoft Corp MSFT.O 0.9%. Trading has remained volatile after a bruising selloff last week sparked by concerns that aggressive interest rate hikes to tame stubborn inflation could hurt economic growth and corporate profits. Sectors considered as safer bets in equities such as healthcare .SPXHC, consumer staples .SPLRCS, real estate .SPLRCR and utilities .SPLRCU gained more than 1%, while energy stocks .SPNY slid 4.7% as crude prices fell $1 a barrel. | As government bond yields fell to two-week lows, rate-sensitive growth and technology stocks gained, with Apple Inc AAPL.O adding 0.8% and Microsoft Corp MSFT.O 0.9%. By Devik Jain and Sruthi Shankar June 23 (Reuters) - U.S. stocks indexes were mixed on Thursday as gains in healthcare and megacap technology stocks offset losses in energy and other economically sensitive sectors amid growing recession fears. The S&P index recorded one new 52-week highs and 38 new lows, while the Nasdaq recorded 26 new highs and 133 new lows. | As government bond yields fell to two-week lows, rate-sensitive growth and technology stocks gained, with Apple Inc AAPL.O adding 0.8% and Microsoft Corp MSFT.O 0.9%. By Devik Jain and Sruthi Shankar June 23 (Reuters) - U.S. stocks indexes were mixed on Thursday as gains in healthcare and megacap technology stocks offset losses in energy and other economically sensitive sectors amid growing recession fears. Bank stocks dropped, with Bank of America BAC.N down 3.6% ahead of the Fed's 2022 stress test results, which will assess how much capital banks would need to withstand a severe economic downturn. | As government bond yields fell to two-week lows, rate-sensitive growth and technology stocks gained, with Apple Inc AAPL.O adding 0.8% and Microsoft Corp MSFT.O 0.9%. By Devik Jain and Sruthi Shankar June 23 (Reuters) - U.S. stocks indexes were mixed on Thursday as gains in healthcare and megacap technology stocks offset losses in energy and other economically sensitive sectors amid growing recession fears. Despite all the talks of recession, earnings revisions are still positive so far this year." |
20577.0 | 2022-06-23 00:00:00 UTC | Apple Workers In Maryland Form Union | AAPL | https://www.nasdaq.com/articles/apple-workers-in-maryland-form-union | nan | nan | (RTTNews) - Workers at a store of iPhone maker Apple Inc. (AAPL) in Towson, Maryland recently voted in favor of joining a union. This move is being considered an important one for the movement of organized labor. The Towson store is the first unionized Apple store in the United States.
The vote to form a union is being considered as a defeat for Apple, which has for long opposed the formation of union. The first Apple union could also motivate workers at other stores to form unions for the improvement of work life of all employees.
The voting tally stood at 65 votes in favor and 33 opposed. Around 110 employees were eligible to vote to join the International Association of Machinists and Aerospace Workers. Voting began on Wednesday and went on till Saturday evening.
The National Labor Relations Board or NLRB is yet to certify the votes and this process could take up to one week. Apple is required to bargain with the union over working conditions after the vote is certified, according to the NLRB.
The Towson store isn't one of Apple's so-called "flagship" stores in a big city. It is a small store located inside a mall.
The store got attention from the Apple management as soon as workers announced plans to unionize. Apple's head of retail and HR, Deirdre O'Brien, visited the location in May. A recorded message from O'Brien circulated among employees after the union drives went public discouraged retail workers from joining unions, saying that doing so would make it harder for the company to respond to employee concerns. She said unions are not committed to the company's employees.
Workers are now seeking more input over pay and working conditions, like how the stores handle Covid safety and other operations.
In a letter sent to Apple CEO Tim Cook, the workers said. "To be clear, the decision to form a union is about us as workers gaining access to rights that we do not currently have."
The Towson store is one of several Apple stores, which have publicly announced union drives and other retail organizers at other locations are watching its results closely. Two high-traffic, high-volume stores in New York, the Grand Central Terminal and World Trade Center locations, have shown that they are unionizing, but are yet to be officially included in the list.
The Apple retail union at the Towson store will not be of its Apple's core business model of selling devices and services. Although Apple stores are a key channel for selling products, Apple also sells through its website and retail partners like carriers.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | (RTTNews) - Workers at a store of iPhone maker Apple Inc. (AAPL) in Towson, Maryland recently voted in favor of joining a union. Workers are now seeking more input over pay and working conditions, like how the stores handle Covid safety and other operations. Two high-traffic, high-volume stores in New York, the Grand Central Terminal and World Trade Center locations, have shown that they are unionizing, but are yet to be officially included in the list. | (RTTNews) - Workers at a store of iPhone maker Apple Inc. (AAPL) in Towson, Maryland recently voted in favor of joining a union. A recorded message from O'Brien circulated among employees after the union drives went public discouraged retail workers from joining unions, saying that doing so would make it harder for the company to respond to employee concerns. The Towson store is one of several Apple stores, which have publicly announced union drives and other retail organizers at other locations are watching its results closely. | (RTTNews) - Workers at a store of iPhone maker Apple Inc. (AAPL) in Towson, Maryland recently voted in favor of joining a union. The first Apple union could also motivate workers at other stores to form unions for the improvement of work life of all employees. The Towson store is one of several Apple stores, which have publicly announced union drives and other retail organizers at other locations are watching its results closely. | (RTTNews) - Workers at a store of iPhone maker Apple Inc. (AAPL) in Towson, Maryland recently voted in favor of joining a union. The vote to form a union is being considered as a defeat for Apple, which has for long opposed the formation of union. The first Apple union could also motivate workers at other stores to form unions for the improvement of work life of all employees. |
20578.0 | 2022-06-23 00:00:00 UTC | Apple Stock-Is Now the Right Time To Add Shares? | AAPL | https://www.nasdaq.com/articles/apple-stock-is-now-the-right-time-to-add-shares | nan | nan | Apple's (NASDAQ: AAPL) business is booming, but its stock is down, is it a good time to buy? In this video clip from "The Future of Fintech" on Motley Fool Live, recorded on June 9, Fool.com contributors Danny Vena and Jason Hall share some info about why it may be a good time to purchase more Apple shares.
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Danny Vena: If you look at the fact that Apple had one of the biggest quarters, or if not the biggest quarter in its history and its stock is currently down 20% because all stocks are down. Then I would say, relative to the opportunity in the fact that the company is continuing to expand its business. It's got a really solid dividend, only pays about 23-24% of its profits to fund the dividend and people continue to line up to buy its products. I personally think it's a buy, and that's why I added two shares here in the last month.
Jason Hall: Ken Erickson says, it seems like a good play for Apple and they have a ton of data on customers. I think that's a really good point. I bet they know how many times people go in the App Store and look up Apple buy now, pay later, or Apple credit card or Apple bank account. They know what people are using. [laughs] I think that's maybe an underappreciated competitive advantage that Apple has.
Danny Vena has positions in Apple. Jason Hall 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. | Apple's (NASDAQ: AAPL) business is booming, but its stock is down, is it a good time to buy? Find out why Apple is one of the 10 best stocks to buy now Our award-winning analyst team has spent more than a decade beating the market. Jason Hall: Ken Erickson says, it seems like a good play for Apple and they have a ton of data on customers. | Apple's (NASDAQ: AAPL) business is booming, but its stock is down, is it a good time to buy? In this video clip from "The Future of Fintech" on Motley Fool Live, recorded on June 9, Fool.com contributors Danny Vena and Jason Hall share some info about why it may be a good time to purchase more Apple shares. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market. | Apple's (NASDAQ: AAPL) business is booming, but its stock is down, is it a good time to buy? In this video clip from "The Future of Fintech" on Motley Fool Live, recorded on June 9, Fool.com contributors Danny Vena and Jason Hall share some info about why it may be a good time to purchase more Apple shares. *Stock Advisor returns as of June 2, 2022 Danny Vena: If you look at the fact that Apple had one of the biggest quarters, or if not the biggest quarter in its history and its stock is currently down 20% because all stocks are down. | Apple's (NASDAQ: AAPL) business is booming, but its stock is down, is it a good time to buy? In this video clip from "The Future of Fintech" on Motley Fool Live, recorded on June 9, Fool.com contributors Danny Vena and Jason Hall share some info about why it may be a good time to purchase more Apple shares. The Motley Fool has positions in and recommends Apple. |
20579.0 | 2022-06-23 00:00:00 UTC | 5 Buy Now, Pay Later Trends Smart Investors Are Watching | AAPL | https://www.nasdaq.com/articles/5-buy-now-pay-later-trends-smart-investors-are-watching | nan | nan | It's official: The S&P 500 index is in a bear market, with the index falling more than 20% since peaking in early January. Investors are focusing on inflation and rising interest rates, which have rippled across the economy.
One area facing increasing pressures is the once-hot buy now, pay later (BNPL) industry. After explosive growth in recent years, BNPL companies could be facing a reckoning. Here are five industry trends that you should be watching.
Image source: Getty Images.
1. Inflation will weigh on consumers
The consumer price index (CPI), a measure of inflation, increased 8.6% year over year in May, higher than economists expected and the fastest since December 1981. One concern is that inflation weighs on consumers, who could cut spending on goods and services -- reducing opportunities for BNPL companies.
Another concern is that consumers use BNPL loans more to pay for things without knowing how much debt they are taking on. This could result in BNPL companies taking larger losses.
One metric to pay attention to is the provision for credit losses, which measures money set aside in a given period to cover expected losses on loans that could default. For example, the stand-alone BNPL company Affirm (NASDAQ: AFRM) posted a $182.6 million provision for credit losses through the nine months ended March 31, up from $40.4 million from the previous year.
This comes as BNPL companies already rack up losses. Affirm's net loss was $520 million through the nine months ended March 31. Privately held Swedish fintech Klarna saw operating losses of $688 million last year, while Australia-based Afterpay (now owned by Block) put up $113 million in losses during its 2021 fiscal year ended last June.
AFRM Net Income (TTM) data by YCharts
2. Higher interest rates will put pressure on BNPL companies
The Federal Reserve is committed to raising interest rates to tackle inflationary pressures not seen since the 1980s. This year, the Fed has increased the federal funds rate from near zero to a 1.75% upper range. Fed policy makers expect interest rates to reach 3.4% by the end of this year.
Target Federal Funds Rate Upper Limit data by YCharts
BNPL companies performed well when interest rates were low, which led to cheaper funding costs and plenty of cash to make loans to consumers.
However, rising interest rates and economic uncertainty have caused borrowing costs to increase significantly. For example, Klarna saw borrowing costs rise to their highest on record.
These higher rates will put more pressure on stand-alone BNPL companies like Affirm, while companies with large cash balances or banking charters like Block could fare better.
3. Consumers are using debt to pay BNPL loans
In one survey by LendingTree, 42% of BNP borrowers paid late on one of their loans. In another survey by U.K.-based Citizens Advice, 42% of BNPL users borrowed money from friends and family, credit cards, or personal loans to pay down their BNPL debt, including 51% of those aged 18 to 34.
Industry watchdogs argue that BNPL is too easy to use, causing consumers to take on more debt than they can handle. That leads us to the next headwind.
4. Regulators are increasing scrutiny of the industry
In January, the U.S. federal Consumer Financial Protection Bureau (CFPB) opened an inquiry into BNPL lenders, citing concerns about growing consumer debt and data harvesting. The CFPB wants BNPL loans reported to credit-rating agencies so lenders can see how much debt a consumer has, while consumers would see their payment record on these loans reflected in their credit history.
European countries are concerned too, and in May, the Swedish Authority for Privacy Protection said it was opening an investigation into Klarna's checkout service.
5. Apple's entry into the space adds more competition
As if BNPL companies didn't face enough headwinds, now they also confront fresh competition from one of the largest companies in the world. This month, Apple (NASDAQ: AAPL) said it would launch its own BNPL installment loan option, Apple Pay Later. Apple sits on $80 billion in cash, which it can use to finance the business.
I'll be interested to see how Apple performs once it rolls out its product, which could threaten stand-alone Affirm, along with PayPal and Block, which acquired BNPL businesses last year.
Given the many pressures BNPL companies face over the next year or two, as an investor I'll be sitting on the sidelines until the dust settles.
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Courtney Carlsen has positions in Apple. The Motley Fool has positions in and recommends Affirm Holdings, Inc., Apple, Block, Inc., and PayPal Holdings. 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. | This month, Apple (NASDAQ: AAPL) said it would launch its own BNPL installment loan option, Apple Pay Later. One concern is that inflation weighs on consumers, who could cut spending on goods and services -- reducing opportunities for BNPL companies. European countries are concerned too, and in May, the Swedish Authority for Privacy Protection said it was opening an investigation into Klarna's checkout service. | This month, Apple (NASDAQ: AAPL) said it would launch its own BNPL installment loan option, Apple Pay Later. For example, the stand-alone BNPL company Affirm (NASDAQ: AFRM) posted a $182.6 million provision for credit losses through the nine months ended March 31, up from $40.4 million from the previous year. Target Federal Funds Rate Upper Limit data by YCharts BNPL companies performed well when interest rates were low, which led to cheaper funding costs and plenty of cash to make loans to consumers. | This month, Apple (NASDAQ: AAPL) said it would launch its own BNPL installment loan option, Apple Pay Later. For example, the stand-alone BNPL company Affirm (NASDAQ: AFRM) posted a $182.6 million provision for credit losses through the nine months ended March 31, up from $40.4 million from the previous year. Higher interest rates will put pressure on BNPL companies The Federal Reserve is committed to raising interest rates to tackle inflationary pressures not seen since the 1980s. | This month, Apple (NASDAQ: AAPL) said it would launch its own BNPL installment loan option, Apple Pay Later. For example, the stand-alone BNPL company Affirm (NASDAQ: AFRM) posted a $182.6 million provision for credit losses through the nine months ended March 31, up from $40.4 million from the previous year. Affirm's net loss was $520 million through the nine months ended March 31. |
20580.0 | 2022-06-23 00:00:00 UTC | Should You Buy Apple Stock? Two Key Issues to Consider | AAPL | https://www.nasdaq.com/articles/should-you-buy-apple-stock-two-key-issues-to-consider | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
With Apple Inc. (NASDAQ:AAPL) shares at a new 2022 low last week, there was news that had investors concerned. It wasn’t another lockdown at a Chinese assembly plant, or another delayed product release. This time, it was in the company’s own back yard and something that could impact the profitability of its Apple Stores. For the first time, an Apple Store — in Towson, Maryland — has voted to unionize. Is this a sign of trouble ahead for AAPL stock?
That’s one way of looking at it. I take a different viewpoint. Apple Stores are a big deal for the company. They bring in massive revenue and they are a key vector for showing off products, helping to drive more sales. If staff gets paid a bit more as a result of a unionization drive, is that really such a bad thing? I’m more focused on what’s in Apple’s product pipeline and how that is going to keep driving AAPL stock growth.
Ticker Company Price
AAPL Apple Inc. $137.43
Apple Stores May Get More Expensive to Operate
It’s hard to picture the scale of Apple’s retail footprint. Official numbers are also hard to come by, but there have been various studies published over the years, along with a few tidbits from Apple itself.
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Apple lists retail store locations in the U.S. That number is approximately 270. In addition, the company operates retail stores throughout the world, bringing the total to over 500. Going back to 2015, it was reported that each of those stores on average employs roughly 100 part-time and full-time employees. The current Apple Store employee count stands at roughly 65,000 and, according to the Washington Post, each of those workers currently earns from $17 to over $30 per hour. In addition, they receive between $1,000 and $2,000 in AAPL stock.
With those kinds of numbers, the cost of operating an Apple Store is considerable. Add in the rent (Apple Stores tend to be in prime locations) and Apple is spending a lot of money here. Should investors be worried about the prospect of rising wages for Apple Store employees if the unionization drive gains steam?
The reality is that rising wages are unlikely to have a big impact. In 2017, it was reported that Apple is the nation’s top-performing retailer in terms of sales per square foot. Apple Stores generated a staggering $5,546 per square foot in sales that year, leaving other retailers in the dust. Sales through Apple Stores and the company’s website made up 36% of the company’s $366 billion in revenue for 2021.
In comparison, the possibility of wage increases for Apple Store retail employees is a drop in the bucket. I’m not concerned about it derailing AAPL stock.
Pipeline Products Set to Move the Needle on AAPL Stock
If you are worried about the prospect of higher retail wages cutting into Apple’s growth momentum, consider the company’s product pipeline.
Those Apple Stores aren’t just retail outlets; they also serve as crucial demonstration locations. When a new product is released, consumers flock to Apple stores to see it and try it out for themselves. There’s a good chance that a demo and hands-on experience will lead to a sale.
With that in mind, think about the products we know are in Apple’s product pipeline. There’s the all-new M2 MacBook Air coming in July, a completely redesigned version of the company’s best-selling Mac. We know the iPhone 14 series will be announced in September. We also know the company has an AR headset in the wings — it has reportedly already been demonstrated to the Apple board of directors. That one will be positioned to take full advantage of the hype around the metaverse, tech’s next big thing.
In short, Apple has plenty of products in the pipeline that are capable of moving the AAPL stock needle. Don’t worry about Apple Store wages potentially eating into that revenue. Instead, celebrate the fact that Apple has highly trained retail employees and high profile locations where these new products can be demonstrated to further drum up sales.
Bottom Line: Should You Buy AAPL Stock?
There is no avoiding the reality of 2022. It has been tough on many tech stocks and Apple is no different. AAPL stock is down over 25% since the start of the year.
However, the long-term prospects for this tech titan are positive. AAPL stock still earns a “B” rating in my Portfolio Grader, with the company well-positioned to deliver, especially once we’re through the current uncertainty. Possibly having to pay its retail workers more will sting, but only a little, and it’s an investment worth making. So is AAPL stock, at least if long-term growth is what you’re after.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
The post Should You Buy Apple Stock? Two Key Issues to Consider 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 stock still earns a “B” rating in my Portfolio Grader, with the company well-positioned to deliver, especially once we’re through the current uncertainty. InvestorPlace - Stock Market News, Stock Advice & Trading Tips With Apple Inc. (NASDAQ:AAPL) shares at a new 2022 low last week, there was news that had investors concerned. Is this a sign of trouble ahead for AAPL stock? | Ticker Company Price AAPL Apple Inc. $137.43 Apple Stores May Get More Expensive to Operate It’s hard to picture the scale of Apple’s retail footprint. Pipeline Products Set to Move the Needle on AAPL Stock If you are worried about the prospect of higher retail wages cutting into Apple’s growth momentum, consider the company’s product pipeline. InvestorPlace - Stock Market News, Stock Advice & Trading Tips With Apple Inc. (NASDAQ:AAPL) shares at a new 2022 low last week, there was news that had investors concerned. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips With Apple Inc. (NASDAQ:AAPL) shares at a new 2022 low last week, there was news that had investors concerned. Ticker Company Price AAPL Apple Inc. $137.43 Apple Stores May Get More Expensive to Operate It’s hard to picture the scale of Apple’s retail footprint. Pipeline Products Set to Move the Needle on AAPL Stock If you are worried about the prospect of higher retail wages cutting into Apple’s growth momentum, consider the company’s product pipeline. | I’m more focused on what’s in Apple’s product pipeline and how that is going to keep driving AAPL stock growth. InvestorPlace - Stock Market News, Stock Advice & Trading Tips With Apple Inc. (NASDAQ:AAPL) shares at a new 2022 low last week, there was news that had investors concerned. Is this a sign of trouble ahead for AAPL stock? |
20581.0 | 2022-06-23 00:00:00 UTC | GOOGL Stock Is the Safest Buy as FAANG Crashes | AAPL | https://www.nasdaq.com/articles/googl-stock-is-the-safest-buy-as-faang-crashes | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Alphabet (NASDAQ:GOOGL) stock is not having a great year. Shares are down 23% year to date. However, it could be much worse.
Some of the other FAANG stocks have absolutely imploded. Netflix (NASDAQ:NFLX), for example, is down a stunning 70% so far in 2022 amid the streaming industry’s woes.
There is a lot of uncertainty in the FAANG stocks in general. Apple (NASDAQ:AAPL), for example, faces supply chain chaos due to its concentration of manufacturing capacity in China.
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With both short-term traders and investors dumping FAANG stocks, are there any of them still worth owning? Yes, Alphabet is still worth the risk.
GOOGL Alphabet $2,229.75
A Closer Look a GOOGL Stock
Analysts now believe that Alphabet will generate $112.25 per share of earnings in 2022. This puts GOOGL stock at just 19 times this year’s projected earnings.
They also see those earnings per share rising to $133.35 in 2023 and $152.09 in 2024. This would put Alphabet at a mere 16 times 2023 earnings and 14 times projected 2024 earnings.
This is simply incredible stuff. It’s one thing for a slow-growing company to sell at a sub-20 P/E ratio, but this is Alphabet that we’re talking about. Alphabet has grown earnings per share at 22% per year compounded over the past decade.
Similarly, it has grown free cash flow per share at 20% per year compounded as well. These are the sorts of figures that should have investors salivating. Instead, GOOGL stock has headed to a discount compared to the S&P 500 overall.
Morningstar Sees Huge Upside
Morningstar senior equity analyst Ali Mogharabi has a fair value target of $3,600 for GOOGL stock today.
This means that Alphabet is, if Mogharabi is correct, 39% undervalued. That is a tremendous margin of safety for such a large and stable company as this one.
Mogharabi believes Alphabet should trade at an enterprise value to EBITDA multiple of 20. Analysts use EV/EBITDA as a quick gauge of a company’s valuation excluding cash compared to its ability to generate cash flows on an annual basis.
Dating back to 2016, GOOGL stock has historically traded in a range between 16 and 20 times EV/EBITDA. It’s currently at 13 now. While Mogharabi’s price target is at the high end of that range, even getting back to just 16 times would put GOOGL stock at around $2,750 versus today’s $2,100 share price.
Alphabet Is A Resilient Business
It’s well-known that Alphabet’s cash cow is in its search business. The Google search engine remains a one-of-kind asset with almost no competition in most parts of the world. The company’s incredible ability to integrate search across other forms, such as the Android platform, has been legendary.
But there’s more to Alphabet than just core search. The YouTube business has become an enviable cash flow machine in recent years. Despite increasing advertisement loads there dramatically, viewership remains off-the-charts.
And then there’s everything else.
Google’s cloud business continues to grow at a rapid rate. Profitability has been an issue for the cloud division to date, but presumably Google will get it figured out sooner or later.
Beyond that, there’s Alphabet’s array of moonshots and other ventures. Be it quantum computing, self-driving, artificial intelligence or any of the other countless irons in the fire, it seems some of these are bound to pay off in a major way with time.
GOOGL Stock’s Bottom Line
You can make a case for some of the other FAANG stocks here. Amazon.com (NASDAQ:AMZN) could see a serious rebound if the economy doesn’t slow down as badly as feared. Meta Platforms (NASDAQ:META) looks like a deep value here if its ad sales don’t see further trouble.
Overall, however, if you just want one FAANG stock that can hold up in this market tumble, Alphabet is that pick. The company’s combination of massive cash flows from the core search business and its moonshots give investors a strong mix of defensive assets and growth-positioned programs.
On the date of publication, Ian Bezek held a long position in META stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The post GOOGL Stock Is the Safest Buy as FAANG Crashes 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. | Apple (NASDAQ:AAPL), for example, faces supply chain chaos due to its concentration of manufacturing capacity in China. 7 REITs to Buy for a Profitable Summer With both short-term traders and investors dumping FAANG stocks, are there any of them still worth owning? Be it quantum computing, self-driving, artificial intelligence or any of the other countless irons in the fire, it seems some of these are bound to pay off in a major way with time. | Apple (NASDAQ:AAPL), for example, faces supply chain chaos due to its concentration of manufacturing capacity in China. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Alphabet (NASDAQ:GOOGL) stock is not having a great year. This puts GOOGL stock at just 19 times this year’s projected earnings. | Apple (NASDAQ:AAPL), for example, faces supply chain chaos due to its concentration of manufacturing capacity in China. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Alphabet (NASDAQ:GOOGL) stock is not having a great year. GOOGL Alphabet $2,229.75 A Closer Look a GOOGL Stock Analysts now believe that Alphabet will generate $112.25 per share of earnings in 2022. | Apple (NASDAQ:AAPL), for example, faces supply chain chaos due to its concentration of manufacturing capacity in China. Shares are down 23% year to date. GOOGL Alphabet $2,229.75 A Closer Look a GOOGL Stock Analysts now believe that Alphabet will generate $112.25 per share of earnings in 2022. |
20582.0 | 2022-06-23 00:00:00 UTC | Apple and Android phones hacked by Italian spyware, Google says | AAPL | https://www.nasdaq.com/articles/apple-and-android-phones-hacked-by-italian-spyware-google-says-0 | nan | nan | By Zeba Siddiqui
SAN FRANCISCO, June 23 (Reuters) - An Italian company's hacking tools were used to spy on Apple Inc AAPL.O and Android smartphones in Italy and Kazakhstan, Alphabet Inc's GOOGL.O Google said in a report on Thursday.
Milan-based RCS Lab, whose website claims European law enforcement agencies as clients, developed tools to spy on private messages and contacts of the targeted devices, the report said.
Google's findings on RCS Lab comes as European and American regulators weigh potential new rules over the sale and import of spyware.
"These vendors are enabling the proliferation of dangerous hacking tools and arming governments that would not be able to develop these capabilities in-house," Google said.
Apple and the governments of Italy and Kazakhstan did not immediately respond to requests for comment.
RCS Lab said its products and services comply with European rules and help law enforcement agencies investigate crimes.
"RCS Lab personnel are not exposed, nor participate in any activities conducted by the relevant customers," it told Reuters in an email, adding that it condemned any abuse of its products.
Google said it had taken steps to protect users of its Android operating system and alerted them about the spyware.
The global industry making spyware for governments has been growing, with more and more companies developing interception tools for law enforcement organizations. Anti-surveillance activists accuse them of aiding governments that in some cases are using such tools to crack down on human rights and civil rights.
The industry came under a global spotlight when the Israeli surveillance firm NSO’s Pegasus spyware was in recent years found to have been used by multiple governments to spy on journalists, activists, and dissidents.
While RCS Lab's tool may not be as stealthy as Pegasus, it can still read messages and view passwords, said Bill Marczak, a security researcher with digital watchdog Citizen Lab.
"This shows that even though these devices are ubiquitous, there’s still a long way to go in securing them against these powerful attacks," he added.
On its website, RCS Lab describes itself as a maker of "lawful interception" technologies and services including voice, data collection and "tracking systems." It says it handles 10,000 intercepted targets daily in Europe alone.
Google researchers found RCS Lab had previously collaborated with the controversial, defunct Italian spy firm Hacking Team, which had similarly created surveillance software for foreign governments to tap into phones and computers.
Hacking Team went bust after it became a victim of a major hack in 2015 that led to a disclosure of numerous internal documents.
In some cases, Google said it believed hackers using RCS spyware worked with the target's internet service provider, which suggests they had ties to government-backed actors, said Billy Leonard, a senior researcher at Google.
(Reporting by Zeba Siddiqui in San Francisco; editing by Jonathan Oatis)
((zeba.siddiqui@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. | By Zeba Siddiqui SAN FRANCISCO, June 23 (Reuters) - An Italian company's hacking tools were used to spy on Apple Inc AAPL.O and Android smartphones in Italy and Kazakhstan, Alphabet Inc's GOOGL.O Google said in a report on Thursday. Milan-based RCS Lab, whose website claims European law enforcement agencies as clients, developed tools to spy on private messages and contacts of the targeted devices, the report said. Google researchers found RCS Lab had previously collaborated with the controversial, defunct Italian spy firm Hacking Team, which had similarly created surveillance software for foreign governments to tap into phones and computers. | By Zeba Siddiqui SAN FRANCISCO, June 23 (Reuters) - An Italian company's hacking tools were used to spy on Apple Inc AAPL.O and Android smartphones in Italy and Kazakhstan, Alphabet Inc's GOOGL.O Google said in a report on Thursday. Milan-based RCS Lab, whose website claims European law enforcement agencies as clients, developed tools to spy on private messages and contacts of the targeted devices, the report said. The global industry making spyware for governments has been growing, with more and more companies developing interception tools for law enforcement organizations. | By Zeba Siddiqui SAN FRANCISCO, June 23 (Reuters) - An Italian company's hacking tools were used to spy on Apple Inc AAPL.O and Android smartphones in Italy and Kazakhstan, Alphabet Inc's GOOGL.O Google said in a report on Thursday. Milan-based RCS Lab, whose website claims European law enforcement agencies as clients, developed tools to spy on private messages and contacts of the targeted devices, the report said. Google researchers found RCS Lab had previously collaborated with the controversial, defunct Italian spy firm Hacking Team, which had similarly created surveillance software for foreign governments to tap into phones and computers. | By Zeba Siddiqui SAN FRANCISCO, June 23 (Reuters) - An Italian company's hacking tools were used to spy on Apple Inc AAPL.O and Android smartphones in Italy and Kazakhstan, Alphabet Inc's GOOGL.O Google said in a report on Thursday. Milan-based RCS Lab, whose website claims European law enforcement agencies as clients, developed tools to spy on private messages and contacts of the targeted devices, the report said. RCS Lab said its products and services comply with European rules and help law enforcement agencies investigate crimes. |
20583.0 | 2022-06-23 00:00:00 UTC | Shopify (SHOP) Unveils New Tools to Beat Market Slowdown | AAPL | https://www.nasdaq.com/articles/shopify-shop-unveils-new-tools-to-beat-market-slowdown | nan | nan | Shopify SHOP recently unveiled a plethora of new features and updates to its first-ever semi-annual showcase — Shopify Editions.
Shopify launched more than 100 new tools, including ones to support business-to-business as it is expanding operations in the wholesale market, and TokenGate commerce, where customers can connect their crypto wallets to a store and enjoy special features.
The company has made strategic integrations with major tech companies to provide new services, like the Twitter TWTR sales channel, Apple’s AAPL iPhone tap-to-pay feature and Alphabet’s GOOGL local inventory integration with Google.
The Twitter sales channel allows merchants to connect with consumers directly from their Twitter profiles. Shopify noted that it is the first time a commerce platform has partnered with a social media company.
The recent integration with Apple enables shoppers to use Apple smartphones against the terminal to pay for goods. While this may not be a new feature in retail but Apple’s recent Pay Later installments added a whole new dimension to retail marketing.
Shopify’s Google feature syncs local inventory data with the Shopify platform to let customers know when a particular product is in stock.
Shopify Inc. Price and Consensus
Shopify Inc. price-consensus-chart | Shopify Inc. Quote
Shopify Taps into New Markets to Drive Performance
Shopify hit the jackpot during the COVID-19-induced pandemic as global brands and small stores were setting up online platforms to sell products as retail markets closed down. This created a boom in the e-commerce space.
However, this was a momentary hike in the market since the economy opened and retail stores started winning back their lost customers. Inflation and possible signs of recession have aggravated the current market scenario, which in turn slowed down the growth in the e-commerce market.
As a result, investors were wary of the future growth of the company. Shopify’s stock plunged 75.5% compared with the Zacks Internet Services industry’s decline of 25.1% in the year-to-date period.
To counter this, Shopify has forayed into the wholesale market, which is far bigger than direct-to-consumer from a market capitalization point of view.
The company is changing its operational strategies in the retail business segment to address the growing demand for consumer-to-consumer rather than direct-consumer.
People are shopping via social media platforms where people can advertise their products and pay through their phones. The recent partnership with Apple and Twitter will help Shopify address the changing dynamics in the retail market.
Shopify has entered the NFT space with its TokenGate commerce platform, which will aid it in attracting a whole new group of customers and gaining access to a whole new asset class.
The new unique feature of this platform is that the company is not operating as a NFT trading or selling platform. Rather it provides NFT holders exclusive access to special products, perks and experiences unavailable on other platforms.
Although the short-term growth prospects look bleak for the company under the current market scenario, the recent launch of new products and foray into new markets will help it generate new revenue sources in the long haul, thus impacting revenue growth positively. This will impact shareholders' wealth positively.
Shopify currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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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. | The company has made strategic integrations with major tech companies to provide new services, like the Twitter TWTR sales channel, Apple’s AAPL iPhone tap-to-pay feature and Alphabet’s GOOGL local inventory integration with Google. Apple Inc. (AAPL): Free Stock Analysis Report Shopify launched more than 100 new tools, including ones to support business-to-business as it is expanding operations in the wholesale market, and TokenGate commerce, where customers can connect their crypto wallets to a store and enjoy special features. | The company has made strategic integrations with major tech companies to provide new services, like the Twitter TWTR sales channel, Apple’s AAPL iPhone tap-to-pay feature and Alphabet’s GOOGL local inventory integration with Google. Apple Inc. (AAPL): Free Stock Analysis Report Twitter, Inc. (TWTR): Free Stock Analysis Report | The company has made strategic integrations with major tech companies to provide new services, like the Twitter TWTR sales channel, Apple’s AAPL iPhone tap-to-pay feature and Alphabet’s GOOGL local inventory integration with Google. Apple Inc. (AAPL): Free Stock Analysis Report Shopify’s Google feature syncs local inventory data with the Shopify platform to let customers know when a particular product is in stock. | The company has made strategic integrations with major tech companies to provide new services, like the Twitter TWTR sales channel, Apple’s AAPL iPhone tap-to-pay feature and Alphabet’s GOOGL local inventory integration with Google. Apple Inc. (AAPL): Free Stock Analysis Report The new unique feature of this platform is that the company is not operating as a NFT trading or selling platform. |
20584.0 | 2022-06-23 00:00:00 UTC | AAPL August 5th Options Begin Trading | AAPL | https://www.nasdaq.com/articles/aapl-august-5th-options-begin-trading | nan | nan | Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the August 5th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new August 5th contracts and identified one put and one call contract of particular interest.
The put contract at the $120.00 strike price has a current bid of $1.85. If an investor was to sell-to-open that put contract, they are committing to purchase the stock at $120.00, but will also collect the premium, putting the cost basis of the shares at $118.15 (before broker commissions). To an investor already interested in purchasing shares of AAPL, that could represent an attractive alternative to paying $137.86/share today.
Because the $120.00 strike represents an approximate 13% discount to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the put contract would expire worthless. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 92%. Stock Options Channel will track those odds over time to see how they change, publishing a chart of those numbers on our website under the contract detail page for this contract. Should the contract expire worthless, the premium would represent a 1.54% return on the cash commitment, or 13.09% annualized — at Stock Options Channel we call this the YieldBoost.
Below is a chart showing the trailing twelve month trading history for Apple Inc, and highlighting in green where the $120.00 strike is located relative to that history:
Turning to the calls side of the option chain, the call contract at the $140.00 strike price has a current bid of $5.85. If an investor was to purchase shares of AAPL stock at the current price level of $137.86/share, and then sell-to-open that call contract as a "covered call," they are committing to sell the stock at $140.00. Considering the call seller will also collect the premium, that would drive a total return (excluding dividends, if any) of 5.80% if the stock gets called away at the August 5th expiration (before broker commissions). Of course, a lot of upside could potentially be left on the table if AAPL shares really soar, which is why looking at the trailing twelve month trading history for Apple Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAPL's trailing twelve month trading history, with the $140.00 strike highlighted in red:
Considering the fact that the $140.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. The current analytical data (including greeks and implied greeks) suggest the current odds of that happening are 54%. On our website under the contract detail page for this contract, Stock Options Channel will track those odds over time to see how they change and publish a chart of those numbers (the trading history of the option contract will also be charted). Should the covered call contract expire worthless, the premium would represent a 4.24% boost of extra return to the investor, or 36.02% annualized, which we refer to as the YieldBoost.
The implied volatility in the put contract example is 45%, while the implied volatility in the call contract example is 38%.
Meanwhile, we calculate the actual trailing twelve month volatility (considering the last 252 trading day closing values as well as today's price of $137.86) to be 30%. For more put and call options contract ideas worth looking at, visit StockOptionsChannel.com.
Top YieldBoost Calls of the Nasdaq 100 »
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Of course, a lot of upside could potentially be left on the table if AAPL shares really soar, which is why looking at the trailing twelve month trading history for Apple Inc, as well as studying the business fundamentals becomes important. Below is a chart showing AAPL's trailing twelve month trading history, with the $140.00 strike highlighted in red: Considering the fact that the $140.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the August 5th expiration. | Below is a chart showing AAPL's trailing twelve month trading history, with the $140.00 strike highlighted in red: Considering the fact that the $140.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the August 5th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new August 5th contracts and identified one put and one call contract of particular interest. | Below is a chart showing AAPL's trailing twelve month trading history, with the $140.00 strike highlighted in red: Considering the fact that the $140.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the August 5th expiration. At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new August 5th contracts and identified one put and one call contract of particular interest. | At Stock Options Channel, our YieldBoost formula has looked up and down the AAPL options chain for the new August 5th contracts and identified one put and one call contract of particular interest. Below is a chart showing AAPL's trailing twelve month trading history, with the $140.00 strike highlighted in red: Considering the fact that the $140.00 strike represents an approximate 2% premium to the current trading price of the stock (in other words it is out-of-the-money by that percentage), there is also the possibility that the covered call contract would expire worthless, in which case the investor would keep both their shares of stock and the premium collected. Investors in Apple Inc (Symbol: AAPL) saw new options become available today, for the August 5th expiration. |
20585.0 | 2022-06-23 00:00:00 UTC | TQQQ, XHYC: Big ETF Inflows | AAPL | https://www.nasdaq.com/articles/tqqq-xhyc%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 ProShares UltraPro QQQ, which added 23,600,000 units, or a 5.5% increase week over week. Among the largest underlying components of TQQQ, in morning trading today Apple is up about 1%, and Microsoft is higher by about 1.2%.
And on a percentage change basis, the ETF with the biggest increase in inflows was the XHYC ETF, which added 50,000 units, for a 33.3% increase in outstanding units.
VIDEO: TQQQ, XHYC: 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. | Among the largest underlying components of TQQQ, in morning trading today Apple is up about 1%, and Microsoft is higher by about 1.2%. And on a percentage change basis, the ETF with the biggest increase in inflows was the XHYC ETF, which added 50,000 units, for a 33.3% increase in outstanding units. VIDEO: TQQQ, XHYC: 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 ProShares UltraPro QQQ, which added 23,600,000 units, or a 5.5% increase week over week. And on a percentage change basis, the ETF with the biggest increase in inflows was the XHYC ETF, which added 50,000 units, for a 33.3% increase in outstanding units. VIDEO: TQQQ, XHYC: 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 ProShares UltraPro QQQ, which added 23,600,000 units, or a 5.5% increase week over week. And on a percentage change basis, the ETF with the biggest increase in inflows was the XHYC ETF, which added 50,000 units, for a 33.3% increase in outstanding units. VIDEO: TQQQ, XHYC: 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 ProShares UltraPro QQQ, which added 23,600,000 units, or a 5.5% increase week over week. Among the largest underlying components of TQQQ, in morning trading today Apple is up about 1%, and Microsoft is higher by about 1.2%. And on a percentage change basis, the ETF with the biggest increase in inflows was the XHYC ETF, which added 50,000 units, for a 33.3% increase in outstanding units. |
20586.0 | 2022-06-23 00:00:00 UTC | Meta Platforms' (META) Creator-Friendly Policy to Aid Engagement | AAPL | https://www.nasdaq.com/articles/meta-platforms-meta-creator-friendly-policy-to-aid-engagement | nan | nan | Meta Platforms META is continuing its creator-friendly policy by not charging any fees for Subscriptions, Badges, Paid Online Events and Bulletin until Jan 1, 2024.
The company also announced that it is opening Facebook Stars to all eligible creators across multiple formats: Facebook Live, on-demand videos and Facebook Reels. Facebook Stars are digital goods that users can buy to support creators.
The latest moves, which expand monetization opportunities for creators, are a part of Meta’s initiatives to retain existing as well as attract new creators who are essential to boost user engagement across Facebook and Instagram.
New Features to Help Creators Develop Business for Metaverse
Meta has been undertaking several initiatives to help creators develop their own businesses and prepare for the metaverse. The company recently announced several new features and tools across Facebook and Instagram for creators.
Creators are expected to play a key role in developing the metaverse economy. Meta’s latest initiatives will surely benefit them in creating attractive brands and products for the metaverse.
Meta is now testing Interoperable Subscriber Groups on Facebook. Through this, creators can receive payments from users on other platforms, and automatically add them to subscribers-only Facebook groups. Meta is also expanding its test of digital collectibles like NFTs on Instagram as it continues to build for the metaverse.
The metaverse space has become the company’s key focus in recent times due to the huge growth opportunities it presents. Meta is expected to spend more than $10 billion over the next 10 years to build the metaverse.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
The metaverse market, globally, is expected to reach $800 billion by 2024, per a Bloomberg report. According to a latest report from Fortune Business Insights, the global metaverse market is expected to witness a CAGR of 47.6% between 2022 and 2029 to reach from an estimated $100.27 billion in 2022 to $1,527.55 billion by 2029.
Meta has been a frontrunner in grabbing this opportunity, given its experience in developing devices like the Quest headset. Meta is also set to release the higher-end headset — Project Cambria — later this year, which is anticipated help it retain the leading position in the Augmented Reality/Virtual Reality device space.
Additionally, Meta is anticipated to launch a digital clothing store where users can purchase designer outfits for their avatars in the metaverse. Brands like Balenciaga, Prada and Thom Browne will be initially available for purchase.
What Awaits Meta Stock in 2022?
Meta is having a terrible 2022, primarily attributable to engagement-related headwinds as well as changes made by Apple AAPL in its iOS that has made ad targeting difficult. Intensifying competition for ad dollars and user engagement from the likes of Snap SNAP, Twitter TWTR and TikTok have been other headwind.
Shares of this social-networking giant are down 53.7% year to date, underperforming the Zacks Computer & Technology sector, which has dropped 30.6% over the same time frame. Snap shares are down 72.2% while Twitter’s has declined 10.9%.
The ongoing Russia-Ukraine war has hurt advertisers’ budgets. Rising inflation as well as slowing economy is expected to trigger budget cuts. This doesn’t bode well for Meta as well as its ad-revenue-dependent peers like Twitter and Snap.
Nevertheless, Snap is benefiting from improving user engagement, particularly in the 13-34-year-old demography, which is expanding its advertiser base. Snap is also providing competition to Meta in the metaverse. Snap has collaborated with Vogue to feature a virtual try-on experience of select pieces from Balenciaga, Dior and Gucci, which will be available for Snapchatters globally.
Meta expects engagement headwinds and ad-targeting difficulty due to Apple’s iOS changes to hurt advertising revenue growth throughout 2022. This Zacks Rank #3 (Hold) company’s second-quarter guidance also reflects macroeconomic and forex concerns. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Meta's second-quarter 2022 revenues is currently pegged at $29.03 billion, indicating 0.2% decline from the figure reported in the year-ago quarter. The consensus mark for earnings stands at $2.57 per share, down 1.2% over the past 30 days and suggesting a decline of 28.81% from the figure reported in the year-ago quarter.
Zacks' Top Picks to Cash in on Electric Vehicles
Big money has already been made in the Electric Vehicle (EV) industry. But, the EV revolution has not hit full throttle yet. There is a lot of money to be made as the next push for future technologies ramps up. Zacks’ Special Report reveals 5 picks investors
See 5 EV Stocks With Extreme Upside Potential >>
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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 having a terrible 2022, primarily attributable to engagement-related headwinds as well as changes made by Apple AAPL in its iOS that has made ad targeting difficult. Apple Inc. (AAPL): Free Stock Analysis Report Meta is also set to release the higher-end headset — Project Cambria — later this year, which is anticipated help it retain the leading position in the Augmented Reality/Virtual Reality device space. | Meta is having a terrible 2022, primarily attributable to engagement-related headwinds as well as changes made by Apple AAPL in its iOS that has made ad targeting difficult. Apple Inc. (AAPL): Free Stock Analysis Report Meta Platforms, Inc. Price and Consensus Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote The metaverse market, globally, is expected to reach $800 billion by 2024, per a Bloomberg report. | Meta is having a terrible 2022, primarily attributable to engagement-related headwinds as well as changes made by Apple AAPL in its iOS that has made ad targeting difficult. Apple Inc. (AAPL): Free Stock Analysis Report New Features to Help Creators Develop Business for Metaverse Meta has been undertaking several initiatives to help creators develop their own businesses and prepare for the metaverse. | Meta is having a terrible 2022, primarily attributable to engagement-related headwinds as well as changes made by Apple AAPL in its iOS that has made ad targeting difficult. Apple Inc. (AAPL): Free Stock Analysis Report Snap shares are down 72.2% while Twitter’s has declined 10.9%. |
20587.0 | 2022-06-23 00:00:00 UTC | Alphabet Stock Is Much Better Positioned Than Other Tech Giants | AAPL | https://www.nasdaq.com/articles/alphabet-stock-is-much-better-positioned-than-other-tech-giants | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) stock is well-positioned to be resilient in the face of slowing economic growth and the valuation of GOOG stock has become quite favorable. As a result, Alphabet’s shares are definitely a buy for many investors.
And for those with a long-term time horizon, Alphabet continues to provide a means of exploiting the tremendous profits that autonomous vehicles will generate.
Ticker Company Price
GOOG Alphabet Inc. $2,247.74
Resilient to Many Challenges
Alphabet’s near-monopoly status in the online search engine space leaves it much less vulnerable to the current economic slowdown than its large-tech peers.
7 Bargain Income Stocks to Buy and Hold Forever
As a result of this status, Alphabet should not be badly hurt by a number of trends — including the reduction of demand for goods, intensifying competition, China’s struggles, and lower ad budgets — that have negatively impacted a number of other tech giants.
For example, Meta Platforms (NASDAQ:META) and Netflix (NASDAQ:NFLX) have been slammed by competition, but Alphabet’s revenue from online search ads will not be materially impacted by competition due to its overwhelming market share in the space. Meanwhile, consumers’ well-documented switch to experiences from products is probably having significant, negative impacts on Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT). But since Alphabet generates revenue from ads for experiences as well as for goods, it should be much less affected by the goods-to-experiences switch than other tech giants.
Similarly, since Alphabet generates very little revenue from China, it should not be, unlike Apple and Microsoft, materially affected by China’s economic issues.
And finally, many companies use Snap’s (NYSE:SNAP) Snapchat as a means of establishing brand identity among young people. When companies’ business slows, brand identity advertising is one of the first items that they cut. Conversely, of course, ads on Google are targeted toward consumers who are looking to buy goods or services immediately.
Waymo Is Still Likely to Move the Needle Eventually
For a couple of years, I have been optimistic about the ability of Waymo, Alphabet’s autonomous-driving unit, to drive GOOG stock higher. Waymo’s progression has been slower than I thought, but the division has had some achievements. Specifically, it has expanded its robotaxi service to downtown Phoenix and the city’s airport. It is expected to start a similar service in San Francisco soon and is partnering with UPS (NYSE:UPS) and Walmart (NYSE:WMT) to deliver products. Waymo is also partnering with Uber (NYSE:UBER) on autonomous trucks.
According to CNBC, autonomous vehicles are “poised to reach 12% of new car registrations globally by 2030.” It’s a good bet that Waymo will continue to play a major role in the sector as it expands in the coming years.
Alphabet is well-positioned to prosper despite the current macroeconomic headwinds and the future of its Waymo unit is very bright. On the valuation front, the shares are changing hands for a forward price-to-earnings ratio of just 19. Consequently, GOOG stock is a buy for both medium-term and long-term investors.
On the date of publication, Larry Ramer did not have (either directly or indirectly) any positions in the securities mentioned in this article.
The post Alphabet Stock Is Much Better Positioned Than Other Tech Giants 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. | Meanwhile, consumers’ well-documented switch to experiences from products is probably having significant, negative impacts on Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT). And for those with a long-term time horizon, Alphabet continues to provide a means of exploiting the tremendous profits that autonomous vehicles will generate. 7 Bargain Income Stocks to Buy and Hold Forever As a result of this status, Alphabet should not be badly hurt by a number of trends — including the reduction of demand for goods, intensifying competition, China’s struggles, and lower ad budgets — that have negatively impacted a number of other tech giants. | Meanwhile, consumers’ well-documented switch to experiences from products is probably having significant, negative impacts on Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT). InvestorPlace - Stock Market News, Stock Advice & Trading Tips Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) stock is well-positioned to be resilient in the face of slowing economic growth and the valuation of GOOG stock has become quite favorable. Ticker Company Price GOOG Alphabet Inc. $2,247.74 Resilient to Many Challenges Alphabet’s near-monopoly status in the online search engine space leaves it much less vulnerable to the current economic slowdown than its large-tech peers. | Meanwhile, consumers’ well-documented switch to experiences from products is probably having significant, negative impacts on Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT). InvestorPlace - Stock Market News, Stock Advice & Trading Tips Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) stock is well-positioned to be resilient in the face of slowing economic growth and the valuation of GOOG stock has become quite favorable. 7 Bargain Income Stocks to Buy and Hold Forever As a result of this status, Alphabet should not be badly hurt by a number of trends — including the reduction of demand for goods, intensifying competition, China’s struggles, and lower ad budgets — that have negatively impacted a number of other tech giants. | Meanwhile, consumers’ well-documented switch to experiences from products is probably having significant, negative impacts on Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT). InvestorPlace - Stock Market News, Stock Advice & Trading Tips Alphabet (NASDAQ:GOOG,NASDAQ:GOOGL) stock is well-positioned to be resilient in the face of slowing economic growth and the valuation of GOOG stock has become quite favorable. As a result, Alphabet’s shares are definitely a buy for many investors. |
20588.0 | 2022-06-23 00:00:00 UTC | 3 Warren Buffett Stocks You'll Wish You'd Bought 5 Years From Now | AAPL | https://www.nasdaq.com/articles/3-warren-buffett-stocks-youll-wish-youd-bought-5-years-from-now | nan | nan | Amid the recent stock market sell-off, Warren Buffett has again proven the success of his investment formula. While the S&P 500 has entered bear territory, his company Berkshire Hathaway sells near levels where it traded 12 months ago.
Although Buffett may have become better known for holdings outside of tech, he holds a few positions in the software sector. As technology stocks recover, companies such as Apple (NASDAQ: AAPL), Mastercard (NYSE: MA), and Snowflake (NYSE: SNOW) could boost Buffett's returns as conditions improve.
The free-cash-flow king that relies increasingly on software
Will Healy (Apple): One cannot discuss Buffett's tech plays without mentioning Apple. His Apple holdings account for 39% of a portfolio that holds more than 50 publicly traded stocks.
The majority of revenue comes from the iPhone, a combined hardware and software offering. Additionally, software may have kept Apple strong during the downturn given the success of Apple Services. It includes software offerings such as iCloud, advertising, digital content, and payments.
The Apple Services segment generated $20 billion in revenue in the fiscal second quarter of 2022 (which ended March 26). This is a 17% surge year over year, taking this segment's revenue to an all-time high.
Its success also helped the company as rising prices and supply chain challenges weighed on Apple. Q2 revenue came in at $97 billion, a 9% increase from year-ago levels. Net income grew 6% over that period to $25 billion as a rising cost of sales, higher operating expenses, and increased income taxes reduced growth in the bottom line.
But despite the single-digit growth, Apple's $201 billion in liquidity should help it ride out any storm and keep it a crown jewel in the Buffett portfolio. Moreover, the stock has risen by 4% over the last 12 months. While not a stellar performance, it bodes well for the company considering that many tech growth stocks have lost more than three-fourths of their value in recent months.
Also, its price-to earnings (P/E) ratio of 22 is at its lowest level since the beginning of the pandemic. Such a valuation could attract more investment from Buffett and other prominent investors. Given its relative stability and massive liquidity position amid this sell-off, perhaps now is the time to buy.
Mastercard gives investors the best of both worlds
Justin Pope (Mastercard): Mastercard is the world's second-largest payment processing network. It has just under 2.9 billion debit and credit cards in circulation worldwide.
Mastercard's network connects the merchants where you swipe your payment card to the financial institutions that handle the money. Think of the network as a highway that cars use to travel back and forth. You pay a toll when you use the highway; similarly, Mastercard charges a small percentage of each transaction its network processes.
The company's grown revenue by an average of 11% annually over the past decade, driven by a steady shift away from cash as a payment method. Additionally, Mastercard isn't impacted by inflation because its fee is a percentage of each transaction; in other words, Mastercard captures more revenue as the prices of goods and services increase.
Mastercard is a cash cow, turning 46% of its revenue into free cash flow. Management shares those cash profits with investors, having paid and raised its dividend for the past 11 years. Investors won't get a huge dividend yield at just 0.6%, but the payout grows quickly; its annual increase has averaged 18% over the past five years. The company also spends billions on share repurchases, shrinking the share count by 22% over the past decade.
The company's ability to grow cash and return it to investors simultaneously has powered market-beating returns, totaling more than 7,300% since Mastercard came public in 2006. Despite its success, there could still be more upside ahead. Earnings per share (EPS) have grown by an average of 16% over the past three years, only slightly dropping from its 10-year rate of 19%. Warren Buffett bought his first position in 2011, which remains a part of his portfolio today.
Snowflake's business model makes it stand out from its cloud-computing peers
Jake Lerch (Snowflake): Snowflake doesn't fit the profile of a typical "Buffett stock." In fact, Snowflake is the type of company Buffett may have derided several years ago. It's a recently founded technology company and its business model can be challenging to understand. Nevertheless, Buffett -- or more likely Berkshire Hathaway investment managers Todd Combs or Ted Weschler -- has accumulated over 6 million shares of Snowflake.
Snowflake is, at the most basic level, a cloud computing company. But what really differentiates the company is its business model. Snowflake doesn't focus on increasing its customers' sales or streamlining their human resources workflow. Instead, it helps organizations gain a bird's eye view of all the data relevant to their operations. This perspective allows them to gain valuable insights into trends and improve their decision making.
For example, Snowflake can help retailers more accurately predict and manage their inventory. In the pharmaceutical industry, Snowflake can help companies research and develop new treatments by quickly compiling and sharing data from outside sources.
There's no doubt that Snowflake has secular tailwinds behind it. The company currently has 184 large customers (those generating more than $1 million in product revenue), and it plans to expand that number to 1,400 by 2029. Moreover, Snowflake hopes to grow its revenue almost tenfold over that same period. Over the last 12 months, Snowflake generated $1.4 billion of revenue -- its first time crossing the $1 billion mark. And by 2029, the company aims to exceed $10 billion in annual sales.
But owning shares of Snowflake isn't without risk. First of all, Snowflake lacks profits. The company has never turned a profit, and its net income actually sank deeper into the red over the last two years, mainly due to lucrative stock compensation for its employees. What's more, the company relies on would-be competitors like Amazon and Microsoft for the cloud infrastructure to run its software.
Nevertheless, Snowflake appears to have carved out a lucrative niche in the cloud-computing space. If you're willing to ride out short-term volatility, Snowflake looks like an outstanding Buffett stock -- albeit an unorthodox one.
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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. Jake Lerch has positions in Amazon. Justin Pope has no position in any of the stocks mentioned. Will Healy has positions in Berkshire Hathaway (B shares). The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), Mastercard, Microsoft, 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. | As technology stocks recover, companies such as Apple (NASDAQ: AAPL), Mastercard (NYSE: MA), and Snowflake (NYSE: SNOW) could boost Buffett's returns as conditions improve. Investors won't get a huge dividend yield at just 0.6%, but the payout grows quickly; its annual increase has averaged 18% over the past five years. In the pharmaceutical industry, Snowflake can help companies research and develop new treatments by quickly compiling and sharing data from outside sources. | As technology stocks recover, companies such as Apple (NASDAQ: AAPL), Mastercard (NYSE: MA), and Snowflake (NYSE: SNOW) could boost Buffett's returns as conditions improve. Mastercard gives investors the best of both worlds Justin Pope (Mastercard): Mastercard is the world's second-largest payment processing network. The Motley Fool has positions in and recommends Amazon, Apple, Berkshire Hathaway (B shares), Mastercard, Microsoft, and Snowflake Inc. | As technology stocks recover, companies such as Apple (NASDAQ: AAPL), Mastercard (NYSE: MA), and Snowflake (NYSE: SNOW) could boost Buffett's returns as conditions improve. Snowflake's business model makes it stand out from its cloud-computing peers Jake Lerch (Snowflake): Snowflake doesn't fit the profile of a typical "Buffett stock." 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. | As technology stocks recover, companies such as Apple (NASDAQ: AAPL), Mastercard (NYSE: MA), and Snowflake (NYSE: SNOW) could boost Buffett's returns as conditions improve. Management shares those cash profits with investors, having paid and raised its dividend for the past 11 years. 10 stocks we like better than Snowflake Inc. |
20589.0 | 2022-06-23 00:00:00 UTC | Is Fidelity High Dividend ETF (FDVV) a Strong ETF Right Now? | AAPL | https://www.nasdaq.com/articles/is-fidelity-high-dividend-etf-fdvv-a-strong-etf-right-now-1 | nan | nan | Making its debut on 09/12/2016, smart beta exchange traded fund Fidelity High Dividend ETF (FDVV) provides investors broad exposure to the Style Box - All Cap Value category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $1.13 billion, this makes it one of the largest ETFs in the Style Box - All Cap Value. FDVV is managed by Fidelity. FDVV, before fees and expenses, seeks to match the performance of the Fidelity Core Dividend Index.
The Fidelity High Dividend Index reflects the performance of stocks of large and mid-capitalization high-dividend-paying companies that are expected to continue to pay and grow their dividends.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Operating expenses on an annual basis are 0.29% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.54%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 19.60% of the portfolio. Financials and Energy round out the top three.
Taking into account individual holdings, Apple Inc Common Stock Usd.00001 (AAPL) accounts for about 5.16% of the fund's total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT) and Chevron Corp Common Stock Usd.75 (CVX).
Its top 10 holdings account for approximately 28.39% of FDVV's total assets under management.
Performance and Risk
The ETF has lost about -10.77% and is down about -1.71% so far this year and in the past one year (as of 06/23/2022), respectively. FDVV has traded between $34.91 and $42.25 during this last 52-week period.
FDVV has a beta of 0.99 and standard deviation of 23.70% for the trailing three-year period. With about 117 holdings, it effectively diversifies company-specific risk.
Alternatives
Fidelity High Dividend 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 $6.18 billion in assets, iShares Core S&P U.S. Value ETF has $10.77 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
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Fidelity High Dividend ETF (FDVV): 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 Common Stock Usd.00001 (AAPL) accounts for about 5.16% of the fund's total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT) and Chevron Corp Common Stock Usd.75 (CVX). Apple Inc. (AAPL): Free Stock Analysis Report Making its debut on 09/12/2016, smart beta exchange traded fund Fidelity High Dividend ETF (FDVV) provides investors broad exposure to the Style Box - All Cap Value category of the market. | Taking into account individual holdings, Apple Inc Common Stock Usd.00001 (AAPL) accounts for about 5.16% of the fund's total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT) and Chevron Corp Common Stock Usd.75 (CVX). Apple Inc. (AAPL): Free Stock Analysis Report Making its debut on 09/12/2016, smart beta exchange traded fund Fidelity High Dividend ETF (FDVV) provides investors broad exposure to the Style Box - All Cap Value category of the market. | Taking into account individual holdings, Apple Inc Common Stock Usd.00001 (AAPL) accounts for about 5.16% of the fund's total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT) and Chevron Corp Common Stock Usd.75 (CVX). Apple Inc. (AAPL): Free Stock Analysis Report Making its debut on 09/12/2016, smart beta exchange traded fund Fidelity High Dividend ETF (FDVV) provides investors broad exposure to the Style Box - All Cap Value category of the market. | Taking into account individual holdings, Apple Inc Common Stock Usd.00001 (AAPL) accounts for about 5.16% of the fund's total assets, followed by Microsoft Corp Common Stock Usd.00000625 (MSFT) and Chevron Corp Common Stock Usd.75 (CVX). Apple Inc. (AAPL): Free Stock Analysis Report Making its debut on 09/12/2016, smart beta exchange traded fund Fidelity High Dividend ETF (FDVV) provides investors broad exposure to the Style Box - All Cap Value category of the market. |
20590.0 | 2022-06-23 00:00:00 UTC | Warren Buffett Has Bet the Farm on These 4 Stocks | AAPL | https://www.nasdaq.com/articles/warren-buffett-has-bet-the-farm-on-these-4-stocks | nan | nan | If you want to be a successful investor, you'd do well to imitate Berkshire Hathaway CEO Warren Buffett. When Buffett took over at Berkshire in the 1960s, the stock traded for less than $15 per share. Today, it trades at over $400,000. And the increase in shareholder value is due to astute investments from Buffett and company.
Buffett's Berkshire often acquires companies outright. But it also invests in shares of public companies. If you were to glance at its holdings, you would conclude that it's betting the farm on Apple (NASDAQ: AAPL), Bank of America, Chevron, and Coca-Cola -- these four stocks account for more than half of the value of its portfolio.
But don't rush out to concentrate the majority of your net worth in just a few investment ideas like Buffett. If you want to be successful like him, there's some indispensable context for Berkshire's portfolio that you must understand first.
Why you need a diversified portfolio
If you're going to invest the Motley Fool way, you need to commit to buying at least 25 to 30 stocks. Buying this many means that you should aim to invest between 3% and 5% of your money in each stock. Betting the farm on just a few stocks is discouraged.
The diversified-portfolio approach recognizes two rock-hard truths about investing. First, some of your investments will be bad ones because plenty of unforeseen, adverse things will happen. Second, just a handful of stocks drive lasting, long-term returns, so you want to buy enough stocks to give yourself a chance at one of the great ones.
I'll back up both points. And I'll back up the first one using Buffett himself.
In 2012, Berkshire Hathaway owned a position in European grocery store chain Tesco, a position it had acquired for $2.3 billion. In the 2014 letter to shareholders, Buffett noted that it had exited its position at a $444 million loss -- 19% of their original investment -- because of quickly deteriorating operating results and a series of managerial mistakes. The following year, Buffett wrote: "I will commit more errors; you can count on that. If we luck out, they will occur at our smaller operations."
As I said, some of your investments will be bad ones.
To my second point, Hendrik Bessembinder of the W.P. Carey School of Business published a study in 2018, which found that, from 1926, just 4% of stocks were responsible for all the stock market's gains -- just one stock out of every 25. You're unlikely to create a portfolio built entirely of these select few life-changing investments. However, your odds of finding at least one of them go up by buying more stocks.
To reiterate, just a handful of stocks drive lasting long-term returns.
Both of these truths underscore the need to have a diversified portfolio.
Context for Buffett's words
Students of Warren Buffett likely disagree. After all, Buffett and his investing partner Charlie Munger seem opposed to the idea of diversification. They sound like people who prefer to bet the farm on a stock like Apple.
Munger has said that investors run the risk of over-diversifying -- something he calls "diworsification" -- after just five stocks.
Similarly, Buffett has said, "Diversification is a protection against ignorance." He also said that diversification "makes very little sense for anyone that knows what they're doing."
Who wants to ignorantly over-diversify when greats like Buffett and Munger say not to?
While, as mentioned, Apple, Bank of America, Chevron, and Coca-Cola make up more than half of Berkshire's portfolio, keep in mind that Berkshire actually owned nearly 50 stocks and one exchange-traded fund (ETF) as of March 31. Moreover, Berkshire created or added to 15 different positions in the first quarter of 2022 alone, according to Forbes. So much for over-diversifying after five stocks.
Therefore, Buffett and Munger are actually practitioners of diversification. And if diversification is good enough for these two greats, it should be good enough for you too.
But what about the Apple farm?
We've clearly seen the need to build a diversified portfolio. But there's another principle investors should embrace: Hold on to your winners for the long haul. Again, Buffett exemplifies this perfectly with Apple.
To double back, statistically, just one in 25 stocks will drive the majority of returns. If that's true, it would be insane to sell that one position, or even a portion of that position, once it became a large part of your portfolio. The most logical thing to do is let it run because odds are you won't reinvest that money in something just as good or better.
For Buffett's part, Apple stock is up around 400% since Berkshire started buying in 2016. It now accounts for nearly 40% of the portfolio's value. But this is largely due to appreciation -- Berkshire did not put 40% of its cash in the stock.
The same could be said of its outsized positions in Bank of America, Chevron, and Coca-Cola: They've gone up.
Without context, you might think that you should invest 40% of your portfolio in one stock. But now we've seen that Buffett actually exemplifies a diversified approach but allows good investments to keep going up. And this is precisely what everyday investors should be doing too.
Knowing when to sell a stock is a separate discussion. Maybe the day will come for Berkshire to sell or trim its position in Apple. But for now, Apple is still posting quarterly records for revenue and returning tons of cash to shareholders, meaning Buffett will likely keep letting this winner win for a while longer.
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Bank of America is an advertising partner of The Ascent, a Motley Fool company. Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple and Berkshire Hathaway (B shares). The Motley Fool recommends Tesco 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. | If you were to glance at its holdings, you would conclude that it's betting the farm on Apple (NASDAQ: AAPL), Bank of America, Chevron, and Coca-Cola -- these four stocks account for more than half of the value of its portfolio. In the 2014 letter to shareholders, Buffett noted that it had exited its position at a $444 million loss -- 19% of their original investment -- because of quickly deteriorating operating results and a series of managerial mistakes. But for now, Apple is still posting quarterly records for revenue and returning tons of cash to shareholders, meaning Buffett will likely keep letting this winner win for a while longer. | If you were to glance at its holdings, you would conclude that it's betting the farm on Apple (NASDAQ: AAPL), Bank of America, Chevron, and Coca-Cola -- these four stocks account for more than half of the value of its portfolio. While, as mentioned, Apple, Bank of America, Chevron, and Coca-Cola make up more than half of Berkshire's portfolio, keep in mind that Berkshire actually owned nearly 50 stocks and one exchange-traded fund (ETF) as of March 31. The Motley Fool recommends Tesco 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. | If you were to glance at its holdings, you would conclude that it's betting the farm on Apple (NASDAQ: AAPL), Bank of America, Chevron, and Coca-Cola -- these four stocks account for more than half of the value of its portfolio. While, as mentioned, Apple, Bank of America, Chevron, and Coca-Cola make up more than half of Berkshire's portfolio, keep in mind that Berkshire actually owned nearly 50 stocks and one exchange-traded fund (ETF) as of March 31. For Buffett's part, Apple stock is up around 400% since Berkshire started buying in 2016. | If you were to glance at its holdings, you would conclude that it's betting the farm on Apple (NASDAQ: AAPL), Bank of America, Chevron, and Coca-Cola -- these four stocks account for more than half of the value of its portfolio. Why you need a diversified portfolio If you're going to invest the Motley Fool way, you need to commit to buying at least 25 to 30 stocks. For Buffett's part, Apple stock is up around 400% since Berkshire started buying in 2016. |
20591.0 | 2022-06-22 00:00:00 UTC | Market Sell-Off: 1 Tech Stock to Buy Hand Over Fist Right Now | AAPL | https://www.nasdaq.com/articles/market-sell-off%3A-1-tech-stock-to-buy-hand-over-fist-right-now | nan | nan | Shares of contract electronics manufacturer Jabil (NYSE: JBL) were clobbered following the release of the company's fiscal 2022 third-quarter earnings report on May 16. The stock fell 10% in a single session as investors were spooked about the possibility of a slowdown in the demand for its offerings.
Jabil reported healthy growth despite the supply chain issues plaguing the semiconductor industry. But management's comments on the latest earnings call regarding a potential weakness in demand due to economic slowdowns led investors to press the panic button. However, a closer look at Jabil's latest results and guidance indicates that investors may be overreacting.
Jabil crushed expectations and raised its guidance once again
Jabil delivered fiscal Q3 revenue of $8.3 billion, an increase of 15% over the prior-year period. Its adjusted earnings increased 32% year over year to $1.72 per share last quarter. Wall Street was looking for $1.62 per share in earnings on $8.22 billion in revenue from Jabil, but strong growth in the company's electronics manufacturing services (EMS) segment helped it crush expectations.
Jabil's EMS business produced 54% of its top line and posted 23% year-over-year growth, driven by fast-growing end markets such as industrial and semiconductor capital equipment, 5G wireless, cloud computing, digital printing, and retail. The diversified manufacturing services (DMS) segment registered a 7% year-over-year increase in revenue despite headwinds in certain areas. Jabil pointed out that the automotive, mobility, and healthcare packaging markets witnessed healthy demand.
More importantly, Jabil CFO Mike Dastoor said on the earnings call: "Across the majority of our end markets, demand has been extremely resilient and continues to outstrip supply across our business, particularly in end markets that continue to benefit from strong secular tailwinds, markets such as electric vehicles, personalized medicine and healthcare, clean and smart energy infrastructure, 5G infrastructure, cloud, and semi-cap."
Dastoor adds that these markets account for a large chunk of Jabil's portfolio, and "sustained growth in these markets will continue, even if overall global economic growth slows from the solid levels over the last few years."
Jabil management's confidence in healthy end-market demand reflects in the company's guidance, which was upgraded once again. The company now expects $32.8 billion in revenue this year along with adjusted earnings of $7.45 per share. For comparison, Jabil had guided for $6.35 per share in earnings on $31.5 billion in revenue at the beginning of the fiscal year. The improved guidance isn't surprising as Jabil headed into its quarterly report with multiple growth drivers, including the sunny prospects of its largest customer Apple (NASDAQ: AAPL).
Jabil's current annual guidance points toward a 12% year-over-year increase in revenue, while fiscal 2022 earnings are on track to increase 33% over the prior-year period. However, it won't be surprising to see Jabil raise its guidance further thanks to a bunch of key growth hotspots, which should also ensure multi-year growth for the company.
Investors shouldn't miss the bigger picture
We have already seen that Jabil management is confident of sustaining its growth thanks to the markets that it is serving. A closer look indicates that there is a huge opportunity available for the company to tap and ensure consistent long-term growth. For instance, the healthcare contract manufacturing market that was worth an estimated $212 billion in 2021 is expected to clock annual growth of 9.6% through the end of the decade, which means that it could be worth $483 billion by 2030.
Similarly, Jabil's supplier relationship with Apple should present another secular growth opportunity for the company. Apple was Jabil's largest customer last year, accounting for 22% of its top line. The tech giant uses Jabil's casings in its iPhones and iPads. Given that Apple is dominating the 5G smartphone market with its iPhones and is taking steps to diversify its presence into more markets such as self-driving cars and mixed reality headsets.
As a result, Jabil's reliance on Apple for a substantial chunk of its revenue could turn out to be a catalyst in the long run as its largest customer branches out into fast-growing niches and expands its product portfolio. All of this indicates that it won't be surprising to see Jabil sustain its healthy bottom-line growth in the long run, which is why investors may want to buy the stock hand over fist right now given its dirt-cheap valuation.
Jabil is trading at just 9.8 times trailing earnings, which is a huge discount over the Nasdaq-100's multiple of 26. The company's impressive growth indicates that it is significantly undervalued right now, so investors have an opportunity to buy this potential growth stock on the cheap before it takes off.
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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | The improved guidance isn't surprising as Jabil headed into its quarterly report with multiple growth drivers, including the sunny prospects of its largest customer Apple (NASDAQ: AAPL). Jabil's EMS business produced 54% of its top line and posted 23% year-over-year growth, driven by fast-growing end markets such as industrial and semiconductor capital equipment, 5G wireless, cloud computing, digital printing, and retail. As a result, Jabil's reliance on Apple for a substantial chunk of its revenue could turn out to be a catalyst in the long run as its largest customer branches out into fast-growing niches and expands its product portfolio. | The improved guidance isn't surprising as Jabil headed into its quarterly report with multiple growth drivers, including the sunny prospects of its largest customer Apple (NASDAQ: AAPL). Jabil crushed expectations and raised its guidance once again Jabil delivered fiscal Q3 revenue of $8.3 billion, an increase of 15% over the prior-year period. Wall Street was looking for $1.62 per share in earnings on $8.22 billion in revenue from Jabil, but strong growth in the company's electronics manufacturing services (EMS) segment helped it crush expectations. | The improved guidance isn't surprising as Jabil headed into its quarterly report with multiple growth drivers, including the sunny prospects of its largest customer Apple (NASDAQ: AAPL). Wall Street was looking for $1.62 per share in earnings on $8.22 billion in revenue from Jabil, but strong growth in the company's electronics manufacturing services (EMS) segment helped it crush expectations. More importantly, Jabil CFO Mike Dastoor said on the earnings call: "Across the majority of our end markets, demand has been extremely resilient and continues to outstrip supply across our business, particularly in end markets that continue to benefit from strong secular tailwinds, markets such as electric vehicles, personalized medicine and healthcare, clean and smart energy infrastructure, 5G infrastructure, cloud, and semi-cap." | The improved guidance isn't surprising as Jabil headed into its quarterly report with multiple growth drivers, including the sunny prospects of its largest customer Apple (NASDAQ: AAPL). A closer look indicates that there is a huge opportunity available for the company to tap and ensure consistent long-term growth. 10 stocks we like better than Jabil Inc. |
20592.0 | 2022-06-22 00:00:00 UTC | After Hours Most Active for Jun 22, 2022 : NIO, QQQ, ITUB, BAC, AAPL, CLVT, TLT, AMZN, MSFT, FHN, X, AMD | AAPL | https://www.nasdaq.com/articles/after-hours-most-active-for-jun-22-2022-%3A-nio-qqq-itub-bac-aapl-clvt-tlt-amzn-msft-fhn-x | nan | nan | The NASDAQ 100 After Hours Indicator is down -9.72 to 11,517.99. The total After hours volume is currently 81,150,669 shares traded.
The following are the most active stocks for the after hours session:
NIO Inc. (NIO) is -0.02 at $22.53, with 6,064,373 shares traded. As reported by Zacks, the current mean recommendation for NIO is in the "buy range".
Invesco QQQ Trust, Series 1 (QQQ) is +0.03 at $280.70, with 3,440,598 shares traded. This represents a 4.24% increase from its 52 Week Low.
Itau Unibanco Banco Holding SA (ITUB) is unchanged at $4.57, with 3,104,598 shares traded. As reported by Zacks, the current mean recommendation for ITUB is in the "buy range".
Bank of America Corporation (BAC) is unchanged at $32.60, with 2,967,035 shares traded. As reported by Zacks, the current mean recommendation for BAC is in the "buy range".
Apple Inc. (AAPL) is -0.08 at $135.27, with 2,654,212 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range".
Clarivate Plc (CLVT) is unchanged at $13.24, with 2,414,517 shares traded. As reported by Zacks, the current mean recommendation for CLVT is in the "buy range".
iShares 20+ Year Treasury Bond ETF (TLT) is -0.16 at $113.05, with 2,225,285 shares traded. This represents a 4.56% increase from its 52 Week Low.
Amazon.com, Inc. (AMZN) is +0.02 at $108.97, with 1,913,355 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".
Microsoft Corporation (MSFT) is -0.08 at $253.05, with 1,825,697 shares traded. As reported by Zacks, the current mean recommendation for MSFT is in the "buy range".
First Horizon Corporation (FHN) is unchanged at $21.45, with 1,801,140 shares traded. FHN's current last sale is 91.28% of the target price of $23.5.
United States Steel Corporation (X) is +0.02 at $19.09, with 1,799,388 shares traded. X's current last sale is 69.42% of the target price of $27.5.
Advanced Micro Devices, Inc. (AMD) is -0.1 at $83.65, with 1,647,764 shares traded. As reported by Zacks, the current mean recommendation for AMD 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 -0.08 at $135.27, with 2,654,212 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". Itau Unibanco Banco Holding SA (ITUB) is unchanged at $4.57, with 3,104,598 shares traded. | Apple Inc. (AAPL) is -0.08 at $135.27, with 2,654,212 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". | Apple Inc. (AAPL) is -0.08 at $135.27, with 2,654,212 shares traded. As reported by Zacks, the current mean recommendation for AAPL is in the "buy range". The total After hours volume is currently 81,150,669 shares traded. | Apple Inc. (AAPL) is -0.08 at $135.27, with 2,654,212 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". |
20593.0 | 2022-06-22 00:00:00 UTC | 3 Mega-Cap Stocks for Recession-Proof Dividends | AAPL | https://www.nasdaq.com/articles/3-mega-cap-stocks-for-recession-proof-dividends | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Mega-cap stocks are defined as stocks with market capitalizations above $200 billion. These represent the largest businesses in the world. Mega-cap stocks have built-in competitive advantages such as strong brands and global scale.
Since they are larger and generally more stable businesses, mega-cap stocks could outperform small-caps or mid-caps in a bear market. As a result, investors looking for quality stocks with reliable dividends in a recession should consider the following 3 mega-cap stocks.
Ticker Company Price
APPL Apple $136.47
WMT Walmart $121.56
PFE Pfizer $49.44
Mega-Cap Stock: Apple (AAPL)
Source: Eric Broder Van Dyke / Shutterstock.com
Apple (NASDAQ:AAPL) is a technology giant that manufactures devices such as iPhones, iPads, Mac, Apple Watch and Apple TV. Apple also has a services business that sells music, apps and subscriptions. Apple’s market cap exceeds $2 trillion.
The tech sector is usually notorious for volatility during recessions. But Apple stock is a very stable company, even for a tech stock. In the most recent quarter Apple generated revenue of $97.278 billion, an 8.6% increase compared to Q2 2021. Product sales were up 6.6%, led by a 5.5% increase in iPhones (52% of total sales). Service sales increased 17.3% to $19.8 billion and made up 20% of all sales in the quarter. Earnings-per-share of $1.52 per share rose 8.6% year-over-year.
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Going forward Apple’s earnings growth will be driven by several factors. One of these is the ongoing cycle of iPhone releases. In the long run Apple should be able to grow its iPhone sales. Moreover, in emerging countries where consumers have rising disposable incomes, Apple should be able to increase the number of smartphones it is selling in the coming years.
In addition, Apple’s Services unit which consists of iTunes, Apple Music, the App Store, iCloud, Apple Pay, etc., has recorded a significant revenue growth rate in recent years. Services revenues grow at a fast rate and produce high-margin, recurring revenues.
Apple is arguably the safest tech stock, not just because of its huge size and stable business model, but also because of its tremendous balance sheet.
As of the most recent report Apple held $51.5 billion in cash and securities, $118.2 billion in current assets and $350.7 billion in total assets (of which an additional $141.2 billion are non-current securities) against $127.5 billion in current liabilities and $283.3 billion in total liabilities.
Shares currently yield 0.7%, which is a fairly low yield. However, Apple is a strong dividend growth stock. The company has come through with 10 years of consecutive dividend increases since initiating its dividend a decade ago. In April, the company increased its dividend by 4.5%. And with a 2022 expected dividend payout ratio of just 15%, Apple has plenty of financial cushion to continue increasing its dividend each year, even in a recession.
Walmart (WMT)
Source: Sundry Photography / Shutterstock.com
Walmart (NYSE:WMT) is a discount retailer and dominates the industry. It is the largest retailer in the world, serving more than 230 million customers each week. Annual sales reach nearly $600 billion for Walmart, and the stock has a market cap above $300 billion.
In the 2022 first quarter, revenue grew 2.4% to $141.6 billion. Adjusted earnings-per-share came to $1.30 for the quarter. Comparable sales were up 3% year-over-year in the U.S., and up 9% on a two-year stacked basis. eCommerce growth was 1% year-over-year, but up 38% on a two-year stacked basis as demand for online shopping continues to grow.
Sam’s Club comparable sales rose 10.2% year-over-year, and the two-year value was +17.4%. Membership income at Sam’s Club was up 10.5% year-over-year.
We have a positive long-term outlook for Walmart’s earnings growth, even with the near-term challenges of inflation. The company continues to buy back stock as well, which is a tailwind for earnings-per-share growth. We see low single-digit sales growth each year, with its e-commerce business being the primary driver of top line growth. That combination should be good enough to create mid-single-digit growth without the benefit of margin expansion.
Walmart is one of the most recession-proof business models in the entire stock market. During recessions, consumers usually shift their spending habits, seeking out lower prices. It could actually be argued that Walmart benefits from recessions.
To that end, consider that Walmart managed to increase earnings steadily during and after the Great Recession of 2007-2010. Hard economic conditions tend to send consumers on the margins to Walmart, which is also an advantage. A similar dynamic played out during the coronavirus pandemic, when Walmart remained highly profitable.
Walmart has increased its dividend for over 40 years, making it a Dividend Aristocrat. Shares currently yield 1.8%. The stock has a 2022 dividend payout ratio of 35%, indicating a safe dividend.
Mega-Cap Stock: Pfizer (PFE)
Source: Manuel Esteban / Shutterstock.com
Pfizer (NYSE:PFE) is a global pharmaceutical company that focuses on prescription drugs and vaccines and has a market cap above $270 billion. Pfizer’s new CEO completed a series of transactions significantly altering the company structure and strategy. Pfizer formed the GSK Consumer Healthcare Joint Venture in 2019 with GlaxoSmithKline plc, which includes Pfizer’s over-the-counter business. Pfizer owns 32% of the JV. Pfizer spun off its Upjohn segment and merged it with Mylan forming Viatris for its off patent, branded and generic medicines in 2020.
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The company is seeing strong growth right now from several factors, such as new products as well as its Covid-19 therapies. In the first quarter, revenue rose 77% to $25.66 billion. Adjusted earnings-per-share soared 72% year-over-year.
Pfizer generated nearly $15 billion in revenue last quarter just from its Covid-19 vaccine and anti-viral drug. While this boost is likely to fade over time as the pandemic subsides, the mRNA vaccine technology will be tried in two protease inhibitor antiviral compounds, a flu vaccine, a shingles vaccine, a breast cancer therapy, hemophilia gene therapy, a Lyme vaccine, RSV Adult vaccine, and others.
Therefore, this could be a longer-lasting tailwind than the market realizes. Pfizer completed its acquisition of Arena Pharmaceuticals for etrasimod and announced the acquisition of ReViral for its RSV programs.
Overall, Pfizer has a strong pipeline in oncology, inflammation & immunology, rare diseases, and vaccines. We are expecting 5% earnings per share growth out to 2027 (beside the COVID-19 vaccine and anti-viral). This should be enough growth to continue raising the dividend over time, which currently yields 3.3%.
On the date of publication, Bob Ciura did not have (either directly or indirectly) positions in any of 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 3 Mega-Cap Stocks for Recession-Proof Dividends 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. | Ticker Company Price APPL Apple $136.47 WMT Walmart $121.56 PFE Pfizer $49.44 Mega-Cap Stock: Apple (AAPL) Source: Eric Broder Van Dyke / Shutterstock.com Apple (NASDAQ:AAPL) is a technology giant that manufactures devices such as iPhones, iPads, Mac, Apple Watch and Apple TV. 7 Bargain Income Stocks to Buy and Hold Forever Going forward Apple’s earnings growth will be driven by several factors. Moreover, in emerging countries where consumers have rising disposable incomes, Apple should be able to increase the number of smartphones it is selling in the coming years. | Ticker Company Price APPL Apple $136.47 WMT Walmart $121.56 PFE Pfizer $49.44 Mega-Cap Stock: Apple (AAPL) Source: Eric Broder Van Dyke / Shutterstock.com Apple (NASDAQ:AAPL) is a technology giant that manufactures devices such as iPhones, iPads, Mac, Apple Watch and Apple TV. As of the most recent report Apple held $51.5 billion in cash and securities, $118.2 billion in current assets and $350.7 billion in total assets (of which an additional $141.2 billion are non-current securities) against $127.5 billion in current liabilities and $283.3 billion in total liabilities. Mega-Cap Stock: Pfizer (PFE) Source: Manuel Esteban / Shutterstock.com Pfizer (NYSE:PFE) is a global pharmaceutical company that focuses on prescription drugs and vaccines and has a market cap above $270 billion. | Ticker Company Price APPL Apple $136.47 WMT Walmart $121.56 PFE Pfizer $49.44 Mega-Cap Stock: Apple (AAPL) Source: Eric Broder Van Dyke / Shutterstock.com Apple (NASDAQ:AAPL) is a technology giant that manufactures devices such as iPhones, iPads, Mac, Apple Watch and Apple TV. InvestorPlace - Stock Market News, Stock Advice & Trading Tips Mega-cap stocks are defined as stocks with market capitalizations above $200 billion. As of the most recent report Apple held $51.5 billion in cash and securities, $118.2 billion in current assets and $350.7 billion in total assets (of which an additional $141.2 billion are non-current securities) against $127.5 billion in current liabilities and $283.3 billion in total liabilities. | Ticker Company Price APPL Apple $136.47 WMT Walmart $121.56 PFE Pfizer $49.44 Mega-Cap Stock: Apple (AAPL) Source: Eric Broder Van Dyke / Shutterstock.com Apple (NASDAQ:AAPL) is a technology giant that manufactures devices such as iPhones, iPads, Mac, Apple Watch and Apple TV. However, Apple is a strong dividend growth stock. It could actually be argued that Walmart benefits from recessions. |
20594.0 | 2022-06-22 00:00:00 UTC | META-U.S. HUD Sign New Settlement For More Ethically Sound Ads | AAPL | https://www.nasdaq.com/articles/meta-u.s.-hud-sign-new-settlement-for-more-ethically-sound-ads | nan | nan | Meta Platforms META has recently announced that the company has reached a settlement with the U.S. Department of Housing and Urban Development (“HUD”) that will change the way the company delivers housing ads to U.S. residents.
Meta collaborated with the HUD for more than a year to develop a machine learning technology that will implement a new system called the variance reduction method to accurately reflect the targeted audience and rein in privacy breaches.
While the recent changes are being targeted only toward housing ads, the new ad-targeting method will be used for employment and credit purposes later on. Meta claims that discrimination in housing, employment and credit has been a grave issue in U.S. history and the company’s new ad-targeting policies are trying to mitigate the same.
Meta has recently committed itself to addressing various claims raised by civil right groups, policy makers and regulators regarding how the company’s ad system delivers certain personalized ads and mishandles personal data. These issues have raised questions about how ethically Meta protects its users’ personal data and have negatively impacted the company’s goodwill.
Meta Platforms, Inc. Price and Consensus
Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote
Meta Invests in AI to Raise Advertisement Revenues
Meta’s Ad Business model was designed by the recently retired COO, Sheryl Sandberg, and became the company’s sole revenue source for an extensiveperiod of time.
However, as Meta rapidly surged ahead, Sandberg and founder Mark Zuckerberg had to face criticism for its failure to rein in large-scale misinformation, hate speech and privacy breaches. This made Meta face a lot of legal issues globally, costing them a significant amount of money. The negative goodwill also hurt Meta’s share prices.
Further down the line, Meta’s ad revenues have faced a serious blow as the company’s social media platforms — Facebook and Instagram — have been banned in Russia. Meta faced this threat along with another social media peer — Twitter TWTR.
Negative sentiments among investors after the ban and macro-economic turmoil also hampered Twitter’s stock prices along with Meta’s, reflecting a major downfall for social media companies.
The recent war has led to an increase in inflation globally, which directly impacted advertisement budget of enterprises. This will impact revenues of ad-driven internet stocks like Meta and Alphabet GOOGL. This, in turn, will impact their stock prices.
Shares of Meta have tumbled 52.8% in the year-to-date period compared with the Zacks Internet – Software industry and Zacks Computer and Technology sector’s declines of 53.3% and 30.6%, respectively.
Alphabet shares have lost 22.7% in the year-to-date period compared with the Zacks Internet – Services industry’s decline of 25.1%.
Adding fuel to the fire is Apple’s AAPL iOS changes and engagement-related changes.
Apple’s iOS changes have made ad targeting difficult for Meta and will hurt advertising revenue growth further.
Meta expects these trends to continue for the entirety of 2022. As a result, Meta is tepid regarding its revenue growth in the short term.
In order to address these challenges, Meta is investing heavily in AI to make a more advanced business model that will drive better recommendations for people in new trending formats like Reels and generate higher returns for advertisers while protecting users’ privacy.
As Meta is addressing the changing ad landscapes by concentrating more on video monetization, it is also evolving its ad revenues to do more with less data and invest heavily in AI and machine learning to support ad infrastructure.
The recent settlement with HUD is addressing Meta’s new ad revenue strategy, which the company believes will aid its long-term growth and separate its ad business model from its peers.
Meta currently carries Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Adding fuel to the fire is Apple’s AAPL iOS changes and engagement-related changes. Apple Inc. (AAPL): Free Stock Analysis Report Meta collaborated with the HUD for more than a year to develop a machine learning technology that will implement a new system called the variance reduction method to accurately reflect the targeted audience and rein in privacy breaches. | Adding fuel to the fire is Apple’s AAPL iOS changes and engagement-related changes. Apple Inc. (AAPL): Free Stock Analysis Report Meta Platforms, Inc. Price and Consensus Meta Platforms, Inc. price-consensus-chart | Meta Platforms, Inc. Quote Meta Invests in AI to Raise Advertisement Revenues Meta’s Ad Business model was designed by the recently retired COO, Sheryl Sandberg, and became the company’s sole revenue source for an extensiveperiod of time. | Adding fuel to the fire is Apple’s AAPL iOS changes and engagement-related changes. Apple Inc. (AAPL): Free Stock Analysis Report Meta Platforms META has recently announced that the company has reached a settlement with the U.S. Department of Housing and Urban Development (“HUD”) that will change the way the company delivers housing ads to U.S. residents. | Adding fuel to the fire is Apple’s AAPL iOS changes and engagement-related changes. Apple Inc. (AAPL): Free Stock Analysis Report Apple’s iOS changes have made ad targeting difficult for Meta and will hurt advertising revenue growth further. |
20595.0 | 2022-06-22 00:00:00 UTC | 2 Safe Stocks to Buy in This Bear Market | AAPL | https://www.nasdaq.com/articles/2-safe-stocks-to-buy-in-this-bear-market | nan | nan | A bear market officially got underway this month as the S&P 500 continued to fall in value. Down by 23% since January, the index has been under consistent pressure this year as multiple factors (inflation, interest rate increases, the war in Ukraine) have been making investors nervous about the future of the economy.
Although the near term looks challenging for many businesses, there are some great stocks to buy and hold for the long term. Both drugmaker AstraZeneca (NASDAQ: AZN) and tech giant Apple (NASDAQ: AAPL) are in good shape to weather the current conditions and generate strong results for investors from here on out.
1. AstraZeneca
AstraZeneca is a top oncology company, and that can make it a relatively resilient business to invest in today. Cancer care is ongoing and doesn't stop for a recession or inflation.
In its first-quarter results, for the period ending March 31, oncology sales rose 21% year over year to $3.6 billion. As good as that looks, there's more growth on the way. The company has a potential blockbuster cancer drug in Enhertu, which has been effective in treating breast cancer for patients with both high and low levels of HER2, a key protein. Analysts project the drug's peak revenue could top $6.6 billion.
The company's other major segments -- cardiovascular, renal, and metabolism -- generated $2.2 billion in sales and rose by 14% in Q1. With more than 180 projects in its pipeline spanning multiple therapeutic areas, there's no shortage of opportunities for the business to build on the strong results it is generating today.
In addition to its solid growth prospects, the stock also pays a dividend yield of 2.4%. That's higher than the S&P 500 average of 1.4% and can help bolster your overall returns. Shares of the company are also trading at a reasonable 15 times future earnings, which is in line with the average healthcare stock in the Health Care Select Sector SPDR Fund.
AstraZeneca's modest valuation can lessen the risk of a steep decline in a bear market. And thus far, a sell-off hasn't been happening. With year-to-date gains of around 5%, the stock has been one of the better investments to be holding this year.
2. Apple
Another solid growth stock to buy and hold is Apple. A favorite of Warren Buffett, the company was once referred to by the billionaire investor as "probably the best business I know in the world."
It's a hard statement to argue with given that despite its high-priced products, which often retail for more than $1,000, the company continues to generate growth. That strong brand loyalty could make Apple one of the better-performing growth stocks to own, even during a recession. In the second quarter of fiscal 2022, Apple's revenue topped $97.3 billion for the period ended March 26 and rose 9% year over year.
Although its dividend yield is fairly modest at just 0.7%, the company rewards investors through its buybacks and the share appreciation they will likely profit from in the long term. Over the trailing 12 months, Apple has reported free cash flow of $105.8 billion. And of that total, it spent $85.8 billion on share repurchases plus $14.7 billion on dividend payments.
Shares of Apple are down 26% this year, but that's likely due to the broad correction that's happening in the markets right now as opposed to anything the business is doing wrong. Apple's cash-rich operations make it one of the safer tech stocks to own today, and buying it on the dip could be a great move for long-term investors.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Both drugmaker AstraZeneca (NASDAQ: AZN) and tech giant Apple (NASDAQ: AAPL) are in good shape to weather the current conditions and generate strong results for investors from here on out. Down by 23% since January, the index has been under consistent pressure this year as multiple factors (inflation, interest rate increases, the war in Ukraine) have been making investors nervous about the future of the economy. With more than 180 projects in its pipeline spanning multiple therapeutic areas, there's no shortage of opportunities for the business to build on the strong results it is generating today. | Both drugmaker AstraZeneca (NASDAQ: AZN) and tech giant Apple (NASDAQ: AAPL) are in good shape to weather the current conditions and generate strong results for investors from here on out. In its first-quarter results, for the period ending March 31, oncology sales rose 21% year over year to $3.6 billion. In the second quarter of fiscal 2022, Apple's revenue topped $97.3 billion for the period ended March 26 and rose 9% year over year. | Both drugmaker AstraZeneca (NASDAQ: AZN) and tech giant Apple (NASDAQ: AAPL) are in good shape to weather the current conditions and generate strong results for investors from here on out. Apple Another solid growth stock to buy and hold is Apple. Apple's cash-rich operations make it one of the safer tech stocks to own today, and buying it on the dip could be a great move for long-term investors. | Both drugmaker AstraZeneca (NASDAQ: AZN) and tech giant Apple (NASDAQ: AAPL) are in good shape to weather the current conditions and generate strong results for investors from here on out. AstraZeneca AstraZeneca is a top oncology company, and that can make it a relatively resilient business to invest in today. Apple Another solid growth stock to buy and hold is Apple. |
20596.0 | 2022-06-22 00:00:00 UTC | Alphabet (GOOGL) Updates Google Tasks With Latest Feature | AAPL | https://www.nasdaq.com/articles/alphabet-googl-updates-google-tasks-with-latest-feature | nan | nan | Alphabet’s GOOGL division Google is consistently adding features to its to-do lists and reminder setting application, Google Tasks.
Reportedly, Google has added a capability to Google Tasks through which users can star mark important reminders on the Android, iOS and web apps.
The new feature provides quick access to important tasks to customers using Google Workspace, legacy G Suite Basic and Business.
With the recent move, Google aims to provide an enhanced experience to Google Tasks users. This, in turn, is expected to boost the adoption rate of Google Tasks.
Alphabet Inc. Price and Consensus
Alphabet Inc. price-consensus-chart | Alphabet Inc. Quote
Efforts to Bolster Google Workspace
With the recent initiative, Alphabet has added strength to the Google Workspace, consisting of Gmail, Meet, Drive, Calendar, Contacts, Tasks and more. Moreover, Google Workspace has been driving the company’s momentum across organizations demanding productivity and collaboration tools.
Beside the latest move, Google Meet was updated with picture-in-picture and multi-pinning features to help presenters and attendees stay glued to meetings.
Google Docs is gearing up to add emoji reactions in documents to express opinions informally.
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 the company’s top-line growth in the days ahead.
This, in turn, will help GOOGL win investors’ confidence in the near as well as long term.
Shares of the company have lost 23% in the year-to-date period, outperforming the Computer and Technology sector’s decline of 32.3%.
Competitive Scenario
Not only Google but other companies like Microsoft MSFT and Apple AAPL which also offer workspace tools as well as productivity applications, are in the fray.
Shares of Microsoft have lost 28% in the year-to-date period. MSFT offers Microsoft365, which delivers powerful productivity and office tools to help users work, learn, organize and connect.
Microsoft’s cloud-based task management application named Microsoft To Do allows users to manage their tasks from a smartphone, tablet and computer, which remains noteworthy.
Apple has lost 23.5% in the year-to-date period. The company’s Apple iWork provides an office suite of applications for users to create word-processing documents, spreadsheets and presentations.
Apple’s Task app helps users to set reminders and let them organize their personal and work projects seamlessly.
Nevertheless, Google’s growing endeavors to strengthen Google Workspace offerings are likely to continue aiding its customer momentum which in turn will keep the company ahead of the abovementioned peers.
Zacks Rank & Stock to Consider
Currently, Google’s parent Alphabet carries a Zacks Rank #3 (Hold). Investors interested in the broader Zacks Computer & Technology sector can consider Avnet AVT, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Avnet has gained 3.3% in the year-to-date period. The long-term earnings growth rate for AVT is currently projected at 37.2%.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2021. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | Competitive Scenario Not only Google but other companies like Microsoft MSFT and Apple AAPL which also offer workspace tools as well as productivity applications, are in the fray. Apple Inc. (AAPL): Free Stock Analysis Report The new feature provides quick access to important tasks to customers using Google Workspace, legacy G Suite Basic and Business. | Competitive Scenario Not only Google but other companies like Microsoft MSFT and Apple AAPL which also offer workspace tools as well as productivity applications, are in the fray. Apple Inc. (AAPL): Free Stock Analysis Report Alphabet’s GOOGL division Google is consistently adding features to its to-do lists and reminder setting application, Google Tasks. | Competitive Scenario Not only Google but other companies like Microsoft MSFT and Apple AAPL which also offer workspace tools as well as productivity applications, are in the fray. Apple Inc. (AAPL): Free Stock Analysis Report Alphabet’s GOOGL division Google is consistently adding features to its to-do lists and reminder setting application, Google Tasks. | Competitive Scenario Not only Google but other companies like Microsoft MSFT and Apple AAPL which also offer workspace tools as well as productivity applications, are in the fray. Apple Inc. (AAPL): Free Stock Analysis Report Want the latest recommendations from Zacks Investment Research? |
20597.0 | 2022-06-22 00:00:00 UTC | Get Ready for Roku Stock Ahead of the Herd | AAPL | https://www.nasdaq.com/articles/get-ready-for-roku-stock-ahead-of-the-herd | nan | nan | InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Not much has changed in the business outlook for Roku (NASDAQ:ROKU). The world is still transitioning right into its realm of operations. The streaming trend is only getting stronger, so ROKU stock should continue to have tailwinds for years. Based on this simple premise, dips in the stock should be opportunities for new investors.
However, the story is a bit more complex because of extrinsic wrinkles. The last time I discussed the value of the stock, I also warned about the Federal Reserve (Fed) variable. Back then, we didn’t know the extent of the harshness of the new monetary policy. Now we know, so it is clear where the selling pressure is coming from.
The threats that Fed Chair Jerome Powell poses are immense. They are out to destroy demand since they can’t fix the supply problems. If we can’t make more chips, the Fed wants to make sure that we can’t buy any either. That problem still lingers, but after an 80% correction, I’d say the worst has passed. ROKU stock is now leaner and perhaps meaner for it. Yesterday, it rallied 8% and I am not a fan of chasing. It would be best to buy it on weakness, like on a dip. But if the bulls can maintain above $83, they can have a shot at $105.
Ticker Company Price
ROKU Roku, Inc. $89.08
ROKU Stock Is Down in Sympathy
Click to Enlarge
Source: Charts by TrendSpider
The problems plaguing ROKU stock are external. There is nothing wrong with its operations. Judging by the financial metrics, the company is executing flawlessly. According to Yahoo! Finance, management almost quadrupled the business. In my book, this earns them a pass and all the benefit of doubt they need. They are profitable now and generating $234 million in cash from operations.
7 Bargain Income Stocks to Buy and Hold Forever
Technically, the chart has seen better stints. This is a momentum stock, so I have seen it move violently before. But this unilateral direction without letup is extreme. All such situations eventually end, so investors need to be ready for that moment. The trick is that they don’t ring bells, especially not for fast movers like this one. So, investors must become creative or courageous.
In such cases, I usually resort to the options markets. Instead of buying shares, I can sell puts 30% below to be long ROKU. This way, the stock can fall by more than that and I can still profit. I won’t start losing money until the stock suffers two more recessions. While there are no guarantees of profit, having a buffer of this size affords me some peace of mind.
Get Ahead of the Herd
ROKU stock was a bargain in January, so I definitely still like its future prospects. The business has not yet shown many of the symptoms that the experts are fretting. The consensus is that the global chip shortages will severely disrupt the business. I contend that they have more than accounted for that in the stock price already.
The expert opinions tend to lag. Therefore, there is a good chance that in the next two earnings reports, the fears don’t materialize. If that happens, then analysts will go back to touting potential upside. Smart investors should get ahead of that scenario by taking starter positions. It would be wise not to go all in just in case they are right.
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 Get Ready for Roku Stock Ahead of the Herd 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. | Click to Enlarge Source: Charts by TrendSpider The problems plaguing ROKU stock are external. 7 Bargain Income Stocks to Buy and Hold Forever Technically, the chart has seen better stints. On the date of publication, Nicolas Chahine did not have (either directly or indirectly) any positions in the securities mentioned in this article. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Not much has changed in the business outlook for Roku (NASDAQ:ROKU). Ticker Company Price ROKU Roku, Inc. $89.08 ROKU Stock Is Down in Sympathy The post Get Ready for Roku Stock Ahead of the Herd appeared first on InvestorPlace. | InvestorPlace - Stock Market News, Stock Advice & Trading Tips Not much has changed in the business outlook for Roku (NASDAQ:ROKU). Ticker Company Price ROKU Roku, Inc. $89.08 ROKU Stock Is Down in Sympathy The post Get Ready for Roku Stock Ahead of the Herd appeared first on InvestorPlace. | It would be best to buy it on weakness, like on a dip. Ticker Company Price ROKU Roku, Inc. $89.08 ROKU Stock Is Down in Sympathy They are profitable now and generating $234 million in cash from operations. |
20598.0 | 2022-06-22 00:00:00 UTC | Shopify unveils new tools, Twitter tie-up to beat e-commerce slowdown | AAPL | https://www.nasdaq.com/articles/shopify-unveils-new-tools-twitter-tie-up-to-beat-e-commerce-slowdown | nan | nan | By Nivedita Balu
June 22 (Reuters) - Shopify Inc SHOP.TO, SHOP.N has launched new tools to help its merchants sell to other businesses and on Twitter, as the Canadian tech giant attempts to shore up sales to counter a post-pandemic slowdown in online shopping.
More than a 100 new tools were unveiled on Wednesday, including ones to support its plans to push into business-to-business, for shoppers to connect their crypto wallets to a store and Apple's AAPL.O "Tap to Pay" feature on iPhones.
Shopify, which helps businesses set up their online stores, hit the jackpot during lockdowns as global brands and mom-and-pop stores alike turned to selling online directly to consumers while their shops were shut.
With the economy reopening, however, investors are starting to question Shopify's future, sending the company's stock down 76% this year and erasing a big chunk of its pandemic gains.
Shopify's answer to the slowdown is expanding into the wholesale market, a far bigger avenue than direct-to-consumer and with "billions in untapped revenue", according to President Harley Finkelstein.
Businesses are looking to move from direct-to-consumer to "connect-to-consumer", which makes it easier for people to shop through social media platforms and pay using their phones, Finkelstein said in an interview.
"This is the next phase of retail ... In many ways, shopping has become a vote with your wallet to support that brand ... And that's what I think connect-to-consumer is all about."
The post-pandemic world has thrown up challenges for Amazon as well, Shopify's biggest rival, as it fields massive losses after building more warehouses than needed during the boom.
In a podcast earlier this month, long-time Shopify investor Mawer Investment Management's Vijay Viswanathan said it was exiting the stock on concerns of slowing growth and competition.
"The internet is getting crowded... It became harder and harder to justify the valuation."
(Reporting by Nivedita Balu in Bengaluru; Editing by Devika Syamnath)
((Nivedita.Balu@thomsonreuters.com; Twitter: @niveditabalu;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. | More than a 100 new tools were unveiled on Wednesday, including ones to support its plans to push into business-to-business, for shoppers to connect their crypto wallets to a store and Apple's AAPL.O "Tap to Pay" feature on iPhones. By Nivedita Balu June 22 (Reuters) - Shopify Inc SHOP.TO, SHOP.N has launched new tools to help its merchants sell to other businesses and on Twitter, as the Canadian tech giant attempts to shore up sales to counter a post-pandemic slowdown in online shopping. In a podcast earlier this month, long-time Shopify investor Mawer Investment Management's Vijay Viswanathan said it was exiting the stock on concerns of slowing growth and competition. | More than a 100 new tools were unveiled on Wednesday, including ones to support its plans to push into business-to-business, for shoppers to connect their crypto wallets to a store and Apple's AAPL.O "Tap to Pay" feature on iPhones. By Nivedita Balu June 22 (Reuters) - Shopify Inc SHOP.TO, SHOP.N has launched new tools to help its merchants sell to other businesses and on Twitter, as the Canadian tech giant attempts to shore up sales to counter a post-pandemic slowdown in online shopping. In a podcast earlier this month, long-time Shopify investor Mawer Investment Management's Vijay Viswanathan said it was exiting the stock on concerns of slowing growth and competition. | More than a 100 new tools were unveiled on Wednesday, including ones to support its plans to push into business-to-business, for shoppers to connect their crypto wallets to a store and Apple's AAPL.O "Tap to Pay" feature on iPhones. By Nivedita Balu June 22 (Reuters) - Shopify Inc SHOP.TO, SHOP.N has launched new tools to help its merchants sell to other businesses and on Twitter, as the Canadian tech giant attempts to shore up sales to counter a post-pandemic slowdown in online shopping. Shopify, which helps businesses set up their online stores, hit the jackpot during lockdowns as global brands and mom-and-pop stores alike turned to selling online directly to consumers while their shops were shut. | More than a 100 new tools were unveiled on Wednesday, including ones to support its plans to push into business-to-business, for shoppers to connect their crypto wallets to a store and Apple's AAPL.O "Tap to Pay" feature on iPhones. By Nivedita Balu June 22 (Reuters) - Shopify Inc SHOP.TO, SHOP.N has launched new tools to help its merchants sell to other businesses and on Twitter, as the Canadian tech giant attempts to shore up sales to counter a post-pandemic slowdown in online shopping. Shopify, which helps businesses set up their online stores, hit the jackpot during lockdowns as global brands and mom-and-pop stores alike turned to selling online directly to consumers while their shops were shut. |
20599.0 | 2022-06-22 00:00:00 UTC | Investors: Don't Sleep on Portfolio Diversification | AAPL | https://www.nasdaq.com/articles/investors%3A-dont-sleep-on-portfolio-diversification | nan | nan | With stocks in a bear market, bonds offering little more than "less negative" returns, and cryptocurrency facing a serious reckoning, the first half of 2022 should remind investors that a diversified portfolio is going to be necessary in the years ahead. Overexposure to any particular stock or stock sector can lead to crushing portfolio losses, which can have the effect of derailing your investing momentum or worse -- putting your retirement in jeopardy.
Let's take a moment to revisit why diversification remains vitally important to your investing success.
Diversification: A quick review
To "diversify your portfolio" is another way of saying that you adequately spread your money across several different investments. While it's great to make money investing, not losing money should also be a central consideration. Diversification serves to limit risk.
Concentrated stock positions -- for example, if you were to hold all of your money in Apple stock -- link your financial future to the performance of a single company, which exposes you to undue risk. Adding more stocks in different industries is likely to give you an adequate return, while also reducing the chance of losing serious amounts of money.
Index funds: A simple solution
If you make "all or nothing" stock or crypto bets, you're probably taking far more risk than you realize. This is why broad-based, market-tracking index funds can make a lot of sense for retail investors.
Index funds follow entire indices, like the S&P 500 or the Russell 2000, which are comprised of hundreds of companies in different sectors. Total market funds, like the Vanguard Total Stock Market Index Fund ETF (NYSEMKT: VTI), track even more companies and can be thought of as several index funds rolled into one.
Basic index funds can do wonders for investors by bundling stocks together in easy-to-purchase and easy-to-manage securities. These funds also build in diversification, so you won't need to worry if any one company -- or even sector -- experiences poor returns over a certain period of time.
Image source: Getty Images.
Diversification in 2022
As the below chart shows, a portfolio heavy in growth stocks (like most of the tech companies) severely underperformed a portfolio of value stocks from the beginning of this year until now:
VTV data by YCharts.
An investor who made a big growth-stock bet at the beginning of the year would have had their position cut by about one-third, while a value-only investor would be down just over 10%.
The middle line, which represents all large-cap stocks (both value and growth), unsurprisingly displayed an average result. While losing over 20% of your money isn't anything to be happy about, an S&P 500 investor avoided a much worse outcome by committing to diversification.
This is all to say that spreading your money around matters and can help avoid catastrophic outcomes, even if markets have fallen broadly. An investor who put their money in only a few growth stocks could be down far more than 32% -- a scenario that could have been taken off the table with proper asset allocation and advance planning.
Recommit to your asset allocation
To survive in an environment with low expected returns, you'll need to recommit to a diversified portfolio through sensible asset allocation. Put another way, consider allocating a percentage of your money to different asset classes and sticking to your plan over time. Too much money in any one asset class can spell disaster, especially in a scenario where nobody knows what will happen next.
The risk of financial ruin can be limited through diversification, which can help limit the volatility within your portfolio. Take the time to be deliberate and intentional when it comes to allocating your money. The future you will be grateful.
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Sam Swenson, CFA, CPA has positions in Vanguard Total Stock Market ETF. The Motley Fool has positions in and recommends Apple and Vanguard Total Stock Market ETF. 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. | With stocks in a bear market, bonds offering little more than "less negative" returns, and cryptocurrency facing a serious reckoning, the first half of 2022 should remind investors that a diversified portfolio is going to be necessary in the years ahead. These funds also build in diversification, so you won't need to worry if any one company -- or even sector -- experiences poor returns over a certain period of time. An investor who put their money in only a few growth stocks could be down far more than 32% -- a scenario that could have been taken off the table with proper asset allocation and advance planning. | Total market funds, like the Vanguard Total Stock Market Index Fund ETF (NYSEMKT: VTI), track even more companies and can be thought of as several index funds rolled into one. * They just revealed what they believe are the ten best stocks for investors to buy right now... and Vanguard Total Stock Market ETF wasn't one of them! The Motley Fool has positions in and recommends Apple and Vanguard Total Stock Market ETF. | Total market funds, like the Vanguard Total Stock Market Index Fund ETF (NYSEMKT: VTI), track even more companies and can be thought of as several index funds rolled into one. 10 stocks we like better than Vanguard Total Stock Market ETF 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 Sam Swenson, CFA, CPA has positions in Vanguard Total Stock Market ETF. | Diversification: A quick review To "diversify your portfolio" is another way of saying that you adequately spread your money across several different investments. Total market funds, like the Vanguard Total Stock Market Index Fund ETF (NYSEMKT: VTI), track even more companies and can be thought of as several index funds rolled into one. The Motley Fool has positions in and recommends Apple and Vanguard Total Stock Market ETF. |
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